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FORTY-FIRST

ANNUAL REPORT
of the

BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM

COVERING OPERATIONS FOR
THE YEAR




LETTER OF TRANSMITTAL

BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM,

Washington, March 15, 1955.

T H E SPEAKER OF THE HOUSE OF REPRESENTATIVES.

Pursuant to the requirements of Section 10 of the Federal Reserve
Act, as amended, I have the honor to submit the Forty-first Annual
Report of the Board of Governors of the Federal Reserve System.
This report covers operations for the year 1954.
Yours respectfully,




W M . M C C . MARTIN, JR.,

Chairman.

CONTENTS

TEXT OF REPORT
Page
Introduction

1

Federal Reserve Credit Policy
Open market operations
Changes in discount rate
Change in reserve requirements
Economic Conditions
Demand and production
Industrial production
Agriculture
Labor market
Prices
Income and saving
Debt and equity
Interest rates

financing

4
6
7
7
8
8
11
13
13
14
15
17
20

Bank Credit and Money
Bank loans and investments
Deposits and currency
Bank reserve positions

22
22
26
27

World Economic and Financial Developments
United States balance of payments
World commodity prices
Countries outside Europe and the Western Hemisphere
Western Hemisphere
Western Europe
Summary

30
31
34
34
35
37
40

Loan Guarantees for Defense Production

40

Banking Operations and Structure
Bank earnings and profits
Bank earning assets
Capital accounts
Number of banking offices
Federal Reserve membership
Par and nonpar banks
Designation of reserve cities

41
41
43
43
44
44
45
46

Bank Supervision by the Federal Reserve System
Examination of Federal Reserve Banks
Examination of State member banks

46
46
46




iii

Page
Bank holding companies
Trust powers of national banks
Acceptance powers of member banks
Foreign branches and banking corporations
Inter-Agency Bank Examination School

47
47
47
48
49

Changes in Regulations of the Board of Governors
Reserves of member banks
Clearing and collection
Foreign banking

49
49
50
50

Legislation
Direct purchase and sale of Government obligations
Investment in bank premises
Paying out Federal Reserve notes
Real estate loans by national banks
Housing Act of 1954
Member banks dealing in obligations of banks for cooperatives

50
50
50
51
51
51
52

Reserve Bank Operations
Volume of operations
Earnings and expenses
Holdings of loans and securities
Foreign and international accounts
Bank premises
Intradistrict territorial changes

53
53
53
54
55
56
57

Board of Governors—Income and Expenses

57

Federal Reserve Meetings

60

Meeting of Central Bank Technicians

60

TABLES
1. Statement of Condition of the Federal Reserve Banks (in detail),
Dec. 31, 1954
62
2. Statement of Condition of Each Federal Reserve Bank at: End of 1954
and 1953
64
3. Holdings of United States Government Securities by Federal Reserve
Banks, End of December 1952, 1953, and 1954
68
4. Federal Reserve Bank Holdings of Special Short-Term Treasury
Certificates Purchased Directly from the United States, 1953-54.. 69
5. Volume of Operations in Principal Departments of Federal Reserve
Banks, 1950-54

69

6. Earnings and Expenses of Federal Reserve Banks during 1954

70

7. Earnings and Expenses of Federal Reserve Banks, 1914-54

72

8. Member Bank Reserves, Reserve Bank Credit, and Related Items—End
of Year 1918-54 and End of Month 1954
74
iv



Page
9. Bank Premises of Federal Reserve Banks and Branches, Dec. 31, 1954 76
10. Number and Salaries of Officers and Employees of Federal Reserve
Banks, Dec. 31, 1954
77
11. Federal Reserve Bank Discount, Interest, and Commitment Rates, and
Buying Rates on Acceptances (in effect Dec. 31, 1954)

78

12. Member Bank Reserve Requirements

79

13. Maximum Interest Rates Payable on Time Deposits

79

14. Margin Requirements

80

15. Fees and Rates Established under Regulation V on Loans Guaranteed
Pursuant to Defense Production Act of 1950
80
16. All Banks in the United States, by Classes, Dec. 31, 1954 and 1953,
Principal Assets and Liabilities, and Number of Banks
81
17. Member Bank Earnings, by Class of Bank, 1954 and 1953

82

18. Analysis of Changes in Number of Banking Offices during 1954

83

19. Number of Banking Offices on Federal Reserve Par List and not on
Par List, by Federal Reserve Districts and States, Dec. 31, 1954
84
APPENDIX
Record of Policy Actions—Board of Governors

86

Record of Policy Actions—Federal Open Market Committee

92

Board of Governors of the Federal Reserve System

99

Federal Open Market Committee

100

Federal Advisory Council

101

Directors and Senior Officers of Federal Reserve Banks

102

Map of Federal Reserve Districts

117

Index

118




ANNUAL REPORT OF THE BOARD OF GOVERNORS
OF THE FEDERAL RESERVE SYSTEM

Broad recovery in economic activity was under way in the United
States as the year 1954 closed, following the period of moderate
contraction which began in mid-1953. Total output for the year
as a whole was exceeded only in 1953. Abroad, activity increased
throughout the year to a record level. In most industrial countries,
general averages of commodity prices changed little. Prices of some
agricultural and mineral products declined in international trade,
and prices of others advanced. Economic readjustment within
this country reflected mainly reduced expenditures for national defense and reduction of excessive business inventories. Renewal of
economic expansion in the closing months of the year reflected an
upswing in private demand.
Throughout 1954 credit was readily available on terms attractive
to borrowers and demand for many types of credit continued to
grow. Nonbank sources supplied a large amount of funds and
bank credit expanded appreciably.
Interest rates, which by summer had declined to comparatively
low levels, showed some firming tendencies over the balance of the
year, mainly in response to a strengthening in credit demand. Privately held demand deposits and currency, which changed little in
the early part of the year, after allowing for seasonal movements,
increased substantially after midyear. At the year-end, they were
4 billion dollars or 3 per cent larger than at the end of 1953. Other
liquid assets, such as time and savings deposits, savings and loan
shares, and shares in credit unions, also continued to be accumulated. Security flotations and mortgage underwriting were in
record volume and investor demand for common stocks was active.
Prices of common stocks rose rapidly throughout the year and
trading activity increased considerably.
Developments in credit markets and interest rates reflected in
part the effects of Federal Reserve policy. In order to cushion
defense and inventory readjustments and to foster business revival



1

Z

ANNUAL REPORT OF BOARD OF GOVERNORS

and sustained economic growth, the Federal Reserve until late 1954
followed a policy of actively promoting credit ease. By that time
recovery was sufficiently advanced to require modification of this
aggressive policy. Debt management operations of the Treasury
during the year had objectives parallel with System policy.
Following a decline of about one-tenth from mid-1953 to the
spring of 1954 and a period of little change from spring to early
autumn, this country's industrial activity increased. By December
output at factories and mines had recovered half of the decline. The
rise reflected expanding production of automobiles and other finished
consumer goods as well as gains in output of steel and other materials. The increase in industrial output also reflected the high and
rising levels of construction activity. Activity in producers' and
military equipment industries, which had declined from mid-1953
through the third quarter of 1954, changed little in the closing
months of the year.
Gross national product was 357 billion dollars for the year 1954,
8 billion less than the record level for 1953. With price averages
fairly stable, the physical volume of product was correspondingly
smaller than in the preceding year. Employment was lower than
in 1953, and the labor force increased further. Unemployment,
although somewhat less severe than in the 1949 recession period,
was above the low levels of 1953, both in terms of the number of
workers affected and as a percentage of the labor force.
Gross national product, which was at an annual rate of 356 billion
dollars during the first three quarters of the year, rose to 362 billion
in the fourth quarter. Stability through the third quarter reflected
important offsetting changes among major sectors of the economy.
Major factors in the rise during the fourth quarter were a marked
slowing down in inventory liquidation and further increases in
consumer buying.
Federal outlays for national security purposes were further curtailed in 1954. Business outlays for fixed capital purposes declined
moderately. Liquidation of business inventories continued on a
large scale in the first three quarters and at a greatly reduced rate in
the fourth quarter.
Consumer spending for goods and services rose steadily in 1954
to new high levels. Residential construction advanced strongly
from already high levels, facilitated by the ready availability of



FEDERAL RESERVE SYSTEM

3

mortgage funds on downpayment and maturity terms exceptionally
attractive to borrowers. Expenditures of State and local governments increased further for roads, schools, other public improvements, and services. Foreign purchases of American goods increased.
The sustained rise in consumer expenditures during the year
reflected further growth in personal income after taxes. Reductions
in tax rates effective at the beginning of the year and increased
unemployment compensation and old-age pension payments more
than offset reductions in wage and farm incomes. Lower corporate
tax rates helped to sustain business profits after taxes. Dividend
income and interest payments increased.
Farm output continued large in 1954. Markets for important
agricultural commodities also were affected by large carryovers
from earlier harvests. Domestic demand for farm products was
relatively strong, and exports expanded toward the end of the year.
Prices of crops under Federal price support programs changed little,
but prices of livestock and products declined further. Net farm
income was lower than in other postwar years.
Unlike some economic adjustments in the past, the business decline from mid-1953 to early 1954 did not become cumulative.
Reasons for this are many but special weight must be given to the
underlying strength and general resilience of our market economy
in making essential adjustments flexibly. Public policy measures
which contributed to recovery included prompt actions by the Federal Reserve System to ease credit conditions and reduction of Federal personal and corporate income taxes. Unemployment payments
and Federal price supports for basic farm products helped to sustain
the incomes of workers and farmers. The further gains in industrial
production abroad provided an element of strength in world markets
for industrial materials and, by enlarging buying power abroad,
made possible an important rise during the year in United States
exports.
For Western Europe the year was one of rising prosperity, with
industrial output greater than a year earlier and about one-fourth
larger than in 1950. European activity rose steadily over the year
in the durable goods and construction industries and continued at
relatively high levels in the textile industries.
In most Western European countries the balance of international
payments was favorable in 1954 and gold and dollar reserves con


4

ANNUAL REPORT OF BOARD OF GOVERNORS

tinued to increase. Under these circumstances, central banks and
governments continued to move toward reestablishment of international convertibility of currencies. Restrictions on imports of
dollar goods were greatly relaxed in some countries. Sterling held
outside the sterling area was made freely transferable except to the
dollar area, and Great Britain abolished most governmental controls
on prices and internal trade.
Financial stability was maintained in other sterling-area countries, where additional progress was made in industrial and agricultural development.
In Japan, inflationary tendencies were checked and the international payments position improved.
Progress toward establishing conditions appropriate to convertibility was evidenced in the gains in production and international
trade in 1954 and in the measures taken to make markets more
responsive to changing demand and supply forces. In some countries, however, restrictive controls continued to limit the play of
market forces, and in a few of these unchecked inflation hampered
sound economic growth and made it difficult to balance external
payments with receipts.
FEDERAL RESERVE CREDIT POLICY

During most of 1954, Federal Reserve policy continued to be
directed toward "promoting growth and stability in the economy
by actively maintaining a condition of ease in the money market."
This directive had been adopted in the latter part of 1953 after
gradual relaxation of the policy of restraint followed until May 1953.
The policy of restraint had had the purpose of keeping the growing
use of credit within the limits set by the resources of the economy,
thus avoiding developments of an inflationary arid unsustainable
nature. Under that policy Federal Reserve open market operations
had supplied only part of the increasing demand for bank reserves.
This had made it necessary for banks to borrow frequently in substantial amounts to cover their reserve needs. The restrictive effect
of such borrowing was reenforced by an increase in the Federal
Reserve Bank discount rate.
The new policy of actively maintaining a condition of ease in
the money market enabled member banks to reduce their indebtedness to the Federal Reserve Banks and also lowered the cost to in


FEDERAL RESERVE SYSTEM

5

dividual member banks of such borrowing as was necessary from
time to time. Reserves made available by the usual seasonal contraction in monetary needs in the early months of 1954 were not
entirely absorbed by Federal Reserve action. Sufficient reserves
were thus available not only to relieve most banks of the need to
borrow in order to meet temporary reserve adjustments but also
to supply the basis for additional bank credit expansion. The Federal Reserve Bank discount rate was reduced twice, in February
and again in midspring.
Further steps were taken in the spring to support forces favorable
to renewed economic growth. First, open market purchases supplied bank reserves in the late spring, to counteract seasonal pressures on bank reserve positions. Second, member bank reserve
requirements were reduced around midyear. This action was taken
primarily to foster bank credit expansion and provide the reserves
that would normally be needed over the remainder of the year. Since
more reserves were supplied than were needed initially, open market
sales were made to absorb temporarily excess amounts. Over the
fall of the year, when demand for credit and currency rose in
response to seasonal forces and to expansion in private spending,
open market purchases returned reserves to the market.
After midyear, as a result of Treasury borrowing and an increase
in private borrowing, demand deposits and currency began to expand. As the second half-year progressed, banks made use of
available funds to increase their holdings of United States Government securities as well as of other loans and investments. Over
the fall, demand deposits and currency grew at a rate of about
500 million dollars a month, after allowance for the usual seasonal
increase. Meanwhile, the chief indexes of economic activity were
moving to higher levels and by the end of the year it was evident that
a recovery movement had taken form. In this situation, Federal
Reserve policy became less active in promoting credit and monetary
expansion. Member banks found it necessary to borrow at the
Federal Reserve Banks to meet December needs for reserves.
Credit ease during the year was reflected in an extension of the
interest rate declines which had characterized credit markets during
the second half of 1953. The declines in rates from their 1953 peaks
were greater for issues of intermediate and longer-term securities than
in comparable readjustment periods since World War I, and about



6

ANNUAL REPORT OF BOARD OF GOVERNORS

as much as in the other periods for prime short-term market paper.
Market yields on intermediate and longer-term securities tended to
stabilize after the first quarter, while yields on short-term paper
continued to decline irregularly into the summer. Yields on nearly
all types of obligations, particularly short-term paper, showed firming tendencies during the second half of the year.
All classes of credit market yields participated in the interest rate
decline from mid-1953 to the second quarter of 1954, but differences
in adjustment were marked. In general, short-term rates declined
more than long-term rates; market rates more than customer rates;
United States Government security yields more than those on private securities, and yields on high-grade securities more than those
on lower-grade issues.
The easy credit situation was also accompanied by increased availability of credit, reflected both in greater willingness of lenders to
make loans to credit-worthy risks and in more attractive downpayment and maturity terms for consumer instalment credit and for
mortgage borrowers. In response to greater availability of credit,
lower interest costs, and other factors, lending activity expanded in
some areas and maintained relatively high levels in others.
The lower levels of interest rates established between mid-1953
and the second quarter of 1954 were reflected in higher prices
for United States Government bonds, State and municipal bonds,
and corporate bonds. The higher prices on securities, as well as
higher dollar values for other long-lived capital assets, were due in
part to the recapitalization of future income at reduced interest rates.
The fact of higher prices on these assets tended to enhance the
liquidity of the economy by increasing the proportion of assets held
by individuals and businesses, especially financial institutions, that
could be sold in markets at cost or profit. Greater liquidity for the
economy encouraged more active spending and investing on the
part of holders of capital assets.
Open market operations. As in 1953, System open market
operations were coordinated with discount policy and changes in
reserve requirements. In January and February 1954, the Federal
Reserve made open market sales to absorb only in part the redundancy of bank reserves that appears at that season. Receding credit
demands in these and early spring months also contributed to
easier bank reserve positions. Over this period, member bank bor-




FEDERAL RESERVE SYSTEM

7

rowing tended to decline and excess reserves to rise. During the
second half of May and in June, the Federal Reserve purchased
about 300 million dollars of Government securities to offset a drain
on bank reserves from an outflow of currency and gold and to
keep banks in an easy reserve position.
Following the reduction in reserve requirements during the summer, sales of Government securities were made by the System in
order temporarily to absorb reserve funds not needed until the fall
period of active currency and credit demand. Beginning in September, open market purchases were geared to the maintenance
of an easy member bank reserve position during the fall phase of
bank credit and monetary expansion. Late in the year, as business
expansion began to gather momentum, open market purchases were
moderated and bank reserve positions were subject to some tightening from pressures resulting from year-end and other credit demands.
Changes in discount rate. During the first half of February
1954, the discount rate was reduced from 2 to 1% per cent at all
Federal Reserve Banks. A second reduction was made by the
Reserve Banks during the period April 14-May 21, when this rate
was changed to ll/2 per cent. In both instances, the actions were
designed to bring the discount rate into closer alignment with
short-term market rates as well as to make it less expensive for
individual member banks to make temporary adjustments in their
reserve positions by borrowing at the Federal Reserve Banks.
Change in reserve requirements. On June 21, 1954 the Board
announced a program to reduce member bank reserve requirements.
The program was made effective over a period of several weeks.
When completed on August 1, 1954 it included a reduction
of 1 percentage point on time deposits at all member banks, a
reduction of 2 percentage points on net demand deposits at central
reserve city banks, and a reduction of 1 percentage point on net
demand deposits at reserve city and country banks. The reserve
requirement percentages in effect following this action were 5 per
cent on time deposits at all member banks and 20, 18, and 12 per
cent, respectively, on net demand deposits at central reserve city,
reserve city, and country banks.
The reductions in reserve requirements, which released about 1.6
billion dollars of reserve funds, were made in anticipation of bank
reserve needs over the fall. They took into account probable ex


8

ANNUAL REPORT OF BOARD OF GOVERNORS

pansion of financing requirements of private activities, including
seasonal needs for marketing crops and for replenishing retail
stocks in advance of the heavy selling season, as well as resumed
economic growth. They also took account of prospective Treasury
financing needs and the seasonal rise in currency circulation over
the second half of the year. The major objective of the action was to
make sure that banks would be supplied with reserves in amounts
sufficient to encourage them to seek uses for their funds and thus
to foster credit and monetary expansion.
ECONOMIC CONDITIONS

The second cyclical postwar downturn, which was in process at the
beginning of 1954, was halted in the spring and followed by rapid
expansion in economic activity late in the year. Consumer and
wholesale price averages continued relatively steady in 1954. Prices
of farm products declined somewhat further, but less sharply
than earlier. Prices of metals and some other industrial materials
advanced in the spring, and late in the year increases extended to
a number of other industrial materials. Strength in world demand
contributed throughout the year to the firming of prices of internationally traded commodities.
Demand and production. The value of total output of goods
and services in the United States was 357 billion dollars in 1954
compared to a record 365 billion in 1953. Since average prices were
little changed from 1953 levels, physical volume of output, as well
as dollar value, was moderately smaller. The value of aggregate
output, which continued to decline through the winter of 1954, was
stable from early spring to early autumn at an annual rate of 356
billion dollars and expanded vigorously late in the year.
In the fourth quarter of the year, gross national product was at
an annual rate of 362 billion dollars, 2 per cent above the plateau
of the immediately preceding quarters and about the same percentage below the peak rate of the second quarter of 1953. Total
expenditures other than for national defense and additions to business
inventories were considerably above their earlier peak in mid-1953.
Expansion in the final quarter of 1954 reflected the combined
effect of a number of factors. Of major importance were the sharp
reduction in the rate of inventory liquidation and the rise of consumer spending to a new high level. Further increases in residential



FEDERAL RESERVE SYSTEM
GROSS NATIONAL PRODUCT
Billions of dollars, annual rates
240
-

400
CONSUMPTION
EXPENDITURES

200

- 360

J
-

320

-

280

-

240

|

I

160
120

GOVT. PURCHASES
80

PRIVATE INVESTMENT

40

200
1950

1952

1954

1950

1952

1954

NOTE.—Department of Commerce quarterly estimates, adjusted for seasonal variation.
Private investment includes gross private domestic investment and net foreign investment.
Government purchases include Federal and State and local purchases of goods and services.

construction activity, in State and local government expenditures,
and in net foreign investment also contributed to economic expansion late in the year, while national defense outlays and business
expenditures for plant and equipment declined more slowly than
earlier.
Nonfarm business inventories were liquidated at an annual rate
of 4 or 5 billion dollars from late 1953 through the third quarter
of 1954. By last summer inventory holdings had been considerably
reduced, particularly in hard goods lines where earlier reductions in
demand had been concentrated. Thus a basis was laid for expansion
in business ordering and termination of inventory liquidation.
Manufacturers' new orders for durable goods recovered somewhat
in the spring and summer months and rose to appreciably higher
levels in the last four months of the year. With new orders about
equal to sales, the sharp decline in outstanding orders of durable
goods manufacturers came to a halt in late summer.
Consumer spending for goods and services reached a record level
in the fourth quarter, 3.5 per cent higher than a year earlier. Pur


10

ANNUAL REPORT OF BOARD OF GOVERNORS

chases of new automobiles were at exceptionally high levels in
December and Christmas buying in general was in record volume.
For the year 1954, the rise in total consumer outlays about kept pace
with the increase of 1.7 per cent in population. Spending for nondurable goods and services was in record volume while spending for
durable goods was somewhat below the 1953 record level.
Residential housing markets were strong throughout 1954. Some
1.2 million new dwelling units were started, compared to 1.1 million
in each of the three preceding years and a record 1.4 million in 1950.
During November and December 1954, the number of new private
dwelling units started declined much less than seasonally. A
major factor in the rapid rise in housing construction in 1954 was
the increased availability of mortgage funds on terms unusually
attractive to borrowers. After the beginning of the year, terms on
loans guaranteed by the Veterans Administration were made substantially easier. The large increase in private units started reflected
mainly expansion in units covered by arrangements for such mortgages, with a sharp increase in the proportion of such loans involving
no downpayment or maturing in 30 years. Late in the year, additional stimulus to housing markets was provided by the Housing
Act of 1954, effective October 1, which liberalized terms on loans
insured by the Federal Housing Administration.
Business outlays for new construction and durable equipment
continued to decline moderately during most of 1954, and for the
year were 5 per cent below the record 1953 level. A decline of 9
per cent in equipment purchases was offset in part by a further
increase in business construction. Individual sectors reported diverse
movements in fixed capital outlays. Spending for new commercial
facilities continued to rise, and outlays by mining concerns were
stable. Other industrial sectors reported reductions of varying magnitudes, including 9 per cent for manufacturing and 35 per cent for
railroads. Farm investment also declined.
The decline in Federal spending for national security from mid1953 to the end of 1954 was the largest contractive element influencing the economy. In the latter part of 1954, however, there was
some slackening in the rate of decline in security spending. Federal
purchases of goods and services for defense declined about onefourth from the second quarter of 1953 to the fourth quarter of 1954,
from a seasonally adjusted annual rate of 54.0 billion dollars to one



11

FEDERAL RESERVE SYSTEM

of 40.5 billion. The proportion of gross national product represented
by national security purchases was reduced from nearly 15 to about
11 per cent. Reduction in defense spending reflected not only
declines in expenditures for weapons and military equipment and
for construction, but also a cut in the size of the armed forces and
diminished outlays for operation of facilities.
GNP SELECTED COMPONENTS
Billions of dollars, annual rates
PRIVATE INVESTMENT

30

60

GOVERNMENT PURCHASES

FEDERAL
NATIONAL SECURITY
50

20

10

NEW RESIDENTIAL
CONSTRUCTION

0

_

30

CHANGE IN NONFARM
BUSINESS INVENTORIES
STATE AND LOCAL

111

ill

0

OTHER FEDERAL

I
1950

-10

1952

1954

1950

1952

1954

NOTE.—Department of Commerce quarterly estimates, adjusted for seasonal variation.

Industrial production. The impact on production of the mid1953 to early 1954 decline and of the more recent resurgence in
demand was largely concentrated at factories and mines. In early
1954 the Board's seasonally adjusted index of industrial production
was still declining from its mid-1953 record level of 137 per cent of



12

ANNUAL REPORT OF BOARD OF GOVERNORS

the 1947-49 average. The decline ended in March, when the index
was 123, and during the spring and summer output was relatively
stable at about that level. Industrial production then rose appreciably in the autumn and in December the index reached 130. For
the year output was 125 per cent of the 1947-49 average as compared
to 134 in 1953 and 124 in 1952.
Production in consumer goods lines began to recover early in
1954, following sharp cutbacks in the latter half of 1953. Retail
sales of most goods were maintained at relatively high levels and
business stocks in most lines except automobiles were reduced.
With recovery in consumer goods output, the decline in total
industrial production—which had been rapid in late 1953—came
to a halt in the early spring of 1954 despite continued curtailment
in defense and producers' equipment lines.
In the summer and early fall the rise in over-all output of consumer goods was interrupted. Auto output declined sharply during
the most extensive model change-over of the postwar period. The
imminence of this change-over also had considerable effects during
the summer on output and inventory changes in the steel and other
supplying industries. In July and August, steel output reached a
low of 63 per cent of capacity.
The rise in industrial output in the latter part of 1954 reflected
widespread advances in industrial materials and consumer goods
lines. Moreover, over-all activity in producers' and military equipment industries was showing little further change following earlier
reductions. Following the model change-over, auto assemblies rose
to an exceptionally high rate in December and production of other
consumer metal goods remained at high levels. Output of building
materials advanced, reflecting strength in construction. Steel output recovered rapidly and in November and December steel mills
operated at close to 80 per cent of capacity.
Production of nondurable goods, which had recovered moderately in the spring, increased further in the latter part of the
year to a level about 6 per cent above the December 1953 low.
Textile output rose considerably in the autumn, following a period
of sustained inventory liquidation during which activity in apparel
and most other major textile-consuming industries continued at
relatively high levels. Output of paper and chemicals was at
advanced levels during most of the year.



FEDERAL RESERVE SYSTEM

13

In late 1954, minerals production was also showing substantial
improvement, reflecting recovery in output of petroleum following
a period of curtailment to reduce stocks, and moderate gains in
other mining industries. Output of electric and gas utilities continued to advance throughout the year.
Agriculture. Agricultural developments during 1954 continued
to be influenced by large carryovers of commodities from previous
harvests and by a further marked increase in supplies of livestock
and livestock products, especially after midyear. Federal acreage
restrictions and drought in some areas reduced crops in which carryovers were largest—wheat, cotton, and corn. There were partly
offsetting increases in other crops. Total farm production, including
livestock as well as crop marketings, was about the same as in 1953.
Domestic demand for farm products generally remained strong
throughout the year, while exports expanded towards the end of
the year. Farm incomes declined somewhat further during 1954.
Farmers' liquid asset holdings were well maintained, however, and
their debts rose little. Farm real estate values firmed during the
year and in November were 2 per cent higher than a year earlier
and one-fifth above the 1950 level.
Labor market. Further growth in the population of working age
brought the civilian labor force to 64.5 million persons in 1954,
about 650,000 above the previous year. Employment declined 1
million, or almost 2 per cent. Unemployment increased from an
average of 1.6 million in 1953 to an average of 3.2 million.
Declines in nonfarm employment, which had begun after mid1953, tapered off after the first quarter of 1954. The low point
in seasonally adjusted nonfarm employment was reached in July
and August, after which employment began to rise. By the end
of the year employment at 48.4 million was 400,000 above the low
but still about 1.5 million below the 1953 peak.
Much of the change in employment after mid-1953 was concentrated in manufacturing industries, especially in metals and metal
fabricating lines. Employment also was reduced in mining and
in transportation. Changes in employment in most other nonmanufacturing activities were small. Average employment on
farms was almost the same in 1954 as in 1953.
In December 1954, unemployment was 2.8 million, or 4.5 per
cent of the civilian labor force—about one-half million above a year



14

ANNUAL REPORT OF BOARD OF GOVERNORS

SELECTED BUSINESS INDEXES
Per cent, 1947-49 • 100

170

-

150

-

130

- 110

90
150

A'
j

FARM PRODUCTS K ^

V\

^ ^
90

1950

1952

1954

1950

195?

1954

NOTE>—Monthly series, seasonally adjusted except for prices. Indexes for retail sales
and disposable personal income based on Department of Commerce data. Indexes for
prices and employment based on Bureau of Labor Statistics data. Index for construction
activity based on Commerce and Labor data representing work put in place.

earlier., Unemployment (after adjustment for seasonal influences)
reached its high point in the early part of 1954, leveled off during
the summer months, and declined moderately after early fall.
Prices. Consumer and wholesale prices were relatively stable
in 1954 as in 1953, although changes for a number of commodities
were substantial. During the contraction in industrial activity from
mid-1953 to early 1954, average prices changed little as final demands



FEDERAL RESERVE SYSTEM

15

for goods—except for defense and business inventories—were generally well maintained, industrial activity and demands abroad
were rising, and a considerable readjustment in prices from the
high post-Korean levels of early 1951 had already taken place.
Supplies of foods expanded further in 1954 and prices of farm
products and foods declined further. Reductions in prices were
most marked for livestock products, reflecting considerable expansion
in supplies in the latter part of the year, while prices of wheat and
corn showed mainly seasonal changes. Following sharp increases
in late 1953 and early 1954, prices of coffee and cocoa fell off substantially after midyear as buying moderated and the supply outlook improved.
The over-all increase in average prices of industrial materials and
products was small, amounting to about 1 per cent from the firstquarter low to the end of the year. Wholesale prices of finished
products for the most part were stable, as during the earlier contraction in output. Average prices of industrial materials advanced
in 1954, particularly in the latter part of the year.
Prices of scrap metals and of lead and zinc rose toward the end
of the first quarter, in part reflecting expansion in foreign demands
for metals and revision in Federal stockpiling policies. During
the recovery in industrial output later in the year, prices of basic
metals rose further and prices of cotton and synthetic textiles, and
some other industrial materials, also advanced. Rubber prices rose
fairly steadily through the year, recovering all of the substantial
decline which had occurred in 1953.
Average consumer prices fluctuated within a narrow range and
in December were only slightly lower than a year earlier. Food
prices declined somewhat after midyear, reflecting largely increased
supplies of livestock products. Prices of many other commodities,
such as television, appliances, and textile housefurnishings, also
declined. Discounts and other concessions from list prices, which
are not fully reflected in the price indexes, were more prevalent
than in 1953. Rents and charges for public transportation and a
variety of personal services advanced more slowly than in other
postwar years.
Income and saving. Further growth in spendable incomes helped
to limit the decline in activity and to set the stage for recovery.
Mainly because of the reduction in Federal individual income tax



16

ANNUAL REPORT OF BOARD OF GOVERNORS

rates effective at the beginning of the year, disposable personal income was at a record rate, more than 3 billion dollars larger than
in 1953.
Personal income in 1954 amounted to 286 billion dollars, equalling
the record 1953 volume. After declining somewhat in late 1953
and early 1954, total personal income changed little during the
spring and summer, and then expanded appreciably late in the year.
The November and December figures exceeded the previous record
high of July 1953. Wage and salary payments, particularly in
durable goods manufacturing industries, advanced considerably
in the autumn and accounted for most of the rise in total income.
Wage rates generally continued to rise, although at a less rapid
rate than in earlier postwar years. Average weekly earnings in
manufacturing industries advanced moderately and were at a
record level at the end of the year. Unemployment compensation
payments continued to rise rapidly to the spring of 1954, but declined somewhat after midyear. Payments under the old-age and
survivors insurance program expanded throughout the year.
Income of nonfarm proprietors rose slowly during most of the
year and in December, when retail trade advanced sharply, exceeded
the high level of early 1953. Dividend and interest income expanded further in 1954, with a marked rise in December reflecting
large special dividends. Income of farm proprietors declined somewhat further in 1954.
Personal saving was in somewhat smaller dollar amount in 1954
than in 1953, but was larger than in any other peacetime year. For
the year 1954 as a whole, the ratio of personal saving to disposable
personal income was close to the relatively high rate prevailing in the
preceding three years. During the course of the year, however,
the ratio declined appreciably, as consumption expenditures increased more rapidly than disposable income.
Corporate profits before tax, which had declined substantially
in the latter part of 1953, leveled off during most of 1954 and increased in the closing months of the year. Before-tax profits for
the year 1954 were at the lowest level since 1949. Tax liabilities
on corporate profits, however, also declined markedly, in part reflecting repeal of the excess profits tax, and after-tax profits were
only moderately smaller than in the preceding year.



FEDERAL RESERVE SYSTEM

17

Debt and equity financing. Funds for debt and equity financing
were available to borrowers on favorable terms in 1954 and found
a large market. With reserve positions easy, commercial banks
aggressively sought loans and investments. Financing institutions
other than banks were active lenders of the continuing large supply
of individual savings.
The nature of credit demand changed considerably from the
preceding year, however, with demand for long-term credit heavier
and that for short-term credit lighter. Growth in outstanding real
estate mortgage credit was about one-fifth larger in 1954 than in
1953, and State and local governments also increased their borrowing.
The Federal Government, although sharply reducing its net cash
borrowing, offered a larger amount of intermediate-term securities,
especially for refunding purposes. Increases in outstanding corporate stocks and bonds, excluding those of investment and consumer
finance companies, were larger than in the preceding year. Outstanding short-term bank loans to commerce and industry declined
appreciably more in 1954 than in 1953. Short- and intermediateterm debt of consumers, which had increased very rapidly in earlier
years, changed little.
A major part of the increase in total credit and capital in 1954
was in real estate mortgages. Demand for new homes and commercial facilities was large and, with an ample supply of funds
available on very favorable terms, mortgage loans were in record
volume. Commercial banks increased their holdings of mortgages
1.8 billion dollars or about 10 per cent, considerably more than in
the preceding year. Expansion was even greater at savings institutions; savings and loan associations alone increased their holdings
4.2 billion dollars or about 20 per cent.
The outstanding volume of consumer financing, an important
form of short-term credit demand, increased 0.6 billion dollars over
the year as compared to 3.7 billion in 1953. Extensions of instalment
credit (adjusted for seasonal variation), which had declined from
March 1953 through January 1954 and then leveled off, rose during
the last half of the year as a greater proportion of sales of autos
and other consumer durable goods was financed with instalment
credit. At the year-end, the sharp increase in sales of new-model
autos was accompanied by a marked rise in instalment loan extensions. Repayments continued at a high level all year and limited



18

ANNUAL REPORT OF BOARD OF GOVERNORS

GROWTH IN M A J O R T Y P E S OF D E B T AND EQUITY FINANCING

[Net increase in amounts outstanding, in billions of dollars]
Distribution of growth by—

1954*

1953

1952

1951

Major types:
Federal cash borrowing
State and local government issues (net)...
Real estate mortgages
Corporate bond and stock issues (net)1. .. .

0.9
5.2
12.0
6.1

4.6
4.6
9.8
5.4

3.4
3.1
9.0

-1.2
2.2
9.4

7.1

5.7

-0.7

-0.1

1.5

3.8

0.6
2.5

3.7
1.3

4.4
1.6

0.7
0.8

1.2
4.0

0.9
8.9

3.0
5.8

1.8
3.S
4.5

1.7
3.0
4.4

0.8
2.0
3.4

2

Bank loans to business
Consumer credit by banks and other
lenders
Bank loans not included above
Selected holders:
Federal Reserve Banks
Commercial banks
Nonbank holders—
Mutual savings banks
Savings and loan associations
Life insurance companies

-0
10,
2.0
4.3
4.6

^Preliminary.
Excludes funds obtained by consumer finance companies and investment companies.
2
Excludes funds obtained by consumer finance companies.
NOTE.—Includes only selected types of loan extensions and of new equity financing.
Among types not included are trade credit other than consumer credit; interbank
loans; security issues by foreign agencies, international organizations, nonprofit
and eleemosynary institutions; nonbank loans for purchasing securities; and claims
such as shares, pass books, and policies issued by financing organizations.
The sum of the figures for major types of debt and equity financing does not equal
the sum of the amounts shown for holders, since not all types of credit and holders are
included. Holders exclude Federal, State, and local governments, individuals,
corporations, foreign investors, nonlife insurance companies, and other investor
groups not shown separately. U. S. Government security holdings of excluded
groups are shown in the table on p. 24.
Owing; to differences in coverage, most of which are indicated above, the figures
for bank credit in this table differ from those used elsewhere in this Report.
1

the growth in outstanding instalment credit. The proportion of
consumer credit extended by commercial banks remained about
the same as in the preceding year.
Business demand for bank credit was light in 1954. Reduction
in inventories provided funds for repayment of bank loans in
many businesses, particularly in metal goods lines. Some corporations chose to increase their working capital by security flotations
and did not borrow from banks. Funds from operations were
well maintained, the small decline in retained earnings having
been largely offset by increases in depreciation allowances.




FEDERAL RESERVE SYSTEM

19

The net increase in outstanding corporate bonds and equities,
excluding investment and consumer finance companies, was substantially larger in 1954 than in 1953. New offerings exceeded retirements by about 6.1 billion dollars as compared to 5.4 billion
in 1953. New issues of consumer finance companies were down
substantially, and those of investment companies were off slightly.
State and local governments added 5.2 billion dollars to their
outstanding debt in 1954 as compared to 4.6 billion in 1953. Flotations of revenue issues continued to grow in importance. Highway
construction was the most important use of borrowed funds, but
amounts for educational and miscellaneous purposes also grew substantially. Financing institutions, especially commercial banks, insurance companies, and mutual savings banks, increased their holdings of State and local securities, supplying a larger proportion
of the new funds than in other recent years. The proportion supplied by individual investors declined.
The Federal Government virtually balanced its cash budget in
the calendar year 1954 with cash outgo of 68.9 billion dollars and
receipts of 68.6 billion. The small deficit of 0.3 billion dollars contrasts with a 6.1 billion deficit in the preceding year. Net cash
borrowing totaled 0.9 billion dollars and the Treasury's cash balance
increased slightly.
The smaller deficit in 1954 reflected declines from 1953 of 7.7
billion dollars in cash outgo and only 1.9 billion in cash income.
The sharp reductions in national security spending from the mid1953 peak continued in 1954. They were partly offset by increased
outlays for unemployment compensation, social security programs,
veterans' benefits, and farm price support programs. The decline
in cash income reflected primarily reduced receipts from individual
income and excise taxes, as a result of lower rates, which were
partly offset by increases in corporate tax collections on the nearrecord 1953 profits and in employment tax receipts resulting from
higher old-age insurance tax rates.
Federal receipts continued to follow a sharp seasonal pattern,
with heavy concentration in the first half of the year of both individual and corporate income tax payments. The result was a cash
surplus of 7.9 billion dollars in the first half, which allowed net
cash repayment of debt of 5.7 billion, and a deficit of 8.2 billion in
the last half, which necessitated net cash borrowing of 6.6 billion.



20

ANNUAL REPORT OF BOARD OF GOVERNORS

During 1954 the Treasury refunded a record total of more than
50 billion dollars of maturing securities—nearly 15 billion more than
in 1953. This included the two largest individual refundings on
record in February and December. By providing advance exchange
offerings on some maturities the number of refundings was reduced
to one in each quarter. Net cash offerings totaled 12.6 billion dollars,
slightly less than in 1953. They provided funds for redemption of
maturing tax-anticipation issues, net redemptions of nonmarketable
savings bonds and notes, and attrition on refundings, in addition to
0.9 billion dollars for the cash deficit and the increase in the
cash balance combined. Net redemptions of savings bonds totaled
less than 0.2 billion dollars, but redemption of savings notes, no
longer on sale, reached nearly 1.5 billion.
Lengthening of Federal debt maturities continued during 1954,
but because of the reduced level of business activity, new securities
offered both in refundings and for cash were restricted to intermediate or shorter maturities that would not impinge on the flow of
funds into long-term private investment. Altogether five new Treasury offerings with maturities ranging from three to nine years were
issued. From December 1953 to December 1954 the average length
of the total marketable Federal debt computed to the first call date
was extended from three years and nine months to four years and
three months; the proportion of the marketable debt maturing
within one year was reduced from 47 to 40 per cent.
Interest rates. Interest rates declined sharply in the early part
of 1954, continuing the downward trend that began in mid-1953.
The decline reflected the large volume of funds available as well
as some diminution of credit demand, particularly for short-term
funds. The supply of funds reflected easy bank reserve positions
and also a flow of savings into life insurance, savings and loan
shares, and other institutional channels in unprecedented volume
for the postwar period.
During the closing months of the year, most rates moved somewhat higher. Demand for both long-term and short-term credit
strengthened and the increase in savings became somewhat slower.
The Treasury, which had retired debt in the first half of the
year, again borrowed extensively. In late November bank reserve
positions became less easy.




21

FEDERAL RESERVE SYSTEM

MONEY RATES
Per cent per annum
CORPORATE Aaa

HIGH-GRADE
MUNICIPAL

COMMERCIAL PAPER

y

DISCOUNT RATE

r'
F
— _ — — — _/..

-

3

-

2

r

. / p7

i i

L

r

TREASURY BILLS

I
1950

1

!
1951

1952

-

1

\ f

1
1953

1954

NOTE.—Treasury bill rates are market rates on longest bills. Before April 1, 1952, yields
on long-term U. S. Governments include 2/4 per cent bonds first callable after 15 years;
thereafter they include 2K per cent bonds first callable after 12 years. Corporate Aaa
rates are from Moody's Investors Service; high-grade municipals, from Standard and Poor's
Corporation. Discount rate is for Federal Reserve Bank of New York.

The Treasury bill rate showed the sharpest decline during the
first half of the year and the sharpest rise during the last half. At
its June low, 0.61 per cent, the rate was only about one-fourth of the
mid-1953 high and the lowest since mid-1947, when the Federal
Reserve Banks discontinued buying bills at a posted rate of % of 1
per cent. The sharp advance during midsummer reflected in part
a technical market reaction from the previous sharp drop and in
part some tightening in the money centers as a result of a temporary maldistribution of bank reserves. Thereafter, the bill yield



22

ANNUAL REPORT OF BOARD OF GOVERNORS

remained around 1.00 per cent until late November and December.
During the last half of December, the rate averaged about the
same as in early January, but almost l/2 per cent below the yield
a year earlier.
Yields on corporate and United States Government bonds declined steadily during the first quarter to a level of 2.85 per cent
for high-grade corporate issues and just under 2.50 per cent
for Government bonds. Increases were slight during the latter
part of the year for high-grade corporate bonds but somewhat
greater for Government bonds. High-grade municipal yields also
declined steadily during the first quarter, then rose in the second
quarter as new offerings reached an unprecedented volume and
inventories of unsold issues accumulated at investment banking
houses,, Municipal yields declined again during the summer,
but at their low in August were still substantially above early
1952 levels. During the remainder of the year, yields on municipal
securities generally moved upward, reflecting the continuing large
supply of new offerings.
BANK CREDIT AND MONEY

Total loans and investments of commercial banks increased more
in 1954 than in any other postwar year. Most of the expansion was in
government securities—Federal, State, and local—and real estate
mortgages. Deposits expanded sharply in the second half of the
year. Bank reserve positions remained generally easy until late
in the year.
Bank loans and investments. The rise in total bank credit outstanding was close to 11 billion dollars in 1954, and exceeded 7 per
cent. More than half the increase was in holdings of United States
Government securities—as shown in the accompanying table. The
remainder was distributed among holdings of State and local
government securities, real estate mortgages, and agricultural, security, and other loans.
Available reserve funds continued to be in excess of requirements
to support private needs for credit, and banks increased their United
States Government security portfolios 6 billion dollars or about 10
per cent. The largest percentage increases occurred in New York
City banks, where outstanding loans declined, and the smallest at




23

FEDERAL RESERVE SYSTEM
LOANS AND INVESTMENTS OF COMMERCIAL BANKS

[In billions of dollars]

Type of loan or investment

Outstanding,
Dec. 31,
1954 1

Increase, or decrease (—)
1954

1953

1952

+ 4.1
+ 0.1
+ 0.5

+ 9.0

Loans and investments, total

156.2

+ 10.7

U. S. Government securities.
Other securities

69.4
16.3

+ 6.0
+ 1.6

Loans, total

70.6

+ 3.2

26.8
18.4
5.3
4.5
10.7
5.9

-

Business
Real estate
Agricultural
Security
Consumer
Other

+
+
+
+

0.4

1.7
0.3
0.9
0.2
0.8

+ 3.4

+
+
+
+

0.7
1.0
0.4
1.5
0.2

+ 1.8
+ 0.8
+ 6.4
+
+
+
+
+
+

2.0
1.1
0.5
0.6
1.9
0.3

1

Data for Dec. 31, 1954 are preliminary.
NOTE.—Data exclude interbank loans. Total loans are after, and types of loans
before, deductions for valuation reserves. Consumer and "other" loans are partly
estimated for all dates. Details may not add to totals because of rounding.

banks outside leading cities, where loan demands were well sustained
during most of the year.
Banks began to acquire additional United States Government
securities in April and continued such acquisitions through October.
Holdings declined about 3 billion dollars during the first quarter,
in part reflecting the retirement of tax-anticipation certificates by
the Treasury. Acquisitions were particularly heavy in May, August,
and October when the Treasury sold new securities for cash. As
private credit demand strengthened in November and December,
banks reduced their holdings somewhat.
The United States Government securities acquired by banks over
the year, directly or indirectly, came largely from nonfinancial
corporations, life insurance companies, mutual savings banks, and
individuals. Net cash borrowing by the Treasury amounted to
less than 1 billion dollars and holdings of the Federal Reserve
Banks decreased by about the same amount. Thus commercial
bank purchases of Government securities indirectly provided part
of the large supply of funds made available to private borrowers
by other lending institutions in 1954, and thereby contributed to



24

ANNUAL REPORT OF BOARD OF GOVERNORS
OWNERSHIP OF THE UNITED STATES GOVERNMENT D E B T

[In billions of dollars, par value, partly estimated]
Net change
Item

Total debt outstanding
Debt held by:
Federal agencies and trust funds
Federal Reserve Banks
Commercial banks
Other investors, total
Insurance companies
Mutual savings banks
Other corporations
State and local govts
Miscellaneous investors
Individuals, total
Savings bonds
Other

End of
1954
1954

1953

1952

278.8

+3.6

+7.8

+7.9

49.6
24.9
69.2

+ 1.3
-1.0
+5.5

135.1

-2.2

+2.4
+ 1.2
+0.3
+3.9

+3.6
+0.9
+1.8
+ 1.6

15.0
8.8
19.3
14.6
13.7
63.7

-0.8
-0.4
-2.2

-0.3
-0.3

+ 1.7
+0.8
-1.3

-0.4
-0.3
-0.3

49.7
14.0

+0.4
-1.6

+ 1.1
+ 1.8
+ 1.2
+0.4
+0.2
+0.1

+ 1.5
+ 1. 1
P)
+0.1
P)

1

Less than 50 million dollars.
NOTE.—Includes matured and noninterest-bearing debt, guaranteed securities,
special issues to Government accounts, and also increases in debt reflecting the
crediting of interest on savings bonds. Changes in total debt differ from net cash
borrowing, quoted in the text, which amounted to 0.9 billion dollars in 1954, 4.6
billion in 1953, and 3.4 billion in 1952. Details may not add to totals because
of rounding.
Differences in figures for commercial banks compared to those in table on p. 23
result largely from the use here of par value data. Changes for Federal Reserve
differ from those in the table on p. 29 because changes here are based on end-ofyear figures.

the expansion in investment activity that figured so prominently in
economic recovery.
The maturity distribution of bank portfolios of United States
Government securities lengthened substantially in 1954, reflecting
in large part intermediate-term Treasury offerings during the year.
Holdings of certificates declined about 5 billion dollars, reflecting
net retirements of issues held outside the Federal Reserve System.
In major refundings during February, August, and December, banks
exchanged about 16 billion dollars of maturing issues for bonds
with six-to-nine year maturities. Bank holdings of Treasury notes,
particularly in three-to-five year maturities, were also increased
substantially over the year through refundings and cash purchases.




FEDERAL RESERVE SYSTEM

25

Holdings of Treasury bills rose only slightly, but there was some
shifting among classes of banks; central reserve city banks reduced their bill portfolios while reserve city and country banks
increased theirs.
Commercial banks also supplied a substantial volume of investment funds through purchases of State and local government securities. The increase in their holdings exceeded 1.5 billion dollars—
about three times the increase during 1953—and accounted for about
one-third of the net increase in the outstanding volume of such
securities over the year.
Total loans at commercial banks rose more than 3 billion dollars in
1954, about the same as in 1953. A sharp expansion in the final
quarter more than offset an earlier cumulative decline. Active
demand for most types of bank loans was evident late in the year.
Business loans rose substantially in late 1954 whereas in the same
period of 1953 they had declined. Nevertheless the increase did
not offset earlier reductions and these loans declined slightly over
the year. The strength of business loan demand late in the year
varied with the type of borrower. New borrowing by some industries with rising seasonal requirements during this period,
such as commodity dealers, was larger in 1954 than in 1953.
Construction loans also rose, although usually they decline during
the fall and winter. The prolonged liquidation of outstanding
loans by metals manufacturers tapered oflf and that by sales finance
companies was reversed. Although outstanding public utility loans
declined more in late 1954 than in late 1953, the reduction probably
represented a substitution of long-term borrowing for bank loans
and not a decline in total demand for funds from this industry.
Real estate loans of commercial banks increased 1.7 billion dollars
in 1954. They rose rapidly in the last half of the year, at more
than twice the rate earlier in the year and throughout 1953. Consumer loans declined slightly over the year, with reductions in the
first and third quarters partly offset by advances in the spring and
late in the year. Loans for carrying Government and other securities increased almost a billion dollars, more than twice as much as
in 1953. Agricultural loans increased much less than in 1953.
Less credit was extended for the price support activities of the
Commodity Credit Corporation. Short-term agricultural production loans changed little after declining in 1953.




26

ANNUAL REPORT OF BOARD OF GOVERNORS

Deposits and currency. Monetary expansion was substantially
greater in 1954 than in 1953. Demand deposits and currency held by
businesses and individuals increased about 4 billion dollars compared to 1.5 billion in 1953 and a decline of 0.5 billion in the 1949
recession year. Expansion in 1954 was concentrated in the last
half of the year, as shown by the chart. It reflected a marked increase
in demand deposits offset in part by a decline in currency outside
banks.
DEPOSITS AND CURRENCY
Billions of dollars

1953
1953
1954
1952
1954
1952
NOTE.—Figures are partly estimated. Demand and time deposits are for all banks in the
United States and are adjusted to exclude U. S. Government and interbank deposits. Demand
deposits are also adjusted to exclude items in process of collection. Time deposits include
deposits in the Postal Savings System and in mutual savings banks. Figures are for last
Wednesday of month except for Tune and December call dates. Figures for last half of
1954 are preliminary.

Demand deposits adjusted declined slightly more than the usual
seasonal amount early in the year and then rose slightly more than
seasonally in the second quarter. A 9 billion dollar increase in
the last half of the year exceeded seasonal expansion by about 3
billion dollars. The annual rate of growth in this period was about
6 per cent compared to 4 per cent for the year and 1 per cent for 1953.
The post-holiday return of currency to the banks early in 1954
exceeded the usual seasonal inflow, and followed a smaller than usual




FEDERAL RESERVE SYSTEM

27

outflow late in 1953. This downward trend of currency outside
banks, after allowance for seasonal movements, continued until the
closing months of the year when it apparently was reversed as
economic activity and consumer spending increased.
Time deposits of businesses and individuals continued their rapid
growth of recent years, increasing almost 5 billion dollars or somewhat more than in 1953. Expansion was generally substantially
ahead of that in 1953 until autumn, but in the last quarter it tended
to slow down.
Turnover of demand deposits was generally slightly faster
in 1954 than in the previous year, rising from 18.9 times to 19.2
times for banks outside financial centers. Turnover in New York
City was up substantially, reflecting in large part increased activity
in the securities markets.
Bank reserve positions. For the year as a whole, the reserves
needed by member banks to back the deposit expansion amounted
to about 900 million dollars, which was more than covered by the
1.6 billion dollar reduction in reserve requirements during the summer. Thus total required reserves were reduced about 700 million
dollars. A decrease in currency supplied reserves approximately
sufficient to cover the drain resulting from a decrease in the country's
gold stock. Reflecting the net reduction in required reserves, Reserve Bank holdings of Government securities declined 700 million dollars and banks were able to meet credit and monetary demands from both private and Government borrowers without increasing their debt to the Reserve Banks. In December free reserves
—that is, excess reserves less discounts and advances to member
banks—though smaller than in summer and fall months, were somewhat larger than a year earlier.
Bank reserve positions eased through April 1954, as shown in
the table on page 29. A large seasonal currency inflow, together
with a seasonal decline in deposits and required reserves, released
substantially more reserve funds than were absorbed, largely by
Federal Reserve sales and redemptions of Treasury bills and some
reduction in float. Member banks reduced their borrowing from
Reserve Banks 300 million dollars and increased their excess reserves
100 million. Free reserves rose to an average of more than 600
million dollars in April.




28

ANNUAL REPORT OF BOARD OF GOVERNORS

MEMBER BANK RESERVES AND RELATED ITEMS
Billions of dollars, monthly averages of daily figures

22

BORROWINGS;

1952




1953

1954

-

20

-

18

29

FEDERAL RESERVE SYSTEM

The reserve position continued to ease through August. Reserves
were made available through open market purchases by the Federal
Reserve in May and early June, and through a reduction in reserve
requirements on demand and time deposits during the period June
16-August 1. In order to prevent excess reserves from becoming
unduly large temporarily in July and August, the Federal Reserve
sold in the open market or redeemed Treasury bills. Thereafter
it supplied reserves through open market purchases in order to
meet fall needs for growth in required reserves and currency as
well as to facilitate business recovery. Free reserves reached about
700 million dollars in June and fluctuated around that level until
late in the year. Member bank borrowing remained small until
late in the year.
CHANGES IN MEMBER BANK RESERVES WITH RELATED FACTORS
[Based on monthly averages of daily figures; in billions of dollars]

Item

Dec.
1953Dec.
1954

Dec.
1953Apr.
1954

Apr.Aug.
1954

-

-

-

Aug.Dec.
1954

Member bank reserves
Total reserves
Excess reserves
.
Required reserves
Effect of:
Reduction in reserve requirement
percentages
Change in deposits

Federal Reserve loans and investments:
U. S. Govt. securities, total
Bought outright
Held under repurchase agreements.,
Discounts and advances:
To member banks
To others
1

0.5

0.8

C)

-f 0.1
- 0.6

+ 0.1
- 1.0

- 0.1
+ 0.9

- 1.6
+ 0.9

- 0.6

- 1.6
+ 0.6

0.9

(Signs indicate effect on reserves)
+ 0.2
+ 0.2

+ 1.2

- 0.3
P)

-

o

P)

-

-

-

0.7

-

1.0

-

0.3
0.4

-

0.6
0.4

-

0.2

+ 0.2

-

0.1
0.3
0.1

0.1

P)

0.2

P)
P)

0.6

-

0.9

+ 0.2
- 0.1
-f 0.3
+ 0.1
0.9

- 0.7 + 1.0
+ 0.1
p)
- 0.3
+ o.i
P)
+ 0.1 + o.i
P)

Less than 50 million dollars.
NOTE.—Details may not add to totals because of rounding.




0.9

- 0.7

Principal factors affecting reserves
Currency in circulation
Treasury operations
Gold stock and foreign accounts
Federal Reserve float
Other factors

0.6

30

ANNUAL REPORT OF BOARD OF GOVERNORS

Bank reserve positions became somewhat less easy in late November and December. Reserve funds from System purchases of Treasury bills in the market and under repurchase agreements with dealers, and from the year-end expansion of float, fell somewhat short of
the amounts needed for a larger-than-usual growth in required
reserves and currency in circulation. Banks found it necessary to
reduce excess reserves somewhat and to increase their borrowing
from Reserve Banks. Free reserves declined to below 500 million
dollars on the average.
WORLD ECONOMIC AND FINANCIAL DEVELOPMENTS

The movement of recent years toward flexibility and freedom
in markets continued in 1954 without interruption. The financial
stability achieved in 1952 and 1953 was maintained in all leading
countries of Western Europe and in the great majority of other
countries. The volume of world trade expanded. Reduced demand
for primary materials in the United States was in large measure
counterbalanced by steadily rising demand in Europe, where industrial production reached record levels in every major nation.
Important new steps were taken toward convertibility of currencies, which is now recognized by governments throughout Western Europe and the sterling area as a major goal of policy along
with the maintenance of economic growth and stability in individual
countries. Steps toward convertibility taken in 1954 included significant relaxations of European restrictions upon expenditures of dollars. In Great Britain, exchange controls affecting the use of sterling
by residents of nonsterling countries outside the dollar area were
simplified and lightened. Similar action was taken in Germany.
New evidence of the current flexibility of central bank monetary
policies under changing conditions was given toward the end of the
year, when there was a moderate rise in rates of interest in London
and some other European centers. In the short-run view, the margin
of unutilized resources available in Europe to meet increasing demands appeared to have narrowed sharply. Nevertheless, scope
for further advance was promised by the growth of capital resources
and productivity in Europe and by the expanding trend of world
production of basic materials traded internationally.
One of the conditions necessary for steady advance in world production and trade is the avoidance of severe disturbances of the




££t>ERAL RESERVE SYSTEM

31

balance of international payments. Although payments to other
countries from the United States in commodity trade and under Government grant and loan programs were smaller in 1954 than in
1953, the decline in these payments produced no general disturbance.
In 1953 foreign countries, in the aggregate, had been adding very
rapidly to their holdings of gold and dollars. Adjustment to the
reduction in United States payments involved only a moderate slowing down in the rate of growth of gold and dollar reserves.
Inflationary developments in a few countries and declines in world
prices of some commodities were not widespread enough to have
serious repercussions in the world economy.
United States balance of payments. In the network of international payments, payments to and from the United States have
been of special importance in recent years both because of their size
and because the United States is still the only large industrial nation,
except Canada, whose currency is freely convertible for use anywhere in settlement of international transactions. The maintenance
U. S. BALANCE OF PAYMENTS
Billions of dollars

PAYMENTS FROM

_ \

V
EXPORTS OF GOODS
AND SERVICES

NET TRANSFERS OF
GOLD AND DOLLARS

T

ll_
TT

ll.lllal.lB
•IT
-1

1948

1950

1952

1954

NOTE.—Department of Commerce data for payments and exports; Federal Reserve data
for net transfers of gold and dollars. Payments shown include civilian and military
payments for goods and services, plus the net outflow of remittances, Government nonmilitary grants and loans, and private U. S. direct investment. Other capital movements
are not included. Exports exclude military transfers under aid programs.




32

ANNUAL REPORT OF BOARD OF GOVERNORS

of a large volume of payments from the United States has contributed to establishment of financial stability and stimulation of
economic growth in other countries. In turn, rising foreign demand
led to a rise in United States exports in 1954.
Total payments from the United States to other countries for
current transactions (including civilian and military purchases of
goods and services, and also gifts other than Government aid) totaled
about 16.5 billion dollars in 1954, as compared to 17 billion in 1953.
Merchandise imports, which had been at a peak in the second
quarter of 1953, fell until the first quarter of 1954 and then rose
somewhat; for the year they totaled 10.3 billion, or 6 per cent less
than in 1953. United States military purchases of goods and services
for the use of our own forces abroad also decreased. Under the
offshore procurement program, however, purchases of equipment
to be transferred to other countries increased. Total United States
military expenditures abroad were thus close to the 1953 amount of
2.5 billion dollars.
United States Government grants and loans to other countries,
other than aid given in the form of military supplies and services,
amounted in 1954 to less than 1.5 billion dollars (net after repayments), considerably below the 2.0 billion total in 1953.
The outflow of private American direct investment capital continued at close to the 1948-53 average rate of 700 million dollars.
As in most recent years with the exception of 1953, the outward
movement of private American portfolio and short-term capital exceeded the inward flow of foreign funds into long-term investments
other than United States Government securities.
Despite the declines in import payments and in Government
grants and loans, total payments from the United States to other
countries were still amply sufficient to support growth in world
trade. Foreign countries and international institutions, which in
1953 had added 2.2 billion dollars to their holdings of short-term
dollar balances, United States Government securities, and gold
purchased from the United States, added a further amount of 1.6
billion in 1954. Including gold from new production and from
other sources, total gold reserves and dollar holdings of foreign
countries (other than the U.S.S.R.) and of international institutions
increased by 2.2 billion dollars in 1954.




FEDERAL RESERVE

33

SYSTEM

The further additions to foreign monetary reserves were especially large among continental Western European nations, and provided direct support for the continued advance in European production and trade. In consequence of rising demand abroad and
the reduction of barriers to trade, foreign countries increased their
purchases of goods and services from the United States to about 17.5
billion dollars in 1954 from 17.0 billion in 1953.
Merchandise exports of the United States (excluding military-aid
transfers) totaled 12.8 billion dollars in 1954. In the fourth quarter,
with some allowance for seasonal variation, they were at an annual
rate of about 13.5 billion dollars, or about 10 per cent above the 1953
level. Exports to Canada, which had declined after the second
quarter of 1953, were still slightly below the average level of 1953.
On the other hand, exports to Western Europe in the second half of
1954 were more than 20 per cent above the 1953 average. There
were also significant increases in exports to most other areas.
EXTERNAL TRADE — WESTERN EUROPE A N D UNITED STATES
Billions of U. S. dollars, annual rates
25

/

25

EXPORTS

IMPORTS

"A

WESTERN EUROPE

20

~ 20

WESTERN EUROPE
15

UNITED STATES

*- 10

/

_

10

UNITED STATES

J
-

i
1950

I

!
1952

5

I
1954

1950

1952

1954

NOTE.—Western European trade shown is trade of members of the Organization for
European Economic Cooperation (OEEC) with all others, including dependencies—that
is, intra-OEEC trade is excluded. All data are on f.o.b. basis except OEEC imports, which
include transportation costs probably of the order of magnitude of 10-15 per cent. U. S.
exports and OEEC imports exclude military-aid shipments from U. S. Sources: Department
of Commerce and OEEC; fourth quarter 1954 OEEC trade partly estimated by Federal
Reserve.




34

ANNUAL REPORT OF BOARD OF GOVERNORS

World commodity prices. Outside Europe and the United States,
economic developments in 1954 were diverse but generally more
favorable than they would have been if the potential impact of reduced American demand upon prices of primary commodities had
not been offset, in considerable degree, by the rise in European demand during 1953 and 1954. This rise in foreign industrial demand
was most evident during 1954 in world markets for such commodities as metals, rubber, and lumber.
World prices of these and other industrial raw materials showed
an upward tendency, on the average, in 1954. Advances were very
large for rubber and copper. Prices of wool and hides declined,
however, reflecting lower world demand in the first case and
greatly increased United States supplies in the second. World
market prices for wheat and rice continued to decline in the first
half of the year. The prices of the beverage commodities—coffee,
cocoa, and tea—rose sharply in the first half of 1954; thereafter
the price of tea continued upward but the other two dropped back
in consequence of reduced buying and improvement in supply
prospects.
Countries outside Europe and the Western Hemisphere. While
world price developments had important influences on business
activity and on the balance of payments for particular countries,
the course of events in each country was greatly affected by the
nature of its own financial policies.
In most sterling-area countries the internal financial stability
earlier achieved was consolidated in 1954. Industrial production
continued to rise in South Africa and Australia, and in these countries, as also in New Zealand, commercial bank loans expanded
rapidly and import purchases rose through most of the year. The
export receipts of Australia and New Zealand were affected by the
fall in prices of wool and wheat, and in the second half of 1954 their
sterling reserves declined somewhat. South Africa's reserves rose
in consequence of expanded gold production and a large inflow
of capital.
Gradually accelerating progress was made in India's program
for agricultural and public utility development, and a further advance was recorded in industrial production. There was relatively
little change in India's gold and sterling reserves over the year.




FEDERAL RESERVE SYSTEM

35

Ceylon's exports of rubber and tea were in strong demand. Budgetary and credit policies put into effect the previous year served
to hold down imports, and the country's foreign exchange reserves
recovered rapidly. Burma, on the other hand, suffered a sharp
drop in reserves in consequence of rising imports and a fall in demand for its exports of rice. Pakistan continued to maintain severe
restrictions on imports of consumer goods, and its exports of raw
cotton declined as domestic utilization rose.
Sterling reserves of British dependencies continued to increase,
partly reflecting unspent earnings from exports to the Western
Hemisphere and to Europe.
During 1954 Japan employed a vigorous tightening of credit
to check a new inflation of prices that had started in 1953. Industrial production, which had been increasing very rapidly, receded
for several months but near the end of the year was advancing
again. In the latter part of the year imports were considerably
smaller than the year before, and the balance-of-payments deficit
was converted into a surplus with the help of a steady rise of exports, supplemented by continuing sales of military supplies and
services to the United States. After midyear there was a marked
recovery in Japan's reserves of both dollars and sterling.
In Thailand the decline in rice exports adversely affected the balance of payments and Government revenue. In Indonesia, financing
of the Government deficit produced an expansion of one-third in
the money supply, but imports were held in check by direct controls. The rise in rubber prices contributed to a gain in Indonesian
foreign exchange reserves during the latter half of the year, and
helped to check the decline in Thailand's reserves. The total value
of Philippine exports was well maintained in 1954, despite lower
prices for coconut oil and manila hemp.
Western Hemisphere. Some South American countries continued to experience difficulty with their balance of payments not
only in dollars but also in sterling and other currencies. In Brazil
these difficulties became especially acute after the break in the previously rising trend of coffee and cocoa prices. The underlying
problem in Brazil, however, as in Chile, Bolivia, and Paraguay, was
domestic inflation. Markets in these countries were imperfectly
linked to world markets through the numerous exchange rates applied to various transactions, and in some cases exports were de


36

ANNUAL REPORT OF BOARD OF GOVERNORS

pressed while mounting difficulties in maintaining effective import
and exchange controls were only temporarily relieved by extensions
of credit from abroad.
Argentina's grain exports, though large in volume, produced
smaller foreign exchange earnings than in 1953. Rapid expansion
of bank credit continued. Industrial activity, which in 1952 and
1953 had been below the 1947-49 average, increased after midyear,
and money incomes and prices, which for two years had been
relatively stable, moved up again.
Some of the countries in North and Central America and in northern South America whose currencies are either fully or substantially
convertible suffered slight recessions in business activity in the latter
part of 1953 and the early part of 1954; these included Canada,
Mexico, and Cuba.
Pressures on central bank foreign exchange reserves in Mexico,
and on free market exchange rates in Peru, when demand for foreign exchange tended for a time to outrun the supply, were checked
after credit controls were tightened and stand-by credits obtained
from the International Monetary Fund. The par value of the
Mexican peso was changed in April from 11.56 cents to 8 cents.
Colombia and Venezuela continued to experience rapid economic
development. Both exports and imports increased. In December
Colombia made a drawing on the International Monetary Fund
to supplement the reserves of its central bank, which had stopped
rising after the weakening of the coffee market; taxes on imports
were increased and importers were required to make larger downpayments when applying for foreign exchange.
In Canada, the largest single trading partner of the United States,
output of minerals expanded continuously in 1953 and 1954. Manufacturing production, when some allowance is made for seasonal
variation, appears to have been about 5 per cent lower during most
of 1954 than at its peak in 1953. While inflow of capital continued on a large scale, both imports and exports were smaller
than in 1953. The exchange rate for the Canadian dollar averaged
$1.02 in the first half-year and $1.03 in the second half. With a
shift in the credit policies of the Canadian authorities, yields on
long-term Government bonds declined sharply from 3.7 per cent in
1953 to 3.0 per cent in the latter half of 1954.




FEDERAL RESERVE SYSTEM

37

Canadian imports from the United States during 1954 averaged
13 per cent below the peak level of the second and third quarters
of 1953. The corresponding decline in Canadian exports to the
United States was only 6 per cent. The value of Canadian exports
to other countries was depressed, however, by lower volume and
prices of wheat exports.
Western Europe. The balance-of-payments position of Western
Europe remained extraordinarily strong in 1954. While in other
parts of the world imports of many countries were roughly in line
with their foreign exchange receipts—and the aggregate gold,
dollar, and sterling reserves of all countries outside Europe and
North America changed very little—Europe's foreign exchange
receipts continued to exceed imports by a considerable margin.
Under these circumstances, with production rising and domestic
prices comparatively stable, the various national authorities in most
Western European countries had considerable freedom to remove
direct controls, lower interest rates, and provide tax incentives for
investment, without fear of inflationary developments at home and
adverse repercussions on reserves. They were able to relax significantly their remaining direct controls over international transactions. Gold and dollar reserves continued to increase, although
at a slower rate than before, and external debts were reduced.
The volume of currency and deposit money in the hands of
the public continued to rise at a rate of about 4 per cent a year in
several of the principal countries, and at a rate of 12 per cent
in France and Germany.
Toward the end of the year, the pressure of rapidly rising demand upon European resources which were virtually fully employed was reflected in rising imports, price increases for some
commodities, and advances in money market rates.
The expansion in Western Europe was concentrated in capital
goods, consumer durable goods, and construction. Total industrial
production was 9 per cent higher in 1954 than in 1953, and rose at
almost this rate throughout the year. In the fourth quarter of 1954
industrial production in Western Europe was one-fourth greater
than at the end of 1950.
The rate of expansion varied from country to country. From
the fourth quarter of 1953 to the last quarter of 1954, industrial



38

ANNUAL REPORT OF BOARD OF GOVERNORS

GOLD RESERVES AND DOLLAR H O L D I N G S - B Y AREAS
Billions of dollars
12

4

-

2

^
S

-

6

-

2

-

DOLLAR AREA:

IN LATIN AMERICA)

OTHER
COUNTRIES

—

^^S

CANADA
0
11948

1950

1952

1954

I

1
1948

-

2

NON -DOLLAR
LATIN AMERICA
1
1

I
1950

1952

1954

NOTE.—End-of-quarter figures; gold reserves partly estimated. Dollar holdings include
principally deposits, short-term U. S. Government securities, and certain reported holdings
of long-term U. S. Government securities.

production rose 4 per cent in Great Britain and Italy, with most of
the advance in the first half of the year. Advances over the year
amounted to 10 per cent or more in France and Belgium, where
activity at the end of 1953 had not yet regained previous peaks.
There were sharp increases in Austria and Greece also. In Germany, a further rise of 13 per cent brought industrial output 45
per cent above its level four years earlier.
At the beginning of 1954, the labor market was already tight
in many European countries. Although wage rates rose somewhat
faster in 1954 than in 1953, much of their impact on production
costs was offset by higher productivity. Personal saving increased
further, as a result not only of growth in incomes but also of
growing confidence in the stability of money values.
Nevertheless, with rising levels of business activity and consumer
demand, wholesale prices tended to advance a little toward the end
of 1954.



FEDERAL RESERVE SYSTEM

39

Partly in consequence of reductions in subsidies and continuing
relaxation of food rationing and rent controls in some countries,
consumer prices rose moderately in 1954, especially in the first
half-year. The increases over the year as a whole were less than
4 per cent in most countries.
In response to higher incomes and more readily available consumer credit, the production and sale of automobiles and some
other consumer durable goods rose more than 20 per cent in several European countries. Residential construction reached a new
record, and at the end of the year was still advancing, although
at a reduced rate. Western European countries, in the aggregate,
completed about 13 per cent more dwellings in 1954 than in 1953;
completions numbered more than 6 per thousand inhabitants,
which may be compared to about 7.5 per thousand in the United
States. The United States rate was considerably exceeded in Germany and Norway, and equaled in Sweden. Further expansion
in residential construction in 1955 in France and Italy was assured
by government plans already in progress.
Industrial demand for new plant and equipment was also strong
in most European countries. In Great Britain industrial capital
expenditures apparently increased only moderately but plans for
future expenditures rose, as evidenced by sharply increased approvals
of new factory construction projects.
The cost of capital, as reflected in interest rates, fell further in
the first half of 1954, as a result of policies pursued by governments and central banks, and of larger business and personal savings. Stock prices on the important European exchanges rose 20
to 60 per cent during the year. Governments were able to obtain
larger borrowings from genuine savings and tended to reduce
their demands on the banking systems. In several important
countries government revenues rose more than expenditures.
In certain countries the available instruments of credit control
were improved and diversified during the course of the year. In
the Netherlands, for example, the establishment of minimum reserve requirements had the effect of restoring to the central bank
a degree of influence over credit developments which had been
lost when the steady growth of foreign assets made the banking
system highly liquid.




40

ANNUAL REPORT OF BOARD OF GOVERNORS

In the second half of the year interest rates rose moderately in
several countries. To help check a deterioration in the Danish balance of payments, the central bank raised the discount rate by 1 per
cent in June and other rates of interest subsequently rose. In a number of other countries toward the end of the year the authorities
permitted interest rates to rise in response to increased demands
for credit and circulating cash. The most important change of this
kind was the rise in short-term money rates in London beginning
in November.
Summary. In general, 1954 was a year of rising living standards
and active investment of capital throughout the world. In Europe
it was a year of high prosperity. Actions of governments and central
banks indicated that in most European countries and many elsewhere the authorities were well prepared to take appropriate actions
promptly, whether to guard against deflation or to prevent inflation. With continued progress in the removal of barriers to trade
and investment, which was made possible by a generally satisfactory
situation in international payments, the possibilities for a further
period of rising world supplies in balance with rising world demand appeared brighter than they had for many years.
LOAN GUARANTEES FOR DEFENSE PRODUCTION

Under the provisions of the Defense Production Act of 1950 as
amended and the implementing Executive Orders, certain designated
procurement agencies of the Government are authorized to guarantee
loans made by commercial banks and other private financing institutions to finance and expedite production for national defense,
also to finance contractors and subcontractors in connection with or
in contemplation of the termination of their defense contracts. The
guaranteeing agencies are the Departments of the Army, Navy, Air
Force, Commerce, Interior, and Agriculture, the General Services
Administration, and the Atomic Energy Commission.
The present program is a reactivation of the V-loan program
utilized so successfully during World War II. The Federal Reserve
Banks act as fiscal agents of the guaranteeing agencies in the making
of such contracts of guarantee.
During 1954 the guaranteeing agencies authorized the issuance
of 73 guarantee agreements amounting to 141 million dollars. Loans



41

FEDERAL RESERVE SYSTEM

outstanding on December 31, 1954 totaled 472 million dollars. On
the same date an additional 273 million dollars was available to
borrowers under guarantee agreements in force. During the year
1,562 million dollars was advanced on V loans, most of which are
revolving credits.
V LOANS AUTHORIZED, SEPT. 27, 1950-DEC. 31, 1954
[Percentage distribution, by size of loan and number of employees of borrower]1
Percentage of
loans authorized
Size of loan

Under $100,000
$100,000-$499,999
$500,000-$999,999
$l,000,000-$4,999,999
$5,000,000-$9,999,999
$10,000,000 and over

Cumulative percentage distribution

Number

Amount

Number

Amount

18.3
37.7
16.3
21.7
2.9
3.1

0.6
5.7
6.6
28.0
12.1
47.0

18.3
56.0
72.3
94.0
96.9
100.0

0.6
6.3
12.9
40.9
53.0
100.0

18.8
15.5
38.6

1.4
2.4
16.0
25.0
51.5
3.7

18.8
34.3
72.9
90.7
95.8
100.0

1.4
3.8
19.8
44.8
96.3
100.0

Number of employees 2
Under 50
50-99
100-499
500-2 499 .
2 500 and over
Not available

17.8
5.1
4.2

1

Distributions are of 1,367 loans authorized in an aggregate amount of 2,500
million dollars.
2
Includes employees of affiliated concerns under common ownership or control.

From the beginning of the program in September 1950 through
December 31, 1954, 1,367 loans totaling 2,500 million dollars were
authorized by the procurement agencies that may guarantee loans.
The accompanying table gives the percentage distribution of authorized loans classified by size of loan and number of employees
of borrower.
BANKING OPERATIONS AND STRUCTURE

Bank earnings and profits.1 Member bank net profits after
income taxes were 1,089 million dollars in 1954, an increase of 224
million from 1953. The rise resulted for the most part from increased profits on sales of securities. Because of larger net profits
1

Figures for 1954 are based on preliminary tabulations.




42

ANNUAL REPORT OF BOARD OF GOVERNORS

before income taxes, provisions for income taxes rose 112 million
dollars despite removal of the excess profits tax. The ratio of net
profits to average total capital accounts increased from 7.8 per cent
in 1953 to about 9.3 per cent in 1954.
Net current earnings before income taxes rose 15 million dollars
to 1,824 million, the smallest increase in several years. Average
rates of return on loans and United States Government securities
changed little but average holdings of both increased. Earnings on
loans rose to 2,700 million dollars, 68 million above the previous
year, with average holdings 2 per cent larger. Earnings on United
States Government securities were 1,063 million dollars, 52 million
more than in the year before, and average holdings increased 7 per
cent. An 8 per cent rise in average holdings of other securities also
contributed to higher net earnings. An increase of 222 million
dollars in total current earnings was largely offset by a rise in
expenses. The accompanying table shows selected earnings, expenses, and profits for all member banks in 1954 and 1953.
EARNINGS, EXPENSES, PROFITS, AND DIVIDENDS OF
ALL MEMBER BANKS, 1954 AND 1953
[In millions of dollars]
Item

1954 P

1953

4,812

4,590

1,063
2,700
1,049

1,011
2,632
947

Expenses

2,988

2,782

Net current earnings before income taxes
Net losses, charge-offs, and transfers to valuation reserves

1,824

+68

1,809
251

Profits before income taxes
Taxes on net income
Net profits

1,893
804
1,089

1,558
692
865

456

419

Earnings
On U. S. Govt. securities
On loans
All other

Cash dividends declared

^Preliminary; final figures will appear in the Federal Reserve Bulletin, probably
in the May issue.

The increased profits on sales of securities were sufficient to change
net profits, recoveries, losses, etc., from a loss of 251 million dollars in 1953 to a gain of 68 million in 1954; as a result, 60 per




FEDERAL RESERVE SYSTEM

43

cent of net current earnings was carried to net profits after taxes
as compared to 48 per cent in 1953. The year 1954 was the first
since the period 1942-46 in which the excess of profits and recoveries over losses and charge-offs contributed to the net profits of
member banks.
About 456 million dollars or 42 per cent of the 1954 profits was
distributed as dividends; this was a return on average total capital
accounts of 3.9 per cent compared to 3.8 in 1953. Profits retained to
strengthen capital accounts amounted to 633 million dollars compared to 446 million in 1953.
Bank earning assets.2 Earning assets of member banks at the
end of 1954 were 132 billion dollars, an increase of 9 billion for the
year. More than half of the increase was in holdings of United
States Government securities. Holdings of State and local government securities rose 1.5 billion dollars, which reflected the largest percentage increase for any type of earning asset. Loans declined
seasonally during the early part of the year, but showed a net increase of 2.5 billion dollars for the year.
About 1.4 billion dollars or more than half of the increase in total
loans was in real estate loans. Loans for purchasing or carrying
securities showed the next largest dollar increase, 860 million.
Agricultural loans rose 260 million dollars, largely reflecting an increase in holdings of certificates of interest of the Commodity Credit
Corporation. "Other loans to individuals," which are largely consumer loans, changed little during 1954, after having been an
important factor in loan growth for two years. Commercial and
industrial loans declined for the second consecutive year. According to sample data by industry groups, the over-all decline of 500
million dollars resulted from a decline of more than 1 billion dollars
in loans to metals and metal products manufacturers, offset in part
by increases in loans to commodity dealers and the construction
industry.
Capital accounts,2 Capital accounts of member banks at the end
of 1954 amounted to 12.3 billion dollars, an increase of nearly
1 billion for the year. Approximately 633 million dollars of this
amount came from retained earnings. Proceeds from sales of common stock accounted for most of the balance; other factors were
mergers and changes in Federal Reserve membership.
9

Figures for 1954 are partly estimated.




44

ANNUAL REPORT OF BOARD OF GOVERNORS

The ratio of average total capital accounts to average total assets
for all member banks was 7.2 per cent, slightly above the preceding
three years. The ratio of average total capital accounts to average
total assets less cash assets and United States Government securities
was 16.1 per cent in 1954 as compared to 15.8 per cent in the preceding year. This was the second year since 1944 in which this
ratio did not decline.
Number of banking offices. For the eleventh consecutive year
the number of banking offices in the United States increased. It
was 20,782 at the end of 1954 as compared to 20,406 a year before.
The number of branches rose by 519 to 6,416, while the number of
banks declined by 141 to 14,366. These figures exclude banking
facilities at military and other Government establishments, of which
there were 198 at the end of 1954, a decrease of one during the year.
The number of banks (head offices) continued the decline of the
past six years. Additions of head offices resulting from the opening
for business of 73 new banks were more than offset by the consolidation or absorption of 207 banks, 176 of which were converted into
branches. Table 18 on page 83 shows the increases and decreases
in the number of banks and branches by class of bank.
The increase of 519 in the number of branches and additional
banking offices exceeded the recent annual records of 377 in 1953
and 296 in 1952. There were increases in practically all States that
permit branch banking, with the largest number in Pennsylvania
(87) and the second largest in California (62). More than 60 per
cent of the increase in branches occurred in places outside of the
head-office cities, a slightly larger proportion than in 1953.
Federal Reserve membership. At the end of 1954, 6,660 banks
were members of the Federal Reserve System. The membership of
4,789 national banks and 1,871 State member banks reflected net
declines for the year of 67 and 16, respectively. Member banks
accounted for 48 per cent of the number and held 85 per cent of
the deposits of all commercial banks in the United States. State
member banks accounted for 21 per cent of the number of all State
commercial banks and held 65 per cent of the deposits of these
banks. These relationships have remained practically unchanged
since 1946.
The continued decline in the number of member banks was
largely the result of consolidations and absorptions. A great ma


FEDERAL RESERVE SYSTEM

45

jority of the 120 member banks eliminated through consolidations
and absorptions during the year continued to operate in their former
locations as member bank branches. The member banks that
merged or consolidated into nonmember banks were relatively small
as measured by deposit size. Other declines included 4 State members that withdrew from membership and 3 national banks that
converted into nonmember banks.
Eighteen national banks and six State member banks were newly
established during the year. Thirteen nonmember banks were admitted to membership in 1954; one of these was a national bank
located in Alaska, the first member bank outside of the continental
United States since 1921. Eight banks became members by conversion from nonmember to national banks; four State member
banks converted into national banks.
Par and nonpar banks.3 During 1954, 83 banks were added to
the Federal Reserve Par List and 208 were deleted. Of the additions,
15 were nonpar banks that chose to go on the Par List, 64 were
newly organized banks, 2 were former nonpar banks admitted to
Federal Reserve membership, and 2 had not previously handled
checking accounts. Of the deletions, only 2 withdrew from the
Par List; the remainder were absorbed by other par banks and, in
most cases, were converted into branches. The number of parremitting and nonpar offices at the end of 1954 is shown below:

Banks (head offices)
Branches
Banking facilities at military and
other Government establishments
Total

On
Par List
11,960
5,783

Not on
Par List
1,787
315

196

2

17,939

2,104

The par-remitting banks, representing 87 per cent of the banks
on which checks are drawn, held about 98 per cent of the deposits
of all commercial banks in the United States. All banks in 29
States and the District of Columbia were on the Federal Reserve
Par List at the end of the year, and in each of 5 other States the
3
This section refers only to banks on which checks are drawn and their branches and offices,
including "banking facilities" at military and other Government establishments. The Federal
Reserve Par List comprises all member banks, which are required under the law to remit
at par for checks forwarded to them by the Federal Reserve Banks for payment, and such
nonmember banks as have agreed to do so.




46

ANNUAL REPORT OF

fidAM

OF GOVERNORS

number of nonpar banks was less than 10. Practically all of the
banks not on the Par List were in 14 Midwestern and Southern
States, with the largest numbers in Minnesota and Georgia. Table 19
on page 84 shows the number of par and nonpar banking offices by
States and Federal Reserve districts.
Designation of reserve cities. Acting in accordance with the
rule adopted by the Board on December 19, 1947, under which the
classification of reserve cities is determined every three years, on
February 18, 1954 the Board of Governors of the Federal Reserve
System took action as follows with respect to the classification of
reserve cities, effective March 1, 1954.4
(1) The City of Washington, D. C, and every city except New York and
Chicago in which there is situated a Federal Reserve Bank or Branch of a
Federal Reserve Bank, were continued as reserve cities. (New York and
Chicago continued as central reserve cities under the Board's rule of December
19, 1947).
(2) On the basis of official reports of condition in the two-year period ended
on June 30, 1953, the following cities met the standard prescribed in paragraph
(2) of subsection (b) of the Board's rule, and, therefore, such cities also were
continued as reserve cities:
Columbus, Ohio; Des Moines, Iowa; Indianapolis, Indiana; Milwaukee,
Wisconsin; National City (National Stock Yards), Illinois; St. Paul, Minnesota; Tulsa, Oklahoma; Wichita, Kansas; and Forth Worth, Texas.
(3) On the basis of written requests from the member banks in such cities,
in accordance with paragraph (3) of subsection (b) of the Board's rule, the
following cities also were continued as reserve cities:
Toledo, Ohio; Cedar Rapids, Iowa; Sioux City, Iowa; Kansas City, Kansas;
Pueblo, Colorado; and Topeka, Kansas.
(4) The following cities did not fall within the scope of either paragraph
(2) or (3) of subsection (b) of the Board's rule, and, consequently, the designation of such cities as reserve cities was terminated:
Dubuque, Iowa; Lincoln, Nebraska; and St. Joseph, Missouri.
BANK SUPERVISION BY THE FEDERAL RESERVE SYSTEM
Examination of Federal Reserve Banks. The Board's Division
of Examinations examined each of the 12 Federal Reserve Banks
and their 24 branches during the year as required by law.
Examination of State member banks. State member banks are
subject to examinations made by direction of the Board of Governors
or of the Federal Reserve Banks by examiners selected or approved
*The rule regarding classification of central reserve and reserve cities appears in the
Board's Annual Report for 1947, pp. 86-87.




FEDERAL RESERVE SYSTEM

47

by the Board of Governors. The established policy is to conduct at
least one regular examination of each State member bank, including
its trust department, during each calendar year, by examiners for
the Reserve Bank of the district in which the bank is situated, with
additional examinations if considered desirable. In order to avoid
duplication and to minimize inconvenience to the banks examined,
wherever practicable joint examinations are made in cooperation
with the State banking authorities or alternate examinations are
made by agreement with State authorities. The 1954 program for
the examination of State member banks was practically completed.
Bank holding companies. During 1954 the Board authorized the
issuance of six voting permits for general purposes and five permits
for limited purposes to holding company affiliates of member banks.
To provide information with respect to such organizations,
regular annual reports were obtained from holding company affiliates to which voting permits have been granted. In accordance with
established practice, a number of holding company affiliates were
examined during the year by examiners for the Federal Reserve
Banks in whose districts the principal offices of the holding companies are located.
Section 301 of the Banking Act of 1935 provides that the term
"holding company affiliate" shall not include, except for the purposes of Section 23A of the Federal Reserve Act, any organization
which is determined by the Board not to be engaged, directly or
indirectly, as a business in holding the stock of, or managing or controlling, banks, banking associations, savings banks, or trust companies. During the year the Board made such determinations with
respect to two organizations.
Trust powers of national banks. During 1954, 37 national banks
were granted authority by the Board to exercise one or more trust
powers under the provisions of Section l l ( k ) of the Federal Reserve
Act. This number includes the grant of additional powers to 19
banks which previously had been granted certain trust powers.
Trust powers of 26 national banks were terminated, 24 by voluntary
liquidation, consolidation, or merger and 2 by voluntary surrender.
At the end of 1954, there were 1,759 national banks holding permits
to exercise trust powers.
Acceptance powers of member banks. During the year the
Board approved the application of a member bank, pursuant to



48

ANNUAL REPORT OF BOARD OF GOVERNORS

the provisions of Section 13 of the Federal Reserve Act, for permission to accept drafts or bills of exchange drawn for the purpose
of furnishing dollar exchange as required by the usages of trade in
such countries, dependencies, or insular possessions of the United
States as may have been designated by the Board of Governors.
Foreign branches and banking corporations. Under the provisions of Section 25 of the Federal Reserve Act, the Board approved
during 1954 three applications made by member banks for permission to establish branches in foreign countries. One member bank
opened a branch in England and another opened a branch in Cuba
in 1954, the latter having been authorized by the Board in 1953. One
branch in Germany was closed during the year.
At the end of 1954, seven member banks had in active operation
a total of 106 branches in 23 foreign countries and possessions of the
United States. Of the 106 branches, four national banks were operating 99 and three State member banks were operating 7. The
foreign branches in active operation were distributed geographically
as follows:
Latin America
Argentina
Brazil
Chile
Colombia
Cuba
Mexico
Panama
Peru
Uruguay
Venezuela
Continental Europe
Belgium
France
Germany

55
10
10
2
4
20
2
4
1
1
1
6
1
3
2

England

11

Far East

20
1
2
10
5
*
1

Hong Kong
India
JaPan
Philippines
^mgfore
Thailand
Vn ed

*
,St«tes
Canal Zone
Guam
Puerto Rico
Total

4
1
9
106

There was no change in 1954 in the list of corporations organized
under State laws which operate under agreements with the Board
pursuant to Section 25 of the Federal Reserve Act relating to investment by member banks in the stock of corporations engaged principally in international or foreign banking. Of the four corporations
in operation, one has no subsidiaries or foreign branches; one operates a branch in England (also an agency at the New York Inter-




FEDERAL RESERVE SYSTEM

49

national Airport); one operates a branch in France; and one has
an English fiduciary affiliate.
At the end of 1954 there were in operation two banking corporations organized under the provisions of Section 25(a) of the Federal
Reserve Act to engage in international or foreign banking. The
head offices of these corporations are located in New York City and
both were examined during the year by the Board's Division of
Examinations. One such institution operates a branch in Germany
and the other has a branch in France and a fiduciary affiliate in
England. During the year the Board approved the application
of one of these corporations for permission to invest in the stock
of an investment company proposed to be organized under the
laws of a foreign country.
In 1954 the Board initiated a special study of the foreign operations of American banks in financing international and foreign
trade. The purpose of the study is to develop information as to
changes that should be made in the Board's existing regulations,
agreements, and policies regarding foreign banking corporations
and foreign branches of national and State member banks, as well
as changes that might be proposed in the law.
Inter-Agency Bank Examination School. During 1954, three
five-week sessions of the School for Assistant Examiners and two
four-week sessions of the School for Examiners were held. The
Inter-Agency Bank Examination School is conducted by the
Board of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, and the Office of the Comptroller
of the Currency. Since established in 1952, the various sessions of
the Inter-Agency School have been attended by 306 men, representing the three Federal bank supervisory agencies, the State Banking
Departments of Indiana, Louisiana, Maine, New Hampshire, North
Dakota, Oklahoma, and Virginia, the Treasury Department of the
Commonwealth of Puerto Rico, and one foreign country.
CHANGES IN REGULATIONS OF THE BOARD OF GOVERNORS
Reserves of member banks. The Board's Regulation D was
amended so as to reduce the reserves required to be maintained by
member banks with Federal Reserve Banks. The percentage applicable on time deposits for all member banks was reduced from
6 to 5 per cent. The percentages on net demand deposits were



50

ANNUAL &Ef>OftT OF BOARD 61? GOVERNORS

reduced from 22 to 20 per cent for central reserve city banks, from
19 to 18 per cent for reserve city banks, and from 13 to 12 per cent
for all other member banks.
The reduction as to time deposits became effective on June 24,
1954 for reserve and central reserve city banks, and on June 16, 1954
for other member banks. The reduction as to demand deposits
became effective one percentage point at a time on June 24,1954 and
July 29, 1954 for central reserve city banks, and became effective on
July 29, 1954 for reserve city banks, and on August 1, 1954 for other
member banks.
Clearing and collection. The Board's Regulation G relating to
the collection of noncash items, and Regulation J relating to check
clearing and collection, were amended, effective July 15, 1954, so
as to permit the collection through Federal Reserve Banks of checks
drawn on nonmember par-remitting banks located in such of the
Territories, dependencies, insular possessions, and parts of the United
States outside of the continental United States as the Board may
designate, and the collection of noncash items payable in such areas.
At the same time the Board designated Alaska and Hawaii as being
in the Twelfth Federal Reserve District for the purposes of these
amendments.
Foreign banking. The Board's Regulation K, entitled "Banking
Corporations Authorized to do Foreign Banking Business under the
terms of Section 25 (a) of the Federal Reserve Act," commonly
known as Edge Act Corporations, was amended effective September
29, 1954 so as to change and liberalize the conditions relating to the
raising of funds by such corporations not engaged in the business
of receiving deposits and to increase the limit on the amount of credit
that such nondeposit corporations may extend to one borrower.
LEGISLATION

Direct purchase and sale of Government obligations. An Act
of Congress approved June 29, 1954 extended until June 30, 1956
the existing limited authority of the Federal Reserve Banks under
Section 14(b) of the Federal Reserve Act to buy and sell Government obligations directly from and to the United States. This
authority would otherwise have expired on June 30, 1954.
Investment in bank premises. An Act of Congress approved
June 30, 1954 amended Section 23A of the Federal Reserve Act,



FEDERAL RESERVE SYSTEM

51

which limits the amount which a member bank may loan to or
invest in the stock or obligations of an affiliate, so as to exempt
from such limitations any affiliate engaged "solely" in holding bank
premises. Previously the statute had exempted only affiliates engaged
in holding bank premises on June 16, 1934 (whether or not solely
so engaged).
The same Act also amended Section 24A of the Federal Reserve
Act which provides that a national bank or a State member bank
must obtain the consent of the Comptroller of the Currency or of
the Board of Governors, respectively, in any case in which its investment in bank premises, either directly or through an affiliate, exceeds
the amount of the bank's capital stock. The amendment made it
clear that the amount of any indebtedness incurred by an affiliate of
the bank engaged in holding the bank's premises should be included
in determining the total investment in bank premises.
Paying out Federal Reserve notes. An Act approved July 19,
1954 repealed the provision in Section 16 of the Federal Reserve Act
which prohibited one Federal Reserve Bank from paying out notes
issued by any other Federal Reserve Bank.
Real estate loans by national banks. An Act approved July 22,
1954 amended Section 24 of the Federal Reserve Act so as to make
the limitations and restrictions on real estate loans by national banks
not applicable to loans in which the Small Business Administration
cooperates or purchases a participation.
An Act approved August 17, 1954 amended certain provisions of
the Water Facilities Act of August 28, 1937 (16 U.S.C. 590r, et seq.)
so as to authorize the Secretary of Agriculture to insure loans made
to further the objectives of the Act, and amended Section 24 of the
Federal Reserve Act so as to exempt such insured loans from the
limitations and restrictions on real estate loans by national banks
contained in the third sentence of the first paragraph of Section 24
(relating to the permissible amount of the loan in relation to the
appraised value of the land).
Housing Act of 1954. The "Housing Act of 1954," approved
August 2, 1954, amended Title III of the National Housing Act
relating to the Federal National Mortgage Association so as to
provide in Section 303 (f) of the latter, that "Notwithstanding any
other provision of law, any institution, including a national bank or
State member bank of the Federal Reserve System . . . shall be




52

ANNUAL REPORT OF BOARD OF GOVERNORS

authorized . . . to receive stock of the Association" evidencing capital
contributions made to the Association "and to hold or dispose of
such stock, subject to the provisions of this title." The effect of
this provision is to modify the provision of Section 5136 of the
Revised Statutes of the United States prohibiting the purchase of
corporate stocks by national banks and State member banks.
The Act also amended the National Housing Act so that Section
309(d) of the latter authorizes the Federal National Mortgage Association, with the consent of any Government corporation or Federal
Reserve Bank, or of any board, commission, independent establishment, or executive department of the Government, to avail itself
of the use of information, services, facilities, officers and employees
thereof, in carrying out the provisions of the Act. By Section 309 (g)
the Federal Reserve Banks are authorized and directed to act as
depositaries, custodians, and fiscal agents for the Association.
In addition, Section 203 of the Act specifically amended the next
to the last sentence of paragraph "Seventh" of Section 5136 of the
Revised Statutes so as to permit national banks to deal in and underwrite obligations of the Federal National Mortgage Association.
Subject,, of course, to any applicable provision of State law, the
provision also extends to State member banks of the Federal Reserve
System because Section 9 of the Federal Reserve Act makes this provision of Section 5136 applicable to State member banks.
Another provision of the Housing Act of 1954 (Section 603)
provided for the establishment of a National Voluntary Mortgage
Credit: Extension Committee and directed the Housing and Home
Finance Administrator to request the Board of Governors of the
Federal Reserve System to designate a representative of the Board to
serve on the Committee in an advisory capacity.
Member banks dealing in obligations of banks for cooperatives.
An Act approved August 23,1954 amended the last sentence of paragraph "Seventh" of Section 5136 of the Revised Statutes so as to
permit national banks to deal in and underwrite obligations issued
by the 13 banks for cooperatives organized under the Farm Credit
Act of 1933, or any of them, in lieu of the existing authority which
related only to obligations issued by the Central Bank for Cooperatives. Such transactions remain subject to the limitation of 10 per
cent of the national bank's capital and surplus. Subject to any applicable provisions of State law, the permission also extends to State




FEDERAL RESERVE SYSTEM

53

member banks of the Federal Reserve System because Section 9 of
the Federal Reserve Act makes these provisions of Section 5136 applicable to State member banks.
RESERVE BANK OPERATIONS

Volume of operations. Table 5 on page 69 gives the volume of
operations in the principal departments of the Federal Reserve Banks
for the years 1950-54. In general, activities were somewhat greater
in 1954 than in 1953. While discounts and advances declined, a new
peak was reached in the number of checks handled.
One new activity of significant proportions was begun in 1954.
At the request of the Treasury and the Post Office Departments, the
Reserve Banks undertook the receipt and proving of deposits from
postmasters throughout the country, along with certain relevant
accounting operations. This was for the purpose of simplifying
operating procedures of the Post Office Department and of speeding
up the flow of funds to the Treasury. The work began at the
various Reserve Banks at different times during the year. By the
end of 1954, a total of 3,460,000 deposits had been handled.
Earnings and expenses. Current earnings, current expenses, and
the distribution of net earnings of each Federal Reserve Bank during
1954 are shown in detail in Table 6 on pages 70-71, and a condensed
historical statement for all Reserve Banks is shown in Table 7 on
pages 72-73. The table on page 54 summarizes the earnings and
expenses and the distribution of net earnings for 1954 and 1953.
Current earnings of 438 million dollars in 1954 were 15 per cent
less than in 1953 largely because of a lower average rate of interest
on holdings of United States Government securities. Earnings from
discounts and advances were also less in 1954 than in 1953, reflecting
decreases in the discount rate during the early part of the year and
a decline in the volume of discounts and advances. Current expenses
were about 3 per cent below 1953, mainly because of decreases in the
production of Federal Reserve currency and shipping charges
thereon. Current net earnings in 1954 amounted to about 328
million dollars, a decrease of 18 per cent compared to 1953.
The effect of profit and loss additions and deductions was minor,
leaving net earnings before payments to the United States Treasury
at about 328 million dollars.
Statutory dividends to member banks amounted to 16 million



54

ANNUAL REPORT OF BOARD OF GOVERNORS

EARNINGS,

EXPENSES, AND DISTRIBUTION OF N E T EARNINGS
FEDERAL RESERVE BANKS, 1954 AND 1953

OF

[In thousands of dollars]
Item
Current earnings
Current expenses

1954

1953

438,486
109,733

513,037
113,515

328,753

399,522

'527
661

'2,096
3,155

134

1,059

Net earnings before payments to U. S. Treasury

328,619

398,463

Paid U. S. Treasury (interest on F. R. notes)
Dividends
Transferred to surplus (Sec. 7)

276,289
16,442
35,888

342,568
15,558
40,337

Current net earnings
Additions to current net earnings
Deductions from current net earnings
Net: deductions

1
Includes net profits on sales of U. S. Government securities: 1954—$482,000;
1953-$1,952,000.

dollars, a rise of nearly 1 million dollars over 1953, which reflected
an increase in the paid-in capital of the Federal Reserve Banks resulting from increased capital and surplus of member banks.
Payments to the United States Treasury as interest on Federal
Reserve notes amounted to 276 million dollars in 1954, or to 90
per cent of net earnings after dividends and allowances for building
up surplus to 100 per cent of subscribed capital of those Banks whose
Section 7 surplus was below that amount. These allowances are
consistent with the provisions of the franchise tax when it was in
effect; for 1954 allowances for bringing surplus up to subscribed
capital were $5,187,000 for three Banks, and for 1953 they were
$2,273,000 for two Banks. Total payments to the Treasury as interest
on Federal Reserve notes since the policy of making such payments
was begun in 1947 have amounted to 1,797 million dollars.
The 36 million dollars of net earnings remaining after dividends
and payments to the United States Treasury were added to surplus
account.
Holdings of loans and securities. Average holdings of United
States Government securities amounted to 24,649 million dollars
during 1954, down slightly from the all-time high in 1953. The
average rate of interest on these holdings declined substantially



55

FEDERAL RESERVE SYSTEM

from 2.02 to 1.76 per cent. Average holdings of discounts and
advances were considerably less in 1954 than in 1953. The average rate of interest, which declined from 1.96 to 1.61 per cent,
reflected two reductions in the discount rate, first from 2 per cent
to 1% per cent and then to ll/2 per cent. The table below shows
a comparison of average daily holdings and average interest rates
on loans and securities held by the Federal Reserve Banks during
each of the past three years.
RESERVE BANK EARNINGS ON LOANS AND SECURITIES,
[Dollar amounts in thousands]

1952-54

Total«

Discounts
and
advances

U.S.
Government
securities

Industrial
loans

$23,933,643
25,438,684
24,866,567

$802,334
777,595
216,697

$23,126,674
24,657,904
24,648,691

$4,635
3,185

Earnings:
1952
1953
1954

455,898
512,841
438,359

14,083
15,265
3,479

441,629
497,455
434,837

186
121
43

Average rate of interest (per
cent):
1952
1953
1954

1.90
2.02
1.76

1.75

1.91
2.02
1.76

Item and year

Average daily holdings:x
1952
1953
1954

1

1.96
1.61

1,179

4.01
3.80
3.65

Based on holdings at opening of business.

Foreign and international accounts. The total of earmarked
gold, dollar deposits, United States Government securities, and
miscellaneous holdings for foreign account at the Federal Reserve
Banks continued to rise during 1954 but at a slower rate than in
the two preceding years. An all-time high of 9.2 billion dollars
was reached in October 1954. Following a steady advance in every
year except 1951 from a total of 3.4 billion at the close of 1947, a
rise of 566 million during 1954 brought the year-end total to 9.1
billion. Of this amount, 5.6 billion dollars was in the form of earmarked gold, 2.9 billion in United States Government securities,
principally Treasury bills held in custody, nearly 500 million in dollar
deposits, and approximately 100 million in miscellaneous securities.



56

ANNUAL REPORT OF BOARD OF GOVERNORS

The gold and dollar assets of the International Monetary Fund
and the International Bank for Reconstruction and Development
held at: the Federal Reserve Bank of New York increased 310 million
dollars during the year to a new year-end high of 3.7 billion.
An account was opened during the year for a recently established
central bank in the Far East. When this account ultimately absorbed
the assets of an account in the name of the same institution which
the Federal Reserve Bank of New York had maintained as fiscal
agent of the United States, the latter account was closed.
Loans secured by gold collateral increased in both number and
amount.. The maximum amount outstanding on any one day
aggregated 185 million dollars as compared to less than 32 million
in 1953. At the end of the year only one loan was outstanding, in
the amount of 133 million; it is scheduled for repayment in monthly
instalments by October 1955. The policy of the Federal Reserve
System continued to provide for the granting of gold loans to assist
foreign monetary authorities in meeting their dollar requirements
for temporary periods.
The Federal Reserve Bank of New York, as depositary and fiscal
agent, continued to perform various services for the International
Bank for Reconstruction and Development and the International
Monetary Fund. As fiscal agent of the United States it also continued to operate the United States Stabilization Fund, pursuant to
instructions of the Treasury Department, and to administer on
behalf of the Treasury Department the regulations affecting blocked
assets and transactions in this country of Communist China and
North Korea and their nationals.
Bank premises. During the year the Board authorized the Federal Reserve Bank of Kansas City to construct an addition to the
Omaha Branch building, and the Federal Reserve Bank of Dallas
to construct a new building for the San Antonio Branch. The Board
also authorized the Federal Reserve Bank of Cleveland to construct
a security court in leased quarters adjacent to the Cincinnati Branch.
During the year, with the approval of the Board, the Federal
Reserve Banks of Chicago and Dallas acquired properties adjoining
their present locations to provide for future expansion and the
Federal Reserve Bank of St. Louis acquired a site for a new building
for the Louisville Branch. The Federal Reserve Bank of Dallas




FEDERAL RESERVE SYSTEM

57

was also authorized to acquire sites for new buildings for the El Paso
and Houston Branches.
Intradistrict territorial changes. During the year intradistrict
territorial changes were made in three Federal Reserve districts.
Each of these changes had the effect of enlarging the area served
by Federal Reserve branches.
In the Second District, the four counties of Ontario, Steuben,
Wayne, and Yates in the State of New York were transferred from
the New York head office to the Buffalo Branch territory, effective April 1,1954. In the Seventh District, the entire lower peninsula
of Michigan was assigned to the Detroit Branch, effective January
1, 1954; previously 49 of these 68 counties had been in the headoffice territory. In the Twelfth District, four counties were transferred to the Los Angeles Branch effective December 1, 1954; Kern,
San Luis Obispo, and Mono counties in California were transferred
from the San Francisco head-office territory and Clark County,
Nevada, from the Salt Lake City Branch territory.
Several towns in the Eighth District were reassigned during the
year so as to be included in the same head-office or branch territory
as the other towns in their respective counties.
BOARD OF GOVERNORS—INCOME AND EXPENSES

The accounts of the Board for the year 1954 were audited by
the public accounting firm of Arthur Andersen & Co., whose
certificate follows:
To the Board of Governors
of the Federal Reserve System:
We have examined the balance sheet of the Board of Governors of the
Federal Reserve System as of December 31, 1954, and the related statement
of income and expenses for the year then ended. Our examination was made
in accordance with generally accepted auditing standards, and accordingly
included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, the accompanying balance sheet and statement of income
and expenses present fairly the financial position of the Board of Governors
of the Federal Reserve System as of December 31, 1954, and the results of its
operations for the year then ended, and were prepared in conformity with




58

ANNUAL REPORT OF BOARD OF GOVERNORS

generally accepted accounting principles applied on a basis consistent with
that of the preceding year.
Arthur Andersen & Co.
Washington, D. C.
February 15, 1955.

BALANCE SHEET—DECEMBER 31, 1954
ASSETS

Cash in Federal Reserve Bank of
Rich mond
Petty cash
Miscellaneous receivables and travel
advances
Stockroom and cafeteria inventories,
at cost
Property and equipment:
Land
Land improvements
Building
Furniture and equipment
Automobiles

$

738,606.91
800.00
9,978 85
14,510.71

At cost

Reserve for
depreciation

$ 737 ,180 .30 $
10 ,939 .15
3,794 ,693 .58
453 ,073 .17 252,784.60
15 ,388 .36
12,655.97
$5,011 ,274 .56

$265,440.57 4 ,745,833.99
$5

,509,730.46

LIABILITIES AND FUND BALANCES

Accounts payable
$ 132,261.07
Employee Federal income taxes withheld
100,126.34
Accrued pay roll
120,735.19
Fund Balances:
Balance, December 31, 1953.
$5,172,933.27
Excess of expenses over income, per accompanying statement
(
18,813.97)
Fixed assets purchased, etc. (net)
2,488.56
Balance, December 31, 1954
Represented by—
Property and Equipment Fund
Operating Fund

$5,156,607.86
4,745,833.99
410,773.87
$5,509,730.46

NOTE—The Board provides for depreciation of furniture and equipment and automobiles, but depreciation of the building has not been recognized in the accounts
inasmuch as the Board deems a provision for such depreciation as unnecessary since
funds for replacement of the building will be obtained, when required, from outside
sources.




RESERVE SYSTEM

59

STATEMENT OF INCOME AND EXPENSES
FOR THE YEAR ENDED DECEMBER 31,

1954

INCOME:

Assessments against Federal Reserve Banks
Bulletin sales
Other publications sales
Miscellaneous receipts

$4,174,600.00
13,694. 68
15,623.32
2,468.59
$4,206,386.59

EXPENSES:

Salaries
Retirement and insurance contributions
Traveling expenses
Postage and expressage
Telephone and telegraph, including leased wire operations (net)..
Printing and binding
Stationery and supplies
Equipment rental
Provision for depreciation
Books and subscriptions
Heat, light, and power
Repairs, maintenance, and alterations
Insurance
Consumer Finances Surveys
Talle Subcommittee project
Retail Credit Survey
Legal and consultant fees and expenses
Security clearance investigations for Board employees
Meeting of Technicians of Central Banks
Audit expenses applicable to Board's accounts
Loss from operation of cafeteria (net)

$3,007,433.18
256,451.65
228,898.63
55,778.03
55,055.77
208,116.46
29,161.97
22,561.79
25,218.38
14,370.33
37,573.83
14,720.57
5,091.77
147,123.06
5,445.47
13,500.00
6,385.93
13,920.00
10,773.52
2,562.97
38,643.82

Other

26,413.43
$4,225,200.56

EXCESS OF EXPENSES OVER INCOME

$

18,813.97

NOTE—Salaries, and retirement and insurance contributions exclude approximately $65,800 and $6,900, respectively, which were charged direct to cafeteria
operations.

In the foregoing statement of income and expenses, "Other"
expenses of $26,413.43 includes an expenditure of $425.00, contributed by the Board of Governors for cost of a luncheon at a
meeting of Treasury Department savings bonds program volunteer workers.
The Board received the following reimbursements in 1954 for
expenditures which it makes on a reimbursable basis:
Printing Federal Reserve notes
Currency Redemption Division (Office of the Treasurer of
the United States)
Federal Reserve Issue and Redemption Division (Office
of the Comptroller of the Currency)
Leased wire service (telegraph)
Leased telephone lines
Miscellaneous




$6,132,815.92
419,574.00
164,538.48
289,647.17
9,684.00
11,943.07

60

ANNUAL REPORT OF BOARD OF GOVERNORS
FEDERAL RESERVE MEETINGS

The Federal Open Market Committee met on March 3, June 23,
September 22, and December 7, 1954, and the executive committee
of the full Committee met frequently during the year. Under the
provisions of Section 12A of the Federal Reserve Act, the Federal
Open Market Committee, which has responsibility for determining
the policies under which the open market operations of the Federal
Reserve Banks will be carried out, is required to meet in Washington
at least: four times each year. A record of the action taken by the
Committee on questions of policy will be found on pages 92-98 of
this Report.
A meeting of the Conference of Chairmen of the Federal Reserve
Banks was held on December 2-3, 1954, and was attended by members of the Board of Governors.
The Conference of Presidents of the Federal Reserve Banks held
meetings on March 1-2, June 21-22, September 20-21, and December
6, 1954, and the Board of Governors met with the Presidents on
March 3, June 23, and September 22, 1954.
Meetings of the Federal Advisory Council were held on February
14-16, May 1648, September 19-21, and November 14-16, 1954. The
Board of Governors met with the Council on February 16, May 18,
September 21, and November 16, 1954. The Council is required by
law to meet in Washington at least four times each year and is
authorized by the Federal Reserve Act to consult with and advise
the Board on all matters within the jurisdiction of the Board.
MEETING OF CENTRAL BANK TECHNICIANS

The Board of Governors and the Federal Reserve Bank of New
York acted as hosts for the Fourth Meeting of Central Bank Technicians of the American Continent, which was held in Washington
and New York during the first two weeks of May 1954. More
than 100 delegates representing 17 Latin American countries,
Canada, the Federal Reserve System, the International Monetary
Fund,, the International Bank for Reconstruction and Development,
and other international organizations attended the meeting. The
purpose, like that of previous meetings held in Mexico, Chile, and
Cuba, was to engage in objective study and discussion of current
monetary and economic problems, as well as to consider central
banking problems of an operating and technical nature.






TABLES

62

ANNUAL REMRT OF BOARD OF

NO. 1—STATEMENT OF CONDITION OF THE FEDERAL RESERVE BANKS (IN DETAIL)
DECEMBER 31, 1954
[Amounts in boldface type are those shown in the Board's weekly statement. In thousands of dollars]
ASSETS
Gold certificates:
Interdistrict settlement fund
Gold certificates on hand
Gold certificates with Federal Reserve Agents

7,941,547
1,015,555
11,208,000

Redemption fund for Federal Reserve notes

867,405

Total gold certificate reserves
Federal Reserve notes of other Federal Reserve Banks
Other cash:
United States notes
Silver certificates
Standard silver dollars
National bank notes and Federal Reserve Bank notes
Subsidiary silver, nickels, and cents
Total other cash
Discounts and advances secured by U. S. Govt. securities:
Discounted for member banks
Discounted for others
Other discounts and advances:
Discounted for member banks
Foreign loans on gold
Total discounts and advances
Acceptances purchased
Industrial loans
U. S. Government securities:
Bought outright—
Bills. ;
Certificates
Notes
Bonds

21,032,507
239,001
30,816
271,836
4,715
1,981
65,312
374,660
9,970

133,334

2,167,000
13,882,341
6,037,271
2,801,750
24,888,362
44,000

Total U. S. Government securities
Total loans and securities
Due from foreign banks
Uncollected cash items:
Transit items
Exchanges for clearing house
Other cash items
Total uncollected cash items
Bank premises:
Land
Buildings (including vaults)
Fixed machinery and equipment
Total buildings
Less depreciation allowances
Total bank premises
Other assets:
Industrial loans past due .^
Miscellaneous assets acquired account industrial loans..
Miscellaneous assets acquired account closed banks
Total
Less valuation allowances
Net
.#
Reimbursable expenses and other items receivable.
Interest accrued
Premium on securities
Deferred charges
Real estate acquired for banking house purposes...
Suspense account
All other




133,334

708

Total bought outright

Total assets

9,970

143,304

Held under repurchase agreement

Total other assets

20,165,102

24,932,362
25,076,374
22
3,691,348
202,323
64,884
3,958,555
64,370
27,606
91,976
52,968

15,740

39,008
54,748

10
84
94
35
59
6 ,254
115 ,833
6 ,181
1 ,545
5 ,316
496
584
136,268
50,872,135

FEDERAL RESERVE SYSTEM

63

NO. 1—STATEMENT OF CONDITION OF THE FEDERAL RESERVE BANKS (IN DETAIL)
—Continued
LIABILITIES
Federal Reserve notes:
Outstanding (issued to Federal Reserve Banks)
27,346,789
Less: Held by issuing Federal Reserve Banks
1,017,538
Forwarded for redemption
76,118
1,093,656
Federal Reserve notes, net (includes notes held by U. S. Treasury and by
Federal Reserve Banks other than issuing Bank)
Deposits:
Member bank—reserve accounts
18,876,128
U. S. Treasurer—general account
563,137
Foreign
489,960
Other deposits:
Nonmember bank—clearing accounts
92 ,555
Officers' and certified checks
8,893
Federal Reserve exchange drafts
374
International organizations1
40,712
All other
298,959
Total other deposits

26,253,133

441,493

Total deposits
Deferred availability cash items
Other liabilities:
Accrued dividends unpaid
Unearned discount
Discount on securities
Sundry items payable
Suspense account
All other

20,370,718
3,150,357
6
8,704
5,121
32
82

Total other liabilities

13,945

Total liabilities

49,788,153
CAPITAL ACCOUNTS

Capital paid in
Surplus (Sec. 7)
Surplus (Sec. 13b)
Other capital accounts:
Reserves for contingencies:
Reserve for registered mail losses
All other
Earnings and expenses:
Current earnings
Current expenses
Current net earnings
Add—profit and loss
Deduct—dividends accrued since January 1
interest on Federal Reserve notes

287,754
660,901
27,543
9,784
98,000
(22)

()

(22)
(2)
()
(2)

Unallocated net earnings
Total other capital accounts
Total liabilities and capital accounts

Contingent liability on acceptances purchased for foreign correspondents

(2)
107,784
50,872,135

19,052

Industrial loan commitments
1,149
1
Includes International Bank for Reconstruction and Development and International Monetary
Fund.
2
Amount in this account closed out at end of year.




NO. 2—STATEMENT O F CONDITION OF EACH FEDERAL RESERVE BANK AT END O F 1954 AND 1953
[In thousands of dollars]
Total
Item

1954

Boston
1953

1954

Philadelphia

New York

1953

1954

1953

1954

1953

Cleveland
1954

Richmond

1953

1954

1953

ASSETS
20,165,102 20,453,102 1,030,159 1,035,380 5,322,811 5,197,850 1,220,496 1,300,725 1,717,478 1,770,513 1,156,033 1,064,892
Gold certificates
Redemption fund for Federal Reserve
53,668
54,927
184,192
58,928
61,086
76,999
867,405
183,706
notes
82,247
74,913
900,644
76,974

pa

Total gold certificate reserves.. . 21,032, 507 21,353,746 1,083,827 1,090,307 5,507,003 5,381, 556 1,279,424 1,361,811 1,794,477 1,852,760 1,230,946 1,141,866
239,001
14,846
3,972
17,291
214,128
47,323
26,487
17,104
16,882
13,707
22,852
30,147
Federal Reserve notes of other Banks. .
374,660
24,277
27,559
80,491
75,299
16,199
26,837
371,761
37,499
24,613
24,156
22,580
Other cash
Discounts and advances:
Secured by U. S. Govt. securities. .
Other
Industrial loans

9,970
133,334
708

12,855
15,000
1,879

550
,133

600
915

450
38,667

2,625
4,425

3,900
9,867
612

3,430
1,125
1,380

2,370
12,267

1,275
1,380

750
6,800

1,200
750
60

U. S. Government securities:
24,888,362 25,317,674 1,373,290 1,394,092 6,357,284 6,517,478 1,514,656 1,525,491 2,133,107 2,149,192 1,465,875 1,501,338
Bought outright
44,000
44,000
597,900
597,900
Held under repurchase agreement. .
Total loans and securities
Due from foreign banks
Uncollected cash items
Bank premises
Other assets
Total assets
1

25,076,374 25,945,308 1,381,973 1,395,607 6,440,401
22
22
3,958,555 4,225,210
54,748
52,465
136,268
151,917

1
295,141
5,919
7,165

771,896
7,149
33,268

7,122,428 1,529,035 1,531,426 2,147,744 2,151,847 1,473,425 1,503,348
16
790,662
7,390
38,519

2
235,683
5,164
7,915

2
253,896
4,734
8,845

2
371,459
5,260
11,328

2
416,386
5,289
12,544

1
333,590
4,495
7,854

335,529
4,719
8,853

50,872,135 52,314,557 2,813,149 2,856,093 12,887,537 13,442,347 3,090,713 3,204,655 4,384,651 4,477,148 3,097,319 3,047,043

After deducting $16,000 participations of other Federal Reserve Banks.




1
324,264
6,232
8,151

i

I

LIABILITIES
Federal Reserve notes
26,253,133 26,558,372 1,608,630 1,632,903 5,950,858 5,924,481 1,845,959
Deposits:
Member bank—reserve accounts... 18,876,128 20 160,435 795,449 848,626 5,482,319 6,049,923 884,622
U. S. Treasurer—general account. .
563,137
345,866
47,253
39,713
8,742
70,675
95,808
Foreign
489,960
423,298
29,402
35,668
24,961 M47.721 1134,793
Other
441,493
492,815
7,609
14,135
361,474
322,038
8,744
Total deposits
20,370,718 21 ,422,414
Deferred availability cash items
3,150,357 3,290,407
13,945
Other liabilities and accrued dividends..
18,170
Total liabilities

879,713
258,100
619

891,073 6,047,886 6,616,865
575,375
267,333
605,851
5,456
821
6,787

896,948 2,417,961 2,463,795 1,864,245 1,849,093
959,879 1,467,287 1,533,769
42,858
38,382
30,135
44,344
37,646
30,690
13,025
14,503
8,688

829,940
44,619
24,582
5,627

827,255
11,127
20,460

974,138 1,029,392 1,567,514 1,624,300
190,709 201,073 299,652 293,806
684
1,121
1,355
875

904,768
270,806

865,604
277,385
762

556

6,762

49,788,153 51,289,363 2,747,062 2,792,130 12,579,575 13,153,984 3,011,490 3,128,288 4,286,248 4,383,256 3,040,375 2,992,844

CAPITAL ACCOUNTS
Capital paid in
Surplus (Sec. 7)
Surplus (Sec. 13b)
Other capital accounts
Total liabilities
accounts

287,754
660,901
27,543
107,784
and

capital

Ratio of gold certificate reserves to
deposit and F . R. note liabilities
combined
Contingent liability on acceptances purchased for foreign correspondents
Industrial loan commitments

265,266
625,013
27,543
107,372

14,998
40,309
3,011
7,769

14,443
38,779
3,011
7,730

89,949
188,070
7,319
22,624

81,852
176,633
7,319
22,559

18,982
47,773
4,489
7,979

18,017
45,909
4,489
7,952

27,318
60,222
1,006

9,857

25,410
57,648
1,006
9,828

12,618
33,480
3,349
7,497

11,655
31,750
3,349
7,445

50,872,135 52,314,557 2,813,149 2,856,093 12,887,537 13,442,347 3,090,713 3,204,655 4,384,651 4,477,148 3,097,319 3,047,043
45.1%

44.5%

43.6%

43.2%

45.9%

42.9%

19,052
1,149

23,940
3,569

1,171

1,460

25,420

2

7,068

45.4%

46.5%

45.0%

45.3%

44.5%

42.1%

1,421
128

1,795
1,724

1,766
598

2,202
748

979
39

1,197
51

FEDERAL RESERVE NOTE
STATEMENT
Federal Reserve notes:
Issued to Federal Reserve Bank
by Federal Reserve Agent and
outstanding
27,346,789 27 ,771,106 1,670,589 1,706,340 6,183,612 6,164,619 1,916,984 1,997,552 2!,559,779 2 ,577,829 1,939,335 1,955,595
Held by Federal Reserve Bank and
232,754
forwarded for redemption
73,437
1,093,656 1,212,734
71,025 100,604 141,818 114,034
75,090 106,502
61,959
240,138
Federal Reserve notes, net 3

26,253,133 26,558,372 1,608,630 1,632,903 5,950,858 5,924,481 1,845,959 1,896,948 2,417,961 2,463,795 1,864,245 1,849,093

Collateral held by Federal Reserve
Agent for notes issued to Bank:
11,208,000 11,093,000
Gold certificates
Eligible paper
7,150
10,130
17,140,000 17,420,000
U. S. Government securities
Total collateral

640,000 640,000 2,670,000 2,670,000 800,000
550
3,900
600
2,525
,200,000 1 ,200,000 3', 600', 000 3,600,000 1,200,000

675,000 625,000
800,000 1,050,000 1,050,000
1,200
750
3,430
,200,000 1^550',000 i,'55O,b66\ 1,300,000 1,350,000

28,355,150 28,523,130 1,840,550 1,840,600 6,270,000 6,272,525 2,003,900 2,003,430 2,600,000 2,600,000, 1,975,750 1,976,200

lAfter deducting $342,220,000 participations of other Federal Reserve Banks on Dec. 31, 1954, and $288,486,000 on Dec. 31, 1953.
After deducting $13,632,000 participations of other Federal Reserve Banks on Dec. 31, 1954, and $16,872,000 on Dec. 31, 1953.
Includes Federal Reserve notes held by the U. S. Treasury and by Federal Reserve Banks other than the issuing Bank.

2
3




NO. 2—STATEMENT OF CONDITION OF EACH FEDERAL RESERVE BANK AT END OF 1954 AND 1953—Continued
[In thousands of dollars]
Chicago

Atlanta
Item
1954

1953

1954

Minneapolis

St. Louis

1953

1954

1953

1954

1953

Kansas City
1954

1953

Dallas
1954

San Francisco

1953

1954

1953

a

ASSETS
Gold certificates
Redemption fund for Federal Reserve
notes

904,578

Total gold certificate reserves..
Federal Reserve notes of other Banks.
Other cash

958,509
42,243
33,003

Discounts and advances:
Secured by U. S. Govt. securities.
Other
Industrial loans

53,931

5,733

912,263 3,581,139 3,743,997

782,928

857,457

421,328

484,485

838,886

854,501

807,406

151,495

47,149

49,407

24,644

25,562

39,771

41,453

28,793

971,076 3,725,147 3,895,492
20,411
27,164
29,747
62,994
62,522
32,527

830,077
12,393
24,837

906,864
15,376
24,452

445,972
8,567
8,848

510,047
7,847
7,658

878,657
10,673
14,929

895,954
8,901
15,080

836,199
9,212
14,234

847,841 2,462,269 2,498,1,172
12,737
16,308
20,939
15,322
33,192
37,312

570

450
3,333
96

1,350
375
99

1,500
5,067

525
570

6,267

500
1,515

58,813

350
645
340

144,008

18,533

1,000
2,055

5,067

U. S. Government securities:
1,267,589 1,294,974 4,350,934 4,375,7041,041,454 1,065,140 611,183
Bought outright
Held under repurchase agreement
Total loans and securities. . .
Due from foreign banks.
Uncollected cash items. .
Bank premises
Other assets

Total assets.




2

1,273,322 1,296,309 4,369,467 4,378,759 1,046,521 1,065,710
1
311,508
3,879
7,609

1
324,678
3,636
8,676

3
638,551
6,281
25,246

3
719,839
6.448
25,931

1
154,706
2,832
5,962

1
178,013
2,898
6,261

817,442 2,381,860 2,413,597
30,399

675

80,409

13,600

84,575

w

S
3
o
W
O

624,866 1,073,783 1,103,420

977,963 1,005,694 2,721,244 2,760,285

615,062

626,690 1,080,350 1,104,515

984,230 1,006,369 2,734,844 2,762,300

1

1
101,402
1,007
3,238

1
112,856
1,024
3,681

1
208,977
1,133
5,877

I

1
1
205,672 217,604
2,533
2,245
6,082
7,319

1
2
196,615 329,970
587
9,096
14,724
6,568

2
354,868
7,263

16,569

2,630,075 2,666,650 8,848,100 9,116,158 2,077,329 2,199,575 1,184,097 1,269,804 2,198,897 2,251,619 2,059,863 2,086,040 5,600,405 5,697,425

M

LIABILITIES
Federal Reserve notes
Deposits:
Member bank—reserve accounts.
U. S. Treasurer—general account
Foreign
Other
Total deposits
Deferred availability cash items
Other liabilities and accrued dividends

1,387,728 1,417,107 5,064,809 5,111,406 1,177,567 1,214,921

644,293 1,028,614 1,019,799

890,376 2,979,096 3,250,620
19,314
97,481
30,189
17,596
66,998
56,060
5,679
15,350
17,776

670,349
28,356
18,316
8,885

764,061
18,078
15,550
11,351

443,527
27,339
12,050
2,316

468,968
17,791
10,230
3,849

912,171
31,581
18,316
4,837

929,493
263,481

932,965 3,158,925 3,354,645
269,537 471,408 505,628

725,906
130,210

809,040
133,779

485,232
86,438

500,838
96,521

966,905 1,010,115 1,088,515 1,114,081 2,641,723 2,673,496
160,467 180,744 180,275 179,523 263,436 279,227

462

612

347

703

528

714

2,319

3,017

460

739,472

743,749 2,583,779 2,639,877

583,511

866,804
38,350
20,726
3,613

965,518 1,039,814 1,050,684 2,504,750 2,550,756
41,479
46,087
39,023
20,931
23,692
18,414
49,183
41,348
15,550
22,654
3,504
41,703
42,369
8,116
2,355

605

398

523

995

1,396

Total liabilities
2,581,230 2,620,323 8,697,461 8,974,696 2,034,145 2,158,352 1,155,528 1,242,355 2,156,446 2,211,263 2,008,660 2,037,876 5,489,933 5,593,996
CAPITAL ACCOUNTS
31,668
29,210
11,158
38,354
35,001
9,935
9,150
6,360
5,952
10,912
14,457
13,279
12,203
10,139
Capital
paid
in.
p
p
66,724
62,182
29,480
28,034
96,566
90,792
26,619
16,219
24,755
29,985
28,146
25,465
16,918
23,456
Surplus (Sec. 7)
2,140
2,140
1,307
762
762
1,429
1,429
521
1,137
1,307
521
1,073
1,137
1,073
Surplus (Sec. 13b)
9,940
9,897
5,432
6,400
14,290
14,240
6,109
5,647
5,454
6,373
6,087
4,205
5,624
4,218
Other capital accounts.
Total liabilities and capital
2,630,075 2,666,650 8,848,100 9,116,158 2,077,329 2,199,575 ,184,097 1,269,804 2,198,897 2,251,619 2,059,863 2,086,040 5,600,405 5,697,425
accounts
Ratio^of gold certificate reserves to
deposit and F. R. note liabilities
47.0%
47.1%
combined
,
41.4%
45.3%
41.3%
46.0%
43.6%
44.8%
41.7%
44.5%
44.0%
44.1%
45.7%
45.6%
Contingent liability on acceptances
1,958
2,417
purchased for foreign correspondents
826
1,029
3,279
1,077
2,669
730
902
909
480
598
730
909
104
131
17
28
Industrial loan commitments
263
887
FEDERAL RESERVE NOTE
STATEMENT
Federal Reserve notes:
Issued to Federal Reserve Bank
by Federal Reserve Agent and
outstanding
1,467,671 1,501,548 5,
;,185,253 5,274,078 1,227,557 1,277,506 622,837 663,225 1,063,357 1,057,504 789,675 787,694 2,720,140 2,807,616
Held by Federal Reserve Bank
79,943
84,441 120,444 162,672
49,990
43,945 136,361 167,739
and forwarded for redemption.
62,585
39,326
18,932
37,705
34,743
50,203
Federal Reserve notes, net 1 . . . 1,387,728 1,417,107 5,064,809 5,111,406 1,177,567 1,214,921 583,511 644,293 1,028,614 1,019,799 739,472 743,749 2,583,779 2,639,877
Collateral held by Federal Reserve
Agent for notes issued to Bank:
Gold certificates
Eligible paper
U. S. Government securities
Total collateral.
1

435,000 2,400,000 2,400,000

355,000

355,000

1,000,000 ,100,000 2,900,000 3,000,000

945,000

'975,606

175,000
450
500,000

175,000
1,350
500,000

280,000
525
800,000

'5*2*5,666

283,000 1,380,000 1,380,000
500
525,000 1,620,000 1,620,000

1,500,000 ,535,000 5,300,000 5,400,000

,300,000 1,330,000

675,450

676,350 1,081,500 1,080,525

808,000

808,000 3,000,000 3,000,500

500,000

280,000
1,500
800,000

Includes Federal Reserve notes held by the U. S. Treasury and by Federal Reserve Banks other than the issuing Bank.




283,000

68

ANNUAL REPORT OF BOARD OF GOVERNORS

NO. 3—HOLDINGS OF UNITED STATES GOVERNMENT SECURITIES BY FEDERAL
RESERVE BANKS, END OF DECEMBER 1952, 1953, AND 1954
[In thousands of dollars]
Type of issue

Rate of
interest
(Per cent)

Treasury bonds:
1951-53
1952-54, J u n e . . . .
1952-54, Dec
1952-55
1951-55 1 ..
1955-60
1956-58...
1958, June
1958, Dec
1957-59
1956-59
1956-592
1960, Nov
1961, Sept
1961, Nov
1959-62, June3.. .
1959-62,2 Dec.3...
1958-63
1963, Aug
1960-65 2
1962-673
1963-683
1964-69, June 4 .. .
1964-69. D e c . 4 . . .
1965-705
1966-715
1967-72, June 6 .. .
1967-72, Sept..6 . .
1967-72, Dec. ...
1978-83

2
2
2
2M
2
2%
2%
2M

1953

1952

1954

1953

476,900
283,100
96,700
8,200

855,825
461,900
297,600
96,700
8,200

12,493

12,493

12,493

339,096
21,690

339,096
21,690

339,096
21,690

319,849
693,765

319,849
693,765

319,849
693,765

56,610
122,585
203,890
266,999
521 490
132,707
49,266
2.552
58 758

56,610
122,585
203,890
266,999
521,490
132,707
49,266
2,552
58,758

56 610
122,585
203,890
266,999
521 490
132,707
49,266
2 552
58 758

2 ,801,750

3 ,666,650

4,521,975

* 95^300
3 ,235,123
1 ,000,000
500,000

257,450
6 ,994.050
89,800
3 ,233,623
1 ,000,000
500,000

— 7 491 750
-257,450
+12,800
-6,994,050 +6,994,050
+5,500
89,800
+ 1 ,500
3 ,233,623
1,000,000
500,000

500,000

500,000

500,000

713,848

713,848

713,848

6 ,044,271

13 ,288,771

13,773,671

-476,900
-283,100
—96,700
-8,200

-855,825
+ 15,000
-14,500

2%

2Y2

2M
2U
2%
2%

2 V?,
2Y2

2H
2)4

2j|
2}A,

SH

2H

1*A

lil
1 *'2

-864,900

-855,325

7 491 750
244,650

17A

IB

Total Treasury
notes
Certificates

1954

Change during

2%

Total Treasury
bonds
Treasury notes:
Dec. 1 1953-A
Mar. 15, 1954-A..
Dec. 15, 1954-B..
Mar. 15, 1955-A..
Dec. 15, 1955-B..
Apr. 1, 1956-EA
Oct. 1, 1956-EO
Mar. 15, 1957-A..
Apr. 1, 1957-EA
May 15, 1957-B..
Oct. 1, 1957-EO
Apr. 1, 1958-EA
Oct. 1, 1958-EO
Feb. 15, 1959-A..
Apr. 1,1959-EA
Oct. 1, 1959-EO

December 31

i|

+7,440,065
+2,520,076
+3,922,200

*7 ,440,065
2 ,520,076
3 ,922,200

2
3 ,704,750

4,857,816
202 800

128,900

2 ,133,491

2%

Total certificates
Treasury bills
Total holdings.
1
Partly tax-exempt, called for
4
Became bank-eligible during
6

-7,244,500

-3,704,750
-128,900
-2,133,491

-484,900

-4,857,816
—202,800
+3,704,750
+128,900
+2,133,491

13 ,882,341

5 ,967,141

5,060,616

+7,915,200

+906,525

2 ,204,000

2 ,993,012

1,340,750

-789,012

+1,652,262

24 ,932,362

25 ,915,574

24,697,012

-983,212

+1,218,562

2

3

redemption. Partly tax-exempt. Became bank-eligible during 1952.
1953. 6Became bank-eligible during 1954.
Restricted as to commercial bank ownership. To become bank-eligible Jan. 1, 1955.




69

FEDERAL RESERVE SYSTEM

NO. 4.—FEDERAL RESERVE BANK HOLDINGS OF SPECIAL SHORT-TERM TREASURY
CERTIFICATES PURCHASED DIRECTLY FROM THE UNITED STATES, 1953-541
[In millions of dollars]
Date
1953—Mar. 18
19
20
21
*22
23
24
25
26
June 5
6

Amount

Amount

Date

110 1953—June *7
104
8
189
9
189
10
189
11
333
12
186
13
63
*14
49
15
196
16
196
17

Date

Amount

Amount

Date

364 1954—Jan. 18
992
19
992
20
992
21
908
22
608
23
296
*24
22
25
169
26
169
Mar. 15
169
16

196 1953—June 18
374
19
491
20
451
*21
358
22
506
23
506
24
506 1954—Jan. 14
999
15
1,172
16
823
*17

323
424
323
306
283
283
283
203
3
134
190

* Sunday or holiday.
J
On Nov. 9, 1953, the Reserve Banks sold direct to the U. S. Treasury 500 million dollars of Treasury
notes. This was the first use of the authority granted by the Act of Mar. 27, 1942, to sell U. S. Government securities directly to the United States.
NOTE.—Interest rate K per cent throughout. Data for prior years beginning with 1942 are given
in previous Annual Reports. There were no holdings on dates not shown.
NO. 5—VOLUME OF OPERATIONS IN PRINCIPAL DEPARTMENTS OF FEDERAL
RESERVE BANKS, 1950-54
[Number in thousands; amounts in thousands of dollars]
1954

1953

1952

1951

1950

NUMBER OF PIECES HANDLED 1

Discounts and advances:
Notes discounted and
advances made
Industrial loans:
Loans made
Commitments to make
industrial loans
Currency received and counted..
Coin received and counted
Checks handled:
U. S. Govt. checks
Postal money orders
All others
Collection items handled:
U. S. Govt. coupons paid. . .
All other
Issues, redemptions, and
exchanges of U. S. Govt.
securities
Transfers of funds

()

()

()

11

8

1.4

.7

()

()

4,384,270
7,001,838

4,405,255
5,889,238

4,183,063
5,716,379

4,066,619
5,889,223

3,846,397
7,190,498

481,408
354,368
2,513,966

458,607
366.807
2,415,164

446,084
371.318
2,293,061

412,865

365,812

2,122,147

1,955,232

12,753
15,443

13,703
14,360

13,599
14,172

14,510
13,428

15,323
12,793

191,112
1,808

177,596
1,718

163,568
1,595

154,335
1,525

153,886
1,343

AMOUNTS HANDLED
22,871,449 93,438,640 105,549,326 43,422,106 17,050,334
Discounts and advances
Industrial loans:
7,477
22,009
31,193
27,656
Loans made
6,530
Commitments to make industrial loans
980
3,468
9,078
4,019
520
,039,335
Currency received and counted..
28,482,428 29,514,663 27,001,076 26,175,324
Coin received and counted
622,620
607,205
558,416
592,664
761,062
Checks handled:
141,037,495 140,739,438 119,423,270 89,648,061
,569,739
U. S. Govt. checks
6,091,173
5,943,178
5,996,899
Postal money orders
882,971,848 885 ,726,031 840,094,629 799,891,846 856 ,952^849
All others
Collection items handled:
2,209,045
2,270,606
1,923,079
2,020,560
,173,589
U. S. Govt. coupons paid. . .
5,085,695
4,615,970
5,103,262
5,121,274
,758,483
All other
Issues, redemptions, and
exchanges of U. S. Govt.
469,247,400 381,877,330 355,234,532 344,771,945 346,224,112
securities
1,038,100,606 876,838,475 767,974,539 656,771,175 509,167,912
Transfers of funds
!

Two or more checks, coupons, etc., handled as a single item are counted as one "piece."
Less than 50.
Figures beginning with 1951 exclude checks drawn on the Federal Reserve Banks; the 1950 data
include 1,785,000 of such items amounting to $178,120,377,000.
2

3




NO. 6—EARNINGS AND EXPENSES OF FEDERAL RESERVE BANKS DURING 1954
Roston

Item

New York

Philadelphia

Cleveland

Richmond

Atlanta

Chicago

St. Louis

Minneapolis

Kansas
City

Dallas

San
Francisco

CURRENT EARNINGS
$3,478,513 $193,855
$749,576 $217,069 $276,513 $220,540 $276,644 $632,661 $148,443 $144,803 $250,061 $131,054 $237,294
Discounts and advances
34,985
304
2,479
5,134
42,902
Industrial loans
Commitments to make in171
6,158
1,178
694
448
5,135
13,784
dustrial loans
f,428 22, 145,602 75,691,706 18,200,386 10,679,996 18,789,637 17,116,359 47,450,053
U. S. Government securities. . 434,837,470 23,951,036 111,697,773 26,360,236 37, 127,258 25,627,428
14,749
3,559
4,263
7,181
12,211
6,532
12,090
12,851
4,878
113,371
19,690
9,885
All other
5,482
Total current earnings... 438,486,040 24,154,776 112,467,039 26,620,165 37,422,140 25,855,252 22,437,993 76,339,287 18,352,388 10,835,415 19,057,684 17,251,676 47,692,225
CURRENT EXPENSES
Salaries:
Officers
Employees
Directors' and other fees....
Retirement contributions. . .
Traveling expenses
Postage and expressage
Telephone and telegraph....
Printing, stationery, and supplies
Insurance.
Taxes on real estate
Depreciation (building)
Light, heat, power, and water
Repairs and alterations
Rent
Furniture and equipment:
Purchases
Rentals
Assessment for expenses of
Board of Governors
Federal Reserve currency. . .
Ail other

332,345
418,618
354,800
407,039
4,857,821
564,316
344,340
261,667
297,951
294,686
871,985
302,200
407,874
68,456,540 4,269,294 15,427,610 4,042,966 5,852,256 4,299,586 3,980,110 11,008,883 3,963,345 2,063,321 3,528,492 3,298,237 6,722,440
14,860
60,426
16,390
41,177
18,552
28,328
18,356
26,301
15,239
25,159
18,597
312,044
28,659
393,815
580,087
417,934 1,083,646
391,136
423,511 1,455,672
440,183
201,511
364,851
344,624
6,766,917
669,947
51,707
106,410
161,472
91,773
107,611
100,915
65,524
79,971
84,463
180,493
83,958
135,451
1,249,748
918,222 1,328,437 1,386,941 1,361,017 2,196,737 856,129
505,854
811,336 1,807,392
885,874
15,618,786 1,234,294 2,326,553
68,204
110,058
50,024
61,573
81,259
58,784
63,342
52,828
194,701
34,691
54,879
924,293
93,950

Total

5,162,460
1,028,361
2,771,539
2,522,722
1,116,881
647,542
499,688

372,015
70,295
450,210
403,814
94,803
33,281
1,418

923,649
200,752
616,585
309,931
194,464
32,979
3,512

290,014
48,412
119,437
66,352
74,991
111,689
37,248

400,516
95,114
249,961
392,616
104,385
216,811
64,029

360,091
88,202
130,058
263,665
91,198
36,706
2,025

398,626
64,066
138,170
162,812
57,858
29,509
105,584

925,187
124,962
390,512
268,506
162,706
42,120
85,444

356,607
70,217
101,761
68,052
85,229
73,566
23,887

128,933
33,203
100,150
48,684
34,085
14,977
52,576

306,925
78,043
131,683
118,067
90,193
15,858
13,915

230,152
47,759
66,066
37,469
45,607
12,966
51,354

469,745
107,336
276,946
382,754
81,362
27,080
58,696

1,556,999
4,365,739

71,281
387,818

135,157
662,123

149,165
323,407

281,330
372,495

164,743
305,784

207,542
268,835

187,057
682,985

137,804
267,120

37,494
158,693

53,625
262,426

50,146
233,803

81,655
440,250

4,174,600
6,489,895
H,665,852

255,300
440,377
127,525

1,207,900
1,311,293
283,170

311,000
500,162
118,519

382,400
579,512
415,066

212,900
531,176
120,868

578,800
182,500
491,556 1,077,102
108,810
281,132

159,800
340,930
113,073

105,500
125,569
104,114

158,100
251,012
127,485

194,300
194,090
84,727

426,100
647,116
170,916

U30,188,427 9,085,569 26,364,830 7,954,335 11,969,874 8,967,804 8,610,814 19,950,177 7,531,881 4,091,785 6,852,745 6,162,497 13,035,669

Less reimbursement for certain fiscal agency and other
120,455,496
expenses
Net expenses

109,732,931




1,117,461

3,901,978 1,085,998 1,838,603 1,160,133 1,389,514 3,589,960 1,279,010

7,968.108 22,462,852

603,044 1,468,944 1,210,442 2,199,962

6,868,337 10,131,271 7,807,671 7,221,300 16,360,217 6,252,871 3,488,741 5,383,801 4,952,055 10,835,707

PROFIT AND LOSS
Current net earnings

328,753,109 16,186,668 90,004,187 19,751,828 27,290,869 18,047,581 15,216,693 59,979,070 12,099,517

7,346,674 13,673,883 12,299,621 36,856,518

Additions to current net earnings:
Profits on sales of U. S.
Government securities
(net)
All other

481,620
45,246

32,661
538

111,317
117

30,741
83

45,289
11,556

31,735
9,213

26,876
85

72,999
11,578

25,452
5,050

14,804
3,431

21,791
2,711

21,920
545

46,035
339

Total additions.

526,866

33,199

111,434

30,824

56,845

40,948

26,961

84,577

30,502

18,235

24,502

22,465

46,374

Deductions from current net
earnings:
Reserves for contingencies
All other

412,739
247,768

38,512
3,768

65,715
7,080

27,181
291

28,717
1,454

52,509
637

27,001
50,700

49,792
111,432

21,655
5,524

13,429
402

23,210
57,158

21,921
2,177

43,097
7,145

660,507

42,280

72,795

27,472

30,171

53,146

77,701

161,224

27,179

13,831

80,368

24,098

50,242

133,641

9,081

+38,639

4-3,352

+26,674

12,198

50,740

76,647

+3,323

+4,404

55,866

1,633

3,868

Total deductions
Net deductions

Net earnings before payments
to U. S. Treasury
328,619,468 16,177,587
Paid U. S. Treasury (interest
276,289,457 13,765,123
on F . R. notes)
Dividends paid
16,442,236
882,897

90,042,826 19,755,180 27,317,543 18,035,383 15,165,953 59,902,423 12,102,840

7,351,078 13,618,017 12,297,988 36,852,650

73,549,613 16,779,300 23,166,338 15,573,733 13,012,038 51,963,902 10,380,897
5,056,042 1,111,286 1,577,114
731,160
707,940 2,164,551
568,325

6,287,237 11,691,201 9,632,252 30,487,823
826,455 1,823,626
365,163
627,677

Transferred to surplus (Sec. 7) 35,887,775 1,529,567 11,437,171 1,864,594 2,574,091 1,730,490 1,445,975 5,773,970 1,153,618
698,678 1,299,139 1,839,281 4,541,201
Surplus (Sec. 7) January 1
625,013,743 38,779,128 176,633,418 45,908,519 57,647,949 31 ,749,515 28,034,120 90,791 ,917 25,465,369 16,219,368 23,456,042 28,145,914 62,182,484
Surplus (Sec. 7) December 31. 660,901,518 40,308,695 188,070,589 47,773,113 60,222,040 33,480,005 29,480,095 96,565,887 26,618,987 16,918,046 24,755,181 29,985,195 66,723,685
1

After deducting $389,553 of prorated inter-Bank expenses to avoid duplication in combined totals.




C/5

%

W
C/i

1

NO. 7—EARNINGS AND EXPENSES OF FEDERAL RESERVE BANKS, 1914-54
Bank and period
All Federal Reserve
Banks, by years:
1914-15
1916
1917
1918
1919

Current
earnings

Current
expenses

Net earnings
before payments to
U. S. Treasury1

2,173,252
5,217,998
16,128,339
67,584,417
102,380,583

2,320,586
2,273,999
5,159,727
10,959,533
19,339,633

-141,459
2,750,998
9,582,067
52,716,310
78,367,504

1920
1921
1922
1923
1924

181,296,711
122,865,866
50,498,699
50,708,566
38,340,449

28,258,030
34,463,845
29,559,049
29,764,173
28,431,126

149,294,774
82,087,225
16,497,736
12,711,286
3,718,180

1925
1926
1927
1928
1929

41,800,706
47,599,595
43,024,484
64,052,860
70,955,496

27,528,163
27,350,182
27,518,443
26,904,810
29,691,113

1930
1931
1932
1933
1934

36,424,044
29,701,279
50,018,817
49,487,318
48,902,813

1935
1936
1937
1938
1939

Dividends
paid

Franchise tax
paid to U. S.
Treasury

217,463
1,742,774
6,804,186 $
5,540,684
5,011,832

Paid to U. S.
Treasury
(Sec. 13b)

Paid to U. S.
Treasury
(Interest on
F. R. notes)

Transferred
to surplus
(Sec. 13b)

Transferred
to surplus
(Sec. 7)

1,134,234
2,703,894

1,134,234
48,334,341
70,651,778

5,654,018
6,119,673
6,307,035
6,552,717
6,682,496

60,724,742
59,974,466
10,850,605
3,613,056
113,646

82,916,014
15,993,086
-659,904
2,545,513
-3,077,962

9,449,066
16,611,745
13,048,249
32,122,021
36,402,741

6,915,958
7,329,169
7,754,539
8,458,463
9,583,913

59,300
818,150
249,591
2,584,659
4,283,231

2,473,808
8,464,426
5,044,119
21,078,899
22,535,597

28,342,726
27,040,664
26,291,381
29,222,837
29,241,396

7,988,182
2,972,066
22,314,244
7,957,407
15,231,409

10,268,598
10,029,760
9,282,244
8,874,262
8,781,661

17,308

-60,323

-2,297,724
-7,057,694
11,020,582
-916,855
6,510,071

42,751,959
37,900,639
41,233,135
36,261,428
38,500,665

31,577,443
29,874,023
28,800,614
28,911,608
28,646,855

9,437,758
8,512,433
10,801,247
9,581,954
12,243,365

8,504,974
7,829,581
7,940,966
8,019,137
8,110,462

297,667
227,448
176,625
119,524
24,579

27,695
102,880
67,304
-419,140
-425,653

607,422
352,524
2,616,352
1,862,433
4,533,977

1940
1941
1942
1943
1944

43,537,805
41,380,095
52,662,704
69,305,715
104,391,829

29,165,477
32,963,150
38,624,044
43,545,564
49,175,921

25,860,025
9,137,581
12,470,451
49,528,433
58,437,788

8,214,971
8,429,936
8,669,076
8,911,342
9,500,126

82,152
141,465
197,672
244,726
326,717

-54,456
-4,333
49,602
135,003
201,150

17,617,358
570,513
3,554,101
40,237,362
48,409,795

1945
1946
1947
1948
1949

142,209,546
150,385,033
158,655,566
304,160,818
316,536,930

48,717,271
57,235,107
65,392,975
72,710,188
77,477,676

92,662,268
92,523,935
95,235,592
197,132,683
226,936,980

10,182,851
10,962,160
11,523,047
11,919,809
12,329,373

262,133
27,708
86,772

81,969,625
81,467,013
8,366,350
18,522,518
21,461,770

1950
1951
1952
1953
1954

275,838,994
394,656,072
456,060,260
513,037,237
438,486,040

80,571,771
95,469,086
104,694,091
113,515,020
109,732,931

231,561,340
297,059,097
352,950,157
398,463,224
328,619,468

13,082,992
13,864,750
14,681,788
15,558,377
16,442,236

1,636,462,231 3,090,837,530

352,589,399

4,777,114,762
Total—1914-54.



2,6 i i! i i 8

247,659
67,054
35,605 $

75,223,818
166,690,356
193,145,837
196,628,858
254,873,588
291,934,634
342,567,985
276,289,457

149,138,300

2,188,893 1,797,354,533

21,849,490
28,320,759
46,333,735
40,336,862
35,887,775
-3,658

2

789,570,063

8
|

Aggregate for each
Federal Reserve Bank,
1914-54:
Boston
315 ,727,959
New York
1,225 ,162,926
331 ,670,418
Philadelphia
440 ,209,761
Cleveland
282 ,739,512
Richmond
245 ,729,125
Atlanta
699 ,966,556
Chicago
231 ,615,567
St. Louis
144 ,233,519
Minneapolis
222 ,971,084
Kansas City
196 .534,628
Dallas
440 553,707
San Francisco
Total

117,479,523
376,396,842
114,929,931
151,123,932
103,496,327
85,912,337
226,692,363
89,298,393
54,563,158
90,282,018
73,483,945
152,803,462

196,043,602
846,139,853
216,453,494
282,830,430
175,822,889
154,261,450
462,954,551
137,013,842
87,823,584
129,259,684
119,705,829
282,528,322

23,224,408
119,048,914
30,022,607
35,018,425
15,008,272
13,128,184
42,201,078
12,197,226
8,352,007
12,160,892
12,704,073
29,523,313

7,111,395
68,006,262
5,558,901
4,842,447
6,200,189
8,950,561
25,313,526
2,755,629
5,202,900
6,939,100
560,049
7,697,341

4,777,114,762 1,636,462,231 3,090,837,530

352,589,399

149,138,300

114,752,611
434,255,226
117,464,922
169,450,608
115,225,155
97,345,824
283,370,897
90,367,938
53,288,056
81,217,694
71,966,279
168,649,323

+ 135,412
-433,413
+290,661
-9,907
-71,516
+5,491
+ 11,681
-26,514
-8,674
+55,336
-17,090

50,538,933
224,893,748
62,393,997
73,445,927
39,288,296
34,752,126
111,906,324
31,712,099
20,860,131
28,886,459
34,318,009
76,574,014

2,188,893 1,797,354,533

-3,658

789,570,063

280,843
369,116
722,406
82,930
172,493
79,264
151,045
7,464
55,615
64,213
102,083
101,421

+64,875

1

Current earnings less current expenses, plus and minus profit and loss additions and deductions.
The $789,570,063 transferred to surplus was reduced by direct charges of $139,299,557 for contribution to capital of the Federal Deposit Insurance Corporation and $500,000
for charge-off on bank premises, and was increased by $11,131,012 transferred from reserves for contingencies, leaving a balance of $660,901,518 on December 31, 1954.
2




i

NO. 8—MEMBER BANK RESERVES, RESERVE BANK CREDIT, AND RELATED ITEMS—END O F YEAR 1918-54 AND END OF MONTH 1954
r
In millions of dollars]
Deposits, other than
member bank reserve
balances, with
F. R. Banks

Reserve Bank credit outstanding
U. S Government
securities
End of year or
month
Total

Held
under
Bought repuroutchase
right
agreement

Discounts
and
advances

Float

All
otheri

Total

Gold
stock 2

2,639 1,709
3,373 1,842
3 642 1 958
3,957 2,009
4,212 2,025

5,325
4,403
4,530
4,757
4,760

218
214
225
213

57
96
11
38

5
12
3
4

18
15
26
19

99

19

20

1,781
1,753
1 934
1,898
2,220

1,654

51

298
285
276
275
258

1,884
2,161

14
59

4,817
4,808
4,716
4,686
4,578

16
17
18

21
19
21
21
24

272
293
301
348
393

2 212
2,194
2 487
2,389
2,355

2,256
2,250
2,424
2,430
2,428

—44
-56
63
—41
-73

375
354
355
360
241

2 471
1,961
2 509
2,729
4,096

2,375
1,994
1,933
1,870
2,282

96
-33
576
859
1,814

253
261
263
260
251

5,587
6,606
7,027
8 724
11,653

2,873
2,707

1920
1921
1922
1923
1924

287
234
436
134

287
234
436
80

2,687
1,144

262
146
273
355
390

3-355
1,563
L,405
1,238
1,302

1,795
1,707

4

320

119
40
78
27
52

8
3
57
31
23

643
637
582
1,056
632

63
45
63
24
34

378
384
393
500
405

I 459
1,381
I 655
1,809
. .583

4 112 1,977
4,205 1,991
4 092 2,006
3,854 2,012
3,997 2,022

686
775
1 851
2,435
2,430

43
42
4

251
638
235

2

98

21
20
14
15
5

372
378
41
137
21

1,373
1,853
2 145
2,688
2,463

4,306
4,173
4 226
4,036
8,238

2,027
2,035
2,204
2,303

2,430
2,430
2,564
2,564
2,484

1

12
39
19
17
91

38
28
19
16
11

2,486
2,500
2,612
2,601
2,593

10,125
11,258
12,760
14 512
17,644

228

197

511

488

1930
1931
1932
1933
1934

729
817
1 855
2,437
2,430

1935
1936
1937
1938
1939

2,431
2 430
2,564
2 564
2,484




W

1,636
1,890

2,498
3,292

367
312
560

o

§
118
208

294
575

375
315
617

51
68

25
28

199
201

1925
1926
1927
1928
1929

1,585
1,822

96
73

1,766
2,215

54

Excess 6

51
31

239
300

536

>

Required 6

288
385

239
300

540

Member bank
reserve balances

Other
FedMoney Treasury
eral
in
cash
Recircu- holdserve
lation
4
ings
TreasForac- 5
Other counts
Total
ury
eign
deposits deposits deposits

4,951
5,091

1918
1919

. . .

Treasury
currency
outstanding 3

618
723

7
5
3
10
4
7

211

216

29

8
46
5
6
6

19
54
8

6
79
19

2,511

4,603
211
5,360
222
5,388
272
5,519
284
5,536 3,029

2,476
2,532
2,637
2,798
2,963

5,882
6,543
6,550
6,856
7,598

203
201
208
202

2,566
2,376
3,619
2,706
2,409

23

3

4

121

20

22
31
24
128
169

544
244

29
99

226
160

142
923
634

172
199
397

235
242
256

2,743 2,844
4,622 1,984
5,815 1,212
5,519 3,205
6,444 5,209

o
o

2,274
2 361
1 6,679
12,239
19,745

21,995
22 737
22,726
21,938
20,619

3 087
3 247
3 648
4,094
4,131

8 732
11 160
15,410
20,449
25,307

2 213
2 215
2 193
2,303
2,375

368
867
799
579
440

1 133
774
793
1,360
1,204

599
586
485
356
394

284
291
256
339
402

578
580
535
541
534

8
10
14
10
4
2
1
1
1
2

25 091
24,093
23 181
24 097
19,499

20,065
20,529
22,754
24 244
24,427

4,339
4,562
4 562
4 589
4,598

28 515
28,952
28,868
28 224
27,600

2 287
2,272
1 336
1 325
1,312

977
393
870
1 123
821

862
508
392
642
767

446
314
569
547
750

495
607
563
590
706

7,411 6,615
14,026
12 450 9,365 3 085
13,117 11,129 1,988
12,886 11,650 1,236
14,373 12,748 1,625
15,915 14,457 1,458
562
16,139 15,577
17,899 16,400 1,499
20 479 19,277 1 202
16,568 15,550 1,018

67
19
156
28

1,368
1,184
967
935

3
5
4
2

22,216
25,009
25,825
26,880

22,706
22,695
23,187
22,030

4,636
4,709
4,812
4,894

27,741 1,293
29,206 1,270
30,433 1,270
30,781
761

668
247
389
346

895
526
550
423

565
363
455
493

714
746
777
839

17,681
20,056
19,950
20,160

16,509 1,172
389
19,667
20,520 -570
19,397
763

156
350
147
172
245
37
184
200
132
297
398
143

640
827
535
576
723
567
672
473
779
721
657
808

2 25,437
2 25,688
1 25,316
25,382
25,781
25,642
25,183
24,696
25,183
1 25,401
1 25,944
1 25,885

21,956
21,958
21,965
21,969
21,973
21,927
21,908
21,809
21,810
21,759
21,710
21,713

4,899
4,913
4,935
4,951
4,957
4,959
4,960
4,966
4,972
4,977
4,982
4,985

29,981
29,904
29,707
29,735
29,870
29,922
29,892
29,929
29,985
30,074
30,500
30,509

793
811
819
819
820
811
798
811
786
806
800
796

405
542
722
579
408
875
716
511
704
729
694
563

440
490
494
471
527
545
533
477
461
426
397
490

459
491
363
321
645
377
503
501
422
496
381
441

830
909
917
850
878
988
908
925
931
884
880
907

19,384
19,412
19,194
19,528
19,563
19,011
18,702
18,316
18,676
18,722
18,985
18,876

19,016
18,821
18,689
18,844
18,891
18,412
17,763
17,572
17,724
18,251
18,467
18,618

1940
1941
1942
1943
1944

2,184 2,184
2 254 2 254
6,189 6,189
11,543 11,543
18,846 18,846

3
3
6
5
80

80
94
471
681
815

1945
1946
1947
1948
1949

24,262
23,350
22,559
23 333
18,885

24,262
23,350
22,559
23 333
18,885

249
163
85
223
78

1950
1951
1952
1953

20,778
23,801
24,697
25,916

20,725
23,605
24,034
25,318

1954—
January....
February
March.. ..
April
May
June
July
August
September
October..
November
JDecember..

24,640
24,509
24,632
24,632
24,812
25,037
24,325
24,023
24,270
24,381
24,888
24,932

24,640
24,509
24,632
24,632
24,812
25,037
24,325
23,894
24,270
24,381
24,888
24,888

1

53
196
663
598

129

44

368
591
505
684
672
599
939
744
952
471
518
258

Includes Government overdrafts in 1918, 1919, and 1920.
Prior to Jan. 30, 1934, included gold held by Federal Reserve Banks and in circulation.
The stock of money, other than gold, for which the Treasury is primarily responsible—silver bullion at monetary value and standard silver dollars, subsidiary silver and
minor coin, and United States notes; also, Federal Reserve bank notes and National Bank notes for the retirement of which lawful money has been deposited with the Treasurer
of the United States. Includes money of these kinds held in the Treasury and the Federal Reserve Banks as well as that in circulation.
4
Gold other than that held against gold certificates and gold certificate credits, including the reserve against United States notes and Treasury notes of 1890, monetary
silver other than that held against silver certificates and Treasury notes of 1890, and the following coin and paper money held in the Treasury: subsidiary silver and minor coin
United States notes, Federal Reserve notes, Federal Reserve bank notes, and National Bank notes.
5
The total of Federal Reserve Bank capital paid in, surplus, other capital accounts, and other liabilities and accrued dividends, less the sum of bank premises and other assets.
6
These figures are estimated. Available only on call dates prior to 1929.
NOTE.—For description of figures and discussion of their significance, see Banking and Monetary Statistics, Sec. 10, pp. 360-66.
2

3




I
C/l

1

76

ANNUAL REPORT OF BOARD OF GOVERNORS
NO. 9—BANK PREMISES OF FEDERAL RESERVE BANKS AND BRANCHES
DECEMBER 31, 1954
Cost

Federal Reserve Bank or
branch
Land

Building
(including
vaults) i

Fixed machinery and
equipment

Net
book value
Total

$ 1,628,132 $ 5,948,069 $ 2,866,643 $10,442,844 $ 5,918,633

Boston
New York. . . .
Annex
Buffalo

5,215,656
592,679
255,000

12,183,528
1,451,570
542,797

4,877,779
497,722

22,276,963
2,541,971
797,797

5,716,499
995,518
437,436

Philadelphia. .

1,884,357

6,972,273

920,743

9,777,373

5,163,732

Cleveland
Cincinnati. . . .
Pittsburgh

1,295,490
380,744
1,189,941

6,681,971
1,083,985
1,162,918

1,688,119
879,537
689,889

9,665,580
2,344,266
3,042,748

2,036,488
1,584,574
1,639,070

Richmond....
Annex. . . . .
Baltimore . . . .
Charlotte

389,611
80,333
250,487
105,701

3,682,181
482,482
1,251,072
308,749

1,648,745
135,106
480,555
154,449

5,720,537
697,921
1,982,114
568,899

3,256,414
136,865
764,900
337,129

Atlanta
Birmingham. .
Jacksonville. . .
Nashville
New Orleans..

632,238
124,137
164,004
48,000
277,078

1,461,474
330,680
1,680,835
211,616
762,456

308,082
70,510
628,139
35,091
265,700

2,401,794
525,327
2,472,978
294,707
1,305,234

957,142
128,105
2,258,865
81,837
452,963

Chicago
Detroit......

2,963,548
1,147,542

6,540,905
2,815,843

2,752,351
1,199,616

12,256,804
5,163,001

2,063,950
4,216,597

St. Louis
Annex
Little Rock.. .
Louisville
Memphis

1,496,060
179,720
85,007
131,177
128,542

2,136,438
1,035,281
264,604
231,702
287,468

1,328,426
524,429
158,320
72,464
105,442

4,960,924
1,739,430
507,931
435,343
521,452

1,263,051
989,880
187,422
156,073
235,628

Minneapolis. .
Helena

600,521
15,710

2,316,746
126,401

629,944
44,142

3,547,211
186,253

924,729
82,090

Kansas City. .
Denver
Oklahoma City
Omaha

545,764
101,512
65,021
444,147

3,514,875
461,823
421,252
488,162

1,234,369
86,910
97,588
94,549

5,295,008
650,245
583,861
1,026,858

1,420,440
243,498
201,016
668,032

Dallas
El Paso
Houston
San Antonio. .

189,831
39,004
78,812
477,347

1,362,220
119,739
317,336
344,577

466,692
32,575
112,111
55,859

2,018,743
191,318
508,259
877,783

310,576
38,849
121,244
662,534

San Francisco.
Los Angeles...
Portland
Salt Lake City
Seattle

476,768
478,603
161,239
114,075
274,772

3,419,261
3,709,542
1,678,511
341,449
1,891,564

1,036,864
325,782
630,920
84,814
642,240

4,932,893
4,513,927
2,470,670
540,338
2,808,576

1,271,640
3,124,350
2,116,242
183,065
2,400,355

24,708,310

80,024,355

27,863,216

132,595,881

54,747,431

Total

OTHER REAL ESTATE ACQUIRED FOR BANKING HOUSE PURPOSES
New York
Buffalo
Richmond
Charlotte
Birmingham
Nashville
Chicago
Louisville
Denver
Dallas
Los Angeles
Portland
Total

45,000
353,550
146,550
10,868
203,215
422,110
1,040,000
458 918
405,413
494,935
290,853
37,000
3,908,412

137,490

1,192,196
26 013

132,466

29,464
1,385,163

132,466

182,490
353,550
146,550
10,868
203,215
422,110
2,364,662
484 931
405,413
494,935
320,317
37,000

76,662
353,550
146,550
10,868
203,215
422,110
2,361,021
484 931
405,413
494,935
320,317
37,000

5,426,041

5,316,572

1
Includes expenditures incident to construction programs carried in unallocated accounts pending
completion of programs and subsequent allocation of costs to appropriate accounts.




NO. 10—NUMBER AND SALARIES OF OFFICERS AND EMPLOYEES OF FEDERAL RESERVE BANKS
[December 31, 1954]
President

Federal Reserve Bank
(Including branches)
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Total
1

Includes 688 part-time employees.




Annual salary

. .

Other officers
Number

Annual salaries

Employees1
Number

Annual salaries

Total
Number

Annual salaries

$30,000
60,000
30,000
30,000
30,000
30,000
40,000
30,000
26,500
30,000
25,000
30,000

24
51

24
30
27
32
39
29
21
25
25
33

$285,000
776,950
302,500
389,500
321,600
358,000
514,200
307,800
228,000
272,200
283,500
374,500

1,271
3,731
1,160
1,663
1,310
1,293
2,922
1,183
654
1,026
948
1,801

$4,163,791
14,949,206
3,885,057
5,618,153
4,151,106
3,916,856
10,529,115
3,685,733
1,994,415
3,357,987
3,202,613
6,346,805

1,296
3,783
1,185
1,694
1,338
1,326
2,962
1 213
676
1,052
974
1,835

$4,478,791
15,786 156
4,217,557
6 037 653
4,502,706
4,304,856
11,083,315
4,023 533
2,248,915
3,660,187
3,511,113
6,751,305

$391,500

360

$4,413,750

18,962

$65,800,837

19,334

$70,606,087

NO. 11—FEDERAL RESERVE BANK DISCOUNT, INTEREST, AND COMMITMENT RATES, AND BUYING RATES ON ACCEPTANCES
[Per cent per annum]
In effect December 31, 1954
Type of transaction

Boston

New

l

York | cieiphia

Cleveland

Discounts for and advances to member banks:
Advances secured by Government obligations and discounts of and advances secured by eligible paper
(Sees. 13 and 13a of the Federal Reserve A c t ) . . . .
Other secured advances (Sec. 10b of the Federal
Reserve Act)

Richmond

Atlanta Chicago

IK

IK

IK

IK

2

2

2

Advances to individuals, partnerships, or corporations
other than member banks secured by direct obligations
of the United States (last paragraph of Sec. 13 of the
Federal Reserve Act)

2M

Loans to industrial or commercial businesses under Sec.
13b of the Federal Reserve Act, direct or in participation
with financing institutions
Discounts for and purchases from financing institutions
under Sec. 13b of the Federal Reserve Act:
On portion for which institution is obligated
On remaining portion
Commitments to make loans under Sec. 13b of the Federal
Reserve Act:
To industrial or commercial businesses
Tofinancinginstitutions

Minneapolis

St
\
Louis
T

3-5 K
0)
(3)
K-U

KD

0)
3
)
i-ly
4-i y

4-Vi

l-i K

2K-5

25€-5

2K-5

0)

0)

2K-5
2K-5

Dallas

IK

IK

IK

2

2

3

3

3-5K

3-5K

2%

3-5

K

3-5 K
0)

San
Francisco

Kansas
Cily

K-i^
5

O

K-U
KU

Rate charged borrower by financing institution less commitment rate.
2
Rate charged borrower but not to exceed 1 per cent above the discount rate.
3
Rate charged borrower.
4
Financing institution is charged K P e r cent per annum on undisbursed portion of loan.
5
Financing institution is charged M per cent per annum on undisbursed portion of loan.
6
The rates shown for the Federal Reserve Bank of New York also apply to any purchases made by the other Federal Reserve Banks.
NOTE.—Maximum maturities. Discounts for and advances to member banks: 90 days for discounts and advances under Sections 13 and 13a of the Federal Reserve Act
except that discounts of certain bankers' acceptances and of agricultural paper may have maturities not exceeding 6 months and 9 months, respectively, and advances secured
by obligations of Federal intermediate credit banks maturing within 6 months are limited to maximum maturities of 15 days; 4 months for advances under Section 10(b). Advances to individuals, partnerships, or corporations under the last paragraph of Section 13: 90 days. Industrial loai?s and commitments under Section 13b: 5 years.




s

0)
(3)

Effective minimum buying rates on prime bankers'
acceptances payable in dollars
1-90 days
91-120 days
121-180 days
1

tr

I

79

FEDERAL RESERVE SYSTEM
NO. 12—MEMBER BANK RESERVE REQUIREMENTS
[Per cent of deposits]
Net demand deposits 1
Effective date of change

1917—June 21

Central
reserve
city banks

Reserve
city banks

13

10

1936—Aug.
1937—Mar.
May
1938—Apr.

16
1
1
16

22M
26
22 %

1941—Nov.
1942—Aug.
Sept.
Oct.

1
20
14
3

26
24
22
20

1948—Feb.
June
Sept.
Sept.

27
11
16
24

22
24

1949—May
May
June
July
Aug.
Aug.
Aug
Aug.
Aug.
Sept.

1
5
30
1
1
11
16
18
25
1

Central
reserve and
reserve city
banks

Country
banks

3

3

7

20

2

14
12

4

6
5

14

20

4

6
5

6

4

6

16
22

24

21
20

23^

19^

23
22^
22

19

15

18

23

19

24

20

22

19

1954—j u n e 15
June 24
July 29
Aug. 1

21
20

18

In effect Jan. 1, 19552

20

18

7

7
6

14
13

.

1951—Jan. 11
Jan 16
Jan. 25
Feb 1
1953—Tulv
July

Country
banks

15

26

. .

Time deposits

6

5

5

12

2

6

6

13

14
13

1
9

5
5

12
12

5

5

1
Demand deposits subject to reserve requirements, which beginning Aug. 23, 1935, have been
total demand deposits minus cash items in process of collection and demand balances due from domestic
banks (also minus war loan and series E bond accounts during the period Apr. 13, 1943-June 30, 1947).
2
Present legal minimum and maximum requirements on net demand deposits—central reserve
cities, 13 and 26 per cent; reserve cities, 10 and 20 per cent; country, 7 and 14 per cent, respectively;
on time deposits at all member banks, 3 and 6 per cent, respectively.

NO. 13—MAXIMUM INTEREST RATES PAYABLE ON TIME DEPOSITS i
[Per cent per annum]
Nov. 1, 1933
to
Jan. 31, 1935

Feb. 1, 1935
to
Dec. 31, 1935

In effect
beginning
Jan. 1, 1936

Savings deposits

3

2K

2K

Postal Savings deposits

3

2J4

2y2

Other time deposits payable:
In 6 months or more
In 90 days to 6 months
In less than 90 days

3
3
3

2y2
i%
iy2

Type of deposit

1

V4
1

Maximum rates that may be paid by member banks as established by the Board of Governors
under provisions of Regulation Q. Under this regulation the rate payable by a member bank may
not in any event exceed the maximum rate payable by State banks or trust companies on like deposits
Digitized for under
FRASER
the laws of the State in which the member bank is located. Maximum rates that may be paid



80

ANNUAL REPORT OF BOARD OF GOVERNORS
NO. 14—MARGIN REQUIREMENTS*

Prescribed by Board of Governors of the Federal Reserve System in accordance with Securities
Exchange Act of 1934
[Per cent of market value]
Jan. 21,
1946—

Feb. 1,
1947—

Mar. 30,
1949—

1947

1949

1951

75
75

100
100

75
75

50
50

75

100

75

50

July 5,
1945—
Jan. 20,
1946
Regulation T:
For extensions of
credit by brokers
and dealers on
listed securities.. .
For short sales
Regulation U:
For loans by banks
on stocks

Jan. 31, Mar. 29, Jan. 16,

Jan. 17, Feb. 20,
1951—
Feb. 20,
1953

Effective

1953—
Jan. 4,
1955

Jan. 4,

75
75

50
50

60
60

75

50

60

1955

the "margin requirements shown in this table are the diiierence between the market value (100 per
cent) and the maximum loan value. Changes on Feb. 20, 1953 and Jan. 4, 1955 were effective after
the close of business on these dates.
NOTE.—For earlier data, see Banking and Monetary Statistics, Table 145, p. 504, and Annual Report
of the Board of Governors for 1948, p. 77.

NO. 15—FEES AND RATES ESTABLISHED UNDER REGULATION V ON LOANS
GUARANTEED PURSUANT TO DEFENSE PRODUCTION ACT OF 1950
[In effect December 31, 1954]
Fees Payable to Guaranteeing Agency by Financing Institution on Guaranteed Portion of Loan

Percentage of loan guaranteed

70 or less
75
80
85
90
95

Over 95

Guarantee fee
(Percentage of
interest payable
by borrower)

Percentage of
any commitment
fee charged
borrower

10
15
20
25
30
35
40-50

10
15
20
25

Maximum Rates Financing Institution May Charge Borrower
[Per cent per annum]
Interest rate
Commitment rate.




30

35
40-50

NO. 16—ALL BANKS IN THE UNITED STATES, BY GLASSES, DECEMBER 31, 1954 AND 1953
PRINCIPAL ASSETS AND LIABILITIES, AND NUMBER OF BANKS
[In millions of dollars]
Commercial banks
All
banks

Item

Member banks
Total
Total i

National

State1

Mutual savings banks

Insured
nonmember

Noninsured

Total i

Insured1

Noninsured

20,860
11,630
9,230
6,160
3,070
840

6,980
3,370
3,610
2,570
1,040
190
6,490

December 31, 1954P
Loans and investments, total
Loans
Investments
U S Govt obligations
Other securities
Cash assets
Deposits total
Interbank
Other demand
Other time
Total capital accounts

. .

.

...

.

Number of banks

184,280
85,780
98,500
78,140
20,360
43,490

156,440
70 780
85,660
69 410
16,250
42,460

131,850
60,240
71,610
58 100
13,510
37,300

88,240
39,280
48,960
39,330
9,630
25,030

43,610
20,960
22,650
18,770
3,880
12,270

22,450
9,950
12,500
10,120
2,380
4,750

2,160

410

27,840
15,000
12,840
8,730
4,110
1,030

209,920
16 440
120,180
73,300
17,390

183,580
16 440
120,130
47,010
14,710

156 200
15 620
102 780
37,800
12,300

104,730
10 450
68,350
25,930
8,080

51,470
5 170
34,430
11,870
4,220

25,350

2,050

26,340

19,850

16,150
8,830
2,080

1,200
400
330

50

26,290
2,680

50

19,800
1,910

6,490
770

14,367

13,840

6,660

4,789

1,871

6,647

536

527

218

309

19,252
10,016
9,236
6,476
2,760
799

6,558
2,910
3,649
2,707

18,383

6,015

370

600

1,560
1,200
360

450

December 31, 1953
Loans and investments, total
Loans
Investments
U S Govt obligations
Other securities
Cash assets
..

171,497
80,518
90,979
72,610
18,370
45,811

145,687
67,593
78,094
63,426
14,668
44,828

122,422
57,762
64,660
52,603
12,057
39,381

81,913
37,831
44,082
35,482
8,600
26,479

40,509
19,931
20,578
17,121
3,457
12,903

21,396
9,328
12,069
9,790
2,278
5,020

1,891
511
1,380
1,045
430

25,810
12,925
12,885
9,184
3,701
983

Deposits total
Interbank
Other demand
Other time
Total capital accounts

201,100
15,957
116,788
68,354
16,118

176,702
15,955
116,750
43,997
13,559

150,164
15,170
99,780
35,213
11,316

100,654
10,152
66,343
24,160
7,391

49,510
5,019
33,437
11,054
3,925

24,555

2,005

24,398

378

407

15,758
8,419
1,925

1,212

3
38

2
35

386
320

24,358
2,559

18,345
1,819

6,013

14,509

13,981

6,743

4,856

1,887

6,672

569

528

219

309

Number of banks

335

941

184

2
740

P Figures for Dec. 31, 1954 are preliminary and based largely on data regularly collected or estimated as of the last Wednesday of the month, "published in the Federal
Reserve Bulletin. Some items, particularly cash assets and demand deposits, are subject to large daily changes, and the estimates for Dec. 31,1954 may be considerably different
from reported figures; the latter will be published in the Bulletin, probably in the May issue.
1
Member bank figures and insured mutual savings bank figures both include three member mutual savings banks. These banks are not included in the total for "commercial
and are included only once in the total for "all banks." Member bank figures for Dec. 31, 1954 include one bank in Alaska that became a member on Apr. 15, 1954.
Digitizedbanks;"
for FRASER



82

ANNUAL REPORT OF BOARD OF GOVERNORS
NO. 17—MEMBER BANK EARNINGS, BY GLASS OF BANK, 1954 AND 1953
[Dollar amounts in millions]
Central reserve city banks
Total
Item

New York
1954P

Earnings

On U. S. Govt. securities
On other securities
On loans
All other

Expenses
Salaries and wages..
Interest on deposits.
All other

Net current earnings
before income taxes.
Recoveries and profits 1 ..
Losses and charge-offs2...
Net addition to valuation
reserves

1953

1954P

1953

Chicago
1954P

$4,812 $4,590

$778

$757

$192

1,063 1,011
252
2,700 2,632
695

153

137
43
434
144

56

"418

92

2,988 2,782

428

404
228
28
148

106

1,824 1,809

349

353

86

1,371
425
985

1953

Reserve
city banks

1954P

1953

Country
banks

1954P

1953

$188 $1,878 $1,798 $1,965 $1,847
53
12
95
28

397

376
96
1,059
267

456

445
100
1,045
257

102 1,161 1,083 1,292 1,192
566
48
529
201
15
181
426
39
372
717

715

672

655

120
332

47
136

45
128

40

15

16

Profits before income
1,893 1,558
taxes
692
804
Taxes on net income.. .
865
1,089
Net profits
deGash dividends
419
456
clared3

556
224

328

681
257
424

167

143

129

18.5
1.18

15.4
1.10

1.11

9.6
0.63

8.5
0.54

9.7
0.69

8.1
0.56

1.94
4.72

1.99
4.75

2.02
5.45

2.00
5.49

374
161

312
151

745
347

610
282

213

161

398

113

103

180

13.2
1.14

13.9
1.21

14.8
1.06

15.7
1.07

17.4
1.14

8.0
0.70

6.3
0.55

9.1
0.66

7.9
0.54

1.79
3.55

1.91
3.55

1.91
3.57

1.94
3.61

333

Ratios (per cent):
Net current earnings
before income taxes
Avers.ge total capital
15.6 16.4
accounts
1.15
Average total assets.. 1.12
Net profits to—
Average; total capital
9.3
7.8
accounts
Avera.ge total assets.. 0.67 0.55
Average return on U. S.
1.98
1.95
Govt. securities
Average return on loans. 4.69 4.69

p Data for 1954 are preliminary, and some items are not available; final figures will appear in the
Federal Reserve Bulletin, probably in the May issue.
1
Includes recoveries credited to valuation reserves.
2
Includes losses charged to valuation reserves.
3
Includes interest on capital notes and debentures.




83

FEDERAL RESERVE SYSTEM

NO. 18—ANALYSIS OF CHANGES IN NUMBER OF BANKING OFFICES DURING 19541
Commercial and stock savings banks
and nondeposit trust companies
Member
banks

All
banks
Total

Nonmember
banks

State

Mutual
savings
banks

National l

member2

Insured

Noninsured2

Insured2

Noninsured

Number of banks, Dec. 31, 1953. 14,509 13,981 4,856

1,887

6,672

569

219

309

Changes during 1954
New banks**
Suspensions
Consolidations and absorptions:
Banks converted to branches...
Other
Voluntary liquidations4
Other changes ^
Conversions:
National into State
State into National
Federal Reserve membership:6
Admission of national bank in
Alaska
Admissions of State banks ..
Withdrawals of State 7banks..
Federal deposit insurance:
Admissions of State banks.. .
Withdrawal of State bank
Net increase or decrease

+73

+73

+18

+6

+43

+6

-176
-31
-7

-175
-31
-7

-80
-14
-1

-22
-4

-71
-11
__1

-2
2
-5

+1

+1

+1
-1

+ 12

+1

+1

+1

+ 12
-4

-16

Number of banks, Dec. 31,1954. 14,367 13,840 4,789
Number of branches and addi-8
tional offices, Dec. 31, 1953 .. 5,897 5,627 2,590

1,871

-142

-141

Number of banking facilities,
Dec. 31, 1954*0
1

+8

—9

—1

—1

198

198

-25
6,647

-1

-28

+1

-33

-1

536

218

309

41

192

78

+88
+26

+79
+47

+2

+9

+97

-7
-5

+21
+2
+6
+29

1,710

1,462

36

221

87

21

22

_5

+1
—2
+1

+2

156

21

21

+341 + 172
+ 174 + 101
-16
-28
+53
-6
+519 +481 +310

—9

+4
+28

1,365

+371
+ 176
-28

+8

-11

1,631

Number of branches and additional offices, Dec. 31, 19548.. 6,416 6,108 2,900
Number of banking
facilities,
199
156
Dec. 31, 19531(>
199
Changes during 1954
Established
.
Discontinued
Interclass changes
Net increase or decrease

-1

+3

-3

-67

Changes during 1954
De novo branches
Banks converted into branches...
Discontinued
Interclass changes—net®
Net increase or decrease

—1

+5

-6
-29
+79

-6
-23

+9

—2
- 1
—1

Excludes banks in United States territories and possessions except one national bank in Alaska,
with
no branches, that became a member of the Federal Reserve System on Apr. 15, 1954.
2
State member bank figures and the insured mutual savings bank figures both include 3 member
mutual savings banks, not included in the total for "commercial banks." State member bank figures
also
include one noninsured trust company without deposits.
3
Exclusive of new banks organized to succeed operating banks.
4
Exclusive
of liquidations incident to the succession, conversion, and absorption of banks.
5
One institution restored to series, previously eliminated.
6
Exclusive
of conversions, if any, of national banks into State member banks, or vice versa.
7
Exclusive of insured nonmember banks converted into national banks or admitted to Federal Reserve
membership,
or vice versa.
8
Covers all branches and other additional offices at which deposits are received, checks paid, or
money
lent,
except
banking facilities which are shown separately.
9
For gross changes by class of bank see Federal Reserve Bulletin, February 1955.
1
°Banking facilities are provided at military and other Government establishments through arrangements made by the Treasury Department with banks designated as depositaries and financial agents
of the Government. These figures exclude branches that have also been designated as banking facilities.




84

ANNUAL REPORT OF BOARD OF GOVERNORS

NO. 19—NUMBER OF BANKING OFFICES ON FEDERAL RESERVE PAR LIST AND NOT
ON PAR LIST, BY FEDERAL RESERVE DISTRICTS AND STATES, DECEMBER 31, 19541
On par list
Not on par list
(Nonmember)

Total 1
Federal
Reserve district or State

Total

Member

Nonmember

Branches
Branches
Branches
Branches
Banks Branches
& offices Banks & offices Banks & offices Banks & offices Banks & offices
DISTRICT
Boston
New Y o r k . . . .
Philadelphia. .
Cleveland....
Richmond. . . .
Atlanta
Chicago
St. Louis
Minneapolis. .
Kansas City. .
Dallas
San Francisco 1

Total
STATE
Alabama
Alaska 1
Arizona
Arkansas
California . . .
Colorado
Connecticut. .
Delaware
Dist. of Col..
Florida
Georgia
Idaho
Illinois
Indiana. . . . . .
Iowa... . . . .
Kansas
Kentucky....
Louisiana. . . .
M!aine
IVlaryland
Massachusetts
Michigan
Minnesota....
Mississippi. . .

454
787
777

1,029
1,004
1,244
2,485
1,457
1,280
1,754
1,049

456

1,178

318
499

454
787
777

1,029
749
817
294
659
747 2,485
199 1,142
116
679
28 1,747
85

456

1,178
318
499

311
680
587
632

476
597
373
252
747 1,017
490
131
473
74
749
28

247
436

143
107
190
397

385
341
217
286
387 1,468
80
652
29
206
18
998
49

427

1,627

957
427

13,747

6,296

11,960

234
1

37

138
1

37

96

37

42

12

82

12

82

4

59

8

72

1,627

632
234

357

1,086

5,979 6,654

13

4,787 5,306

1,192

1,787

317

115
163

6
1,120

70
107

3
1,033

45
56

5
88
33
54

153
97
34
17

5
88
33
54

94
57
13
13

4
70
13
44

59
40
21
4

907
473
664
602
370

63
47
90
205
273
6
15

388
261

16
23
82
37
195
64
11

23

177
83
139
7
52
262
34
490
55
40
407
222
20

1

212
109

Pennsylvania.
Rhode Island.
South Carolina
South Dakota.
Tennessee....
Texas
Utah
Vermont
Virginia
Washington., .
West Virginia.
Wisconsin....
Wyoming. . . .

853
10
151
170
295
922
54
64
316
107
183
553
53

396
63
78
52
128
17
38
13
157
186
150
1

67
60
152
173
425
270
43

75
89
156
232
337
6
25

535
110
413
8
75
304
52
558
106
59
634
376
46

1

853
10
72
72
212
879
54
64
313
107
182
553
53

1
3

51
37
70
136
230
206
32

3
66

1
24
2
231
26
960
304
23
333
2
138

50
280

58
160

600
370

1

1
5

392
239
498

3
66

596
110
413
8
75
304
52
558
210
154
634
383
46

17

3
95
2

513
234
166

Missouri
M^ontana .
Nebraska
Nevada
New Hamp. „ .
New Jersey...
New Mexico
New York . . .
North Carolina
North Dakota.
Ohio
Oklahoma. . .
Oregon

116

1
18
20
10

9
51
60

3
153
162

102
89
156
232
337
6
86

3
87

87
65
20

905
473
664

172
60
152
173
425
678
197

96
23

10
56
65

3
153
162

1
24
2
231
26
960
159
6
333
2
138
396
63
71
27
114
17
38
13
157
186
150
1

644
6
34
62
84
577
29
38
205
47
111
166
40

'315'
601
7

152
42
68'
42

92

23
1,120

169
121
38

187
585

23
131

153
97
34
17

11
59
65

212
35
360
51
45
10

325
193

1,496

231
163

219
401
38

99
92
71
63

3
43

1
21
1
205
9
899
89
295
2
129
335
48
57
23
85
17
34
4
105
176
22
1

82
56
18

358
27
274
1
23
42
18
68
51
19
227
154
26
209
4
38
10
128
302
25
26
108
60
71
387
13

5

2
2

12
42
66
27
64

io'

105

27

408
154

61

61
3

1
26
17
61
70
6
38

104
95

145
17

7

9
61
15
14
4
29
4
9
52
10

79
98
83
43

7
25
14

3

1

128

1
Comprises all commercial banking offices on which checks are drawn, including 198 banking
facilities (see note 10, Table 18). Excludes banks in the United States territories and possessions
except one member national bank in Alaska, with no branches, that became a member in 1954, included
in the San Francisco District. Number of member banks is less here than in Table 18 by 3 member
nondeposit trust companies and 3 mutual savings banks; number of nonmember commercial banks
less by 90 banks and trust companies on which no checks are drawn.
Digitized for isFRASER






RECORD OF POLICY ACTIONS
BOARD OF GOVERNORS
FEBRUARY 4,

1954

Reduction in Rates on Discounts for and Advances to Member Banks by Federal Reserve Banks.

Effective February 5, 1954, the Board approved actions taken
by the Boards of Directors of the Federal Reserve Banks of Boston,
New York, Philadelphia, St. Louis, and San Francisco in establishing a rate of 1 % per cent (a reduction from 2 per cent) on discounts
for and advances to member banks under Sections 13 and 13a of the
Federal Reserve Act.
Votes for this action: Messrs. Martin, Evans, Vardaman, Mills,
and Robertson. Votes against this action: none. Mr. Szymczak,
who was not present when this action was taken, stated that he
concurred in it.
Pursuant to the policy established by this action, the Board subsequently approved the same rate for the other Federal Reserve Banks,
effective on the dates indicated below:
Cleveland
February 15, 1954
Richmond
February 12, 1954
Atlanta
February 9, 1954
Chicago
February 11, 1954
Minneapolis
February 5, 1954
Kansas City
February 12, 1954
Dallas
February 15, 1954
The Board also approved, for each of the Federal Reserve Banks, a
rate of 2lA per cent (a reduction from 2*/2 per cent) on advances to
member banks under Section 10(b) of the Federal Reserve Act.
The effective dates of these approvals were those shown above. In
addition, the Board approved certain changes at some of the Federal Reserve Banks in other rates, including rates on advances to
individuals, partnerships, and corporations under the last paragraph
of Section 13 of the Act and on industrial loans and commitments
under Section 13b.
In accordance with the provisions of the Federal Reserve Act, the Federal
Reserve Banks establish, subject to review and determination of the Board of
Governors, rates on discounts and advances to member banks at least every
14 days and submit such rates to the Board for consideration. No changes




FEDERAL RESERVE SYSTEM

87

involving new policy had been made in these rates since those referred to on
pages 82 and 85 of the Board's Annual Report for 1953.
As evidences of receding levels of economic activity became increasingly
apparent after the middle of 1953, the Federal Reserve System, as outlined
in the text of this Report and the Board's Annual Report for 1953, modified
its credit policies to bring about easier conditions in the money markets.
When the above reductions in Federal Reserve Bank rates were approved
by the Board of Governors, the System was following a policy of supplying
or maintaining member bank reserves adequate to promote growth and
stability in the economy with emphasis on a program of actively maintaining
a condition of ease. The reduction in rates brought them more nearly in
line with existing short-term money market rates, and furthered current
monetary and credit policy by reducing the cost to member banks of borrowing
from Reserve Banks to make temporary adjustments in reserve positions.
APRIL 13,

1954

Reduction in Rates on Discounts for and Advances to Member Banks by Federal Reserve Banks.
Effective April 14, 1954, the Board approved action taken by the
Board of Directors of the Federal Reserve Bank of Chicago in establishing a rate of V/2 per cent on discounts for and advances to member banks under Sections 13 and 13a of the Federal Reserve Act.
Votes for this action: Messrs. Martin, Szymczak, Evans, Vardaman, and Robertson. Votes against this action: none. Mr. Mills,
who was not present when this action was taken, stated that he
concurred in the action.
Pursuant to the policy established by this action, the Board subsequently approved the same rate for the other Federal Reserve
Banks, effective on the dates indicated below:
New York
San Francisco
Cleveland
St. Louis
Kansas City
Dallas
Boston
Minneapolis
Richmond
Atlanta
Philadelphia

April
April
April
April
April
April
April
April
May
May
May

16,
16,
23,
23,
23,
23,
27,
29,
15,
15,
21,

1954
1954
1954
1954
1954
1954
1954
1954
1954
1954
1954

The Board also approved actions taken by the Boards of Directors



88

ANNUAL REPORT OF BOARD OF GOVERNORS

of all the Federal Reserve Banks except Kansas City in establishing
a rate of 2 per cent on advances to member banks under Section
10(b) of the Federal Reserve Act. The effective dates of these approvals were those shown above except that the reduction at the
Federal Reserve Bank of Chicago became effective on September 13,
1954.
Inasmuch as market rates had continued to decline since the reductions in
Federal Reserve Bank rates in February and the System was continuing the
policy of actively maintaining ease in the money markets, the above reductions
were approved for substantially the same reasons as prompted the earlier action.
JUNE 21,

1954

Reduction in Reserve Requirements of Member Banks.
The supplement to Regulation D, Reserves of Member Banks,
was amended to decrease reserve requirements with respect to deposits
of member banks as follows:
On net demand deposits—
Effective
June 24,
July 29,
July 29,
August 1,,

1954
1954
1954
1954

For
Central reserve city banks
Central reserve city banks
Reserve city banks
Banks not in central reserve
or reserve cities

Percentage
From 22 to 21 per cent
From 21 to 20 per cent
From 19 to 18 per cent
From 13 to 12 per cent

On time deposits—
For

Effective
June 16, 1954

1

June 24, 1954

Banks not in central reserve
or reserve cities
Central reserve and reserve
city banks

Percentage
From 6 to 5 per cent
From 6 to 5 per cent

Votes for this action: Messrs. Martin, Szymczak, Vardaman,
and Mills. Votes against this action: Mr. Robertson
The reasons for this action were stated as follows in a press statement
issued by the Board on June 21, 1954:
"This action was taken in conformity with the Federal Reserve
System's policy of making available the reserve funds required
for the essential needs of the economy and facilitating economic
growth. The reduction will release a total of approximately 1,555
million dollars of reserves. It was made in anticipation of estimated
1
This reduction was made retroactive so as to apply to the average balance in each
bank's account with its Federal Reserve Bank for the period June 16 through June 30, 1954.




FEDERAL RESERVE SYSTEM

89

demands on bank reserves during the summer and fall, taking account
of probable private financing requirements, including the marketing
of crops and replenishment of retail stocks in advance of the fall
and Christmas sale seasons, as well as the Treasury's financing
needs.
". . . Changes in reserve requirements supply or withdraw relatively large amounts of bank reserves, even when effected on a
gradual basis, as in the present action. Accordingly, such changes
are comparatively infrequent. For more flexible and frequent adjustments to the credit needs of the economy the System relies chiefly
upon open market operations to release or absorb reserve funds."
As indicated by the above statement, it was realized that this action would
supply more member bank reserves than were called for at the time. It
was taken with the understanding that the increase would be partly offset
by open market operations. Accordingly, during July and August System
holdings of Government securities were reduced by about 1 billion dollars.
Thereafter, as the needs for reserves became evident, the System again
purchased securities for the open market account.
Although Governor Robertson agreed with the majority of the Board
with respect to the need for providing a substantial amount of reserves during the remainder of 1954, he favored a smaller reduction in reserve requirements at this time and a review of the situation later in the year to determine
what, if any, further action seemed necessary in the light of developments.
JULY 2,

1954

Amendments to Regulation J, Check Clearing and Collection, and Regulation G,
Collection of Noncash Items.
Effective July 15, 1954, Regulations J and G were amended so
as to permit the collection through Federal Reserve Banks of checks
drawn on nonmember par-remitting banks located in such of the
Territories, dependencies, insular possessions, and parts of the United
States outside the continental United States as the Board of Governors might designate, and the collection of noncash items payable
in such areas. At the same time, the Board designated Alaska and
Hawaii as being in or of the Twelfth Federal Reserve District for
the purposes of Regulations J and G, effective on and after July 15,
1954.
Votes for this action: Messrs. Mills and Robertson. Messrs.
Martin, Szymczak, and Vardaman, who were absent, had previously indicated their approval. Votes against this action:
none. This action was taken on this date because in the circumstances it was desirable to have the new procedures become
effective as soon as possible with reasonable notice thereof. The



90

ANNUAL REPORT OF BOARD OF GOVERNORS

action was ratified by unanimous vote at the next meeting on
July 7, 1954, at which Messrs. Martin, Vardaman, Mills, and
Robertson were present, and became effective on July 15, 1954.
Following the admission of an Alaskan bank to membership in the Federal Reserve System in April 1954, certain nonmember banks in that Territory announced that they intended to remit for cash items at par, as member
banks are required to do. Similarly, all banks in the Territory of Hawaii
made known their willingness to remit at par for cash items sent to them
through the facilities of the Federal Reserve System.
Prior to the amendments referred to above, the two regulations technically
did not permit Federal Reserve Banks to collect cash items drawn on parremitting nonmember banks located in Territories, dependencies, insular
possessions, and parts of the United States outside the continental United
States, nor to collect noncash items payable in such areas. The Board took
the actions stated because it felt that the Federal Reserve Banks should be
in a position to make available their collection services to expedite and simplify
the presentation and collection of checks and other items for their depositors
and for the general public.
SEPTEMBER 29,

1954

Amendment of Regulation K, Banking Corporations Authorized to do Foreign
Banking Business under the Terms of Section 25 (a) of the Federal Reserve Act.
Effective immediately, Sections XI and XV of Regulation K were
amended to broaden the powers of banking corporations authorized
to do foreign banking business under the terms of Section 25(a) of
the Federal Reserve Act (commonly known as Edge Act corporations) to raise funds through the sale of their unsecured notes or
debentures if such corporations are not engaged in the business of
receiving deposits, and to increase the amount of credit that such
a nondeposit corporation may extend to a single borrower.
Votes for this action: Messrs. Martin, Szymczak, Vardaman,
Mills, Robertson, Miller, and Balderston.
Before this amendment was adopted, Regulation K contemplated two types
of Edge Act corporations. One type would finance its operations principally
through the issuance of obligations secured by the pledge of collateral; such
a corporation could not receive deposits in the United States except those
incidental to its foreign operations and could not receive deposits abroad
except those incidental to the conduct of its exchange, discount or loan operations. The other type could do a general foreign banking business; these
corporations could receive in the United States only such deposits as were
incidental to their foreign operations but could receive deposits of any kind
outside the United States.



FEDERAL RESERVE SYSTEM

91

The amendment will permit Edge Act corporations which do not receive
deposits either within the United States or abroad to finance themselves
chiefly through the sale of unsecured notes. It thus provides a more flexible
means of financing than was previously available, and was adopted primarily to
put such nondeposit corporations in a better position to finance durable goods
exports which require financing on longer terms than are usual in ordinary
commercial banking transactions. It was the view of the Board that such
a liberalization of its regulation within the limitations established by the
amendment was desirable in promoting international and foreign trade.




RECORD OF POLICY ACTIONS
FEDERAL OPEN MARKET COMMITTEE

MARCH 3,

1954

1. Authority to Effect Transactions in System Account.
The following directive to the executive committee was approved:
The executive committee is directed, until otherwise directed by
the Federal Open Market Committee, to arrange for such transactions
for the System open market account, either in the open market
or directly with the Treasury (including purchases, sales, exchanges,
replacement of maturing securities, and letting maturities run off
without replacement), as may be necessary, in the light of current
and prospective economic conditions and the general credit situation
of the country, with a view (a) to relating the supply of funds in
the market to the needs of commerce and business, (b) to promoting growth and stability in the economy by actively maintaining
a condition of ease in the money market, (c) to correcting a disorderly situation in the Government securities market, and (d) to
the practical administration of the account; provided that the aggregate amount of securities held in the System account (including
commitments for the purchase or sale of securities for the account)
at the close of this date, other than special short-term certificates
of indebtedness purchased from time to time for the temporary
accommodation of the Treasury, shall not be increased or decreased
by more than 2 billion dollars.
The executive committee is further directed, until otherwise directed by the Federal Open Market Committee, to arrange for
the purchase direct from the Treasury for the account of the Federal Reserve Bank of New York (which Bank shall have discretion,
in cases where it seems desirable, to issue participations to one or more
Federal Reserve Banks) of such amounts of special short-term certificates of indebtedness as may be necessary from time to time for
the temporary accommodation of the Treasury, provided that the
total amount of such certificates held at any one time by the Federal
Reserve Banks shall not exceed in the aggregate 2 billion dollars.
Votes for this action: Messrs. Martin, Chairman, Sproul,
Vice Chairman, Evans, Leedy, Mills, Robertson, Szymczak,
Williams, and Young. Votes against this action: none.



92

FEDERAL RESERVE SYSTEM

93

This directive was in the same form and had the same limitations as
the directive adopted by the Federal Open Market Committee at its
meeting in December 1953. The December action was for the purpose of
providing, as the central objective of current credit policy, that transactions
for the System open market account should be with a view "to promoting
growth and stability in the economy by actively maintaining a condition of
ease in the money market." The objective of this directive was to combat
the moderate but unmistakable decline in economic conditions that had
become apparent after mid-1953 and which was continuing as the year
came to a close.
The Committee's review of the economic situation in March 1954 showed
that the recessionary tendencies which had appeared during the second half
of 1953 were continuing. Industrial production had decreased by about 8
per cent from the high levels of April-August 1953, and other important
measures of activity had shown similar declines, although commodity prices
had been relatively stable. It was not evident whether there soon would
be either an upturn in activity or a leveling out of the decline.
Pursuit by the Federal Reserve in late 1953 and in the first two months
of 1954 of the credit policy described as "active ease" was for the purpose
of assuring that recession tendencies would not be accentuated, as at times
in the past, by pressure for liquidation of bank credit, and that tendencies
toward economic recovery would be encouraged by an ample volume of
reserves at the banks and aggressive efforts to extend the availability of credit.
The easing tendencies, both in the market and in System policy, were confirmed and reinforced in February by reductions in discount rates at the
Federal Reserve Banks. In order to continue this atmosphere and to foster
recovery, the Committee concluded that the policy of actively providing
reserves to the money market to facilitate credit expansion should be continued during the spring of 1954.
2. Review of Continuing Authorities or Statements of Policy.
The Committee reviewed and reaffirmed without change all continuing
statements of operating policy and specific authorities for operations which
were in effect immediately prior to this meeting on March 3, 1954, at which
the newly elected members of the Federal Open Market Committee assumed
their duties.
In this connection, Mr. Sproul referred to the action taken by the Committee
at its meeting in December 1953 in approving a statement of policy that,
until superseded or modified by further action of the Committee, "transactions for the System account in the open market shall be entered into solely
for the purpose of providing or absorbing reserves (except in the correction of
disorderly markets), and shall not include offsetting purchases and sales of
securities for the purpose of altering the maturity pattern of the System's
portfolio." Mr. Sproul moved that the first clause of this statement of policy



94

ANNUAL REPORT OF BOARD OF GOVERNORS

be rescinded and that the Committee rely on the policy statement which had
been adopted by unanimous vote in March 1953 that "it is not now the policy
of the Committee to support any pattern of prices and yields in the Government securities market, and intervention in the Government securities market
is solely to effectuate the objectives of monetary and credit policy (including
correction of disorderly money markets)." In the absence of a second to
Mr. Sprout's motion, it was not brought to a vote and the statement of policy
set forth above was continued.
3. Minimum Buying Rate on Bankers' Acceptances.
At this meeting, the action taken by the members of the Committee
effective February 5, 1954, reducing the minimum buying rate on prime
eligible bankers' acceptances from 2 per cent to 1% per cent, was approved,
ratified,, and confirmed.
Votes for this action: Messrs. Martin, Chairman, Sproul,
Vice Chairman, Evans, Leedy, Mills, Robertson, Szymczak,
Williams, and Young. Votes against this action: none.
The reduction in the minimum buying rate on bankers' acceptances was
in response to a recommendation from the Manager of the System Open
Market Account on February 4, 1954, that this rate be reduced as a reflection of the existing and developing pattern of interest rates in general, which
had been declining in response to the Federal Reserve System's recent policy
of actively maintaining a condition of ease in the money market. This
pattern included reductions in the Federal Reserve Bank discount rates from
2 per cent to 1 % per cent effective at several Federal Reserve Banks on February 5 and at the remaining Reserve Banks within a few days thereafter.
JUNE 23,

1954

1. Authority to Effect Transactions in System Account.
At this meeting, the Committee renewed without change the directive
to the executive committee which was adopted in December 1953 and renewed without change at the meeting on March 3, 1954. The directive
is set forth on page 92 of this report.
Votes for this action: Messrs. Martin, Chairman, Sproul,
Vice Chairman, Bryan, Leedy, Mills, Robertson, Szymczak,
Vardaman, Williams, and Young. Votes against this action: none.
The economic outlook had improved somewhat between the March and
June meetings of the Committee. In March, recession was the dominant
characteristic of industrial and commercial activity, and there was serious
question whether the recessionary tendency might become self-feeding and
cumulative, although there was also a view that an early end to the economic



FEDERAL RESERVE SYSTEM

95

decline might be anticipated. In that atmosphere, the Committee had continued a policy of actively supplying reserves to the market.
By June, it was apparent that there had been a slackening of the decline
in production and consumption. In fact, a slight rise had taken place in
industrial output, construction activity had advanced further to record levels,
and the decline in employment had slackened. Prices had continued to show
little change. Production abroad had continued to rise. On the other hand,
elements in the situation clouding the outlook included the continued contraction in outlays of the Federal Government for national security, a decline
in farm income, and a decline in the income of industrial workers. The
Committee concluded that, under the circumstances, monetary policy continued to bear a heavy countercyclical responsibility. It felt that the policy of
"active ease" which had been maintained for some months had facilitated and
made possible the financing of business without causing distortions in the
credit and capital markets. In the Committee's opinion such revival as had
occurred was insufficient to call for modification of the policy of active ease
and, therefore, action was taken to renew without modification the directive
calling for a policy of actively promoting ease in the money market. At the
same time the Committee noted that the Board of Governors of the Federal
Reserve System had acted in June to reduce the amount of reserves which
member banks are required to carry against their deposits, such reductions
to become effective during June, July, and August. In this connection, it
was suggested that the prospective reduction in reserve requirements should
be observed carefully and that, while the Committee's existing general policy
of "active ease" should be continued, in the interests of avoiding undesirable
redundancy in the money market it would be desirable to absorb temporarily
some of the excess reserves that would be released to the market during the
summer months as a result of the action taken by the Board of Governors.
2. Minimum Buying Rate on Bankers' Acceptances.
The Committee approved, ratified, and confirmed the action taken by the
members of the Federal Open Market Committee, effective April 16, 1954,
reducing from 1% per cent to ll/2 per cent the minimum buying rate on
prime eligible bankers' acceptances.
Votes for this action: Messrs. Martin, Chairman, Sproul, Vice
Chairman, Bryan, Leedy, Mills, Robertson, Szymczak, Vardaman, Williams, and Young. Votes against this action: none.
This further reduction in the minimum buying rate on bankers' acceptances was made at the time the discount rates of the Federal Reserve Banks
of Chicago (April 14) and New York and San Francisco (April 16) were
reduced from 1% per cent to 154 per cent, which reductions were followed
shortly by corresponding reductions in discount rates at all other Federal
Reserve Banks. As was the case with the reduction effective February 5,



96

ANNUAL REPORT OF BOARD OF GOVERNORS

1954, this decrease in the minimum buying rate was in recognition of the
existing market conditions and developments and was made in accordance
with the Committee's general policy of actively promoting a condition of
case in the money market.
3. Repurchase Agreements.
The Committee modified the authority granted to the Federal Reserve
Banks to enter into repurchase agreements with nonbank dealers in United
States Government securities so as to provide that the rates or rate ranges
on such repurchase agreements would be prescribed by the executive committee rather than by the Manager of the System Open Market Account,
as had been the case since mid-1952. This action did not modify the policy
with respect to the use of repurchase agreements, which remained subject
to the general limitation adopted on July 22, 1952, that in no event should
the effective rate be below whichever was the lower of (1) the discount rate
of the purchasing Federal Reserve Bank on eligible commercial paper, or
(2) the average issuing rate on the most recent issue of 3-month Treasury
bills.
Votes for this action: Messrs. Martin, Chairman, Sproul, Vice
Chairman, Bryan, Leedy, Mills, Robertson, Szymczak, Vardaman, Williams, and Young. Votes against this action: none.
SEPTEMBER 22,

1954

1. Authority to Effect Transactions in System Account.
The Committee again renewed without change the directive to the executive committee which was adopted in December 1953, and continued without
change at the meetings on March 3 and June 23, 1954. This directive, which
provided as the current credit policy of the Committee that transactions in
the account should be with a view, among other things, to "promoting
growth and stability in the economy by actively maintaining a condition of
ease in the money market," is set forth on page 92 of this report.
Votes for this action: Messrs. Martin, Chairman, Sproul, Vice
Chairman, Balderston, Bryan, Leedy, Miller, Mills, Robertson,
Szymczak, Vardaman, Williams, and Young. Votes against
this action: none.
The Committee gave attention to developments in the economy since its
June meeting, particularly to the "sidewise" movement that had been taking
place during the summer months, and to the question of how long the
economy might continue such a movement before showing a definite upturn
or downturn. The Committee felt that the policy of "active ease" that had
been pursued since late 1953 had helped to maintain a stable economic and
business situation which, in turn, had given encouragement to investors.



FEDERAL RESERVE SYSTEM

97

It was the view of the Committee at this time that the ready availability
and low cost of bank credit and capital funds had maintained a monetary
climate favorable to business expansion and high employment. Although
the economy had been on a plateau for several months, following cessation
of the moderate decline that had taken place in output and employment
between the summer of 1953 and late spring of 1954, there was some evidence
that there might be an upturn in the autumn months. Inventory liquidation had continued, but further declines in Government defense outlays were
expected to be small, private capital investment and State and local capital
outlays were holding up well, and consumer spending had remained high.
At the time of this meeting there had not been an upturn in economic
activity which appeared to warrant any reduction in the flow of money and
credit and the Committee believed that in supplying reserves to the market
in the weeks ahead, any doubts should be resolved on the side of ease rather
than the reverse. The Committee recognized that credit policy was only one
part of the whole complex, but it felt that the economic outlook at the time
warranted a continuation of the existing credit policy of actively maintaining
a condition of ease in the money market, and it therefore renewed its
directive in the same form that had been approved at the three preceding
meetings.
DECEMBER 7,

1954

1. Authority to Effect Transactions in System Account.
The following directive to the executive committee was approved:
The executive committee is directed, until otherwise directed by
the Federal Open Market Committee, to arrange for such transactions for the System open market account, either in the open
market or directly with the Treasury (including purchases, sales,
exchanges, replacement of maturing securities, and letting maturities
run off without replacement), as may be necessary, in the light of
current and prospective economic conditions and the general credit
situation of the country, with a view (a) to relating the supply of
funds in the market to the needs of commerce and business, (b) to
promoting growth and stability in the economy by maintaining a
condition of ease in the money market, (c) to correcting a disorderly
situation in the Government securities market, and (d) to the practical administration of the account; provided that the aggregate
amount of securities held in the System account (including commitments for the purchase or sale of securities for the account) at
the close of this date, other than special short-term certificates of
indebtedness purchased from time to time for the temporary accommodation of the Treasury, shall not be increased or decreased by
more than 2 billion dollars.



98

ANNUAL REPORT OF BOARD OF GOVERNORS

The executive committee is further directed, until otherwise directed by the Federal Open Market Committee, to arrange for
the purchase direct from the Treasury for the account of the Federal
Reserve Bank of New York (which Bank shall have discretion, in
cases where it seems desirable, to issue participations to one or more
Federal Reserve Banks) of such amounts of special short-term
certificates of indebtedness as may be necessary from time to time for
the temporary accommodation of the Treasury, provided that the
total amount of such certificates held at any one time by the Federal
Reserve Banks shall not exceed in the aggregate 2 billion dollars.
Votes for this action: Messrs. Martin, Chairman, Sproul,
Vice Chairman, Balderston, Bryan, Leedy, Mills, Robertson,
Szymczak, Vardaman, Williams, and Young. Votes against
this action: none.
This directive was changed in only one respect from the directive approved at the December 1953 and the March, June, and September 1954
meetings: the word "actively" was deleted from clause (b) of the first
paragraph so as to provide that transactions in the System open market
account: should be with a view, among other things, "to promoting growth
and stability in the economy by maintaining a condition of ease in the
money market." For a year preceding this meeting, the clause had provided that transactions should be with a view "to promoting growth and
stability in the economy by actively maintaining a condition of ease in the
money market."
The Committee's review of the economic situation at this meeting showed
that expansion in the economy had started to take place during the fall
months, following a period of relative stability during the second and
third quarters of 1954. For more than a year, the Committee had been
following a policy of aggressively maintaining a condition of ease in the
money market as a means of facilitating economic recovery, recognizing
that monetary policy was only one factor in the complex of elements on
which an upward movement might be based. In evaluating the situation,
the Committee took cognizance of evidences of expansion available from data
on production, employment, capital expenditures, Federal defense outlays,
construction, and commodity prices, and also of the sharply increased activity
and price levels in securities markets as well as other less tangible manifestations of a speculative attitude in some areas.
A re-examination of the policy of "active ease" in the light of this economic review led the Committee to the conclusion that the developing
economic situation did not warrant continuing as active a program of supplying reserves to the market as had been followed during the preceding
year, although it did not feel that a policy of credit restraint was called for
at the time.



BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM
[December 31, 1954]
W M . MCC. MARTIN, JR., of New York, Chairman
M. S. SZYMCZAK of Illinois

Term Expires
January 31, 1956
January 31, 1962

JAMES K. VARDAMAN, JR., of Missouri

January 31, 1960

A. L. MILLS, JR., of Oregon
J. L. ROBERTSON of Nebraska

January 31, 1958
January 31, 1964

C. CANBY BALDERSTON of Pennsylvania
ELLIOTT THURSTON, Assistant to the Board
WINFIELD W. RIEFLER, Assistant to the Chairman

January 31, 1966

WOODLIEF THOMAS, Economic Adviser to the Board
ALFRED K. CHERRY, Legislative Counsel
S. R. CARPENTER, Secretary
MERRITT SHERMAN, Assistant Secretary
KENNETH A. KENYON, Assistant Secretary
GEORGE B. VEST, General Counsel

FREDERIC SOLOMON, Assistant General Counsel
HOWARD H. HACKLEY, Assistant General Counsel
DAVID B. HEXTER, Assistant General Counsel
G. HOWLAND CHASE, Assistant General Counsel
RALPH A. YOUNG, Director, Division of Research and Statistics
FRANK R. GARFIELD, Adviser on Economic Research, Division of Research and Statistics
KENNETH B. WILLIAMS, Assistant Director, Division of Research and Statistics
SUSAN S. BURR, Assistant Director, Division of Research and Statistics
GUY E. NOYES, Assistant Director, Division of Research and Statistics
ALBERT R. KOCH, Assistant Director, Division of Research and Statistics
ARTHUR W. MARGET, Director, Division of International Finance
LEWIS N. DEMBITZ, Assistant Director, Division of International Finance
ROBERT F. LEONARD, Director, Division of Bank. Operations
J. E. HORBETT, Assistant Director, Division of Ban\ Operations
LOWELL MYRICK, Assistant Director, Division of Ban\ Operations
GEORGE S. SLOAN, Director, Division of Examinations
C. C. HOSTRUP, Assistant Director, Division of Examinations
FRED A. NELSON, Assistant Director, Division of Examinations
ARTHUR H. LANG, Chief Federal Reserve Examiner, Division of Examinations
ROBERT C. MASTERS, Assistant Director, Division of Examinations
GLENN M. GOODMAN, Assistant Director, Division of Examinations
HENRY BENNER, Assistant Director, Division of Examinations
EDWIN J. JOHNSON, Director, Division of Personnel Administration
H. FRANKLIN SPRECHER, JR., Assistant Director, Division of Personnel Administration
LISTON P. BETHEA, Director, Division of Administrative Services
JOSEPH E. KELLEHER, Assistant Director, Division of Administrative Services
GARDNER L. BOOTHE, II, Administrator, Office of Defense Loans
EDWIN J. JOHNSON, Controller, Office of the Controller
M. B. DANIELS, Assistant Controller, Office of the Controller
Special Assistants to the Board—CHARLES MOLONY and CLARKE L. FAUVER




99

FEDERAL OPEN MARKET COMMITTEE
[December 31, 1954]
MEMBERS
W M . MCC. MARTIN, JR., Chairman (Board of Governors)
ALLAN SPROUL, Vice Chairman (Elected by Federal Reserve Bank of New York)
C. CANBY BALDERSTON (Board of Governors)

MALCOLM BRYAN (Elected by Federal Reserve Banks of Atlanta, St. Louis, and Dallas)
H. G. LEEDY (Elected by Federal Reserve Banks of Minneapolis, Kansas City, and San
Francisco)
A. L. MILLS, JR. (Board of Governors)
J. L. ROBERTSON (Board of Governors)
M. S. SZYMCZAK (Board of Governors)
JAMES K. VARDAMAN, JR. (Board of Governors)

ALFRED H. WILLIAMS (Elected by Federal Reserve Banks of Boston, Philadelphia, and
Richmond)
C. S. YOUNG (Elected by Federal Reserve Banks of Cleveland and Chicago)
OFFICERS

EXECUTIVE COMMITTEE
W M . MCC. MARTIN, JR., Chairman

WINFIELD W. RIEFLER, Secretary

ALLAN SPROUL, Vice Chairman

ELLIOTT THURSTON, Assistant Secretary

J. L. ROBERTSON

GEORGE B. VEST, General Counsel

M. S. SZYMCZAK

FREDERIC SOLOMON, Assistant General Counsel

ALFRED H. WILLIAMS

WOODLIEF THOMAS, Economist

KARL R. BOPP, Associate Economist
GEORGE W. MITCHELL, Associate Economist

AGENT
FEDERAL RESERVE BANK OF NEW YORK

ROBERT G. ROUSE, Manager of System

Open Market Account




EARLE L. RAUBER, Associate Economist

H. V. ROELSE, Associate Economist
CLARENCE W. TOW, Associate Economist
RALPH A. YOUNG, Associate Economist

100

FEDERAL ADVISORY COUNCIL
[December 31, 1954]
MEMBERS
District No. 1—WILLIAM D. IRELAND, President, The Second National Bank of Boston,
Boston, Massachusetts.
District No. 2—HENRY C. ALEXANDER, President, J. P. Morgan & Co., Inc., New York,
New York.
District No. 3—GEOFFREY S. SMITH, President, Girard Trust Corn Exchange Bank, Philadelphia, Pennsylvania.
District No. 4—GEORGE GUND, President, The Cleveland Trust Company, Cleveland, Ohio.
District No. 5—ROBERT V. FLEMING, President and Chairman, The Riggs National Bank,
Washington, D. C.
District No. 6—WALLACE M. DAVIS, President, Hibernia National Bank, New Orleans,
Louisiana.
District No. 7—EDWARD E. BROWN, Chairman, The First National Bank of Chicago, Chicago,
Illinois.
District No. 8—W. W. CAMPBELL, Chairman, National Bank of Eastern Arkansas, Forrest
City, Arkansas.
District No. 9—JOSEPH F. RINGLAND, President, Northwestern National Bank of Minneapolis,
Minneapolis, Minnesota.
District No. 10—CHARLES J. CHANDLER, President, First National Bank in Wichita, Wichita,
Kansas.
District No. 11—GEO. G. MATKIN, President, The State National Bank of El Paso, El Paso,
Texas.
District No. 12—JOHN M. WALLACE, President, Walker Bank & Trust Company, Salt Lake
City, Utah.
EXECUTIVE COMMITTEE
EDWARD E. BROWN, ex officio

ROBERT V. FLEMING, ex officio

HENRY C. ALEXANDER

'GEOFFREY S. SMITH
GEORGE GUND

OFFICERS
President, EDWARD E. BROWN




Vice President, ROBERT V. FLEMING

Secretary, HERBERT V. PROCHNOW

101

DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS
[December 31, 1954]
CHAIRMEN AND DEPUTY CHAIRMEN OF BOARDS OF DIRECTORS

Federal Reserve Bank of—

Chairman and
Federal Reserve Agent

Deputy Chairman

Boston

Harold D. Hodgkinson

Ames Stevens

New York

Jay E. Crane

William I. Myers

Philadelphia

William J. Meinel

Henderson Supplee, Jr.

Cleveland

John C. Virden

Leo L. Rummell

Richmond

John B. Woodward, Jr

W. G. Wysor

Atlanta

Rufus C. Harris

Paul E. Reinhold

Chicago

John S. Coleman

Bert R. Prall

St. Louis

M. Moss Alexander

Caffey Robertson

Minneapolis

Leslie N. Perrin

Kansas City

Raymond W. Hall

Cecil Puckett

Dallas

J. R. Parten

Robert J. Smith

San Francisco

A. H. Brawner

Y. Frank Freeman

Vacancy

CONFERENCE OF CHAIRMEN

The Chairmen of the Federal Reserve Banks are organized into a Conference of Chairmen which meets from time to time to consider matters of common interest and to consult
with and advise the Board of Governors.
Mr. Hodgkinson, Chairman of the Federal Reserve Bank of Boston, was elected Chairman of the Conference and of the Executive Committee in April 1953 and served as such
through the meeting held in December 1954. Mr. Virden, Chairman of the Federal Reserve
Bank of Cleveland, and Mr. Meinel, Chairman of the Federal Reserve Bank of Philadelphia,
served with Mr. Hodgkinson as members of the Executive Committee, Mr. Virden also
serving as Vice Chairman of the Conference.
At the meeting held in December 1954, Mr. Virden was elected Chairman of the
Conference and of the Executive Committee. Mr. Woodward, Chairman of the Federal
Reserve: Bank of Richmond, was elected Vice Chairman and a member of the Executive
Committee, and Mr. Crane, Chairman of the Federal Reserve Bank of New York, was
elected as the other member of the Executive Committee.




102

FEDERAL RESERVE SYSTEM

103

DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1954—Cont.
DIRECTORS
Class A and Class B directors are elected by the member banks of the district. Class C
directors are appointed by the Board of Governors of the Federal Reserve System.
The Class A directors are chosen as representatives of member banks and, as a matter of
practice, are active officers of member banks. The Class B directors may not, under the
law, be officers, directors, or employees of banks. At the time of their election they must be
actively engaged in their district in commerce, agriculture, or some other industrial pursuit.
The Class C directors may not, under the law, be officers, directors, employees, or stockholders of banks. They are appointed by the Board of Governors as representatives not of
any particular group or interest, but of the public interest as a whole.
Federal Reserve Bank branches have either five or seven directors, of whom a majority
arc appointed by the Board of Directors of the parent Federal Reserve Bank and the others
are appointed by the Board of Governors of the Federal Reserve System.
District No. 1—Boston
Term
Expires
DIRECTORS

Class A:
Harold I. Chandler
Oliver B. Ellsworth
Lloyd D. Brace
Class B.Frederick S. Blackall, jr
Harry E. Umphrey
Harvey P. Hood
Class C:
Ames Stevens
Harold D. Hodgkinson
James R. Killian, Jr

Dec. 31

Executive Vice President, The Keene National Bank,
Keene, N. H
1954
President, Riverside Trust Company, Hartford, Conn.. 1955
President, The First National Bank of Boston, Boston,
Mass
1956
President and Treasurer, The Taft-Peirce Manufacturing Company, Woonsocket, R. 1
1954
President, Aroostook Potato Growers, Inc., Presque
Isle, Me
1955
President, H. P. Hood & Sons, Inc., Boston Mass..... 1956
President, Ames Worsted Company, Lowell, Mass.. .. 1954
Vice President, General Manager and Chairman of
Management Board, Wm. Filene's Sons Company,
Boston, Mass
1955
President, Massachusetts Institute of Technology,
Cambridge, Mass
1956
District No. 2—New York

Class A:
F. Palmer Armstrong
N. Baxter Jackson
John R. Evans
Class B:
John E. Bierwirth
Clarence Francis
Lansing P. Shield




President, The Keyport Banking Company, Keyport,
N. J
1954
Chairman of the Board, Chemical Corn Exchange
Bank, New York, N. Y
1955
President, The First National Bank of Poughkeepsie,
Poughkeepsie, N. Y
1956
President, National Distillers Products Corporation,
New York, N. Y
1954
Director and member of Executive Committee, General
Foods Corporation, New York, N. Y
1955
President, The Grand Union Company, East Paterson,
N.J
1956

104

ANNUAL REPORT OF BOARD OF GOVERNORS

DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1954—Cont.
Term
Expires
DIRECTORS—Cont.

Class C:
William I. Myers
Franz Schneider
Jay E. Crane

Dec. 31

Dean, New York State College of Agriculture, Cornell
University, Ithaca, N. Y
1954
New York,N. Y
1955
Vice President, Standard Oil Company (New Jersey),
New York, N. Y
1956

Buffalo Branch
Appointed by Federal Reserve Bank:
Lewis G. Harriman
Chairman of the Board, Manufacturers and Traders
Trust Company, Buffalo, N. Y
Bernard E. Finucane
President, Security Trust Company of Rochester,
Rochester, N. Y
Edward P. Vreeland
President, Salamanca Trust Company, Salamanca,
N. Y
Robert L. Davis
President, The First National Bank of Olean, Olean,
N. Y
Appointed by Board of Governors:
Clayton G. White
Dairy farmer, Stow, N. Y
Edgar F. Wendt
President, Buffalo Forge Company, Buffalo, N. Y
Robert C. Tait
President, Stromberg-Carlson Company, Rochester,
N. Y

1954
1955
1955
1956
1954
1955
1956

District No. 3—-Philadelphia
Class A:
Wadsworth Cresse
Bernard C. Wolfe
Wm. Fulton Kurtz
Class B.Andrew Kaul, III
Charles E. Oakes
Warren C. Newton
Class C:
William J. Meinel
Henderson Supplee, Jr
Lester V. Chandler

Executive Vice President and Trust Officer, The First
National Bank and Trust Company, Woodbury, N. J. 1954
President, The First National Bank of Towanda,
Towanda, Pa
1955
Chairman of the Board, The Pennsylvania Company
for Banking and Trusts, Philadelphia, Pa
1956
President and Director, Speer Carbon Company, St.
Marys, Pa
1954
President, Pennsylvania Power and Light Company,
Allentown, Pa
1955
President, O. A. Newton and Son Company, Bridgeville, Del
1956
President and Chairman of the Board, Heintz Manufacturing Company, Philadelphia, Pa
1954
President, The Atlantic Refining Company, Philadelphia, Pa
.'
1955
Professor of Economics, Princeton University, Princeton, N. J
1956

District No. 4—Cleveland
Class A:
Edison Hobstetter
John D. Bainer
J. Brenner Root




President, The Pomeroy National Bank, Pomeroy,
Ohio
1954
President, The Merchants National Bank and Trust
Company of Meadville, Meadville, Pa
1955
President, The Harter Bank & Trust Company, Canton,
Ohio
1956

FEDERAL RESERVE SYSTEM

105

DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1954—Cont.
Term
Expires
DIRECTORS—Cont.

Class B:
Joel M. Bowlby
Edward C. Doll
Alexander E. Walker

Class C:
Leo L. Rummell
Sidney A. Swensrud
John C. Virden

Dec. 31

Chairman of the Board, The Eagle-Picher Company,
Cincinnati, Ohio
1954
President, Lovell Manufacturing Company, Erie, Pa... 1955
Chairman of the Board, The National Supply Company,
Pittsburgh, Pa
1956

Dean, College of Agriculture, The Ohio State University, Columbus, Ohio
1954
Chairman of the Board, Gulf Oil Corporation, Pittsburgh, Pa
1955
Chairman of the Board, John C. Virden Company,
Cleveland, Ohio
1956
Cincinnati Branch

Appointed by Federal Reserve Bank:

Joseph B. Hall
E. S. Dabney
Fred A. Dowd
Leonard M. Campbell

President, The Kroger Company, Cincinnati, Ohio
President, Security Trust Company, Lexington, Ky
President, The First National Bank of Cincinnati,
Cincinnati, Ohio
President, The Second National Bank of Ashland, Ashland, Ky

1954
1954
1955
1956

Appointed by Board of Governors:

John C. Baker
Henry C. Besuden
Anthony Haswell

President, Ohio University, Athens, Ohio
1954
Farmer, Winchester, Ky
1955
President, The Dayton Malleable Iron Company,
Dayton, Ohio
1956
Pittsburgh Branch

Appointed by Federal Reserve Bank:

William B. McFall
John C. Warner
Paul Malone
Albert L. Rasmussen

President, Commonwealth Trust Company of Pittsburgh, Pittsburgh, Pa
President, Carnegie Institute of Technology, Pittsburgh, Pa
President, The Second National Bank of Uniontown,
Uniontown, Pa
President, The Warren National Bank, Warren, Pa

1954
I954
I955
1956

Appointed by Board of Governors:

Clifford F. Hood
Douglas M. Moorhead
Henry A. Roemer, Jr

President, United States Steel Corporation, Pittsburgh,
Pa
1954
Farmer, North East, Pa
I955
President, Sharon Steel Corporation, Sharon, Pa
1956
District No. 5—Richmond

Class A:
James D. Harrison
Warren S. Johnson
John A. Sydenstricker




President, First National Bank of Baltimore, Baltimore, Md
1954
Investment Counselor, Peoples Savings Bank & Trust
Company, Wilmington, N. C
1955
Executive Vice President, First National Bank in
Marlinton, Marlinton, W. Va
1956

106

ANNUAL REPORT OF BOARD OF GOVERNORS

DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1954—Cont.
Term
Expires
DIRECTORS—Cont.

Class B.Edwin Hyde
H. L. Rust, Jr
W. A. L. Sibley
Class C:
W. G. Wysor
John B. Woodward, Jr
Alonzo G. Decker, Jr

Dec. 31

President, Miller & Rhoads, Inc., Richmond, Va
1954
President, H. L. Rust Company, Washington, D. C... 1955
Vice President and Treasurer, Monarch Mills, Union,
S. C
1956
Management Counsel, Southern States Cooperative,
Inc., Richmond, Va
1954
Chairman of the Board, Newport News Shipbuilding
& Dry Dock Company, Newport News, Va
1955
Vice President, The Black & Decker Manufacturing
Company, Towson, Md
1956
Baltimore Branch

Appointed by Federal Reserve Bank:

Charles A. Piper
Lacy I. Rice
Stanley B. Trott
Charles W. Hoff

President, The Liberty Trust Company, Cumberland,
Md
President, The Old National Bank, Martinsburg,
W. Va
President, Maryland Trust Company, Baltimore, Md...
President, Union Trust Company of Maryland, Baltimore, Md

1954
1955
1955
1956

Appointed by Board of Governors:

Clarence R. Zarfoss
Howard M. Taylor, Jr
Theodore E. Fletcher, Sr

Vice President, Western Maryland Railway Company,
Baltimore, Md
1954
President, International Bedding Company, Baltimore,
Md
1955
Senior Partner, Albert W. Sisk & Son, Preston, Md
1956
Charlotte Branch

Appointed by Federal Reserve Bank:

Thomas J. Robertson
George S. Crouch
Jonathan Woody
Archie K. Davis

President, First National Bank of South Carolina,
Columbia, S. C
Chairman of the Board, The Union National Bank,
Charlotte, N. C
President, First National Bank, Waynesville, N. C . . . .
Senior Vice President, Wachovia Bank and Trust
Company, Winston-Salem, N. C

1954
1955
1955
1956

Appointed by Board of Governors:

Paul T. Taylor
T. Henry Wilson
William H. Grier

President, Taylor Warehouse Company, WinstonSalem, N. C
1954
President & Treasurer, Henredon Furniture Industries,
Inc., Morganton, N. C
1955
Executive Vice President, Rock Hill Printing &
Finishing Company, Rock Hill, S. C
1956
District No. 6—Atlanta

Class A:
W. C. Bowman
Leslie R. Driver
Roland L. Adams




Chairman of the Board, TheFirst National Bank of
Montgomery, Montgomery, Ala
1954
President, The First National Bank in Bristol, Bristol,
Tenn
1955
President, Bank of York, York, Ala
1956

FEDERAL RESERVE SYSTEM

107

DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1954—Cont.
Term
Expires
DIRECTORS—Cont.

Dec. 31

Class B:

Pollard Turman
Donald Comer
A. B. Freeman

President, J. M. Tull Metal & Supply Company, Inc.,
Atlanta, Ga
1954
Chairman of the Board, Avondale Mills, Birmingham,
Ala
1955
Chairman of the Board, Louisiana Coca-Cola Bottling
Company, Ltd., New Orleans, La
1956

Class C:

Paul E. Reinhold
Rufus C. Harris
Harllee Branch, Jr

Chairman of the Board, Foremost Dairies, Inc., Jacksonville, Fla
1954
President, The Tulane University of Louisiana, New
Orleans, La
1955
President, Georgia Power Company, Atlanta, Ga
1956
Birmingham Branch

Appointed by Federal Reserve Bank:

Malcolm A. Smith
John B. Barnett, Jr
Frank M. Moody
John Will Gay

First Vice President, Birmingham Trust National Bank,
Birmingham, Ala
President, The Monroe County Bank, Monroeville,
Ala
Vice President, The First National Bank of Tuskaloosa,
Tuscaloosa, Ala
President, The First National Bank of Scottsboro,
Scottsboro, Ala

1954
1955
1955
1956

Appointed by Board of Governors:

Edwin C. Bottcher
Thad Holt
Adolf Weil, Sr

Farmer, Cullman, Ala
1954
Investments, Birmingham, Ala
1955
President, Weil Brothers-Cotton, Inc., Montgomery,
Ala
1956
Jacksonville Branch

Appointed by Federal Reserve Bank:

G. W. Reese
Frank W. Norris
J. Carlisle Rogers
T. A. Davis, Jr

President, The Citizens and Peoples National Bank of
Pensacola, Pensacola, Fla
President, The Barnett National Bank of Jacksonville,
Jacksonville, Fla
President, The First National Bank of Leesburg, Leesburg, Fla
President, Pan American Bank of Miami, Miami, Fla...

1954
1955
1955
1956

Appointed by Board of Governors:

J. Wayne Reitz
Harry M. Smith
McGregor Smith

Provost for Agriculture, University of Florida, Gainesville, Fla
1954
President and Manager, Winter Garden Ornamental
Nursery, Inc., Winter Garden, Fla
1955
Chairman of the Board and Director, Florida Power and
Light Company, Miami, Fla
1956
Nashville Branch

Appointed by Federal Reserve Bank:

Sam M. Fleming
James V. Sprouse




President, Third National Bank in Nashville, Nashville, Tenn
1954
President, The First National Bank of Springfield,
Springfield, Tenn
1955

108

ANNUAL REPORT OF BOARD OF GOVERNORS

DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1954—Cont.
Term
Expires
DIRECTORS—Cont.

T. R. Keys
W. E. Tomlinson

Dec. 31

President, Erwin National Bank, Erwin, Tenn
1955
President, The Hamilton National Bank of Johnson
City, Johnson City, Tenn
1956

Appointed by Board of Governors:

H. C. Meacham
Ernest J. Moench
Frank B. Ward

Farming, Franklin, Tenn
1954
President, Tennessee Tufting Company, Nashville,
Tenn
1955
Dean, College of Business Administration, University
of Tennessee, Knoxville, Tenn
1956
New Orleans Branch

Appointed by Federal Reserve Bank:

Philip C. Williams
Keehn W. Berry
James T. Brown
Leon J. Minvielle

President, Bank of Yazoo City, Yazoo City, Miss
President, Whitney National Bank of New Orleans,
New Orleans, La
Chairman of the Board, First National Bank of Jackson,
Jackson, Miss
President, The Peoples National Bank of New Iberia,
New Iberia, La

1954
1955
1955
1956

Appointed by Board of Governors:

Joel L. Fletcher, Jr
E. O. Batson
E. E. Wild

President, Southwestern Louisiana Institute, Lafayette, La
1954
President, Batson-McGehee Company, Inc., Millard,
Miss
1955
Rice grower, Midland, La
1956
District No. 7—Chicago

Class A:
Walter J. Cummings

Chairman, Continental Illinois National Bank and
Trust Company of Chicago, Chicago, 111
1954
Nugent R. Oberwortmann.. .President, The North Shore National Bank of Chicago,
Chicago, 111
1955
Vivian W. Johnson
President, First National Bank, Cedar Falls, I o w a . . . . 1956

Class B:
Walter E. Hawkinson
William J. Grede
William A. Hanley
Class C:
Bert R. Prall
John S. Coleman
J. Stuart Russell

Vice President in Charge of Finance, and Secretary,
Allis-Chalmers Manufacturing Company, Milwaukee, Wis
1954
President, Grede Foundries, Inc., Milwaukee, Wis.... 1955
Director, Eli Lilly and Company, Indianapolis, Ind
1956
President, Butler Bros., Chicago, 111
1954
President, Burroughs Corporation, Detroit, Mich
1955
Farm Editor, The Des Moines Register and Tribune,
Des Moines, Iowa
1956
Detroit Branch

Appointed by Federal Reserve Bank:

Howard P. Parshall
John A. Stewart
Raymond T. Perring




President, Bank of the Commonwealth, Detroit, Mich. 1954
Vice President and Cashier, Second National Bank &
Trust Company, Saginaw, Mich
1954
President, The Detroit Bank, Detroit, Mich
1955

FEDERAL RESERVE SYSTEM

109

DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1954—Cont.
Term
Expires
DIRECTORS—Cont.

Ira A. Moore

Dec. 31

President, Peoples National Bank of Grand Rapids,
Grand Rapids, Mich
1956

Appointed by Board of Governors:

John A. Hannah
William M. Day
Watson H. Vanderploeg

President, Michigan State College, East Lansing, Mich. 1954
Vice President and General Manager, Michigan Bell
Telephone Company, Detroit, Mich
1955
President, Kellogg Company, Battle Creek, Mich
1956

District No. 8—St. Louis
Class A:
Phil E. Chappell
J. E. Etherton
William A. McDonnell
Class B.Leo J. Wieck
S. J. Beauchamp, Jr
Louis Ruthenburg

President, Planters Bank & Trust Company, Hopkinsville, Ky
1954
President, The Carbondale National Bank, Carbondale,
111
1955
President, First National Bank in St. Louis, St. Louis,
Mo
1956
Vice President and Treasurer, The May Department
Stores Company, St. Louis, Mo
1954
President, Terminal Warehouse Company, Little Rock,
Ark
1955
Chairman of Board, Servel, Inc., Evansville, Ind
1956

Class C:

Joseph H. Moore
Caffey Robertson
M. Moss Alexander

Farmer, Charleston, Mo
1954
President, CafFey Robertson Company, Memphis, Tenn. 1955
President, Missouri Portland Cement Company, St.
Louis, Mo
1956
Little Rock Branch

Appointed by Federal Reserve Bank:

H. C. McKinney, Jr
Thos. W. Stone
Harvey C. Couch, Jr
Donald Barger

President, The First National Bank of El Dorado, El
Dorado, Ark
President, The Arkansas National Bank of Hot Springs,
Hot Springs, Ark
President, Union National Bank of Little Rock, Little
Rock, Ark
President, Peoples Exchange Bank, Russellville, Ark...

1954
1954
1955
1956

Appointed by Board of Governors:

Shuford R. Nichols
A. Howard Stebbins, Jr
Sam B. Strauss

Farmer, Ginner and Cotton Broker, Des Arc, Ark
1954
President, Stebbins and Roberts, Inc., Little Rock, Ark. 1955
President, Pfeifers of Arkansas, Little Rock, Ark
• • 1956
Louisville Branch

Appointed by Federal Reserve Bank:

M. C. Minor
Ira F. Wilcox
Magnus J. Kreisle
Noel Rush




President, The Farmers National Bank of Danville,
Danville, Ky
President, The Union National Bank of New Albany,
New Albany, Ind
President, The Tell City National Bank, Tell City, Ind.
President, Lincoln Bank and Trust Company, Louisville, Ky

1954
1954
1955
1956

110

ANNUAL REPORT OF BOARD OF GOVERNORS

DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1954—Cont.
Term
Expires
Dec. 31

DiREcroits—Cont.
Appointed by Board of Governors:

Pierre B. McBride

President, Porcelain Metals Corporation, Louisville,
Ky
1954
Farmer, Cadiz, Ky
1955
Vice President and Treasurer, Standard Oil Company
(Kentucky), Louisville, Ky
1956

Smith Broadbent, Jr
David F. Cocks

Memphis Branch
Appointed by Federal Reserve Bank:

John A. McCall

President, The First National Bank of Lexington,
Lexington, Tenn
President, National Bank of Commerce in Memphis,
Memphis, Tenn
Chairman of Board, Phillips National Bank, Helena,
Ark
President, The First National Bank of West Point,
West Point, Miss

William B. Pollard
Ben L. Ross
John K. Wilson

1954
1954
1955
1956

Appointed by Board of Governors:

A. E. Hohenberg
Henry Banks
John D. Williams

President, Hohenberg Bros. Company, Memphis, Tenn. 1954
Farmer, Clarkedale, Ark
1955
Chancellor, The University of Mississippi, University,
Miss
1956
District No. 9—Minneapolis

Class A:
John W. Scott
Edgar F. Zelle
Harold N. Thomson
Class B.Ray C. Lange
Homer P. Clark
J. E. Corette
Class C:
Vacancy
F. Albae Flodin
Leslie N. Perrin

President, The First State Bank of Gil by, Gilby, N. D.. 1954
Chairman of the Board, First National Bank of Minneapolis, Minneapolis, Minn
1955
Vice President, Farmers and Merchants Bank, Presho,
S. D
1956
President, Chippewa Canning Company, Inc., Chippewa Falls, Wis
1954
Honorary Chairman of the Board, West Publishing
Company, St. Paul, Minn
1955
President and General Manager, Montana Power
Company, Butte, Mont
1956
1954
President and General Manager, Lake Shore Engineering Company, Iron Mountain, Mich
1955
Director, General Mills, Inc., Minneapolis, Minn
1956
Helena Branch

Appointed by Federal Reserve Bank:

J. Wilkrd Johnson
Geo. N. Lund
A. W. Heidel

Financial Vice President and Treasurer, Western Life
Insurance Company, Helena, Mont
1954
Chairman of the Board and President, The First National Bank of Reserve, Reserve, Mont
1954
Vice President, Powder River County Bank, Broadus,
Mont
1955

Appointed by Board of Governors:

Carl McFarland
George R. Milburn




President, Montana State University, Missoula, Mont.
Manager, N Bar Ranch, Grass Range, Mont

1954
1955

FEDERAL RESERVE SYSTEM

111

DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1954—Cont.
Term
Expires
DIRECTORS—Cont.

Dec. 31

District No. 10—Kansas City
Class A:

Harold Kountze
W. S. Kennedy
W. L. Bunten

President, The Colorado National Bank of Denver,
Denver, Colo
1954
President and Chairman of the Board, The First National Bank of Junction City, Junction City, Kan.... 1955
President, Goodland State Bank, Goodland, Kan
1956

Class B:

Max A. Miller
E. M. Dodds
K. S. Adams

Livestock rancher, Omaha, Neb
1954
President, United States Cold Storage Corporation,
Kansas City, Mo
1955
Chairman of the Board, Phillips Petroleum Company,
Bartlesville, Okla
1956

Class C:

Lyle L. Hague
Raymond W. Hall
Cecil Puckett

Farmer and stockman, Cherokee, Okla
1954
Vice President and Director, Hall Brothers, Inc.,
Kansas City Mo
1955
Dean, College of Business Administration, University
of Denver, Denver, Colo
1956
Denver Branch

Appointed by Federal Reserve Bank:

Ralph S. Newcomer
Arthur Johnson
Merriam B. Berger

Executive Vice President, First National Bank in
Boulder, Boulder, Colo
1954
President, First National Bank in Raton, Raton,
N. Mex
1954
Vice President, The Colorado National Bank of Denver,
Denver, Colo
1955

Appointed by Board of Governors:

G. Norman Winder
Aksel Nielsen

Rancher, Craig, Colo
1954
President, The Title Guaranty Company, Denver, Colo. 1955

Oklahoma City Branch
Appointed by Federal Reserve Bank:
F. M. Overstreet
President, The First National Bank at Ponca City,
Ponca City, Okla
1954
Frank A. Sewell
Chairman of the Board and President, The Liberty
National Bank and Trust Company of Oklahoma
City, Oklahoma City, Okla
.'
1954
George R. Gear
President, The City National Bank of Guymon,
Guymon, Okla
1955
Appointed by Board of Governors:

Phil H. Lowery
Davis D. Bovaird

Owner, Lowery Hereford Ranch, Loco, Okla
President, The Bovaird Supply Company, Tulsa, Okla..

1954
1955

Omaha Branch
Appointed by Federal Reserve Bank:

William N. Mitten
Ellsworth Moser
George J. Forbes




Chairman of the Board and President, First National
Bank of Fremont, Fremont, Neb
1954
President, The United States National Bank of Omaha,
Omaha, Neb
1955
Executive Vice President, The First National Bank of
Laramie, Laramie, Wyo
1955

112

ANNUAL REPORT OF BOARD OF GOVERNORS

DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1954—Cont.
Term
Expires
DIRECTORS—Cont.

Dec. 31

Appointed by Board of Governors:
Manville Kendrick
Rancher, Sheridan, Wyo
1954
Gilbert C. Swanson
Chairman of the Board, C. A. Swanson & Sons, Omaha,
Neb
1955

District No. 11—Dallas
Class A:
P P. Butler
J. Edd McLanghlin
W. L. Peterson
Class B:
D. A. Hulcy
J. B. Thomas
John R. Alford
Class C:
Robert J. Smith
J. R. Parten
Hal Bogle

President, First National Bank in Houston, Houston,
Tex
1954
President, Security State Bank & Trust Company, Rails,
Tex
1955
President, The State National Bank of Denison, Denison, Tex
1956
Chairman of the Board and President, Lone Star Gas
Company, Dallas, Tex
1954
President and General Manager and Director, Texas
Electric Service Company, Fort Worth, Tex
1955
Industrialist and Farmer, Henderson, Tex
1956
President, Pioneer Air Lines, Inc., Dallas, Tex
1954
President, Woodley Petroleum Company, Houston,
Tex
1955
Rancher and Feeder, Dexter, N. Mex
1956

El Paso Branch
Appointed by Federal Reserve Bank:
John P. Butler
President, The First National Bank of Midland, Midland, Tex
J. M. Sakrison
President, Southern Arizona Bank and Trust Company,
Tucson, Ariz
Thomas C. Patterson
Vice President, El Paso National Bank, El Paso, Tex...
F. W. Barton
President, The Marfa National Bank, Marfa, Tex

1954
1954
1955
1956

Appointed by Board of Governors:
Tames A. Dick
President, James A. Dick Investment Company, El
Paso, Tex
1954
E. J. Workman
President, and Director of Research and Development
Division, New Mexico Institute of Mining and
Technology, Socorro, N. Mex
1955
D. F. Stahmann
Farmer, Las Cruces, N. Mex
1956
Houston Branch
Appointed by Federal Reserve Bank:
O R. Weyrich
President, Houston Bank & Trust Company, Houston,
Tex
P R. Hamill
President, Bay City Bank & Trust Company, Bay City,
Tex
S. Marcus Greer
Chairman of Executive Committee, The City National
Bank of Houston, Houston, Tex
I. F. Betts
President, The American National Bank of Beaumont,
Beaumont, Tex




1954
1954
1955
1956

FEDERAL RESERVE SYSTEM

113

DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1954—Cont.
Term
Expires
DIRECTORS—Cont.

Dec. 31

Appointed by Board of Governors:

Ross Stewart

Chairman of the Board of Directors, Stewart & Stevenson Services, Inc., Houston, Tex
1954
Dean of Agriculture, A. & M. College of Texas,
College Station, Tex
1955
T. O. Sutton and Sons, Colmesneil, Tex
1956

Charles N. Shepardson
Herbert G. Sutton

San Antonio Branch
Appointed by Federal Reserve Bank:

E. A. Baetz

President, Bexar County National Bank of San Antonio,
San Antonio, Tex
President, Gonzales State Bank, Gonzales, Tex
President, The Corpus Christi National Bank, Corpus
Christi, Tex
President, The First National Bank, Harlingen, Tex...

V. S. Marett
Burton Dunn
E. C. Breedlove

1954
1954
1955
1956

Appointed by Board of Governors:

Henry P. Drought
D. Hayden Perry
Clarence E. Ayres

Attorney at Law, San Antonio, Tex
1954
Livestock farming, Robstown, Tex
1955
Professor of Economics, The University of Texas,
Austin, Tex
1956

District No. 12—San Francisco
Class A:
Carroll F. Byrd
John A. Schoonover
M. Vilas Hubbard
Class B:
Reese H. Taylor
Walter S. Johnson
Alden G. Roach
Class C:
Harry R. Wellman
Y. Frank Freeman
A. H. Brawner

President, The First National Bank of Willows,
Willows, Calif
1954
President, The Idaho First National Bank, Boise, Idaho 1955
President and Chairman of the Board, Citizens Commercial Trust and Savings Bank of Pasadena, Pasadena, Calif
1956
President, Union Oil Company of California, Los
Angeles, Calif
1954
President, American Forest Products Corporation, San
Francisco, Calif
1955
President, Columbia-Geneva Steel Division and Consolidated Western Steel Division, of United States
Steel Corporation, San Francisco, Calif
1956
Vice President, Agricultural Sciences, University of
California, Berkeley, Calif
1954
Vice President, Paramount Pictures Corporation,
Hollywood, Calif
1955
President, W. P. Fuller & Company, San Francisco,
Calif
1956
Los Angeles Branch

Appointed by Federal Reserve Bank:

Anderson Borthwick
James E. Shelton
Hugh C. Gruwell




President, The First National Trust and Savings Bank
of San Diego, San Diego, Calif
1954
President, Security-First National Bank of Los Angeles,
Los Angeles, Calif
1954
President, First National Bank of Arizona, Phoenix,
Ariz
1955

114

ANNUAL REPORT OF BOARD OF GOVERNORS

DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1954—Cont.
Term
Expires
DIRECTORS—Cont.

Appointed by Board of Governors:
Bryant Essick
President, Essick Manufacturing Company,
Angeles, Calif
Paul H. Helms
President, Helms Bakeries, Los Angeles, Calif

Dec. 31

Los

Portland Branch
Appointed by Federal Reserve Bank:
Frank Wortman
President, The First National Bank of McMinnville,
McMinnville, Ore
John B. Rogers
President, The First National Bank of Baker, Baker,
Ore
E. C. Sammons
President, The United States National Bank of Portland, Portland, Ore
Appointed by Board of Governors:
William H. Steiwer, Sr
Livestock and farming, Fossil, Ore
Philip I. Welk
President, Preston-Shaffer Milling Company, Walla
Walla, Wash
'
Salt Lake City Branch
Appointed by Federal Reserve Bank:
Russell S. Hanson
Vice President and Cashier, The First National Bank
of Logan, Logan, Utah
George S. Eccles
President, First Security Bank of Utah, National Association, Ogden, Utah. Salt Lake City, Utah
Harry Eaton
Executive Vice President, Twin Falls Bank and Trust
Company, Twin Falls, Idaho
Appointed by Board of Governors:
Geo. W. Watkins
President, Snake River Equipment Company, Idaho
Falls, Idaho
Joseph Rosenblatt
President, The Eimco Corporation, Salt Lake City,
Utah
Seattle Branch
Appointed by Federal Reserve Bank:
Vacancy
S. B. Lafromboise
President, The First National Bank of Enumclaw,
Enumclaw, Wash
Charles F. Frankland
President, The Pacific National Bank of Seattle,
Seattle, Wash
Appointed by Board of Governors:
Ralph Sundquist
Fruit Grower and Cold Storage Operator, Yakima,
Wash
D K. MacDonald
Chairman of the Board, D. K. MacDonald & Company,
Inc., Seattle, Wash




1954
1955

1954
1954
1955
1954
1955

1954
1954
1955
1954
1955

1954
1954
1955

1954
1955

115

FEDERAL RESERVE SYSTEM

DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS
Dec. 31, 1954—Cont.
SENIOR OFFICERS OF FEDERAL RESERVE BANKS
[December 31, 1954]
Federal Reserve
Bank of—

President
First Vice President

Vice Presidents

Boston.

J. A. Erickson
Alfred C. Neal

Robert B. Harvey2
E. O. Latham

Carl B. Pitman
O. A. Schlaikjer
R. F. Van Amringe

New York.

Allan Sproul
William F. Treiber

H. A. Bilby
John Exter
H. H. Kimball
A. Phelan
H. V. Roelse

Robert G. Rouse
T. G. Tiebout
V. Willis
R. B. Wiltse
J. H. Wurts

Philadelphia..

Alfred H. Williams
W. J. Davis

Karl R. Bopp
Robert N. Hilkert
E. C. Hill
Wm. G. McCreedy

P. M. Poorman
J. V. Vergari3
Richard G. Wilgus1

Cleveland

W. D. Fulton
Donald S. Thompson

Dwight L. Allen
Roger R. Clouse
A. H. Laning2

Martin Morrison
H. E. J. Smith
Paul C. Stetzelberger

Richmond.

Hugh Leach
Edw. A. Wayne

N. L. Armistead
Aubrey N. Heflin
Upton S. Martin
J. M. Nowlan 1

James M. Slay
C. B. Strathy
Chas. W. Williams

Atlanta.

Malcolm Bryan
Lewis M. Clark

V. K. Bowman
L. B. Raisty
J. E. Denmark
Earle L. Rauber
2
John L. Liles, Jr.
S. P. Schuessler
Harold T. Patterson

Chicago.

C. S. Young
E. C. Harris

Neil B. Dawes
W. R. Diercks
W. A. Hopkins
L. H. Jones1

L. G. Meyer
George W. Mitchell
A. L. Olson
Alfred T. Sihler
W. W. Turner

St. Louis

Delos C. Johns
Frederick L. Deming

Dale M. Lewis
Wm. E. Peterson

H. H. Weigel
J. C. Wotawa

Minneapolis..

O. S. Powell
A. W. Mills

E. B. Larson
H. G. McConnell

Otis R. Preston
M. H. Strothman, Jr.
Sigurd Ueland

Kansas City. .

H. G. Leedy
Henry O. Koppang

John T. Boysen1
Clarence W. Tow

E. D. Vanderhoof
D. W. Woolley

Dallas

Watrous H. Irons
W. D. Gentry

E. B. Austin
J. L. Cook2
T. W. Plant

L. G. Pondrom
Morgan H. Rice
Harry A. Shuford

San Francisco.

C. E. Earhart
H. N. Mangels

E. R. Millard
H. F. Slade

Eliot J. Swan2
O. P. Wheeler

1

Cashier.

2

Also Cashier.




3

Counsel.

116

ANNUAL REPORT OF BOARD OF GOVERNORS

DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS
Dec. 31, 1954—Cont.
VICE PRESIDENTS IN CHARGE OF BRANCHES OF FEDERAL RESERVE BANKS
Federal Reserve Bank of—
New York . . .
Cleveland. . ..
Richmond
Atlanta

Chicago
St. Louis
Minneapolis.,
Kansas City. .
Dallas
San Francisco

Branch
Buffalo
Cincinnati
Pittsburgh
Baltimore
Charlotte
Birmingham
Jacksonville
Nashville
New Orleans
Detroit
Little Rock
Louisville
Memphis
Helena
Denver
Oklahoma City
Omaha
El Paso
Houston
San Antonio
Los Angeles
Portland
Salt Lake City
Seattle

Chief Officer
I. B. Smith
R. G. Johnson
J. W. Kossin
D. F. Hagner
R. L. Cherry
H. C. Frazer
T. A. Lanford
R. E. Moody, Jr.
M. L. Shaw
R. A. Swaney
Fred Burton
V. M. Longstreet
Darryl R. Francis
C. W. Groth
G. A. Gregory
R. L. Mathes
P. A. Debus
C. M. Rowland
W. H. Holloway
\V. E. Eagle
W. F. Volberg
J. A. Randall
W. L. Partner
J. M. Leisner

CONFERENCE OF PRESIDENTS

The Presidents of the Federal Reserve Banks are organized into a Conference of
Presidents which meets from time to time to consider matters of common interest and to
consult with and advise the Board of Governors.
Mr. Leach, President of the Federal Reserve Bank of Richmond, who was elected Chairman of the Conference in February 1952, was re-elected as such in March 1953 and continued to serve until March 1954. Mr. Young, President of the Federal Reserve Bank of
Chicago, was elected Vice Chairman in September 1953, to succeed Mr. Gilbert, who retired
as President of the Federal Reserve Bank of Dallas. Mr. Young continued to serve as Vice
Chairman until March 1954.
Mr. Aubrey N. Heflin, Vice President and General Counsel, Federal Reserve Bank of
Richmond, who was elected Secretary of the Conference in June 1952, was re-elected as
such in March 1953, and continued to serve until March 1954.
At the meeting held in March 1954, Mr. Young, President of the Federal Reserve Bank
of Chicago, and Mr. Earhart, President of the Federal Reserve Bank of San Francisco, were
elected Chairman of the Conference and Vice Chairman, respectively, and served as such
during 1954.
Mr. Robert C. Holland, an Economist at the Federal Reserve Bank of Chicago, was
elected Secretary of the Conference at the meeting held in March 1954, and served as such
during 1954.




FEDERAL RESERVE SYSTEM
BOUNDARIES OF FEDERAL RESERVE DISTRICTS
AND THEIR BRANCH TERRITORIES

1

=

BOUNDARIES OF FEDERAL RESERVE DISTRICTS
BOUNDARIES OF FEDERAL RESERVE BRANCH TERRITORIES

Tfc
®
•

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
FEDERAL RESERVE BANK CITIES
FEDERAL RESERVE BRANCH CITIES

NOTE—For a description of the Federal Reserve districts and branch territories, see the Annual Report of the Board of Governors
for 1953, pp. 124-34; for recent changes in branch territory lines, see p. 57 of this Report.



INDEX
Page
Acceptances:
Bankers', buying rates on
78, 94, 95
Drafts of bills of exchange for purpose of furnishing dollar exchange,
application granted
47
Agriculture, developments during year
13
Alaska:
Admission of national bank to membership in Federal Reserve
System
45, 90
Amendments to Regulations G and J with respect to items i n . . . . 50, 89
Designation as being in or of Twelfth Federal Reserve District for
purposes of Regulations G and J
50, 89
Assets and liabilities:
All banks in the United States, by classes
81
Federal Reserve Banks
62, 64
Balance of payments, United States
31
Bank credit and money, review for year
22
Bank holding companies
47
Bank premises:
Federal Reserve Banks and branches
56, 76
Investment in, amendments to Sections 23A and 24A of Federal
Reserve Act
50
Bank supervision by Federal Reserve System
46
Banking offices, number and analysis of changes
44, 83
Banks for cooperatives, authority of member banks to deal in and underwrite obligations of
52
Board of Governors:
Accounts audited
57
Income and expenses
57
Members
99
Officers
99
Policy actions (See Policy actions, Board of Governors)
Reimbursable expenditures
59
Branch banks:
Domestic, number and analysis of changes
44, 83
Federal Reserve System:
Bank premises
56, 76
Cincinnati, construction of security court authorized
56
Directors, list of
104
El Paso, acquisition of site for new building authorized
57
Houston, acquisition of site for new building authorized
57
Louisville, site for new building acquired
56
Omaha, construction of addition authorized
56
San Antonio, construction of new building authorized
56
Territory of, intradistrict changes in
57
Vice Presidents in charge of
116
Foreign, number in operation
48
Buying rates on acceptances
78, 94, 95



118

INDEX

119

Page
Capital accounts:
All banks in the United States, by classes
81
Federal Reserve Banks
63, 65, 67
Member banks
43, 81
Central bank technicians, meeting of
60
Chairmen of Federal Reserve Banks:
Conference of
102
Executive committee
102
List of
102
Meeting
60
Charts:
Deposits and currency
26
External trade, Western Europe and United States
33
Gold and dollar holdings, by areas
38
Gross national product
9
Gross national product, selected components
11
Member bank reserves and related items
28
Money rates
21
Selected business indexes
14
United States balance of payments
31
Clearing and collection:
Designation of Alaska and Hawaii as being in or of Twelfth Federal
Reserve District for purposes of Regulations G and J
50, 89
Items in Territories of Alaska and Hawaii, amendments to
Regulations G and J
50, 89
Par list
45, 84
Commercial banks:
Assets and liabilities
81
Holdings of Government securities
23
Loans and investments
23
Condition statements of Federal Reserve Banks:
All banks combined
62
Each bank
64
Conferences {See Meetings)
Credit, Federal Reserve policy
4
Credit and money, review for year
22
Currency, holdings and circulation during year
26
Debt and equity
financing
17
Deposits:
All banks in the United States, by classes
81
Expansion during year
26
Time deposits, maximum interest rates on
79
Deputy Chairmen of Federal Reserve Banks
102
Directors:
Federal Reserve Banks:
Classes of
103
List of
103
Federal Reserve branch banks, list of
104
Discount rates at Federal Reserve Banks
7, 78, 86, 87




120

INDEX

Page
Dividends:
Federal Reserve Banks
54, 71, 72
Member banks
42, 82
Dollar exchange, permission to accept drafts or bills drawn for
purpose of furnishing
47
Earnings and expenses:
Federal Reserve Banks:
1954
53, 70
1914-1954
72
Member banks
42, 82
Economic conditions, review for year
8
Economic and financial developments, world
30
Examinations:
Federal Reserve Banks
46
Foreign banking corporations
49
Holding company affiliates
47
State member banks
46
Expenses:
Board of Governors
59
Federal Reserve Banks
54, 70, 72
Federal Advisory Council:
Executive committee
101
Meetings
60
Members and officers
101
Federal National Mortgage Association, provisions of Housing Act of
1954 relating to
51
Federal Open Market Committee:
Executive committee
100
Meetings
60
Members and officers
100
Policy actions
92
Review of continuing authorities or statements of policy
93
Federal Reserve Act:
Section 14(b), amendment extending authority of Federal Reserve
Banks for direct purchase and sale of Government obligations
from and to the United States
50
Section 16, amendment repealing provisions prohibiting one Federal
Reserve Bank from paying out Federal Reserve notes of another
Federal Reserve Bank
51
Section 23A, amendment relating to investment in bank premises.... 50
Section 24, amendments relating to real estate loans by national banks 51
Section 24A, amendment relating to investment in bank premises. . . . 51
Federal Reserve Bank of Chicago, property acquired for expansion.... 56
Federal Reserve Bank of Dallas, property acquired for expansion
56
Federal Reserve Banks:
Assets and liabilities
62, 64
Authority for direct purchase and sale of Government obligations
from and to the United States, extension of
50
Bank premises
56, 76
Capital accounts
63, 65, 67




INDEX

121

Page
Federal Reserve Banks—Continued
Chairmen (See Chairmen of Federal Reserve Banks)
Condition, statement of
62, 64
Directors
103
Discount rates
7, 78, 86, 87
Dividends
54, 71, 72
Earnings and expenses
53, 70, 72
Earnings on loans and securities
55
Examination of
46
First Vice Presidents
115
Foreign and international accounts
55
Holdings of Government securities
54, 68
Holdings of special short-term Treasury certificates purchased directly
from the United States
69
Officers
115
Officers and employees, number and salaries
77
Presidents
115
Profit and loss
71
Territory of, intradistrict changes in
57
Vice Presidents
115
Volume of operations
53, 69
Federal Reserve credit policy
4
Federal Reserve notes:.
Cost of printing
59
Issued to and held by Federal Reserve Banks
63, 65, 67
Payments to Treasury as interest on
54, 71, 72
Repeal of provisions prohibiting one Federal Reserve Bank from
paying out notes of another Federal Reserve Bank
51
Federal Reserve System:
Changes in membership
44
Map
117
Fiduciary powers of national banks
47
Foreign banking corporations
48, 50, 90
Foreign countries:
Economic and financial developments
30
Gold and dollar holdings, by areas
38
Foreign operations of American banks, study of
49
Government securities:
Direct purchase and sale of, from and to the United States, extension
of authority of Federal Reserve Banks
50
Holdings of commercial banks
23
Holdings of Federal Reserve Banks
54, 68
Open market operations
6, 29
Treasury certificates, holdings of special short-term, purchased directly
from the United States, by Federal Reserve Banks
69
Hawaii:
Amendments to Regulations G and } with respect to items in . . . 5 0 , 89
Designation as being in or of Twelfth Federal Reserve District for
purposes of Regulations G and J
50, 89
Holding company affiliates
47




122

INDEX
Page
51
15
11
49

Housing Act of 1954
Income and saving
Industrial production
Inter-Agency Bank Examination School
Interest rates:
Changes during year
Federal Reserve Banks
Loans guaranteed under Defense Production Act
Time deposits, maximum rates on
Investments:
Bank premises, amendments to Sections 23A and 24A of Federal
Reserve Act
Labor market, developments during year
Legislation:
Direct purchase and sale of Government obligations from and to the
United States, extension of authority of Federal Reserve Banks. . . .
Federal National Mortgage Association, provisions of Housing Act
of 1954 relating to
Federal Reserve notes, repeal of provisions prohibiting one Federal
Reserve Bank from paying out notes of another Federal Reserve
Bank
Housing Act of 1954
Investment in bank premises, amendments to sections 23A and 24A
of Federal Reserve Act
Obligations of banks for cooperatives, amendment permitting member
banks to deal in and underwrite
Real estate loans by national banks, amendments to Section 24 of
Federal Reserve Act
Loans:
Defense production loans:
Fees and rates under Regulation V
Guarantees of
Federal Reserve Banks, earnings on
Industrial loans under Section 13(b) of Federal Reserve Act, changes
in rates approved
Real estate loans by national banks, amendments to Section 24 of
Federal Reserve Act
Loans and investments:
All banks in the United States, by classes
Commercial banks
Margin requirements, table
Meetings:
Central bank technicians
Chairmen of Federal Reserve Banks
Federal Advisory Council
Federal Open Market Committee
Presidents of Federal Reserve Banks
Member banks:
Acceptance powers
Analysis of changes



20
78
80
79
50
13
50
51
51
51
50
52
51
80
40
55
86
51
81
23
80
60
60
60
60
60
47
83

INDEX

123

Page
Member banks—Continued
Assets and liabilities
81
Capital accounts
43, 81
Dividends
42, 82
Earnings and expenses
41, 42, 82
Investment in bank premises, amendments to Sections 23A and 24A
of Federal Reserve Act
50
Number of
44
Obligations of banks for cooperatives, authority to permit
dealings in
52
Obligations of Federal National Mortgage Association, authority to
permit dealings in
52
Reserve positions
27
Reserve requirements:
Reduction in
7, 49, 88
Table
79
Reserves, Reserve Bank credit, and related items
74
Stock of Federal National Mortgage Association, authority to permit
purchase
51
Membership in Federal Reserve System, changes in
44
Money and bank credit, review for year
22
Mutual savings banks:
Analysis of changes
83
Assets and liabilities
81
National banks:
Admission of national bank in Alaska to membership in Federal
Reserve System
45, 90
Analysis of changes
83
Assets and liabilities
81
Real estate loans by, amendments to Section 24 of Federal
Reserve Act
51
Trust powers granted to
47
National Voluntary Mortgage Credit Extension Committee
52
Nonmember banks:
Analysis of changes
83
Assets and liabilities
81
Par list, number on list and not on list
84
Open market operations
6, 29
Par list:
Number of banks on, changes during year
45
Number of banks on list and not on list, by Federal Reserve Districts
and States
84
Policy actions, Board of Governors:
Designation of Alaska and Hawaii as being in or of Twelfth Federal
Reserve District for purposes of Regulations G and J
89
Discounts for and advances to member banks, reductions in rates. . 86, 87
Regulation D, Reserves of Member Banks, amendment to
88
Regulation G, Collection of Noncash Items, amendments to
89
Regulation J, Check Clearing and Collection, amendments to
89




124

INDEX

Page
Policy actions, Board of Governors—Continued
Regulation K, Banking Corporations Authorized to Do Foreign
Banking Business under the Terms of Section 25(a) of the
Federal Reserve Act:.
Amendment of Sections XI and XV
90
Policy actions, Federal Open Market Committee:
Authority to eflect transactions in System account:
Meeting of March 3, 1954
92
Meeting of June 23, 1954
94
Meeting of September 22, 1954
96
Meeting of December 7, 1954
97
Bankers' acceptances, reductions in minimum buying rate
94, 95
Repurchase agreements
96
Review of continuing authorities or statements of policy
93
Presidents of Federal Reserve Banks:
Conference of
116
List of
115
Meetings
60
Prices:
Changes in
14
World commodity prices
34
Production, review for year
8
Rates:
Advances to individuals, partnerships, and corporations other than
member banks
78, 86
Advances to member banks under Section 10(b) of Federal
Reserve Act
78, 86, 88
Buying, on acceptances
78, 94, 95
Discount rates at Federal Reserve Banks
7, 78, 86, 87
Industrial loans and commitments under Section 13(b) of Federal
Reserve Act
78, 86
Interest rates
20, 78
Loans guaranteed under Defense Production Act
80
Postal Savings deposits
79
Savings deposits
79
Time deposits
79
Regulations, Board of Governors:
D, Reserves of Member Banks, amendment decreasing reserve
requirements
49, 88
G, Collection of Noncash Items:
Amendments with respect to items payable in Territories of
Alaska and Hawaii
50, 89
Designation of Alaska and Hawaii as being in or of Twelfth
Federal Reserve District for purposes of
50, 89
}, Check Clearing and Collection:
Amendments with respect to checks drawn on nonmember parremitting banks in Territories of Alaska and Hawaii
50, 89
Designation of Alaska and Hawaii as being in or of Twelfth
Federal Reserve District for purposes of
50, 89



INDEX

125

Page
Regulations, Board of Governors—Continued
K, Banking Corporations Authorized to Do Foreign Banking Business
under the Terms of Section 25(a) of the Federal Reserve Act:.
Amendment of Sections XI and XV
50, 90
V, Loan Guarantees for Defense Production
40
Repurchase agreements
96
Reserve cities, designation of
46
Reserve positions of member banks
27
Reserve requirements:
Member banks:
Reduction in
7, 49, 88
Table
79
Reserves, member banks, 1918-1954
74
Revised Statutes, Section 5136:
Amendment permitting member banks to deal in and underwrite
obligations of banks for cooperatives
52
Amendment permitting member banks to deal in and underwrite
obligations of Federal National Mortgage Association
52
Salaries:
Board of Governors
59
Officers and employees of Federal Reserve Banks
70, 77
Secretary of Agriculture, loans insured by, amendment to Section 24 of
Federal Reserve Act
51
Small Business Administration:
National bank loans in which Small Business Administration cooperates or purchases participation, amendment to Section 24 of
Federal Reserve Act
51
State member banks:
Assets and liabilities
81
Examination of
46
Number and analysis of changes
44, 83
Stock of Federal National Mortgage Association, legislation permitting
purchase by member banks
51
System open market account:
Authority to effect transactions in
92, 94, 96, 97
Bankers' acceptances
94, 95
Repurchase agreements
96
Review of continuing authorities or statements of policy
93
Territory of Federal Reserve Banks and branches, intradistrict
changes in
57
Trust powers of national banks
47
Voting permits issued to bank holding companies
47