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☆ ☆ ☆ Annual Report ☆ ☆ to the Directors ☆ ☆ 1952 ☆ ☆ ☆ FEDERAL RESERVE B A N K OF M I N N E A P O L I S I N D E X Directors and Officers.............. ....... .. .. .......... ....1 . Changes of Directors and Officers....... .... ................... 6 Economic Developments... ......... ..... .......... ........ —.. 8 As s e t s . .. ..... .. . Liabilities ............... ... ..... ...... 16 ..18 Departmental and Other Comments • ’ Check Collection ..................... ............. 22 Currency and Coir#.. ... .................................. 26 Discount and C r e d i t ......................................30 Duplicating.. ............... . .... . 31 Examination ......... ..................................... 32 Fiscal Agency............................................. 34Noncash Collection ...................................... 4-2 Personnel ................................................ 4-3 Planning.... ........................................ .4-7 Protection-................................................ 4-9 Public Services' ..................................... 50 Purchasing-............................................... 59 Research.................................................. 60 Reserves (Member Bank)................................... 62 Safekeeping .... ....................................... 64Wire Transfers-........................................... 65 Capital Accounts. Dividends.. Bank Premises ___ _________ ______ Earnings .. Expenses .. 67 .. 70 .. 71 . 73 .. 79 HEAD OFFICE DIRECTORS AND MEMBER OF FEDERAL ADVISORY COUNCIL Directors Roger B. Shepard, Chairman, and Federal Reserve Agent Paul E. Miller, Deputy Chairman Term Expires December 31 Class A H. N. Thomson, Vice President, The Farmers and Merchants Bank, Presho, South Dakota 1953 Charles W. Burges, Vice President and Cashier, Security National Bank of Edgeley, Edgeley, North Dakota 1954- Edgar F. Zelle, Chairman of the Board, First National Bank, Minneapolis, Minnesota 1955 Class B William A. Denecke, Livestock Rancher, Bozeman, Montana 1953 Ray C. Lange, President, Chippewa Canning Company, Chippewa Falls, Wisconsin 1954- Homer P. Clark, Honorary Chairman of the Board, West Publishing Company, St. Paul, Minnesota 1955 Class C Roger B. Shepard, 322 Endicott Building, St. Paul, Minnesota 1953 Paul E. Miller, Director, University of Minnesota Agricultural Extension Division, St. Paul, Minnesota 1954- F. A. Flodin, President, Lake Shore Engineering Company, Iron Mountain, Michigan 1955 Member of Federal Advisory Council Joseph F. Ringland, President, Northwestern National Bank, Minneapolis, Minnesota 1953 -1- OFFICERS 0. S. Powell, President A. W. Mills, First Vice President H. C. Core, Vice President in Charge of Personnel Personnel: Cafeteria Education & Welfare Medical Personnel Maintenance Retirement System Social Security Office Boys & Pages C. W. Groth, Vice President H. A. Berglund, Assistant Cashier Assigned to Helena Branch E. B. Larson, Vice President *M. B. Holmgren, Assistant Cashier Fiscal Agency Securities: Purchase and Sale Federal Taxes Commodity Credit Corporation H. G. McConnell, Vice President Bank Examination Securities Exchange Act *J. Marvin Peterson, Vice President and Director of Research F. L. Parsons, Associate Director of Research Library Publications Research Statistics '"Effective January 23, 1953 -2- OFFICERS (Contd.) Otis R. Preston, Vice President *Christian Ries, Assistant Vice President Public and Bank Relations Announcements Circulars Correspondence Press Relations M. H. Strothman, Jr., Vice President George M. Rockwell, Assistant Cashier Industrial Loans Loans & Discounts Regulation V Loans Sigurd Ueland, Vice President, Counsel, & Secretary Legal *A. W. Johnson, Assistant Vice President *John Gillette, Assistant Cashier Check Collection Equipment Repairs Ordinary Mail A. R. Larson, Assistant Vice President Noncash Collection Registered Mail Routing Symbol Securities: Safekeeping Vault 0. W. Ohnstad, Assistant Vice President Accounting: Expenditures Monthly and Annual Directors1 Reports Building Duplicating Protection Purchasing Security Files Telephone * Effective January 23, 1953 OFFICERS (Contd.) M. 0. Sather, Assistant Cashier Accounting: General Books and Bank Accounts Transfer of Funds Foreign Exchange Reports Files & Old Records M. E. Lysen, Operating Research Officer Operating Letters Operating Manuals Planning: Efficiency Studies Equipment Office Forms Suggestions Kyle K. Fossum, Auditor Clement Van Nice, Assistant Vice President Currency and Coin HELENA BRANCH DIRECTORS John E. Corette Chairman Term Expires December 31 G. R. wilburn, Livestock Rancher, Grass Range, Montana 1953 A. W. Heidel, Vice President, Powder River County Bank, Broadus, Montana 1953 John E. Corette, President and General Manager, Montana Power Company, Butte, Montana 1954- J. Willard Johnson, Financial Vice President, Western Life Insurance Company, Helena, Montana 1954- George N. Lund, Vice President and Cashier, First National Bank, Reserve, Montana 1954- -5- CHANGES DIRECTORS AND OFFICERS The regular November election resulted in the re-election of Edgar F. Zelle, Chairman of the Board, First National Bank of Minneapolis, as Class A director, and Homer P. Clark, Honorary Chairman of the Board, West Publishing Company, St. Paul, as Class B director. F. A. Flodin, President of the Lake Shore Engineering Company, Iron Mountain, Michigan, was reappointed by the Board of Governors as Class C director. All terms expire December 31, 1955. The Board of Governors reappointed Roger B. Shepard as Chairman and Federal Reserve Agent. Paul E. Miller was reassigned as Deputy Chair man. The Board of Governors redesignated John E. Corette, Butte, Montana, as a director of our Helena Branch for a two-year term beginning January 1, 1953. Our Board of Directors appointed J. Willard Johnson, Financial Vice President of the Western Life Insurance Company, Helena, Montana, and George N. Lund, Vice President and Cashier of the First National Bank, Reserve, Montana, to succeed former directors Theodore Jacobs, Missoula, Montana, and E. D, MacHaffie, Helena, Montana. These terms expire Decem ber 31, 1954-. Wm. E. Peterson, Assistant Cashier, retired on April 30 after 3U years of service at the bank. -6- J. N. Peyton, after serving as Chairman of our Board for 3 years and as President for 16 years, retired as of July 1. As of the same date, Oliver S. Powell returned from the Board of Governors, where he served approximately two years as a member, to assume the presidency of the Minneapolis Federal Reserve Bank. On November 25 our Board of Directors advanced Kyle K. Fossum to Auditor and 0. W. Ohnstad to Assistant Vice President. On January 23, 1953, our Board of Directors advanced J. Marvin Peterson to Vice President and Director of Research, Christian Ries and A. W. Johnson to Assistant Vice Presidents, and elected M. B. Holmgren and John Gillette as Assistant Cashiers. -7- ECONOMIC DEVELOPMENTS AND U.S. DEBT OPERATIONS IN 1352 The ultimate measure of an economy's performance is its output. By this standard, and others, the American economy performed admirably in 1952. Record levels of production and employment were achieved during the year in spite of predictions by some that the restrictive monetary policy adopted earlier would generate unemployment with its consequent lower level of activity. Even the prolonged shutdown of the basic steel industry was not sufficient (seriously) to disturb business operations. The Federal government which had financed military operations in World Wars I and II with large borrowings from both the banking system and the public, managed from mid-1950 to mid-1952 to finance almost all its total expenditures with tax receipts. In the last half of 1952 the public debt rose by $3 billion. The bulk of this increase represents higher investments by government agencies and trust accounts and a net increase in the general fund balance. On a cash basis, the government incurred a deficit of $1.6 bil lion in calendar 1952 compared to cash surpluses of $.4 billion and $1.2 billion in 1950 and 1951, respectively. This splendid budget record,together with the high production and the better control of the monetary system, contributed importantly to the large degree of price stability enjoyed throughout the year. Wholesale prices continued the decline originated in the Spring of 1951 while consumer prices edged slightly upward. In contrast to 1951 when it rose 8 points, the consumer's price index was up 2 points in 1952. -8- The relative stability in the purchasing power of the dollar meant that the higher consumer expenditures which characterized 1952 represented additions to the physical amount of goods and services taken by consumers rather than higher prices paid. This contrasts with the previous year when a large part of the additional consumption expenditures represented higher prices paid. In spite of their higher expenditures in 1952, larger incomes permitted Americans to save at approximately the same high rate as in the latter part of 1951. These large savings were reflected in the statements of all types of financial institutions. Assets of life insurance companies, savings banks, and savings and loan associations increased at a higher rate than in previous years. Commercial banks reported sharp additions to time deposit accounts. To the extent that savings satisfy the demand for funds from borrowers, pressure on the banking system to expand credit is diminished. Such pressure became increasingly strong during the year. Despite funds supplied to borrowers from large savings and credit expansion, the demand for credit remained sufficiently strong to induce interest rates higher than at any time in nearly two decades. At the end of 1952 three-month Treasury bills were yielding as much as long-term govern ment bonds had yielded less than three years earlier. The rate of return on the shortest government obligations, the bill rate, has been climbing, except for brief intervals, since mid-194-9. The yield on long-term governments has climbed too, although not so much and not so soon. Early in 1950 long-term government bond prices began a decline which was accelerated in the Spring of 1951 when the Federal Reserve System abandoned policies intended to support the prices of these securities. Contrary to the expectations of some pessimists the withdrawal of support from the government security market has not resulted in serious declines or panics. At no time since the Treasury—Federal Reserve "Accord" which gave birth to the withdrawal of support purchases of government bonds has any U.S. government issue traded at less than 95. In terms of histori cal precedent this is an extremely favorable record. The decline was orderly. At no stage was there a dumping of government securities on the market by holders who feared a collapse; instead the decline encouraged the retention of those securities, this being a prime objective of the new open market policy. Previously, banks, as well as some nonbank investors, had almost continuously reduced their holdings since 194-5. During that time com mercial banks liquidated government securities worth $32 billion. These banks have added $6 billion to their government portfolios since the ac cord. It would seem that the coincidence of the reversal of the liquidation trend and the date of the accord were more than accidental. Obviously, higher yields and lower prices for government securities induce their purchase while the threat of capital loss deters their sale. Even the greater attraction afforded the obligations of state and local governments by the interplay between their tax exempt feature and the higher income taxes levied after Korea was not strong enough to overcome the repercussions of the decline in U.S. government securities. The yield on a sample of municipal bonds was 1.98%, 2.00$, and 2.17$ in 1950, 1951, and 1952, respectively. -10- The changed situation in the market for U.S. government credit was not without its effect on the market for private credit. This was to be expected since the return on Federal government securities represents the pure rate of interest—no risk premium—while the return on private loans includes both pure interest and risk premium. The average return on a sample of the best quality corporate bonds was tively. 2, 62%, 2.86%, and 2.95% in the three years ended with 1952 respec Most commercial banks have announced more than once since early 1951 higher charges on loans of all kinds. Of course, lenders have benefited frcm these higher charges. The benefits can be measured partly by the change in gross earnings reported for all member banks. In 1951 these banks reported gross earnings more than 12 per cent higher than in the previous year. not by so much. Expenses rose too, but The greater increase in earnings than in expenses is re flected by the 15 per cent rise in net current earnings before taxes between 1950 and 1951. Data for 1952 are not yet complete but such fragmen tary data as have been made available indicate the continuation of these trends after 1951. Benefits have not been confined to commercial bank lenders. Life insurance companies, for example, report that earnings on invested funds amounted to 3*18% in 1951 compared with 3-09% in 1950 and 3.06% in 1949. In part these improved earnings reflect a shift to higher yielding assets, but in part they reflect higher yields on all types of earning assets. Life insurance policy holders, savers, are the ultimate recipients of these higher earnings. -11- Once again the forces of supply and demand have been permitted to assert themselves in the market for funds. The resultant higher interest rates have served a dual role of discouraging borrowers and encouraging savers, thus equating the supply and demand for funds without undue genera tion of more credit. This is not to say that credit expansion did not occur in 1952— it did. But our economy was growing and such an economy needs more credit. The expansion would doubtless have been much greater if the Federal Reserve System had not stopped feeding reserves to the banking system by engaging in support purchases of government securities. Evidence that the expansion which did occur was not excessive can be found in the record of stable prices throughout the year. The composition of the new credit which was extended last year, with respect to the type of borrower, was not as favorable as it might have been. The removal of consumer credit controls in May was accompanied by a reversal of the decline which had been in progress in the amount of consumer credit outstanding. Subsequently, consumers added $3 billion to their indebtedness bringing such borrowings to an all time high. In one sense consumers are out of the reach of general credit controls which operate through changes in the interest rate. This is be cause consumers as a group are less sensitive to changes in interest rates than are business borrowers. Under these circumstances a general tightening of credit might easily cause an undesirable shift in the composition of credit—more for consumers and less for business. In ordinary times this shift might not be considered undesirable. But with the defense program growing in an economy already fully employed, -12- it seems the interests of defense would best be served if more funds were made available to the productive elements of the economy while less funds were made available to finance consumption. Also, in the event of any future possible economic decline, the repayment of these debts by consumers can only serve to accelerate the fall in demand for the economy's products. Such a fall is at the heart of any recession. Although the Board of Governors suspended Regulation W on May 7 "....after careful review of developments in the economy generally and in the markets directly affected by the regulation", they recommended to the Congress that authority for regulation of consumer credit be continued after June 30, 1952, in order that it could be reinstated should subsequent developments warrant such action. The authority was not extended. Less than a week after suspension of Regulation W the Board of Governors in effect ended the Voluntary Credit Restraint Program when they withdrew requests for compliance with the provisions of the program. Another important selective credit control, Regulation X, was suspended on September 16. Under the 1952 amendments to the Defense Pro duction Act no minimum down payment requirement in excess of 5 per cent could be imposed on the purchase of residential properties if the season ally adjusted annual rate of housing starts fell below 1.2 million units for three successive months. When the Bureau of Labor Statistics found that housing starts had fallen below the 1.2 million annual rate, the Board of Governors sus pended Regulation X which had provided for restriction of nonresidential loans as well as residential. -13- Actually, many prospective borrowers who could not meet the terms of the regulation found that, even after suspension, lenders were not willing to accommodate them. This is particularly true of borrowers who had hoped to obtain FHA or GI loans. Lenders had more attractive alternative in vestments . Thus, last year witnessed the suspension of three important sup plements to indirect controls, namely, Regulations W and X, and voluntary credit restraint. These essentially qualitative controls are powerful tools that should be employed by the Federal Reserve System in conjunction with the essentially quantitative indirect controls at times when the threat of inflation warrants their use. The absence of any alarming developments after the removal of selective controls last year is a tribute to the ef fectiveness of indirect controls. Although the use of indirect controls has raised the cost of borrowing to the U.S. Treasury, Treasury debt instruments have become more attractive at the same time. For the first time since the Victory Loan of 194-5 the Treasury issued marketable bonds last year. The first issue was offered in exchange for maturing securities; the other was an issue for new money. More attractive provisions for owners of Savings bonds, announced in May, failed to cause these obligations to become an important source of new money for the Treasury. A slight increase in the amount outstanding occurred during the year, however, in contrast to the previous year when a slight decrease occurred. -U - One curious aspect of the changing structure of interest rates in recent months has been a flatening of the yield curve. That is, the difference between the yield on short-term obligations and the yield on long-term obligations has been diminished. Long-term securities have declined in price proportionately less than short-term securities. In the last few days of 1952, 90-day Treasury bills were yielding more than the longer Treasury certificates. Although this was a temporary condition associated with the great stringency in the money markets at the time, it illustrates the nature of the fundamental changes which have re sulted from the operation of free markets. In contrast to the previous year when the Federal Reserve System added, net, government securities worth $3.1 billion to its portfolio, Reserve bank assistance to Treasury financing in 1952 was of a magnitude which required a net addition of less than a billion dollars. The reserves provided to the commercial banks by these purchases were less than the amount necessary to replace the reserves lost during the year because of higher currency circulation. Thanks mostly to expanded borrowing from the Federal Reserve banks and to a gold inflow, commercial banks obtained sufficient reserves to support their higher deposit liabilities. Required reserve balances would have risen more rapidly except that a substantial part of last year's deposit increase was in the form of time deposits which require less reserves than do demand deposits. -15- MILLION DOLLARS M ILLIO N DOLLARS 1600 1600 1400 1400 1200 1200 1000 1000 800 800 600 600 400 400 200 l M O t 200 - 1917 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 COMPARATIVE STATEMENT OF ASSETS MINNEAPOLIS AND HELENA BRANCH COMBINED (Thousands of Dollars) 12-31-52 Assets: Cash Reserves: Interdistrict Settlement Fund Gold Certificates with F.R.Agent Redemption Fund - F.R.Notes Total Gold Certificate Reserves Total Other Cash Bills Discounted Foreign Loans on Gold Industrial Loans IT. S. Government Securities: Bills Certificates of Indebtedness Notes Bonds Total U. S. Government Securities Due From Foreign Banks F.R. Notes of other F.R. Banks Uncollected Items: Transit Items Exchanges for Clearinghouse Other Cash Items Due From Branches or Head Office Total Uncollected Items 12-31-51 Change from 12-31-51 157,606 170,000 25,549 353,155 175,261 150,000 25,018 350,279 - 17,655 20,000 + 531 + 2,876 5,879 7,056 - 1,177 _ _ + + + 500 767 1 500 767 135 134 23,013 159,018 438,430 143,939 764,400 14,852 403,955 160,891 169,655 749,353 1 10,298 1 7,727 99,119 3,013 1,004 85,754 9,037 1,998 + 13,365 - 6,024 994 - - - 8,161 244,937 +;277,539 - 25,716 + 15,047 + + 2,571 103,136 96,789 + 6,347 Bank Premises Less Reserve Bank Premises - Net 2,493 1,442 1,051 2,493 1,410 1,083 + - 32 32 Miscellaneous Assets: Fiscal Agency expense, reimbursable Interest Accrued Premium on Securities Deferred Charges All Other Assets Total Miscellaneous Assets 135 4,414 367 47 15 4,978 90 3,392 487 54 13 4,036 + + 45 1,022 120 7 2 942 1,244,300 1,216,458 Total Assets - + + 27,842 -17- MILLION DOLLARS M ILLION DOLLARS COMPARATIVE STATEMENT OF L I A B I L I T I E S MINNEAPOLIS AND HELENA BRANCH COMBINED (Thousands of Dollars) 12-31-52 12-31-51 Change from 12-31-51 Liabilities: Federal Reserve Notes in Circulation 650,889 632,029 + 18,860 Deposits: Member Bank - Reserve Accounts U.S. Treasurer - General Account Foreign Nonmember Bank - Clearing Accounts Officers' Checks Due to Other F.R.Banks - Collected Funds Other Deposits Total Deposits 437,867 26,412 13,611 819 224 3,U7 482,080 464,389 8,309 13,013 1,561 124 2,749 490,145 - 26,522 + 18,103 + 598 742 + 100 + 398 - 8,065 4,333 80,429 84,762 3,363 65,754 69,117 + 970 + 14,675 + 15,645 252 124 79 455 270 125 96 491 18 1 17 36 1,218,186 1,191,782 + 26,404 5,719 15,131 1,073 4,191 26,114 5,363 14,063 1,073 4,177 24,676 1,244,300 1,216,458 Deferred Availability Items: U.S.Treasurer - General Account All Other Total Deferred Availability Items Miscellaneous Liabilities: Discount on Securities Sundry Items Payable Suspended Credits Total Miscellaneous Liabilities Total Liabilities Capital Accounts: Capital Stock Paid in Surplus Fund - Section 7 Surplus Fund - Section 13B Reserve for Contingencies Total Capital Accounts Total Liabilities & Capital Accounts - + + 356 1,068 - + + 14 1,438 + 27,842 -19- Probably the most significant development in the banking com munity last year was the growing importance of borrowing by member banks from the Federal Reserve banks. This form of extending credit by the Reserve banks is much less inflationary than is the purchase of government securities by the Reserve banks. This is true because prudence requires that banks in debt to the Federal reduce that debt at the earliest opportunity, either by liquidat ing assets or by utilizing the proceeds of a deposit increase for this purpose. Reserves provided by borrowing are, therefore, temporary in character while reserves provided when government securities are purchased by the Reserve banks are more likely to be regarded as permanent, and to be used as the basis for extension of additional credit by the commercial banks. The growing importance of borrowing by the commercial banks has been accompanied by a growth in the effectiveness of the discount rate as an instrument of control. FEDERAL RESERVE BANK OF MINNEAPOLIS STATEMENT CHANGES Although earnings on loans to member banks are still a relatively unimportant part of total earnings at the Federal Reserve Bank of Minneapolis, it is still possible to obtain an idea of how the volume of borrowing has changed by comparing such earnings for 1952 with 1951. The comparison shows an increase of more than 50 per cent. -20- Most of the higher earnings which sent gross revenue at the Minneapolis Federal Reserve Bank to the highest level in history came from earnings on investments—U.S. government securities. This increase of almost 15 per cent came partly from larger holdings and partly from higher yields. The comparative balance sheet shows that investment in govern ment securities was up from $74-9.3 million at the end of 1951 to $764.4million at the end of 1952, an increase of $15.1 million. Inspection of the other asset accounts shows that the larger investment in governments accounted for the largest part of the increase in total assets. The national trend towards higher currency circulation is re flected on the liability side of this bank's statement. Federal Reserve notes outstanding at the end of 1952 amounted to $18.8 million more than a year earlier. The Christmas increase in demand for currency brought money in circulation to an all time high for the nation. Member bank reserve accounts show a decline of $26.5 million from the year ago level but this decline is within the range of random fluctuation and does not indicate any basic changes in the condition of Ninth District member banks. The net worth of the bank was enlarged during the year by reason of the sale of more stock, the retention of earnings and the provision of reserves for contingency. There was no change in this bank's reserve ratio as the pro portionate addition to our gold certificate reserves was equal to the proportionate addition to our note and deposit liabilities. -21- DEPARTMENTAL AND OTHER COMMEN TS CHECK COLLECTION The volume and dollar amount of checks handled during 1952 in the Check Collection Department surpassed all records as reflected in the following tables: 1952 City Checks Country Checks Govt. Checks Paper Card-Other Feds Card-Our District Returned Items Postal Money Orders Volume (000 Gnitted) No. of Items Increase____ 1951 Percent Increase 12,728 49,006 11,584 42,605 1,144 6,401 9.8 15.0 1,171 2,925 9,234 657 10.097 85,818 1,151 2,492 7,084 627 4.711* 70,254 20 433 2,150 30 5,386 15,564 1.7 17.3 30.3 4.7 114.3 22.1 Dollar Amount (000 Omitted) 1952. City Checks #12,967,251 8,226,278 Country Checks Govt. Checks Paper 1,139,903 Card-Other Feds 200,924 Card-Our District 809,065 296,570 Returned Items Postal Money Orders 162,565 $23,802,556 mi Dollar Amount Increase Percent Increa: $12,870,201 7,908,974 $ 97,050 317,304 .7 4.0 1,058,061 167,377 664,087 282,581 75,220* $23,026,511 81,842 33,547 144,978 13,989 7.7 20.0 21.8 4.9 116.0 3.4 ...87.ai£ ^776,045 *This bank became paying agent for postal money orders effective July 1, 1951. The previous highest single day's record (August 9, 1951) of 347,947 checks handled was surpassed on 48 different occasions during 1952. -22- The new single day's volume record of 444,583 items processed was established on December 8, 1952. New single day's volume records were also set during 1952 in processing country and city checks of 227,456 on December 17 and 103,294 on November 17, respectively. Due to the availability of a larger volume of items the two late shifts totaling approximately 50 clerks sort and list from 100 thousand to 150 thousand checks each night, Monday through Friday. The majority of all items are completely handled on the 80 proof machines or tabulating equipment maintained in the department. The total staff in the Check Collection Department was approxi mately the same at the close of 1952 as it was at the close of 1951. Check Routing Symbol During the year, we have continued to gain in our efforts toward having the check routing symbol properly placed on cash items. The officer and bank representatives assigned to promote the rout ing symbol directed their efforts mainly to problem banks. Calls were made at these banks and lists furnished them of their customers whose checks did not carry the symbol. On their bank calls, our Public Services men con tinued to call the matter to the attention of the par banks. The State of South Dakota, Department of Public Instruction, was considering revising its school accounting system and was approached with recommendations to permit using a uniform and standard type of check with the routing symbol. -23- As of December 1, 1952, a survey showed the average use of the routing symbol in the Ninth District by states was as follows: Michigan 83%| Minnesota 90$; Montana 91%? North Dakota 90%; South Dakota 91%’ and Wis , consin 86%. Our Ninth District average of 90% (an increase of 10% for the year) now equals the System average of 90% (an increase of 5% for the year). Because the use of the check routing symbol has now reached the point where it is workable in check collection operations, our efforts the latter part of the year were directed to calling the attention of the banks in our district to its use. Check Standardization Program A program was inaugurated at the beginning of 1952 for the pro motion of check uniformity and standardization. It was found in changing over to machine operation in our check collection department that poorly designed checks and drafts and noncash items being handled as cash items were responsible for considerable time loss in departmental operations. Two senior representatives were assigned to promote this program. During the year, some 4-00 direct calls were made on business, industrial firms, printers, and banks. When firms felt they could not properly redesign their own checks, the work was done at our bank and the firm was sent photo static copies of suggested changes. Talks were given and slides shown to several organizations in the Twin Cities and Duluth. Letters were written to all member and par banks where their noncash items were being handled as cash items through the check collection department asking for their assistance in eliminating this noncash form of customers' drafts. Our Public Services men, on their bank calls, followed through on these letters with further discussion as to the need in correcting this situation. Checks of national corporations operating in this district were scrutinized and if a poorly designed check was being used the Federal Reserve Bank of the district in which the corporation was located was asked to con sult with them with the idea of making a change in the form of their check. Legislation was initiated through the Bankers Association of Minnesota, North and South Dakota, for presentation to the 1953 legislature for the substitution of checks for warrants in disbursing municipal sub divisions funds in those states. Wisconsin passed similar legislation in 1951 and Michigan and Montana are on a pending basis at present. CREDIT CONTROL Regulation W This regulation, which had been reinstituted in September 1950, was suspended on May 7, 1952. During the life of the regulation, repre sentatives from our Credit Control Department visited 12,362 concerns sub ject to the regulation. Less than i& of those visited were found to have violated the regulation in such a manner as to warrant revisits or compliance conferences at our bank. At the suspension of the regulation nine men were devoting their entire time to investigations of concerns operating within the scope of the regulation. -25- Regulation X This regulation, applicable to real estate credit, was instituted in October 1950 and suspended effective September 16 , 1952, under statu tory provisions. During the life of the regulation our representatives called on 387 concerns subject to the regulation compliance with its terms. and found substantial Activity during 1952 to the end of the regula tion covered visits to 208 real estate financing organizations, less than 5% of which had transactions in violation of its terms. Nearly all of such "violations" related to technical rather than substantive matters. At the time of the suspension of the regulation six full time investigators were engaged in investigative duties. These men were either absorbed in other departments or resigned to accept employment elsewhere. CURRENCY AND COIN The volume of work involved in the various operations of the Currency and Coin Department in 1952 ranges from slightly above to sub stantially greater, in some cases, than the record volume of 1951. During 1952 wrapped coin showed an increase of almost 9% in the number of pieces wrapped. Two new automatic coin counting and wrapping machines have been ordered and are expected to be received early in 1953. These machines will eliminate the hand wrapping operation and are expected to give us a substantial increase in the potential production of wrapped coin, particularly in nickels and cents. -26- Four new currency sorting machines were received in late 1952. A rearrangement of the departmental space was made necessary by the acqui sition of the new sorting machines and by the removal of the elevator which formerly linked the Currency Department with the bank floor. The space formerly occupied by the elevator is now being used for a new teller's cage, and the partitions which formed another cage have been removed so that there will be sufficient room for the new sorting machines. Our currency sorters discovered 82 counterfeits ostensibly worth § > 1,055 during the year as compared with 126 picked up in 1951. -27- Outgoing Shipments for Account of Member Banks 1951 1952 Currency paid out Currency shipped to Helena Branch and for other F.R. Banks Coin paid out Number 20,926 Amount $359,931,000 Number 21,831 Amount $356,332,500 664 12*022 36,662 48.764.000 12.032.000 $420,727,000 509 14.496 36,836 49,583,500 10 .946.000 $416 ,862,000 Incoming Shipments for Account of Member Banks 1952 Number 22,041 -2*212 25,954 Currency Coin 1951 Number 22,816 -4.i220 27,106 Amount $397,286,000 9,399,000 $406,685,000 Amount $383,495,000 9.009.000 $392,504,000 Number and Amount of Fieces Handled Currency Bills received and counted Bills rehandled Hand verification of bills .1252. Number Amount $436,089,000 65,883,703 77,483,470 6,367,024 21.493.369 251.707.250 5*765,279,720 93,744,096 , Number 1951 64 983,663 5 ,620,427 24.041.991 94,646,081 Amount $ , 420 409,560 67,751,600 287.758.790 $775,919,950 Coin Coins received and counted Coins rehandled Coins wrapped , 1952 _ Number Amount 102 222,422 $ 8,887,532 3,011,385 471,775 ___ AJ£2*Z25 $ 13, 8a , 582 160,849,537 Number 104,789,880 , 3 610,122 51.186.000 159,586,002 1251- Amount 8,823,987 523,378 4.309.400 13,656,765 -23- Amount of Coin Received from U. S. Mints 1952 $2,957,000 1951 $2,310,200 Number of Unfit Bills Forwarded to Treasurer of the United States for Redemption mz mi 33 ,342,863 26 ,182,316 Return of Federal Reserve Notes to Bank of Issue Fit-for-use Federal Reserve Notes returned to other F. R. banks Our fit-for-use Federal Reserve Notes received from other F. R. banks m i 1951 $52,321,300 $37,907,000 $42,474,000 ^40,485,750 -29- DISCOUNT AND CREDIT A total of 54 banks in Head Office territory borrowed an aggregate of $1,949,055,000 during 1952, all of which was secured by United States government obligations. Twin City banks. to 41 banks. All but $72,205,000 of this amount was borrowed by Advances on governments in 1951 aggregated $1,715,790,000 Seven banks in Montana borrowed $65,275,000 through the Helena Branch in 1952, $40,085,000 more than in 1951« There were no borrowings made under Section 10b in 1952. One non member bank borrowed $500,000 secured by United States government obligations. Such loans are authorized under the last paragraph of Section 13 of the Fed eral Reserve Act and carry a rate 1% above the discount rate. Our bank's participation in foreign loans on gold during the year totaled $1,976,000. At year's end there was $767,000. Only five applications for industrial loans under Section 13b of the Federal Reserve Act were received during the year. aggregated $507,000. These applications Four of the applications were declined and one was approved and disbursed. No applications were pending at the year's end. An industrial loan disbursement for $56,250 was made. The total amount of industrial advances outstanding on our bank's books on December 31, 1952, was $134>883.34* These funds were being utilized by (l) a wholesale and retail grocery business, (2 ) a paint manufacturer, (3) a creamery, (4 ) a builder's hardware and appliance dealer, (5) a soft water service company, and (6) a feed manufacturer. -30- In 1952, advances amounting to $13 ,064.,741.27 were made by financing institutions under Regulation V. $9,318,243.94 advanced was guaranteed by the Department of the Army; $377,000.00 by the Department of the Navy; and $3*369,497.33 by the Department of the Air Force. As of December 31, 1952, the amount of loans outstanding guaranteed by the Department of the Army was $13,527,073.41, portion guaranteed $>11,070,403.79J the Department of the Air Force, $7,437,326.96, portion guaranteed $6,693,594.31; and the Department of the Navy $418,710.59, portion guaranteed $349,477.41. Twenty applications for guaranteed loans totaling $12,393,450 were received during 1952 and one application for $125,000 was pending at the beginning of the year. Ten applications were authorized, five were disapproved, five were withdrawn and one is under consideration. The total amount of guarantee agreements executed in 1952 was $3 ,430 ,000 . The approvals of applications for guaranteed loans ranged from $15,000 to $800,000, all of which are in the form of revolving credits. DUPLICATING During 1952, the department turned out 5.9 million pieces of duplicated matter on 5,516 separate production runs. This volume repre sents an approximate decrease of 8% compared with total production for 1951 and is largely due to the suspension of Credit Controls, Regulation W on -31- May 7 and Regulation X on September 15. four different machines, namely: and the multilith. The total is a combined output of the uitto, the mimeograph, the multigraph The addressograph section of the department addressed a daily average of approximately 4>600 envelopes and 4,500 miscellaneous forms. Photostatic reproduction of various documents declined slightly for the year. We v.*ere reimbursed for the cost of about 50% of our 1952 photostat work. EXAMINATION At the close of the year there were 4.76 state and national member banks in the Ninth District. The number of national banks decreased one, and the number of state member banks increased one. The banks are geographi cally distributed as follows: National Banks Michigan Minnesota Montana North Dakota South Dakota Wisconsin State Banks Total 26 178 38 40 35 27 3U 14 28 45 2 28 JLi 132 40 206 83 42 63 _A2 476 A regular examination of each of the state member banks was made except that the Rapid City Trust Company, Rapid City, South Dakota, which opened for business September 15, 1952, was not examined, and one Montana state member bank was examined twice. -32- At the close of the year, eleven state member banks were exercising trust powers. powers. Ten other state member banks are not exercising their trust Sixty-five national banks held permits to exercise full or limited trust powers. Two applications for membership in the Federal Reserve System were received from state banks during the year. During the year we received 687 examination reports from the Chief National Bank Examiner's office at a cost of $6,870. In addition, six sep arate reports of examination of trust departments were received at a cost of $30 . The number of reports of examination received from the various state banking departments in this district of state member banks examined independently by them was as follows: Minnesota South Dakota Wisconsin North Dakota 27 4 3 2 Four calls for a report of condition of each member bank were issued, and, in addition, all member banks submitted semiannual reports of earnings and dividends. -33- FISCAL AGENCY During the year 1952s the Treasury Department each week made the usual offering of Treasury Bills, and in addition two special offerings of Treasury Bills labeled "Tax Anticipation Series". An additional issue of the 2 3/4$ Treasury Bonds, Investment Series B-1975-80, was also offered for cash and in exchange for any of the following four outstanding restricted Treasury Bonds: 1. 2 \/2% Bonds of 1965-70, dated Feb. 1, 1944, due March 15, 1970. 2. 2 1/256 Bonds of 1966-71, dated Dec. 1, 1944, due March 15, 1971. 3. 2 1/2$ Bonds of 1967-72, dated June 1, 1945, due June 15, 1972. 4. 2 1/2% Bonds of 1967-72, dated Nor. 15, 1945, due Dec. 15, 1972. Commercial banks could only subscribe to this offering to the extent that they presented restricted bonds of the eligible issues acquired before December 31, 1945, in payment of 75 percent of their subscription and cash for the remain ing 25 percent. We received and allotted 34 applications, totaling $11,568,000 for this offering. Six of these applications were for the account of banks and 28 for the account of others; 08,450,000 were exchange subscrip tions and $3,118,000 were for cash, Nationwide, exchange subscriptions totaling $1,307,359,500 and cash subscriptions totaling $450,399,500 were received. Also offered for cash were 2 3/8$ Treasury Bonds of 1958. Com mercial banks could subscribe for this issue for their own account to an amount not exceeding the combined capital, surplus and undivided profits, or 5 percent of the total deposits as of December 31, 1951, whichever was greater. We received 600 applications totaling $263,922,500 for this issue, of which $107,547,000 was allotted. These appl ica.tions represented 726 -34- subscribers - 531 being banks. Nationwide, subscriptions totaling $11,693,- 351,000 were received and $4,24.8,4.37,500 allotted. There were six exchange offerings during the year, as follows: 1. 2 3/8$ Treasury Bonds of 1957-59 for 2 l/2$ Treasury Bonds of 1952-54. 2. 1 7/8$ Certificates of Indebtedness, Series A-1953, for 1 7/8$ Certificates of Indebtedness, Series A-1952. 3. 1 7/8$ Certificates of Indebtedness, Series B-1953, for 1 7/8$ Certificates of Indebtedness, Series B-1952. 4. 2$ Certificates of Indebtedness, Series C-1953 for 1 7/8$ Certificates of Indebtedness, Series C-1952, and 1 7/8$ Certificates of Indebtedness, Series D-1952. 5. 2 1/8$ Treasury Notes, Series A-1953, for 1 7/8$ Certificates of Indebtedness, Series E-1952. 6. An additional issue of 2$ Certificates of Indebtedness, Series C-1953, for 1 7/8$ Certificates of Indebtedness, Series F-1952. We received 1,512 applications, totaling $445,629,000 for these exchange offerings, which were allotted in full. These applications represented 3,904 subscriptions, of which 2,981 were for the account of banks. During the year, we received 4,661 tenders for the weekly Treasury Bills, totaling $706,036,000, and $635,938,000 were accepted. represented 5,276 subscribers. These tenders In 1951, we received 2,665 tenders, totaling $363,505,000, and $350,377,000 were accepted. The average equivalent rate of discount on Treasury Bills increased from 1.883 percent for the Bills dated January 3, 1952, to 2.228 percent for the Bills dated December 26, 1952. On October 3, 1952, tenders were received for bids to an issue of 161-day Treasury Bills dated October 8, 1952, due March 18, 1953. were labeled "Tax Anticipation Series". These Bills We received 126 tenders, totaling $82,995,000, and $75,595,000 were accepted. These Bills may be used to pay income and profits taxes due March 15, 1953. On November 13, 1952, tenders were received for bids to an issue -35- of 210-day Treasury Bills, dated November 21, 1952, due June 19, 1953, also labeled "Tax Anticipation Series". We received 111 tenders, totaling $101,765,000, and $56,034,000 were accepted. These Bills may be used to pay income and profits taxes due on June 15, 1953. Banks that were qualified as "Special Depositaries for Public Honeys" were permitted to make payment for accepted tenders for these Tax Anticipation Treasury Bills by deposit in their Treasury Tax and Loan Account On April 29, 1952, the Treasury Department announced a number of changes in United States Savings Bonds. 1. Briefly, the changes are as follows: The issuance of a new design Series E bond, effective as of May 1, 1952, which matures nine years and eight months after the issue date. The new "E" bonds yield a higher rate of return, if redeemed during the early years, than the old bonds. They also increase in redemption value at the end of six months after the issue date; whereas "E" bonds issued prior to May 1, 1952, do not increase in redemption value until one year after the issue date. The over-all interest rate was also increased from 2.9 percent to 3 percent compounded semi-annually, by shortening the term of the bonds from ten years to nine years and eight months. 2. The interest rate on the "E" bonds, during the extension period, was also raised for all such bonds that mature after May 1, 1952, so that the return will be 3 percent compounded semi-annually on the issue price, if such bonds are retained for an additional ten years after the original maturity date. The new rates during the extension period do not apply to the "E" bonds which matured before May 1, 1952. 3. The annual limitation on the purchase of Series E bonds was also raised from $10,000 (maturity value) to $20,000 (maturity value). Since the new design "E" bonds were not physically available on May 1, 1952, the stock of the old design bonds was used until the new design bonds were available. Such old style bonds bearing issue dates of May 1, 1952, or thereafter, nevertheless, entitled the owner to the benefits of the revised terms. The new design Series E bonds became available early in August 1952. On August 8, we began to ship the new bonds to the issuing agents in our district with instructions to return the unissued stock of the old style "E" bonds. By the end of October 1952, the agents in our district had accounted for and returned all of the old design Series E bonds, amounting to 175,569 pieces, totaling $34,990,275 (maturity value). It is interesting to note that only two issuing agents in this district were unable to account for all bonds con signed to them. One agent could not account for one bond at $25 and another could not account for two bonds at $25 and two bonds at $50. Under Treasury Department provisions, these agents re imbursed the Department for the issue price of these five un accounted for bonds. The unissued "E" bond stock has been audited by us and sorted in serial number order by denomina tions. This stock will be retained by us and will be used for reissue cases involving bonds bearing issue dates prior to May 1, 1952, 4. The Treasury Department discontinued the sale of Series F and G United States Savings Bonds as of the close of business April 30, 1952, and offered in their place Series J and K bonds. The Series J bond, which replaces the "F" bond, will yield 2,76 percent interest -37- if held to maturity, which is twelve years after the issue date; whereas the "F" bonds only yielded 2.53 percent if held twelve years. The redemption values on the new bonds if redeemed prior to maturity are also higher. Series G bonds. The Series K bonds replaced the The "K" bond is a current income bond and it will yield 2.76 percent if held to maturity, twelve years after the issue date; whereas, the "G" bond only yields 2 1/2 percent if held twelve years. This bond also has the same par payment pro vision as the "G" bond. The amount of bonds of Series J or Series K, or the combined aggregate amount of bonds of both series originally issued during any one calendar year to any one owner that may be held by that owner at any one time, including those registered in the name of an individual and another person as co owner, is limited to $200,000 (issue price). Bonds of Series K issued in exchange for matured bonds of Series E are not included in computing the owner's holdings for the purpose of applying the limitation on holdings. Series J and K United States Savings Bonds may be registered in the names of individuals as well as organiza tions, However, up to the present time, commercial banks have not been permitted to subscribe for either Series J or K United States Savings Bonds. 5. As of June 1, 1952, a new current income bond, known as Series H, also became available. This bond matures nine years and eight months after the issue date, and will yield 3 percent if held to maturity. They are sold at par and the interest is paid by check semi-annually on a graduated scale of rates. The bond is redeem able at par at any time six months after the issue date as of the -38- first day of the month on one full calendar month's notice. It may only be registered in the names of individuals and the annual purchase limitation is $20,000 (maturity value). There were 1,4-09 qualified issuing agents for Series E savings bonds in this district as of December 31, 1952, which is the same net number of qualified issuing agents as of December 31, 1951. These agents, during 1952, sent us 21,453 sales reports covering 991,908 pieces of Series E bonds, total ing $95,457,355 (issue price) as compared with 931,016 pieces aggregating $93,287,829 (issue price) issued during 1951. During the year 1952, we made 9,442 shipments of unissued stock of Series E bonds to issuing agents in our district, involving 1,187,165 pieces as compared with 980,255 pieces shipped in 1951. United States Savings Bonds of Series E, F, G, H, J and K amounting to $48,684,487 (issue price), involving 214,956 applications and 244,987 pieces, were issued by our bank during 1952. This compares with $41,285,375 (issue price), involving 227,638 pieces of Series E, F and G issued in 1951. On December 31, 1952, 1,251 banks with 110 branches and 38 other organizations in our district were qualified to act as paying agents for Series A through E savings bonds and Armed Forces Leave Bonds. The daily average of all savings bonds paid by our bank and the paying agents in our district during 1952 was 8,101 pieces as compared with a daily average of 8,573 in 1951. Paying agents in our district were reimbursed for paying savings bonds and Armed Forces Leave Bonds during the first three quarters in 1952 in the amount of $205,821 for 1,513,123 pieces as compared with $227,922.20 for 1,703,698 pieces during the first three quarters of 1951. We received a monthly average of 1,597 pieces of savings bonds for safekeeping during the year 1952 as compared with 1,166 pieces per month during -39- the year 1951. Savings bonds released from safekeeping during 1952 averaged 2,083 pieces monthly as compared with 2,342 per month during 1951. As of December 31, 1952, we were holding in safekeeping for individuals, fiduciaries and organizations other than banks 229,837 savings bonds as compared with 235,666 bonds held on December 31, 1951. During the year 1952, we reissued for all purposes 133,162 savings bonds with a maturity value of $27,407,550 as compared with 109,018 pieces, totaling $22,008,895 (maturity value) reissued in 1951. The total public debt as of December 31, 1952, was $267,445,125,000, as compared with $259,445,000,000 on December 31, 1951. In this district, 1,171 banks are now qualified as "Depositaries for Public Moneys" and 988 of them had active Treasury Tax and Loan Accounts. As of December 31, 1952, the total deposits in the Treasury Tax and Loan Accounts were $107,475,150.28. The aggregate of all amounts deposited in the accounts during 1952 were $982,323,888.49 as compared with $294,648,656.51 for 1951. As it did last year, the Treasury Department permitted Special Depositaries to accept for deposit in their Treasury Tax and Loan Accounts, special drafts prepared by us representing checks of $10,000 or over drawn on such depositaries in payment of quarterly installments of income and excess profits taxes remitted to Directors of Internal Revenue. This provision was made effective for the following periods: March 1, 1952 through April 5, 1952 June 2, 1952 through July 3, 1952 Sept. 1, 1952 through Oct. 3, 1952 Dec. 1, 1952 through Jan. 5, 1953 For the tax payment period December 1, 1952, through January 5, 1953, only 50 percent of the amount of such checks could be deposited in the Treasury Tax -40- and Loan Account by a Special Depositary. On December 31, 1952, 680 banks in this district were qualified to act as Depositaries for Withheld Income Taxes, Federal Insurance Contribution Act Taxes and Railroad Retirement Taxes, and as such could accept deposits of those taxes from employers, and deposit the funds in their Treasury Tax and Loan Accounts. During the year, we received from qualified Depositaries and direct from employers 186,278 Depositary Receipts for withheld tax payments, totaling '$360,352,296.35. In addition, we also received from qualified De positaries and direct from employers 507 Depositary Receipts for $23,252,457.90, representing Railroad Retirement Taxes. In 1951,634 banks were qualified as Depositaries for Federal Taxes and we received a total of 155,710 Depositary Receipts for such taxes, amounting to $295,978,315.96. The Fiscal Agency now occupies space on the Bank Floor, the Green Room in the Subbasement and the Annex. On December 31, 1952, there were 106 employees in the Fiscal Agency Division, as compared with 112 on December 31, 1951. Commodity Credit Corporation This year, in our district, new agreements with the Production Marketing Administration were executed by 846 lending agencies. forty of these agencies also qualified as servicing agents. Two hundred Ninety-one percent of the servicing agencies are banks. The number of items handled as cash items this year was approximately 57 thousand, as compared with 90 thousand last year. The dollar volume was $116.5 million as compared with $147 million last year. We paid approximately 32 thousand sight drafts drawn on the Commodity Credit Corporation by the Production Marketing Administration State Committees, of which there are 337 in this district, as compared with 41 thousand paid in 1951. These drafts -41- totaled $25.5 million as compared with $22.5 million in 1951. Approximately 3,200 sight drafts, drawn on the Commodity Credit Corporation and payable through the Federal Reserve bank, were paid by us in 1952. These drafts totaled $ 64. million. In 1951 we paid 2,100 such drafts, totaling approximately $60 million. On behalf of the Minneapolis Office of the Commodity Credit Corpo ration, during the year we issued 15 thousand checks drawn on the Treasurer of the United States, totaling approximately $221 million as compared with 20 thousand checks for $176 million in 1951. There were two full-time employees in this division as of Decem ber 31, 1952. NONCASH COLLECTION During 1952 this department handled 885,674. grain drafts totaling $787,002,803.28. This was a decrease of 37,110 in the number of items handled and a decrease in dollar value of $76 million under that of 1951. There was an increase of 3,338 items in city collections and a de crease of 584. items in country collections compared with 1951. The dollar value of city collections increased $10,188,000 and the dollar value of country items increased $1,4-99,000. Coupon and country security collections showed a decrease of 61,599 items and a dollar value decrease of $967 thousand. Our member banks forwarded 2,832 direct-sent collections to other Federal Reserve banks as compared to 2,539 in 1951. The dollar value of these collections totaled $23 million for 1952 as compared to $25 million for 1951. Exclusive of direct-sent collections, this department handled during -4-2- 1952 a total of 1,169,4-86 items with a dollar value of $914 million. This is a decrease of 95,955 in number of items handled and in dollar value, a decrease of $66 million. During the year we redeemed 307,123 Government coupons aggregating $17 million, which is a decrease of 30,000 items and $12 million as compared with 1951. We also redeemed 12,092 Governmental agency coupons amounting to $588,000 during 1952, as compared to 11,810 coupons totaling $436,000 in 1951. PERSONNEL During the early part of 1952, after discussions with our Placement Director friends and a survey of current literature concerning employment, it appeared that there would be an extremely tight labor market during the year. Several reasons were in evidence. Census figures show that while demand for employment of young women between the ages of 18 and 35 has been increasing, the supply has dropped off since 1940. The latter was caused by the low birth rate during the depression years, sharp increases in early marriage, and a rising birth rate in the post war years. Census figures also show a gradual increase in the number of girls attaining the age of 18 after 1952, but not before I960 will the number of 18 and 19 year-olds exceed the 1940 level. Firms employing clerical women have experienced increased difficulty because of the higher rates paid by production type industries. Many young women who in the past would have taken clerical positions have preferred a higher paying factory job since they plan to be a part of the labor force only for a relatively short period of time. -43- Armed with this information and anticipating difficulty in filling orders for new employees, we discussed with department managers the need for longer term planning concerning operating personnel and the importance of ordering new employees well in advance. By so doing, we finished the year almost 100$ staffed, but it is already evident that we are starting the new year in an extremely tight labor market. During the past year we found it most difficult to fill jobs re quiring special skills, such as stenographers. We have continued our practice of placing older women on jobs where pressure deadlines are not re quired. The number of night shift employees was also increased to tap a source of labor that is not available for day work. On December 31, 1952, we had 24 women IBM operators working on the night shift. On December 31, 1952, the head office staff consisted of 638 em ployees, 4-06 women and 232 men. separations totaled 328. Accessions for the year totaled 308 and One hundred and five employees were hired during June for the largest June placement since 194-3. This large number, consist ing mostly of junior clerical employees, was necessary because the staff had decreased during the last two months of 1951 and the first five months of 1952. The staff fluctuated from a low of 624- on May 21 to a high of 694on June 26. Since 194-7 it has also been necessary to build up the staff for vacation relief because the local high schools now have only one graduating class each year and that during the spring. At the end of the year, 213 employees were members of the local chapter of the American Institute of Banking. and 115 women. Of this number, 98 were men Sixty employees enrolled in 13 classes in order to further their education and better prepare themselves for their work. An employee of the bank is president of the AIB, and many others were appointed to work on -44- various committees. The contract with the Minda Anderson Lunchroom was terminated in February, and a new agreement was made with Nationwide Food Service, Inc., which assumed management of the cafeteria. During the year, 116 suggestions were submitted and 32 suggestions were approved with awards totaling 0192 . During January, the Welfare Division, in conjunction with the Federal Reserve Club, made arrangements for the Red Cross Mobile Blood Unit to visit the bank. One hundred and sixty employees volunteered to give, and 105 were accepted and gave donations of blood to be used for Armed Forces personnel. The Welfare Division also made arrangements to have the Mobile X-ray Unit of the Hennepin County Tuberculosis Association come to the bank to give free X-rays to employees and their dependents or relatives. ployees were X-rayed. Over 15% of the em Sixty-eight relatives or dependents also were X-rayed and were taken on tours of the bank and served refreshments in the employees' cafeteria if they so wished. Eleven employees completed a 24-week instructors' course in first aid which was taught by a representative from the local Red Cross office. A number of women employees attended a class in swimming which was taught by a local Red Cross instructor. We have continued the policy of offering polio insurance to interested employees through the Connecticut Casualty Company. 38 single and 59 family applications were made. A total of Our policy carried with the Connecticut General Life Insurance Company covering hospitalization and surgi cal benefits has continued to give assistance to employees in case of illness. The following tabulation shows the costs incurred by employees for surgery -45- and hospitalization and the portions thereof paid by the insurance company: Services Claims Surgical Hospital 138 128 2^6 Total Cost $17,232.30 8.802.20 $26,034.50 Amount Recovered % of Recovery $14,406.28 6.295.00 $20,701.28 84 71 77.5 In September the position of Job Analyst was created in the depart ment. An employee who has worked in several of the large departments of the bank over a period of many years was selected to conduct a review of all active jobs in order to determine whether the description of the duties on file in the Personnel Department adequately describes the tasks performed by the individual assigned to each job. Information for the review is obtained by interview with department heads and supervisors. Minor or inconsequential job changes are made without re-evaluation, but if it is felt that major changes have occurred, the Job Analyst presents the job to the Employee Evaluation Committee, consisting of three members of the Personnel Department, for preliminary evaluation. The job is then evaluated by a Junior Officer Committee composed of three members, and final evaluation is made by the Personnel Committee after giving consideration to evaluations by the Employee and Junior Officer Committees. The Job Analyst is also responsible for the writeup of descriptions of new jobs as they occur. It is believed a constant review will help us insure a fair and just classification of jobs in all de partments based on specific job requirements. The Personnel Development Program continued its long-range plan aimed at broadening the bank experience of our employees and developing manpower for promotions within the bank. In the fall a Personnel Development Committee was formed, consisting of two officers, two department managers from large de partments, and a representative from the Personnel Department. -46— PUNNING As a result of the changes in postal rates and the size and weight limitations which became effective January 1, 1952, a complete review of our methods of forwarding checks, currency, coin, securities, etc., was made in order to minimize the resulting increase in our postage expenses and to assure that our shipments would comply with the new regulations. The regula tions issued by the Post Office Department permit the Reserve banks to exceed the reduced weight limitations under certain circumstances provided that such shipments are "pouched" and we are using this authority extensively on ship ments of coin, redeemed currency and United States Savings Bonds, etc. As we assume the shipping charges on currency from member banks, we advised all member banks of the new postal rates and regulations and requested their cooperation in minimizing such expense by reducing the number of ship ments forwarded by including deposits of fit and unfit currency in the same shipments and by increasing the size of shipments where more than one ship ment was being forwarded to us on the same day. Test checks of all shipments received were made for a period of months to correct misunderstandings of the new postal rates and regulations by member banks and postmasters and to obtain the cooperation of the banks in effecting feasible savings in postage expense. A survey of all phases of Check Collection Department operations was completed early in the year and assistance given to the Check Collection Department in the installation of the recommended changes which were adopted. Arrangements were made with a number of member banks in this district to forward checks to us by air mail or air express so as to permit receipt of the items for handling by our night force. 1Te reimburse such banks for the addi -47- tional shipping charges incurred in excess of the cost of forwarding such de posits by first class mail or railway express. As a result of the absorption of the activities of the Chicago and Seattle offices of the Veterans Admini stration by the Fort Snelling Veterans Administration office, there was a substantial increase in the volume of items received from that office. The Fort Snelling office previously deposited items at approximately 10:30 A.M. daily. Arrangements were made to obtain a portion of these items for handling by our night force after the consolidation and effective January 2, 1953, checks deposited as late as 5:00 P.M. permit the handling of all such items by our night force. A Security Files Program, under the supervision of the Planning De partment has been in continuous operation during the year. Current informa tion is being maintained of our essential records in space in the basement of the Wayzata State Bank, Wayzata, Minnesota. Several surveys were made during the year of facilities for the storage of emergency currency reserves. A plan for converting space in two grilles in our main vault formerly used for the storage of coin, for the storage of currency or coin on a basis which will permit joint audit and officers control of individual compartments was adopted and the necessary steel for this installation has been ordered and will be installed shortly. An exhaustive study is being made of our previous, present and estimated future space requirements with a view to determining the amount of additional space which should be provided for in any ultimately adopted build ing plans. The Planning Department considers employees' suggestions and makes recommendations to the Personnel Committee for the acceptance or rejection of such suggestions and in certain instances alternate methods of accomplishing -48- the objectives of the suggester. During the year several changes were made in the locations of de partments in the bank and Syndicate building and the Planning Department assisted in making such moves by furnishing suggested office layouts for efficient space utilization, flow of work, etc. The Planning Department made studies of various operations in a number of departments and recommended changes ia forms, equipment used, in formation recorded, etc., to improve operations. Several operating letters and supplements were revised and dis tributed to all member banks during the year. A considerable amount of research for System committees was con ducted during the year. Included in these surveys were several question naires on check collection, currency and coin and leased wire activities. Our first class mail and valuable registered mail schedules were reviewed during the year and our records brought up to date. The coopera tion of the Railway Mail Service was solicited in order to obtain improved service to a number of points and information furnished on the necessity for retaining the service in effect in several instances where reductions in service were under consideration. PROTECTION Four guards left the employ of the bank during 1952, and one of these guards was rehired. cies. Three new guards were hired to fill these vacan As of December 31, 1952, the personnel of the protection department was as follows: -4-9- 1 Superintendent U Sergeants 24 Guards (one acting as chauffeur) Ammunition for all weapons was renewed, and old ammunition was fired on the range by guards in their weekly practices. All guards were given training on all arms, as well as their side arms. All alarms were tested monthly by the Superintendent of Protection. All inside alarms were tested weekly by the sergeant in charge. The information clerk issued 2,503 passes to outsiders who wished to visit upper floors of the bank — 1,733 work cards were issued to outside workmen, canteen employees, etc. At the request of the Bond Department, 575 guard escorts (4-76 singles and 99 doubles) were furnished. One hundred and five employees were admitted by memorandum and after-hour passes turned in to the guard office after hours. All applicants for employment were investigated at the Identifi cation Bureau of the Minneapolis Police Department by the Superintendent of Protection. PUBLIC SERVICES A summary of the Public Services activities of our bank for 1952 is the best medium for comparison of our work with the objectives of a bank and public relations program formulated by the subcommittee on bank and public relations for the System. The objectives agreed on by that committee axe as follows: -50- I. II. To bring about public understanding of the System's statutory purposes, responsibilities, and ooerations, and of their part in the economy of the United States. To provide opportunity for mutual exchange of ideas among the Federal Reserve System, bankers, and the public at large, in order: (a) (b) To keep bankers and the general public informed of developments, policies, regulations, and operations of the System and each Federal Reserve Bank; (c) III. To keep the System currently informed of economic and business developments; To keep the System aware of public attitudes toward the System's policies and regulations and toward individual Reserve Bank operations and practices. To provide media for study of banking problems and techniques, and economic developments, with a view toward improvements that will contribute to the strength of the banking system as a whole. The broad objectives are not expected to be achieved in any one year, nor can a description of any one activity of an individual Reserve Bank be expected to coincide exactly with any one of the objectives. For purposes of comparison of our program with the broad objectives, we will take each objective and list below it the activities of our bank which relate to it. Relative to Objective No. I, TO BRING ABOUT PUBLIC UNDERSTANDING OF THE SYSTEM'S STATUTORY PURPOSES, RESPONSIBILITIES, AND OPERATION, AND OF THEIR PART IN THE ECONOMY OF THE UNITED STATES, our bank engaged in the following: I. In the fall of 1952, we introduced a new type of meeting to the Ninth District. Now known as the Assembly, this meeting held on November 24. and 25 included the directors as well as the senior officers of our member banks. The announced program theme, WHAT'S AHEAD FOR YOU AND YOUR BANK, sought to interest -51- particularly those directors of our member banks who play an active part in the business life of their communities rather than in the banks. The program included tours of the Federal Reserve Bank, talks devoted largely to Federal Reserve policy by Governor R. M. Evans, President Powell, and Director of Research, J. M. Peterson. Credit problems and other bank matters were discussed by qualified speakers. The number of directors included in the audience total of 562 was very encouraging. Unsolicited comment received indicates that future meetings of this type will attract an even greater number of directors. The continuing effort to better acquaint the directors' group with the Reserve Bank and its direct connection with the local bank and the economic welfare of the community should certainly qualify this activity under Objective No. 1. On May 3 our bank sponsored the fourth in a series of Money and Banking Workshops. As in previous years, this meeting was open to the instructors of economics and money and banking from Ninth District colleges. Continuing the theme originally announced in 1949, this meeting offered its audience discussions on monetary and economic subjects which could be used as supplementary material in teaching. The 1952 major topic was inflation and the role of the Re serve Bank was discussed in detail. Teachers play an im portant part in the development of public understanding. Our Workshop attempts to broaden the source of information of the teachers. III. The Federal Reserve Bank of Minneapolis' widest contact with the general public continues to be our movie, THE FEDERAL RESERVE BANK AND YOU, shown to school classes and other interested groups. During 1952 it was shown to Ninth District audiences totaling 4-2,267 persons bringing its cumulative Ninth District audience total (since its intro duction in 1950) to 195,470. In addition, our bank circulated the movie, THE FEDERAL RESERVE SYSTEM, produced by the Encyclo pedia Brittanica. This film was shown to audiences totaling 5,616 persons. IV. Our publication, YOUR MONEY AND THE FEDERAL RESERVE SYSTEM, continued to be very popular with teachers in the eighth grade and junior high schools. During the year, we filled 779 re quests for 8,135 copies. These requests came from all parts of the country. V. Another direct contact of our bank with the public was through tours made of our bank. The total number to be shown the work of the Federal Reserve Bank in 1952 did not reach the record total of 2,920 achieved in 1951, but during the year 101 groups totaling 2,773 people visited our bank. As in previous years, the greatest number of people visited our bank during the months of April and May, when an average of one high school group a day was shown through. VI. To encourage a favorable press, three avenues of approach are used: The newspapers in the district, the financial press outside of the district, and banking periodicals are provided news releases and feature story material. Repre- -53- sentatives of the press are invited to attend meetings sponsored by this bank. Personal calls are made on editors by representatives of our bank. VII. Not directly under the supervision of the Public Services Department, but an essential part of the program, is the work of the Research Department whose various publica tions have a wide mailing list including bankers, business and professional men, teachers, students, and others interested throughout the district. In addition, our economists delivered 115 addresses to audiences totaling , . 12 640 Objective No. II is stated: TO PROVIDE OPPORTUNITY FOR MUTUAL EX CHANGE OF IDEAS AMONG THE FEDERAL RESERVE SYSTEM, BANKERS, AND THE PUBLIC AT LARGE, IN ORDER, and our bank attempted to work along the following lines I. The Assembly, held November 2U and 25} had as the bulk of its audience the executive officers of our member banks. In addition to the program offered the audience, the meeting gave the bankers and directors assembled an opportunity to exchange opinions and ideas among them selves, the directors of other banks, and the representa tives of our bank. II. The Money and Banking Workshop described under Objective No. 1 would qualify under Objective No. II since the program content serves to keep the colleges and the general public informed of developments, policies, and so forth of the System. III. Visits to banks in the District would probably be the activity of our bank which would come closest to working toward Objective No. II. During 1952, our officers and senior staff members visited every bank in the District at least once. Originally the plan of the Public Services Department was to make calls on every bank twice during the year. A review of the program (after the spring visits in 1952) resulted in a decision to reduce the number of calls made to one a year, thereby allowing more time for each visit. To supplement the one visit, the de partment now has a young man designated as a full-time field representative. The specific purpose of his visits is to become acquainted with the younger bankers in the District. It is hoped that visits to banks in the Dis trict will accomplish two things. First, that the opportunity for our representatives to become personally acquainted with commercial bankers will lead to friend ships which in turn will lead to a more amicable approach to common problems. Second, that a firsthand appraisal of economic and social conditions of an area visited will broaden the background of our men which in turn will lead to a better understanding of the problems of commercial bankers. Our bank was represented at all the State bankers' con ventions in the District and at as many group meetings and other bankers' gatherings as could be scheduled without undue expense. To give the directors of our bank an opportunity to meet bankers in the District, for several years the department has arranged for their attendance at one of the State conventions. In 1952 conflicts in dates made it impossible to repeat this program. Two of our directors, however, toured the North Dakota oil fields enroute to the Montana con vention. We also arranged for the directors to hold their August meeting in Duluth, to meet Duluth and Iron Range bankers, and to view the developments on the Range for the processing of low-grade ore. While in Duluth, the directors visited a refinery in Superior which at present is processing oil delivered by pipeline from Canada. V. Our Research Department, previously mentioned, is most active in the work under Objective No. II. Objective No. Ill, TO PROVIDE MEDIA FOR STUDY OF BANKING PROBLEMS AND TECHNIQUES, AND ECONOMIC DEVELOPMENTS. WITH A VIEW TOWARD IMPROVEMENTS THAT WILL CONTRIBUTE TO THE STRENGTH OF THE BANKING SYSTEM AS A WHOLE, was represented by: I. The Assembly which also qualified under Objective No. 1 and II most certainly qualifies under No. Ill, since the program provided a medium outlined in the objective. II. The program of our Money and Banking Workshop in 1952 qualifies this meeting under Objective No. III. III. In addition to the large group meetings previously described, for nine years our bank has conducted a meeting for the working members of the examining force of the F.D.I.C., the national bank examiners, Federal Reserve examiners, and the State banking departments of the District. The program of the meeting (held this year on November 29) again included current economic and banking topics. IV. Continuing the program which began in 194-8, the Federal Reserve Bank of Minneapolis in 1952 offered to repre sentatives of our member banks the opportunity to attend our Short Course in Central Banking. The groups attend ing (as in previous years) had an opportunity to study at firsthand the work of the Federal Reserve Bank as it applies to our member banks, to discuss current economic and monetary developments with our economists, and to discuss banking problems and techniques with representatives of other banks from other parts of the District. A recent canvass of our member banks indi cates a continued interest in our Short Course. The groups recently attending the Short Course have been drawn mostly from the younger men and women in our member banks. V. In 1949, at the suggestion of one of our member bankers whose bank had been represented at our Short Course, our bank started and has continued a program of sending our senior men for a week's study at a commercial bank. Details of this program have been handled by our personnel department, but the Public Services Depart ment has solicited the banks which have taken our men for training. -57- Some of the activities of our Public Services Department cannot be readily catalogued, but in a sense supplement the efforts of other functions. I. Our bank has a display of currency which it offers to member banks for exhibit in their lobbies during anniversary celebrations or open houses marking the completion of a remodeling project. II. In 1950, in cooperation with the Secret Service, we prepared a series of slides showing the features of counterfeit currency. These slides have been used in the conduct of so-called counterfeit clinics for bank employees, school groups, and other interested organizations. During 1952, we conducted three such clinics. III. The department stands ready and willing to extend services requested by bankers. As an illustration, we receive requests for information on plans for anniversaries and other celebrations; to line up out side speakers for bankers' programs (if none of our men are available); to obtain tickets for entertain ment events in the Twin Cities; and to assist in making transportation reservations. IV. For several years the department has maintained an in formal clearinghouse for bankers requesting additional personnel and bank employees seeking to change jobs. V. In addition to circulating to our own employees changes in the Ninth District Bank Directory, the department sends these changes to 55 holders of the directory in other banks and business firms. VI. On the occasion of the celebration of a bank's or banker's anniversary, the department prepares a special citation. Again, the broad objectives of a bank and public relations program cannot be expected to be achieved in any one year. Indeed it would be difficult at any time to determine whether any one objective had been achieved. Fortunately, the objectives outlined by the system committee direct rather than limit the scope of the activities of the Public Services Department. Functions which have been found acceptable are being repeated and possibilities for new or improved methods are constantly being con sidered. PPBCHASING In 1952 purchase orders were placed with various firms for 2,851 items, a decrease of 286 items from 1951. This reduction is largely due to the increased use of our multilith duplicator for making bank forms which were formerly purchased from outside suppliers. During the year the departments of the bank requisitioned from the stockroom a total of 10,309 items, listed on 4,151 requisitions. Although our stockroom inventory is kept at a minimum consistent with good operating efficiency, the total value of supplies on hand is usually above $40 thousand. The market for office supplies was very competitive during 1952, the more intense competition causing suppliers to absorb increases in operating -59- costs to a large extent. RESEARCH Near the end of 1952 the research department and the library were moved from the ground floor of the bank building to new quarters in the Syndicate building. This move provided the department with additional space to accommodate an enlarged staff. Since 1941, the number of research employees has increased from 9 to 2 3 . The work program of the department during 1952 was little changed from that prevailing during 1951. special regional research projects. Again, considerable effort was devoted to These supplemented the department's regular research program which included many regular and special analyses of economic conditions. Four major regional projects were started during the year. These dealt with the district's manganese supplies, the Missouri River Basin De velopment, the processing of taconite, and Williston Basin oil developments. Of these, two were completed and published during the year, and the other two will be finished early in 1953. The published reports were distributed to the regular Monthly Review mailing list — one, "Meeting the Supply Problem of Manganese - Vital Ingredient in Steelmaking" was published as a supplement to the May 1952 Monthly Review; the other, "Williston Basin Progress Suggests District Will Have Major Oil Producing Area" was carried as an article in the July Review. Speaking engagements, attendance at meetings, committee assignments, and requests for special statistical and analytical reports continued to occupy much of the department's time during 1952. In addition to various bank com -60- mittees, representatives of the department served on 12 Federal Reserve System committees during the year. Professional and educational organiza tions, such as the Minneapolis Economic Roundtable and the Minnesota Economics Club were served by employees of the department in capacities ranging from officers to committee members. Speeches were delivered by the department's economists at the Federal Reserve Assembly, the Examiners Conference, the Money and Banking Workshop, and at other bank functions. They also delivered speeches before bankers' conventions and group meetings, service clubs, meet ings of farm groups, etc. Ninety-nine such talks were given outside the bank before a combined audience of more than 12,000 people. It is estimated that from 10 to 12 per cent of the time of senior members of the department was spent in answering the wide variety of special requests which were received from businessmen, students, and others through out the district. Many of these requests also required a degree of clerical work in compiling basic statistical data. Numerous statistical series designed to provide adequate factual information regarding current agricultural, business, and financial condi tions were compiled throughout the year. Much of this information was dis tributed to interested persons and to newspapers through the medium of periodic statistical releases. pared at the present time. Twelve different types of releases are pre These are mailed to approximately 3,500 users throughout the country. Publications issued by the department - the Farm News and the Monthly Review - continued to increase in circulation. The Farm News, which is the more widely distributed of the two, increased its circulation by 1,700 during the year. About 11,700 copies of this pamphlet are now sent out each month to individuals, either directly or through bankers and school teachers. At -61- year-end, the Monthly Review was being mailed to 8,927 people - this is an increase of over 500 during the year. In addition to special articles devoted to major regional research projects, other Review articles featured during the year include "Arrested Inflation Characterized 1951" in the January Review; "Recovery in the Hous ing Market Has Continued" in the September Review; and "Drouth, Production Costs, Cloud Farm Outlook" in the November Review. During the year the facilities of the library were used by approxi mately 6,600 people. Most of these were research department employees, the remainder being made up of 1,900 service calls from other departments of the bank, and 500 persons from outside the bank. crease of 1,000 patrons from 1951. This represents an overall in As in previous years, most of the demand for library material was for current publications such as newspapers, periodicals, and statistical releases. These types of material accounted for 35,000 out of a total of 39,000 pieces of library material used. MEMBER BANK RESERVES Reserve requirements for all member banks remained unchanged dur ing the year 1952 as shown by the table below: Bank Classification Country Banks Reserve City Banks Central Reserve City Banks Net Demand Deposits Time Deposits 14$ 20$ 24$ 6$ 6$ 6$ The number and amount of penalties assessed during 1952 decreased over the previous year; however, the dollar amount of penalties waived in creased substantially although there was a slight decrease in the number waived. Penalties assessed at the head office decreased 38.6% in number and 38.9% in dollar amount, and at the Helena 3ranch 15.5% in number and 32.9% in amount. Penalties assessed for head office and Helena Branch com bined decreased 31.5% in number and 36.7% in amount. Penalties waived at the head office decreased 20% in number but increased 13.5% in amount and at the Helena Branch, increased 8.8% in number and 85.2% in amount. This increase in the dollar amount of penalties waived is the re sult of the Reserve City Banks in the Twin Cities and Helena, with their large reserve requirements, taking advantage of the opportunity to use the rule under which a deficiency in one period may be offset by excess reserves in the following period, provided that such deficiency does not exceed 2% of a bank's reserve. Out of 36% of the number and 77.7% of the dollar amount of all penalties waived under this rule for all banks, 4-0,3% of the number and 86.3% of the dollar amount were waived for deficiencies of Reserve City Banks, There was a decrease also in the number of penalties waived under the rule which permits a penalty to be waived on a deficiency of not more than 5% of the member bank's required reserve, provided that a penalty has not been waived under this rule within a two year period. Fifteen per cent of all penalties waived and 17.8% of the dollar amount were in this classifi cation. Forty-nine per cent of the number of all penalties waived with only 4.5% in dollar amount were waived under the rule which applies to penalties not in excess of $5.00. During 1952, 73 banks were penalized for a total of 124 times, -63- compared with 104 banks for 181 times in 1951. The following is a compara tive report by states of penalties for deficiencies in reserves during 1952 and 1951: Penalties Waived Penalties Assessed 1952 No. Amount Michigan Minnesota North Dak. South Dak. Wisconsin Head Off. Totals Helena Branch Combined 1951 No. Amount 19 $ 879.64 47 1331.06 7 278.46 10 303.97 3 63.03 17 $ 604.28 64 2637.23 20 601.11 18 469.05 17 363.08 86 $2856.16 136 $4674.75 38 1850,65___ 4 5 124 $4706.81 1952 No, Amount '52 '51 152 Jjjl No. N o . No. N o . 24 $ 240.48 32 $ 204.04 6 139 6323.52 179 5371.15 28 21 154-28 25 398.07 5 41 332.41 36 547.53 10 28 116.96 46 185.96 3 8 14 21 35 66 90 11 13 16 13 27 25 12 15 22 253 $7167,65 318 $6706.75 52 79 135 174 2758.06 181 $7432.81 1951 No. Amount Banks Affected Assessed Waived 74 2226.37 68 1202.27 21 25 36 31 327 $9394.02 386 $7909.02 73 104 171 205 SAFEKEEPING Securities held for safekeeping and collateral purposes as of December 31, 1952, were $1,484 million, an increase of $113 million compared with the $1,371 million held a year ago, as reflected by the comparative figures for 1952 and 1951 shown below: 12-31-52 Inc. or Dec 12-31-51 (In thousands of dollars) Accounts Securities held in safekeeping (Not pledged) Securities pledged to secure public deposits ^Securities pledged to secure Government deposits **Securities pledged to secure Treasury Tax and Loan Account ■^Securities held as collateral for Discounts and Advances 877,993 829,44-9 + 48,544 327,685 295,762 + 31,923 11,683 10,064 234,809 203,424 30,250 30,242 + 1,619 + 31,835 + 8 -64- 12-31-52 Accounts (continued) Securities held as collateral to Consignment Account - U.S.Savings Bonds, Series E Securities held for Public Housing Administration 12-31-51 Inc. or Dec. (in thousands of dollars) 4-5 4-5 0 ____ 1,704________ 1.712_______ -______ 8 $1,484,169 $1,370,698 +113,471 * Includes $2,815}000 held by commercial banks. ** Includes $20,4305000 held by commercial banks and other Federal Reserve banks„ **# Includes $25,300,000 held by commercial banks. The safekeeping department received 53,584 pieces of securities, issued 7,336 receipts, and delivered 49,334 pieces in 8,752 transactions, resulting in a net increase of 4,250 pieces of securities held during the year. This department also made 5,828 transfers of securities from one account to another, and clipped 273 thousand coupons from securities held during 1952. The table below shows comparative volume figures for 1952 and 1951s 19.52 Receipts issued Pieces received Withdrawals handled Pieces delivered Transfers from one account to another Coupons clipped Custodian receipts issued 7,336 53,584 8,752 49,334 5,828 273,629 1,053 1951 5,228 44,^97 6,442 47,359 6,198 263 <662 1,021 Inc. or ] + + + + 2,108 9,087 2,310 1,975 370 + 4,967 + 32 WIRE TRANSFERS During 1952 the Wire Transfer Division handled a total of $13.1 billion in wire transfers. This figure is approximately $500 million lower -65- than 1951. Of this $13.1 billion, $4.5 billion (or 34$) were transfers to other Federal Reserve districts, $6.1 billion (or 47$) were transfers re ceived from other Federal Reserve districts, and the remaining $2.5 billion (or 19$) were transfers within our own district. The total number of transfers handled in 1952 was 43,319, which is an increase of 663 over the 1951 figure. The average dollar amount of transfers decreased to $303.6 thou sand in 1952 from $319 thousand in 1951. A total of 73,688 telegrams was handled - an increase of 5,524 over 1951. Of this number, 59,918 were transmitted over our leased private wire system - an increase of 4,283 over 1951. split between commercial wire and TWX. totaled 7,005 and TWX 6,765. The remaining 13,770 were Commercial wire (Western Union) The combination of commercial and TWX (total of 13,770) was 1,241 over commercial last year. Our TWX system was not installed until November 1951; therefore, no comparative figures are avail able , -66- MILLION DOLLARS i 0 <2 1 M ILLIO N DOLLARS CAPITAL ACCOUNTS CAPITAL STOCK paid in totaled § 5,719 thousand on December 31, 1952, an increase of $356 thousand during the year. SURPLUS ACCOUNTS. Surplus (Section 7) was increased $1,068 thou sand on December 31, 1952, which brings the total to $15,131 thousand, Sur plus (Section 13b) remained unchanged at $1,073 thousand. RESERVES FOR CONTINGENCIES. No change was made in the reserve of $1 million set aside for losses in excess of the blanket bond coverage; the reserve of $500 thousand earmarked for losses not covered by the Loss Sharing Agreement; or the special reserve for contingencies of $2,4-76 thousand. The reserve for registered mail losses totaled $215 thousand as of December 31, 1952. This is an increase of $14 thousand during the year. A loss of $199.72 was charged against this reserve. The table below reflects the changes made in this account during 1952. Reserve for registered mail losses beginning of year 1952 Debit: Our pro rata share of loss sustained by the Federal Reserve Bank of Philadelphia Credit: Annual addition based on 2^ per $1000 of total shipments of $713,358,440 for 12-month period Dec. 1, 1951 through Nov. 30, 1952 Net additions during year Reserve for Registered Mail Losses, Dec. 31, 1952 $200,883.70 $ 199.72 14.267.17 14.067.45 $214,951.15 -68- The following table shows currency and coin shipments made during the fiscal year December 1, 1951 to November 30, 1952, which were the basis for the addition to the registered mail loss reserve. 1952 (000 Omitted) 1951 (000 Omitted) $151,260 60,569 $176,520 46,582 Registered Mail New F.R. currency from Washington Fit F.R. notes to bank of issue Currency and coin between Minneapolis and Helena Other currency and coin outgoing Minneapolis and Helena Other currency and coin incoming Minneapolis and Helena 1,920* 8,290 216,746 276,4P5 251,885 2,433 8.430 $717,763 Railway Express and Truck Delivery All Other: Other currency and coin outgoing Other currency and coin incoming 211,607 3,059 8.605 $706,548 ^Whenever notes are available in Washington, shipments are made direct to the Helena Branch from that source. The disposition of 1952 net earnings and the changes made in the surplus accounts are shown below: Net Earnings Dividends Paid Paid U.S. Treasury (interest on F.R. Notes) Transferred to Surplus (Section 7) Surplus (Section 7) December 31, 1951 Transferred from Earnings 1952 Surplus (Section 7) December 31, 1952 $11,013,615.81 $ 327,905.73 9,617,021.12 9.944.926.35 $ 1,068,688.96 $L4,062,607.68 1.068.688.96 $15,131,296.64 -69- DIVIDENDS As of December 31, 1952, capital stock held by member banks totaled $5,719,300, on which accrued dividends totaling $327,906 were paid. year's dividend payment is the largest for any single year in the This history of the bank and when combined with previous years' payments, bring the ag gregate total to $7,638,071. Distribution of 1952 and 1951 Dividends 1252_________ Dividend No. of Banks Paid State Michigan Minnesota Montana North Dakota South Dakota Wisconsin 40 206 83 42 63 42 476 ___________1251. No. of Banks $ 17,996.05 209,882.87 35,091.94 19,873.72 27,052.68 18.008.47 $327,905.73 41 206 84 42 62 41 476 Dividend Paid $ 17,122.73 205,180.24 32,040.71 18,598.58 24,934.37 17.057.60 $314,934.23 Change $+ 873.32 + 4,702.63 + 3,051.23 + 1,275.14 + 2,118.31 + 950.87 $+12,971.50 TABLE OF DIVIDENDS PAID SINCE ORGANIZATION 1914 1915 1916 1917 1918 1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 $ 57,719.87 ft 363,894.19 W 168,102.97 180,186.21 195,870.65 211,657.03 213,774.01 212,732.68 202,827.98 193,559.46 187,609.25 180,726.51 181,202.86 184,029.92 184,4-4-5.39 , 180,454- 53 2J 175,4-94-. 80 171,568.89 1934 1935 1936 1937 1938 1939 1940 1941 194-2 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 $ 181,117.51 185,448.45 179,052.04 174,057.31 174,231.27 174,905.39 177,400.58 179,789.68 183,336.33 190,924.19 206,158.74 221 ,686.96 238,372.30 253,251.30 262,776.22 272,831.22 294,034.00 314,934.23 327,905.73 $7,638,070.65 a/ For period November 1, 1914- through June 30, 1915. b/ For period July 1, 1915 through December 31, 1917. c/ $134,649.67 withdrawn from Surplus to pay dividend. -70- BANK PREMISES Improvements made during 1952 to the Head Office building were charged to Repairs and Alterations. A depreciation of 2% was taken on both the Helena and Minneapolis buildings while no additions to the book value of either building were made during the year. Inasmuch as a full reserve had already been established, the reserve for depreciation on fixed machinery and equipment of the Head Office was not increased. The Helena Branch took a normal depreciation of 10% on fixed machinery and equipment. Below are listed the principal repairs or alterations to the Head Office building during 1952 and projects near completion at year's end. 1. Additional space was acquired in the Currency Department and the bank floor by removal of number 7 elevator located in front of the vault. 2. Projects near completion a. Installation of three windows in the front wall of the reception room between the president's and chairman of the board's offices. This space is to be occupied by the Public Services Department. b. Conversion from a single phase lighting service to a three phase four-wire service to take care of any emergency. c. Converting space in two grilles on the ground floor of the main vault for storage of currency. -71- BANK PREMISES Head Office Total BANK PREMISES: Gross Book Value: Beginning of 1952 (no change during year) ........... . 01,384,281.50 Helena Branch $1,283,281.50 #101,000.00 Allowance for Depreciation: Beginning of 1952 .................. Normal depreciation ............. . • 715,821.36 27,685.56 $ 692,971.56 25.665.60 $ 22,849.80 2,019.96 End of Year ......................... . $ 743,506.92 $ 718,637.16 $ 24,869.76 Net book value December 31, 1952 . . . . $ 640,774.58 e 564,644.34 $ 76,130.24 FIXED MACHINERY AND EQUIPMENT: Gross Book Value: Beginning of 1952 (no change during year) ........... 698,171.34 $ 660,969.35 $ 37,201.99 694,336.46 3.720.24 $ 660,969.35 $ 33,367.11 3,720.24 698,056.70 $ 660,969.35 $ 37,087.35 114.64 $ - 410,520.66 $ 400,520.66 $ 10,000.00 $1,051,4-09.88 $ 965,165.00 $ 86,244-.88 . e Allowance for Depreciation: Normal depreciation ............... Net book value December 31, 1952 . . . . $ $ 114.64 LAND: . TOTAL BANK PREMISES: Net book value December 31, 1952 . . . . $ NET EARNINGS & PROFITS Net earnings and profits for the year 1952 totaled $11,014 thou sand. This figure established a new all-time high and exceeds the 1951 total by $1,754- thousand. A statement of net earnings and profits is shown below: Change from 1951 1952 Current Earnings Current Expenses Current Net Earnings Additions to Current Net Earnings: Profit on U.S. Government Securities sold, net All Other Total Additions $14-,300,838 3.291.556 $11,009,282 $62,4-31 79 $62,510 $+1,835,939 + 153.511 $+1,682,4-28 $+ 62,4-31 +________f>7 $+ 62,488 Deductions from Current Net Earnings: Loss on U.S. Government Securities sold, net Fees paid to architect for project not carried out $4-2,517 Reserve for Registered Mail Losses 14-,267 All Other 1.392 Total Deductions $58,176 $- 51,867 + 4-2,517 + 136 +______ 171 $9,04-3 Net Additions to Current Net Earnings $_____ 4 .334. - $+ 71.531 Net Earnings and Profits $11,013,616* $+1,753,959 *For disposition of profits see page No. 69 . -74- The table below gives a breakdown of Profit and Loss during 1952. Head Office Total Helena Branch Additions to Current Net Earnings; Profit on U. S. Govt, securities sold, net Overage in uncurrent coin shipments to U. S. Mint, Denver, on 1-23-52 Extra dividend on our cash letter claim for $98.85 sent to F.R.B. Chicago on closed bank, First National Bank, Georgia, Iowa $62,431.28 3.36 $62,431.28 $ - 3.36 3.36 .68 .68 $62,435.32 $62,431.96 $ $14,267.17 $14,267.17 $ .62 .62 - Loss on counterfeits 275.61 275.61 - Difference account 275.52 303.51 -27.99 5.18 12.07 - 6.89 692.69 692.69 Silver certificate altered to $50.00. Bill found in Receiving Teller's cash 6-27-52. Source unknown. 49.00 49.00 Silver certificate altered to $20.00. Bill found in currency sorted by I. Iverson. Source unknown. 19.00 19.00 Fees paid to architect for project not carriedi out 42.517.00 42.517.00 Total Additions Deductions from Current Net Earnings: Reserve for Registered Mail losses Discount on foreign currency and coin Loss on mutilated currency and coin Difference between the estimated and actual expense for Fiscal Agency for December 1951 - Total Deductions $58,101.79 $58,136.67 $ -•34.88 Net Additions to Current Net Earnings $ 4,333.53 $ 4,295.29 $ 38.24 -75- I O' ' I EARNINGS An increase during the year of $20 million in our average daily holdings of U.S. Government securities, together with a rise in the average yield from 1.71$ to 1.91$, reflect the major increase in our earnings over 1951. The table below shows changes in the various earning accounts: 1952 Discounts and Advances Foreign Loans on Gold Industrial Loans U.S. Govt. Securities-System Account Deficient Reserve Penalties Commission Earned on Bankers' Acceptances purchased for foreign correspondents Interest on Personal Loans to Employees Clearinghouse Fines $ Change from 1951 277,228 9,567 5,515 14 j,003,295 4,694 $+ + 370 33 126 $14,300,838 + 87,094 9,381 2,269 +1,744,925 2,752 464 33 $+1,835,939 The average daily holding of bills discounted for the year 1952 was $15,785 thousand and resulted in earnings of $277,228 as compared with last year's average of $10,853 thousand and earnings of $190,134-. return for the year was 1.75$. The average For ten months during 1952 our bank partici pated in foreign loans on gold as compared with only two months in 1951. This resulted in an increase of $533 thousand over 1951 in our daily average. Earnings were $9,567 during 1952 as compared with $186 for the year 1951 at the average yield of 1.76$. Our 1952 daily average holding of industrial loans decreased to $110 thousand from $156 thousand in 1951, and, as a result, earnings from that source were $ 2,269 less than for the previous year. The average yield was 5.01$. For the year 1952, the average yield from loans to Ninth District banks, foreign loans on gold, U.S. Government securities, and industrial loans was 1.9126$. During 1951 the average yield on these -77- combined holdings was 1.7127$. Our average daily participation in Open Market securities was $731 million, whereas one year ago the daily average was $716 million. 1951. The average yield was 1.91$ for 1952 against 1.71$ for Earnings from these securities were $L4,003 thousand compared with $12,258 thousand one year ago. As of December 31, 1952, the bank's total participation in U.S. Government securities held increased $15 million. The following table indicates the bank's holdings as of December 31, 1952, and shows the dollar increase or decrease in comparison with December 31, 1951. Change 12-31-52 from 1951 (In thousands of dollars) Bonds Notes Bills Certificates $14-3,939 4-38,430 23,013 159.018 $764,400 $- 25,716 +277,539 + 8,161 -24.4.937 $+ 15,047 -78- MILLION DOLLARS MILLION DOLLARS COMPARATIVE STATEMENT OF NET CURRENT EXPENSES Head Office 1952 Salaries: Officers Employees Fe es : Directors Federal Advisory Council Other Retirement Contributions: F.R. Retirement System Supplemental Death Benefit Social Security Traveling Expenses: Directors Federal Advisory Council Other Postage and Expressage: Original Shipments of F.R. Currency Redemption of F.R. Currency Other Telephone and Telegraph Printing, Stationery & Supplies Insurance Taxes on Real Estate Depreciation Light, Heat, Power & Water Repairs & Alterations Rent Furniture & Equipment: Purchases Rentals Assessment for expenses of Bd. of Gov. Federal Reserve Currency: Original Cost Cost of Redemption All Other Total Expense Miscellaneous Recoveries: Coin Wrapping Rental of Furniture & Equipment Rental of Space Postal Money Orders Other Total Recoveries Total Net Current Expenses 199,384 1,458,276 $ 19,872 144,719 5,775 1,125 3,490 $ Helena Branch 1952 3,820 Combined $ 219,256 1,602,995 Combined 1951 $ 215,304 1,484,718 690 9,595 1,125 4,180 8,375 1,050 5,773 110,334 4,289 21,208 10,804 565 2,185 121,138 4,854 23,393 123,124 2,896 21,952 4,561 715 57,794 2,352 6,913 715 62,801 6,698 725 77,855 41,030 17,313 377,181 29,067 115,496 13,394 96,824 31,406 31,939 20,648 48,241 35,903 13,182 333,970 27,438 118,895 18,644 97,164 31,406 27,125 93,392 48,618 47,762 121,576 105,000 28,574 63,144 103,700 140,559 5,988 79,802 $3,380,191 127,550 7,695 81.649 $3,206,519 9,327 2,887 33,938 39,621 2.862 88,635 8,570 3,030 37,703 15,374 3.797 68,474 — - 5,007 41,030 14,674 317,066 19,582 105,982 11,533 92,224 25,666 29,484 18,972 48,218 - 2,639 60,115 9,485 9,514 1,861 4,600 5,740 2,455 1,676 23 2,631 15,959 45,131 105,617 105,000 140,559 5,988 76.096 $3,069,773 $ 8,155 2,887 33,434 36,658 2.862 83,996 $2,985,777 - - 3,706 $310,418 1,172 - 504 2,963 $ 4,639 $305,779 $ $3,291,556 $ $3,138,045 -80- NONREIMBURSABLE EXPENSE 1952 $2,985,777 305.779 $3,291,556 Head Office Helena Branch Change from 1951 $+129,4-75 + 2L .036 $+153,511 Head Office expense, after deduction of reimbursable expense, increased $129 thousand compared with the year 1951. Principal increases over last year were in salaries; postage and expressagej telephone and telegraph; light, heat, power and water; furniture and equipment-purchases and rentals; Federal Reserve currency-original cost and cost of redemption. Principal decreases were in traveling expenses-other, insurance, and repairs and alterations. Helena Branch expense increased $24- thousand over last year. The larger increases were in salaries, postage and expressage, and furni ture and equipment-rentals. SALARIES 1952 Head Office Helena Branch Change from 1951 $1,657,660 164..591 $1,822,251 $+104,182 + 18.04.8 $+122,230 Head Office salaries for 1952 totaled $1,657 thousand, an increase of $104- thousand over last year. This increase is due to merit and salary adjustments as the average number (623) of employees for the year was the same as in 1951. -81- FEES _ DIRECTORS 1952 Head Office Helena Branch $5,775 3.820 $9,595 Change from 1951 $+ 4-25 + 795 $+1,220 Increased attendance in the eleven meetings held in 1952 account for this increase. FEES _ FEDERAL ADVISORY COUNCIL 1952 $1,125 Head Office Change from 1951 $+75 In 1952, our Council member attended seven local and four out-oftown meetings; in 1951 he attended four local and four out-of-town meetings. FEES _ OTHER Head Office Helena Branch 1952 $3,490 690 $4,180 Change from 1951 $-1,728 +__ 13j5 $-1,593 In 1951 this bank paid honorarium fees of approximately $1,100 to speakers in connection with the Member Bank Conference and Forum, whereas in 1952 these two meetings were not held. -82- RETIREMENT CONTRIBUTIONS F.R. RETIREMENT SYSTEM 1952 $110,33410.804 $-2,015 + 29 $ 121,138 Head Office Helena Branch Change from 1951 $ - 1,986 The retirement rate was reduced from 7.22 to 7.20 on July 1, 1952. SUPPLEMENTAL DEATH BENEFIT 1952 $4,289 565 $4,854 Head Office Helena Branch Change from 1951 $+1,623 + 335 $+1,958 Contributions to Supplemental Death Benefit began on November 1, 1951. The $4,289 represents the first complete year's net expense to the bank for this coverage. SOCIAL SECURITY 1952 Head Office Helena Branch Change from 1951 $21,208 2.185 $23,393 $+1,230 +__ 211 $+1,441 Larger salary costs account for the increase in Social Security tax payment during 1952. -83- TRAVEL _ DIRECTORS 1952 Head Office Helena Branch $4-,561 2.352 $6,913 Change from 1951 $-608 +823 $+215 Eleven meetings were held during the year as compared with twelve in 1951. TRAVEL _ FEDERAL ADVISORY COUNCIL 1952 $715 Head Office Change from 1951 $-9 In 1952 our council member attended four out-of-town meetings. TRAVEL _ OTHER 1952 Head Office Helena Branch Change from 1951 $57,794 5.007 $ 62,801 $-34-, 895 167 $ - 15,062 The decrease of $14,895 in Head Office travel is primarily due to the termination of credit controls - Regulation W on May 7 and Regula tion X on September 16. POSTAGE & EXPRESSAGE Original Shipments F. R. Currency 1952 $41,030 Head Office Change from 1951 $+5,127 Higher postal rates were the chief cause of this increase. POSTAGE & EXPRESSAGE Redemption F. R. Currency 1952. Head Office Helena Branch $14,6742.639 $17,313 Change from 1951 $+4-,694- 563 $+4-, 131 The large increase in the number of bills forwarded for redemption i 3 the principal reason for this increase. POSTAGE & EXPRESSAGE Other Change from 1951 Head Office Helena Branch $317,066 60.115 $377,181 $+31,952 +11.377 $+43,329 Increased postage and expressage costs, together with greater volume, account for this increase. TELEPHONE & TELEGRAPH 1952 $19,582 9.485 $29,067 Head Office Helena Branch Change from 1951 $+ 1,062 + 567 $+1,629 Increases were $600 in toll calls, $1,500 in telephone equipment rental due to increased rates, and $250 in leased wire costs. There was a decrease of $1,300 in commercial messages. PRINTING, STATIONERY & SUPPLIES m 2 $105,982 9.514 $115,496 Head Office Helena Branch Change from 1951 $-3,845 + A4.6 $-3,399 This decrease is largely due to the increased use of our multilith duplicator for making bank forms which were formerly purchased from outside suppliers, INSURANCE 1952 Head Office Helena Branch Change from 1951 $11,533 1.861 $13,394 $-5,408 + 158 $-5,250 As of April 1, 1952, this bank terminated its group insurance contracts with the Equitable Life Assurance Society. This accounts for -86- the decrease of $5,4-08. TAXES ON REAL ESTATE 1952 Head Office Helena Branch Change from 1951 $92,224 4-.600 $96,824- $-592 +252 $-340 The tax rate was reduced from 14-5 mills to 14-4 mills. DEPRECIATION ON BANK BUILDING & FIXED MACHINERY & EQUIPMENT 1952 Head Office Helena Branch Change from 1951 $25,666 5.740 $31,406 Depreciation on buildings, including vaults, is at the rate of 2 % per annum, and on fixed machinery and equipment at 10$ per annum of the gross book value. LIGHT, HEAT, POWER & WATER 1952 Head Office Helena Branch Change from 1951 $29,484 2.455 $31,939 $+4,835 21 $+4,814 The Head Office total of $29,484 covers - -87- Light & Power Heat Water Sewage Gas $22,751 4,520 1,4-12 589 212 Higher light and power rates, together with much larger IBM equipment operations, account for the increase of $4-,835 during 1952. REPAIRS & ALTERATIONS 1952 $18,972 1.676 $20,64.8 Head Office Helena Branch Change from 1951 $-62,580 -10.164$-72,744- The larger items of expense at Head Office during 1952 were: 1. Painting, plastering, and washing walls and ceilings for general maintenance of building, $4,700. 2. Maintenance of elevators, $4,400. 3. Removal of elevator and shaft from Currency Department to Bank floor, $2,300. 4. Sinking two test holes beside concrete caissons, $1,350. 5. Repair of water and gas main outside of building, $1,000, RENT 1952 Head Office $48,218 Change from 1951 $-380 The 1952 figure includes rental of space in an adjacent building -88- totaling approximately $4-7,000 and space leased in the Wayzata State Bank in connection with the Security Files program at an annual rental cost of $1 ,200 . FURNITURE & EQUIPMENT Purchases 1952 Head Office Helena Branch $45,131 2.631 $47,762 Change from 1951 $+19,908 720 $+19,188 The larger purchases during 1952 were: Bookkeeping machines Chairs Desks Carpeting of executive offices Plymouth Club coupe Chevrolet Sedan delivery truck Adding machines Typewriters Time Card machine Files $10,228 5,952 3,398 2,900 2,240 1,940 1,877 1,436 1,214 1,077 FURNITURE & EQUIPMENT Rentals 1952 Head Office Helena Branch $105,617 15.959 $121,576 Change from 1951 $+53,832 + 4.600 $+58,432 The 1952 figure reflects a full year's rental cost of IBM equip ment in the Check Collection Department whereas the 1951 figure reflects -89- only a partial year's rental due to the installation of the major portion of this equipment during that year. BOARD ASSESSMENT 1252 $105,000 Head Office Change from 1951 $+1,300 The Board of Governors early in each semiannual period, levies upon the Federal Reserve banks in proportion to the capital stock and surplus of each, an assessment sufficient to pay the estimated expenses and salaries of its members and employees for the period, plus any deficit carried for ward from the preceding period. The basis for our assessments for the years 1952 and 1951 are shown below: First Half Capital Stock Surplus (Section 7) Surplus (Section 13b) 1952 , $ 5,362,650 1.072.621 $20,497,879 $ 5,073,700 13 168,052 1.072.621 $19,314,373 .00265 .00291 14 062,608 Assessment Rate Total Assessment for First Half $ 54,300 , $ 56,200 -90- 1952 1951 $ 5 ,466,400 14,062,608 1.072.621 $20,601,629 $ 5,235,450 13,168,052 1.072.621 $19,476,123 .00246 .00244 Second Half Capital Stock Surplus (Section 7) Surplus (Section 13b) Assessment Rate Total Assessment for Second Half $ 50,700 $ 47,500 Total Assessment for Year $ 105,000 $ 103,700 FEDERAL RESERVE CURRENCY 1952 Original Cost Cost of Redemption $140,559 5.988 $146,547 Change from 1951 $+13,009 - 1.707 $+11,302 Higher printing costs, together with greater volume, account for this increase. ALL OTHER 1952 Head Office Helena Branch Change from 1951 $76,096 3.706 $79,802 $-1,438 - 409 C l , 847 All Other expense during 1952 reflects a slight increase over 1951. -91- MISCELLANEOUS r e c o v e r i e s 1952 Head Office Helena Branch Change from 1951 $83,996 4. 639 $88,635 $+18,4-63 + 1.698 $+20,161 Itemization i s : Head Office Coin Wrapping Rental of Furn. & Equip. Rental of Space Postal Money Orders Other $ 8,155 2,887 33,43436,658 2.862 $83,996 Helena Branch $1,172 5042,963 $4,639 This bank became paying agent for postal money orders on July 1, 1951, and for the last half of that year was reimbursed $14,181 for its services. For the full year 1952 we received $ 36 ,658, an increase of $22,477. Rent received from government agencies for space, furniture, and equipment (deducted from total expense) totaled $36,321 during 1952 for the Head Office, a decrease of $4,044 compared with the previous year. The chief cause of this decrease was due to a reduction in space required for Fiscal Agency operations. -92- REIMBURSABLE EXPENDITURES Account of Public Debt Federal Taxes Currency Reports Reconstruction Finance Corporation Federal Farm Mortgage Corporation Federal Land Banks Federal Intermediate Credit Banks Public Housing Administration Commodity Credit Corporation War Department Central Bank for Cooperatives Federal Home Loan Banks Home Owners' Loan Corporation 1952 Change from 1951 $506,343 23,347 221 87 68 487 88 24 11,571 5,682 30 51 62 $548,066 $-4,239 -1,276 + 183 - 941 + 7 + 339 + 58 16 +2,233 -3,156 + 30 79 18 $-6,875 -93-