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ANNUAL REPORT of FEDERAL RESERVE BANK OF MINNEAPOLIS to the BOARD OF DIRECTORS 1945 http://fraser.stlouisfed.org/ \ Federal Reserve Bank of St. Louis INDEX Assets........ . ........................ . . 1 Liabilities * . . . ...........................6 Capital Accounts . . . . . . . . . ............. „ 9 Earnings ............................. . . . . * L4 Expenses ............... ......... 19 Departmental Comments........ ............... 31 1 -/ ASSETS The Minneapolis Federal Reserve Bank has reached a milestone in its history* In 1945 the total assets of the bank reached and exceeded the billion dollar mark* Total assets at the end of the year aggregated 1,054 million dol~ lars0 Total assets in 1945 increased 172 million dollars0 This is the second largest annual growth in assets in the history of the institution. In 1942 they increased 183 million dollsirs*, This expansion in assets is due al~ most entirely to the larger holdings of U* S Government securities. At the * J end of 1945, 630 million dollars were invested in these securities which is significantly more than one-half of the total assets. Total Cash Reserves declined for the third consecutive year* On December 31, 1945 the total cash reserve aggregated 360 million dollars - 6 million dollars less than a year a o , g, All of the decrease occurred in the amount of gold certificate re* I ’ serve* The purchase of U* S . securities during the year is the Drimary cause of the 8 million dollar decline in the reserve* Securities held in the Open Market Account totalled 143 million dollars more at the end of 1945 than at the end of the preceding year* By an Act of Congress, approved June 12, 1945, t e minimum reserve hrequired by law to be held against deposits and Federal Reserve notes was re* duced0 It is now necessary to hold a minimum reserve of 25 percent in gold certificates against both deposits and Federal Reserve notes* With the continued rise in deposits and note circulation, on the one hand, and the steady decline in gold certificate holdings, on the other, the gold certificate reserve against both deposits and notes in circulation on December 31, 1945 had decreased to 35*3 percent. At the end of 1944, the gold .S certificate reserve against uoth u5 G x i > s i notss steed at 43*8 pcrcsnu* p & u i uu Since the bank holds no discounts, Government securities are / 9 pledged as collateral for the notes in circulation. On December 31, 1945, / 40p million dollars of Government securities were pledged as such collateral* This amount represents an increase of 100 million dollars from the end of 1944* When collateral security is pledged for Federal Reserve notes, it is necessary to maintain a gold redemption fund equal to 5 percent of the amount of Botaa in circulation that are in excess of the gold certificates held in reserve for them. Since more collateral security was pledged for the notes during the past year, the fund was increased to 20 million dollars from 15 million a year ago. Federal Rasarve Notes of Other Federal Reserve Banks, Such notes held at the end of 1 4 5 totaled 6,713 thousand dollars - an increase of 2,800 9' thousand dollars from a year ago* These are notes of other Federal Reserve Banks which we have not returned to them. Bills Discounted and Industrial Advances, On December 31, 1945 this bank held 1 million dollars of#discounted bills. These bills are part of foreign lo&na mad© by the New York Federal Reserve Bank for the Federal Reserve System to the Royal Netherlands Bank and to the Banco De La Republica Oriental Dol Uruguay and parceled out to the twelve Federal Reserve Banks, As in the previous war years, no paper was discounted during 1945. The last discounted paper was held in February, 1942. Member banks, however, borrowed from this bank more during the past year than in any other year since the decade of the twenties. Banks purchased treasury bills with the surplus funds accumulated in war loan deposit accounts, as the U. S. Treasury drew down these accounts, bills ware sold to this bank under repurchase agreement. At the end of June as much as 30,475 thousand dollars of these bills were held by this bank. Due to the Victory Loan ■ .> Drive which boosted the war loan deposit accounts, these bills were again held by the member banks. No industrial advances were carried on our books during 1 4 5 9., United States Government Securities. Government securities held at the end of 1 4 5 aggregated 630 million dollars - an increase of 164 9million fro® the end of the preceding year. Most of these securities were hsld in the Open Market Account. On December 31, 1945 this account totaled 596 million dollars. The remaining 3 - million dollars of U. S. securities were held under the repurchase option. 4 To reveal more clearly the holdings of each issue, as well as the changes that have taken place in the holdings, the amount of securities held 2 by types of issue at the end of the last three years is tabulated in the ac companying table. Dec. 31 Dec. 31 .. 1244. . . .V M i L. m su (In thousands of dollars) Dec. 31 Bonds Notes Certificates of Indebtedness Bills in Open Market Account Bills under Repurchase Option % 26,275 58*818 232,112 278,431 33,923 $ 22,553 28,444 88,636 312,607 13,595 $ 60,270 25,074 91,258 108,120 73,474 The issues held during the past two years have been predominantly short-term. There has been a great demand for Government bonds maturing in 15 years and longer. The yield on these securities (taxable) has fallen from 2.4S percent in November 19 4 to 2.33 percent in November 1 4 5 To 49-. avoid competing with the public for these securities which would drive the yield down still more, the Open Market Committee has concentrated on the purchase of short-term securities. Of the total amount of Government se curities held by the Federal Reserve Banks on November 28, 1 4 5 only 3 per 9cent had a maturity date of over 5 years. , As in former war years financing military operations dominated the monetary policy in 1945. During the year the Treasury initiated two bond drives. A special effort was made, as in previous drives, to borrow the needed funds from individuals and non-bank investors, but the portion of the quota not so taken by individuals was borrowed from banks. The Open Market Committee of the Federal Reserve System pursued a policy that pro vided the banks with excess reserves to invest in Government securities. Through the purchase of securities in the Open Market, more Federal Reserve bank credit was extended to member banks which increased their reserves. With excess reserves on hand, banks were in a position to invest in the Government securities offered by the D. S. Treasury. Uncollected ?unds. Cash item3 in the process of collection for banks and governmental agencies were 10 million dollars larger on December 31, 1945 than a year earlier. This increase in the amount of uncollected items reflects principally the rise in the number as well as in the value of cash items handled by this bank. Out of these items arises a credit, commonly known as float, which is absorbed b * the Federal Reserve Bank, Sin30 the deferred availability y items, which is the offsetting account to uncollected items on the liability side of the balance sheet, increased 9 million dollars, the float was only 1 million dollars larger at the end of the year as compared with a year ago* Bank Premises. The head office account was changed wily by the depreciation chargee* The only change occurring in this account other than depreciation charges was the cost of installing ventilating equipment at the Branch* The bank buildings were depreciated 2 per cent, and the fixed machinery and equipment 10 per cent of book value. To provide the reader with all of the details, the accounts are reproduced belcrfo LAND - , Head Office Book Value $ 400,520.66 Helena Branch Total $10,000.00 $ 410,520.66 $65,250.00 1.500<>00 $63,750.00 $ 835,219*14 27.165o 60 $ 808,053.54 $ 5,882.45 2,394.11 1.920o 24 $ 6,356.32 $ $ $81,132.45 2,394oll 3.420*24 $80,106„32 $1,251,622.25 2,394*11 29.085„84 $1,224,930.52 BANK BUILDING Ret book value December 31, 1944 Lesss 1945 depreciation charges ' Net book value December 31, 1945 $ 769,969*14 25.665.60 $ 744,303*54 FIXED MACHINERY AND EQUIPMENT Hat book value December 31, 1944 Plus1 1945 additions Lesss 1945 depreciation charges Het book value December 31, 1945 $ - 5,882.45 2,394.11 1.920o 24 6,356*32 TOTiil BANK PREMISES Het book value December 31, 1944 Plus: 1945 additions Lesss 1945 depreciation charges Net book value December 31, 1945 $1,170,489*30 25.665*60 $1,144,824.20 ■ Miscellaneous Assets0 Among these assets the three important items were reimbursable expenditures, interest accrued, and premium cm securitiese Nearly all of the increase in these assets during the year was con-, centrated in the amount of interest accrued on Government securities. ' At the end of 1945 the amount was 580 thousand dollars more than a year earlier<> A small increase of 6 thousand dollars also occurred in the premiums on securities c Some of the increase in these two items was offset by a decline in other smaller items. ing the year0 In the aggregate, these assets rose 524 thousand dollars dur ASSETS LIABILITIES Minneapolis Federal Reserve Notes In Circulation. 552 million dol lars of notes were in circulation at the end of 1 4 5 Since the end of 1940, 9-. which marks approximately the beginning of war activities in this country, notes in circulation issued by this bank have risen by nearly 3 1/2 times the former amount. The per capita currency i. circulation in the United r States on October 31, 1945, wa3 £200.24. while on December 31, 1940 it was £65.96. The amount of notes in circulation continues to rise but there is some evidence that the increase is tapering off. During 1945 notes in 4 circulation of the J'inneapolis Bank increased by 76 million dollars, an amount which is decidedly less than in the three preceding years. The in crease in 1 4 - was 90 million dollars; in 1943, S3 million dollars; and in 94 1942, 96 million dollars. ' Member Bank Reserve Accounts. These accounts expanded faster during 1945 than in the two preceding years. During the year they increased by 68 million dollars to an all time high of 325 million dollars. Since the resources of banks have been drained steadily by the ever increasing amor.nt of currency demanded by the public, adequate reserves have been maintained by member banks only through the operations of the Open Market Committee» \ ' * J Ninth District Member 3ank Reserves (In thousands of dollars) Daily average for the first half of December 1945 Reserve City Banks Change since Dec. 1-15 Dec. *44 rleserve accounts $172,939 Required l e . is Excess -veserves Excess: Minneapolis 3t. Paul Helena 166,320 6,619 . 1,916 3,790 913 Country Banks Change since Dec. 1-15 Dec. *44 $ +19,102 $214,547 $ +46,723 +19,114 - 12 + 36o 320 674 All ?ember 3anks . r Change * since Dec. 1-15 Dec. 11J+ £337,486 y +65,330 161,479 +32,619 327,799 +51,733 53,06S +14,109 59,607 +14,097 Other Deposits were 16 million dollars larger at the end of 1 4 5 9as compared with a year earlier. The rise in these deposits was due almost entirely to the U. S, Treasurer^ general account. On December 31* 1 4 5 9-# 38 million dollars were on deposit in this account, the largest amount since September 1 4 3 9-* 7 00 LIABILITIES FEDERAL RESERVE NOTES IS ACTUAL CIRCULATION M SA 191? is a p a 2 3 zh 25 g6 ?? 59 30 3* 35 36 37 3S • ko ui ug U3 uu CAFITAL ACCOUNTS Capital Stock paid in ‘ increased 361 thousand dollars during the year to a new total of 3,861 thousand dollarsa Stock was issued to ten new member banks while four member banks severed connections with the Federal Reserve Banko Surplus Accounts < Surplus (Section 7) was increased 3,920 thou, \ sand dollars which brought the total to 8,870 thousand dollarso Of this araount 1,728 thousand was transferred from the reserves for contingencies and 2,192 thousand dollars from net earnings for the y r ea ,, Surplus (Section 13b) remained unchanged at 1,073 thousand dollars 0 i Contingencies, Some major changes were made in the reserves for contingencieso The two reserves for contingencies formerly on the books from earnings prior to 1937 and froa surplus during 1937 and thereafter were abolishedo A reserve of one million dollars was set aside for losses in excess of the blanket bond coverage on employees; a reserve of 500 thousand was earmarked for losses not covered by Loss Sharing Agreement; and the reserve for registered mail losses was raised to 131 thousand dollars0 Two losses were suffered from currency shipmentsa The combined loss of 2,821 dollars was debited to the reserves for registered mail losses„ During the year this reserve was also credited with 8,522 dollars which brought the balance to 131 thousand dollars„ The following table reveals the disposition of 1 4 5 net earnings 9and the changes made in the surplus accountsc \ 1 4 5 Net Earnings 9Dividends Paid Transferred to Surolus Section 7 i $2,413,668,33 221.686^96 $2,191,981^37 * **• Surplus, Section 7, December 31» 1 44 9 Transferred from 1 4 Earnings 9 .5 Transferred from Reserves for Contingencies $4,949,737<,28 2,191,981*37 1,727,781.37 Surplus, Section 7, December 31, 1945 $8,869,500c 02 i 9 ft ft ft ft Surplus, Section 13b, December 31> 1944 Transferred from 1 4 5 Earnings 9- $1,072,621.34 ____ None Surplus, Section 13b, December 3 ' 1945 1, $1,072,621.34 Reserves for Contingencies, December 31, 1945 Reserve for losses in excess of blanket bond coverage Reserve for losses not covered by Loss Sharing Agreement Reserve for registered mail losses 1,000,000.00 ; 500,000.00 ' 131.134,10_ 31.631,134.30 I I 10 The financial statement of the Federal Reserve Bank of Minneapolis and Helena Branch as of December 31, 1 4 5 = n the changes which have occurred 9- ^d since December 31, 1944: COMPARATIVE STATEMENT OF ASSETS (In thousands of dollars) Increase or De crease since Dec. 31. 1945 Cash Reserves: Interdistrict settlement fund ....... Gold certificates v/ith F.R. Agent.... Redemption Fund - F.R. Notes ........ 161,935 170,000 20.145 0 ♦ 11,332 - 25,000 ♦ 5,325 Total gold certificate reserves ... $ 352,030 £ - 3,293 0ther cash .......... ............. . . 7,637 + 1,755 359,767 0 - 6;5;S 1,081 + 1,031 595,636 ♦143,396 33,923 + 20,328 $ 630,640 ■ +164,305 5 Due from foreign banks... ........... F. R. Ilotes of other Federal Reserve Banks 3 6,713 — + 2,300 Uncollected Items: Transit items .......... ......... .• Exchanges for clearing house ........ Other cash items .................. 50,295 2,113 1.691. + 10,120 564 . * 43 1. Total uncollected items ........... £ 54,099 $ ♦ 9,969 Bank premises ...................... . Less reserve ...................... . 2,491 1.223 Total cash reserves ............. Bills and Securities: Bills Discounted...... ...... U. S. Government securities in Open Market Account ...... ........... U. S. Treasury Bills held under Repurchase Option.... ........... Total bills and securities ...... 3ank premises - Net .......... . Miscellaneous Assets: Premium on securities ............ . . Interest accrued ........ ...... . Reimbursable expenditures ........... . Deferred charges............... . All other assets ................... $ $ 40 30 £ 1,263 $ * 10 $ 0 + ♦ 6 531 22 r r 34 $+ 524 373 963 376 15 61 Total miscellaneous assets ....... $ 1,796 TOTAL ASSETS ................... $1,054,283 4 . v + 171,570 12 COMPARATIVE STATEMENT OF LIABILITIES (In thousands of dollars) Increase or D * e crease since Pee-. 2 U J5.44, F0 R. Notes in circulation ...... $ 551,859 Deposits: Members - Reserve Account ............... U. S„ Treasurer - General Account.... . Foreign balances .................... Nonmembers - Clearing Account .......... Officers * checks ... ......... „..... 0 Due to other F« R. Banks 0* . . . . . . , 0 Other deposits ............... .... $ + 76,065 385,4.03 38,287 18,869 1,767 437 47 + 67,614 + 22,410 - 6,563 + 569 209 + 4? _____ m $ Total deposits IOtal Qess.oooo. «eo $ $ + 83,777 1,508 Deferred availability items4 Treasury ...... ...... ......... Other 0*o<*Qeoo +*oeoe&6e««t:e&o9al « t » « « G 9 f<o9' o 444,984 + 1,508 + 7.568 41,673 $ + 9,076 Miscellaneous Liabilities? Sundry items payable ........... . Discount on securities ............... 191 141 + » 114 11 Total miscellaneous liabilities .... 332 £+ 103 Capital Surplus Surplus Reserve 3,861 stock paid in o.fta.o&oa.Geo.ooacooo Fund - Section 7 ....... ••••»•»«0 Fund - Section 13b e.•••••••••••••• for contingencies •»»'•••••..... . TOTAL LIABILITIES ........ ..... 8,870 1,073 $+ 360 1 + 3,920 1*731 <* r ~1 *» \ Reserve ratio against combined net deposits and note liabilities ........... . § +171,570 35 .3% 8.5% Commitments to make industrial advances *.. Float absorbed *... ...... «......... * , $ 12,426 $+ 893 13 NET EARNINGS AND PROFITS Inc. or Dec; from 1 4 . 94 1241 Current Earnings Current Expenses Net Current Earnings $3,657,087 $+964,300 $2,311,764 $+924,248 Additions to Net Current Earnings: Profit on U,S. Sec. Open Market Acct, All Other Total Additions $ 95,519 _Ju 72S $102.317 $- 4,258 85,644 $- 89,902 Deductions from Net Current Earnings $___ m $+ - % Net Additions to Net Current Earnings Net Earnings & Profits 101.904 $2 ,^13,668 8 $- 89.910 $+834,338 Net earnings and profits totaled $ , - 4 thousand dollars during 1945, 241an increase of $834 thousand over 1944. Current earnings increased $964 thousand while current expenses increased $40 thousand, leaving an increase in net current earnings of $924 thousand over one year ago0 For the second consecutive year net current earnings were the largest since 1921„ Net additions to net current earnings during 1945 were $39,910 less than a year ago due mainly to the $88,800 reserve against an industrial loan which was credited to Profit and Loss in 1944 when the loan was paid* The table below gives a breakdown of the Profit and Loss transac tions during 1945. Additions to Net Current Farnings Head Office Helena Branch 67 $ 95,519 218 67 $46 - 3,500 3,500 2,690 276 2,690 276 — 1 $102,317 1 $102,271 $46 $ $ Total Frofit on sale of U.S, Gov’ sec, t* in Open Market account Profit on mutilated currency & coin Sale cf scrap Recoveries from liquidation on misc* assets acquired in settlement of claims account closed banks Recovery of items previously charged to Profit and Loss Dividend received on claims - endorser unknown Misc. small cash found in bank & turned in to Personnel Department Total additions $ 95,519 264 Deductions from Net Current Earnings 2 33 22 Discount on foreign currency & coin Loss on counterfeit Items destroyed or lost - endorsers unknown 20 Pesos Philippine circulating note source unknown Difference account Total deductions 10 .. 346 . £ 413 $ 10 288 354 $59 Net Additions to Net Current Earnings $101,904 $101,917 *13 ,2 32 22 $1 - if. NET CURRJENT SARHINGS 19^9 lb 17 16 X§ W 21 SS £3 S P.6 a 30 31 32 23 3^ 35 3b 3? 38 33 . ^0 ^ **3 CURRENT EARNINGS Inc. or Dec, from_l_944 m i Discounts & Advances Industrial Advances Uo S0 Gov5 Seco - System Account 10 Treasury Bills held under Repurchase Option Deficient reserve penalties Interest on past due industrial advances Sale of wastepaper, money bags, etc* Service charges - Safekeeping Clearinghouse fines Savings in registration fees, etc. on registered mail shipments for member banks during year Interest on personal loans to employees All other $ 55,166 - 3,396,901 200,255 3,730 - 300 8 100 520 - $+ 36,617 3,979 908,214 + 23,225 + 793 642 43 « 10 + 10 12 + 107 $4 964,300 - 107 $3,657,087 Earnings from current operations totaled $3,657 thousand during 1 4 5 an increase of $964. thousand over one year earlier and larger than any 9-, year since 19210 The largest source of our earnings in 1945 was from U„ S9 Government securities while in 1921 earnings of $4,650 thousand were from discounts and advances and only $142 thousand from Governments„ During 1945 earnings from discounts and advances totaled $55,166, an increase of $36,617 over one year agoc There have been no industrial advances on our books this year so the earnings on this account have decreased $4 thousando Our earnings from government securities held in the Open Market account totaled $3,397 thousand for 1945, an increase of 0908 thousand over last years Our shara of the System's earnings has increased from $261 thou sand for the month of January 1945 to $354 thousand for December, or on an average daily basis, from $8,419 in January to $11,419 in December0 The table below shows our share of holdings in the System Open Market account (excluding Bills held under Repurchase Agreement) for the last business day of 1945 and 1944» 12=21=45 Bills Certificates Notes Bonds $278,431,000 232,112,000 58,818,000 26.275.009 $595,636,000 12=21-44 $312,607,000 88,636,000 28,444,000 22.553.000 $452,240,000 Our earnings from operations of purchase and sale of government securities which we hold under repurchase option totaled $200 thousand for 1 4 5 an increase of $23 thousand over one year ago„ 9-, Earnings from deficient reserve penalties totaled 13,730 during 1945, an increase of $793 over last year9 total* s v During 1 4 5 122 banks were penalized 193 times while in 1944 the 9-, banks numbered 120 and the penalties 217« The reason for the larger amount ' I of penalties during 1945 with a lesser number of penalties was accounted for by the fact that one bank was penalized ten times for a total of $1,368.30 l compared rith that bank1 single penalty in 1944 of $129*54* s CURRENT EARNINGS NET CURRENT EXPENSES Inc, or Dec* 1945 from 194A $1,218,926 $ +33,120 126.396 +Jbj322L $1,345,322 $ +40,052 Head Office Helena Branch % Net expenses at the Head Office after deducting reimbursable ex penses totaled $1,219 thousand, and at Helena Branch $126 thousand, bringing the total net expense to $1,345 thousand for the year 1945, an increase of $40 thousand over a year ago. Expense items which showed the largest increases over a year ago are Salaries, Retirement System Contributions, Directors* Fees, Insurance Other Than on Currency, Coin and Securities, Taxes on Bank Premises, Repairs and Al terations, Furniture and Equipment, Board Assessment, and Redemptions of Federal Reserve Currency and other Miscellaneous Expense, Reductions occurred in Post age and Expressage, Insurance on Currency and Securities, and Original Cost of Federal Reserve Currency. \ / ' SALARIES m i Head Office Helena Branch $671,265 64.363 $735,628 Inc. or Dec. .fromJLgM--. . $ +51,662 + 1.261 $ +52,923 Head Office salaries for 1945 totaled $671 thousand, an increase of $52 thousand over 19440 Of this increase, $35 thousand is for salaries and $17 thousand for overtime. Helena Branch salaries for the same period increased $l,26l0 A shift from reimbursable to regular bank work has taken place dur ing 1945. The number employed on reimbursable functions in December 1945 totaled 373 compared with 427 in 1944. Regular bank employees totaled 339 com pared with 287 for the same period. 1Q RETIREMENT SYSTEM CONTRIBUTION Head Office Helena Branch 145 9. $76,577 5.878 032,455 Inc. or Dec. from 1 . 4 94._ $ + 19,711 .♦ ,... £00 £ ♦ 19,911 Retirement System Contributions totaled $76,577, an increase of *20 thousand over 1944. This increase was mostly due to a special prior service contribution. Helena Branch had very little change. TRAVELING EXPENSE Inc. or Dec. I'M! Ilead Office Helena Branch $21,772 2,159§23,931 from , 9 ., ^2 44 $ + 510 ~ ,.? 21w $ + 293 Traveling Expense at the Head Office totaled 021,772 for 1945, an increase of 0510 over a year ago. The largest increase was in Bank Hala tions work primarily due to our visiting more banks in 1945, while the i' collection of some old Closed Bank papers accounted for $910. A detail of this expense is shown below. Inc. or Dec. Head Office Bank examinations Bank relations Conference (miscellaneous) Presidents * conference Retirement System Consumer Credit Research and Statistics Trips to Helena Branch Graduate School of Banking United Nations Monetary & Finance Conference Claims account - Closed Banks Industrial Advisory Committee Miscellaneous Total Head Office Helena 3ranch Ilead Office Auditors Bank relations S. V. Swanson - Helena , ’ Assistant Manager*s trip to Minneapolis Special expense survey Montana Group Meeting Miscellaneous Total Helena Branch Total Traveling Expense $ 8,917 5,663 1,473 229 174 24 2,642 604 247 . - 910 147 737 $21,772 « - 597 > 1,321 35 277 57 229 598 ♦ 335 + 149 422 ♦ 910 + 147 137 $ ♦ 510 — 9/,Q - $ 2,159 $ - 136 184 360 125 294 147 54 212 $23,931 $ ♦ 293 3 1,008 551 360 0 At ♦ POSTAGE AND EXFRESSAGE Head Office Helena Branch . 1945 $136,104 24«317 £162,921 •Inc. or Dec. from 1944 $ - 1,741 ♦ 1«477__ 5 - 264 Postage and Exprassage for the Head Office totaled $138,104 for 1945, a decrease of $1,741 compared with 1944. There were several classifications of postage and expressage under this heading and the largest changes occurred in postage on outgoing currency, ordinary mail, and expressage on incoming currency. The following table gives the details: Inc. or Dec. 1245. Postage Currency - Incoming Currency - Outgoing Coin - Incoming Coin - Outgoing Securities Ordinary mail § 34,661 27,201 291 11,920 425 44,246. $113,744 $ 2,380 4,011 2,290 5,658 669 3.852 $ 19,360 Expressage Currency - Incoming Coin - Incoming Treasury Checks - Outgoing Transit Checks to Member Banks Auto & Miscellaneous Brink*s, Inc* $ - 121 -1,333 * 178 ♦ 721 ♦ 74 -4>204 $ -4,635 $ +2#714 + 390 ♦ 144 - 30 - 274 I +2,944 Helena Branch increased $1,477 for the same period. TELEPHONE & TELEGRAPH Head Office Helena Branch 1945 $ 4,431 5,337 $ 9,SIS Inc* or Dec. from..1944 . 0-410 - 399 $ - 809 Head Office Telephone and Telegraph expense during 1945 totaled §4*431, a decrease of $410 compared with 1944. 21 time we are setting aside in this reserve an amount equal to 2 cents per thousand of the aggregate total of such shipments handled during the fiscal year which begins December 1 and ends November 30* Based on the above men tioned 2 cents per thousand, we set aside ^8,432.38 for the fiscal year ended November 30, 1945. The charges against this reserve during 1945 were: 1. 2. Our pro rata share of annual retainer fee paid to Marsh $ & VcLennon, Inc. 70.00 Outgoing $60.00 shipment of pennies to Security Bank & Trust Co., Madison, South Dakota, lost in the mails, of which $50*00 insurance coverage was received from the Post Office Department. 10.00 3„ Shipment of $3,000 in ten dollar notes to First National Bank, Anoka, Minnesota, broken open and contents partially lost due to mail pouch rolling under the wheels of 6l0o 00 the mail train which does not stop at this point, 4. . Shipment of $5,000 consisting of $1,000 in £l’s, and £4,000 in $5*s to Northwestern National Bank, Litchfield, Minnesota, broken open and contents partially lost due to the mail pouch rolling under the wheels of the mail train which does not stop at this point. Loss $2,081. 2,04.1* 50 Recovery of $39*50 by FBI. $2,731o50 Incidentally, since the Reserve Banks set up this reserve for registered mail losses, I ' r h & McLennon, Inc. have increased their rates tac from 2 1/4 cents to 4 cents per thousand on all currency and coin insurance except new Federal Reserve currency from Washington, which rate remained at 1 l/4 cents. The following gives a detail of shipments made during the fiscal year? Head Office New F. R, Currency from Washington Fit F. R Notes to Bank of Issue . Currency & Coin between Offices Other Currency & Coin - Outgoing Other Currency & Coin - Incoming All Others (delivered or picked up by truck) Other Currency & Coin - Outgoing Other Currency & Coin - Incoming t 87,900,000 Helena Branch Combined $ 8 , 900,000 $ 96 , 800,000 4,990,900 270,000 27,658,994 13,552,496 34,970,000 4,995,000 161 , 648,565 120,m , 857 1,509,880 1,519,872 29, 980,000 4.,725,000 133,989,571 106, 622,361 1,509,880 1,519,872 $363,216,932 $58,402,142 #421,619,074 ) 23 OTHSR INSURANCE Head Office Helena Branch Inc. or Dec. -from. m L $ ♦ 2,499 ♦ 428 $ + 2,927 2245. $7,272 1.410 13,632 Other insurance expense for the Head Office during 1945 totaled 07,272, an increase of $2,499 over one year ago. Premiums which show the largest changes are: Group Life Insurance expense increased $2,186 due to the bank absorbing the premium for the months of August, September and October 1945 ordinarily paid by the employees. This method was used to give the employees the benefit of the large dividend received. The dividend received on our Group Life Insurance policy totaled $5,570 for the policy year ended Harch 31* 1945, an increase of $424 over the previous ; e r ra. Military Service Insurance increased $975 over the previous year due primarily to our change in the method of payment for Military Service Insurance to employees in the armed services from a yearly basis to the time of discharge. During 1945 discharges were rather heavy. Police Officers Bond expense increased $234 over the previous year. These bonds run for two years beginning July 1, 1945 so the only amount spent in 1944 would be in case we hired additional guards. • Helena Branch insurance increased $423 for the same period. A detail of Head Office insurance is shown below. * Group Life Insurance Group Life Insurance Dividend Bankers Blanket Bond Automobile Insurance Building and Contents Camera Property Floater & Insurance on Bank Movie Film Comprehensive Public & Auto Liability Military Service Special Police Bond Steam Boiler Workmen’s Compensation Fidelity Bonds (F.R. Agent, Ass*t F.R. Agent, and Alternate Ass*t. F.R. Agent) Discontinued as of May 319 1945 1945 $ 5,795 5,570 2,628 93 912 52 554 1,546 305 72 S72 Inc,, or Dec from 1944 $ + 2,186 4 424 - 134 7 ♦ + - 22 975 284 22 305 - 8 $ 7,272 - 32 2,499 TAXES OK BANK PREMISES m i Head Office Helena Branch $71,505 1.937 $73,442 Inc, or Dec. from 19U $+ 8,002 + 1£1 *+ 8,U3 , # Taxes on Bank Premises for 1 4 5 actually were $73,065 instead of 9. the above mentioned $71,505, of which #1,560 was charged to 1 4 . tax expense 94 on our books because of an error in the County Treasurer's Office in billing us $1,560 less in 1945 than they had told us verbally in December 1944o The reason for this $1,560 deduction was that the assessed valuation \ of the bank building was reduced fro® $1,187 thousand to $1,148 thousand. In December 1945 we ware Informed that the rate had increased from 'V 100 mills to 118 which made a net Increase of $8,002 over 1944 after allowing for the $1,560 decrease0 LIGHT. HEAT. POKER AND WATER 1945 Head Office Helena Branch $20,206 2.372 $22,578 Inc. or Dec* from 1944 $+ 142 - 291 $- 149 The cost of light, heat, power, water and sewage disposal for the Head Office totaled $20,206 during 1945, an increase of $142, while Helena Branch cost decreased $291 for the same period compared with 1944o A detail for Head Office Is shown belowe Inc. or Dec* m i Fuel for hot water Fuel for heating Power and light City water Sewage tsssLx m 187 2,577 16*072 811 . .5 9 5 $20,206 $♦ 16 - 138 ♦ 391 - 61 , - 66 142 ' $ 25 REPAIRS ARP ALTERATIONS 1945 $38,251 553 138,804 Head Office Helena Branch Inc* or Dec, from 1944 $♦ 30,307 - 1.522 $♦ 28,785 Cost of repairs and alterations at the Head Office totaled $38,251 during 1945, an increase of $30,307 oyer 1944* The major items ares $22,000 for professional services of Larson & McLaren, architects, who charged 1$ of an estimated cost of $2,200,000 for planning additions and alteration of bank building; $4,678 for painting the ceiling on the main banking floor which had not been renovated since moving into this building in 1925; $1,172 for painting the second and third floors; and $2,760 to Otis Elevator Company for maintenance of elevatorso Helena Branch shows a decrease of $1,522 for this periods FURNITURE AND EQUIPMENT 1945 Head Office Helena Branch $14,320 933 $15,253 Inc0 or Dec, from 1944 $+ 5,554 - 109 $♦ 5,445 Furniture and equipment purchased at the Head Office totaled $14,320 during 1945, an increase of $5,554 over the year 1944- The large purchases are: 8 Remington Rand typewriters $804, 3 sorting racks $165, Information desk $170, : \ Calculator $585, 3 scales $336, payroll machine $2,176, and 20 Burroughs adding machines $ll,002o Our 1942 DeLuxe Ford sold for $1,042 which was credited to this account0 Helena Branch showed a decrease of $109 for this periodo MISCELLANEOUS NET EXPENSE 1945 Head Office Helena Branch $39,791 8.599 $48,390 Inc, or Dec0 from 1944 $* 4,337 + 5.026 $♦ 9,363 Siscellaneous net expanses at th© Head Office totaled $39,791 during 1 4 5 an increase of $4,337 ewer 19i4< 9., largest increases are: Th® items which showed the officers* and employees' dinners, Federal Reserve Clubf Foreign Accounts, and Agricultural Econcuic Conference, A detailed breakdown is shown belowc Head Office 1945 Rental, repairs & maintenance of furniture and equipment 4,604 Outside protection, vault inspection, etc* 691 Outside laundry and cleaning charges, etc„ 87 Licenses & permits - auto, chauffeurs', elevator, e e 0 tt 69 457 Local transportation 422 Post office box & postage meter rental Mewspapers, periodicals, books, binding, 2,812 clipping service, etc© Collection charges absorbed 93 Copies of bank examination reports • 3,313 Commercial agency credit reports 591 Medical service & supplies & physical examinations 1,239 Entertainment of bankers and others not in , 3,118 bank's employ 3,382 Officers' and employees5 dinners 2,857 Employees ' education: AIB All other 305 Federal Reserve Club 2,613 4,117 Foreign accounts 1,692 Membership dues and donations Cafeteria net expense 4,643 Study on banking & credit policy 69 Advertising for help wanted 199 4.60 Annual Twenty Tear Club 1,036 Agricultural Economic Conference 117 Special work on nailing list All other 30? Net Total 139,791 Inco or Deco f c a 1944 ra ■ * 293 43 40 ♦ * ■ 44 96 2 - 809 - 56 4 38 - 72 + 268 - 661 ♦l,228 ; ♦ 157 * 165 ♦1,513 +1,166 ♦ 284 123 + 69' - 53 - 43 +1,036 117 + 189 $+4,337 Helena Branch Rental, repairs & maintenance of furniture and equipment $ 9,357 Outside protection, vault inspection, etcc 199 Outside laundry and cleaning charges 34 Licenses & permits - auto, chauffeurs9, elevator, ©tc0 4 Post office box & postage meter rental 213 Newspapers, periodicals, book bindings, clipping service, ©tc0 96 Collection charges and protest fees absorbed 15 Copies of bank examination reports 144 161 Hedieal serv0 & supplies & physical examinations Entertainment of bankers & others not in bank;3 employ 284 236 Officers’ and employeer9 dinners 300 Federal Reserve Club Membership dues and donations i,cu All other « 84 — Photographs of employees 112,133 Less Reimbursable Expenses Net Total . 3.539 * 8,5V? ♦+7,308 + 65 - + * + - 59 39 1 20 40 - 94 51 « , + 711 - 54 - 100 $+7,846 +2*820 $+5,026“ < BOARD ASSESSMENT Assessment for expang©s of the Beard of Governors totaled $53,409 during 1945, an increase of $3,949 due mainly to the increase in our capital and surplus over the previous year even though the average rate of assessment was reduced to 0 00277 for 1945 compared with ,00309 in 1944* COST OF FEDERAL RESERVE CURRENCY Inc. or Dec* m i Original Cost (including shipping charges) Redemptions ( f l " " $26,527 ASlS52 $37,480 t ljn V M $~ 89,457 * ,4 i i 2 - fS $- 85,457 The cost of new currency totaled $26,527 during 1945, a decrease of $89,457 compared with 1944c The cost for 1945 was the lowest since 1940 due Baainly to the substantial reduction in the printing of Federal Reserve Notes for uso With more money in circulation since the beginning of the war it is only natural that more bills were redeemed because of wear and tear, with the resulting $4,000 increase in redemption expenses0 A detailed breakdown of the cost of Federal Reserve currency for the years 1941 through 1945 is given in the table below* 1244 m s. 1242 2 m , $ 80,923 8,577 24,386 1,941 • 157 $115,984 . 6,252 $122,937 $ 74,910 8,072 17,955 1,951 $ 87,800 8,000 13,000 2,000 $26,000 5,900 10,200 1,600 _ 232 _ $102,991 6.857 $109,848 200 $111,000 _5*100 $116,100 400 $u,ioo JLtlQO $49,400 1241 Printing Cost $ 6,461 Postage 5,244 Surcharges 14,413 Insurance 175 Salaries of Issue & Redemption Division Z M *26,527 Cost of Redemption 10.953 137,480 1242 Inc* or D c , e< from 1944 ALL OTHEEt EXPENSES Legal •Directors1 Fees Federal Advisory Council •Depreciation on bank building $ 40 11,615 1,424 29.085 $42,164 $- 404 ♦ 1,446 + 81 ♦ .m $♦ 1,362 *Includes Helena Branch0 28 RENTAL RECEIVED 1945 Head Office Helena Branch $47,042 5«123 $52,165 Inc. or Dec. from 1944 $+ 682 - 281 $♦ 401 Rental received f c a governuent agencies, which is deducted from rs our total expenses, amounted to $52,165 during 1945 for Read Office and Branch, an increase of $401 over 1944- Space aantal at the Head Office was $722 more than a year earlier due to more apace being used by the Fiscal Agency department here0 REIMBURSABLE EXPENDITURES • 1945 Uo S. Treasury Issues U. S. Savings Bonds Foreign Funds Control Foreign Funds Control - Cy„ trans actions Withheld Taxes Reconstruction Finance Corporation Federal Farm Mortgage Corp. Federal Land Banks Federal Intermediate Credit Banks Federal Public Housing Authority Commodity Credit Corporation Maritime Commission War Department Navy Department Public Works Administration Home Owners* Loan Corporation Office of Price Administration Leased Wire Service Photostat Service Inc. or Dec, from 1944 $177,518 . 618,861 8,583 $~ 5,662 - 117,976 746 - 839 7,685 59,785 1,305 1,044 5 22 52,443 1,227 16,040 4,017 123 1,247 28,873 1,508 370 $981,495 + 839 - 1,496 - 13,280 * 2,447 ♦ 67 « • 1 46 - 36,306 ♦ 420 - 6,535 371 ♦ 103 - 1,002 909 ♦ 141 * J1 $~ 185,174 Reimbursable expenditures during 1945 at the Head Office and Helena Branch totaled $981,4.95, a decrease of $185,174 compared with 1944o Expenses in connection with U„ S. Savings Bonds showed the largest decline totaling $117,976, while Ccsanodity Credit showed a decline of $36,306* 90 t J O CURRENT EXPENSES 1915 i c f \j is 19 »■ S ?? S3 e» * 25 26 8? 88 29 30 }l 38 33 3' * ,5 ?6 37 3 3s 39 *» lt f Us k} V* 1*5 DEPARTMENTAL COMMENTS Bank and Public Relations . . . . . . . . Cafeteria . . ............ Check Collections Consumer Credit ............ Discounts . . . . . . ...... . . . « « • ........ . Examinations . . . . .................... * ......... '• Fiscal Agency . , . .............. ................. Noncash Collections . . . . . . . . . . Personnel ................. » ............ . . . . . . . Reconstruction Finance Corporation . . . . . . . Research and Statistics . . . . . . . . . . Safekeeping ....... • * ............. ....... . . . . . . » 1 4 5 BANK AND PUBLIC RELATION? ACTIVITIES 9. (Read Office) Bank officers and representatives delivered 110 addresses to an eoti® mated audience of 9,849 people. The attendance at showings of the Federal Reserve Bank movie during 1945 was 12,685* The bank continued its cooperation with the Wisconsin Bankers Association with regard to showing of the Federal Reserve movie. The movie was first made in the latter part of 1935 and since then it has been shown to ap= proximately 46-4,800 individuals, •, Requests were received for 846 copies of the picture book, nYour Money and the Federal Reserve System" in 1945. The picture book was completed and 50,000 copies received in May 1942» Distribution since then has been: 21,824; 1943, 1,927; 1944, 16,403; 1942, 1945, 856. In April, an all-day Trust Conference was held at the bank. Discussions were led by Mr. Gilbert T. Stephenson, Trust Research Department of the ABA, who was conducting similar conferences in each Federal Reserve district. Attending were representatives from the offices of the Chief National Bank Examiner, the FDIC> and State Banking Departments of Minnesota, North Dakota and South Dakota* Luncheon was served at the bank and dinner at the Radisson Hotel® In July, the directors and officers of this bank accented the invita« tion of the University of Minnesota and made a conducted tour of the Agriculture al Experiment Station in St. Paul, paying particular attention to plant-breeding experiments9 followed by a discussion of the swine development program. In October, an all-day conference was held attended by the agriculture al economists from the agricultural colleges of the states of Montana, North Dakota, South Dakota* Minnesota and Wisconsin. Speakers included Dr. Joseph S. Davis, Director, Food Research Institute, Leland Stanford University; R. M. Evans, member of the Board of Governors of the Federal Reserve System; R. R. Renne, President of the Montana State College; 0. B. Jesness, Department of Agricultural Economics of the University of Minnesota; Montana State College. and Phil Eckert of the Entertainment consisted of luncheons at this bank on October 26 and 27, and a dinner at the Athletic Club on October 26 at which the economists and businessmen and bankers from the Twin Cities also were present. Ten bank tours were made by students of out=of~town high schools and colleges. Three of these groups were our guests at luncheon. Six additional luncheons were held at the bank with bank officers, prominent businessmen, and University professors as our guests. At each luncheon a guest speaker discussed some topic of the day® A dinner in honor of Governor John K, ^cKee of the Board of Governors in Washington was held on f^arch 8, 1945, for 87 guests consisting of our direc tors, Twin City bankers and businessmen, and our officers, Messrs0 Preston and McCracken made an inspection tour of the public relations operations of a number of the Federal Reserve Banks, The operating ratio statement covering 1944 operations of member banks in this district was mailed out to all member banks. Special studies of operat ing ratios were computed for the State Banking Departments of North Dakota and I South Dakota and in Wisconsin for Ninth District State banks in that state. One thousand, one hundred and seventy five banks and bank offices in i the district T er visited during 1945, of which 168 were visited twice. ? e Calls were reported by 17 men. In October, a joint meeting of the directors of the Head Office and Helena Branch was held at Pierre, South Dakota, on the invitation of Director J„ R. McKnight. f CAFETERIA Comments, observations and figures seem to indicate that our cafeteria was as popular an eating place during the war as before, despite difficulties in obtaining food, W© have fared quite well, and now that foods are becoming more easily available, w© are rapidly getting back to a orewar basis. In addi tion to the employee relationship value of our lunchroom, we \inderstand our service is faster than outsidee It is believed that both the bank and the em® ployees are fortunate in having a good eating place at reasonable cost, Employees’ cost per meal during 1945 averaged .2115 cents, while cost to the bank was ,2443 cents. During 1945 our cafeteria served 155,241 meals compared with 165*736 in 1944, or a daily average of 514 compared with 547, which is comparable with decrease in number of employees, so that patron age is quite constant„ 33 V CHECK COLLECTION DEPARTMENT (Kead Office) » A grand total of 40*426,000 checkB was handled in 1945, which total exceeds by 3,529,000 the number of checks handled in 1944 and is the largest number of checks handled in any one year in the history of the bank. Checks drawn on banks outside of the Twin Cities increased 1,729,000, city checks increased 485,000, Treasury punch sard checks increased 1,943,000, return items Increased 47,000, while Treasury paper checks decreased 681,000 in number* Three times during the year the total number of checks functioned in one day passed the 200,000 mark0 The largest day's business was on November 13, when 217,000 checks were handled,, Thirty new adding machines were purchased, 23 of which have been de~ l'iveredo These new machines were required because of the increased volume of businessa With a 50 percent increase in volume of Treasury punch card checks, an additional I. B. to this division. sorting machine and another tabulating machine were added The number of checks handled in this division increased each month from 425*000 in January until it reached a peak of 647,000 in July. From August until December, the volume decreased monthly, until in Decamber the total was only 411,000. Volume Data City checks Country checks Checks on us Return items Gov*t checks (paper) Gov’ checks (punch card) t Amount Number of checks handled (000 omitted) -1345____ 7-1944 1945 . 1944 7,158,000 6,673,000 f 5,745,788 $ 5,316,391 25,404,000 23,675,000 3,911,989 3,390,715 86,000 80,000 628,416 608,959 310,000 263,000 79,297 68,582 1,676,000 2,357,000 1,450,912 1,432,250 5,852,000 3,909,000 353,279 308,480 40,486,000 36,957,000 §12,169,681 $11,125,377 Mail Department In August of this year our method of handling outgoing mail to banks in our district* Federal Reserve Banks, and Branches^ and other large banks, was changedo Prior to the chango, a certain amount of our mail was sorted and en~ 34 closed with our transit letters. Mail received after our transit letters were delivered to the Post Office, was forwarded separately so that some banks re ceived several pieces of mail from us daily. We now sort all mail in special sort racks that were constructed for this purpose. These racks contain over sixteen hundred pigeon holes so that it is possible to keep all mail and other enclosures sorted and ready for enclos ing in prepared envelopes when the deadline for mailing is reached * A crew of six part-time girls and three men is employed for this purpose. This system of enclosure has proved to be a big improvement over the old method of mailing and has cut missorted items to a minimum. Ration Check Department (Head Office) The number of ration checks handled this year showed a decrease of only 75,000 items from the total of 2,282,000 in 1944, in spite of the fact that most rationing was discontinued during the last quarter. of July a total of 231,512 checks was handled* During the month In December only 35,227 checks 7 • were handled. Number Number Transadttal Transmittal . 'Number Letters Letters Ration Received Sent Out Checks 19/5 65,989 .66,095 259,317 277,955 2, 282,328 Daily Average (Based on the last three months of,the year 1945) 190 776 5,154 Daily Average (Based on the last three months of the year 1944) 208 936 6,827 19U 2,206,962 CONSUMER CREDIT DEPARTMENT (Head Office) During 1945 the Consumer Credit Department operated with one full time investigator and the part time assistance of a stenographer. Since no complaints of violations of Regulation W were received during the year, the supervisory activities of the department were negligible. Apart from the is suance of new registration statements, the work of the department consisted 35 almost entirely of answering inquiries and handling requests for interprets^ tions, mostly in connection with new amendments to the Regulation. There were 139 new registrations in 1945, as compared with 148 in 1944« The 1945 registrants were for the most part new business enterprises; larger registration figures for 1944 were largely attributable to the preparation of a single chain of retail stores for postwar instalment credit business. During the year the restrictive provisions of the Regulation were somewhat relaxed by the adoption by the Board of Governors of five amendments. Amendment 15, adopted February 5, 1945, broadened the exemption of servicemen^ guaranteed loans which had been provided for in Amendment 14• Amendment 16, adopted June 11, 1945* constituted the first soften® ing of restrictions following VS Day* Certain articles were removed from the restricted list; the maximum maturity of housing and home improvement loans was extended from 12 to 18 months; and fuel conservation credits negotiated prior to November 18 1945. were allowed a maximum maturity of 24 months„ i Amendment 17, adopted July 27, 1945, exempted certain military air= craft from the operation of the Regulation and modified the exemption qualifi* cations for railroad watches. Amendment 18, adopted October 14, 1945, was a further relaxation of requirements as to certain types of transactions. The maximum maturity of loans otherwise than for the purchase of listed articles was extended from 12 to 18 months, and real estate and home improvers©nt loans were freed from res« triction0 Amendment 19, adopted December 1, 1945, exempted credit extended for the purpose of providing demonstrators to bona fide automobile salesmen. It also provided that where the maximum maturity for any class of transaction had been increased, a renewal of obligations theretofore contracted might be based upon such increased maturity provisions. On June 30, 1945 Mrc R. D. Baker, Assistant Cashier, resigned, and the department was placed under the supervision of Mr. Vc H, Strothman, Jr., Assistant Counsel. CURRENCY AND C I Q I? (Read Office) The volume of work in the Currency and Coin Department continued to expand during 1945* The number of outgoing currency and coin shipments increas ed 3,236 and the dollar amount paid out increased £36,515,390* The number of incoming shipments increased 2,891 end the dollar amount received increased $375 B46,888o The number of pieces of currency and coin handled by the department last year increased almost two million pieces* A decrease in the hand verifi*" cation of notes was made possible by the purchase of a shadowgraph scale. After sorting and counting, packages of fit for use currency put up by new clerks are weighed instead of making a hand verification. During the year we increased the number of sorting tellers from nine to sixteen. The dollar amount of currency paid out in denominations of 50, 100f 500 and 1,000 was less this year, but currency in the smaller denominations in* creased considerably over 1944> During the year 1945 the following changes were made in the Ctirrency and Coin Department: three separate units have been established in place of one unit, which was the Paying and Receiving Teller, The new units having separate control over their cash are; (1) City Teller, (2) Receiving Teller, and, (3) Currency Sorting Teller,, A registered mail section has been installed, which division writes up all incoming registered mail and delivers to the Minneapolis Post Office all outgoing currency and coin shipments sent by registered mail* Number of Piece& Handled 1I5 S4 .3,922>466 Notes Received and Counted 4,886,511 Notes Rehardled 9,469,707 Hand Verification of Notes Coin Rehandled 12M 43,007,016 4,756,458 12,484,758 Currency Paid Out to Ninth District Commercial Banks and Governmental Agencies 1944 $ 25,015,000 $ 23,586,000 1*8 and 2*s 42,555,000 44.524.000 42,555,' 5's . 80,465,000 86.728.000 80,465, 10»s 70,004,000 81.437.000 70,004, 20s B 7.307.000 7,070, 7,070,000 50!e 25.709.000 26,238, 26,238,000 100'3 1 . 498.000 2 , 623,000 1.498.000 2,623, 5 0 0 's 1.993.000 4.4&.0QQ 4. , 434 1000’ s $27^,211,000 1257,025,000 Outgoing Shipments . 1945— _ . _ Number Amount ____ ISJA ____ Number Amount 29,339 $274,211,000) 27,599 $257,025,000) Currency Paid out Currency shipped to Helena Branch & for ) ) 23,775,000) 5,338,815) other F. R, Banks 11,773 6,429,376 10,277 5,536,171 Coin 41,'m $304,415,376 37,876 $267,899,986 Incoming Shipments 1945 .. ..........1944--Humber Amount Number Amount s 19,266 §228,290,000 16,358 5191,196,103 1,906 3,230,753 1,923 2,477,762 Currency Coin 21^172 $23i7 2 " *753 18,281 $193,673,8^5 50, DISCOTOT DEPARVMEMT During the year 1945 the discount rate remained at one percent, and one-half of one percent on loans to member hanks secured by direct obligations of the United States Government having one year or less to run to maturity or to call date* I Seventeen banks took advantage of loan privileges on two hundred and sixty**seven different occasions during 1 * 5 borrowing an aggregate amount of 94, 11,441,966,000, all of which was represented by member bank bills payable se~ cured by U. S. Government obligations, 117,5^6,000 of the total discounted represented borrowings of members other than 3win City banksc The large total was the result of one Twin City member renewing one-day notes in large amounts for different periods of time rather than discounting notes with longer maturi ties. In 1944 ten banks were accommodated to the extent of £328,780,000. of December 319 1945, there was no member bank borrowing. As A similar condition existed on December 31, 1944* United States Treasury Bills bought under repurchase agreements totaled £723,734,000 during 1945, as compared to £652,262,000 during 1944. On 1 December 319 1945 the amount of Treasury Bills held was $33,923,000 compared with f13,595,000 held on December 31, 1944« No industrial advances were made in 1945. No industrial loan applicas tions were under consideration as of Dacember 31, 1945* Forty*»two applications for guarantees on loans were received during 1945* Of this number, together with eleven under consideration and available from 1944, forty-one were approved and made, one rejected and four withdrawn after, and seven before, approval. None were under consideration at the end of the year* In 1944, sixty*four applications were received. Of this number, to gether with two under consideration and available from 1943, thirty*nine were approved and made, six rejected, three withdrawn after, and seven before, ap proval, and eleven were under consideration at the end of the year. Advances amounting to $36,613,677*31 Fere ®ede by financing institu tions under Regulation V, guaranteed by the War Department, Navy Department and Maritide Commission, during the year, compared to $78,745,200.11 during 1944* The approvals of applications for guaranteed loans ranged from 023,000 to $3,000,000, practically all of which were in the form of revolving credits. The large majority of the guarantees were for 90 percent. As of December 31, 1945, the amount of loans outstanding guaranteed by the War Department was £2,907,967.13, portion guaranteed $2,646 ,933*06j the Navy Department, $1,223*816*80, portion guaranteed $1,101,435.12; and the Maritime Commission, $70,000.00, portion guaranteed $52,500*00. In 1945, eight hundred and twenty-three Foreign Funds Control applica tions to engage in transactions relating to blocked property were received, one hundred and seven of which involved the release of blocked securities, sixtythree received no action or were denied and six hundred and fifty-three were ap~ proved and licenses issued. During the year all failed bank assets retaining as property of this bank were examined and borrowers contacted wherever possible in an effort to effect collections or compromise settlements. $5,419.21 was received. Expenses and commissions incurred in making these collections amounted to £l,061.62, EXAMINATION DEPARTMENT There were on December 31, 1945, one hundred seventeen Ftate member banks. Each State member bank in this District was examined once by examiners ( for the Federal Reserve Bank of Minneapolis during the calendar year 1945. As of the end of the year, eleven State member banks were exercising trust pbwers, and the trust department of each of those member banks was ex® amined during the year* Four other State member banks having trust powers have restricted their activities to the handling of escrow, custodianship and safe® keeping accounts; in each of these cases their activities were checked by our examiners and a brief report written. Sixty-nine national banks held permits to exercise full or limited trust powers„ Application in behalf of one national bank for full trust powers wae received during the year and powers 1 to 5 were approved by the Board at Washington, During the year, one national bank surrendered its trust powers and a similar application on the part of one other national bank has been sub® mitted to the Board at Washington for appropriate action. ' The examinations by this Department in the various States were as follows: State Banks 15 26 38 0 25 _L J£ 118 Michigan Minnesota Montana North Dakota South Dakota Wisconsin Holding Company Affiliates 3 ° 3 Examination of .Holing Company,Affiliates , Each of the three holding company affiliates which are residents of this District was examined during the year. Examinations of the First Bank Stock Corporation and Bank Shares Incorporated were completed earlier in the year, but the examination of the Northwest Bancorporation, which was commenced as of the close of business November 26, 1 4 5 has not yet been completed. 9-, State Bank Applications for Membership ■ m i Applications of three banks which were received in 1944 were approved during 1945 and membership completed. Five applications for membership in the Federal Reserve System were received from State banks during 1945« The appli cations of four of these bank3 were approved and the banks admitted to member® ship. One application for membership was pending as of the close of the year. 40 This application has been sent to the Board's office, but at the year end we had not been informed of the 3oard*s action, Reports of Examination of State Member Banks The number of reports of examination received from the various State Banking Departments in the Ninth Federal Reserve District during 1945 of State member banks examined independently by them was as follows: Minnesota South Dakota Wisconsin 28 2 2 Applications for permission to exercise Fiduciary Powers Approved, etc. Application of the following banks for permission to exercise fiduci ary powers were approved by the Board at Washington during 1945: Date Name of Bank Location Approved The Peninsula Bank of Ishpeming Crookston Trust Company in behalf of Crookston National Bank Ishpeming, Michigan *ll-30~45 Crookston, Minnesota **11-19-45 Powers Limited Limited Crookston, Minnesota (*Boardfs conditions not yet accepted by bank.) l (**Effective if and when national bank is authorized to commence business. National bank charter issued effective 11*21-45) Application of the following bank for surrender of fiduciary powers was approved during the years Name of Bank Location The First National Bank of . Little Falls Little Falls, Minnesota Date Approved 5-19-45 Application of The First National Bank of Kalispell, Kelispell, Montana, for surrender of fiduciary powers was forwarded to the Board at Washington cn October 18, 1945 and is held in abeyance by the Board. Applications for National Charters Two applications for conversion of State institutions into national ' banking associations were referred to this office for recommendation during the year* These conversions were completed. One other application for a national bank charter to succeed another national bank which contemplated liquidation was referred to this office for recommendation, and certificate of authority to 41 commence business was issued by the Comptroller of the Currency. Bank Changes in 194 (Per Stock Book Records) Total number of member banks in the District January 1, 1945 National banks organized State banks admitted 467 3 _ 1 477 National banks succeeded by nonmember State banks 2 National banks absorbed by nonmeraber State banks 1 State member banks absorbed by other State member banks . L J _k Total number of member banks holding stock in the Federal Reserve Bank of Minneapolis at the end of the year 473 Membership At the close of the year there were 473 member banks in this District as compared with 467 member banks at the beginning of the year® The number of national banks remained the same and there was a net gain of 6 State member bankso The total membership at the close of the year was divided into 356 national banks and 117 State banks. State Bank Membership According to States No* of State Bank Members State Michigan Minnesota Montana North Dakota South Dakota Wisconsin _ k k & L -. _ No* of State No, of State Banks Which Banks Admitted Withdrew During Year During Year 15 25 33 No, of State Bank Members .!?-3i>45. 15 25 38 ■ m 24 JA 111 25 14 117 'FISCAL AGENCY DEPARTMENT “ (Head Office) • During 1945 the Fiscal Agency Department handled all the details In cident to the issuance of 16 offerings of marketable government securities for cash or exchange, excluding Treasury Bills, Seven of the issues were offered during the Seventh War Loan Drive and the Victory Loan Drive, The total num« bor of subscribers for all such issues for the year was 39,632, of which 7,271 were banks,N compared to 47,814 subscribers in 1944, 6,482 of that number be« as 42 ing banks. The total subscriptions received end allotted aggregated $1,403,575,500 as compared to total subscriptions received and allotted aggregating $1,433,476,900 in 1944, the latter figure being based on a total of 25 offer® ing8 of marketable government securities during the year 1944c There were received in 1945 2,631 tenders for Treasury Bills aggre gating $615,112,000 of which $433,112,000 was accepted. The total tenders re~ ceived represent 2,658 subscribers as compared with 4,104 tenders in 1944 covering 4,454 subscribers* The decrease evidently was due to banks seeking higher income by investing in Certificates of Indebtedness„ During the year this bank issued U. S. Savings Bonds of Series E, F, and G in the amount of $183,872,000 (maturity value) involving 818,606 pieces as compared to $^13,059,325 (maturity value) involving 1,046,344 pieces issued in 1944. The issuing agents in this head office portion of the district issued 3,832,000 Series E Savings Bonds amounting to $333,160,760 as compared to 5,280,869 pieces amounting to $421,163,165 issued in 1944We shipped 4,015,351 pieces of Series E Savings Bonds to issuing agents in 1945 as compared to 5,508,765 pieces in 1944. As of December 31, 1945 there were 1,111 incorporated banks and 102 branches properly qualified to redeem certain classes of U. S. Savings Bonds, Series A through F, as compared with 1,087 banks on December 31, 1944. Effect® » ive June 30, 1945 the Treasury Department authorized savings and loan associa tions, building and loan associations and credit unions, as well as certain other classes of financial institutions, to pay Savings Bonds, Series A through E, on the same basis as banks. There were on December 31, 1945, thirteen sav ings and loan associations and 2 branches, 2 building and loan associations and 2 branches, and 3 credit unions properly qualified to pay Savings Bonds. From Oct. 2, 1944 through June 30, 1945 banks were reimbursed on a quarterly basis for services rendered in paying Savings Bonds as follows: 15 cents each for the first 1,000 bonds 12 cents each for the second 1,000 bonds 10 cents each for all over 2,000 bonds After June 309 1945 the reimbursement schedule for all paying agents was as follows: 15 cents each for the first 1,000 bonds 10 cents each for all over 1,000 bonds Reimbursement for paying bonds amounting to v 450,943o48 for 3,573,175 pieces \ was paid to paying agents making such requests during the year. During the 43 year 1945 the daily average of all United States Savinps Ronds redeemed at the head office was 13,234 pieces as compared to a daily average of 11,837 for the period October 2# 1944 through December 31, 1944, October 2, 1944 being the date when when banks were first authorized to pay Savings Bonds0 The figures include rei demptions by paying agents and direct redemptions by this bank. There are 1,145 banks in the district now qualified as Special Deposi taries, of which 977 have active accounts, which number includes 86 active ac» counts handled by the Helena Branch. The amounts deposited in these accounts, exclusive of those accounts handled by the branch, aggregated $1,045,929,829.50 I' for the year. The total deposits in War Loan Deposit Accounts as of December 31, 1945 were $578,427,015.58. During the year 1945 the number of Savings Bonds received for s f * ae* keeping averaged 8,622 pieces per month as compared with a monthly average of 9,721 pieces for 1944- The monthly average nuiber of,these bonds released from safekeeping during 1945 was 2,973 pieces compared to a monthly average of 1,770 pieces in 1 4 . As of December 31, 1945 this bank held for safekeeping 270*390 94* savings bonds as compared to 203,610 bonds as of December 31, 1944. During the past year our Reissue Division handled 74,620 pieces of savings bonds for reissue for one purpose or another, the amount involved being $8,782,455 as compared to 66,674 pieces in 1944 amounting to $7,714,710, Reissue cases arise where original bonds have been incorrectly inscribed, where it is necessary to add, omit or substitute a beneficiary, add a co-owner, or change a beneficiary to a co-owner, and many other types of cases, and it is necessary to issue a new bond in order to effect the proper change. We redeemed 523,912 Government coupons amounting to $37,267,490,09 as compared to 437,819 coupons totaling §29,084,090.81 during 1944. We also re deemed 18,264 Governmental Agency coupons amounting . o §315,966.46 during 1945 t as compared to 63,906 totaling $785,018.15 during 1944* Beginning October 29, 1945, the opening of the Victory Loan Drive, there was placed on sale a &200 denomination Savings Bond, Series E, in honor of the late President Franklin Delano Roosevelt. 39,824 pieces were sold dur ing the Victory Loan Drive ending December 31, 1945. Under the Tax Adjustment Act of 1945, U. S. Excess Profits Tax Refund Bds. became payable at par at the option of the holder on and after Jan.l, ’ t e e 46.' h s bends are not negotiable at the present time* There were received during November and December 915 such bonds amounting to 56,879,832,02 for payment on and after January 1, 1946. / Afjusted Service Bonds, or Bonus Bonds as they were popularly called, matured on June 15, 1945, Because of the large volume of these bonds presented for payment at maturity, it was necessary to set up a special unit at the War Bond Annex to handle this work* This unit operated for a period of about six weeks and when the volume ran off, the work was returned to the main office and handled in regular course,, These bonds were originally issued in $50o denominations, and at maturity were redeemed at $50o plus 00 00 $13o50 accrued interest,. We received 180,-403 pieces amounting to $9,020,150 during the year for payment on which we issued 15,489 checks* The number of bonds presented by holders averaged 11 plus0 On December 31, 1945 there were 280 employees as compared with 323 on December 31, 1944• The Victory Loan Drive which endsd December 31, 1945 concluded the most successful war financing program in the history of the world. In order to briefly review the contribution made by the Ninth Federal Reserve District during the various drives, there is attached an exhibit setting forth certain interesting figures, These are statistical figures for the Ninth Federal Re serve District which include all incoming allocations of credit originating outside the district and exclude all outgoing allocations of credit arising as a result of sales originating in the district. The figures do not include sales to commercial banks for their own account. Series E Bond sales as shown in the exhibit include Army and Navy personnel purchases and post office sales for the entire State of Wisconsin, but exclude all post office sales and out-of-district sales for the State of Michigan, which were received and reported by the Detroit Branch of the Federal Reserve Bank of Chicago* / 45 Salas to 8on-Bank Investors In the Minth Federal B aerve District / (la thousands of dollar#) Drive Total Natl* Suhscriotion Dates Marketable Issues E Bonds* S&6 Bonds Tax Hotee 3inth District To^al Quota . 93.335 los in First 11-30-U2 to 12-23*42 9,000,000 12,900,000 48,072 23.369 8,13 8 13.756 Second 4-12-43 to 5- 1-43 13,000,000 IS, .000 600 , 163.782 87,162 28,806 33«52*t 313.27* * i?5.ooo Third * 9- 9=43 to 10- 2-43 15,000,000 18,900,000 2V*,935 135.313 3**.6lS > 9 651 *c U6U .517 356.6?9 Fourth l«lg~4u to 2-15-44 14 ,000*000 16,700,000 225,Uoo 152 .Ul9 39,1^ 66 .97U **83,937 317,800 Fifth 6-12=44 to h 8-44 16,000,000 20,600,000 336,U62 ll»U,858 36 ,* 3 *3 5V952 572.705 1*03,100 Sixth 11-20-44 to 12-16-44 14,000,000 21,621,000 39M«5 134,286 30,725 57.813 617.709 339,600 5-14-U5 to 6-3O-45 , 14 ,000,000 26,313,000 Ul6,S7l 171.323 36,681 55,693 680,568 36U,500 10-29-45 tc 12- 8-45 11,000,000 21 ,144,000 388,6¥* 102,975 26,899 38.365 556,883 2 5 .* o 5. * o 106,000,000 156 *778fOOO i 2.219.051 951.705 2Ul, WiU 370,728 3,782,928 2,212,079 Seventh flctory Loan TOTAL •Includes Army and Navy personnel purchases and post office sales for entire state of Wisconsin, but excludes all post office sales and out-of-district sales for state of Michigan which were re ceived and reported by the Detroit Branch of the Federal Reserve Bank of Chicago, Motes These are statlstloal figures for the Sinth Federal HeBerve District which include all incoming allocations of credit originating in other Fed eral £9serve Dietriot as the result of sales and exclude all outgoing allocations of credit arising as a result of sales originating in the district. COMPARATIVE VOLUME REPORT Fiscal Agency Department G07ERIKNT ISSUES AND OTHER THAU GOVERNMENT ISSUES •• Pieces Gov9 Issues Delivered on Original Issues tc Tax Series Direct Gov’ Obligations t. Amount 15,466 $ 85,505,500 117,086 1^17,869,000 U0 Savings Bonds Delivered on 0rigo Issues S0 By rm 818,606 By Issuing Agents 3,832,000 Pieces 1944. . . . Amount 28,399 $ 146,045,700 122,874 1 , , 904 951,400 183,872,000 333,160,760 213,059,325 421,163,165 472,104 194,559,770 9,020,150 121,251,900 49,581 2,656,774 5,269 17,358 645,020 123,729,810 264,700 106,303,200 1,087,375,982 Redemptions War Savings Stamps & Thrift Staaps 37,915 U,S„ Savings Bonds 4,001,445 Adjusted Service 180,403 Treasury Notes Tax Series 20,423 Coupon and Registered Securities Redeemed or Exchanged for Hew Issues 64,327 1,04.6,344 5,280,869 72,225 1,182,646,375 Exchanges Received (Coupon & Registered) and received against issues by other Federal Reserve Banks (CPD) 20,842 389,590,150 15,715 265,012,740 Savings Bonds Received a/c Reissues 74,511 8,782,455 66,293 7,714,710 Total to agree with Form E 9,183,024 14,131,459,771 9,361,701 $4,371,536,145 Exchanges delivered (Coupon and Registered) and issued against receipts by other Federal Reserve Banks 20,00C $ 380,145,750 Savings Bonds Issued a/c Reissues 74,620 8,782,455 66,674 7,714,710 4,015,351 355,244,880 5,508,765 443,051,525 Securities handled by Bond Delivery Division in connection with the sale of Securities for other than our ora account * 17,179 395,764,700 15,950 252,488,175 Delivered to agents an Consigne Series E Total Securities handled by us for U«S0 Govern mental C r . S Credit Agencies op, t Total Volume handled by Fiscal Agency Treas, Checks issued in payment of Savings Bonds, Adjusted Service Bonds and other Public Debt Redemptions 20,687 $ 275,946,950 13,310,174 $5,271,397,556 14,973,777 $5,350,737,505 12,637 1 23,525,325 50,117 $ 49,959,250 13,322,811 $5,294,922,881 15,023,894 $5,400,696,755 84,297 743,730 Tabulating Operations In Fiscal Agency The tabulating division of the Fiscal Agency department at Head Office increased the scope of its activities during the year to include ser» vices previously perfonred by the International Business Machines service bureau0 An alphabetic tabulator was installed enabling the department to prepare all sales reports at the close of the Seventh and Victory War Loan drives and reports of sales by cities of Series E, F and G bonds between drives0 Effective July 1, 1945 arrangements were completed to submit to the Treasury schedules of bonds spelled in the process of issue by issuing agents and this office on the same basis as redeemed savings bonds, expediting the handling of such bends by the Treasury and eliminating the sort by serial numberso During the period July 1, 1945 through December 31, 1945, 80,710 bonds spoiled in the process of issue were handled under this arrangementa Tabulating equipment was installed at the Helena Branch permitting • \ the handling of the Seventh and Victory Loan drive sales reports on this equip»enta The tabulating equipment at Helena was also utilized for handling Treasury punch card checksy the scheduling of savings bonds sold, the prepara tion of sales reports between war loan drives of sales of Series E, F and G bondso Effective November 1, 1945 arrangements were completed for the Helena Branch to su^lt schedules of savings bond's redeemed on a basis similar to that In effect at Hoad Office, In addition to the detail listings of savings bonds redeemed and shipped, tabulator listings are furnished the Treasury at the close of the month of the bonds redeemud in serial number order. This arrangement eliminates the necessity of the Treasury sorting the bonds according to serial numbers to note redemptions on the numeric registers of bonds issued0 The Branch also uses the tabulating equipment for the recording of number of pieces of savings bonds redeemed by each qualified bank and for preparing a monthly report of the amount of redemptions of savings bonds by counties. The tabulating division of the Fiscal Agency department at Head Office prepared schedules of savings bonds sold by month of issue, denomination and in serial number order for 4*650,606 savings bonds sold during 1945o Detailed shipping schedules and lists of savings bonds* Series A-E redeemed, also arranged in serial number order were tabulated during 1945 for 3,982,973 savings bonds redeemed as compared with 2,6*5,140 during 1944o The Treasury expects to inaugurate & new plan of handling redeemed savings bonds effective February 1, 1946 materially increasing the tabulating activities of this b n * The Treasury will discontinue one of two audits under ak, the revised procedure and the detailed checking of bond serial numbers on Federal Reserve bank shipping*schedules„ In lieu of submitting lists of bonds redeemed in serial number order, under the new procedure the Reserve banks will submit the punch cards prepared for each redeemed bond to a Treasury I Regional officee NONCASH COLLECTION DEPARTMENT During 1945 the Noncash Collection Department handled 837,472 grain drafts, an increase of 38,121 items as compared to 1944. The value of grain items handled totaled $690,584,580, increase of $146,440,000 over 1944, This increase in dollars and number of items was due to the increased volume of grain shipments in 1945. There was an increase of 2,601 city collection items, and 7,641 country items handled in 1945 compared to 1944. Security collections showed a decrease of 4,128 items, although the dollar value of security collections increased $6,641,000 over 1944. Member banks forwarded 2,883 collections, totaling $24,778,815 di rect to other Federal Reserve banks for their credit with us during 1945, as against 3,735 during 1944. Comparison of Number of Items Received for Collection City Collections 1245 m k Number of Items Grain Drafts 837,472 City Items 27.620 865,092 Dollar Vain? (000 omitted) Grain Drafts City Items 799,351 25.019 824,370 $690,585 $544*143 242.485 185.868 1933,070 $730,011 Country Collections Security Collections m s. m i m k 42,190 34,549 25,504 ' $37,381 $24,230 $34,533 m k 1 29,632 $27,891 PERSONNEL DEPARTMENT / During 1945, the employment picture in the bank turned about until at the end of the year our need for new help was at a four year low. Factors which helped create this favorable situation were: first, our carefully de veloped and long term friendly contact with the local high schools which made it possible for us to employ a near normal number of June graduates despite a tight labor market and a small city-wide graduating class; second, a consistent downward trend in our net turnover figures during the entire last six months of the year. Throughout the year a total of 307 persons were employed as against 317 during 1944, while separations were reduced 20 percent, totaling 324 dur» ing 1945 as against 405 during 1944. The change from all-out war to victory meant that only five persons (four women and one man) left the bank for military service during 1945, the smallest number sine© 1940. At the same time, servicees have been and are being released from service at an accelerating rate. Employees Entering and Leaving Military Service (Head Office) Released from Service Women ESI Men Entered Military Service i 1 Women Men 11 1 J S 2 0 B C . . I ..... 1940 1941 1942 1943 1944 1945 Thus far our records indicate that a little more than half of the 125 employees in military service from this bank and branch have been released0 / Fifty-four have been discharged, four are on terminal leave, three have been re leased to inactive duty and five died in service, . Twenty®four servicees have been reemployed, eighteen at Minneapolis, and six at Helenae Eighteen servicees have accepted employment in other lines, four are attending school under the Go X0 Bill and fifteen are looking around, still undecided as to their ultimate plans. Realizing that 1945 would see a rapid release of servicees and pre sent a pressing problem of reemployment, the Personnel Department, early in the year, completed careful plans for the reassigrment of veterans. Salary studies were prepared to permit analysis of salary changes, during the war period, by salary groups and these studies were the basis of a reemployment salary schedule for returning veterans0 This schedule is used in I increasing the servicee’s salary base to a level consistent with his probable earnings, had he been able to remain on the job throughout the war. With further respect to the reemployment of veterans, the Personnel Department developed a plan which called for the preparation of concise de~ partmental war®period histories for use in reorientation talks during the first day or two of the servicee*s return to the job. Such talks serve to quickly and painlessly bring the servicee up to date on changes which have taken place in operations or procedures during the war* r.mrmnsttinn of Staff at t h end of each Quarter. 1940-1545 .« — (Head Office! Early in the year a continuing series of "Mothers and Daughters Luncheons” were started, beginning with more recent additions to the staff. Em* ployees are invited to ask one of their parents to lunch at the bank, the lunch to be followed by a bank tour. Thus far 76 employees and their guests have ac® cepted our invitation. The favorable comments from employees and guests have been both unanimous and gratifying and indicate accomplishment of our dual pur pose, creating understanding and establishing friendships* 52 . 1 The luncheons are arranged by departments, in so far as is possible, and the Officer and department head serve, with a representa tive of the Personnel, as hosts. The guests go through the regular cafeteria line and carry their own trays, in this way gaining, at first hand, experience in the employees eating arrangements0 After lunch the employees and their i guests are taken on a tour of the bank and at its conclusion each employee takes her visitor directly to her own desko Here the visitor may meet the employee’ fellow workers and see the work performede Pictures of each em s ployee and guest are taken during this part of their visit and prints are later sent each visitor along with a copy of ' ’ Tour tfoney" and the "Peggy” booklet* Correspondence with the guests both before and after the luncheons are signed by the Officer in charge of the department in which the employee involved is assigned* In April a Job Evaluation Committee was set up to prepare job descriptions and conduct job analyses to test the feasibility of a Job Evaluation program for this hank3 The secretary of this committee, a member of the Personnel department, is now preparing a report covering a review of this preliminary step* In June, Mr* Peyton established an employee counseling service and this office is staffed by a member of the Personnel department who, with the welfare secretary as assistant, acts as counselor for employees who have personal problems, troubles, suggestions, complaints, etc* Thus far, our experience with this service indicates it is of value to employees and the bank* In July the Personnel department assumed the operation of the fiction library for the Federal Reserve Club and in so doing moved its location from the Research department to a position on the third floor adjacent to the cafeteria. This move coupled with an increased schedule of library hours has caused a 30% increase in circulation of books. During the month of July a dividend was received from the Equitable Life Assurance Society. This payment was occasioned by an unusually favorable Insurance experience with employees covered under our group life contract. It was decided to pass this reimbursement on to employees participating in the insurance and accordingly the money was used to pay the employees® group . / life and accidental death premiums for the three months August, September and October* This is the first time any such action has been possible and it served as a noticeable morale booster for those sharing in the benefit* i In November* inspectors fro® the ^age Hour Division of the U. S, Department of Labor made an inspection of wage-hour records at this bank and its Helena branch. The inspection, which consumed about ten days, was the first of Its kind experienced by thie bank though six other Reserve banks have been so inspected0 The department has continued its policy of attempting to keep informed on ideas and problems In personnel^ fith representatives attending meetings of the local chapter of the Office Manager’ Association, seminar s meetings at the University of Kinnesota and personnel conferences held at the New Tork and Chicago Reserve banks* 54 RECONSTRUCTION FINANCE COHTORATIOW DEPARPAMP (Head'Offica) Our activities for the RFC during 1945 have been in the main much as beforeThere were several new angles, however. by the RFC of five of its affiliatess One was the absorption Disaster Loan Corporation, Defense Plant Corporation, Defense Supplies Corporation, Metals Reserve Company, and Rubber Reserve Company, which, however, did not materially change matters for us. The Corporation put into operation a plan whereby it agrees under a blanket agreement to purchase participations up to 75# of loans made by banks. During the year 183 banks qualified under the plan, but only about 75 loans aggregating less than $3 million were made under it. Comparatively few new loans were made this year; most of them were made by the Smaller ?ar Plants ’ Corporation, We have a number of old loans on our books. The new RFC loans totaled $500 thousand plus and the Smaller 7 a Plants Corporation about ^700 ?r thousand. Preferred stock and debenture holdings are being constantly re duced; numerous banks have completed retirement of their issues. Activities for account of affiliates have been largely in reverse; for instance, proper ties and equipment owned by the Defense Plant Corporation (now RFC) have and are being disposed of; plants, including many privately owned, are being cleared of equipment furnished by Defense Plant Corporation; wool owned by Defense Supplies Corporation (now RPC) is being disposed of for the United Kingdom has and is being transported abroad — that held (storage charges paid during 1945 on wool owned by Defense Supplies Corporation aggregated $25,500 and cn that held for the United Kingdom $154 thousand. We verify all such changes.); and rationed articles which had been acquired by Defense Supplies Corporation have for the most part been disposed of, Subsidy payments are being made0 649 disbursements on flour tor 1945 aggregated $67 million, making a grand total to date of 1,267 aggregating about $106 million. 6,445 disbursements on i ea for the year aggregated over r t $15 million, making a grand total of over 035 million,, Tie have a number of bond issues which we service. These were acquired in connection with various Public TJorks Administration projects, i F Irrigation and drainage projects, etc, lG Y e now issue checks for payrolls of the local agency which has grown ' very considerably, principally because of property disposal. We also issue checks for various expenses and costs involved in the disposal and other programs. War Damage Corporation activity has been very light — no new policies and very few adjustments. Activity for other RFC affiliates, RFC Mortgage Company and Federal National Mortgage Association, has largely been servicing of loans made or acquired prior to 1945. Federal Public Housing Administration We have several bond issues acquired in connection with housing pro jects which it financed. Some of its projects are financed by short term notes sold to eastern banks or trust companies which will later be refinanced through the issue of bonds by the Housing Administration, One such transaction x is still on our books. Federal Works Ageicy During 1945 we acquired only two naw bond issues from financing of hospitals. Commodity Credit Corporation I During 1945 we paid drafts drawn against the Commodity Credit Corporation as follows? Dairy Production Sight Drafts totaling 1,151,022 for $56,226,729,49, Sheep and Lamb Production Drafts 27,257 for $1,342,792,10 and 3eef Production Drafts 20,123 for $1,273,995-15. ? e disbursed checks for purchases of grain, grain notes, payments J of freight, storage etc. aggregating $146,630,560.76, The total number of checks disbursed for the year was 33,634 for a total sum of $205,474,077,50. We received for collection and credit to Washington checks, drafts, and other items aggregating $91,596,192.53* 56 Grain notes received for custody totaled 17,274 and we released 17,351* Warehouse receipts received totaled 6,315 and we released 12,240. *«***#«*« Our department handling the matters mentioned above is now reduced to 36 people,. Auditors of the Il.F.G, cane to our bank on last September 28 for the first time in five years. until in March. The outlook is that they may not finish There are about fifteen men in the crew, most of whom / work on our records; the others are at the local loan agency, RESEARCH DEPARTMENT i^ajor Personnel Changes The activities of the Research Department in 1945 continued along the course of the preceding years. There were three major personnel changes. In Way 1945, Arthur R* Up- gren, Vice President and Economist, resigned from the bank to accept positions as Associate Editorial Editor of the Minneapolis Star Journal and Professor of Economics at the University. The Director of Research Paul W. McCracken was placed in charge of the research activities. The second major change wa3 incident to the return from military service of George Hlikens. Kr, Milkens was made Statistician, to be in V general charge of the statistical activities of the Department, and 0. F. Litterer, formerly Statistician, was shifted to the position of Industrial Economist, The latter position had not been previously filled, Mr. Litterer*s new work will deal v/it industry studies in the Ninth District and economic h analyses incident to Northwest commercial and industrial development* This new work is parallel with the setup of the research activities at the other Federal Reserve Banks. The third personnel change was the addition of Kiss Eileen Killer as head librarian, Kiss Miller is a professional librarian with a library science degree from the library school of St. Catherines College of St, Paul, 57 and has had library experience at fuacalester College and the University of San Francisco. Library / The addition of a professional librarian was in line with our • program of developing the library into a more useful method of disseminating information. In December a library letter was inaugurated. Its 'chief pur pose is to inform the bankers (and others) in the District about material in the library available for circulation* Reviews of recently acquired publications are written by the various members of the staff for this pub lication. During the year our inventory of books was further expanded* At the present time we a * subscribing to 95 periodicals, all of which are re available for use within the b n : a!. Publications The major publications of the Department have been continued and expanded. The Monthly Review is currently b>Ing circulated to 5,512 bankers and others, all of whom are on our mailing list by request* It is interesting to note that 17 issues are circulated to overseas readers. Special articles carried in the 1945 Monthly Reviews Included the followings "3ank Warnings Continue to Expand'* "Beef Cattle Situation Suggests Caution" ’Consumer Credit A Factor in Instability" ’ HIncome From Livestock Tops Grain in Ninth District*1 "Price Control Has Curbed Wartime Prices*1 "Expansion In Construction Already Noted*1 rLiquid Asset3 Stimulate Postwar Economy" t The Farm Hews ha3 met with increasing popularity, and at the pre sent time l a a requested circulation of 1,487. is The typography of the weekly News Review has been redesigned; it continues to be sent only to executive officers of member banks. A survey of the readers to determine if the Hews Revieie were actually read revealed that 93 percent of those returning the survey read it regularly. A majority found items on agriculture to be of most interest and those on deposits and 58 money in circulation of the lea3t interest™ The selection of our material is being modified accordingly. In addition to these regular publications, a special study on the wheat situation written by P. L Parsons was circulated during the year. . The Proceedings of the Conference of Agricultural Sconomists held in October were also sent to the bankers and newspapers in the District. It is interesting to note that the major address at this conference was featured in "Vital Speeches”. Conferences and Speaking Engagements, A new type of conference this year was sponsored by the Research Department with the Federal Reserve Bank acting as host. Agricultural economists from all over the Ninth District were invited into Minneapolis for an all-day session to consider the subject "Issues Involved in Agricul tural Policy." Approximately 35 economists attended thi3 session, and all of the full states in the District were represented, together with a dele gation from the University of Wisconsin and the agricultural economists from the Federal Reserve Bank at Chicago. The program of the day was as follows: 9:45 Registration 10:15 J. N. Peyton, President, Welcoming Remarks 1.0:30 C. 3. Powell, ?irst Vice President, "Reserve Bank Operations Related to Ninth District Agricultural Economy." 11:00 Paul McCracken, Director of Research, ’Research." ’ 11:30 F. L. Parsons, Agricultural Economist, "The Agricultural Economises Place in the District." 12:00 Luncheon, Phil Eckert, Montana State College, "Agricultural Credit in Paraguay." 1:15 Tour of Bank 2:30 R. R. Renne, President, Montana State College, "Agricultural Policy in Review." 3:15 0. 3. Jesnes3 , Department of Agricultural Economics, Univer sity of Minnesota, "Agricultural Policy, A Look Forward." 4:00 Discussion on Agricultural Policy and Problems. 6:30 Dinner - Speakers: R. i. Evans, Member, Board of Governors of the Federal n Reserve System, Washington, D. C. Dr. Joseph S. Davis, Director, ^ood Research Institute, Leland Stanford University. In addition to this, the senior members of the Department have continued their procedure of accepting speaking engagements out over the 59 District, and a total of 103 of these engagements were filled in 1945. Most of these were sad8 initially through the bankers in the various communities. The subjects of most interest were international monetary stabilization, agricultural outlook and policies, and looking ahead at northwest business. Sracial Projects During the year our statisticians assisted in the tabulation of 6 community surveys. The service which we performed was two-fold. Tie assisted in tabulating the returns on employment and consumer demands in the area, and in some cases throughout the survey some of our personnel advised with the local committees in the more technical statistical problems of setting up the projects. The bank deposits ownership survey was substantially enlarged, and approximately 370 banks sent in ownership data for tabulation. < System Research In line with the current System policy of emphasizing regional System-wide research, the personnel in our Department served on a number of these System research committees. t Our Department wa3 represented on the overfall Subcommittee of the President's Conference Committee on Research (a ^roup consisting of the heads of research at all of the banks and the Director of the Division of Research at the Soard), the Agricultural Com mittee, the Business Finance Committee, and the Committee on State and Local Finance. These committees have held meetings at various times during the year in accordance with their particular projects. SAFEKEEPING DEPARTMENT (Head Office) At the close of business December 31, 1945, the total of all securities held in our custody for safekeeping and collateral purposes (excluding l. S. Savings Bonds for individuals) totaled 01,795,300,934-92, i an increase of $263,302,123.55 during the year. The principal increases • 60 were as followst $176,871,109.03 17,132,078.55 Member bank safekeeping Safekeeping-Pledged accounts Collateral to 7 a Loan Deposit »r Accounts Treasury Bills held under Repurchase Option U. S„ Savings Bonds held for nonmembers Safekeeping Nonmember accounts 36,201,400.00 17,323,000.00 13,332,625.00 3,574,000.00 The department issued 14,268 receipts and handled 10,957 withdraw als during 1945, as compared with 15,193 receipts and 12,105 withdrawals during 1944. We received 33,332 pieces and delivered 68,072 pieces in 1945, as compared to 79,954 pieces received and 63,967 pieces delivered during 1944. There were 6,293 transfers from one account to another in 1945, compared to 5,907 transfers for 1944. The number of coupons clipped this year was 221,717 as compared to 275,021 tSi previous year. For comparative purposes, there is listed below a statement of all accounts showing securities held at the close of business December 31, 1945 and December 31, 1944. December 31.1945 Government and miscellaneous securities held in safekeeping for members Securities pledged to secure public deposits U. So Savings 3onds held for ?Tonmenbers Securities held for U.S. Treasurer and others Securities hold for Reconstruction Finance Corporation Collateral to War Loan Deposits U. S. Depositary Bonds held In Safekeeping U. 3. Depositary Bonds held as Collateral to T i e Deposits ia Federal Works Administration Collateral to Discounts, Rediscounts and Industrial Advances Securities held for U.S. Housing Authority Collateral to Consignment Account— U.S. Savings Bonds, Series S Treasury 3ills held under Repurchase Option Safekeeping— Monmember Accounts U. Sa T a Savings Stamps 'r Unclaimed Cashier*s Checks Suspended Delivery (Original Issue) $ December 31.1944 865,182,331.85 $ 638,311,222.77 210,138,985.43 41,266,950.00 193,006,906.93 27,434,325.00 3,479,400.00 3,464,400.00 12,334,431.49 605,253,000.00 3,589,000.00 13,855,522.49 569,051,600.00 3,375,000.00 119,500.00 75,020.00 103,500.00 54,806.00 200,708.00 1,747,024.00 1,052.00 2,823,028.00 131,500.00 136,300.00 31,423,000.00 19,810,000.00 111.68 22.42 - 13,595,000.00 16,236,000.00 170«76 22.42 500,000,00