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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