Full text of Annual Report of the Federal Reserve Bank of Atlanta : 1981 Annual Report

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CONTENTS

From the Boardroom

Pricing and Deregulation

9
12

Automation
The Fed’s
Fifth Dimension

16
18
20
22

The Southeastern
Economy
Board of Directors
and Officers

.-,:

Branches
I
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Financial Statements

FROM THE
BOARDROOM

"'.y
left to right, Deputy Chairman Weitnauer,
Chairman Fickling.
President Ford

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Behind the handsome Georgia marble
facade of our Atlanta headquarters, the
Federal Reserve Bank of Atlanta is a
professional community of people people facing perhaps the Banks greatest
challenge since it was founded in 1914.
'Ihat challenge is the Monehy control
Act of 1980 -which accelerated competition in the nation's financial services
industry-and the groundswell toward
deregulating our industry.
Atlanta Fed employees responded to
their new mandate during an unprecedented year of outreach in 1981, involving not only member banks and new
constituents but the business and academic communities within the Sixth
Federal Reserve District and even beyond
During the year, the Atlanta Bank
staged two major conferences whose
provocative themes attracted hundreds
of visitors from around the nation. Four
hundred came to Georgia for a conference
on the Future of the Financial Services
Industry, while more than 300 attended
our conference on the Future of the
US. Payments System.
In addition, our employees organized
smaller gatherings that attracted leading
bankers, Atlanta's consular corps and
economic forecasters from District universities. The Bank invited business
leaders to hear and question such guest
speakers as Geoda Gov. George Busbee,
Citibank economist k i f Olsen, Hmard
University's Martin Feldstein, Emory
University President James T. h e y and
Federal Reserve Board Governor Emmett
Rice.
3

The diversity of those activities
suggests the diversity of our staff, which
represents a broad range of specialties
and talents. Central banking may be aur
function, yet bankers represent only a
minority of our work force. Rather, our
people may be uniformed guards pmtecting the millions of dollars that pass
through the Bank every day, Service
Department employees working in the
print shop turning out Bank publications
or Cash Services employees screening
out tattered currency.
Each employee contributes in his or
her own way to the Atlanta Fed’s
multiple missions: acting as the
Tmsury Department’s banker and financial agent; distributing currency and
coin; processing checks; holding constituents’ reserve deposits; transferring
funds at banks’ requests and examining
state member banks to assure their
safety.
Our employees process an awesome
8.3 million checks, worth $3.8 billion,
each working day. In terms of physical
volume and labor, this is - by far our most important line of business.
Employees also handle about $15 billion
in wire transfers each day, along with
nearly 10 million coins (shipments of
pennies alone average about 400 tons a
month at our six offices) and about $65
million in cash.
Our employees’ ingenuity was put to
the test in 1981 as they began to
implement the Monetary Control Act.
That historic legislation granted new
powers to savings and loan associations,
authorized the nationwide introduction
of interest-bearing checking accounts
and decreed the phaseout of interest
rate ceilings on savings accounts.
?he Act also brought h a t i c changes
to the Atlanta Fed, which serves as a
regulatory authority and central bank
within a six-state southeastern district
comprising more than 30 million people,
some 13 percent of the nation’s population. It created a new relationship
between our Bank and such institutions
4

as nonmember banks, savings and loan
associations and credit unions. Through
its provisions, it expanded the Atlanta
Fed’s responsibilities within the Sixth
Federal Reserve District from serving
700 institutions to serving.about 2,900.
The Bank’s staff was tested further
because the Congress, seeking to enaurage competition in the financial services
industry, directed that Reserve Banks
begin charging constituent institutions
for services traditionally provided to
member banks without cost.
If the arrival of pricing is a novel
challenge for our staff, challenge itself is
nothing new. During the first three
quarters of 1981, our people handled
their myriad assignments with one of
the system’s most impressive records of
efficiency. We are now processing checks
and cash at almost 20 percent less
expense per item than the Federal
Reserve System as a whole, a testament
to the dedication of our staff.
Year after year, our people through
technology and innovation have been
able to handle a burgeoning volume of
work, even as the staff has been
trimmed at our home base in Atlanta
and our five branches- in Jacksonville
and Miami, Florida; Nashville, Tennessee;
Birmingham, Alabama and New Orleans,
Louisiana The staff we counted at yearend, for example, had dropped below
2,200 employees, down from last year’s
December head count of about 2,370
and a 1975 level of 2,850. That continuing
reduction was accomplished even though
our Bank’s production was growing at a
10 percent annual rate through most of
the period. As a result, our District
continued to maintain a strong first
place in the 12-bank Federal Reserve
System in overall cost efficiency.

One reason for our success has been
the helpful counsel of our Board of
Directors, particularly valuable during
the past year of transition. Our sincere
thanks and best wishes go to Fred
Adams Jr. and Floyd W. Lewis, who
stepped down from the board as their
terms expired Adams is president of
Cal-Maine Foods, Inc., Jackson, Mississippi. Lewis is chairman of Middle
South Utilities Inc. of New Orleans.
They are being ably succeeded by
Horatio Thompson, a Baton Rouge
businessman, and Jane C Cousins,
president of Memll Lynch Realty/
Cousins in Miami.
In January 1982, the Atlanta Fed lost
two key staff members who have contributed to our achievements through the
years. One was lost through retirement,
the other through a tragic airplane
crash.
Senior Vce president Brown R Riwlings,who came to us in 1947 as an
agricultural economist and became a
leader in payments system technology,
retired effective January 31. He guided
our Bank’s research in electronic fund
transfers and played a major role in
developing the automated clearinghouse
network. Our thanks and best wishes
go with him.
Arland D. Williams Jr., a directing
examiner, died in the line of duty
January 13 when an airliner crashed on
takeoff from Washington’s National Airport. Arland joined the Bank in 1975
after serving as president of First
Community Bank in Boca Raton, Florida.
The strong indications that he sacrificed
his life saving other crash victims may
never be confirmed, but his associates
knew him as a man of personal courage,
one of our best people.

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Chairman

.t‘kk.,ct-.g,. @&&&
H. Weitnauer, Jr.
Deputy Chairman

William F. Ford
President

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PRICING
AND
DEREGULATION
ON TO THE LEVEL PLAYING FIELD
As the financial world knows, the Monetary Control Act threw the Reserve Banks

and their employees into a new ball game
with its own special “level playing field”
that enables some major league competitos
to challenge us in areaswe dominated in
the past
It’s still early in the first inning-too
early to speculate about the World seriesbut we think we can already point to a
winner. The public should come out on
top as competition produces new efficiencies and innovations leading to more
responsive services.
Responding to Congress’ mandate that
we price our central banking services, we
began chargingmember banks last year for
a number of services we previously offered
free. Specifically, we began charging for
wire transfednet settlement services in
January 1981; for check collection and
automated clearinghouse services in August,
and for securities and noncash collections
in October. Pricing of cash services began
in January 1982.
By charging for our services, we opened
ourselves to competition. Not surprisingly,
a number of competitors have risen to
accept the challenge. As we prepared to
begin pricing for check handling, for
instance, seved local clearing anangements quickly formed, permitting depository institutions in the same locale to
exchange items drawn on each other.
Additionally, some large regional and
money center banks joined in new correspondent relationships to clear checks directly, foregoing Federal Reserve charges
The Atlanta Fed welcomes this new
challenge, which frees market forces to
work to the advantage of the financial

services consumer. Nonetheless, the new
competition affectsourpeoplerather-.
In fact., competition already has trimmed
shatply the System’s check-pmcsing volume and Atlanta’s as well. This volume
loss, in turn, is now causing some contraction in our Check Collection area, the
largest single contingent among our nearly
2,200 employees.
To explain our newly priced services to
our customers, Atlanta Fed employees
have staged numerous seminars and workshops and visited many individual District
institutions, including new constituents.
The Atlanta Bank has also received authonzation to offersemal new check collection
services designed to remove old restridons
and to provide a mix of services better
tailored to meet the current needs of our
constituents.
Following is a brief score sheet for each
of the Atlanta Fed services affected.

Check Collection
and ACH Services
Check processing is the Fed’s largest
volume operation, involving the most
people, and the most important in terms of
potential impact
PS our check collection people expected,
the volume of checks sent to the Fed
dropped after check services were priced
on August 1,1981. J3y providing a “free”
service in the past, we had, in effect,
nullified the incentive for commercial
banks to establish local clearing anangements. When our price schedule revived
that incentive, such cleating ammgements
began to burgeon.
5

As a result, our check processing staff
handled 10.3 percent fewer checks in
September 1981 than in September 1980
at our six offices combined. The impact
was spotty, with some offices posting
substantial increases in certain categories.
For the first three months after pricing
took effect, the aggregate item count
dropped 10.9 percent The dollar volume
was virtually unchanged at about $273
billion for the three month period.
Hoping to regain some of the lost
volume-and possibly even achieve an
increase-our check people are now offering some new services that involve later
deadlines, reduced prices on certain services
and other advantages.
Automated clearinghouse @CH) growth
has continued strong. The number of
entries handled by Sixth District ACH
crews in November 1981 was 3.2 million,
almost 41 percent above the year-earlier
level. The biggest gainer was Commercial
Debits -the electronic equivalents of drafts
initiated by the payee (with the payor‘s
approval), usually in payment of regularly
recumng bills. The number of entries in
that categoty rose 73 percent and the
dollar volume rocketed by 705 percent

Securities and
Noncash Collection
Resewe Banks provide safekeeping facilities for the securities of constituent institutions. They also collect “noncash items
(includingcoupons on securitiesand bonds,
etc.) and credit the depositing institution.
Pricing of these services began in October
and the volume of noncash collections
dropped rather quickly by more than a
third, District-wide. To offset this decline,
our Fiscal Agency Department staffers are
contemplatinga schedule change to make
credit for these items available earlier.
The volume of securities services has
not been affected significantly. The few
customers who have taken their business
elsewhere have been balanced by others
who have brought new business Nonetheless, to improve our competitive position
we are now permitting city banks to
deposit securitieswith us. This servicewas
formerly available only to country banks.
In addition, we are considering eliminating
the fee now charged to new customers for
our securities safekeeping services and

The public should come out
demand new efficiencies and

broadening the scope of securities which
may be deposited.
Wire transfers of securities in 1981
numbered 188,050 transactions valued at
over $288 billion, a 10 percent increase in
volume and an 18 percent gain in dollar
amount

Wire Transfers/
Net Settlement Services
These were the first Fed services to wear
price tags. Wire transfers, of course, had
long been provided by our Accounting
staffs to member banks, while net settlement was introduced in January 1981,
when pricing took effect
Wire transfervolume has remained substantially unchanged throughout 1981,
suggesting that any migration of business
has been offset by a combination of new
customers and growth in use of the service
by old customersActivity b u g h November
indicatesvolume for the full year 1981 will
be close to 1980’s level of 4.2 million
transfers, with an aggregate value of $3.9
trillion, at our six offices.

The new net settlement service involves
a series of entries with a net of zero- total
debits equaling total credits- ideal for
clearinghouse settlements.Member banks
participating in local ckaring anangements
have long used debits and credits to their
reserve accounts at the Fed to settle for
their clearings. As the number of such
clearing anangements multiplied following
explicit pricing of check collection&ces in
August, the use of Net Settlement grew.
To accommodatethese and other transactions, our Accounting Department teams
opened some 80 new clearing and reserve
accounts for depositow institutions during
the year.

Cash Services,
These sewicesweren’t priced until January
1982, and no effects are visible so far.
Actually, our only charges relating to the
disbursing of currency and coin will be for
the cost of transportation.
Because of the special nature of our
m n c y and coin services,our Cash Services
people expect to continue dominatingthis

fop as the forces of competition
more responsive services.
v

categow.At present,no potential competiton -

are bidding to act as a regional warehouse
for currency and coin. We received and
distributed about 80 tons of newly minted
cents monthly at our Atlanta office alone
through most of 1981.At about 34 pounds
per $50 bag, that works out to around 225
bags a day for the Atlanta coin unit’s husky
two-man team to handle. The picture is
similar at our other five offices. And that’s
just the smallest of the small change..
Our currency processors have more
than doubled their productivity over the
past few years following the introduction
of the automated currency verification
counting and sorting (CVCS)system we
helped develop. The CVCS equipment
rejeds wrong denominations and suspected
counterfeits and destroys notes unfit for
further use. It then automaticallystraps fit
notes in neat packets of 100 notes, while
balancing total output against total input.
Last year our offices processed nearly
1.4 billion pieces of paper money and over
2.7 billion coins with a combined value of
over $18 billion. That’s a lot of cash,and
processing and storing it requires huge
vaults, sophisticated (and therefore expensive) equipment, a highly trained staff, and

a reassuringly solid protection pmgmn.
(Our guards are polite and friendly, but
they are capable of being otherwise, should
the occasion arise.)
To minimize the transportation charges
they will have to bear, depositow institutions
may find ways to exchange currency and
coin within their own localities, or to sort
out and recirculate fit currency, shipping
only the unfit to the Fed. Such measures
should improve the overall efficiency of
the cash distribution system.

MOVING INTO
THE MARJiET
At the risk of w i n g the ‘‘ball game”
analogy beyond its limits, we might say
that converting the Fed to its new role
was, in some respects, like converting an
umpire to a shortstop. Of course, we’ll be
playingthe sameposition as before, but we
are changing the way we think and develop
ing some additional skills.
Shortly after the Monetary Control Act
was signed in March 1980,we formed what
we then called the Access and Pricing
Project Team. For this team, we picked out

some problem-sob skilled analysts who
were familiar with the old rules but not
straightjacketed by them. From all six
offices we formed a group blending experience in the services affected They had to
coordinate the design of a new operating
environment, then draw a step-by-step
map for the march from the old world to an
on-schedulearrival at the new. They had to
restate the g e n d problem in the form of
thousands of specific problems, then go
after the answers. Several team members
and others involved failed to take all of
their vacation time in 1980 or 1981, and
12-hour (or longer) days have not been
uncommon. Of course, involvementspread
far beyond the team itself, touching all of
our 2,200 people in one way or another.
On May 1, 1981, we established a fullfledged Pricing Administration Department (“PAD’?,with v e t e m of the original
team as its nucleus. At the same time, a
Customer Relations officerwas designated.
To inform present and potential customen
of our services and prices, PAD members,
with the help of others, developed a fourlevel program. At the first level was a
simple, inexpensive brochure briefly and
generally describing our major groups of
For potential customen intemted
enough to ask for more, the next level was
built around a two-pocket folderincluding
price schedules, additional information
about deadlines and conditions, and the
names, addresses, and phone numbers of
Fed contacts ready, willing and able to
answer specific questions. Detailed handbooks represented the third level. The
fourth level featured presentations by our
staff, both in well-attendedseminarssponsored by the Bank throughout the Sixth
District and through one-on-one personal
visits to discuss a particular institution’s
needs. This information program assures
that, when a potential customer calls, he is
already well informed he knows what
questions to ask and how to evaluate the
answers. He’ll be contacted by a Fed
representative who knows the nut-andbolt details of the service area involved
Neither the customer‘s time nor ours will
be wasted.
Needless to say, we wouldn’t want to go
through something like this every year.
Yet it has been an invigorating challenge,
creating within our institution a sense of
renewed interest in an‘importantmission.
The job isn’t finished We intend to get
better and better at i t And we’re making
ProBress
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DEREGULATION IMPROVING THE SYSTEM’S
One purpose of the Monetary Control
Ad was to stimulate competition by reducing regulation, freeing unnecessary constraints that inhibit the responsiveness of
the financial system. In 1981the Federal
Reserve System and the F e d d Reserve
Bank of Atlanta took s e v d steps to
reduce the regulatory burden on financial
institutions.

On January 7, the Federal Reserve
Board approved a new policy introducing greater flexibility in the timing
of bank examinations Based on ratings
and monitoring. stronger institutions
will be examined less frequently,
allowing more time for on-site rwiew
of less-sound institutions. All state
member banksand holding companies
will be examined with sufficient
regularity to monitor safety, soundness and compliance with banking
regulations. Under the new policy,
banks and large holding companies
in satisfactory condition will be examined every 18 months instead of
every 12 months.

OInMarch,theBoardeliminatedsewml
reporting requirements. The actions
lighten the reporting burden of all
state member banks, and should be
of special benefit to small banks.
In Apri1,the Atlanta Bank in cooperation with the Georgia Departmentof
Banking and Finance put into effect
a plan to alternate annual commercial
and trust examinations for certain
state member banks. This progmn
will reduce the regulatory burden;
these banks will be examined only
once a year instead of twice. It will
also allow the agencies to allocate
their resources better, particularly
ttained bank examiners Two months
later the Atlanta Bank announced a
similar agreement with the Alabama
State Banking Deparhnent
0 On May 18and 19, the Atlanta Bank
sponsored seminars on the revised
%thin LendingAdandRegulationZ
(implementingthat Act). Intense interest among regulators and creditors
led the Bank to provide speakers to
statebankmassociations,SGrLleagUes,
and credit union leagues h u g h u t
0

the District The revision focuses on
providing less complicated,more general guidance on the disclosure of
lending information, together with
illustrative examples.
0 In June the statistical Repoh Department reviewed data items collected
for District use only. In an effort to
reduce the reporting burden on depository institutions, all items included only for Research Department
analytical purposes were eliminated.
In effed,we eliminated all the reporting requirements under our control
and retained only those reports required by the Board of Governors
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In the same month, the Atlanta Bank
eliminated its service of purchasing
and selling government securities in
the secondary market on behalf of
member institutions. Few District
institutions were using the service,
and it would have been subject to a
fee on October 1.The personnel and
resources allocated to this function
were reassigned to activities serving
a broader range of the Bank’s constituency.

AUTOMATION:

SHIlFTING INTO HIGH GEAR

The Monetary Control Act unleashed a
deluge of new financial reports coming
into the Atlanta Fed weekly, monthly, and
quarterly. The number of financial institutions reporting to the Statistical Reports
Unit jumped from 560 to over 2,500, with
1,900 reports coming in every week
To cope with these and future
changes, the Bank developed a new
automation strategy that provided
the foundation for the Sixth District
Long Range Automation Plan (1981-1985)
approved by Bank management and the
Boardof Governors. The plan charts a gradual conversion from decentralized data
processing in each office to cenhliized processing using System-wide standard software in the Atlanta office.

Several key components of the Automation Plan were launched in 1981:
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Conversion to the centralized computer system began with installation

of initial equipment and software
and training of staff.
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Installation of an integrated bulk
data system in Data Processing a
second dual Cyber telecommunications computer and modular minicomputers in-financial institutions.
The new Federal Reserve Communications System (FRCS-80) also was
implemented.

Development of a wide variety of
Monetary Control Act applications,
including pricing, billing, revenue
matching ttansaction data, and monitoring of reserve accounts.

To accommodate the centralized computer system, we constructed a new computer rmm which houses an IBM 4341
level I1 processor and related power,storage,
and cooling equipment.
On May 3 the Bank’s third currency
verification counting and sorting system
9

was installed The Cash Services Department was renovated to accommodate the
new system,and employeesreckived b i n ing in cumncy preparation, machine operation, and reconcilement The increased
capacity should enable Cash Services to
process all of its currencyvolume in a high
speed mode.
Despite the additional capacity gained,
keeping up with the growing volume of
currency may require extended shifts in
the near future.
The expanded number of reporting institutions, together with the necessity to
keep pace with computer and automation
technology, trisgered a series of remodeling
and building projects at the Atlanta Bank
in 1981. Before the chain reactions ended,
14 departments or major operating units
were affected.
In 1981, the Board of Governors appmved
the first phase of the Jacksonville building
program, recommending construction of a
$30 million facility with potential for
future expansion.Workingdrawings are to
be completed this July and the new building is scheduled to open in November
1984.
But the Atlanta Fed is responding to
change through ideas as well as construction and hardware. One key to our success
has been an increasing application of the
Management by Objectives concept For
several years, our personnel have been
increasingly involved in determining just
what their objectives are to be and this
involvement has pervaded more and more
levels of our six offices.
In our newly reorganized Research Department, for example, specialized professional teams have been formed in a novel
approach to accomplishingresearch goals.
Team captains and team members jointly
develop “performance agreements,” then
go to work to cany them out Among other
things, this has helped Research launch a
semi-monthly newsletter, Southeastern
Economic Insight; expand and double the
frequency of its Economic Review;adopt
an advanced typesettingsystem; developa
computerized database and upgrade its
word processing equipment
In one form or another, adapted to
varying departmental needs, the MBO
concept is now harvesting ideas and energies at the Atlanta Fed. Art Kantner, the
senior officer in charge of our cost-control
effort, calls it “the main reason we’re
number one in overall cost efficiency in
the System.”

A deluge of new reports an&
triggered more sophisticated-

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:expanded responsibilities
;computerization.
Y

THE FED’S
FIFTH
DIMENSION
Fed watchers know u as a bank for
depository institutions, a bank and a fiscal
agent for the United States Treasury, a
regulator and supervisor,and a participant
in the process of formulating monetary
policy.
But there’s another side to the Fed, a
fifth dimension we consider to be as
important, in its way, as the others.
In six cities of the South-Atlanta,
Birmingham, Jacksonville, Miami, Nashville,
and New Orleans-we are a major employer...a major purchaser of supplies and
services..a major property taxpayer...a major
community resource.
Both on and off the job, members of our
staff interact with diverse elements of

these communities. They provide data to
business and academicians...they take part
in the continuing dialogue that shapes the
evolution of thought...they help public
school teachers devise ways to make economic concepts understandable and interesting to coming generations of citizens...they pitch right in when the United
Way and other charities call for volunteers...and in many other ways involve
themselves in the Fed’s multifaceted role.
In short, the Fed is more than a marble
facade and a central bank the Fed is
people.
On these pages, we offer some glimpses
nf Fed people in action.

More than a marble facade

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the Atlanta Fed is

m p l e working for the Southeast.

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THE
SOUTHEASTERN
ECONOMY
Our southeastern states entered the new
year struggling with a recession whose
grip was becoming tighter as 1981 drew to
a close.
But a pair of welcome trends- a cooling
of inflation and a decline in last year’s
short-term interest rates-also accompanied
the region into the new year, offeringhope
for economic stability.
The recession’s impact varied considerably among the states that lie all or
partially within our Sixth Federal Reserve
District-Alabama, Florida, Georgia, Louisiana Mississippi and Tennessee. Yet all
were feeling its influence, from their lagging manufactwing industries to the growing number ofworkerson their unemployment rolls.
Economic weakness appears likely to
continue until the second half of 1982,
when a moderate recovery should begin.
In thii new year, major weaknessesremain
centered in construction, manufacturing,
trade and agriculture. Employment is expected to remain weak in the public sector
as government entities trim their budgets
in response to the administration’sefforts
to rein in federal spending.
Some weakness also can be expected in
service indusbies, reflecting reduced business travel and some reductions in traffic
to major tourist areas of the District.
On the whole, though, service industries
are less affected by cyclical downturns
than manufacturers Thus, since the Southeast boasts a higher concentration of
servicerelatedemployment than the nation,
recession shouldn’t impact our District as
painfully as the nation as a whole.

In the Southeast as across the nation,
construction ranks among the industries
hardest hit by the slowdown. Iast year,
that industry continued a slide that began
in 1980, as residential construction’swoes
spread into related building sectors. If the
cheering downturn in interest rates experienced late in 1981 should resume, though, it
could gradually breathe new life into
homebuilding by late 1982.
Renewed spending, if it begins as we
expect, should provide a shot in the arm to
retailers who have watched their sales of
durable goods taper off as the recession
reached into d i m sectors of the economy.
Before the recession plateaus, though,
District unemployment could rise from its
yearend levels, which already had brought
cutbacksaffectingindustriesranging from
forest products to transportation equipment
and textiles.
High-technology firms are defying the
downtrend, however, with some firms in
Atlanta,e n t d Florida and otha locations
aggressively expanding their staffs as they
enjoy their own economic booms. The
Southeast’s concentration on military contracting should bring some prosperity as
the administration steps up defense spending. Energy firmsalso are doing well, as are
many involved with the space program.
District farmersface a bleak year, as they
strugglewith heavy indebtedness brought
about by two consecutiveyears of drought
and profitless plantings.
Agricultural profits will come hard in
1982 even if abundant rainfall finally
anives. Large carry-over crop stores and
abundant livestock produdion threaten to

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hold down District farmers' prices again
this year.
Nationally, 1982 should see continuing
progress in the Fed's effort to bring inflation
under conbl. The Fed followed a consistent
policy of restraint throughout 1981, despite
sometimes vocal critics who didn't let up
until short-term interest rates began to
edge downward late in the year.

The Fed's policy, we believe, produced
measurable progress in the inflation fight
during 1981, a year that reversed two
straight years of more volatile increases.
The average annual CPI for 1981 wound
up at 10.3 percent -a far cry from the 13.5
percent that bedeviled the nation in 1980.
Unfortunately, the national recession, marked
by weakness in such industries as housing

and autos, tended to overshadow the
progress being made in reversing almost
two decades of inflation.
Perhaps the new year will see the happy
combination that would be so welcome to
all of us: an economic machine that runs
forward smoothly and does so without
inflationary overheating.

BOARD OF DIRECTORS

clockwise from left foreground Botts, Adams, Blach, Andrews, President Ford, Davis, Willson, Fickling, Weitnauer
I.

DIRECTORS

William A Fickling, Jr., Chairman

Jane C. Cousins

Chairman and Chief Executive,
Charter Medical Corporation
Macon, Georgia

President and Chief Executive Officer
Menill Lynch Realty/Cousins

Miami,Florida

John H. Weitnauer, Jr.,
Deputy Chairman

Jean McArthur Davis

Chairman and Chief Executive Officer,
Richway
Atlanta, Georgia

Dan B. Andrews
President, First National Bank
Dickson, Tennessee

President, McArthur Dairy, Inc.
Miami, Florida

Horatio C. Thompson
President,
Horatio Thompson Investment, Inc.
Baton Rouge, Louisiana

Hugh M. Willson
Harold B. Blach, Jr.

President, Blach's, Inc.
Birmingham, Alabama

President,
Citizens National Bank
Athens, Tennessee

Guy w.Botts

Federal Advisory Council

Chairman of the Board,
Bamett Banks of Florida, Inc.
Jacksonville. Florida

Robert Strickland
Chairman,
Trust Company of Georgia
Atlanta, Georgia

t-.

--.
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.(.

SENIOR
OFFICERS

* AND OFFICERS

William F. Ford
President

Robert P. Forrestal
First Vice President

Arthur H. Kantner
Senior Vice President

Hany Brandt
Senior Vice President

Jack Guynn
Senior Vice h i d e n t

B. H. Hargett
Senior Vice President

Donald L Koch
Senior Vice President and
Director of Research

Brown R Rawlings
Senior Vice President

Hany C. Schiering
General Auditor

W. R Caldwell
left to right: Koch, Hargett, Brandt, Forrestal, Guynn, Rawlings, Kantner

Vice President

William N. Cox, I11
Vice President and
Associate Director of Research

MANAGEMENT COMMITTEE
Robert P. Forrestal

B. H. Hargett

First Vice President

Senior Vice President

Arthur Kantner

Donald L Koch

Senior Vice President

Senior Vice President and
Director of Research

Hany Brandt
d

Senior Vice President

Brown R Rawlings
Senior Vice President

Jack Guynn
Senior Vice President

W. M. Davis
Vice President

Delmar Harrison
Vice President

Robert E. Heck
Vice President

John R Kerr
Vice President

William G. Pfaff
Vice President

H. Terry Smith
Vice President

John M. Wallace
Vice President

Edmund Willingham
Vice President and
General Counsel

BRANCHES

Jacksonville
Branch Managm
Charles D. East

JACKSONVILLE

NEW ORLEANS

Directors

Vice Resident

New Orleans
Branch Managec
James D. Hawkins
Vice Resident

Birmingham
Branch Managex
Hiram J. Honea
v
i
o
e Rresident

Copeland D. Newbem, Chairman

Leslie B Lampton, Chairman

Chairman of the Board,
Newbem Groves, Inc.
Tampa) Florida

President,
Ergon, Inc.
Jackson, Mississippi

cordon W. Campbell

Jerry W. Bents

Resident and Chief Executive officer,

President and Chief Executive Officer,
First National Bank
lafayette, Louisiana

Exchange Banmporation, hc
Tampa) Florida

LewiSADoman
President
Citizens and Peoples National Bank
pensacola, Florida

Nashville
Branch Managec
Jeffrey J. Wells

Paul W. McMullan
Chairman and Chief Executive Officer,
First Mississippi National Bank
Hattiesburg, Mississippi

Whitfield M. Palmer, Jr.

Sharon A, Perlis
Attorney
Metairie, Louisiana

vice Resident

partna;
Regenq Squme Properties, Inc

.
E

Patrick A Delaney

President
Florida Institute of Technology
Melboume, Florida

Joan W. Stein

Chairman and President,
Whitney National Bank of New Orleans
New Orleans Louisiana

Jerome P. Keuper

Chairman,
Mid-Florida Mining Company
oca4 Florida

Ben M. Radcliff
President,
Ben M. Radcliff Contractor, Inc.
Mobile, Alabama

Jacksonville, Florida

Billy J. Walker
Resident,
Atlantic Bancorporation

Jacksonville, Florida

Roosevelt Steptoe

Chancellor,
Southern University
Baton Rouge, Louisiana

-,*

Miami
Branch Managm

Frank Craven

Digitized 20
for FRASER

V i Resident

P
3

BIRMINGHAM

NASHVILLE

MIAMI

Directors

William H. Martin, 111, Chairman

President,
ACR Electronics, Inc.
Hollywood, Florida

Samuel Richardson Hill, Jr.

Michael T. Christian

Sue McCourt Cobb

President,
University of Alabama in Birmingham
Birmingham, Alabama

President and Chief Executive Officer,
First National Bank of Greeneville
Greeneville, Tennessee

Attorney,
Greenberg, Traurig, Askew, Hoffman,
Lipoff, Quentel and Wolff, P.A
Miami, Florida

C. Gordon Jones

Charles J. Kane

President and Chief Executive Officer,
First National Bank of Decatur
Decatur. Alabama

Chairman and Chief Executive Officer,
Third National Bank
Nashville, Tennessee

Henry A. Leslie

John Rutledge King

Martha McInnis

-- <

)

David H. Rush, Chairman

Executive Director,
Sunday School Publishing Board
Nashville, Tennessee

President and Chief Executive Officer,
Union Bank & Trust Company
Montgomery, Alabama

Cecelia Adkins, Chairman

President and Chief Executive Officer,
Martin Industries, Inc
Florence, Alabama

President,
The Mason and Dixon Lines, Inc.
Kingsport, Tennessee

Robert C.H. Mathews, Jr.

Executive Vice President,
Alabama Environmental Quality Association
Montgomery, Alabama

Managing General Partner,
RC. Mathews, Contractor
Nashville, Tennessee

William M. Schroeder

C. Warren Nee1

Chairman and President,
Central State Bank
Calera,Alabama

Louis J. Willie
Executive Vice President,
Booker T. Washington Insurance Company
Birmingham, Alabama

*
e"

Eugene Cohen
Chief Financial Officer and Treasurer,
Howard Hughes Medical Institute
Coconut Grove. Florida

Daniel S. Goodrum
President and Chief Executive Officer,
Century Banks, Inc
Fort Lauderdale, Florida

M.G. Sanchez
President and Chief Executive Officer,
First Bankers Corporation OfFlorida
Pompano Beach, Florida

Dean,
College of Business Adminishation
The University of Tennessee
Knoxville, Tennessee

Roy VandegriRJr.

James F. Smith, Jr.

Stephen G. Zahorian

Chairman and Chief Executive Officer,
Park National Bank
Knoxville. Tennessee

President,
h e t t Bank of Fort Myers, N.k
Fort Myers, Florida

President,
Roy Van, Inc.
Pahokee, Florida

llrr

r L

Statement of Condition
Assets

December 31,1980

Gold Certificate Account

December 31, 1981*

$ 465,000,000

$ 436,000,000

Special Drawing Rights Certificate Account

79,000,000

98,000,000

Coin

37,825,493

42,972,353

Loans and Securities

4,720,945,944

4,393,389,758

Cash Items in Process of Collection

2,040,620,660

1,570,787,869

34,819,465

34,084,092

536,880,814

528,467,974

$7,915,092,376

$7,103,702,046

$3,670,093,144

$3,141$1 0,668

Deposits**

1,887,472,720

1,874,454,588

Deferred Availability Cash Items

1,666,523,054

1,359,725,246

Other Liabilities

118,931,979

99,414,889

Interdistrict Settlement Account

391,915,579

Bank Premises
Other Assets
~~~

Total Assets

Liabilities
Federal Reserve Notes

433,838,855
~~~

Total Liabilities

$7,734,936,476

$6,909,244,246

Capital Accounts
Capital Paid In

90,077,950

97,228,900

90,077,950

97,228,900

Total Capital Accounts

$ 180,155,900

$ 194,457,800

Total Liabilities and Capital Accounts

$7,915,092,376

$7,103,702,046

Surplus

'Preliminaty closing figures.
"Includes Depository Institution Accounts, Collected Funds Due to Other ER Banks. US. Treasurer- General Account

Statement of Earnings
Earnings and Expenses
Total Current Earnings

1980
$491,746,033

$546,756,345

.70,172,381

78,806,986
___

$421,573,652

$467,949,359

Net Expenses
Current Net Earnings
Net Additions (+) Deductions (-)**

-1,038,097

-26,892,362

Earning Credits Used by Depository Institutions***

1408,775

4,723,800
--

Assessment for Expenses of Board of Governors

Net Earnings before Payment to U S . Treasury

1981*

4.735.700

$415,811,755

$435,912,522

5,355,123

$ 5,637,025

407,036,932

423,124,547

Distribution of Net Earnings
Dividends Paid

Payments to US. Treasury (Interest on ER Notes)
Transferred to Surplus Account
Net Additions (+) Deductions (--)
Total Earnings Distributed

+3,419,700
_ __
~

+7,150,950

$415,811,755

$435,912,522

$ 86,658,250

$ 90,077,950

3,419,700

7,150,950
__

$ 90,077,950

$ 97,228,900

Surplus Account
Surplus January 1
Transferred to Surplus - as above
Surplus December 31
*Preliminary closing figures
**Includes gains/losses on sales of US. Covemment securities and foreign exchange transactions
***Contingent liability in the amount of $242,499 due to depository institutions.

Summary of Operations
1980

SERVICES TO DEPOSITORY INSTITUTIONS

(millions)

1981

_____

items
(thousands)

(millions)

Clearing and Collection Services
Checks handled
US. Government checks ,
Postal money orders
All other
ACH payments processed

57,572
942
1,028,497
14,718

90,098
18,129
2,043,507
29,462

61,975
1,022
1,108,686
57,991

86,392
17,903
1,996,257
37,689

Wire transfen of funds

3,900,000

4,200

4,267,524

4,784

16,926
10.982

1,246,197
1,029,306
1,170,823
2,580,650

18,441
12,635

1,348,849
1,145,989
1,367,994
2,720,750

Cash Services
Total cash receipts
Total cash payments
Currency processed
Coin Processed
Loans to depository institutions, daily average
Securities Services
Wire transfer of securities
Noncash collection

112

246,579
673

171
555

287,968
808

188
588

348

2,377

365

1,998

1,581

2 1,840

1,072

15,520

529,518

207

144,777

219

29,477

911

41,416

1,280

2,616

286,308

1,658

432,400

SERVICES TO US. TREASURY
US. savings bonds issued, serviced, redeemed by Federal Reserve Bank
US. savings bonds issued and redeemed by qualified issuing and
paying agents
Other Treasury securities issued, sewiced and redeemed
Deposits to Treasury Tax and Loan accounts
Food coupons destroyed

'1
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