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FEDERAL RESERVE BMK OF ATLAMTA Entrance to Main Vault 1951 S T / ii't t y - M x f/ t A nnual R eport fo r the Y ear Ended D ecem ber 3 1, 1950 February 15, 1951 To the Member Banks of the Sixth Federal Reserve District: In the following pages I present a review of the operations of the Federal Reserve Bank of Atlanta for the year 1950. A major part of this report deals with specific departmental activities. These activities are carried on for the benefit of the Government and the public in general and of banking and the business com munity in particular. In truth, the Bank is a service institution and again I urge, as I have in the past, that bankers of the District visit our offices in the interest of becoming better acquainted with our work and of strengthening those personal relationships which mean so much in maintaining mutual confidence and understanding. It is indeed gratifying that our relations with the banks of the Sixth Federal Reserve District were maintained during the year on the same basis of friendly co-operation that has been charac teristic of the past. Jointly, we share in the vast responsibility of maintaining a sound and adaptable financial mechanism for the benefit of the public in its monetary dealings. In the year 1951, this responsibility will be greatly enhanced because of the na tional defense effort. I am sure that in our joint relationships we shall discharge our trust with continued integrity and efficiency. Sincerely yours, W. S. M c L a r i n , J r ., President TABLE OF CONTENTS PAGE R e v i e w o f B a n k i n g D e v e l o p m e n t s ...............................................9 Business B a c k g r o u n d ........................................................ 10 Changes in Membership in the Sixth District . 14 Growth in Par B a n k i n g ............................ 15 R e v i e w o f B a n k O p e r a t i o n s ....................................... V-Loan Program ....................................... 17 . Consumer C redit............................ 18 . . 1 9 Real Estate C r e d i t ...................... Commodity Credit Corporation 20 . . . . Reconstruction Finance Corporation . 21 . 22 Bank and Public Relations...................... 23 Bank E x am in atio n ....................................... Check Clearing and Collection .2 4 . . . . 25 Currency and C o i n ................................................... .2 7 Discount and C redit................................................... .2 8 Fiscal Agency and Securities . . . 29 P erson n el............................................................................... 33 R e s e a r c h ............................................................................... 34 Appointments, Elections, and Official Staff Changes . . 35 D i r e c t o r s a n d O f f i c e r s ...................................................................... 3 9 F in a n c ia l a n d V o l u m e R e p o r t s 46 Measured by their ability to meet the demands of business bor rowers, by growth in assets, and by earnings, the member banks of the Sixth District operated with complete success during the year. As a group, their total assets grew from $6.1 billion to $6.7 billion, reaching an all-time high. Although holdings of securities declined by about $50 million, total loans and discounts increased by approximately $390 million. Reflecting the growth in loans was a rise in total deposits from $5.7 billion to $6.2 billion. Earnings of the member banks as a whole were substantial. Current operating earnings amounted to $162 million, compared with $146 million in 1949, a gain of 11 percent. Interest on United States Government obligations provided $38.7 million, or 23.9 percent of the total. Interest and discount on loans amounted to $83.3 million, or 51.4 percent of the total. Net current operat ing earnings were $61.7 million, compared with $54 million for 1949. Net profits after all charges, including taxes on net income, amounted to $37 million, against $34 million for 1949. 9 Increases over the preceding year were made in dividend pay ments. For the year 1950, such payments amounted to $12.8 mil lion, against $11.7 million for 1949. These gains in banking re sources indicated that business activity was in an expansionary phase. When goods are moving briskly from producer to con sumer, the demand for bank loans increases to facilitate the grow ing volume of exchanges. On a rising price level, businessmen purchase for inventory with confidence and enlarge and improve their plants. Consumers are stimulated to practice anticipatory buying and to save at a decreasing rate. All of these factors were present during the year, but they gained in force following the outbreak of the Korean War at midyear. During the first half of the year, only a moderate expansion of business activity took place. This expansion was evidenced by almost uninterrupted month-to-month gains in industrial produc tion, in generally rising employment after allowing for seasonal changes, and in rising income. The distribution of National Serv ice Life Insurance refunds, largely in the first quarter, provided a strong stimulus to business and served in large measure to avoid a decline such as had appeared in the early part of each of the other postwar years. With the decision by the United States Government to repel the North Korean forces that crossed into South Korean territory on June 25, 1950, the expansionary factors that were already in evi dence in the economy were given added strength. There is no par ticular mystery about what took place. An avalanche of consumer and business spending that brought sales to abnormal levels had been released. Fearing that the Korean conflict marked the begin ning of another major war, consumers went on a buying spree 10 that embraced houses, automobiles, tires, electric appliances, and many other items. Panic buying occurred even for articles of wear ing apparel and food. Business investment also expanded sharply. Another buying wave was set in motion when the Chinese Communist armies swept into North Korea in late November. In spite of all-time highs in the output of automobiles, electric appliances, and textiles, consumer demand remained unsatiated. In response to this sustained demand, business planned an even greater investment in additional productive capacity for 1951 than had been committed in 1950. Price inflation following the outbreak of the Korean War had assumed major proportions as the year ended. The index of 28 basic commodities was 50 percent higher than it was in March, wholesale prices were 16 percent higher, and consumer prices, 6 percent higher. The upward pressure on prices was strongly supported by an expansion of credit. Consumer instalment credit increased $493 million in July, $409 million in August, and $322 million in Sep tember. Following the imposition of consumer credit restrictions in late September, these extraordinary gains were checked, and in November consumer instalment credit dropped by $74 million to an estimated total of $13.3 billion. As testimony to the effective ness of the credit controls, this decline was the first November decrease experienced since 1943. But in the meantime bank-credit expansion had gone on un checked. At the end of the year, loans at all commercial banks stood at an estimated $52.7 billion, a gain of $10 billion for the 12 months. Most of this gain, $8 billion, came in the second half of the year. Obviously, if total bank loans had in some way been prevented from growing beyond the midyear level, the country would have been spared a large part of the ensuing inflation. The most striking feature in this inflationary situation was that it came about without additional Federal spending and deficit financing. Treasury budget expenditures for the second half of 1950 were $20 billion against $22 billion for the like period of 11 1949, and the budgetary deficit was $1 billion against $4 billion. The gross public debt at the end of the year was $256.7 billion against $257.2 billion a year earlier. Here then is the dominant note for 1951: at a time when personal-consumption and business-investment expenditures are at record levels, government spending for defense is to be stepped up sharply. A potent expansionary lift to an already overexpanded economy is thus indicated. At the end of 1950, the country was producing at near-capacity rates. The index of industrial production in December was at 216 percent of the prewar average compared with 195 percent reached at the top of the 1948 expansion. It is obvious, therefore, that increased defense production in 1951 must be at the expense of production for personal and business needs, insofar as total out put cannot be enlarged. The responsibility of the banking system in the new national defense program that will get under way in 1951 is thus partic ularly grave. The commercial banks are endowed with the extra ordinary power of being able to expand or contract the money supply. Through the fractional reserve mechanism, the banks can lend more money than they actually have on hand, and, when they make loans, additional purchasing power is made available to the borrower. Additional Federal spending, as it becomes translated into additional consumer purchasing power, will increase borrowing capacity and will at the same time result in the quickening of production and consumption. Under these circumstances, de mands for business and consumer loans will continue to expand. The banks will be in a position to sift these demands for the pur pose of channeling bank credit into the defense effort and away from nondefense purposes. Such channeling will remain the para mount responsibility of bankers so long as the defense effort lasts. During 1951, the banks in the District will operate in an eco nomic setting whose broad outlines will be determined by the expanding program of national defense. Implicit in the program 12 is a high level of business activity, accompanied by severe dis turbances and dislocations not present in the preceding postwar years. Some initial dislocation will be involved in the conversion of production facilities to defense needs. In many key industries, the transition will involve no great disturbances. Steel, nonferrous metals, lumber, textiles, chemicals, rubber products, petroleum products, and tobacco manufactures will simply be diverted, to whatever extent is necessary, from civilian to Government use. Severe dislocations, however, are assuredly in store for the auto mobile, housing, and electric appliance industries, among others. There are certain to be sharp reductions in allotments for a long list of manufactured civilian goods. New home building will be another casualty, with new starts dropping sharply under those of 1950. Severe readjustments are also in store for retail distribution. Business will certainly not be as usual in a growing number of lines as the year unfolds. Every ton of steel diverted to war and defense production will mean that some manufacturer of civilian items will be denied needed materials, and this derangement will reduce the flow of goods to distributive channels and compel many retailers to accept declining sales volumes. Automobile dis tributors and appliance dealers will be major casualties as the flow of new units drops off in response to reduced production sched ules. Home building supply dealers will be another major cas ualty. On the other hand, department, drug, and jewelry stores, and eating, drinking, and amusement establishments, among others, should experience a sharpened demand. The primary retailing problem for 1951 will be one of finding supplies. The survival of many retailers will depend on their success in such quests. Business will also be compelled to cope with a growing number of Government controls. The controls that have already been established are disturbing enough, but they constitute only a be ginning. A part of the control program will consist of sharply higher tax burdens both on individuals and business. 13 The quest for manpower will be intensified, and the manpower pinch is likely to become severe. Nonagricultural employment reached 54,075,000 in December, a record total. Unemployment was estimated at 2,229,000, or 3.6 percent of the total labor force. It is anticipated that stepped-up draft calls will practically elimi nate unemployment, except that of a temporary or transitional nature occasioned by the shifting of production for civilian uses to production on defense orders. More intensified use of available manpower will be necessary. A longer work week in industry, reduction in absenteeism and turnover, avoidance of the hoarding of labor, and direction of workers to essential occupations are phases of such an intensified program. In spite of rigid controls and manpower shortages, business as a whole should experience extraordinary levels of activity in 1951. Except for some inevitable failures in the ranks of non defense and nonessential industries, boom conditions will charac terize the economy. The banks will share in this pattern of busi ness expansion and may anticipate a further growth in resources and deposits. The District had a net gain of two members during the year 1950, compared with a net gain of five in 1949. On December 31, 1950, membership in the Sixth District totaled 353 banks, consisting of 283 national banks and 70 state banks. This is the largest number of member banks the System has had in the Sixth District since 1931 when there was a total of 390. The smallest number of such banks, since the System’s establishment, was in 1934, when there were 309. The increase in membership came through the admission of two state banks and the organization of one national bank. The new member banks are identified as follows: 14 D ate o f A d m issio n N am e o f B an k L o ca tio n D ep o sits D ecem b e r 3 1 , 1950 February 27 Peoples National Bank Miami Shores, of Miami Shores Florida $8,530,050.22 July 17 Monroe County Bank Monroeville, Alabama 2,112,779.55 December 11 Merchants Trust & Savings Bank Kenner, Louisiana 177,854.89 The only loss in membership came through the merger of the Citizens Bank & Trust Company with the Savannah Bank & Trust Company on February 25, under the title of the Savannah Bank & Trust Company of Savannah, Savannah, Georgia. The Childersburg State Bank, Childersburg, Alabama, a state bank member, converted into the First National Bank of Chil dersburg, Childersburg, Alabama, on January 3, 1950. The American National Bank of Nashville, Nashville, Tennes see, changed its name to the First American National Bank of Nashville, Nashville, Tennessee, effective February 1, 1950. The Palmer National Bank and Trust Company of Sarasota, Florida, changed its title to Palmer First National Bank and Trust Company of Sarasota, Sarasota, Florida, on December 1, 1950. During 1950, the number of par banks continued the growth that has been characteristic of the past several years. On December 30, 1950, there were 1,198 banks in the Sixth District, of which 595 were on the Par List. The number included 283 national banks, 70 state bank mem bers, and 242 nonmember state banks. There was a gain of seven 15 in the total number of banks in the District and a gain of nineteen in the number on the Par List. Nonmember state banks added to the Par List in 1950 were the following: F lo r id a Hastings Exchange Bank Bank of Hollywood Madeira Beach Bank Okeechobee County Bank The Punta Gorda State Bank Citizens Bank in Sarasota Hastings Hollywood Madeira Beach Okeechobee Punta Gorda Sarasota G eo r g ia Albany Savings Bank Albany Trust & Banking Company The Bank of Albany Citizens and Southern Bank of Dublin The Citizens & Southern Bank of LaGrange LaGrange Banking Company St. Simons State Bank Citizens and Southern Bank of Thomaston Farmers and Merchants Bank Bank of Waynesboro Albany Albany Albany Dublin LaGrange LaGrange St. Simons Island Thomaston Washington Waynesboro T en n essee Union County Bank Citizens Bank & Trust Company Bank of Commerce Maynardville Wartburg Woodbury Banks that are on the Par List remit at par for checks drawn on them when received from the Federal Reserve Bank. 16 t J i x / / c f f e d e i a / t r e (J / ii r / Since the outbreak of the Korean War on June 25, 1950, the Bank’s operating responsibilities have been considerably ex panded. Pursuant to the Defense Production Act of 1950, ap proved September 8, the Board of Governors of the Federal Reserve System was authorized to act as fiscal agent of the United States in the making of guaranteed loans to finance contractors operating on Government defense contracts and to exercise con sumer credit and real estate construction credit controls. In carry ing out these new responsibilities, the Board reinstituted its Regulations W and V, referring to consumer credit controls and guaranteed defense loans, respectively, and issued an entirely new regulation, Regulation X , to establish restrictions on real estate construction credit. The Board, in turn, called upon the twelve Federal Reserve Banks to set up the necessary operating departments to administer these regulations. In response to the Board’s directives, the Bank made appro priate operating arrangements. Two additional operating depart- 17 ments were established to administer the consumer credit and real estate construction credit controls. Provision was also made to handle the V-Loan Program within the existing Discount Department. A review of the operations involved in these addi tional responsibilities, as well as an account of the Bank’s regular activities, is presented in the following sections. duction Act of 1950 and the President’s Executive Order No. 10,161 of September 9, 1950, is substantially the same as that in effect during the Second World War. The twelve Federal Reserve Banks are designated in the Order as fiscal agents of the United States. As such, they are charged with facilitating the guarantee by Government depart ments of loans made by banks and other lending institutions to individuals and private corporations for the purpose of financing contracts and other operations related to the national defense program. The departments authorized to extend such guarantees are the Army, the Navy, the Air Force, the Commerce, Interior, and Agriculture Departments, and the General Services Admin istration. Upon consultation with the guaranteeing agencies, the Board of Governors revised its Regulation V, effective September 27, 1950, to establish the forms and procedures to be observed in the operation of the program. Except for minor changes, both the forms and procedures prescribed are identical with those used in the wartime program. A guaranteed loan may not bear an interest rate in excess of 5 percent. Such a loan originates with the holder of a defense contract. His initial step is to apply for the loan at his local bank or another financial institution. If approved by the local financing 18 institution, an application for a guarantee of the loan by the ap propriate agency is then filed with a Reserve Bank or Branch. The Bank’s share in the program is essentially that of agent or facilitator. It makes a credit investigation of the contractor and endeavors to provide maximum protection to the guaranteeing agency, but with due regard to the urgency of placing contracts for the defense effort. Following the issuance of Regulation V, the Bank handled a large number of inquiries from banks and contractors concerning the V-Loan program and a considerable number of applications and other forms were distributed. Because of the necessary delays in awarding defense production contracts, the volume of applica tions filed with the Bank for guarantee was relatively small at the end of the year. From the time the regulation was first issued, September 27, 1950, to the end of the year, the Bank handled nine loan applications, aggregating $3,299,927. Of these appli cations, two had been approved, aggregating $900,000, and the remainder were still under consideration, but no application had been declined or denied. The new Regulation W, the Board of Governors’ consumer credit control measure, became effective on September 18, 1950. It applies to extensions of credit granted in connection with or arising from instalment sales of listed articles and instalment loans. It fixes minimum down pay ments and maximum loan values and prescribes terms of repay ment and maximum maturities. The listed articles are divided into four groups, namely, automobiles, household appliances, furni ture, and residential repairs, alterations, or improvements. Because of unabated upward pressures on prices, the Board of Governors issued an amendment to the regulation, effective Octo 19 ber 16, 1950. The amendment increased the down payments on appliances from 15 percent to 25 percent and on furniture from 10 percent to 15 percent. It also reduced the maximum maturity on automobiles, appliances, and furniture credits to fifteen months, but left the maximum maturity on home-improvement credits unchanged at thirty months. All businesses subject to the regulation are required to file regis tration statements with the Federal Reserve Bank or Branch in the District in which their main office is located. In the Sixth Federal Reserve District, registration certificates had been issued at the close of the year to 11,500 businesses that had filed state ments of registration. In the meantime the department had estab lished an active enforcement program and field compliance checks had been made of more than 10 percent of the registrants. V ie r/fY Regulation X of the Board of Governors establishes restric tions on the granting of residen tial real estate credits. The regulation became effective October 12, 1950, and in general was applicable to credit extensions in connection with one and two family residences started since Au gust 3, 1950, and to major improvements on residences, both old and new, where the cost exceeds $2,500. The regulation makes some provision for exempt credits in hardship cases, disaster areas, and in cases where commitments for credit were outstand ing as of October 12. Effective November 14, the regulation was amended to provide that its prohibitions shall not apply to any real estate construction credit extended prior to May 1, 1951, with respect to new construction begun prior to October 12, 1950. Under the regulation, individuals and firms engaged in the business of extending real estate credit, either as principal or agent, are subject to its provisions and are designated as “Regis 20 trants.” The registrants are principally banks, savings and loan associations, insurance companies, mortgage loan companies, and mortgage loan brokers. Real estate credit departments have been set up at the head office and at the branches for administering Regulation X. Inves tigators have been appointed who will operate out of the respec tive offices, making field investigations to check for compliance with the terms of the regulation. Such investigations will even tually be made of all registrants in the District. c(? o i f w i a { i € n Under a continuing agreement entered into with the Commod ity Credit Corporation, the Bank and its Branches served as fiscal agent and custodian for the Commodity Credit Corporation during 1950. As fiscal agent, the Bank receives and disburses funds for the Production and Marketing Administration’s New Orleans Cotton Office, and the Atlanta Area Fiscal Office, and the G FA (Georgia-Florida-Alabama) Peanut Association at Camilla, Georgia. As custodian for the Corporation, the Bank holds in its vault and services Form A and Form G cotton-loan notes and related collateral comprised of warehouse receipts. The 1949-50 cotton-loan program of the Corporation was completed early in the fall. Of the 394,435 bales of the 1949 crop placed in the Government loan, 380,365 bales were re deemed by note repayments during 1950. These transactions related only to cotton stored at warehouses in Alabama, Georgia. South Carolina, North Carolina, Virginia, and Florida. The rest of the cotton-producing states are served by other Federal Reserve Banks or Branches, as well as by the PMA Commodity Office at New Orleans. The Bank prepared and forwarded to member and nonmember collecting banks a total of 29,597 collection letters, 21 containing cotton producers’ notes, called for repayment, amount ing to $56,575,380.29. Because of the current high market price, only 1,534 bales of the 1950 crop, grown in the states served by this Bank, were placed in the Government loan by the end of the year. Most of the bales pledged were of the long-staple variety. All restrictive acreage allotments for the 1951 cotton crop have been removed, and, in an effort to replenish the country’s short stockpile, pro ducers have been urged to grow 16 million bales in 1951. In addition to cotton-loan transactions, the department re ceived and disbursed funds under the PMA general commodities programs. During 1950, the department paid 10,713 sight drafts (PMA-277), totaling $7,950,423.03. These drafts were drawn by authorized representatives of the PMA in connection with the Irish potato, sweet potato, corn, wheat, barley, oats, soybean, cottonseed and farm-storage facilities programs, and were han dled in substantially the same manner as transit cash items. Peanuts were the chief Government price-support commodity handled by this Bank during the year. As fiscal agent of the Cor poration, the Bank received deposits and made disbursements under the 1950 peanut loan and purchase programs from the GFA Peanut Association at Camilla, Georgia, and for five com mercial banks which had entered into fiscal agency or lending agency agreements with the Corporation. Under these programs, the department disbursed in excess of $43 million. Effective June 30, 1950, the function of acting as Custodian for the Reconstruction Finance Corporation was discontinued at the Federal Reserve Bank of Atlanta. This service was discontinued by mutual agreement and at the request of the Corporation. The notes, mortgages, securi 22 ties, and supporting documents formerly held by this Bank as custodian have been delivered to the Atlanta Loan Agency of the R.F.C. or other offices, pursuant to instructions. The Corporation continues to clear checks through the Fed eral Reserve Bank of Atlanta, and the proceeds of such checks are credited to the account of the Treasurer of the United States in the same manner that deposits are accepted for other govern mental agencies. It also continues to use the private wire system of the Federal Reserve Banks. A number of the Corporation’s files are still held by this office, pending receipt of an agreement, in satisfactory form, releasing the Federal Reserve Bank from liability in connection with such files. an r/ 'S te lft/fo n b Bank and public relations ac tivities, as in previous years, were directed primarily to pro moting efficiency in the Bank’s service functions and to a better understanding of them. Operating as it does within statutory limitations and prescribed responsibilities, there is no occasion for the Bank to undertake a program of new business solicitation and service advertising as is necessary with most business enter prises. The bank-visitation program occupies the most important place in the bank and public relations activities. The number of such visits totaled 1,118 for the year, of which 546 were to member banks and 572 to nonmember banks. Such visitations are more than simply courtesy calls; an effort is made to check on the efficiency, promptness, and completeness of the Federal Reserve Bank’s services to the banking community. In order to maintain close touch with banking developments of the District, the Bank takes an active interest in all meetings where bank problems are discussed. Representatives of the Bank 23 and Branches attended all the principal banker gatherings in the District, totaling 38 for the year, including the annual conven tions of the State Bankers Associations and the American Bank ers Association. Representatives were also present at 211 other meetings where banking matters pertaining to the economy of the District were discussed. Fifty-five speeches and informal talks on various subjects were made by members of the Bank’s staff during the year. In its public relations, the Bank served as host for a number of important meetings. One such meeting was held for the pur pose of promoting the sale of United States Savings Bonds. An other was the joint conference of supervisors and trust men from the Sixth Federal Reserve District. There was a conference of reserve city banks, held for the purpose of discussing mutual problems, and several meetings were held for the discussion of problems involved in the administration of Regulations X and W. As a part of this program, members of the staff conducted a large number of tours, at the head office and branches, of visiting groups who were interested in seeing the various functional serv ices of the institution in actual operation. The Bank continued its operations survey service, which was established in 1949. Cost analyses and surveys were made for 19 member banks and one nonmember bank during the year. This service is available only upon application and is designed to supplement, and not to take the place of, any similar service that may be available in correspondent banking relationships. r f f if in t £ x a m h i a t r e n At least one examination was made of all state member banks in the District, including their trust departments. Although such examinations are conducted primarily in the public interest, care is taken to ensure that the 24 institutions examined shall also be benefited. The facts developed by examinations are used as a basis upon which constructive ac tion may be taken by the supervisory authorities and the manage ment of the banks. Reports are prepared and presented in such a manner that they will be helpful to the directors and executive management of the banks examined, as well as to the Federal Reserve Bank and the Board of Governors in the discharge of their responsibilities. During 1950, the demand for new banks and additional branches of established institutions continued on about the same basis as in the preceding year. In each case where an application for membership in the Federal Reserve System was received from a state bank in process of organization, or when a request for a recommendation was received from the Comptroller of the Currency in connection with an application to organize a na tional bank, a representative of the Bank made a field investiga tion to develop information on which the Bank might base its decision on the matter. These investigations were made with the close co-operation of the other supervisory agencies. In passing on an application, care is always exercised not to create an over banked condition in any locality and to see that the proposed bank has adequate capital, capable management, and a favorable earnings prospect. V /e c A ' a n d V v /Z e r/ffm Regulation J of the Board of Governors of the Federal Re serve System and operating cir culars and time schedules of this Bank prescribe the terms and conditions upon which cash items will be received and handled for collection. Accepted as cash items are checks drawn on banks or banking institutions collectible at par, Government checks, and such other items as are specifically approved. 25 Scheduled for adoption on January 12, 1951, was a two-day deferred credit schedule. The new schedule provides for a maxi mum period of deferment of credit of two business days from date of receipt for cash items received from member banks for collection and two business days from date of dispatch for cash items routed direct by member banks to other Federal Reserve Banks and Branches. Also scheduled for adoption on January 12, 1951, was the absorption by the Bank of the cost of telegrams transmitted over the Federal Reserve leased wires relative to the nonpayment, tracing, or other pertinent information on the han dling of cash items. In order to promote earlier presentment of checks and other cash items, the Bank continued to encourage the use of the uni form check routing symbol. A survey made toward the end of the year revealed that 78 percent of all par checks in circulation in the Sixth District bore the uniform routing symbol in the proper Listing Checks on Proof Machines 26 location. A similar survey made in 1949, in comparison, indi cated that 74 percent of such checks bore the symbol. Check clearing and collection activity of the Bank reached another all-time high. The number of checks handled by the Bank at its head office and branches during 1950 was 142,691,000. The value of the checks handled was $59 billion. V tn U t ic t j f u t r / C(?c h i Dollar volume of currency and coin receipts and payments in creased substantially over 1949. Receipts from banks amounted to $1,520 million, an increase of $63.9 million. Payments to banks amounted to $1,264 million, an increase of $106 million. During the year, 271.9 million pieces Training in Sorting and Counting of Currency 27 of currency and 312.4 million pieces of coin were received and counted, representing increases in the number of pieces handled over the previous year of 10.8 million in currency and 15.6 million in coin. The head office and branches received from the Federal Re serve Agent during 1950 a total of $435 million in Federal Re serve notes, an increase of $27 million over the previous year, and the largest amount received since 1945. Net circulation of the Bank’s Federal Reserve notes outstanding at the close of 1950 was $1,276 million. This amount outstanding represented a de cline of $15 million in comparison with the close of 1949, but it is the smallest decrease that has occurred since the end of 1945, when our circulation was at its highest peak. From $1,291 million at the end of 1949, net circulation declined by August 31 to about $1,242 million, and increased by December 31 to $1,276 million. In October of this year, arrangements were made with an armored car service for transporting Army payroll funds each month to Fort Benning, near Columbus, Georgia, where such funds are delivered to representatives of the three participating banks. This arrangement is a convenience to the Columbus banks, and the cost of this service is approximately a third less than registered mail costs. During 1950, the Bank made 259 advances, accommodating 39 member banks to the extent of $430 million. Of that amount $426 million was secured by United States Government obligations, $4 million by eligible paper, and $377,000 by collateral not eligible for discount or purchase. The high point of member bank borrowings was reached on November 27, 1950, when $25 million was outstanding. At the 28 end of the year, only one member bank was indebted to this Bank, in the amount of $25,000, compared with one at the end of 1949, in the amount of $30,000. As in 1949, no advances were made during the year to nonmember banks. In most instances, ad vances made during the year were for short periods and were for the purpose of covering temporary reserve deficiencies of the member banks. There were increases of 27.6 percent and 62.1 percent in the number and amount, respectively, of notes discounted during 1950, over the preceding year. The discount rate on member bank borrowings under Sections 13 and 13a of the Federal Re serve Act was increased from 1V2 percent to 13A percent by this Bank on August 24, 1950. a t i f l SPecu/u/teb Because of the tremendous in crease in the Federal debt as the result of war financing, the issuance, redemption, and refunding of the various obligations has become one of the largest financial activities in the country. The Federal Reserve Bank of Atlanta, through its Fiscal Agency and Securities Department, plays a very important part in this service function. No cash offering of unrestricted securities, except weekly bills, was made by the Treasury Department during the year. Maturing securities included eight issues of certificates of indebtedness, one issue of Treasury notes, and one issue of Treasury bonds. In addi tion, the Treasury exercised the call privilege on three issues of bonds. On each of these issues, a refunding privilege was offered, which involved nine note issues and one issue of certificates of indebtedness. In the Sixth District, there were 5,703 subscrip tions received in these operations, totaling over $742 million. Beginning January 1, 1950, facilities for issuing Treasury bills 29 were in operation at each of the branch offices as well as at the head office. During the year, 2,457 tenders were received, from which there was allotted over $543 million. Issues of Treasury savings notes amounted to over $47 million, and redemptions were in excess of $48 million. The department also handled a considerable volume of issues, reissues, and redemptions of United States Savings Bonds. Issues of savings bonds of all series amounted to 1,921,307 pieces, with a maturity value of $292 million. Compared with 1949, there was an approximate increase of 3 percent in maturity value, and a 10 percent decrease in the number of pieces. Approximately 60 percent of the amount issued, or $174 million, was by issuing agents. At the end of the year, there were 1,326 such agents. Savings bonds can be reissued only by the Federal Reserve Banks or the Treasury Department. A reissue involves an ex change of a new bond for one that is already outstanding. During Punching Cards in Savings Bonds Redemption 30 the year, the head office and branches processed 12,383 such transactions, involving 186,216 pieces and a maturity value of $40 million. Redemptions of savings bonds were in particularly large vol ume. Series A-E redemptions amounted to $329 million and num bered 4,187,828 pieces. Compared with 1949, there was a slight decrease in the number of pieces redeemed, but there was an increase of 33 percent in face value. At the end of the year, there were 1,317 paying agents. Redemptions of Series F and G sav ings bonds amounted to 55,527 pieces, with a face value of $56 million. As a service to the public, the Federal Reserve Banks are au thorized to hold savings bonds in custody for individuals. During 1950, this Bank handled the deposit or withdrawal of 69,749 pieces, having a maturity value of $10 million. On December 31, 1950, the Bank held 244,000 pieces with a maturity value of Sorting Government Card Checks 31 $29 million, a slight increase in maturity value above the hold ings at the end of 1949. Other volume operations included the processing of coupons; the handling of exchanges, transfers, and redemptions of Treas ury issues; serving as custodian of securities deposited by member banks and governmental agencies; and performing open-market operations for member banks. Although diminishing in volume because certain short-term securities are now offered without coupons, the processing of coupons, forwarded for payment or clipped directly from United States obligations held in custody, requires much time and attention to detail. Such coupons paid during the year amounted to approximately $27 million and numbered 481,000 pieces. In its capacity as fiscal agent of the Treasury, the Bank processed for exchange or transfer Treasury issues in the number of 56,583 and handled the redemption of 80,201 such pieces. In its capacity as custodian, the Bank held at the end of the year $2,925 million in face value of securities for the account of member banks and governmental agencies. The Bank's open-market operations were confined to making pur chases, sales, and clearings of United States Government securi ties in behalf of member banks. Such transactions during the year numbered 7,356, representing $1,823 million in maturity value. The change announced by the Treasury Department effective January 1, 1950, for the reporting and depositing of Federal taxes was put into operation. Receipts for the employers who deposit taxes are in the form of a punch card that is processed on tabulating machines. The tabulating operation is done in the Atlanta office only. Collection of taxes for the calendar year 1950 was in excess of $319 million. Banks which are qualified under Treasury Department Circulars 92 and 848 may accept tax pay ments from employers and make payment to the Bank by credit in the Treasury Tax and Loan Account. In 1950, depositary banks handled 197,581 receipts received from employers. The procedure is continuously being refined to effect a maximum of ef ficiency for the employer, the Treasury Department, and the Bank. 32 On December 31, 1950, there were 848 banks qualified as Treasury Tax and Loan depositaries in the amount of $1,437 million and holding balances in the amount of $92 million. The number of entries in the Treasury Tax and Loan Accounts was 122,076 in 1950, an increase of 84 percent over those of 1949. The increase was principally because of the acceptance by depos itaries of deposits of Federal taxes. Personnel procedures and poli cies were changed during the year to meet conditions brought about by the expansion of the armed forces and the enactment of new Federal legislation. Between the time the war broke out in Korea and the end of the year, twenty-one employees left the Bank and branches to enter military service. Accordingly, the Bank revived its wartime policy with respect to the rights of em ployees entering such service. Under this policy, employees, other than those on a temporary employment basis, are accorded special treatment. Whether they enter upon duty with the armed services under the Selective Service Act of 1949 or voluntarily enlist, they are allowed re-employment rights following the end of their military service. Moreover, upon re-employment they may be restored to active membership in the Bank’s retirement system, with no loss of service for the period of military leave. In addition, they will be reimbursed for premiums paid on National Service Life Insurance policies not in excess of $5,000 in coverage. Finally, if they have had at least one year of employment with the Bank, they are paid one month’s unearned salary upon enter ing military service. In response to the national defense effort, there was a general tightening of the employment situation, a tightening particularly noticeable as the year drew to a close. The rate of turnover in 33 creased in the second half of the year, making necessary an active employee-recruiting effort. Amendment on August 28, 1950, of the Social Security Act extended the benefits of the social security program to employees of the Federal Reserve Banks, beginning January 1, 1951. Ac cordingly, effective November 30, 1950, changes were made in the retirement system of the Federal Reserve Banks to integrate the retirement costs and benefits with those of the new coverage. The enactment of new Federal minimum wage legislation, effective January 25, 1950, caused minor upward salary adjust ments in the unskilled classification group. All salary grades were later adjusted upward on the basis of the regular annual salary survey made by the Personnel Department in September 1950. The Bank continued active encouragement of study at ad vanced banking schools by its officers and employees. Twelve staff members, six of whom received their graduate diplomas, were sent to the summer session of the Graduate School of Bank ing at Rutgers University. Two other staff members were sent to the new Banking School of the South at Louisiana State Uni versity which held its first session for graduate banking students in June. The new school is scheduled to graduate its first students at the close of the 1952 summer session. For the past three years this Bank has had an active pro gram that includes agricultural relations. This program was begun in recognition of the impor tant role played by farming in the economy of the Sixth Federal Reserve District and of the desirability of assisting member banks in helping farmers to make needed changes in their farming meth ods. Activating the program is one of the many functions per formed by the Research Department. 34 The agricultural relations program is conducted in close co operation with the agricultural committees of the State Bankers Associations. One phase of such co-operation is represented by banker-farmer meetings which are sponsored by the State Bank ers Associations, the State Agricultural Colleges, and the Bank. During the year, three such meetings were held in Florida, two in Alabama, three in Mississippi, five in Tennessee, and three in Louisiana. Most of these meetings were held on farms where the results of improved pastures, proper forestry practices, and sound bank credit could be demonstrated. The Bank also assisted in planning and conducting a number of farm credit schools, in co-operation with the Georgia and Florida Bankers Associations. Much of the department’s work is for use within the Bank and within the System. In addition to carrying on this work and pub lishing the Bank’s Monthly Review and the Bankers Farm Bul letin, the Department met numerous requests for economic data by commercial banks, colleges, trade organizations, Federal and state agencies, civic clubs, and individuals. fo/eclt'tm ty atw f Frank H. Neely, Chairman of the Board of Rich’s, Inc., At lanta, Georgia, was appointed by the Board of Governors of the Federal Reserve System a Class C director of the Federal Reserve Bank of Atlanta for an addi tional term of three years, beginning January 1, 1951. Mr. Neely was redesignated by the Board of Governors as Federal Reserve Agent and Chairman of the Board of Directors of the Federal Reserve Bank of Atlanta for the year 1951. Rufus C. Harris, President of The Tulane University of Louisiana, New Orleans, Louisiana, was reappointed by the Board of Governors as Deputy Chairman of the Board of Directors for the year 1951. At elections held in October, Roland L. Adams, President, ^ 35 Bank of York, York, Alabama, was chosen by member banks in Group 3 as a Class A director, and Alfred Bird Freeman, Chairman of the Board, Louisiana Coca-Cola Bottling Company, Ltd., New Orleans, Louisiana, was re-elected by member banks in Group 1 as a Class B Director. Each of these directors was elected for a term of three years, beginning January 1, 1951. Appointed by the Board of Governors of the Federal Reserve System, each for a term of three years beginning January 1, 1951, were the following branch directors: Birmingham Branch, John M. Gallalee, President, University of Alabama, Tuscaloosa, Ala bama; Jacksonville Branch, Marshall F. Howell, Vice President, Bond-Howell Lumber Company, Jacksonville, Florida; Nashville Branch, C. E. Brehm, President, University of Tennessee, Knox ville, Tennessee; New Orleans Branch, H. G. Chalkley, Jr., Pres ident, Sweet Lake Land & Oil Company, Inc., Lake Charles, Louisiana. The Board of Directors of the Federal Reserve Bank of Atlanta also appointed four branch directors. These appointments, each fora three-year term, beginning January 1, 1951, were as follows: Birmingham Branch, T. J. Cottingham, President, State National Bank of Decatur, Decatur, Alabama; Jacksonville Branch, Clem ent B. Chinn, President, The First National Bank of Miami, Miami, Florida; Nashville Branch, G. C. Graves, President, The First National Bank of Athens, Athens, Tennessee; New Orleans Branch, William C. Carter, President, Gulf National Bank of Gulfport, Gulfport, Mississippi. As a member of the Federal Advisory Council, representing the Sixth Federal Reserve District, for a term of one year begin ning January 1, 1951, the Board of Directors of the Federal Re serve Bank of Atlanta appointed Paul M. Davis, Chairman of the Board of Directors of the First American National Bank of Nash ville, Nashville, Tennessee. To serve as members of the Industrial Advisory Committee for the Sixth District, the Board of Directors of the Federal Reserve Bank of Atlanta re-appointed for the year 1951, John E. Sanford, 36 President, Armour Fertilizer Works, Atlanta, Georgia; George Winship, President, Fulton Supply Company, Atlanta, Georgia; W. W. French, Chairman of the Board, Moore-Handley Hard ware Company, Inc., Birmingham, Alabama; Luther Randall, President, Randall Brothers, Inc., Atlanta, Georgia; and I. C. Milner, President, Gate City Mills Company, East Point, Geor gia. Mr. Sanford is Chairman of the committee, and Mr. Milner is Deputy Chairman. Three changes were made in the Bank’s official staff during the year. R. DeWitt Adams, Acting General Auditor, was ap pointed General Auditor. L. B. Raisty, Senior Economist, was appointed Assistant Vice President. F. C. Vasterling, Assistant Cashier, New Orleans Branch, retired. yixtA ityetlelaltw t ve (/WifW C DIRECTORS in i OFFICERS The Bank has nine directors, divided into three classes. Class A Directors are elected by the stockholding banks and in practice are officers of member banks. Class B Directors are also elected by member banks but may not be operating bankers. The Board of Governors of the Federal Reserve System appoints the Class C Directors, one of whom is designated as Chairman and another as Deputy Chairman. No Class C Director may be an officer, director, employee, or stockholder of any bank. For the purpose of electing Class A and Class B Directors, the member banks are divided into three groups, representing large banks, middle-sized banks, and small banks. Each group elects one Class A and one Class B Director. Each of the four branches has a Board of Directors of seven members. Four of these members are appointed by the parent Board and in practice are operating officers of member banks and serve only one term. The other three directors are appointed from nonbanking fields by the Board of Governors. 39 >J \e>et re ( c . r /f/a n /a IIIIIEITIIIIS ^ Elected by M em ber Banks Term Expires December 31 ^ ^ ^ Group R. C lyde W i l l ia m s 1951 ........................................................................................ 1 President. The First National Bank of Atlanta Atlanta. Georgia L e s l ie R . D r iv e r 1952 ............................................................................................... 2 President. The First National Bank in Bristol Bristol, Tennessee R o la n d L. 1953 A d a m s ............................................................................................... 3 President, Bank of York York, Alabama C la ss B Elected by M em ber B anks 1951 J. A. M c C r a r y ......................................................................................... 2 Vice President and Treasurer, J. B. McCrary Company, Inc. Decatur, Georgia D onald C o m e r 1952 ...................................................................................................... 3 Chairman of the Board, Avondale Mills Birmingham, Alabama A l f r e d B ir d F r e e m a n 1953 .................................................................................. 1 Chairman of the Board, Louisiana Coca-Cola Bottling Company, Ltd. New Orleans, Louisiana C l a ss C Appointed by the B oard o f Governors o f the F ederal Reserve System F r a n k H . N e e l y , C h a irm a n .................................................................. . 1953 . 1952 . 1951 Chairman of the Board, Rich’s, Inc. Atlanta, Georgia R u f u s C. H a r r i s , Deputy C h a ir m a n ................................................ President, The Tulane University of Louisiana New Orleans, Louisiana P a u l E. R e i n h o l d ................................................................................................ President and Director, Foremost Dairies, Inc. Jacksonville, Florida 40 I "N W . S . M c L a r i n , J r . , President L . M . C l a r k , F irst Vice President V. K . B o w m a n Vice President S. P. SC H U E SSL E R Vice President E. L . R a uber J. E . D H a ro ld T. P a tte r s o n R. D e W itt A d am s en m ark Vice President D irector o f Research G eneral Auditor G eneral Counsel J. H . B o w d e n A ssistant Vice President I. H. M a r t i n A ssistant Vice President C. R. C am p R oy E . M A ssistant Vice President il l in g A ssistant Vice President E . C . R a in e y F . H . M a r t in A ssistant Vice President A ssistant Vice President L . B . R a i s t y , A ssistant Vice President P a u l M . D a v is Chairman of the Board First American National Bank of Nashville Nashville, Tennessee f Member Federal ) C Idvisorv Council Industrial Idvisiirvl'oniniillec J o h n E. S a n f o r d , Chairman President Armour Fertilizer Works Atlanta, Georgia W. W. F re n c h Chairman of the Board Moore-Handley Hardware Co., Inc. Birmingham, Alabama I. C. M i l n e r President Gate City Mills Company East Point, Georgia L u th e r R a n d a ll President Randall Brothers, Inc. Atlanta, Georgia G e o r g e W in s h ip President Fulton Supply Company Atlanta, Georgia 41 of the Federal Reserve System Term Expires December 31 T h a d H o l t , C hairm an ............................................................................................... 1 9 5 2 President and Treasurer, Voice of Alabama, Inc. (Radio Station WAPI) Birmingham, Alabama W m . H ow ard S m it h ............................................................................................................. 1951 President, McQueen-Smith Farms Prattville, Alabama J o h n M. G a l l a l e e .................................................................................................................... 1953 President, University of Alabama Tuscaloosa, Alabama Appointed by Board o f D irectors, Federal Reserve Bank o f A tlanta D. C . W a d s w o r t h .................................................................................................................... 1951 President, The American National Bank of Gadsden Gadsden, Alabama J. B . B a r n e t t ........................................................................................................................... 1952 President, The First National Bank of Monroeville Monroeville, Alabama A . M . S h o o k .................................................................................. . 1952 . 1953 President, Security-Commercial Bank Birmingham, Alabama I . J. C o t t i n g h a m ...................................................... President. State National Bank of Decatur Decatur, Alabama limi'KRS \ P. L . T . B e a v e r s , Vice President an d M anager H . C . F razer H. J. U Assistant M anager 42 rquhart C ashier L . W . S tarr Assistant Cashier A ppointed by the Board of Governors of the Federal Reserve System Term Expires December 31 J. H i l l i s M i l l e r , C h a irm a n ................................................................................... 1951 President, University of Florida Gainesville, Florida H ow ard P h il l ip s ........................................................................................ 1952 Vice President and General Manager, Dr. P. Phillips Company Orlando, Florida M a r sh a ll F . H o w e l l .............................................................................................................1 9 5 3 Vice President, Bond-Howell Lumber Company Jacksonville, Florida A ppointed by B oard of D irectors, F ederal Reserve Bank of A tlanta J. D . C a m p ................................................................................................................. 1951 President, Broward National Bank of Fort Lauderdale Fort Lauderdale, Florida J. E . B r y a n ................................................................................................................. 1952 President, Union Trust Company St. Petersburg, Florida N . R a y C a r r o l l ............................................................ President, The First National Bank of Kissimmee Kissimmee, Florida .1952 C l e m e n t B . C h i n n ............................................................. 1953 President, The First National Bank of Miami Miami. Florida T. A . L a n f o r d , Vice President and M anager T. C . C l a r k C ashier J. W y ly S n y d e r C . M aso n F o r d Assistant Cashier Assistant Cashier 43 - I ff .*/r e /fa DIRECTORS \ A ppointed by the B oard o f Governors o f the Federal Reserve System Term Expires December 31 H. C . M e a c h a m , C h a ir m a n ................................................................................... 1951 Agriculture and Livestock Franklin, Tennessee W . B r a t t e n E v a n s ....................................................................................................................1 9 5 2 President, Tennessee Enamel Manufacturing Company Nashville, Tennessee. C. E. Br e h m ........................................................................................ . 19 5 3 President, University of Tennessee Knoxville, Tennessee Appointed by Board o f Directors, Federal Reserve Bank of A tlanta P a r k e s A r m i s t e a d ..................................................................................................... 1951 President, First American National Bank of Nashville Nashville, Tennessee T . L . C a t h e y ......................................... . 1952 . 1952 . 1953 President. Peoples and Union Bank Lewisburg, Tennessee T h o m a s D. B r a b s o n ...................................................... President, The First National Bank of Greeneville Greeneville, Tennessee G . C . G r a v e s ............................................................ President, The First National Bank of Athens Athens. Tennessee OFFICERS X J o e l B . F o r t , J r . , Vice President and M anager E. R . H a r r i s o n Cashier 44 R o b e r t E. M o o d y , J r . A ssistant Cashier lAet-w 0 i/e a tU Appointed by the B oard o f Governors / ( ta tic f in iin T iiitv \ W ill) \ o f the Federal Reserve System Term Expires December 31 E . O. B a t s o n , C h a ir m a n ......................................................................................... 1952 President, Batson-McGehee Company, Inc. Millard, Mississippi J o h n J . S h a f f e r , J r ................................................................................................... 1951 Agriculture and Farm Machinery Ellendale, Louisiana H. G . C h a l k l e y , J r ................................................................................................... 1953 President, Sweet Lake Land and Oil Company, Inc. Lake Charles, Louisiana Appointed by B oard of D irectors, F ederal Reserve Bank o f Atlanta J a m e s C. B o l t o n ..................................................................................................... 1951 President, Rapides Bank & Trust Company in Alexandria Alexandria, Louisiana P e r c y H . S i t g e s ..................................................................................................... 1952 President, Louisiana Bank & Trust Company New Orleans, Louisiana E l b e r t E . M o o r e ................................................................. .1952 President, Louisiana National Bank of Baton Rouge Baton Rouge, Louisiana W i l l i a m C . C a r t e r ...................................................... .1953 President, Gulf National Bank of Gulfport Gulfport, Mississippi ^ OFFICE I!,S \ E . P . P a r i s , Vice President and M anager M. L. S h a w W. H . S e w e l l A ssistant M anager Cashier L. Y. C h a p m a n A ssistant Cashier 45 (I/m // 'tyef/e'ut/ dfiebetve' f c ? p , FINANCIAL Ml VOLUME REPORTS Reserve Position of Neiber Banks S e m im o n t h l y P e r io d E Required Reserves State ALABAM A nded D Actual Reserves ecem ber 31,1950 Excess Reserves $107,800,000 $120,900,000 $13,100,000 Percent of Actual Reserves to Required Reserves 112.2 FLORIDA 148,500,000 161,700,000 13,200,000 108.9 GEORGIA 151,700,000 159,600,000 7,900,000 105.2 LOUISIANA 135,700,000 153,500,000 17,800,000 113.1 MISSISSIPPI 21,500,000 24,100,000 2,600,000 112.1 TENNESSEE 98,600,000 109,500,000 10,900,000 111.1 $663,800,000 $729,300,000 $65,500,000 109.9 DISTRICT 46 Currency aid Coin Operations Mail Bank and Branches N um ber of P ie c e s R e c e iv e d by and C o unted M onth s Currency Month January . February . March April . . May . . June . . July . . August September October . November December . . . . . . . . . . . . Total . R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e c e ip t s f r o m . fo r 1950 and (In Thousands) 1949, Coin . 1950 22,181 21,465 25,493 21,495 23,980 21,535 20,638 23,518 22,412 22,842 23,292 23,108 1949 24,368 24,025 24,030 23,000 21,688 20,401 19,116 21,555 20,856 20,426 20,379 21,279 1950 30,861 24,641 25,230 21,899 28,351 26,265 24,287 29,265 27,619 24,562 26,289 23,169 1949 24,703 28,478 25,953 24,801 25,067 25,798 21,113 25,945 24,363 23,564 22,966 24,088 . 271,959 261,123 312,438 296,839 . . . . . . . B anks and P a y m en ts to B by M o nth s Receipts anks fo r (In Thousands) 1950 1949, Payments Month January . February March . April May . . June . . July . . August . September October November December 1950 . $ 135,915 120,748 146,378 119,937 124,848 117,774 119,700 126,646 114,736 121,670 126,689 144,905 1949 $ 146,309 123,622 144,890 120,843 110,574 112,620 107,674 114,510 110,038 108,202 115,211 141,529 1950 $ 79,263 103,368 119,626 91,124 96,959 96,093 96,072 105,749 113,437 118,112 112,076 132,160 Total . $1,519,946 $1,456,022 $1,264,039 and 1949 $ 67,946 85,021 108,498 94,459 93,832 90,621 97,142 94,404 98,211 103,466 100,245 124,421 $1,158,266 47 STATEMENT OF CONDITION ASSETS Gold Certificates...................... Redemption Fund for Federal Re serve N o te s............................ Total Gold Certificate Reserves Other C a sh .................................. Total Cash . . . . . . Discounts and Advances . . Industrial L o a n s ....................... U. S. Government Securities— System Account . . . . Total Loans and Securities . Federal Reserve Notes of Other Banks Uncollected Cash Items Bank Premises (Net) Other Assets . . . T otal A sse t s December 31,1950 December 31,1949 $ 890,799,772.39 $ 995,700,383.92 39,540,790.00 $ 930,340,562.39 18,763,112.38 $ 949,103,674.77 25,000.00 6,596.90 39,850,752.57 $1,035,551,136.49 21,131,989.40 $1,056,683,125.89 2,879,500.00 1,110,085,000.00 $ 1,110,116,596.90 1,012,460,000.00 $1,015,339,500.00 20,312,250.00 277,132,397.83 1,720,100.56 6,328,745.61 $2,364,713,765.67 18,865,250.00 211,620,743.98 1,523,303.62 5,500,352.59 $2,309,532,276.08 LIA BILITIES Federal Reserve Notes in Actual $1,276,091,240.00 C irculation ............................ Deposits: Member Bank Reserve Accounts 740,421,957.53 U. S. Treasurer—General Ac 38,559,111.47 count .................................. 37,283,400.00 F o r e ig n .................................. 42,761,729.66 Other D eposits....................... $ 859,026,198.66 Total Deposits . . . . 191,070,072.32 Deferred Availability Cash Items 200,073.95 Other L ia b ilitie s....................... T o ta l L ia b il it ie s . . $2,326,387,584.93 CA PITAL ACCOUNTS Capital Paid In . . . Surplus (Section 7) . . Surplus (Section 13b) Reserves for Contingencies Total Capital Accounts T o tal L $1,290,998,620.00 685,366,469.27 50,492,636.50 31,184,600.00 31,948,301.66 $ 798,992,007.43 182,688,791.71 455,043.24 $2,273,134,462.38 $ 8,239,800.00 21,193,500.54 762,425.68 6,202,087.48 36,397,813.70 ia b il it ie s a n d C a p it a l A 48 $ 8,954,450.00 22,368,597.95 762,425.68 6,240,707.11 38,326,180.74 0 ccounts $2,364,713,765.67 $2,309,532,276.08 EARNINGS AND EXPENSES Current Earnings: Discounts and Advances . . . Industrial L o a n s ............................ Industrial Loan Commitments . . U. S. Government Securities— System A ccount....................................... All O t h e r ....................................... Total Current Earnings . . $ 1950 78,261.81 128.93 $ 0 1949 110,508.60 0 713.55 14,611,876.32 22,222.89 $14,712,489.95 16,734,213.52 34,512.89 $16,879,948.56 Current E x p e n s e s ............................ Current Net Earnings . . . 4,342,755.89 $10,369,734.06 4,093,924.20 $12,786,024.36 Net Addition to Current Net Earnings T o t a l ....................................... 1,942,583.76 $12,312,317.82 1,534,179.68 $14,320,204.04 $ 40,434.18 $ 2,178,867.89 10,575,575.12 $10,616,009.30 10,490,251.54 $12,669,119.43 Net Earnings after Reserves and Pay ment to U.S.Treasury...................... $ 1,696,308.52 $ 1,651,084.61 Other Deductions: Transferred to Reserve for Contin gencies ........................................ Paid to U. S. Treasury (Interest on Outstanding Federal Reserve N o t e s ) ....................................... T o t a l ....................................... Distribution of Net Earnings: Dividends P a i d ............................ Transferred to Surplus (Section 7) Surplus (Section 7 ): Surplus January 1 ....................... Transferred to Surplus— As Above Surplus December 3 1 ...................... $ 521,211.11 1,175,097.41 $ 1,696,308.52 $ $21,193,500.54 1,175,097.41 $22,368,597.95 $20,027,863.59 1.165.636.95 $21,193,500.54 485,447.66 1.165.636.95 $ 1,651,084.61 MEMBER B iM COMPARATIVE STATEMENT [Amounts in thousands of dollars] ASSETS Loans and in v estm en ts......................................... Loans (including o v e rd ra fts)........................ U. S. Government obligations, direct and g u a r a n te e d .......................................... Obligations of States and political subdivisions Other bonds, notes and debentures . Corporate stocks (including Federal Reserve Bank s to c k ).................................... Reserves, cash, and bank b a la n c e s ........................ Bank premises owned and furniture and fixtures . Other real estate o w n e d .......................................... Investments and other assets indirectly represent ing bank premises and other real estate . Customers’ liability on acceptances........................ Other assets................................................................. Total assets . . . . December 30 1950 December 31 1949 $4,753,841 1,999,595 $4,412,170 1,610,669 2,286,834 386,448 70,778 2,371,942 344,351 75,476 10,186 1,811,039 59,406 1,448 9,732 1,622,125 55,405 1,612 1,722 6,947 19,914 $6j654j317 889 8,654 17,236 $6,118,091 $5,105,298 3,544,179 94,136 624,650 781,084 $4,601,939 3,179,581 83,086 598,594 689,979 61,249 1,111,802 6,217,100 50,699 1,109,613 5,711,552 175 8,634 37,773 $6,263,682 30 11,869 31,259 $5,754,710 $ 122,753 182,903 60,893 24,086 $ 390,635 $6,654,317 $ 115,713 164,230 59,249 24,189 $ 363,381 $6,118,091 LIABILITIES Demand d e p o sits..................................................... Individuals, partnerships, and corporations . U. S. G overnm ent.......................................... States and political subdivisions . . . . Banks in U. S. and foreign countries . . . Certified and officers* checks, cash letters of credit and travelers’ checks, etc. . Total d e p o s it s .......................................... Bills payable, rediscounts, and other liabilities for borrowed m o n e y ................................................ Acceptances outstanding . .............................. Other liabilities . . . .............................. Total liabilities . . . . CAPITAL ACCOUNTS . . . C a p it a l................................... S u rp lu s........................ .................................... Undivided p ro fits...................................................... Other capital accounts . . . . . . . Total capital accounts.............................. Total liabilities and capital accounts . 50 Changes in Membership 19-13-19511 1943 1944 1945 1946 1947 1948 1949 1950 M embership, beginning o f year Additions during year: Organization o f National banks .................................... Conversion of State banks to National b an k s*. . . . Adm ission o f State banks . Resumption following s u s p e n s i o n ........................ Total additions . Losses during year: M ergers between N ational banks .................................... Mergers between State banks Suspension or insolvency . . Withdrawal of State ban k s*. Voluntary liquidation . Conversion of member to nonmember b a n k s** . Total losses . . . . Net change during year . . . Membership end of year . N ational b a n k s ........................ State b a n k s .............................. 318 316 317 325 333 340 346 351 0 4 0 0 3 2 0 1 1 3 3 3 4 7 6 5 1 6 2 4 3 5 1 2 0 4 0 10 0 11 0 11 0 10 0 8 0 8 0 4 0 0 0 2 0 0 0 0 8 1 0 0 0 1 2 0 0 0 3 0 1 0 0 1 1 0 0 0 1 1 1 0 0 2 0 0 1 0 1 0 4 6 0 9 0 3 0 3 0 3 0 2 0 3 0 2 -2 + 1 + 8 + 8 + 7 + 6 + 5 + 2 316 260 56 317 266 51 325 268 57 333 274 340 276 64 346 279 67 351 281 353 283 70 59 70 *Includes conversion of State member banks to National banks. * * Includes conversion of National banks to nonmember banks, and absorption of members by nonmembers.