The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
FEDERAL RESERVE BANK January 5, 1954 'Ssltei* To the Member Banks of the '■ '-'.'.-a : ■ ■ ■. '■: '■ ■ ■ , ■ ■ ■ ■ ; Federal Reserve Bank of Boston: Step I am pleased to transmit the 1953 annual report of the Federal Reserve Bank of Boston. This year it high lights the operations of the fiscal agency, wire transfer, and the credit, discount and V-Loans departments. - It also includes a section relating to post-Korean economic developments. On behalf of the directors and officers, I wish to express appreciation for the cooperation received from bankers and from leaders of agriculture, commerce and industry in the First Federal Reserve District. President http://fraser.stlouisfed.org/=T»=Federal Reserve Bank of St. Louis Table o f Contents Page F r o n t i s p i e c e , E a s t C o r i n t h , V e r m o n t ................................................... 4 T he D efense P rogram an d the N e w E ngland E conomy . 5 T he F e d e r a l R e s e r v e S y s t e m : B a n k e r for the G o v e r n m e n t 13 S ervin g through C redits, D iscounts, and V - L oans 15 W i r e T r a n s f e r S e r v i c e .......................................... 18 O t h e r P r i n c i p a l O p e r a t i o n s .............................................................................2 0 S u m m a r y of P r i n c ip a l C h a n g e s in S t a t e m e n t o f C ondition 21 C o m p a r a t i v e S t a t e m e n t o f C o n d i t i o n ................................................... 2 2 C o m pa r a t iv e S t at e m e n t of E a r n in g s and E x p e n s e s . . D i r e c t o r s a n d O f f i c e r s ......................................................................................2 4 23 !H§ East Corinth, Verm ont The Defense Program and . . . The New England Economy Crossed the 38th Parallel in Korea in J une 1950 they touched off military and economic developments that have had a profound impact on New Englanders. During the subsequent three and one-half years New Englanders have simultaneously adjusted the struc ture of their economy, contributed significantly to the military effort and more than maintained their standard of living as did the nation as a whole. Changes in manufacturing activities in New England were stimulated by expanding production for defense. In the spring of 1950 manufacturing employment in the region about matched the post-World War II low of 1946. Only slight recoveries had been registered from the bottom of the 1949 recession which had a relatively greater impact on the region than it had on the country at large. During the second half of 1950 manufacturing employment in the region jumped nine per cent as the Govern ment as well as consumers, distributors and manufacturers in creased their purchases and flooded manufacturers with orders. Durable-goods manufacturers led the way with an employment increase of 14 per cent, while nondurable-goods manufacturers registered a more modest five per cent increase. After the first six-month rush of expansion, the two major sectors of the region’s manufacturing industries had quite dif ferent experiences. During the three years from Janu ary 1951 to the end of 1953 nondurable-goods manufacturing employment in the New England region contracted to the extent of about 70,000 workers. In contrast, durable-goods manufacturers added T T THEN THE NORTH KOREAN 5 A R M IE S EMPLOYMENT EMPLOYMENT IN SELECTED NEW ENGLAND DEFENSE-STIMULATED INDUSTRIES N O N ELECTRICAL M AC H IN ER Y ELECTRICAL M AC H INER Y FABRICATED M ETALS INS TR UM ENTS, CLOCKS, W ATCHES ORDNANCE I I | I I I I I || | S o u r c e : U. S . Bureau of Labor S t a t i s t i c s . about 72,000 workers. In the three years between the start and the formal armistice of the Korean War four industries alone pro vided 96 per cent of all the new manufacturing jobs in New Eng land. Those four rapidly expanding industries, electrical m a chinery, nonelectrical machinery, transportation equipment and fabricated metal products, received much of their stimulus from the defense program. Similar expansion was not necessary for nondurable-goods producers in the region. Their capacity has proved more than adequate to satisfy both defense and civilian requirements. New England’s factories have been contributing substantially to the defense program since J une of 1950. For security purposes, data describing all Government procurement are not published by the Federal Government. The best available estimates indicate that New England suppliers received about 13 per cent of all the non-secret defense contracts issued in the 33 months following the outbreak of war. During the first few months of the fighting 6 it was imperative that servicemen be outfitted with uniforms and New England’s textile industry was relied on heavily to produce the fabrics. In subsequent months the aircraft, shipbuilding, m a chinery and ordnance industries of the region played larger roles in the region’s defense contribution. War in Korea and an expanding national security program not only led to more defense contracts; it also led to federal tax in centives to expand defense-related industrial capacity. By N o vember 28, 1953, New England’s manufacturers had responded by scheduling investments totaling $455 million under certificates of necessity as part of the accelerated depreciation program. The certificates allowing accelerated depreciation encouraged expan sion of munitions plants and basic industrial capacity to produce power, metals and chemicals. W ithout many chemical or mineral resources New England could not participate extensively in a large part of the program. About two-thirds of all the certificates received by New England firms have been for expansion of man ufacturing facilities in comparison with the national proportion of only 56 per cent. Nevertheless, during the first two years of the program, the region’s manufacturers accounted for only 2.8 per cent of the value of all certificates for expansion of manu facturing facilities. It appears that New England manufacturers again, as after World War II, m ay be at a disadvantage in future competition for civilian markets as a result of the induced expan sion of manufacturing activities in competing areas. The New England economy very quickly went on a general "overtim e” basis after Korea, even though a few communities were plagued with persistent unemployment. In Connecticut the average weekly hours of manufacturing employees increased by five per cent between Ju n e and December of 1950. Gains in the other New England states were substantial but not as rapid. The working hours in the whole region built slowly to a peak in De cember 1952. Since then as the emergency pressure to boost out put lessened, workweeks generally shortened. Longer work hours and higher average hourly payments com- A V E R A G E W EEK LY EAR NINGS N E W E N G LA N D CONSUM ERS’ PRICES U NITED STATES S o u r c e s : TJ. S . Bureau of Labor Statistics, and Federal R eserve B ank of Boston. bined to increase income in New England. Average weekly earn ings of manufacturing workers have increased by 23 per cent since the start of fighting in Korea. At the same time, consumer price increases reduced the effectiveness of increased incomes. By the end of 1953 the United States Bureau of Labor Statistics’ Consumer Price Index had advanced about 13 per cent from its Ju n e 1950 level. On balance, real incomes in the region have continued to advance since the start of fighting in Korea. Consumer loans at New England’s member banks expanded sharply in the first few months after the outbreak of hostilities in Korea. The expansion reflected chiefly "scare” buying in antici pation of future shortages. The imposition of Regulation W in September of 1950 brought this expansion to a halt, and for the next 18 months, consumer credit oustanding for automobiles, retail sales, and home repairs declined slightly. The abandon ment of Regulation W in M ay 1952 gave impetus to pronounced expansion of member bank credit to consumers. Automobile credit paced the rise in instalment credit, increasing 81 per cent during the 16 months after the termination of Regulation W. Loans to individuals to finance other purchases increased 51 per cent in the same period. 8 Even as they borrowed more, New Englanders also saved more. Accumulated per capita liquid savings in bank time and savings deposits, savings and loan accounts, postal savings, life insur ance equities and savings bonds advanced about 7.4 per cent during the past three years. Although aggregate liquid savings in possession of consumers are a substantial offset to the total volume of consumer debt, in general, the same individuals do not hold both the debt and the savings. Business loans at all New England member banks increased approximately 40 per cent, roughly matching the national increase during the first year of the rearmament program (Ju n e 1950-June 1951). Rapidly rising commodity prices, expanding inventories and expansion of credit to finance plant and equipment outlays were all contributing factors. In the second year of the rearmament effort the volume of bu si ness loans in New England remained close to its Ju n e 1951 level in contrast with a 10 per cent rise in the nation. During this period loans to producers of metals and metal products continued to expand, while textile, leather and apparel firms made net repay ments. This divergent development reflected the varied impact of the rearmament program on New England, the early comple- CONSUMER LOANS OUTSTANDING ALL FIRST DISTRICT MEMBER BANKS TO TA L CONSUMER LOANS PERSO NAL LOANS RETAIL A U T O M O B ILE PAPER OTHER RETAIL P A P E R S * ................................................................... •*?•«• ***•••••*• ♦****••• ••••••• • ° * “® £ - .R 0>AIR A N D M O D ER N IZ A T IO N LOANS S ottrce: M em ber B ank Call R eports. 9 tion of defense needs in soft goods, and the continued need for more production of durable goods. In the 12-month period, Ju n e 1952-June 1953, total loans for the district rose by 10 per cent, which is comparable to the aver age rise in the nation. Loans to metal producers remained substantially unchanged, reflecting the plateau reached by de fense requirements in the region. The abandonment of R egu la tion W in M ay 1952 quickened sales of consumer goods, and loans to sales finance companies, commodity dealers, retail and wholesale trade firms expanded sharply. The failure of business loans to expand in the second half of 1953 despite some rise in the national total reflects, in part, the slightly lower levels of over-all business activity, inventory cut backs and certain special influences. The funding of fixed capital expenditures previously financed by an expansion of member bank credit may explain part of the lag in the final period of 1953. The defense program has served both to weaken and to strengthen the regional economy in several ways. Defense spend ing has built up great dependence on defense contracts in the re gio n ’s industries. A 1953 survey of the electronics industry re vealed that about 30 per cent of the industry’s sales were depend ent on defense needs. New England aircraft and shipbuilding industries are similarly dependent. Partly in response to defense needs, metalworking centers have attracted new workers and con centrated employment in industries which have historically dis played greater cyclical fluctuations than our nondurable-goods industries. Finally, defense-related inducements to expand manufacturing facilities have built up the vigor of competition facing New England manufacturers. On the other hand, the defense program has assisted in build ing up the regional economy. It created many new jobs at good pay to offset the loss of jobs in the contracting textile in dustry. Concentration of those new jobs in the durable-goods in dustries aided the long-term transition in the region’s manufac turing industries. The value of output for workers in the newer 10 expanding industries generally exceeded value of output for workers in the contracting textile industry. At the same time, de fense contracts served to initiate and incubate many new firms in growing industries such as electronics. These new manufac turers are now seeking to use their accumulated experience and to transfer production to non-defense lines. The high level of business activity, supported by defense spending, has also aided the efforts of community and state development groups which are exam ining their weaknesses and seeking to develop compen sating strengths. The full impact of the defense program on the New England economy will be revealed during coming years. It is already evi dent, however, that the defense program has accelerated import ant structural changes in the New England economy. It is a tribute to the region’s economic vitality that it could simultane ously raise the standard of living of its people and contribute sub stantially to the defense effort. The region is now challenged to maintain its achievements and to broaden its economic base. S o u r c e : Estim ates prepared b y Federal R eserve B ank o f Boston from U. S. D epartm ent o f L a b o r , and U. S. D epartm ent of Commerce data. 11 Key 11™ Administrative Section, Fiscal Agency Punch Unit, Fiscal Agency; Close-Up V iew Lower Left The Federal Reserve System: Banker for the Government needs a banker. Con gress to meet that need authorized the Secretary of the Treasury to designate the twelve Federal Reserve banks to act as Government depositaries and fiscal agents. In the years following World War I the volume of banking transactions performed by the Reserve banks for the Govern ment and its agencies increased enormously, particularly in opera tions relating to the public debt. Since the end of that war, the debt has increased to about $275.0 billion as of December of the year just past. Almost every dollar of the obligations for this huge debt has been issued directly or indirectly through the Federal Reserve banks. The fiscal agency department publishes announcements of new offerings of securities, receives applications for such offerings, makes allotments of securities, delivers them and receives pay ment for account of the Treasurer of the United States. It also redeems securities, makes exchanges, transfers registered for coupon bonds and vice versa and pays matured coupons. The Reserve Bank conducts similar debt service transactions for vari ous Government agencies, for some of which it acts also as dis bursing agent. During 1953 the bank issued, redeemed or exchanged 240,185 units of United States direct obligations representing a dollar vol ume of $10.1 billion, plus 1,281 other units of governmental agencies’ obligations having a dollar volume of $12.3 million, and paid $107.0 million representing 545,000 United States m a tured coupons. The Boston Reserve Bank supervises 1,334 authorized savings he greatest nation on 13 earth bond issu in g agents in the Boston District. They are all types of organizations selling directly or through payroll deduction plans large volumes of Series E bonds. The Reserve Bank sells directly Series E, H, J and K savings bonds and, until temporarily d is continued in October of last year, Treasury savings notes. The convenience of New England holders of savings bonds is served by 1,179 paying agents, also qualified for the Treasury by the Reserve Bank. In 1953 the Bank, through these issuing and paying agents, issued, redeemed or exchanged 9,700,000 savings bonds with a value of about $786 million. The Reserve banks accept deposits of withheld income and railroad retirement and excise taxes for the account of the Treasury. Now 405 banks in this district are qualified deposi taries of these Federal taxes. During 1953 about 455,000 withheld tax receipts for about $1.1 billion in taxes were received for the Treasurer’s account from these agents and directly from taxpayers. There are also in this district 377 commercial banks acting as special depositaries of Government funds. These banks are au thorized to receive and credit to tax and loan accounts, maintained for the Treasury, tax deposits as well as payments for Govern ment securities purchased by or through them. During 1953 they reported through the Federal Reserve Bank of Boston about 118,000 transactions for about $4.1 billion. Prior to J u l y 1953 United States currency so badly mutilated, soiled or worn as to be unfit for further circulation was canceled and forwarded to the Treasury in W ashington for verification, re tirement and destruction. In J u ly the Treasury requested the Reserve banks to undertake this operation locally. Through De cember 31 of last year this bank incinerated 29,183,000 pieces of currency having a value of $47 million. The principal depositor and customer of the Reserve Bank in addition to its member banks is the United States with its various departments and agencies. During the past year, of the bank’s staff totaling about 1,375, more than 157 were engaged in these fiscal agency services. 14 Serving through . . . Credits, Discounts, and V-Loans is by law auA thorized to extend to each member bank in the First Federal Reserve District such discounts, advances and accommodations as may be safely and reasonably made with due regard for the claims and demands of other member banks, the maintenance of sound credit conditions and the accommodation of commerce, in dustry and agriculture. This privilege the member banks avail themselves of through the credit and discount department. Direct extensions of credit take the form of discounts (or rediscounts) of paper meeting cer tain standards of eligibility and direct advances on notes secured by collateral. Although in the earlier history of the department member banks needing credit customarily rediscounted or bor rowed on the security of their custom ers’ eligible paper, during recent years practically all direct extensions of credit have been advances secured by United States Government obligations. In 1953 only one member bank in the district obtained Reserve credit through rediscounting eligible paper. Member bank borrowing at Federal Reserve Bank of Boston, having risen sharply in the last quarter of 1952, continued heavy during the first five months of 1953. In M a y average daily bor rowings aggregated more than $50 million, with a peak of about $94.2 million on M ay 7, the greatest amount outstanding on any one day since 1929- Borrowings declined sharply from the M ay peak to a daily average of $4 million in October. Daily averages were slightly higher for the last two months at $ 6 .3 million for N o vember and $5-9 million for December compared with $38 million and $43 million for the same months of 1952. During the past ^pH E FEDERAL RESERVE B A N K OF BOSTON 15 year 144, or nearly one out of every two and one-quarter member banks in the district, availed themselves of the credit privilege, the largest number since 1 9 3 3 . During 1953 there were no industrial or commercial loans or commitments outstanding and none were made under Section 13b of the Federal Reserve Act, which authorizes such accommoda tions in exceptional circumstances. In addition to the transactions involved in these extensions of credit to member banks, the department processes records re lating to the bank’s participation in the Federal Reserve System Open M arket Account and to Foreign Account transactions, both of which are conducted through the Federal Reserve Bank of New York. Also as a service to its members, the bank (upon m em bers’ request and for their account) purchases and sells United States Government securities at the market. The department maintains all records pertaining to earnings on all classes of loans and investments of the bank. To expedite production and deliveries of services under Gov ernment contracts, Congress authorized the various defense agencies, acting through the Federal Reserve banks as fiscal agents, to guarantee financing institutions against loss on loans or commitments for the purpose of financing any contractor, sub contractor or other person in connection with the performance or termination of Defense Production contracts. Federal Reserve Bank of Boston performs these fiscal agency services for nine de fense agencies through its credit and discount department. These agencies are Department of the Army, Department of the Navy, Department of the Air Force, Atomic Energy Commission, De partment of Commerce, Department of Interior, Department of Agriculture, Defense Materiels Agency and General Services Administration. This bank as Fiscal Agent of the United States has executed guarantee agreements for six of the nine agencies. From the beginning of the program in September 1950 through December of the current year, this bank received 158 applications with respect to loans and loan increases aggregating approxi- 16 mately $132 million. Guaranty agreements and supplements ap proved through this bank for the same period numbered 132 for about $119 million. Of these, about 56 guaranty agreements with respect to loans aggregating about $56 million have been ful filled and terminated. Advances presently outstanding under guaranty agreements now in effect aggregate about $43 million with unused credit available amounting to about $14 million. From the beginning of the program through the past year 35 banks in this district have participated in the V-Loan program. These banks, located mostly in the larger cities, have advanced under revolving credits more than $4 6 l million to 80 New Eng land companies and to three companies outside New England. About 50 per cent of all V-Loan borrowers received loans of under $500,000 with their total borrowings representing only about nine per cent of the aggregate of all V-Loans authorized through September 30, 1953. Also, 47 per cent of the number and 13 per cent of the amount of V-Loans authorized through that date were to borrowers having assets of under $500,000. S ix ty-sev en th o u s a n d m e s s a g e s w it h in s tr u c tio n s to tr a n s fe r $ 3 0 b iil io n p a s s e d over te le ty p e w r it e r s such as th ese in 195 3 W ire Transfer Service he qu icken ed tempo o f fi nancial t r a n s a c t i o n s t h r o u g h out the nation has led to the adoption by the Federal Reserve System of a new and completely automatic teletypewriter net work to speed up the transfer of funds by wire. The new system replaces one in use for nearly 15 years which incorporated manual switching at two centers. Known as the Federal Reserve Leased Wire System, the operation eliminates the necessity of rehandling messages at intermediate points. All transm ission is automatic, the only manual operations being per foration of messages in tape by station operators, placing of tape in transmitters, and removal of messages at the point of destina tion. By streamlining the communications system, it is now possible to transfer funds from one section of the nation to another at a faster rate than formerly. A test message from Richmond to Los Angeles and return, at a time when traffic was light, took only 46 seconds. The new network operates at a speed of 75 words per minute, as compared with a maximum speed of 60 words per m in ute formerly. The switching center or "brain” of the network is located at the Federal Reserve Bank of Richmond. This center brings together 18 12 Federal Reserve Banks, their 24 branches, the Federal Reserve Board and the Treasury offices in W ashington and Chicago. It also handles communications of the Commodity Credit Corpora tion. Two-letter codes that precede m essages sent over the net work supply the electric impulses to route messages to their des tinations. Another code at the end concludes the m essage, thus causing disconnection of the receiving station. Incorrectly ad dressed messages or those that become garbled through mechani cal failure are stopped by an intercepting machine at Richmond. An operator informs the sending station of the trouble and ad vises the proper action to be taken. Approximately 6,000 messages a day flow over the System net work, with each message containing an average of 22 words. The Federal Reserve Bank of Boston during 1953 handled 67,414 transfers of money in the amount of $29-5 billion and about 12,000 transfers of Government securities totaling $4.1 billion. The new communications system was installed after many years of study and is designed to meet the fast written communications requirements of the Federal Reserve System. It is a low cost and uniform method of communication and is so designed that it can be easily rearranged as traffic warrants without major changes. daiiWitwwi ! Ml glgJajgJ* EL. S 8s W Smif' J ~ pi l_ S H I1! : . IIW ire Transfer Department Other Principal Operations T N T H E N U M B E R OF P I E C E S H A N D L E D , which is the best measure of the size of the job performed, the volume of the ban k ’s business generally continued the upward postwar trend, as the accompanying comparative table demonstrates. See pages 13-19 for references to the Fiscal Agency, Loan and Discount, and Wire Transfer Departments not herein referred to. T r a n s a c t i o n — V o lu m e in P ie c e s o r U n its 1953 N u m b er 1952 N um ber Currency Sorted and C o u n t e d ................................ 266,503,294 297,411,139 Coin Received and C o u n te d ..................................... Check Collections: City C h e c k s .............................................................. 37,054,012 Country C h e c k s .................................................... 171,531,019 U. S. Government C h e c k s .............................. 22,031,849 U. S. Postal M o n ey O r d e r s ........................... 20,123,347 N oncash Collections: Notes, Drafts and Coupons (Except U. S. G overn m ent)...................................................... 888,899 Safekeeping of Securities: Pieces Received and D elivered ...................... 293,866 Coupons D etach ed ............................................... 328,503 Orders to Sell or Buy Securities Executed for M em ber B a n k s ......................................... 682 246,188,018 246,279,227 1953 Amount 1952 Amount $1,778,727,854 23,684,557 $1,674,353,878 21,087,436 20,329,565,743 32,967,083,023 4,487,006,766 321,803,954 19,601,881,082 30,929,467,272 4,291,660,089 324,847,699 296,276,805 265,420,600 12,342,150,000 27,094,151 8,090,074,000 21,752,394 76,504,200 84,344,750 T r a n s a c t i o n — V o lu m e in D o lla r s Currency Sorted and C o u n t e d ................................ Coin Received and C o u n te d ..................................... Check Collections: City C h e c k s .............................................................. Country C h e c k s .................................................... U. S. Government C h e c k s .............................. U. S. Postal M o n ey O r d e r s ........................... N oncash Collections: Notes, Drafts and Coupons (Except U. S. G o vern m en t)...................................................... Safekeeping of Securities: Pieces Received and D e liv e re d ...................... Coupons D e ta c h e d ............................................... Orders to Sell or Buy Securities Executed for M em ber Banks .................... 20 36,556,358 165,838,195 21,131,358 20,941,018 821,093 236,856 311,483 675 Summary of Principal Changes in Statement o f Condition decreased slightly during 1953. The principal changes comprised decreases in U. S. securi ties and in uncollected cash items which more than offset an in crease in gold certificates and other cash. Effective September 1, 1953, the System Open M arket Account participations formula was changed to make the relationship of total assets of each Reserve bank the determining factor. The decrease in U. S. securities of $299 million and the in crease of $337 million in gold certificates largely reflect this for mula adjustment. A small favorable balance of payments with other Federal Reserve districts, however, also contributed to the increase in gold certificates. Allocations of a share of net pur chases by the Account offset a part of the U. S. securities lost through reallocation. Loans and advances showed a year-to-year decline of $699 thousand. Member banks, however, used the borrowing facilities o f this bank to the greatest extent since 1929 during the first five months of 1953- During the last half of the year Reserve bank credit extended through the U. S. securities market was generally freely available and member banks reduced their discounts. Among the liabilities, Federal Reserve notes outstanding in creased $30 million and set a new record total. Member bank re serve accounts showed a net increase of $13 million. M em ber bank required reserves were practically unchanged and the in crease occurred in excess reserves. Net Treasury expenditures in New England along with the reduction in required reserves in J u l y more than offset losses of reserves to other districts on pri vate commercial and financial account. A ggregate capital accounts of the bank were increased $3.2 million. Approximately $2.3 million of net earnings were added to regular surplus (Section 7). Capital paid in by member banks accounted for the balance. OTAL a s s e t s of this b a n k 21 C om parative Statement of Condition ASSETS Gold Certificates............................. Other C a sh ...................................... Loans and A dvances.................... U. S. Government Securities . . . Federal Reserve Notes of Other Federal Reserve Banks............. Uncollected Cash Ite m s............. Bank P rem ises............................... Other A ssets.................................... Total A s s e ts ........................... December 31, 1953 D ecember 31, 1952 $1,090,306,889-98 $ 753,319,645.51 27,558,644.96 22,031,579.34 1,515,000.00 2,214,000.00 1,394,092,000.00 1,693,012,000.00 3,972,000.00 324,264,167.91 6,232,088.36 8,152,539.06 $2,856,093,330.27 5,996,000.00 387,995,132.61 4,071,253.51 11,396,915.87 $2,880,036,526.84 LIABILITIES Federal Reserve Notes.................. $1,632,902,835.00 $1,603,208,415.00 Deposits: Member Bank Reserve Ac 835,721,104.74 counts ...................................... 848,625,505.59 U. S. Treasurer-Collected Funds........................................ 8,741,652.34 44,086,174.71 Foreign.......................................... 32,457,000.00 24,961,200.00 O ther............................................ 8,745,050.96 10,012,895.77 Total D epo sits...................... $ 891,073,408.89 $ 922,277,175.22 Deferred Availability Cash Ite m s............................................ 293,075,151.64 267,332,957.57 Other L iab ilities............................. 713,468.36 821,348.60 Total Liabilities...................... $2,792,130,550.06 $2,819,274,210.22 CAPITAL ACCOUNTS Capital Paid I n ............................... Surplus (Section 7 )........................ Surplus (Section 1 3 b ).................. Reserves for Contingencies......... $ 14,443,100.00 38,779,127.65 3,010,527.20 7,730,025.36 $ 13,611,750.00 36,461,591.24 3,010,527.20 7,678,448.18 Total Capital Accounts . . . . Total Liabilities and Capital A cco un ts............. $ 63,962,780.21 $ 60,762,316.62 $2,856,093,330.27 22 $2,880,036,526.84 Com parative Statement of Earnings and Expenses Current Earnings: Advances to Member Banks............. Foreign Loans on Gold...................... U. S. Government Securities— System Account.............................. All O ther................................................ $ 1953 402,803.91 14,684.62 m 2 248,607.26 22,838.44 $ 32,345,704.96 12,421.01 30,744,551.27 9,719-51 Total Current E arnings.......................... Current E xpenses..................................... $32,775,614.50 8,764,148.50 $31,025,716.48 7,656,277.60 Current Net Earnings............................... Net Addition to Current Net Earnings $24,011,466.00 55,224.40 $23,369,438.88 157,614.50 Total.................................................... $24,066,690.40 Other Deductions: Transferred to Reserves for Contin 51,300.76 gencies ................................................ Paid to U. S. Treasury: (Interest on Outstanding Federal 20,857,522.40 Reserve N otes)................................. $20,908,823-16 Total.................................................... $23,527,053.38 Net Earnings after Reserves and Pay ment to U. S. Treasury................. $ 3,157,867.24 40,516.08 20,426,366.45 $20,466,882.53 $ 3,060,170.85 DISTRIBUTIO N OF NET EARNINGS Dividends P aid.......................................... Transferred to Surplus (Section 7). . . . $ 840,330.83 2,317,536.41 $ 3,157,867.24 $ 790,381.09 2,269,789-76 $ 3,060,170.85 SURPLUS (Section 7) S u r p l u s January 1..................................... Transferred to Surplus-As Above......... $36,461,591-24 2,317,536.41 $34,191,801.48 2,269,789-76 Surplus December 31............................... $38,779,127.65 $36,461,591.24 23 FED ERAL RESERVE BANK OF BOSTON O fficers President A l f r e d C. N e a l , First Vice President R o b e r t B . H a r v e y , Vice President and Cashier E a r l e O . L a t h a m , Vice President C a r l B . P i t m a n , Vice President O s c a r A . S c h l a i k j e r , Vice President and General Counsel R o y F. V a n A m r i n g e , Vice President A n s g a r R. B e r g e , Secretary, Assistant Counsel and A ssistant Federal Reserve Agent D a v i d L . S t r o n g , General Auditor G e o r g e H . E l l i s , Director of Research P a r k e r B . W i l l i s , Financial Economist D . H a r r y A n g n e y , Assistant Vice President E l l i o t S . B o a r d m a n , Assistant Vice President F r a n k C. G i l b o d y , Assistant Vice President E d w a r d W . O ’N e i l , Assistant Vice President D a n a D . S a w y e r , Assistant Vice President L o u i s A . Z e h n e r , Assistant Vice President W i l l i a m R . K i n g , Assistant Cashier J o h n E. L o w e , Assistant Cashier J o h n J . R o c k , Assistant Cashier J a m e s D . M a c D o n a l d , Chief Examiner Jo se p h A . E ric k s o n , D irectors H a r o l d D. H o d g k i n s o n , Chairm an of the Board and Federal Reserve Agent, Boston, Massachusetts A m e s S t e v e n s , D ep uty Chairman of the Board, Lowell, M assachu setts F r e d e r i c k S. B l a c k a l l , j r . , Woonsocket, Rhode Island L l o y d D . B r a c e , Boston, M assachusetts H a r o l d I. C h a n d l e r , Keene, New Hampshire K a r l T . C o m p t o n , Cambridge, M assachusetts O l i v e r B . E l l s w o r t h , Hartford, Connecticut H a r v e y P. H o o d , Boston, M assachusetts H a r r y E . U m p h r e y , Presque Isle, M aine M em b er o f F ed eral A d visory C o u n cil W illia m D. I r e la n d Boston, M assachusetts 24