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January 10, 1956
I am pleased to transmit the 1955 annual report of the
Federal Reserve Bank of Boston.
As has been the custom in recent years, much of this report
is given to examining an important phase of the New England
In the following pages we have endeavored to put into
proper perspective the industrial transition since W orld W ar I,
paying particular attention to the birth and effective operation
of numerous organizations created expressly to help revitalize
industrial New England.
During 1955 the New England people earned more, spent
more, and saved more than in any previous year. T o this success
the region’s industrial development agencies contributed signifi­
As usual, the report also includes the bank's operating
results, which show continuing growth.
The bank’s steadily increasing efficiency and economy grow
out of the unceasing endeavors of its officers and staff, and to
them 1 express my own sincere gratitude as well as that of our
directors. Our thanks go also to bankers, and to leaders of
industry, commerce and agriculture in the First F ederal Reserve
District for their continuing cooperation with the bank.



One of the best vantage points for appraising New England’s indus­
trial growth is a hilltop overlooking the route of Paul Revere’s midnight
ride and the battleground where New Englanders bled for the right to
mold their own economic and political destinies.
From that Lexington hilltop a present-day observer can glimpse a
symbol of New England’s industrial past, survey its expanding present,
and estimate its future.

Running off to the N orth is a grass-grown trace of the old Middlesex
Canal along which, until ousted by the railroad, plodding horses exchanged
the commerce of sea-going Boston and the city of Lowell, by 1850 the
nation’s leading producer of cotton textiles.
Thinking backward, today’s observer might reflect on the fact that
by combining water power and water transport with a perpetual itch for
making things, the enterprising Yankee had built New England into
industrial eminence even in the heyday of the Canal. By that time, more
than one-third of the region’s entire work force labored in mills and
shops on dozens of harnessed streams pouring out a profusion of fabrics,
footwear, furniture, machinery, guns, locks, clocks, knitting needles and
parlor organs. Before the Civil W ar, the Yankee already had a long
headstart in supplying both the necessities and luxuries of an expanding



Now slicing through the scene before the observer are the express­
ways that link the industrial and commercial enterprises of Greater Boston
with the rest of modern New England. Like the rim of the wheel, the
83-mile circumferential Route 128 swings around Boston from the ocean
at Gloucester on the North, cuts across the routes of Paul Revere and
the old Middlesex Canal, and rejoins the ocean at Hingham on the
South. And just as the Canal symbolized the young manhood of indus­
trial New England, so does the circumferential Route 128 symbolize its
mature, postwar redevelopment.
Even now, before this expressway is complete, 99 new industrial
establishments with an investment of more than $100 million have been
built along its borders. These architecturally handsome plants are largely
divorced from water and even rail transport and have wedded themselves
to rubber tires for moving both freight and workers.
But Route 128 is only a bright sample of the new billion-dollar
highway facilities developed throughout New England to bring Yankees
and their industries into closer contact with each other and with their
customers elsewhere.
The Lexington hilltop also provides a view of the diversity of indus­
trial growth along the highway. Within five miles of Paul Revere’s route
the observer would see seven electronics manufacturers which include a
number of young research-based firms. These are sprinkled among new
plants of venerable manufacturers of shoe machinery, instruments and
fasteners, and new office buildings of old-line insurance companies.
T he creation of the new expressway through historic Lexington —
and of similar throughways across and up and down New England — the
zoning of new industrial sites and the building of modern plants and
offices testify to the continuing transition in New England’s economic
activities. Implicit in all this construction, relocation, redevelopment and
expansion is widespread recognition of the continuing vital importance of
manufacturing in Yankee life.
The very heart of New England’s present economic and social struc­
ture is its 23,000 manufacturing establishments, their 1,500,000 workers,
and their $6 billion payroll. Forty-two per cent of all wage and salary
payments in New England come from manufacturing, as compared with
the national average of only 34 per cent. And manufacturing accounts for
42 per cent of the region’s non-agricultural employment, a figure one-third
greater than that of the nation.
New England has been able to achieve and maintain incomes con­
sistently above the national average only by sustaining the vigor of its
manufacturing operations.
It is obvious therefore that the key to New England’s future economic
health is the continuing success and expansion of its existing industries
and the establishment of both new concerns and branch plants.


Decades of Change and New Growth

Between the years 1939 and 1953 the number of manufacturing
firms in New England increased from some 16,000 to 23,000 — a jump
of almost 50 per cent. During the same period the number of manufac­
turing jobs rose by 400,000.
'Phis dramatic new growth during and after W orld W ar II was the
result of new forces working within and upon industrial New England.
These forces reversed a 20-year trend in the region’s manufacturing life
and demonstrated that a mature industrial civilization can contain the
seeds of rebirth and revitalization.
It is the purpose of this report to describe the background and
birth of some of these new forces, their effects thus far, and their impli­
cations for New England in days to come.
By 1850 the combination of a rapidly growing nation, expressed needs,
imagination and inventiveness, and the availability of water power and
skilled workers had built New England into the most highly-industrialized


area in the country. Operating in a land with few natural resources, Yankee
managers counterbalanced their costs of importing raw materials and
exporting finished products by their innovations in manufacturing methods,
the dexterity of their employees, the drive and shrewdness of their
The successes of early firms promptly bred competition and New
England’s progress became geometric — machine begot machine, firm
begot firm, and industry begot industry. M anufacturing growth forced
the development of faster transportation facilities. These two working
in harness steadily swelled the volume and accelerated the rate of exchange
of goods and services. Commercial banks redeployed accumulating re­
sources along the industrial front and more and more wheels spun faster
and faster. For decades New England’s per capita income paced those
of all other regions.
Pressures from Without and Within

It couldn’t last forever, of course, and it didn’t. T he factors which
first slowed and then temporarily halted New England’s over-all industrial
growth were numerous and complex. M any of them were born outside the
region, but some evolved from within. They came at different time periods,
exerted different pressures, hampered or crippled some industries, left
others untouched. Even now it is almost impossible to disentangle them
and measure their individual effects. But taken together they checked
New England sharply and brought about a fundamental change in the
character of the region’s manufacturing activity.
The power advantages derived by New England from its rivers
vanished with the development of steam and electricity. T he center of
population moved westward and industries were created in its wake to
serve new markets increasingly remote from New England manufacturers.
Initially, at least, labor was cheaper in some new industrial areas than in
already mature New England. T he enormous demands of W orld W a r I
pressured manufacturing development of communities in or near abundant
sources of raw material.
In addition to wrestling with these problems posed by industrial
growth elsewhere, New England manufacturing was beset by others which
arose within its borders. Civic maturity and a high and steadily-rising
standard of living boosted local and state tax burdens. T o some firms age
seemed to bring not wisdom but a hardening of the intellectual arteries
and a greater concern with liquidity than with changing consumer demands.
Nepotism tended to supplant energetic and venturesome fathers with con­
servative sons, and too many bright young brothers got their basic training
in family plants and then went W est and South in search of broader


Despite the tremendous diversity of products made in New England,
there grew up a high concentration of manufacturing employment in the
textile industries. As late as 1919 nearly 30 per cent of all the region’s
manufacturing jobs were in textiles, and in more than 100 New England
cities and towns the textile industry was either the sole or the leading
Simple statistics tell the tale. Between 1919 and 1939, New England
lost 12.3 million cotton spindles, two-thirds of its total. Since the South's
gain in that period was only 3.4 million, nearly nine million spindles just
disappeared from New England and from the United States. W ith them
went tens of thousands of Yankee jobs.
H alted momentarily by W orld W ar II, the national textile decline
was resumed in postwar days, this time embracing the woolens and
worsteds which had largely escaped the difficulties of earlier years. Since
1919, New England has lost 265,000 textile jobs — nearly one-fifth of the
total number of manufacturing jobs of that year.

Industrial misfortune on such a scale is almost without precedent in
American life. T he drama of New England mill closings, of community
after community racked with unemployment, fascinated editors and writers
for nearly a generation. T heir stories and pictures provoked a widespread
pessimistic belief, both in New England and elsewhere, that the region’s
manufacturing sun had crossed the zenith and was well on the wane. And
their preoccupation with the decline of textiles obscured their view of the
growth of other industries and the final supremacy of New England metal­
working. Especially significant are the newer research-based industries
which put the electron to work and are anticipating the needs of the atomic
age. In contrast to the textile job losses, Yankee metal users alone added
200,000 workers to their payrolls between 1919 and 1953.
The New Englanders Sw ing into Action

It was the trials of the twenties and thirties and the rigors of postwar
readjustment that galvanized New Englanders into vigorous and effective
action. Research agencies began careful analysis of all major phases of the
region’s economy. They appraised past performances, drew up trends,
evaluated the interplay of industrial forces, codified problems and indicated
activities looking to their solution. Never before has a region’s economic
life been so minutely scrutinized. Dozens of community, state and regional
organizations, both private and governmental, some of them unique in
design, were created to plan and carry out industrial diversification and
redevelopment programs. Public information campaigns built broad moral
and financial support for these programs and helped set the transition in
New England manufacturing in true perspective.
The extent to which these unceasing efforts have contributed to
converting New E'ngland’s industrial decline into positive gains, it is
impossible to estimate. But it is safe to say that never before in the region’s
history have so many individuals, private organizations, and local and
state governmental agencies labored together for a common goal.
Business makes its own decisions. They are aimed solely at the future
success of individual firms and are based on careful evaluation of all
foreseeable factors. In this light it is of interest to report two sets of facts:
1. Between 1919 and 1939 the number of N e w England
manufacturing firms decreased by 18 per cent, and the number
of manufacturing workers by 26 per cent.
2. In sharp contrast, between 1939 and 1953 the number of
firms increased by 48 per cent and the number of workers by
35 per cent.
T here is a vast amount of work yet to be done in and for industrial
New England, but day by day more New Englanders know it and are
pitching in to provide and operate the machinery for doing it. W ith the

basic issues now defined and the areas for strategic action mapped out,
means are certain to be found for ultimately assisting New England
manufacturers further to improve their competitive positions.
1 he atomic age promises eventual reduction of New England’s power
costs close to levels of other sections.
The cooperation of science and industry is sure to develop more
intensive use of the region’s existing raw materials, and to stimulate greater
concentration on manufacture of high-value products made from imported
New England is already well aware of its great stake in rapid and
low-cost domestic transportation by rail, highway, water and air carriers,
and is seeking to capitalize its advantageous location with respect to
Canada, Europe, South America and Africa.


O bjectives and M echanisms
of Industrial Developm ent
The sources of New England’s continued industrial growth have
already been indicated — the expansion of present industries, the creation
of entirely new firms, and the acquisition of branch plants of manufacturing
concerns headquartered outside the region.
While conclusive figures are not available as to the relative importance
of these growth factors in New England, it is believed that in no other
section of the country is so much manufacturing employment the result of
the creation and expansion of entirely new firms.
One survey of manufacturing growth in Massachusetts shows that
during the last two years entirely new firms accounted for as much as
one-quarter of the new jobs. It also shows that only one-fifth of M assa­
chusetts’ new factory jobs are directly traceable to gains from outside
sources. Incomplete evidence covering the same period suggests that growth
by the establishment of new firms in Connecticut is even more vigorous and
of greater relative importance than in the Bay State. It is probably fair to
conclude that more than half, and perhaps as much as three-quarters, of the
region’s industrial growth is due to decisions on the part of New England
businessmen either to set up new firms, to establish branches, or to expand.
Industrial growth through the establishment of branch plants is a
highly desirable procedure for most communities, and in general branch
plants seem a better bet than entirely new firms or relocations. A survey of


the postwar experience of a selection of New England new establishments
revealetl that branch plants had a lower rate of failure, a larger proportion
of firms which increased employment, a higher rate of employment growth,
and a larger proportion of firms which expected to add workers in the
future than did new firms or relocations. Branch plants also tended to have
fewer problems than the other types of concerns. In addition, they usually
had larger financial and personnel resources than new firms and relocations,
enabling them more easily to solve such problems as did arise.
In Massachusetts, branch plants accounted for a little less than a third
of the entirely new manufacturing jobs of the past two years. Branches of
parent companies not in Massachusetts accounted for less than half of that
proportion. In Connecticut, branch plants established by existing Connecti­
cut firms were much more important than those by outside firms, but
branching was of less significance than in Massachusetts.
New England’s growth is but the sum of the growth of its communi­
ties. In the Yankee tradition of self-help, citizens of many of the region’s
cities and towns have assumed direct responsibility for their community’s
industrial development.
Action on the local level is carried on through such agencies as
chambers of commerce, industrial development committees, industrial
foundations, management assistance bureaus, and private industrial real
estate developers.
At the state level, development credit corporations and departments
of commerce have been tailored to minister to the industrial needs of the
individual states.
At the regional level are found such agencies as the New England
Governors’ Conference, the New England Council, the New England Sena­
tors' Conference and other groups composed of officials of the states.
Through various means of communication all these groups exchange
ideas and facts with a resulting cross-fertilization of great benefit to New
In some communities the local chamber of commerce, an industrial
development committee of the chamber, or a similar civic organization has
handled all aspects of industrial development work. M ore frequently,
however, a need has arisen for a separate organization to devote all of


its efforts to planning and promoting the. economic development of the
community. This need has been met by the formation of such groups
as industrial development commissions and local industrial development
A t least 68 New England cities and towns now have local industrial
development commissions which concern themselves with the development
and promotion of all the economic resources of their communities. They
assist in strengthening and expanding manufacturers already located in
the area as well as in helping establish entirely new concerns and new
branch plants.
Industrial Financing O rganization s

Some communities with industrial development commissions have
found a need for local financing organizations to assist in cases where
conventional financial institutions or individual investors are unable, or
unwilling, to extend sufficient financial aid or the type of financing needed
by manufacturers. In some of these communities, local industrial financing
corporations have been formed to provide suitable sites and plants for
manufacturers while the industrial development commissions have con­
tinued to provide all other industrial development services.
In Lowell, for example, the Development and Industrial Commission
determined that modern plants were needed to attract certain industries
believed most suitable for the area. It stimulated a group of local business­
men and bankers to establish the New Industrial Plants Foundation of
Lowell, Inc. Since 1952 this organization has purchased 200 acres of land,
developed it into an industrial park, and financed the construction of three
new plants containing 188,000 square feet. In each case, construction was
started or was well under-way before a tenant was found. The Lowell
Development and Industrial Commission performs all industrial develop­
ment services except the provision of sites and the financing of plants.
Together, the commission and the foundation form an effective team
working for the community’s development.
New England communities have organized 75 local financing organ­
izations similar in purpose to the Lowell Commission. The names or
organizational forms of the various local industrial financing organizations
in New England differ, but there is one element common to all: they are
privately-financed methods of stimulating industrial growth. No tax money
has been invested in any of these organizations, nor is any municipal,
county, or state government agency’s credit pledged.
These groups have built 60 new manufacturing plants with more
than two and a quarter million square feet of space and have purchased
and renovated 167 mills with over thirteen and a half million square feet
for lease or sale to manufacturers. They have assisted approximately 425
concerns in a wide variety of industries. About half of these manufacturers
were entirely new firms, 64 were expansions of concerns already doing


business in the area, and the remainder were new branch plants of existing
firms or relocations. T he 425 aided concerns currently employ about 36,000
workers and have an annual payroll estimated at over $105,000,000.
The region’s private industrial realtors are also an important asset.
They perform many of the same functions as local industrial development
corporations by purchasing, renovating, subdividing, and subsequently
leasing or selling vacant industrial buildings.
In addition, private real estate firms have developed in New England
since the war a number of planned industrial parks with modern plants.
These groups have purchased extensive areas well-suited for industry, and
then thoroughly planned, graded, and drained the areas and installed
roads, sewerage systems, railroad spurs, and electric, water, and gas

utilities before offering sites to industrial concerns. Comprehensive plan­
ning has provided for adequate control of the area and buildings through
restrictions and zoning.
Individual investors have usually supplied the equity capital to
purchase the land and finance the basic facilities of planned industrial
centers. W hen the land has been improved, New England insurance
companies, savings banks, commercial banks, and other institutional



investors have furnished mortgage money for the construction of modern
industrial buildings.
Private investors who have developed raw land and built new plants
have dealt largely or exclusively with established, well-rated, and usually
large companies.
T he ability to develop new types of financial organizations to accom­
plish special purposes is a significant New England characteristic. The
challenge shown by surveys for the need for capital loans to assist growing
businesses did not pass by default in New England. An important step
toward solution of the problem was devised by establishing state-wide
development credit corporations in each New England state. By pooling
funds from many individual commercial banks, savings banks, insurance
companies, and other financial institutions which become members of
development credit corporations, these organizations have provided size­
able amounts for medium and long-term loans and capital advances to new
and growing manufacturers.
Development credit corporations are now operating in every New
England state except Vermont, where capital stock is just being sold.
Maine was the first state in the union to establish a development credit
corporation, with operations beginning in M ay, 1950. Similar organiza­
tions commenced business in New Hampshire in 1952, in Rhode Island in
1953, and in Massachusetts and Connecticut in 1954.
Development credit corporations had received 623 formal loan
applications and approved 186 loans totaling $10,854,499 by the end of
1955. Repayments on outstanding loans at that time totaled $1,81 1,070.
W hen this amount is added to the uncalled funds still available from
present members, the development credit corporations had more than
$7 million available for additional loans and investments.
Development Credit Funds Unlock Others

T he effect of the money put to work in growing businesses as a result
of activities of development credit corporations is not limited to the
amount of their loans. Banks, insurance companies and local industrial
foundations have participated with development credit corporations and
made additional loans in about half of the loans made thus far. Further­
more, the availability of longer-term credit from development credit
corporations has made possible the employment of several million dollars
of equity capital in the aided concerns. T he availability of funds from the
development credit corporations is often the necessary key to the useful
employment of other funds totaling many times the amount of the loan.
T he planning and investigating activities of the corporations also
lead to greater availability of funds for expansion. Banks and insurance
companies have made scores of loans to concerns which were referred to
them after thorough investigation by development credit corporations. In


these ways, the influence of the funds available to development credit
corporations multiplies several times.
Official state recognition of the importance of encouraging industrial
growth is expressed through the activities of the departments of commerce
and industry or the development commissions in each New England state.
By providing technical advice, procedural guidance, and widespread indus­
trial contacts, the state agencies assist the community development efforts.
Through research they isolate the problems and spotlight the opportunities
for economic development. Through their industrial contacts they develop
prospects for new industry, and by helping solve problems they aid
established industry.
New England is outstanding among the regions of the United States
in having its Governors, its U. S. Senators, and its representative business­
men organized into three separate yet cooperative groups. H ere matters
of New England-wide importance are discussed and, if appropriate,
coordinated action undertaken.



The New England Governors’ Conference was formed in 1937 to
consider broad economic, educational and social questions of regional
concern. Some indication of the variety of fields in which the Governors
have taken joint action is provided by a view of the committees currently
at work. Groups of experts representative of the six states have studied
atomic energy, public transportation, flood control and river development,
interstate highway programs, and the New England textile industry. The
Governors directed their Industrial Development Commissioners to form
a permanent regional committee on industrial development. They have also
fostered periodic conferences of their six state officials in the fields of
agriculture, forestry, public utilities, aviation, water pollution control,
and taxes.
The New England Senators’ Conference came into being in 1954
under the bi-partisan sponsorship of the Senators from Massachusetts. It
meets regularly in Washington and implements at the federal level some
of the work carried on by agencies within the region.
Finally, New England is ably served by its unique New England
Council, an organization created in 1925. Supported entirely by the
membership contributions of some 3,000 firms and individuals, it devotes
itself to the advancement of the region on the entire economic front.
Primarily “a stimulator and coordinator,” it brings together interests and
agencies most concerned with specific regional issues, helps develop action
programs, and promotes cooperation for their execution. Through its
extensive informational work it keeps both the region and the nation
informed of new developments and opportunities in New England business.


New England — Today and Tomorrow

The foregoing pages tell briefly the story of the growth, maturity,
decline and revitalization of industrial New England. They tell, too, of
how . energetic New Englanders created scores of new organizations and
agencies to facilitate the region’s economic transition and redevelopment.
Out of the work of these organizations and the individual decisions of
businessmen New England’s industrial climate has been greatly improved,
manufacturing operations and employment have been sharply increased,
and production diversified both in nature of output and in geographical
Since 1919 some 2,000,000 persons have been added to New
England’s population and individual incomes have increased by 50 per cent
even after adjustment for changes in price levels. Over the same period
the ranks of New England’s service industries — such as transportation
and public utilities, trade, finance, government, and personal service —
have grown by 850,000 workers. The ability of the region’s manufacturing
operations to support both an expanding population and expanding service
employment comes from the shift of the labor force to higher-paying,
more productive industries.
In 1955 the New England people earned more, spent more, and saved
more than ever before in history. Both the region’s per capita income and
per capital liquid savings continue to exceed those of the nation.
The nature of tomorrow’s industrial New England is already discern­
ible in the fast-growing, research-oriented manufacturing plants throughout
the region, and in pilot plants and the blueprints of hundreds of industrial
research laboratories. New England’s new philosophy is perhaps best
summed up in the words of one of its distinguished sons. H e said:
“ If we cannot make tonnage products . . . we can and will make the
finest products, the most intricate mechanisms — anything in which the skill
of hand and brain is taxed to the utmost.”
History continues to testify to the validity of the New Englander’s
vision, the resiliency of his spirit, and his enduring capacity for working
with his neighbors for the common good.


Com parative Statement of Condition


December 31,1955
December 31,1954
Gold C ertificates........................................ *1,016,398,408.20
federal Reserve Notes of Other
Federal Reserve Banks ....................
14,845,510 00
O ther Cash ..................................................
Loans and A d v a n c e s ................................
U. S. Government Securities.................
Uncollected Cash Items .........................
Bank Premises . . ......................................
Other Assets ...............................................
T o t a l A s s e t s ........................................ $2,911,999,900.73

Federal Reserve N o t e s ........................... $1,613,945,595.00
D eposits:
Member Bank Reserve Accounts . .
U. S. Treasurer-Collected Funds . .
Foreign ....................................................
° ther .........................................................
6,1 14,582.62
T o t a l D e p o s i t s .............................. $ 920,565,702.52
Deferred Availability Cash I t e m s -----308,186,913.87
Other Liabilities ........................................ ................658,997.73
T o t a l L i a b i l i t i e s ......................... $2,843,357,209.12
Capital Paid I n ..........................................
Surplus (Section 7) ................................
Surplus (Section 13b) ...........................
Reserves for Contingencies ..................
T otal Ca p it a l A ccounts . . . .
T o t a l L ia b i l it i e s a n d
C a p i t a l A c c o u n t s ..................






$ 879,713,394.59





Com parative Statement of Earnings and Expenses

Current Earnings:
Advances to Member B a n k s .........................
Foreign Loans on G o l d ...................................
U. S. Government Securities —
System A c c o u n t.............................................
All O t h e r ...............................................................
Total Current Earnings .................................
N et E x p en se s........................................................
Current Net E a r n in g s ......................................
Additions to Current Net Earnings:
Profit on Sales of U. S. Government
Securities (net) .............................................
All Other ............................................................
T otal A dditions ...........................................
Deductions from Current Net Earnings:
Reserves for Contingencies .........................
Loss on Sales of U. S. Government
Securities (net) .............................................
All O t h e r ...............................................................
T otal D e d u c t i o n s ........................................
Net D e d u c tio n s..................................................
Net Earnings before payments to
U. S. Treasury .............................................
Paid U. S. Treasury (Interest on Federal
Reserve Notes) .............................................
Dividends P a i d ........................................................
T ransferred to Surplus (Section 7) ..........

























Sum m ary of Principal Changes in Statement of Condition

T he total' assets of the bank increased by $98 million to $2.9 billion, the largest
on record.
G o l d C e r t i f i c a t e holdings decreased $67.3. million. A gain of $209 million on
private business account was more than offset by large Treasury transfers from N ew
England to other districts, and to a smaller extent by inter-Reserve Bank transactions.
Our holdings of F e d e r a l R e s e r v e N o t e s o f o t h e r F e d e r a l R e s e r v e B a n k s
increased by about $9.5 million.
L o a n s a n d A d v a n c e s were more than $ 7 million lower than a year ago and
reflected the repayment of loans on gold to foreign central banks, in which this bank
participated. W hile member banks were borrowing $1.4 million at year-end, they had
used this facility more liberally during the year.
U . S. G o v e r n m e n t S e c u r i t i e s representing our allocation of holdings of System
Open M arket Account were $26.3 million less. T he decrease represented this bank’s
share in net market sales during the year made by the System Open M arket Account
in developing a restrictive credit policy.
Accompanying a further growth in check clearing activities the two components
of Federal Reserve float, the U n c o l l e c t e d C a s h I t e m s on the asset side and
D e f e r r e d A v a i l a b i l i t y C a s h I t e m s on the liability side, increased by $190 million
and $50 million respectively. T he float was unusually large due to the three-day
Christmas holiday and to the disruption of airmail deliveries because of weather.
On the liability side of the statement, F e d e r a l R e s e r v e N o t e s rose by $5.3
million. The region’s currency supply measured by this bank’s note circulation and by
notes of other Federal Reserve banks held by us, which may now be paid out by this
bank, was moderately larger.
M e m b e r B a n k R e s e r v e A c c o u n t s increased over $ 6 6 million. Larger reserve
balances were necessitated by additional deposits resulting from the increasing volume
of loans. The increase in both currency and deposits reflected the high level of this
district’s production and trade in 1955.
T h e U . S. T r e a s u r e r ’s g e n e r a l a c c o u n t d e c re a s e d a b o u t $ 1 8 m illio n .
C a p i t a l A c c o u n t s increased $2.6 million. T he increase of $1.2 million in C a p i ­
t a l P a i d I n reflects the purchase of additional shares by member banks which increased
their own capitalization. Approximately $1.4 million of net earnings were added to
S u r p l u s (S e c tio n 7).

T he reduction in the Gold Certificate reserves accompanied by an increase in
both deposit and note liabilities resulted in a decline in the bank’s reserve ratio from
43.5 to 40.1 per cent.
N e t E a r n i n g s of $14.5 million were $1.6 million less than in ’54. Again this
year the decrease in earnings was largely the result of a lower average yield on the
holdings of U . S. securities and also a smaller volume of holdings.
N e t E x p e n s e s were $42,000 less than last year.
A fter dividend payments of $930,000 to member banks, 90 per cent or $12.2
million of net earnings was transferred to the U . S. Treasurer in payment of interest
charges on Federal Reserve Notes levied under Section 16 of the Federal Reserve Act.


Volum e Figures for Years 1954 and 1955

V olum e in Pieces or Units
(D aily A verage)
Tran sac tion



Volum e in Dollars
(A nnual T o ta l)

195 4

Check Collections .......... ....1,057,062




Coin Counted and
W r a p p e d ......................3,429,608




Currency Sorted and
C o u n te d ....................



1,599,667,01 1


Noncash Collections:
N otes, D ra fts , and
C o u p o n s (e x c e p t
U. S. Government)





Safekeeping of Securities:
Pieces Received and
Delivered ...............
Coupons Detached ..





Transfers of F u n d s ____





Issues, Redemptions, and
U. S. Securities (Direct
Obligations) ..........
U. S. Savings Bonds .



1 1,496,549,380


U. S. Government
Coupons Paid ____



1 17,028,632

1 12,360,033

Federal Taxes: Deposi­
tary Receipts and
Direct Remittances









Currency Verified and
Destroyed ...............





J. A . E r i c k s o n , President
A l f r e d C. N e a l , First Vice President
D . H . A n g n e y , Vice President
E . O . L a t h a m , Vice President
C a r l B. P i t m a n , Vice President
O. A. S c i i l a i k j e r , Vice President and General Counsel
J . E . L o w e , Cashier
A n s g a r R. B e r g e , Assistant Vice President
E l l i o t S. B o a r d m a n , Assistant Vice President
F. C. GlLBODY, Assistant Vice President
E. W . O ’N e i l , Assistant Vice President
D a n a D . S a w y e r , Assistant Vice President
L . A . Z e h n e r , Assistant Vice President
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 . L. S t r o n g , General Auditor
W a l l a c e D i c k s o n , Administrative Assistant
W i l l i a m R . K i n g , Assistant Cashier
J a m e s D . M a c D o n a l d , Chief Examiner
L o r i n g C. N y e , Assistant Cashier
J o h n J. R o c k , Assistant Cashier
L a u r e n c e H . S t o n e , Secretary and Assistant Counsel
C h a r l e s E. T u r n e r , Assistant Cashier
G. G. W a t t s , Assistant Cashier





ROBERT C . S p r a g u e , Chairm an of the Board and Federal Reserve A g en t; Chairman of the
Board and Treasurer, Sprague Electric Company, North Adams, Massachusetts

J a m e s R . K i l l i a n , J r ., D eputy Chairman of the Board; President, M assachusetts Institute
of Technology, Cambridge, Massachusetts
F r e d e r i c k S. BLACKALL, JR., President and Treasurer, The Taft-Peirce M anufacturing
Company, W oonsocket, Rhode Island
LL O Y D D . B r a c e , President, T he First National Bank of Boston, Boston, M assachusetts
H a r o l d I. C h a n d l e r , President, T he Keene National Bank, Keene, N ew Hampshire
O l i v e r B. E l l s w o r t h , President and T ru st Officer, Riverside Trust Company, Hartford,
H A R V E Y P . H o o d , President, H . P. Hood & Sons, Inc., Boston, Massachusetts
H a r r y E . U m p i IREY, President, Aroostook Potato Growers, Inc., Presque Isle, M aine



W i l l i a m D . I r e l a n d , President, Second Bank-State Street Trust Company, Boston, M assa­



J o h n L . B a x t e r , Partner, H . C. Baxter & Brothers, Brunswick, M aine
W a l l a c e E . C a m p b e l l , Vice President and D irector of Personnel and P ublic Relations,
T he Fuller Brush Company, H artford, Connecticut
E a r l P . S t e v e n s o n , President, Arthur D . Little, Inc., Cambridge, Massachusetts
F r e d C. T a n n e r , President and General M anager, Federal Products Corporation, Providence,
Rhode Island
H a r o l d J . W a l t e r , President, Treasurer and General M anager, Bachmann Uxbridge W o r­
sted Corporation, Uxbridge, Massachusetts






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