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1979

Annual Report

FEDERAL RESERVE BANK OF CHIC

1979
ANNUAL REPORT
Federal

Reserve

Bank

of

Chicago

CONTENTS
A

message F r o m
1979

THE

Financial

Summary of

president

statements
operations

1
5
8

directors

9

Officers

12

A

president

MESSAGE FROM THE

Thouqhts

on

inflation

and

monetary

policy

W e can hardly move into a new decade w i t h o u t w o n d e r i n g what the
f u t u r e holds. W h i l e w e may be uncertain, w e naturally tend, I t h i n k , to
anticipate a brighter f u t u r e because of o u r past experiences.
Given the performance of the A m e r i c a n economy d u r i n g the 1970s,
however, can w e be this optimistic? D u r i n g the closing year of the decade
w e experienced the worst inflation of the postwar period. Even m o r e dist u r b i n g , the inflation of 1978-79 appears to be a resumption and further
acceleration of a cycle that was traced most recently by the U.S. e c o n o m y
between the late 1960s and mid-1970s. T h r o u g h o u t the postwar period we
can observe a series of cyclical peaks, each o n e bringing higher inflation
and interest rates than the o n e preceding it, w i t h less moderation in the
recession that f o l l o w e d . Thus, despite the substantial price—in terms of
prosperity, jobs, and i n c o m e — p a i d by Americans in 1974-75 to c o n t r o l inflation, those pressures subsided only temporarily. M u s t w e repeat this
pattern again or can w e break away and avoid still higher inflation a few
years d o w n the road?
I think the 70s p r o v i d e d us w i t h m o r e than merely a forecast of what o u r
f u t u r e w o u l d be like. The experiences of the decade underscored some
hard realities about inflation and what is required to combat it. W h a t was
demonstrated was hardly anything new. But if w e as a nation understand,
accept and act u p o n those realities, w e w i l l have reason t o anticipate a
better f u t u r e rather than just a repeat of the past.
Reality #7; Money growth
combat
inflation

has to be restrained

to

" T o o m u c h money chasing t o o few goods"—a highly simplified
description of inflation to be sure. Clearly it fails to cover important aspects
of the story, such as why there may be t o o m u c h money. Nevertheless, logic,
economic theory, historical fact, and certainly our recent experience all
substantiate the validity of this capsulized d e f i n i t i o n of inflation.
Inflation is essentially a matter of aggregate expenditures in excess of
available goods and services. Spending, in t u r n , depends o n the availability
of money and credit.

G r o w t h in m o n e y and credit supports business activity and expansion
of t h e nation's p r o d u c t i v e facilities, b u t o n l y to a p o i n t . The n a t i o n can
p r o d u c e only so m u c h and, w i t h i n any given t i m e p e r i o d , the e c o n o m y has
a l i m i t e d ability to expand p r o d u c t i v e capacity. W h e n idle resources begin
to disappear, c o n t i n u e d m o n e y g r o w t h causes prices to be b i d u p , and t h e
inflationary process begins t o take hold.
It stands t o reason that if i n f l a t i o n is financed by excessive m o n e y
g r o w t h , t h e n taking away t h e fuel should p u t o u t t h e fire. W h i l e t h e
d e v e l o p m e n t of inflation is a c o m p l i c a t e d process, n u r t u r e d and sustained
by a variety of interacting forces, it c a n n o t be o v e r c o m e w i t h o u t regaining
adequate c o n t r o l of t h e q u a n t i t y of m o n e y . Responsibility for c o n t r o l l i n g
m o n e y g r o w t h rests largely, of course, w i t h the Federal Reserve.
This was precisely the message a n d m e a n i n g of t h e actions a n n o u n c e d
last O c t o b e r 6. " T h e Federal Reserve today a n n o u n c e d a series of c o m p l e m e n t a r y actions that should assure better c o n t r o l over t h e expansion of
m o n e y and bank credit . . . and t h e r e b y serve to d a m p e n inflationary
forces."
The i m m e d i a t e market response to that a n n o u n c e m e n t — s h a r p increases in t h e w h o l e spectrum of interest rates—was q u i t e dramatic—so
dramatic, in fact, that I fear that many may have confused the s h o r t - t e r m
results w i t h t h e Federal Reserve's u l t i m a t e objectives.
The Fed's a n n o u n c e m e n t i n v o l v e d all t h e tools available to the Fed to
affect m o n e y — t h e discount rate, reserve r e q u i r e m e n t s and o p e n market
operations. Thus, the actions in c o m b i n a t i o n signified the System's c o m m i t m e n t to d o all in its p o w e r to c o n t r o l excess g r o w t h in m o n e y and credit.
Record high interest rates w e r e n o t an e n d in themselves b u t merely a t e m porary and inevitable o u t c o m e of the refusal to a c c o m m o d a t e excessive
credit demands.
Interest rates represent t h e price of credit. Like any price they reflect
t h e relationship b e t w e e n supply and d e m a n d . H i g h interest rates reflect
high credit d e m a n d s relative to funds available. Since i n f l a t i o n permits
b o r r o w e r s to repay debts w i t h cheaper dollars, inflation itself stimulates
these credit demands. A n d creditors, of course, factor their inflationary expectations into the interest rates they charge. The Fed c o u l d r e d u c e shortt e r m rates t e m p o r a r i l y by p r o v i d i n g m o r e loanable funds. U l t i m a t e l y ,
h o w e v e r , t h e action w o u l d only add f u r t h e r to inflationary pressures,
causing rates to rise even higher.
H i g h interest rates are m o r e p r o p e r l y v i e w e d , t h e n , as a s y m p t o m of inflation rather than either as its c u r e or as a cause. So l o n g as p e o p l e expect
inflation to persist, it is inevitable that rates w i l l remain high. But if real
progress can be made t o w a r d restraining excessive m o n e t a r y g r o w t h and
r e d u c i n g c r e d i t demands, rates w i l l just as inevitably c o m e d o w n . That
decline w i l l in no way violate t h e Fed's m o n e t a r y objectives; it w o u l d not
indicate that t h e Fed had given up t h e fight against i n f l a t i o n , b u t rather that
some success had b e e n w o n .

2

Reality #2; Monetary
cannot work in a

policy does not
vacuum

and

Like o t h e r c e n t r a l banks a r o u n d t h e w o r l d , t h e Fed has in r e c e n t years
established a n d a n n o u n c e d a n n u a l target rates of g r o w t h in t h e m o n e y
s u p p l y w h i c h it d e e m e d a p p r o p r i a t e in l i g h t of t h e n a t i o n ' s c u r r e n t
e c o n o m i c c o n d i t i o n a n d l o n g - r u n e c o n o m i c o b j e c t i v e s . Targets f o r t h e
p e r i o d f r o m t h e last q u a r t e r of 1978 t o t h e last q u a r t e r of 1979 w e r e set last
February. T h e Federal Reserve's a c t i o n s of O c t o b e r 6 d i d n o t m o d i f y these
targets. Rather t h e p u r p o s e o f t h o s e actions was t o increase t h e p r o b a b i l i t y
of h i t t i n g t h e m .
G i v e n that w e k n o w t h a t l o w e r rates of m o n e t a r y g r o w t h are essential
t o c o n t r o l i n f l a t i o n , w h y h a v e n ' t w e a c h i e v e d t h e m d u r i n g t h e past several
years? Largely because, as I h i n t e d e a r l i e r , t h e s i m p l e n o t i o n t h a t w e can get
i n f l a t i o n u n d e r c o n t r o l if w e just stop " p r i n t i n g m o n e y " leaves o u t i m p o r tant parts of t h e story.
The t e c h n i c a l p r o b l e m s associated w i t h b o t h t h e d e t e r m i n a t i o n a n d
i m p l e m e n t a t i o n of m o n e t a r y p o l i c y , of c o u r s e , r e p r e s e n t o n e part of that
story. O u r e c o n o m y is t o o c o m p l i c a t e d a n d u n p r e d i c t a b l e f o r m o n e tary p o l i c y t o b e a m a t t e r o f s i m p l e a r i t h m e t i c . In t r y i n g t o set m o n e y targets, p o l i c y m a k e r s are c o n f r o n t e d by a variety of u n c e r t a i n t i e s c o n c e r n i n g ,
a m o n g o t h e r s , t h e effects of n e w m o n e y substitutes, d e p o s i t shifts, a n d t h e
rate at w h i c h m o n e y w i l l be s p e n t , t h a t is, its v e l o c i t y . In a d d i t i o n , h i t t i n g
targets is n o s i m p l e task g i v e n t h a t m o n e y g r o w t h has t o be i n f l u e n c e d ind i r e c t l y t h r o u g h t h e supply of b a n k reserves, that m o n e y d e m a n d can f l u c t u a t e significantly, t h a t lags in p o l i c y effects vary, a n d that o u r i n f o r m a t i o n
f l o w s are l i m i t e d .
But e v e n if w e had all t h e i n f o r m a t i o n a n d t e c h n i c a l expertise necessary
t o c o n t r o l m o n e y p e r f e c t l y , t h e r e is a n o t h e r a n d e v e n m o r e i m p o r t a n t part
t o this story. T h e p o l i t i c a l a n d social realities of t h e s i t u a t i o n are such that
r i g i d a d h e r e n c e t o m o n e t a r y targets by a c e n t r a l b a n k is n e i t h e r palatable
n o r practical.
I n c o m e s a n d prices in m a n y segments of t h e e c o n o m y have b e c o m e i n s t i t u t i o n a l i z e d t h r o u g h legislation a n d c o n t r a c t u a l a r r a n g e m e n t s . They d o
n o t f l u c t u a t e freely in response t o c o m p e t i t i v e forces. Prices a n d i n c o m e s
have b e c o m e " s t i c k y , " a n d a d j u s t m e n t s are o n l y possible w i t h fairly l o n g
t i m e lags. Because of these rigidities a n d lags, it is d i f f i c u l t t o see t h e v a l u e of
restraining m o n e t a r y g r o w t h , b u t t h e costs are o b v i o u s . Jobs a n d i n c o m e s
are a f f e c t e d l o n g b e f o r e i n f l a t i o n . M o r e o v e r , t h e initial i m p a c t of m o n e t a r y
p o l i c y is u n e v e n , a f f e c t i n g t h o s e sectors m o s t d e p e n d e n t o n c r e d i t . T i g h t
m o n e y is l i k e a g a m e of musical chairs, a n d residential c o n s t r u c t i o n , small
business, a n d a g r i c u l t u r e t e n d t o b e t h e first losers.

5

Because t h e costs are o b v i o u s l o n g b e f o r e t h e b e n e f i t s , f o l l o w i n g a
c o u r s e of strict m o n e t a r y d i s c i p l i n e is likely t o b e s e l f - d e f e a t i n g . T h e r e is an
u n d e r l y i n g d a n g e r that as t h e m o n e t a r y p o l i c y b i t e takes h o l d , forces may
be set in m o t i o n o n o t h e r p o l i c y f r o n t s t o c o u n t e r b a l a n c e it, f u r t h e r
aggravating a n d p r o l o n g i n g t h e i n f l a t i o n battle.

M o n e t a r y policy cannot w i n that battle alone. The stronger the
elements that increase money d e m a n d in relation to the supply of real
goods and services—notably budget deficits, soaring oil prices, and declining p r o d u c t i v i t y — t h e m o r e d i f f i c u l t it is for the Fed to restrain monetary
g r o w t h w i t h o u t incurring costs that are politically and socially
unacceptable.
Reality #3: A "quick-fix"
neither possible nor

to our inflation
desirable

problems

is

In light of the high cost associated w i t h a rigid anti-inflation policy, w e
clearly cannot ask for or expect t o o m u c h , t o o soon f r o m the Federal
Reserve's actions of O c t o b e r 6. In the end, however, a gradual b u t consistent policy is our best hope for l o n g - t e r m success.
Americans w i l l have to exhibit uncharacteristic patience to pursue a
gradual solution to problems that have been b u i l d i n g for almost fifteen
years. A t t h e same time, w e w i l l have to have the forebearance b o t h to
accept the inevitable costs—in terms of reduced e c o n o m i c a c t i v i t y associated w i t h anti-inflationary policy, and to avoid m o v i n g t o o q u i c k l y to
a policy geared t o w a r d offsetting them. Overly stimulative measures in a
weak p e r i o d are a threat to lasting progress.
W e must recognize that w h e t h e r w e c o n f r o n t o u r inflation p r o b l e m or
not, w e w i l l have to pay a price. O u r only real choices have t o d o w i t h h o w
great that price w i l l be, w h e n w e w i l l pay it and, once having paid it, w h e t h e r
there is likely to be an e n d u r i n g beneficial effect. Given what w e have learned about inflation's impact o n savings, investment and the nation's p r o d u c tivity, inflation and recession can no longer be regarded as an e i t h e r / o r
situation.
W h i l e it is unrealistic to h o p e for or pursue a final solution to inflation
q u i c k l y , dramatic actions, such as those of O c t o b e r 6, w e r e a vital first step.
The public's expectations, w h i c h have b e c o m e such a f u n d a m e n t a l element
in the inflationary process itself, have to be altered before l o n g - t e r m stability in the e c o n o m y can be restored. Ultimately, p e o p l e will have to be c o n vinced that there is a firm public policy c o m m i t m e n t to c o n q u e r inflation.
O n l y if this happens can w e avoid progressively higher inflation that can be
corrected only by deeper recession.

Robert P. Mayo
President

1 9 7 9 FINANCIAL STATEMENTS
The financial statements of private enterprises provide a basis for
evaluating performance. Their balance sheets and statements of income are
statistical indicators of current and future capacity to generate earnings. By
contrast, Federal Reserve Banks do not operate under a profit objective.
Nonetheless, substantial earnings are incidental to the functions performed.
Changes in major asset, liability and income items on Reserve Bank
financial statements reflect developments in the economy and actions undertaken in support of System monetary objectives. Through purchases of
securities and loans to member banks, the Federal Reserve increases the
base for expansion in currency and deposits in accord with the economy's
growth needs. Additions to member bank reserve deposits that result from
this process are either withdrawn as currency or used to support the public's
deposits at commercial banks. Income consists mainly of interest on each
Reserve Bank's share of the System's portfolio of Treasury securities. Most
of this is returned to the Treasury after expenses and statutory dividends to
member banks are paid.
During 1979 this bank's share of securities held in the System O p e n
Market Account increased by $1.0 billion. All the increase in Reserve Bank
credit outstanding was absorbed by the payout of currency (Federal
Reserve notes outstanding) in response to public demands.

5

Increased interest income resulted from higher market interest rates as
well as the larger portfolio of loans and securities. Bank operating expenses
increased only moderately and foreign exchange losses, entailed in System
currency stabilization operations, were insignificant compared to last year.
As a result, net earnings rose by over $357 million, producing a record payment of almost $1.5 billion to the U.S. Treasury.

STATEMENT

of condition

(in thousands of dollars)

As of December 31
1979
Assets
Gold certificate account
Interdistrict settlement account
Special drawing rights
certificate account
Coin

1978

1,591,089
(769,417)

1,762,680
183,836

300,000
30,647

215,000
13,865

151,035
1,303,778
18,454,852

67,175
1,259,214
17,460,051

19,909,665

18,786,440

2,113,866
15,998
769,950

1,624,385
15,637
588,584

Total assets

23,961,798

23,190,427

Liabilities
Federal Reserve notes

18,504,804

17,189,680

3,689,067
283,924
45,149
150,036

4,092,270
427,940
31,013
105,929

4,168,176

4,657,152

589,904
363,118

757,482
260,909

23,626,002

22,865,223

167,898
167,898

162,602
162,602

335,796

325,204

23,961,798

23,190,427

Loans and securities:
Loans
Federal agency securities
U.S. government securities
Total loans and securities
Cash items in process of collection
Bank premises
Other assets

Deposits:
Reserves1
U.S. Treasury—general account
Foreign
Other
Total deposits
Deferred availability cash items
Other liabilities
Total liabilities
Capital accounts
Capital paid in
Surplus
Total capital
Total liabilities and capital

i n c l u d e s reserves of Edge Act Corporations and of U.S. agencies and branchesof foreign banks in
addition to member bank reserves.

6

STATEMENT
(in thousands

of

of Earnings
dollars)

Year e n d i n g December 31
1978
Current earnings:
Interest o n loans to m e m b e r banks
Interest o n g o v e r n m e n t securities
Interest o n investments of
foreign currencies
A l l other
Total current earnings

Current expenses:
O p e r a t i n g expenses
Cost of Federal Reserve currency
Total current expenses
Less reimbursement for certain
fiscal agency and other expenses
C u r r e n t net expenses

Current net earnings

Additions to (or deductions from)
current net earnings:
Net profit (or loss) on sales
of securities
Net p r o f i t (or loss) on foreign
exchange transactions
Assessment for expenses of
Board of Governors
Net additions (or deductions)

Net earnings before payments to
U.S. Treasury

Distribution of net earnings:
Dividends paid
Payments to U.S. Treasury (as interest
o n Federal Reserve notes)
Transferred to surplus

7

24,582
1,586,820

8,003
1,325,213

10,374

297

222

248

1,621,998

1,333,761

85,932
9,667

81,679
8,412

95,599

90,091

7,651

7,307

87,948

82,784

1,534,050

1,250,977

(24,422)

(20,792)

(551)

(77,369)

(7,600)
496

(8,130)
(36)

(32,077)

(106,327)

1,501,973

1,144,650

9,981

9,603

1,486,696
5,296

1,129,478
5,569

1,501,973

1,144,650

SUMMARY o f

OPERATIONS
Dollar amount
1979

Clearing and collection operations
Commercial bank checks collected ..
U.S. government checks collected 1 ..
Automated payments processed
Wire transfers of funds
Corporate and municipal bonds,
coupons and other noncash items
collected
Currency and related operations
Currency received and counted
Unfit currency withdrawn
Coin received and counted
Food stamps received and processed.

Loans to member banks
Total loans made during year
Banks accommodated

Services to U.S. Treasury
Marketable government securities
issued, serviced and redeemed:
Definitive securities
Book entry securities
U.S. savings bonds issued,
serviced and redeemed
Federal taxes processed

Member bank "service" operations
Safekeeping of securities:
Definitive, balance December 31 . . .
Book entry, balance December 31 ..
Securities purchased and sold
for member banks

1,113.9
80.0
7.5
9.5

billion
billion
billion
trillion

2.5 billion

8.1
1.6
289.9
652.5

billion
billion
million
million

35.7 billion
—

Number

1978

991.8
60.0
4.7
7.9

billion
billion
billion
trillion

1.9 billion

7.5
1.4
262.1
858.6

billion
billion
million
million

15.0 billion
—

1979

2.1
102.6
19.5
5.0

billion
million
million
million

1978

2.0
90.3
14.0
4.2

billion
million
million
million

659.5 thous.

563.3 thous.

976.0
325.0
2.2
190.7

936.2
274.4
2.0
224.0

million
million
billion
million

7,588
364

million
million
billion
million

5,870
299

2.9 billion
975.4 billion

3.2 billion
875.4 billion 2

259.1 thous.
424.4 thous.

304.3 thous.
327.5 thous.

4.2 billion
64.3 billion

4.1 billion
56.9 billion

66.2 million
0.8 million

62.2 million
0.8 million

8.7 billion
50.5 billion

9.7 billion
43.2 billion

1.7 million

1.7 million

1.8 billion

1.8 billion

34.7 thous.

—

—

25.9 thous.

includes postal money orders.
Revised.

2

8

DIRECTORS

9

Federal Reserve Bank directors, under the general supervision of the
Board of Governors of the Federal Reserve System, supervise the operations
of the bank and ensure that the affairs of the bank are administered fairly
and impartially. Drawing on their broad experience and knowledge of
regional conditions, the directors provide the president of the bank and the
Board of Governors information for use in formulating monetary policy. At
least once every 14 days, they establish the discount rate charged member
banks borrowing from the Fed, subject to the review and determination of
the Board of Governors. The directors are also responsible for selecting the
district's representative to the Federal Advisory Council which meets
periodically with the Board of Governors to provide input and advice on
economic policy matters. A n d because of their association with the Federal
Reserve, the directors contribute to better public understanding of the
Federal Reserve System and its actions.
Each Federal Reserve Bank has nine directors serving three-year terms.
Three Class A and three Class B directors are elected by member banks in
the district. Three Class C directors are appointed by the Board of Governors. For the election of Class A and B directors, member banks are
classified into three groups according to their capital size. Each group elects
one Class A and one Class B director.
Class A directors are representative of the member banks. Class B and C
directors represent the public; they cannot be officers, directors,
employees, or, in the case of Class C directors, stockholders of a bank. These
nonbanking directors are chosen with due but not exclusive consideration
to the interests of agriculture, commerce, industry, services, labor, and consumers.
O n e Class C director is designated chairman of the board of directors
and Federal Reserve Agent by the Board of Governors. Another is appointed deputy chairman.
Branches of Federal Reserve Banks have either five or, as in the case of.
the Detroit Branch, seven directors. A majority of the branch directors are
appointed by directors of the parent Federal Reserve Bank. They meet the
same qualifications as Class A or B directors of the head office.
The other branch directors are appointed by the Board of Governors.
They are selected according to generally the same criteria as Class C head
office directors, the difference being that they can be stockholders in
banks.
The chairman of the branch is selected from directors appointed by the
Board of Governors using a method prescribed by the parent Federal
Reserve Bank. The directors of the Detroit Branch, for example, elect their
chairman. The directors of the branch assist the bank's board of directors in
overseeing the operations of the branch. In addition, just as with directors
of the bank, they provide two-way communication between the Federal
Reserve and the public, ensuring participation by regional representatives
in the formulation of monetary policy.

DIRECTORS (as of December

31, 1979)

Board
of
Directors,
Federal
Reserve Bank of Chicago,
from
left to right: (standing)
Messrs.
Abboud,
Decio, Sagan,
Hunt,
Spies; (seated) Messrs.
DeLay,
Strotz, Ms. Garst; (not
shown
Mr. Brabec).

Chicago
ROBERT H. STROTZ, Chairman
President
Northwestern
University
Evanston, Illinois

EDWARD F. BRABEC
Business Manager
Chicago Journeymen
Local 130
Chicago,
Illinois

JOHN SAGAN, Deputy Chairman
Vice
President-Treasurer
Ford Motor
Company
Dearborn,
Michigan
A. ROBERT ABBOUD
Chairman of the Board
The First National Bank of
Chicago,
Illinois

Federal Advisory

Council

Plumbers,

DENNIS W . H U N T
President
Hunt Truck Lines, Inc.
Rockwell City, Iowa

ARTHUR J. DECIO
Chairman of the Board
Skyline
Corporation
Elkhart, Indiana

Chicago

ROGER E. ANDERSON
Chairman of the Board
Continental
Illinois National
Chicago,
Illinois

MARY GARST
Manager—Cattle
Division
The Garst Company
Coon Rapids, Iowa

Member

JAY J. DeLAY
President
Huron Valley National
Ann Arbor,
Michigan

Auditors

JOHN F. SPIES
President
Iowa Trust and
Savings Bank
Emmetsburg,
Iowa

Bank

(reporting

to bank's board of

FRED A. DONS, General
Bank

directors)

Auditor

RICHARD P. BUSH, Assistant General

Auditor

Detroit Branch
JORDAN B. TATTER, Chairman
President and Chief Executive
Southern Michigan
Cold
Storage Company
Benton Harbor,
Michigan
RODKEY CRAIGHEAD
Chairman of the Board
Detroit Bank & Trust Company
Detroit,
Michigan
HERBERT H. D O W
Secretary
The Dow Chemical
Midland,
Michigan

Officer
JAMES H. D U N C A N
Chairman
First American Bank
Corporation
Kalamazoo,

Michigan

LAWRENCE A. JOHNS
President
Isabella Bank and Trust
Mount Pleasant,
Michigan

CHARLES R. M O N T G O M E R Y
President
Michigan Consolidated
Gas
Company
Detroit,
Michigan
H O W A R D F. SIMS
President
Sims-Varner & Associates,
Detroit,
Michigan

Inc.

Company

10

BoardchangesF R 1980
O

John Sagan

Howard Sims

C h i c a g o Fed b o a r d

D e t r o i t Branch b o a r d

New Chicago Fed and Detroit
1980.

Robert Strotz
Three directors who provided
Chicago Fed boards completed

11

Branch board chairmen

Jay DeLay

have been designated

for

Jordan Tatter

six years of valuable service and leadership
their terms at year-end 7979.

on

John Sagan, vice president-treasurer of Ford M o t o r Company, will serve as
Chicago Fed board chairman in 1980, assuming the post held by Robert H. Strotz the
past two years. M r . Strotz, w h o is president of Northwestern University, completed
the maximum of two consecutive three-year terms on the bank's board at year-end
1979.
Stanton R. Cook, president, Tribune Company and publisher of the Chicago
Tribune, has been appointed to a three-year term as a Class C (nonbanker) director
by the Board of Governors and will serve as deputy chairman in 1980.
The only other new director on the Chicago Fed board in 1980 will be Patrick
McNarny, president of the First National Bank of Logansport, Indiana. McNarny was
elected a Class A director by medium-sized district member banks to fill the seat
held for the past six years by Jay J. DeLay, president of the Huron Valley National
Bank, Ann Arbor, Michigan. Mary Garst, of The Garst Company in Coon Rapids,
Iowa, was reelected as a Class B (nonbanker) director by the district's largest
member banks after serving on the board in 1979.
Changes in the board at the Chicago Fed's Detroit Branch for 1980 include a new
chairman, Howard F. Sims. M r . Sims is president of Sims-Varner & Associates of
Detroit and has been a branch director since 1978. In addition, two new directors are
joining the branch board. Russell G. Mawby, president and trustee, W.K. Kellogg
Foundation , Battle Creek, was named by the Board of Governors to take the seat
held by Jordan Tatter, president, Southern Michigan Cold Storage Company of Benton Harbor. M r . Tatter completed two full terms on the branch board and served as
branch board chairman for the past four years. Taking the branch board seat held by
Rodkey Craighead, chairman of the board of Detroit Bank and Trust, will be Dean E.
Richardson, chairman of Manufacturers National Bank of Detroit. M r . Richardson
was named a branch director by the Chicago Fed board.

OFficERs

(as of December

31, 1979)
EUGENE J. WAGNER, Vice President
ALLEN G. WOLKEY, Vice President
NICHOLAS P. ALBAN, Assistant Vice
and Assistant Secretary
JAMES A. BLUEMLE, Assistant Vice

President

President

HARRIS C. BUELL, JR., Assistant Vice

President

CHARLES W . FURBEE, Assistant Vice President
ROBERT P. M A Y O
President

DANIEL M . DOYLE
First Vice

President

OLIVER I. IRELAND, Assistant General
CAROL P. KASPAR, Assistant Vice
ERICH K. KROLL, Assistant Vice

M . BRIAN CAREY, Senior Vice President
and FRCS-80 Project

W A R D J. LARSON, Senior Vice
Legal Adviser and Secretary

President

ROSE M . KUBUSH, Assistant Vice

Manager

President

LARRY R. MOTE, Senior Economist
Assistant Vice President

President,

Counsel

President

and

LAWRENCE J. POWAGA, Assistant Vice

KARL A. SCHELD, Senior Vice President
Director of Research

and

President

HARVEY ROSENBLUM, Senior Economist
Assistant Vice President

HARRY S. SCHULTZ, Senior Vice President
CARL E. VANDER WILT, Senior Vice

President

RICHARD H. RAMSDELL, Assistant Vice

JAMES R. MORRISON, Senior Vice President

WALTER A. SIENKO, Assistant Vice

President

RICHARD P. ANSTEE, Vice President

DAVID R. STARIN, Assistant Vice

and

President
President

HILBERT G. SWANSON, Assistant Vice

GEORGE W. CLOOS, Economic Adviser
Vice President

and

President

PATRICK J. TRACY, Assistant Chief
CARL C. WELKE, Assistant Vice

FRANKLIN D. DREYER, Vice President

President

THOMAS L. WOLFE, Examining

Examiner

DetroIt

DANIEL P. KINSELLA, Vice President
JOSEPH G. KVASNICKA, Economic Adviser

and

Vice President

B r a n c h

WILLIAM C. CONRAD, Senior Vice President and

GLEN BROOKS, Assistant Vice

DOROTHY M . NICHOLS, Economic Adviser
Vice President

and

offices

President

President

ROBERT W . C O O K , Assistant Vice

President

District offices
THOMAS P. KILLEEN, Assistant Vice President, Des

R A Y M O N D M . SCHEIDER, Vice President

RUSSELL O . LANGAN, Assistant Vice President,

ROBY L. SLOAN, Vice President

RICHARD L. SIMMS, JR., Assistant Vice President,

Associate Director

and

Manager

President

WAYNE R. BAXTER, Assistant Vice

WILLIAM T. NEWPORT, Vice President

and

Officer

FREDERICK S. D O M I N I C K , Vice

ROBERT A. LUDWIG, Vice President

WILLIAM ROONEY, Vice President

President

PATRICIA W. WISHART, Assistant Vice President
Assistant Director of Research

WILLIAM H. GRAM, Vice President,
General Counsel and Assistant Secretary

LOUIS J. PUROL, Vice President, district

Examiner

ROBERT W . WELLHAUSEN, Assistant Vice

ROBERT M . FITZGERALD, Vice President

RODERICK L. HOUSENGA, Chief

President

WARREN J. TAUBMAN, Assistant Vice

PAUL J. BETTINI, Vice President

Moines

Milwaukee
Indianapolis

of Research

ADOLPH J. STOJETZ, Vice President
RUTH F. VILONA, Vice President

12

official changes

13

A number of official changes were announced during 1979, including
the promotion of Carl E. Vander Wilt to senior vice president with overall
responsibility for the management services and automation services
departments; Robert A. Ludwig to vice president in the management services department; and Ruth F. Vilona to vice president in charge of the accounting and disbursing departments. In addition, Senior Vice President
Ward J. Larson was named legal advisor, and Vice President William H. Gram
was appointed general counsel.
Joining the official staff during 1979 were Richard P. Anstee, vice president in automation services; Nicholas P. Alban, assistant vice president and
assistant secretary, responsible for the new office of the bank secretariat;
Oliver I. Ireland, assistant general counsel in the legal department; and
Lawrence J. Powaga, assistant vice president in the fiscal agency department.
Finally during 1979, the Federal Reserve System announced that a
special project team, composed of staff from Fed offices across the country,
would be based at the Chicago Fed to coordinate the development and installation of the system's new computer-based communications network,
FRCS-80. M . Brian Carey of the Board of Governors staff was named FRCS80 project manager, and for purposes of thisassignment,a senior vice president of the Chicago Fed.
At year-end the promotions of three assistant vice presidents and the
appointment of eight new officers were announced. Effective January 1,
Harris C. Buell of the supervision and regulation department, Charles W.
Furbee of the personnel department, and Patricia W. Wishart of the
research department were elevated to vice presidents. New members of the
official staff included Gary L. Benjamin, as senior economist and assistant
vice president in the research department, and seven managers of various
bank divisions. They are Jack S. Light, accounting department, Delmar W.
Robb, disbursing department, Warren E. Potts, wire transfer department,
and John Van Pelt, Detroit Branch check operations, all named operations
officers; Marlene O'Sullivan and Jean L. Valerius, both of the research
department, named research automation officer and research statistical officer, respectively; and William D. Stratton, bank relations division, named
banking services officer.

(312) 322-5112

FEDERAL RESERVE BANK
OF CHICAGO
Public Information Center
P. O. Box 834
Chicago, Illinois 60690

BULK RATE
U.S. POSTAGE
PAID
CHICAGO, ILLINOIS
PERMIT NO. 1942


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102