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FEDERAL RESERVE BANK OF CHICAGO

PRESIDENT'S ANNUAL REPORT
TO
MEMBER BANKS

ACTIVITIES FOR THE YEAR

1947

Federal

PRESIDENT'S

Reserve

Bank

of

Chicago

ANNUAL REPORT TO MEMBER BANKS

OF THE SEVENTH FEDERAL

ACTIVITIES

FOR THE

RESERVE

YEAR

DISTRICT

1947

F E D E R A L R E S E R V E BANK OF CHICAGO

O F F I C E OF T H E

PRESIDENT

January 22, 1948

To the Member Banks of the Seventh
Federal Reserve District:
You will find in the following pages a
brief description of the services performed by
the Federal Reserve Bank of Chicago for the
banks of the Seventh Federal Reserve District,
as well as for the government and the general
public, during 1947.
This past year was one of tremendous
volumes of work for us, as it was for you, and
our tasks were completed and written into this
record only through the wholehearted support
of our Member Banks. For that support I would
like to extend the warmest thanks of myself
and our entire organization.
Very truly yours,

President

CONTENTS OF REPORT
SEVENTH

DISTRICT

FEDERAL

OPEN

ECONOMIC

MARKET

SUMMARY

Page

COMMITTEE.

1
4

ACTIVITIES OF BANK DEPARTMENTS - HEAD OFFICE
S e r v i c e s to M e m b e r
Banks
Discounts and Other Credits
Currency and Coin
Collection of Checks and Other Items
Safekeeping of Securities
Investments
Economic Research
Examination of Banks
Bank and Public Relations

5
6
7
8
9
10
11
12

S e r v i c e s to T r e a s u r y
Department
Issuance of Government Securities
Servicing of Government Securities
Redemption of Government Securities.
Collection of Withheld Taxes

13
14
15
16

Reconstruction

17

Finance

B o a r d of G o v e r n o r s

Corporation.

Activities

- Consumer

C r e d i t . . . 18

General Bank
Activities
Accounting
Wires, Telephone, Mail, Files
Personnel
Procurement
Maintenance of Building.,
Legal

19
20
21
22
23
24

ACTIVITIES OF BANK DEPARTMENTS - DETROIT BRANCH
S e r v i c e s to Member
Banks
Discounts and Other Credits
Currency and Coin
Collection of Checks and Other Items
Safekeeping of Securities

25
26
27
28

S e r v i c e s to T r e a s u r y
Department
Issuance of Government Securities
Servicing of Government Securities
Redemption of Government Securities
Collection of Withheld Taxes

29
30
31
32

Reconstruction

33

Finance

Corporation

General Bank
Activities
Accounting
Wires, Telephone, Mail, Files
Personnel
STATEMENT

OF

E A R N I N G S * AND

STATEMENT

OF

CONDITION

EARNINGS
DIRECTORS

HISTORY
AND

OFFICERS

34
35
36
EXPENSES

37
38
39
40

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

SEVENTH DISTRICT ECONOMIC SUMMARY

Nineteen hundred and forty-seven goes into the records as the greatest
year of peacetime prosperity yet attained in the Seventh Federal Reserve
District as well as in the nation generally. During the past twelve months
virtually every barometer of business established a new all-time level —
particularly in dollar terms — and the immediate outlook for 1948 is for
a continuation of inflationary trends.
Because the goods currently in greatest demand but in shortest supply
to meet domestic and world needs are to a very large extent produced in
the Seventh District and its economic hinterland, it is not surprising to
find that during 1947 more people were at work, more goods produced,
more wages and salaries paid, more goods and services purchased, and
more profits received than in any previous year of peace. Underlying this
"boom," however, is a very apparent feeling that caution is in order in
business thinking and planning because the current prosperity is rooted
in part upon artificial, war-borne stimulants and cannot be expected to
endure indefinitely. Moreover, as prices continue to rise, there has been
increasing, although still scattered, evidence of financial stringency as
certain individuals and business firms have become more vulnerable to
an interruption or slowing down in their incomes or production.
The failure of inflationary forces to give ground during 1947 was basically
the unexpected result of demand continuing to outrun supply for nondurable as well as durable goods. Of particular marginal significance
here was the revived demand for food and textiles in the early months
of 1947 consequent upon the poor crop outlook at home and abroad and
second round wage increases among organized workers. The end of
building controls in midyear stimulated lagging commercial construction
and, together with greater working capital requirements resulting from
rising prices, increased business demands for funds. These developments changed business expectations, and inflation psychology once again
became dominant. Many consumers, moreover, became convinced that
price declines were not imminent and revised their buying plans. Residential starts increased more than seasonally throughout the District as
well as the nation from June to September and fell less than seasonally
in the last quarter.

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947.

PAGE 1

SEVENTH DISTRICT ECONOMIC SUMMARY -

CONTINUED

The Seventh District includes a sufficiently large proportion of the nation's
population, industrial and farm production, and financial activities to
serve in many respects as a barometer of business trends for the nation
as a whole. This condition was particularly evident in 1947. The District,
however, appears to have been somewhat more sensitive than the nation
to inflationary forces during the year. This resulted from the above
normal concentration of durable goods in the District and from the unexpected price strength of cereal grains and livestock which affected not
only farmers but also certain important food manufacturing industries
such as meat packing.
Continuous expanding employment, in contrast to extensive work stoppages
during the previous year, was primarily responsible for record Seventh
District prosperity in 1947. About seven million persons were at work in
nonagricultural pursuits in the District at the end of the year, with approximately three million in manufacturing. Unemployment was virtually
non-existent and shortages of workers widely reported, particularly in
the larger industrial centers.
The 9-10 per cent average increase in consumer prices in the principal
Seventh District cities during 1947, slightly above the rise generally
in the United States, was reflected in all dollar business trends. Disposable income of individuals exceeded the 12 per cent national increase.
Cash farm income in the five District states surpassed the 1946 level .by
roughly 25 per cent, rising well above the 19 per cent gain in the nation.
Wage and salary advances during 1947 averaged somewhat less than 10
per cent, but living cost increases commonly eliminated the possibility
of increases in real income.
In an effort to maintain their living standards in the face of mounting
prices, consumers in this District as elsewhere spent greater proportions
of their larger incomes in 1947 than during the previous year, and made
increased use of credit facilities. Retail Sales in Illinois and Michigan,
which together account for over three-fifths of the District total, increased
22-24 per cent over their year ago total, while the corresponding national
gain was slightly under 14 per cent. Similarly, Seventh District department store sales showed a greater 1946-47 increase, 10 per cent, than
in the nation, 7 per cent.

PAGE

2

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR1947.PAGE1

SEVENTH DISTRICT ECONOMIC SUMMARY-CONTINUED

The year 1947 witnessed an upsurge in the need for business credit, the
result of, as well as a contributory factor to, higher prices. Working
capital requirements advanced and commonly more funds were needed to
meet fixed and operating expenses than anticipated earlier. Commercial
and industrial loans of member banks in the Seventh District rose 27 per
cent during the year, compared with 29 per cent in the nation.
Within the Seventh District, all areas have shared in the District prosperity. The largest industrial centers, Chicago and Detroit, however,
have made the most striking gains during the past twelve months, in
contrast to their somewhat slower progress during the early postwar
reconversion months. The 1946-47 over-all rise in employment of roughly
five per cent in the Seventh District was exceeded by Detroit and Chicago,
but was slightly above the gains reported in Milwaukee, Indianapolis, and
Des Moines. While there was no appreciable difference in the extent of
1946-47 consumer price increases among the principal District cities,
Indianapolis was the only area to show a gain of less than the national
average of 8.8 per cent. The same general pattern of increases around
the District average prevailed in department store sales trends, with
the largest areas achieving particularly striking increases. The most
substantial increases in construction occurred in Detroit and Indianapolis,
with the latter city showing the greatest rate of expansion in new dwelling
units. Commercial and industrial loan expansion during the year was
largest among banks in Chicago and Milwaukee.

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947.

PAGE

1

FEDERAL OPEN MARKET COMMITTEE

The United States government securities shown
on the December 31, 1947, statement of the
Federal Reserve Bank of Chicago represent this
bank's share in the portfolio of the System Open
Market Account, in which all the Federal Reserve
banks participate. The activities of this account
are directed by the Federal Open Market Committee, and its transactions are handled principally
in New York. This bank's participation has varied
from time to time during the year but on December
31, 1947, stood at $3,085,404,000, representing
13.7% of the total portfolio of $22,559,334,000.

PAGE

4

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

DISCOUNTS AND OTHER CREDITS

SERVICES TO MEMBER BANKS.
The Federal Reserve Banks are empowered to make
to commercial firms.

loans to member b a n k s and, under certain

circumstances,

G E N E R A L SUMMARY
Member bank borrowings for the year aggregated $1,207,743,000, an
increase of 17.2% over the previous year. These increased borrowings
were due primarily to withdrawals of war loan deposit accounts in member
banks and elimination of the practice of permitting member banks to
tender U. S. Treasury bills for sale under repurchase agreement. The
maximum member bank borrowings outstanding as of any one day were
$278,690,000 on March 31, 1947.
One emergency loan for $400,000, secured principally by real estate
mortgages, was made under Section 10b of the Federal Reserve Act.
This loan was to a member bank which had suddenly experienced a loss
of approximately one-third of its deposits and enabled the bank to effect
an orderly liquidation of its excess loans and investments.
Two commitments aggregating $345,000 were entered into during the year
with financing institutions in connection with working capital loans to
industrial enterprises under the provisions of Section 13b of the Federal
Reserve Act.

S T A T E M E N T OF O P E R A T I O N S
1947

1946

430
1

395

2

2

$1,207,743,000
400,000

345,000

increase
or decrease

NUMBER OF TRANSACTIONS
Advances to Member Banks Secured by U. S. Govt. Obligations
Secured by Mtges. Sec. 10b
Industrial Loans
Advances
Commitments

+

8.9%

$1,030,155,000

+

17.2%

382,666

-

9.8%

DOLLAR VALUE OF TRANSACTIONS
Advances to Member Banks Secured by U. S. Govt. Obligations
Secured by Mtges. Sec. 10b
Industrial Loans
Advances
Commitments

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

PAGE 5

CURRENCY AND COIN

SERVICES TO MEMBER BANKS

Currency and coin a r e routed into general circulation through the Federal Reserve Banks, which act a s distributing agents between the Treasury and the Banking community. Commercial b a n k s desiring currency or coin m a y
obtain it from this Bank in exchange for their draft, a c h a r g e to their reserve account, etc. Similarly b a n k s
having excess c a s h m a y turn it in to this Bank and obtain funds in return. Incoming c a s h is used either to supplement n e w currency and coin in outgoing shipments, or, if unfit for further circulation, is returned to the Treasury
for destruction.

GENERAL

SUMMARY

During 1947 Cash Department activities continued in heavy volume and
showed substantial increases both in amount and pieces over 1946. In
1947 a large number of member banks availed themselves of a wrapped
coin service which was begun in a limited way in the latter part of 1946.
This service is being well received by member banks throughout the
district and will be further extended as additional mechanical equipment becomes available.
The net circulation of our Federal Reserve Notes reached an all-time
high of $ 4 , 6 6 9 , 3 3 8 , 0 0 0 on December 24, 1947, as against a high of
$4,602,370,000 a year ago, the net increase amounting to $66,968,000.

S T A T E M E N T OF O P E R A T I O N S
PIECES
Currency
Outgoing
Incoming
Forwarded for Redemption
Coin
Outgoing - Loose
Wrapped
Total
Incoming - from banks
from mints
from other Feds
D O L L A R V A L U E O F PIECES
Currency
Outgoing
Incoming
Forwarded for Redemption
Coin
Outgoing - Loose
Wrapped
Total
Incoming - from banks
from mints
from other Feds

1947

1946

505,142,656
523,534,850
207.974,832

465,288,540
499,617,483
169,466,861

568,634,136
316.034.000
884,668,136
738,481,403
146,400,000
4,100,000

741,892,988
14.420.000 t
756,312.988
481,142,829
325,250,000
2,400,000

$3,003,754,800
3,118,258,887
772.378.087

$2,749,670,700
2,879,538,129
566.563.229

$

$

$
$

42,515,060
31.394.450
73,909,510
66,919,297
6,950,000
1,300,000

$
$

58,639,122
591,000 t
59,230,122
45,851,998
15,100,000
853,500

increase
or decrease

+

8.6%
4.8%
22.7%

-

23.4%

+
+

+
+
-

+

17.0%
53.5%
55.0%
70.8%

+

9.2%
8.3%
36.3%

-

27.5%

+
+

+

24.8%,
45.9%
54.0%
52.3%

51,540,000
53,918,000

+
+

19.8%
34.0%

587,000,000
742,515,000

+

28.2%
16.8%

*

+
-

t Figures cover only last 3 months of 1946, when wrapped coin service was inaugurated.
F E D E R A L RESERVE NOTE ISSUES - FEDERAL RESERVE AGENT
PIECES
Received from Washington
61,764,000
Issued to Bank
72,259,000
D O L L A R V A L U E O F PIECES
Received from Washington
Issued to Bank

PAGE

6

$

752,640,000
867,060,000

$

+

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

SERVICES TO MEMBER

COLLECTION OF CHECKS AND OTHER ITEMS

BANKS.

The Federal Reserve Banks act a s nation-wide clearing agents for the routing of checks between commercial banks
in much the e a m e manner a s clearing house associations do in local communities, and accept and p a y checks
drawn by the Federal Government. They also collect drafts, notes, bonds, coupons, acceptances, etc., for member
banks and deliver against payment securities sold b y member banks.

G E N E R A L SUMMARY
The number of country checks cleared during 1947 was
8.5% greater than the number cleared during 1946; the
volume of all checks handled was up 5.8%. Noncash
items processed during the year declined 8.5% from the
1946 volume.

S T A T E M E N T OF O P E R A T I O N S
1946

42,717,756
182,389,933
4,080,834
41,835,136
271,023,659

42,435,255
168,024,163
7,004,569
38,745,465
256,209,452

$50,198,913,000
33,065,055,000
5,796,590,000
2,567,080,000
$91,627,638,000

$42,768,284,000
27,343,275,000
6,459,897,000
2.931,456,000
$79,502,912,000

+
+
+

17.4%
20.9%
10.3%
12.4%
15.3%

5,277

3,795

+

39.1%

42,246
190,795
486.324
719,365

40,451
225,662
520,440
786,553

+
-

4.4%
15.5%
6.6%
8.5%

106,893

121,198

-

11.1

84,192,000
694,350,000
1,042,226,000
$ 1,820,768,000

+
-

54.1%
17.1%
11.4%

-

10.6%

$

-

21.0%

NUMBER OF CHECKS HANDLED
City
Country
Government - Paper
Government - Card
Total
DOLLAR VALUE OF CHECKS HANDLED
City
Country
Government - Paper
Government - Card
Total
Daily average number of cash letters dispatched
NONCASH

0.7%
8.5%
41.7%

8.0%
5.8%

ITEMS

TRANSACTIONS
City
Country
Coupon and Security
Total
t Includes direct sendings to other Federal Reserve
Banks by our Member Banks

DOLLAR VALUE OF TRANSACTIONS
129,751,000
City
575,468,000
Country
923,018,000
Coupon and Security
$ 1,628,237,000
Total
Includes direct sendings to other Federal Reserve
450,347,000
Banks by our Member Banks
RATION

increase
or decrease

1947

CHECKS

CHECKS

Number of Items Handled
Total Units Processed
* Discontinued June 30, 1947

$

569,830,000

*
415,891
3,628,326,638

728,659
3,099,291,115

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

- 42.1
+ 17.1

PAGE 7

SAFEKEEPING OF SECURITIES

SERVICES TO MEMBER

BANKS

The Federal Reserve Banks act a s depositories for securities owned by member banks. Securities so held a r e
completely serviced a s to collection of interest, redemptions, exchanges, etc. A free safekeeping service for U. S
bavings Bonds, Series E, is extended to members of the armed forces and to the general public.

GENERAL

SUMMARY

During 1947 the number of pieces received exceeded by 50,000 the number
released. The large amount of municipal financing, mostly Soldiers'
Bonus bonds, was the reason for this increase. The amount of Government
securities received was less by $7,570,000,000 than in 1946. Coupons
detached from securities in Safekeeping declined 28,000.
During 1947, 109,825 Savings Bonds were deposited by the public for
safekeeping: 48% by service personnel, and 52% by civilians. Over
190,000 Savings Bonds were released during the year, compared to 414,129
during 1946; and on December 31, 1947, there remained in our safekeeping
782,202 pieces with a maturity value of over $73,000,000.
S T A T E M E N T OF O P E R A T I O N S
1946

285,520
235,196
489,266
879,662

281,851
252,522
438,942
907,288

$29,594,516,120
30,358,925,792
4,786,100,324
90,658,171

$37,165,447,774
37,525,805,554
5,550,509,996
113,138,766

31,167
30,059
61,166

33,212
33,318
60,058

+

9.8%
1.8%

52,366
57,459
139,589
51,906

68,981
157,528
352,838
61,291

_
_
_
_

24.1%
63.5%
60.4%
15.3%

443,000
339,202

530,223
333,649

_
+

16.5%
1.7%

3,779,000
11,377,000
16,010,000
7,139,000

_
_
_
_

5.4%
28.1%
56.5%
7.0%

25,604.000
49,278,000

_
+

13.2%
3.1%

SAFEKEEPING - MEMBER BANKS. ETC.
Pieces
Securities - Received
Released
Held as of Dec. 31
Coupons detached from Securities
Dollar Value of Pieces
Securities - Received
Released
Held as of Dec. 31
Coupons detached from Securities
Receipts Issued
Receipts Released
Receipts Outstanding
SAFEKEEPING - SAVINGS BONDS
Pieces
Received - U. S. Army Personnel
Civilian
Released - U. S. Army Personnel
Civilian
Held as of Dec. 31
U. S. Army Personnel
Civilian
Dollar Value of Pieces
Received - U. S. Army Personnel
Civilian
Released - U. S. Army Personnel
Civilian
Held as of Dec. 31
U. S. Army Personnel
Civilian
PAGE

8

increase
or decrease

1947

$

3,576,860
8,133,178
6,961,075
6,637,021
22,220,025
50,823,979

$

+

_

+
-

_
-

_
-

_
_

1.3%
6.9%
11.5%
3.0%
20.4%
19.1%
13.8%
19.9%

6.2%

.FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

INVESTMENTS

SERVICES TO MEMBER BANKS

The Federal Reserve Banks act a s securities agent for member banks. T h e purchase and sale of bonds b y
member banks, either for their own account or for the account of customers, m a y b e effected through their Reserve
Bank without c h a r g e .

G E N E R A L SUMMARY
The operations of the Investment Department declined somewhat during 1947 from the
previous year. Purchases decreased 24.2% in number and 25.3% in dollar value,
while sales declined 10.6% in number and 19.3% in value. The decrease was largely
attributable to the discontinuance during the year of the previous arrangement under
which member banks sold Treasury bills to the Federal Reserve banks at a stated
price with an option to repurchase.

S T A T E M E N T OF O P E R A T I O N S

PURCHASES
y. S. Governments Member Banks and Others
Other F. R. Banks
Repurchase Agreement
Own Account
Other
Member Banks and Others
Total Purchases

3,205
164
1,146
1

3,772
158
1,951

22
4,538

103
5,984

6,695
420
1,042

7,051
437
1,486

7
278

854

310

SALES
U. S. Governments Member Banks and Others
Other F. R. Banks
Repurchase Agreement
"
"
exchanged for Treas.
bills due 7 / 3 1 / 4 7
"
"
matured
"
"
transf. to System
Open Market Account
Own Account - transf. to System
Open Market Account
Other
Member Banks and Others
Total Sales
DOLLAR VALUE OF

Increase or
decrease

1946

1947

NUMBER OF SECURITY TRANSACTIONS

15.0%
3.8%
41.3%

-

+
-

~

•

-

5.0%
3.9%
29.9%

-

67.4%

-

-

1

78.6%
24.2%

~

53
9,881

80
8,833

+
-

50.9%
10-6%

TRANSACTIONS

PURCHASES
U S Governments T
Member Banks and Others
Other F. R. Banks
Repurchase Agreement
Own Account
Other
Member Banks and Others
Total Purchases
SALES
V. S. Governments Member Banks and Others
Other F. R. Banks
Repurchase Agreement
"
"
exchanged for Treas.
bills due 7 / 3 1 / 4 7
"
"
transf. to System
Open Market Account
"
"
matured
Own Account - transf. to System
Open Market Acct,
Other
Member Banks and Others
Total Sales

$

119,820,650
21,398,500
9,590,508,000
39,952,000

569.000
$ 9,772,248,150

$

175,938,140
8,129,500
7,445,191,000

$

-

+
-

30.6%
100.3%
25.6%

"

792,000
$13,079,004,950

$

39,952,000

165,058,050
18,069,950
9,561,542,000

-

—

28.2%
25.3%

-

6.6%
55.0%
22.1%

-

62.6%

+
-

-

1,587,479,000
1,236,993,000

-

3,310,899,000

39,952,000
634.900
$10,534,269,540

172,762,850
10,683,100
12,894,767,000

-

235.400
$13,055,804,400

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES

t 168.1%
19.3%

FOR THE YEAR 1947

PAGE 9

ECONOMIC RESEARCH

SERVICES TO MEMBER BANKS

Information on current economic developments in which the Federal Reserve System h a s an interest is gathered
and interpreted by the Bank. These studies are made a v a i l a b l e not only to the officers and directors of this Bank
and to the Board of Governors, but also to member b a n k s and business firms in the Seventh Federal Reserve
District, an
informational service being a very important activity of the Research Department. Members of the
research staff maintain continuing close contact with leaders of banking, industry, agriculture, and trade so a s
to obtain first-hand information on banking and business in this Reserve District.

GENERAL

SUMMARY

During 1947 the Research Department continued its emphasis on the gathering
of economic information in the Seventh Federal Reserve District and strengthening its ties with businessmen, agricultural leaders, and other sources of current
information. The Library staff, economists, and others in the Research Department participated as usual in providing information for the thousands of inquiries
for business and financial information which are received by mail, phone, or in
person from banks,business firms, and others.
Current statistical series were maintained and the usual periodic surveys and
studies were conducted. A new project this year was a survey of agricultural
loans conducted in approximately 80 member banks as a part of a national
Federal Reserve System survey. In addition, a number of studies were made
in the fields of agriculture, business, finance, and state government, which
were subjects of articles in the monthly review, Business Conditions.
The following material was published during the year as a result of current
studies and collection of data in the Seventh District:
Weekly
Agricultural Letter; department store sales; financial statements - Federal Reserve
Banks combined statement and member bank statements (national, and cities of
Chicago, Detroit, Indianapolis, and New York).
Monthly
Business Conditions (monthly review); retail trade and consumer credit series department stores, furniture, household appliance, jewelry, shoes; financial reports assets and liabilities of Seventh District member banks, bank debits, bankers acceptances, and commercial paper; other business summaries - business indexes, furniture
manufacturing, lumber, and paper and pulp.
Quarterly
Farm land value survey.
Annually
Department store sales by departments; deposit survey; meat packing study and
supplement; member bank operating ratio study; retail credit survey; and agricultural
credit data.

The usual number of intrabank publications were prepared, and in connection
with the vast amount of data collected from Seventh District reporting banks and
business firms, summary reports of these figures were prepared and sent to
the Board of Governors. To the extent that these data and other activities of
the Research Department are a part of the national program of research of the
Federal Reserve System, members of the research staff participated in a
number of System conferences and studies of national economic conditions.

PAGE

10

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER B A N K S - A C T I V I T I E S FOR THE YEAR 1947

EXAMINATION OF BANKS

SERVICES TO MEMBER BANKS

An examination of the state member banks in its district is made e a c h calendar y e a r by the Federal Reserve
Bank. Field investigations required in connection with applications to exercise banking functions are also carried
out. Various applications and reports required b y l a w to be rendered by organizations performing banking
services in this Reserve District are analyzed and reviewed by the Bank before being submitted to the Board
of Governors.

GENERAL

SUMMARY

Nine banks, 6 national and 3 state, were
admitted to membership in 1947. The staff
of the Bank Examination Department completed 573 examinations during the year.

S T A T E M E N T OF O P E R A T I O N S
NUMBER OF EXAMINATIONS MADE
Regular
Membership
Trust Departments
Follow-up Investigations
Holding Company Affiliate

1947

-

NUMBER OF MEMBER BANKS IN 7TH F. R. DISTRICT
National Banks
As of January 1
Additions (see Note A)
Withdrawals (see Note B)
As of December 31
State Banks
As of January 1
Additions (see Note A)
Withdrawals (see Note B)
As of December 31

1946

433
2
137
1

447
7
141
2
l

559
6
4
561

550
10
1
559

443
3
4
442

446
10
13
443

Note A - Additions to Membership
National Banks
Commercial National Bank of Berwyn, Berwyn, Illinois
First National Bank of Byron, Byron, Illinois
dencoe National Bank, Glencoe, Illinois
Tampico National Bank, Tampico, Illinois
Wheaton National Bank, Wheaton, Illinois
The Midland National Bank, Midland, Michigan
State Banks
Manteno State Bank, Manteno, Illinois
Waverly Savings Bank, Waverly, Iowa
The Citizens Bank of Saline, Saline, Michigan
Note B - Withdrawals
National Banks
4 - assumed by other banks
State Banks
2 - converted to national banks
2 - voluntary withdrawals
FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

PAGE

11

BANK AND PUBLIC RELATIONS

SERVICES TO MEMBER BANKS

The personnel assigned to the public relations staff visit member and non-member banks, attend conventions and
group meetings, deliver public addresses, etc., and in g e n e r a l attempt to determine w a y s in which the Bank's
services to its members m a y be improved.

GENERAL

SUMMARY

The development of good relationships between the Federal Reserve
Bank of Chicago and its member banks particularly, but also nonmember banks, corporations, and individuals was the over-all
objective of the Bank and Public Relations Department during 1947.
In the pursuit of this objective, all segments of the public were
contacted by means of personal calls, participation in the programs
of bankers' organizations, conferences with industrial leaders, and
speeches before service clubs, chambers of commerce, other
business organizations, and university and college groups. In
addition, the general public was acquainted with Federal Reserve
activities through the use of articles and press releases to publications.
The development of a better understanding of Federal Reserve
System policies and services was carried out through meetings
held in the Federal Reserve Bank and organized tours through the
Bank.
Joint staff meetings of the Bank Examination, Bank Relations, and
Research Departments were held each month. These meetings were
study conferences designed to improve the presentation of Federal
Reserve Bank service to the public.
Assembling of information of financial, economic, and fiscal problems was carried on throughout the year. The gathering of this
information on topics of importance to bankers was one of the
major activities of representatives. These opinions were summarized monthly for the use of the officers and directors, and
quarterly for the use of the Board of Governors.
During the year, officers and representatives made 2,553 calls
on banks throughout the District. All bankers' conventions of
the five District states were attended as were all bankers' group
meetings.
Speakers were furnished for 96 meetings in the District and for
national organizations.
The promotion of the services of the Bank was carried on with
special emphasis on such matters as proper handling of withheld
tax, procedures for cashing Armed Forces Leave Bonds, prompt
remitting for bonds sold, promotion of the Bond-A-Month plan,
development of the use of coupon collection letters, encouraging
protection of currency shipments, increasing the use of the Check
Routing Symbol, checking reasons for deficiency in reserve requirements, and other services to the operating departments.
P A G E 12

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

SERVICES TO TREASURY DEPARTMENT

ISSUANCE OF GOVERNMENT SECURITIES

The Federal Reserve Bank, acting a s agent of the Treasury Department, performs all operations relative to tne
placing of n e w Treasury issues in the hands of the general public, and r e l a y s information from Washington throughout this district. The Bank qualifies commercial b a n k s and others in the district a s agents in the sale of U. S.
Savings Bonds, Series E, to the public; and services these agents a s regards supplies of n e w bonds, applicable
Treasury directives, the processing of paid registrations, etc. The Bank analyzes the sales of U. S. Savings
Bonds, and furnishes the Treasury Department and others with detailed reports showing what the public purchased in the various counties and states in this district.

GENERAL

SUMMARY

As no cash (new money) offerings for market securities were made during the year,
an over-all decrease in the volume of work will be noted. Market securities issued
during the year were all offered on an exchange or refunding basis. Sales of Series
E Savings Bonds by Issuing Agents indicate a decrease of 29% in pieces whereas the
maturity value sold shows an increase of 3%, this being the result of a decline in pay
roll purchases and an increase in the purchase of large denominations by investors.
The processing of Armed Forces Leave Bond stubs which started late in 1946 is now
on a rapidly declining basis and will end in September 1948.
S T A T E M E N T OF O P E R A T I O N S
increase
or decrease

1947

1946

171,750
18,700

181,400
22,700

5.3%
17.6%

181,800
300,450

185,150
398,050

1.8%
24.5%

$13,797,900,000
16,935,000

$20,575,700,000
19,590,000

32.9%
13.6%

10,212,335,000
16,935,000

14,702,380,000
19,590,000

30.5%
13.6%

NEW ISSUES
Subscriptions
Forms Received
Treasury (Other than E Bonds)
" E " Bonds
Subscribers Involved
Treasury (Other than E Bonds)
" E " Bonds
Dollar Value of Subscriptions
Received
Treasury (Other than E Bonds)
" E " Bonds
Allotted
Treasury (Other than E Bonds)
" E " Bonds
ISSUING AGENTS
Series E Savings Bonds Sold
Pieces
Maturity Value
Number of Qualified Issuing
Agents as of December 31
Number of Geographical Sales Reports
Prepared (E, F & G Savings)
Dollar Value

9,775,000
775,410 r 000

+

29.6%
3.3%

3,128

3,236

-

3.3%

2,820
$ 1,382,800,000

5,700
$ 1,306,670,000

+

50.5%
5.8%

173,000
6,985,000

161,000
9,280,000

450,550
1,623,850
2,074,400

44,160
960,350
1,004,510

$

SHIPPING AND DELIVERY
Pieces Shipped
Treasury (Other than E Bonds)
" E " Bonds
ARMED FORCES LEAVE BONDS
Stubs Processed
Pieces
Army Issuing Officers
Navy
"
Total
Face Value
Army Issuing Officers
Navy
"
Total

$
$

6,877,000
800,690,000

95,522,000
322,259,000
417,781,000

$

$
$

10,776,000
205,245,000
216,021,000

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

+
7.5%
- 24.7%

The processing
of Armed
Forces Leave
Bond stubs
began in
October 1946

PAGE 13

SERVICING OF GOVERNMENT SECURITIES
The Federal Reserve Banks handle the servicing of all government securities.
transfers, custody of blank stock, accounts of depositary banks, etc.

GENERAL

SERVICES TO TREASURY DEPARTMENT
Such

work

includes

exchanges

SUMMARY

The volume in pieces and maturity value of securities received and
issued on denominational exchange and public debt transfers indicates
an over-all decrease over 1946. This is the result of the absence of
new money financing by the Treasury Department and the relative inactivity during the past year in the Government Bond market with less
shifting in Government Bond portfolios on the part of banks and other
financial institutions.
Activities in the Depositary Bank Division show a decrease of 17% in the
number of payments handled. This is a result of the Government's
Debt Reduction Program with heavy withdrawals from War Loan Accounts
and with the opportunity of depositaries to make only limited additions to
their War Loan balances.

S T A T E M E N T OF O P E R A T I O N S

Maturity Value
Received
Marketable Issues
Public Debt Transfers
Issued
Marketable Issues
Public Debt Transfers
Depositary Banks
Number of Payments Handled
Depositary Balances Dec. 31
Number of Qualified Depositaries - December 31
Custody - General Stock
Pieces
Received from Treas. Dept.
Prepared for Delivery

PAGE 14

1946

107,500
31,650

135,750
39,900

-

20.8%
20.7%

106,300
24,500

124,000
35,250

-

14.3%
30.5%

$1,739,910,000
2,701,775,000

$1,933,000,000
3,347,450,000

-

10.0%
19.3%

1,739,910,000
2,685,625,000

1,933,000,000
2,485,000,000

+

10.0%
8.1%

155,200
169,690,000
1,676

188,300
351,794,000
1,669

+

17.6%
51.8%
.4%

8,500,000
8,435,000

10,580,000
11,153,000

-

19.7%
24.4%

338,000

DENOMINATIONAL EXCHANGE
Pieces Received
Marketable Issues
Public Debt Transfers
Pieces Issued
Marketable Issues
Public Debt Transfers

Security Mail
Pieces Received

increase or
decrease

1947

375,000

9.9%

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

REDEMPTION OF GOVERNMENT SECURITIES

SERVICES TO TREASURY DEPARTMENTIn connection with their duties
Government securities eligible
Bonds, from commercial banks
directed by the Treasury and

a s Fiscal Agent of the United States, the Federal Reserve Banks accept (and pay)
for redemption, either directly from the holders thereof, or, in the c a s e of savings
designated a s paying agents. Securities paid in redemption are processed a s
are turned over to the Bureau of the Public Debt for final settlement and disposal.

GENERAL

SUMMARY

The number of pieces of U. S. Savings Bonds redeemed in 1947 was 38.8%
less than in 1946, whereas the redemption value indicated a decrease of
15.4% for the same period. The optional redemption of Armed Forces
Leave Bonds was authorized effective September 2, 1947, since which time
the greater part of 670,000 pieces having a redemption value of
$139,987,000 have been handled through paying agents authorized to pay
savings bonds. Redemptions of other U. S. Bonds, Notes, Bills and
Certificates, as well as U. S. and other Governmental agency coupons,
show a decline in volume and dollar amounts over 1946.

S T A T E M E N T OF O P E R A T I O N S
1946

1947

REDEMPTIONS
U. S. Savings Bonds
Pieces
By Paying Agents A-E
By F. R. B.
A-G
Total
$25 Pieces, Series E, Included Above

increase
or decrease

21,230,000 98.0%
13,600,000 97.1%
2.0%
427.000
413.000
2.9%
14.013.000 100.0% 21.657.000 100.0%
15,718.000 72.6%
9.625.000 68.7%
$563,465,000 78.5% $733,823,000 86.5%
154.200,000 21.5% 114,227,000 13.5%
$717,665,000 100.0% $848,050,000 100.0%

Redemption Value
By Paying Agents A-E
By F. R. B.
A-G
Total
Armed Forces Leave Bonds *
Pieces
By Paying Agents
By F. R. B.
Total

- 35.9%
- 3.3%
- 35.3%
- 38.8%
- 23.2%
+ 35.0%
- 15.4%

632,750

37.450

670,200

$132,891,000
7,096,000
$139,987,000

Redemption Value
By Paying Agents
By F. R. B.
Total
* Redemption of Armed Forces Leave
Bonds Authorized Sept. 2, 1947
Number of Qualified Paying Agents
as of December 31

-0-

-0-

+ 1.7%

2.403

2,363

Other Bonds, Notes, Bills and
Certificates Redeemed
Pieces
Amounts

252,000
$7,413,000,000

375,000
$11,187,000,000

- 32.8%
- 33.7%

U. S. and Other Governmental
Agency Coupons Redeemed
Pieces
Dollar Value

$

2,278,000
140,075,000

- 7.1%
- 9.8%

2,116,000
126,410,000

$

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

PAGE

15

COLLECTION OF WITHHELD TAXES

SERVICES TO TREASURY DEPARTMENT

The Bank acts a s agent of the Treasury Department, assisting the Bureau of Internal Revenue in the collection
of funds deposited in commercial b a n k s b y employers under withholding tax arrangements.

GENERAL

SUMMARY

At the close of the year 1,604 banks were
c a r r i e d in our accounts as Depositaries for
"Withheld Taxes." Depositaries paid to us during
the year approximately 1,089 millions of dollars
represented by over 536,000 receipts. The dollar
value of the receipts increased approximately 24%
over 1946; the number issued increased approximately 4%.
Offices of the Internal Revenue Department
deposited with us their certificates of deposit
amounting to over 1,112 millions of dollars,
represented by more than 578,000 receipts.
The largest volume received from depositaries
on any one day was received on December 11, 1947,
and amounted to $24,566,000.

S T A T E M E N T OF O P E R A T I O N S

NUMBER OF RECEIPTS
Issued by Depositaries
DOLLAR VALUE OF RECEIPTS
Issued by Depositaries

PAGE

16

1947

1946

increase

536,141

514,758

+

4.2%

$1,088,926,292

$877,315,566

+

24.1%

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER B A N K S - A C T I V I T I E S FOR THE YEAR 1947

SERVICES TO R. F. C.

RECONSTRUCTION FINANCE CORPORATION

The Federal Reserve Banks are fisccl agents of the Reconstruction Finance Corporation and the Commodity Credit
Corporation. In such capacity the Bank disburses the proceeds of loans, makes a d v a n c e s for the accounts of
various Governmental corporations, maintains custody of collateral, handles work relative to the redemption and
e x c h a n g e of securities, etc.

G E N E R A L SUMMARY

RECONSTRUCTION FINANCE CORPORATION
Reflecting the gradual settlement of outstanding claims and
liquidation of inventories and facilities acquired under the
Reconstruction Finance Corporation war programs, particularly those of the Office of Defense Plants and of the Office of
Defense Supplies, the totals of disbursements and receipts for
1947 were radically reduced from the corresponding totals
for 1946.
During the year 1947 the Corporation began a process of
transferring accounting responsibility, much of which had
been handled by the Federal Reserve Banks as fiscal agents,
to its local loan agencies. Transfers of accounting responsibility for administrative expenses, Office of Defense Plants
transactions, and for mortgages purchased by The RFC
Mortgage Company and Federal National Mortgage Association were completed during the year. Although additional
transfers were contemplated, accounting responsibility for
the Corporation's loan programs, loan guarantees, acquired
collateral, investments, and Office of Defense Supplies transactions remained assigned to the fiscal agents throughout 1947.
COMMODITY CREDIT CORPORATION
Disbursements and receipts for account of Commodity Credit
Corporation for 1947 were lower than the corresponding totals
for 1946 reflecting termination during 1946 of the war programs of lend-lease and production subsidies.

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

PAGE 17

CONSUMER CREDIT

BOARD OF G O V E R N O R S

ACTIVITIES

The Board of Governors of the Federal Reserve System, worked through the Reserve Banks in its regulation of
credit and instalment buying. Each Bank investigated credit activities throughout its district to ascertain whether
or not Executive orders and related directives were violated.

GENERAL

SUMMARY

During 1947 a spot check of the books and records of 2,696 Registrants was made for
the purpose of determining the extent of compliance of the Registrants' credit transactions with the provisions of Regulation W. In the same period approximately 5,000
inquiries concerning the Regulation were answered and 2,842 new licenses issued.
Three hundred twenty-nine municipalities were visited during the year by investigators
who filed detailed reports covering their review of 124,401 credit transactions. Violations, totaling 2,430,were disclosed in 1,363 of the 2,696 investigations conducted.
Registrants were apparently wilfully violating the Regulation in 2 cases.
The activities of the Consumer Credit Department decreased considerably during the
current year due primarily to the fact that Regulation W was terminated on November
1, 1947 by an act of Congress passed on August 10, 1947. Following this congressional
action, our investigative activities during August, September and October were confined
to the few complaints received from Registrants. The clerical and filing staff was
retained until December 1, 1947 in order to effect the consolidation and transfer of
files and records.

S T A T E M E N T OF O P E R A T I O N S
Inquiries Received
By Letters
By Personal Interviews
By Telephone Calls Total
Mailings
Dictated Replies
Form Letters
Letters written regarding Incorrect Registration
Statements received and letters to Registrants
concerning violations disclosed in Investigators'
reports, as well as other letters, such as
follow-ups
Circular Letters and Amendments
Total
Number of Registrants as of December 31
Number of Registration Statements Received
Number of Registration Statements Cancelled
Licenses Issued
Investigations
Number Conducted
(Including calls on cash dealers)
Credit Transactions Reviewed
Number of Investigations Disclosing Violations
Violations Disclosed
t 1947 figures cover a ten-month period only.

PAGE

18

1947
1,039
525
3,617
5,181

1946
2,284
723 4,076
7,083

1,039
1,209

2,284
549

566
101.633
104,447
38,314
2,725
1,325
2.842

2,086
140,907
145,826
36,919
2,563
925
2.643

2,696
124,401
1,363
2.430

3,579
314,025
1,442
4,110

increase
or decrease
- 54.5%
- 27.4%
- 11.3%
26.9%

-

54.5%

+ 120.2%
- 72.9%
- 27.9%
- 28.4% +3.8
• 6.3%
+ 43.2% 7.5%

- 24.7%
- 60.4%
- 5.5%
- 40.9%

* 1947 figure as of October 31, 1947

f e d e r a l r e s e r v e b a n k o f c h i c a g o - p r e s i d e n t ' s a n n u a l r e p o r t t o member b a n k s - a c t i v i t i e s

f o r t h e y e a r 1947

ACCOUNTING

GENERAL BANK ACTIVITIES

The central accounting routines of the Bank include the maintenance of the reserve accounts of member banks,
the constant a n a l y s i s of these reserves a s regards the legal minimum of e a c h bank, the maintenance of accounts
with other Federal Reserve Banks through an interdistrict settlement fund, the transfer of funds b y wire for
member banks, the handling of all Bank disbursements, the compilation of claims for services rendered the government, the a s s e m b l y of cost d a t a and construction of reports, etc.

G E N E R A L SUMMARY

The number of entries to member bank reserve
accounts declined 5.0% during 1947; the number
of wire and mail transfers increased 11.7%.
Expense vouchers functioned during the year
declined 5.9%, and the number of cost entries
were down 13.5%. Extensive rearrangements
were made in the Bank's expense accounting
systems, and a detailed budgetary control setup
was evolved and placed in operation.

S T A T E M E N T OF O P E R A T I O N S
1947

1946

GENERAL LEDGER
Number of Entries Functioned

345,493

341,230

FEDERAL RESERVE BOOKS
Number of Entries Functioned

1,358,964

MEMBER BANKS' RESERVE ACCOUNTS
Number of Entries Functioned
activities Accounts as of December 31

2,404,550

increase
or decreas
decrease
+ 1.2%

MEMBER BANK RESERVES
Excess Over Requirement
Maximum
Minumum
Assessable Deficiencies
Banks
Amount of Penalties Assessed

Period
Mar. 15
July 31

TRANSFERS OF FUNDS
Number Interdistrict
By wire
By mail
Number Intradistrict - By wire and mall
Total
Dollar Value
EXPENSE DISBURSEMENTS
Expense Vouchers Functioned
Fiscal Agency Claims Prepared
Number of Cost Entries Functioned

Amount
$148,433,000
99,431,000
$

2,530,247
810
Amount
$217,692,000
122,285.000

Period
Jan. 15
Sept. 30
201
9,900

89,523
3,080
97,039
189.642
$28,080,347,000
$

1,362,080

12,368,440
4.578.435
47,308

-

5.0%

-

31.8%

179
9,697

+.12.3%
+.2.1%

78,558
2,573
88,698
169,829
$21,496,559,000

+ 14.0%
+ 19.7%
+
9.4%
+ 11.7%
+ 30.6%

13,150,162
6.363.177
54,672

5.9%
- 28.0%
- 13.5%

$

$

ZL

PAGE

19

WIRES, TELEPHONE, MAIL, FILES

general

bank

activities

In addition to the usual mail and telephone facilities, the Bank maintains the principal relay center of a l e a s e d
wire system having connections with the board of Governors in Washington, with the other Reserve Banks and
Branches, with the Treasury Department and with the Reconstruction Finance Corporation. Telegrams effecting
transfers of funds for members, Fiscal Agency operations, and other banking transactions a r e processed both incodeandinclear.

GENERAL

SUMMARY

Almost one million telegrams were handled through the
Chicago relay office of the Federal Reserve Leased Wires
System in 1947, a decrease of 8.3% from the 1946 volume.
The Codes and Telegrams Division of the Bank processed
177,000 telegrams during the year, an increase of 3.6%
over the previous period.
Local outgoing telephone calls decreased from the 1946
average of 27,940 per month to 26,719. Long distance calls
dropped from 1,215 per month in 1946 to 1,135 in 1947.
Mail Department activities fell off slightly during 1947.
Air E x p r e s s service to all Federal Reserve Banks and
Branches and to some member banks was instituted; such
shipments averaged 19,000 pounds a month.
Bookbindings were up slightly during the period to 14,781;
case spaces of material stored were up from 36,980 at the
end of 1946 to 43,762 at the end of 1947. Over 1,100,000
pieces were handled by the General Files Division during
the year.

S T A T E M E N T OF O P E R A T I O N S

TELEGRAMS PROCESSED
Leased Wires
Received
In Code
In Clear
Dispatched
In Code
In Clear
Commercial Wires
Received
In Code
In Clear
Dispatched
In Code
In Clear
MAIL HANDLED
Number of Pieces Received
Number of Pieces Dispatched, Mail and Express

PAGE 1 30_

increase
or decrease

1947

1946

68,747
6,862

65,383
8,806

+

49,786
10,619

49,030
12,985

+
-

1.5%
18.2%

18,121
5,267

16,054
4,059

+
+

12.9%
29.8%

12,339
5,947

6,540
8,575

+
-

88.7%
30.6%

1,803,462
3,251,448

1,863,593
3,414,416

-

3.2%
4.8%

-

5.1%
22.1%

.FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER B A N K S - A C T I V I T I E S FOR THE YEAR 1947

PERSONNEL

GENERAL BANK ACTIVITIES-

All general personnel activities of the Bank are handled b y a central personnel unit. Such work includes the
hiring of employees, the keeping of s a l a r y and personnel records, the promotion of education and welfare programs, and the maintenance of a medical department and an employees' cafeteria.

G E N E R A L SUMMARY
The number of employees of the Bank declined further in
1947 to 2,373, a decrease of 137. During the year 700 new
employees were hired, and 837 left our employee, the turnover being somewhat less than that of 1946. At the close
of the year there were 179 employees in active service
who had been with the Bank 25 years or more. A substantial
number of e x - s e r v i c e men attending schools under the
GI Bill of Rights were employed on a part time basis during
the period.
A program for the interdepartmental training of key employees
was instituted during the year, and the Job Evaluation Plan,
which provides grades and commensurate salary ranges for all
employees of the Bank, was approved by the Board of Governors of the Federal Reserve System and became effective
September 1, 1947.
S T A T E M E N T OF O P E R A T I O N S

PERSONNEL UNIT
Number of Regular Employees
As of December 31
New Employees
Separations
Number of Extra-Help Employees
As of December 31

1947

2,373
700
837

2,510
1,118
1,224

64

52

884
32,327
1,647

1,189
51,596
1,670

34
1,813
621
2,468

increase
or decrease

1946

36
1,803
550
2,389

-

5.5%
37.4%
31.6%
23.1%

MEDICAL DEPARTMENT
Physical Examinations
Requests for Medical Care
Visits by Nurse

-

25.7%
37.3%
1.4%

CAFETERIA
Daily Average Number of Meals Served
Officers Dining Room
Cafeteria - Noon
Evening
Total Meals

PAGE131_.FEDERALRESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE

5.6%
+
+

YEAR

12.9%
3.3%

1947

PROCUREMENT

GENERAL BANK ACTIVITIES

ThecentralprocurementunitsoftheBankhandle the purchasing of all equipment and supplies, the storage of
supplies, and the maintenance of a printshop, an addressing division, and an office machine repair shop

G E N E R A L SUMMARY
During 1947, the Purchasing Department issued
8,006 purchase orders totaling approximately
$685,000 for building supplies, office supplies,
The number of orders written increased during the
year; this was due partly to the decrease in
inventories to six months' supply, which in some
instances necessitated the issuing of two purchase
orders during the year. The number of items
carried in the Bank stock room decreased during
the year, but showed an increase in dollar value
of 8. 7%

S T A T E M E N T OF O P E R A T I O N S
1947
8,006
$685,000

PURCHASING
Purchase Orders
Dollar Value
PRINTING

Jobs
453
555
1,157
311
1,119
3,595

Duplicating
Mimeograph
Multilith
Multigraph
Photostat
ADDRESSOGRAPH UNIT
Plates Made and Corrected
Plates Removed and Transferred
Carbon Paper Inserted Into Forms
Impressions Made on Forms, Envelopes,
Statements, etc.

PAGE

22

1946
7,729
$670,000

Impressions
96,000
397,000
9,708,000
1,385,000
46.000
11,632,000

Jobs
372
792
438
369
1.447
3,418

increase
or decrease

+ 3.6%

+

2.2%

Impressions
45,000 969,000
5,634,000
2,058,000
71,000
8,777,000

3,622
1 754
1,050,000

608,000

4,627,287

4,362,000

4.0%
3.5%

3,772

1,818
+

+

72.7%

6.1%

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER B A N K S - A C T I V I T I E S FOR THE YEAR 1947

MAINTENANCE OF BUILDING

GENERAL BANK ACTIVITIES.

The operation of the Bank's main building and auxiliary space is handled b y a general maintenance staff. This
work includes routine duties, such a s janitor service and elevator service, a s well a s major alterations and upkeep.

G E N E R A L SUMMARY
During the year contracts were let covering conversion of
building light and power from Direct Current to Alternating
Current, enlarging of the concourse and construction of a new
Directors Room on the fifth floor. This work is now all in
process. A contract for new elevator installation and modernization was awarded to Westinghouse Company but work on the
contract was not begun during the year.
Linotile was laid in several areas on the 5th, 6th, 7th floors
and 1st basement where the Coin Department was enlarged.
Skylight roofing was completed and a new suspended ceiling
installed in the Bank Examination Department. Acoustone
ceilings were installed in the banking lobby on the second
floor and about one-third of the ceiling area on the fourteenth
floor.
Tabulated below are occupied quarters, owned and rented,
at the end of 1947 and 1946:

S T A T E M E N T OF O P E R A T I O N S
Square Feet Rentable
Area in Use at Year-End
Owned:

1947

230 South LaSalle Street

1946

243,963 *

243,963 *

11,210

6,000
11,210

50,834
23,524

51,331
6,000
23,524

198

198

329,729

342,226

Rented:
166 West Jackson Boulevard
120 South LaSalle Street
175 West Jackson Boulevard
(Insurance Exchange Building South)
725 South Wells Street (Warehouse)
416 Federal Street (Warehouse)
Security Trust Building, Room 521,
Indianapolis, Indiana
Total

•The Federal Reserve Bank Building contains 307,138 square feet, the difference of 63,175 square feet being rented to four tenants on term leases.

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947.

P A G E 23

LEGAL

GENERAL BANK

ACTIVITIES

Legal matters arising in the course of this Bank's operations (litigation, preparation and approval of documents,
preparation of opinions and memoranda relating to F e d e r a l and State regulations and laws) are handled b y the
legal department.

GENERAL

SUMMARY

The Legal Department consists of the General
Counsel, an Assistant General Counsel and two
Assistant Counsels, one of whom serves as the
resident lawyer for the Detroit Branch.
The legal matters handled by the department
during the year included conferences with and
advice to the officers and supervisors of the
various operating departments; examination and
approval of all applications for membership
in the Federal Reserve System, applications
of national banks to exercise fiduciary powers
and all documents evidencing changes in the
corporate status of state member banks and
trust companies; correspondence and conferences
with representatives of member banks concerning
banking laws, regulations and rulings of the
Board of Governors; consultations and c o r respondence with the Board of Governors and
its staff, and also representatives of the Treasury Department with respect to fiscal agency
functions; and the examination and approval
of court orders relating to the special custody
of securities.

PAGE

24

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

DETROIT BRANCH

S E R V I C E S T O MEMBER

DISCOUNTS AND OTHER CREDITS

BANKS

The Federal Reserve Banks are empowered to make
to commercial firms.

loans to member b a n k s and, under certain

circumstances,

G E N E R A L SUMMARY
Eight banks, three city and five country, were
accommodated with loans during 1947, an increase
of one country bank over the previous y e a r .
The number and total amount of the loans, however, showed a decline. Included were two 10b
loans granted to one country bank. The borrowings
were all made for short periods to adjust cash
reserves.

S T A T E M E N T OF O P E R A T I O N S

NUMBER OF TRANSACTIONS
Advances to Member Banks
Secured by U. S. Government Obligations
Advances to Member Banks
Under Section 10b

increase
or decrease

1946

1947

113

-

34.5%

$941,250,000

-

40.7%

74

2

DOLLAR VALUE OF TRANSACTIONS
Advances to Member Banks
Secured by U. S. Government Obligations
Advances to Member Banks
Under Section 10b

$558,040,000
200,000

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947.

-

PAGE

25

DETROIT BRANCH

CURRENCY AND COIN

SERVICES TO MEMBER BANKS

Currency and coin are routed into general circulation through the Federal Reserve Banks, which act a s distributing agents between the Treasury and the Banking community. Commercial b a n k s desiring currency or coin m a y
obtain it from this Bank in exchange for their draft, a c h a r g e to their reserve account, etc. Similarly, b a n k s
having excess c a s h m a y turn it in to this Bank and obtain funds in return. Incoming c a s h is used either to supplement new currency and coin in outgoing shipments, or, if unfit for further circulation, is returned to the Treasury
for destruction.

GENERAL

SUMMARY

The number of pieces of outgoing currency handled
during 1947 was 9.6% greater than the number of
pieces handled during 1946. Likewise, the number
of pieces of incoming currency handled during 1947
was 17.8% in excess of the number of pieces
handled during the preceding year. Outgoing coin
was 33.1% less than in 1946, and incoming coin
from banks showed an increase of 83.1%; while
incoming coin from mints reflected a 61.8%
decrease.

S T A T E M E N T OF O P E R A T I O N S
increase
or decrease

1947

1946

119,530,095
113,721,732

109,041,131
96,539,485

+
+

100,925,458
67,931,653
42,365,000

150,809,500
37,103,235
110,960,000

+
-

33.1%
83.1%
61.8%

$779,261,517
772,650,408

$670,340,229
620,623,523

+
+

16.2%
24.5%

7,676,707
5,232,730
3,265,000

8,481,445
3,878,173
4,535,000

+

PIECES
Currency Outgoing
Incoming
Coin Outgoing
Incoming

-

from banks
from mints

-

9.6%
17.8%

DOLLAR VALUE OF PIECES
Currency Outgoing
Incoming
Coin Outgoing
Incoming

PAGE

26

-

from banks
from mints

-

-

9.5%
34.9%
28.0%

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR1947.PAGE25

DETROIT BRANCH
services t o

member

COLLECTION OF CHECKS AND OTHER ITEMS

banks-

The Federal Reserve Banks act a s nation-wide clearing agents for the routing of checks between commercial banks
in much the same manner a s clearing house associations do in local communities, and accept and p a y checks
drawn by the Federal Government. They also collect drafts, notes, bonds, coupons, acceptances, etc., for member
banks and deliver against payment securities sold by member banks.

The number of city checks, country checks, and Government card checks handled
during 1947 increased 3.5%, 15.0%, and 1.2%, respectively, over the number handled
in 1946, while Government paper checks reflected a decrease of 40.3%, resulting in a
net increase of 7.4% in the volume of all checks handled. The number of noncash
collections declined 1.8% during 1947. This change resulted from decreases of 5.4%
in city items and 8.6% in coupon and security items which were offset by an increase
of 11.6% in the collection of country items.
S T A T E M E N T OF O P E R A T I O N S
CHECKS

1947

1946

12,711,000
23,070,000
953,000
4.550,000
41,284.000

12,277,000
20,060,000
1,597,000
4,496,000
38,430,000

$10,965,013,000
4,625,857,000
556,484,000
417,531,000
$16,564,885,000

$ 9,179,236,000

3,776 ; 629,000
1,117,664,000
395,179,000
$14,468,708,000

545

536

17,987
21,118
25,246
1,632
65,983

19,015
18,923
27,611
1,611
67,160

7,910

NUMBER OF CHECKS HANDLED
City
Country
Government - Paper
Government - Card
Total
DOLLAR VALUE OF CHECKS HANDLED
Citv
Country
Government - Paper
Government - Card
Total
Daily average number of cash letters dispatched
NONCASH

+

+
-

+
+

3.5%
15.0%
40.3%
1.2%
7.4%

+

19.5%
22.5%
50.2%
5.7%
14.4%

+

1.7%

+
+
-

+

ITEMS

TRANSACTIONS
City
Country t
Coupon and Security
Purchases and Sales (including open market trans.)
Total
t Includes direct sendings to other Federal Reserve
Banks by our Member Banks
DOLLAR VALUE OF TRANSACTIONS
City
$
Country
t
Coupon and Security
Purchases and Sales (including open market trans.)
Total
$
t Includes direct sendings to other Federal Reserve
Banks by our Member Banks $
RATION

increase
or decrease

-

5.4%
11.6%
8.6%
1.3%
1.8%

6,123

+

29.2%

56,748,390
135,506,970
78,357,349
58,676,314
329,289,023

-

1.0%

-

-

47.9%
9.3%
10.4%
24.0%

59,137,113

125,140,316

-

52.7%

74,000
4,710,000

129,000
778,964,000

-

42.6%
99.4%

56,203,782
70,557,570
71,104,794
52.545.338
250,411,484

$

$

-

+
-

+

-

CHECKS *

Number of Items Handled
Total Units processed
•Discontinued June 30, 1947

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

PAGE

27

SAFEKEEPING OF SECURITIES

_

DETROIT BRANCH

SERVICES TO MEMBER BANKS

The Federal Reserve Banks act a s depositories for securities owned b y member banks. Securities so held a r e
completely serviced a s to collection of interest, redemptions, exchanges, etc. A free safekeeping service for U S
Savings Bonds, Series E, is extended to members of the armed forces and to the general public

GENERAL

SUMMARY

Securities held in Safekeeping declined $81,427,000
during 1947, the principal factor being a reduction
in securities held for Member Banks.

S T A T E M E N T OF O P E R A T I O N S

PIECES
Securities - Received
Released
Coupons detached from securities
DOLLAR VALUE OF PIECES
Securities - Received
Released
Held as of December 31
Coupons detached from securities

PAGE

28

increase
or decrease

1947

1946

110,109
81,482
150,969

117,693
91,832
144,455

- 6.4%
- 11.3%
+ 4.5%

$2,092,404,570
2,173,832,390
331,638,579
5,947,690

$1,836,026,343
2,147,803,548
413,066,398
8,586,931

+ 14.0%
+ 1.2%
- 19.7%
- 30.7%

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR1947.PAGE25

DETROIT BRANCH

ISSUANCE OF GOVERNMENT SECURITIES

SERVICES TO TREASURY DEPARTMENT

The Federal Reserve Bank, acting a s agent of the Treasury Department, performs all operations relative to the
placing of new Treasury issues in the hands of the general public, and r e l a y s information from Washington throughout this district. The Bank gualifies commercial b a n k s and others in the district a s agents in the sale of U. S.
Savings Bonds, Series E, to the public; and services these agents a s regards supplies of n e w bonds, applicable
Treasury directives, the processing of paid registrations, etc. The Bank analyzes the sales of U. S. Savings
Bonds, and furnishes the Treasury Department and others with detailed reports showing what the public pur
c h a s e d - i n t h e ' v a r i o u s counties and states in this district.

GENERAL

SUMMARY

During 1947, there was a general decrease in
practically all Fiscal Agency activities as compared with the previous year. There was a
d e c r e a s e in the number of subscriptions to
market issues, but an increase in their dollar
value. This was brought about by the Treasury
Department Refunding policy where short-term
s e c u r i t i e s were exchanged for maturing or
called bonds.
The dollar value of " E " Bonds issued by the
Federal Reserve Bank decreased approximately
40% and that of Issuing Agents by 4%.

S T A T E M E N T OF O P E R A T I O N S
increase
or decrease

NEW ISSUES
Subscriptions
Forms Received
Treasury (Other than E Bonds)
" E " Bonds

1947

1946

14,014
1,708

15,775
2,034

-

11.2%
16.0%

Subscribers Involved
Treasury (Other than E Bonds)
E Bonds (Pieces)

14,455
126,991

16,115
165,825

-

10.3%
23.4%

Dollar Value of Subscriptions
Received
Treasury (Other than E Bonds)
" E " Bonds

$567,433,800
3,377,100

$504,827,900
5,501,825

+
-

12.4%
38.6%

Allotted
Treasury (Other than E Bonds)
" E " Bonds

535,213,800
3,346,850

395,057,075
5,573,650

+
-

35.5%
40.0%

2,308,134
$155,014,945

2,752,898
$161,656,515

-

16.2%
4.1%

372

404

-

7.9%

129
$653,863,101

134
$510,135,015

4

3.7%
28.2%

62,032
195,561

60,843
229,759

+
-

2.0%
14.9%

ISSUING AGENTS
Series " E " Savings Bonds Sold
Pieces
Maturity Value
Number of qualified Issuing Agents as of
December 31
SALES ANALYSIS
Number of Reports Prepared
Items Tabulated (dollar value)
SHIPPING AND DELIVERY
Pieces Shipped
Treasury (Other than E Bonds)
" E " Bonds

f e d e r a l r e s e r v e b a n k o f c h i c a g o - p r e s i d e n t ' s a n n u a l r e p o r t t o member b a n k s - a c t i v i t i e s

f o r t h e y e a r 1947

p a g e

29

page

DETROIT BRANCH

SERVICING OF GOVERNMENT SECURITIES
The Federal Reserve Banks handle the servicing of all government securities,
transfers, custody of blank stock, accounts of depositary banks, etc.

GENERAL

SERVICES TO TREASURY DEPARTMENT
Such

work

includes

exchanges,

SUMMARY

Denominational exchanges on marketable issues increased
approximately 63% during the year. A great portion of
these were for individuals and for trust accounts.
The C. P. D. activity shows an increase in the purchase of
short-term securities by banks and others in the Detroit
District.

S T A T E M E N T OF O P E R A T I O N S

DEPOSITARY BANKS
Number of Payments Handled
Number of Qualified Depositaries
as of December 31
Depositaries' Balances as of Dec. 31
CUSTODY
Pieces
Received from Treasury Dept.
Prepared for Delivery
Dollar Value
Received from Treasury Dept.
Prepared for Delivery
SECURITY MAIL
Pieces Received

PAGE

30

380
3,286

+

2,592
2,521

$

1946

618
1,938

DENOMINATIONAL EXCHANGE
Pieces
Received
Marketable Issues
Public Debt Transfers
Issued
Marketable Issues
Public Debt Transfers
Maturity Value
Received
Marketable Issues
Public Debt Transfers
Issued
Marketable Issues
Public Debt Transfers

increase
or decrease

1947

1,812

2,234

+
+

10,940,000
209,089,500

$

22,766,500
390,220,800

-

-

-

62.6%
41.0%
43.0%

12.8%

51.9%
46.4%

10,940,000
245,112,500

22,766,500
123,361,000

10,986

11,975

131
40,630,141

131
57,404,344

2,527,286
2,626,640

3,001,321
2,920,689

-

10.1%

$1,370,035,000
1,517,608,350

$1,060,490,400
1,332,250,045

+
+

29.2%
13.9%

29,973

36,880

-

18.7%

-

+

-

-

-

51.9%
98.7%
8.3%
_
29.2%

15.8%

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER B A N K S - A C T I V I T I E S FOR THE YEAR 1947

DETROIT BRANCH
services t o treasury

REDEMPTION OF GOVERNMENT SECURITIES

department.

In connection with their duties
Government securities eligible
Bonds, from commercial banks
directed by the Treasury and

a s Fiscal Agent of the United States, the Federal Reserve Banks accept (and pay)
for redemption, either directly from the holders thereof, or, in the c a s e of Savings
designated a s paying agents. Securities paid in redemption a r e processed a s
are' turned over to the Bureau of the Public Debt for final settlement and disposal.

G E N E R A L SUMMARY
Redemption of Savings Bonds by both Detroit Branch and its
paying agents disclosed a decrease in number of pieces of
12.0% and 39.7%, respectively. However, the dollar value
of bonds redeemed by the Branch shows an increase of 3.1%,
whereas redemptions through paying agents shows a decrease
of 32.7%. This increase in dollar value of Savings Bonds
redeemed by the Branch is due to a great extent to redemptions of " F " and "G" bonds. The redemption of other bonds,
notes, certificates and bills increased 66„5% in dollar value
due to the Treasury Department Refunding Program.
On September 1, 1947 the Branch started to redeem Armed
Forces Leave Bonds, and from that date to December 31st
had redeemed 179,000 pieces having a redemption value of
$36,000,000.

S T A T E M E N T OF O P E R A T I O N S
1947
REDEMPTIONS
U. S. Savings Bonds Redeemed
Pieces
By Paying Agents
By F. R. Bank
Total
$25 pieces included above
Redemption Value of Pieces
By Paying Agents
By F. R. Bank
Total

4,994,881 98.8%
59.776
1.2%
5.054.657 100.0%
3,663,315 72.5%

1946

8,277,038 99.2%
67,923
.8%
8.344.961 100.0%
6,194,421 74.2%

$175,851,453 90.6% $261,099,036 93.7%
9.4%
17,633,955
18,180,346
6.3%
$194,031,799 100.0% $278,732,991 100.0%

increase
or decrease

- 39.7%
- 12.0%
- 39.4%
- 40.9%

- 32.7%
3.1%
- 30.4%

+

Armed Forces Leave Bonds Redeemed
Pieces
Redemption Value

179,247
$ 36,191,110

Number of Qualified Paying Agents as
of December 31

200

199

Other Bonds, Notes, Certificates and Bills Redeemed
Pieces
25,365
Maturity Value
$630,285,575

36,038
$378,530,925

- 29.6%
+ 66.5%

U. S. and Other Governmental Agency Coupons Redeemed
Pieces
215,084
Dollar Value
$ 11,937,255

239,358
$ 16,547,738

- 10.1%
- 27.9%

None
None

-

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947.

+

.5%

PAGE

31

COLLECTION OF WITHHELD TAXES

DETROIT BRANCH

SERVICES TO TREASURY DEPARTMENT

The Bank acts a s agent of the Treasury Department, assisting the Bureau of Internal Revenue in the collection
of funds deposited in commercial banks b y employers under withholding tax arrangements.

GENERAL

SUMMARY

The number of depositary receipts functioned
during 1947 exceeded by 3.2% the number handled
in 1946. Likewise, the number of receipts credited
as Income Tax during the current year was greater
by 5.3% than the number credited the preceding
year. The dollar value of receipts issued, as well
as receipts credited as Income Tax, increased
27.3% and 25.6%, respectively.

S T A T E M E N T OF O P E R A T I O N S

NUMBER OF RECEIPTS
Issued by Depositaries
DOLLAR VALUE OF RECEIPTS
Issued by Depositaries

PAGE

32

1946

increase
or decrease

134,590

130,463

+

3.2%

$424,712,000

$333,523,000

+

27.3%

1947

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

DETROIT BRANCH

SERVICES TO R F. C.

RECONSTRUCTION FINANCE CORPORATION

The Federal Reserve Banks a r e fiscal agents of the Reconstruction Finance Corporation and the Commodity Credit
Corporation. In such capacity the Bank disburses the proceeds of loans, makes a d v a n c e s for the accounts of
various Governmental corporations, maintains custody of collateral, handles work relative to the redemption and
exchange of securities, etc.

GENERAL

SUMMARY

During the year 1947 the activities of the R. F. C.
Custody Division were reduced through the elimination of claims and the liquidation of inventories
and facilities required during the war period.
These were most noticeable in the Defense Plant
Corporation and in the Office of Defense Supplies.
During the past year the Reconstruction Finance
Corporation began the transfer of the accounting
responsibility from the custodian to its local
loan agencies. The transferring or the decentralization of these accounts, was made as follows:
the Loan Agency Administration Expense, on
July 1, 1947; the Office of Defense Plants, on
August 1, 1947; the Federal National Mortgage
Company and the R. F. C. Mortgage Company,
on October 1, 1947. The custodian retained the
accounting responsibilities for the corporation's
investments and defense supplies transactions,
together with the loan programs, loan guarantees
and collateral. However, it is contemplated that
the loan program, guarantees and acquired collateral will be transferred to the loan agencies
within the very near future.
The receipts for the account of the Commodity
Credit Corporation were lower in 1947 than the
previous year due to the elimination of the war
programs of lend lease and production subsidies.

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947.

PAGE

33

ACCOUNTING

DETROIT BRANCH
GENERAL BANK

ACTIVITIES

The central accounting routines of the Bank include the maintenance of the reserve accounts of member banks,
the constant a n a l y s i s of these reserves a s regards the legal minimum of e a c h bank, the maintenance of accounts
with other Federal Reserve Banks through an interdistrict settlement fund, the transfer of funds by wire for
member banks, the handling of all Bank disbursements, the compilation of claims for services rendered the government, the assembly of cost d a t a and construction of reports, etc.

GENERAL

SUMMARY

While the decline in Fiscal Agency functions performed by the
bank reduced somewhat the activity in the Accounting Department, there was little change in the overall picture.
The decrease in the number of Officers' checks and expense
checks issued was primarily responsible for the reduction
in number of General Ledger entries for the year. The
increase in the Federal Reserve Books division was primarily
caused by additional member banks forwarding their cash
letters direct and a change in the assignment of activities
in connection with direct-sent collection items.
The discontinuance of most of the custodial activities previously performed for the Reconstruction Finance Corporation
and the decrease in volume of items received by the Savings
Bond Department are reflected in the decrease in the amount
of Fiscal Agency claims prepared.
S T A T E M E N T OF O P E R A T I O N S
increase
or decrease

1947
41,000

GENERAL LEDGER
Number of Entries Functioned
FEDERAL RESERVE BOOKS
Number of Entries Functioned
MEMBER BANK RESERVE ACCOUNTS
Number of Entries Functioned
Active Accounts as of December 31
MEMBER BANKS RESERVES
Period
Excess Over Requirement
Requirement
Reserve Citv
City
Sept. 18
Maximum
Mar. 27
Minumum
Country
Maximum
Minimum

Sept. 15
Feb. 28

Assessable Deficiencies
Number of Banks
Amount of Penalties

1946
44,169

-

7.2%

262,941

247,629

+

6.2%

+
+

3.9%
1.0%

-

350,165
99

337,005
98

Amount

Period

Amount

$21,291,000
2,547,000

Aug. 1
Oct. 10

$8,349,000
'2,326,000

$10,965,000
6.866,000

Jan. 1
July 31

$14,501,000
8,223,000

22
$1,260

10
$595

$2,939,431
1,399,023

$ 3,037,801

+ 155.0%
+
9.5%
-

24.4%
16.5%

+ 120.0%
+ 111.8%

EXPENSE DISBURSEMENTS
Dollar Value of Items Handled
Vouchers Functioned
Fiscal Agency Claims Prepared
p a g e

34

2,243,195

f e d e r a l r e s e r v e b a n k o f c h i c a g o - p r e s i d e n t ' s a n n u a l r e p o r t t o member b a n k s - a c t i v i t i e s

-

3.2%
37.6%

f o r t h e y e a r 1947

DETROIT BRANCH
d

=

l

ESTS™.

general bank

WIRES, TELEPHONE, MAIL, FILES

activities

In addition to the usual mail and telephone facilities, the Branch is a unit in a leased wire system having connections with all other Federal Reserve Banks and Branches, the Board of Governors, the Treasury Department
and the Reconstruction Finance Corporation. Telegrams effecting transfers of funds for member banks, Fiscal
Agency work, and other banking transactions a r e processed both in code and in clear.

GENERAL

SUMMARY

The volume of work handled by the several communications services
declined further during the year except for telegrams received over
leased wire and telegrams received and dispatched over the commercial
wire. Incoming leased wires increased 2.1%; outgoing leased wires
decreased 2.4%. Incoming commercial wires increased 22.5%; and
outgoing increased 4.7% during the year.

S T A T E M E N T OF O P E R A T I O N S
1947
TELEGRAMS PROCESSED
Leased Wire
Received In Code
In Clear
Total
Dispatched In Code
In Clear
Total
Commercial Wire
Received In Code
In Clear
Total
Dispatched In Code
In Clear
Total
TELEPHONE CALLS HANDLED
Calls Handled by Switchboard Outgoing - Local
- Long Distance
Terminals in Use December 31
MAIL HANDLED
Number of Pieces Received & Routed
Number of Pieces Dispatched Mail
Express
CENTRAL FILES
Pieces Filed

1946

16,246
4,669
20,915

14,532
5,958
20,490

15,186
4,863
20,049

15,547
4,991
20,538

1,102
582
1,684

952
423
1,375

3,031
93
3,124

2,520
463
2,983

56,484
1,549
102

81,537
2,125
138

301,886

310,088

374,195
8,608

401,728
10,105

209,248

294,916

increase
or decrease

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES

FOR THE YEAR 1947

+

+
-

-

+
+
+
+
+

-

11.8%
21.6%
2.1%
2.3%
2.6%
2.4%

15.8%
37.6%
22.5%
20.3%
79.9%
4.7%

30.7%
27.1%
26.1%
2.6%

-

.as

6.9%
14.8%
29.0%

PAGE

35

DETROIT BRANCH

PERSONNEL

GENERAL BANK

ACTIVITIES

All g e n e r a l personnel activities of the Bank are handled by a central personnel unit. Such work includes the
hiring of employees, the keeping of s a l a r y and personnel records, the promotion of education and welfare programs, and the maintenance, of a medical department and an employees' cafeteria.

GENERAL

SUMMARY

The reduction in number of employees during the year was
due primarily to the discontinuance of most of the custodial
activities previously performed for the Reconstruction
Finance Corporation and to a decrease in the volume of
items received by the Savings Bond Department.
The Job Evaluation Program initiated in 1946 was completed
and became effective October 1, 1947. The procedure for
appraising employees is being amended and adapted to this
program. The Job Evaluation Program has made possible a
systematic plan of promotional sequence for employees and
an improved method of salary control. These plans have
been initiated and are now in the process of being refined.
The supervisory training program, established in 1946,
covered only those persons in the higher supervisory levels.
This program has been expanded to include all levels of
supervision.
STATEMENT

OF O P E R A T I O N S
increase
or decrease

1947

1946

PERSONNEL DIVISION
Number of Employees
As of January 1
New Employees
Separations
As of December 31

596
117
300
413

672
258
328
602

MEDICAL
Number of Cases
Physical Examinations Prospective Employees
Bank Employees
Total

110
110

218
227

-

Requests for Medical Care

2 t 759

3,782

-

68,026
186
796
69,008

28,652
50

229

258

CAFETERIA
Number of Meals Served
Noon
Compli mentary - Guest of Bank
- Bank Employees
Total
Daily Average Number of Meals Served
Cafeteria
Noon
PAGE

36

0

9

1,111

29,813

-

11.3%
54.7%
8.5%
31.4%

-100.0%

49.5%
51.5%
27.1%

Cafeteria
established
August 13,
1946

.FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

STATEMENT OF EARNINGS AND EXPENSES

FEDERAL RESERVE BANK OF CHICAGO

C O M P A R A T I V E S T A T E M E N T OF EARNINGS AND

EXPENSES

y e a r ended december 31, 1947, a n d y e a r ended december 31, 1946

1946

1947
EARNINGS

$21,318,967.85

$21,235,190.45

EXPENSES
Operating Expenses
Assessment for Board of Governors
Cost of Federal Reserve Currency
Total Net Expenses

$ 7,752,397.70
358,627.98
732,071.56
$ 8,843,097.24

$ 6,853,344.65
303,483.83
632,515.27
$ 7,789,343.75

$12,475,870.61

$13,445,846.70

$

$

Current Net Earnings
ADDITIONS TO CURRENT NET EARNINGS
Profit on Sales of U S. Government Securities
Other Additions
Total Additions to Current Net Earnings
Total Current Net Earnings and Additions
to Current Net Earnings
DEDUCTIONS FROM CURRENT NET EARNINGS
Retirement System (Salary Compensation
Adjustment)
Other Deductions
Total Deductions from Current Net Earnings
NET

EARNINGS

DISTRIBUTION OF NET EARNINGS
Paid United States Treasury (Section 13B)
Paid United States Treasury (Interest on
Federal Reserve Notes)
Dividends Paid
Transferred to Surplus (Section 7)
T o t a l D i s t r i b u t i o n of N e t

Earnings

$

340,408.87
107,449.05
447,857.92

231,045.60
12,090.60
243,136.20

$

$12,923,728.53

$13,688,982.90

$

$

$

154,505.16
154,505.16

281,169.00
47,045.57
328,214.57

$

$12/769,223.37

$13,360,768.33

$

$

426.82
10,249,335.31
1,380,233.78
1,139,227.46

1,311,792.03
12,048,976.30

$12,769,223.37

$13,360,768.33

FEDERAL RESERVE BANK OF CHICAGO

S U R P L U S ACCOUNT — S E C T I O N 7
y e a r ended december 31, 1947, a n d y e a r ended december 31, 1946

1947

1946

Surplus January 1
Transferred to Surplus - as above

$65,077,906.26
1,139,227.46

$53,028,929.96
12,048,976.30

Surplus December 31

$66,217,133.72

$65,077,906.26

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

PAGE

37

STATEMENT OF CONDITION

FEDERAL RESERVE BANK OF CHICAGO

C O M P A R A T I V E S T A T E M E N T OF CONDITION
december 31, 1947, a n d december 31, 1946

ASSETS

1947

Gold Certificates on Hand and
Due F r o m U. S. Treasury
Redemption Fund - Federal Reserve Notes
Other Cash
Total Cash

$4,182,995,550.98
90,073,683.08
42,325,966.94
$4,315,395,201.00

$3,369,272,586.87
136,644,442.30
31,559,710.71
$3,537,476,739.88

$

$

1946

Bills Discounted
U. S. Government Securities
Total Bills and Securities

7,056,600.00
3,085,404,000.00
$3,092,460,600.00

18,291,000.00
3,455,402,000.00
$3,473,693,000.00

Bank Premises
Federal Reserve Notes of Other F . R. Banks
Uncollected Items
Other Assets
Total Miscellaneous Assets

$

$

TOTAL ASSETS

$

3,063,507.26
22,440,500.00
464,387,652.61
16,005,592.50
505,897,252.37

$

3,056,737.98
22,944,300.00
387,335,826.02
6,952,192.13
420,289,056.13

$7,913,753,053.37

$7,431,458,796.01

Federal Reserve Notes in Actual Circulation

$4,636,568,155.00

$4,573,143,890.00

DepositsMember Banks - Reserve Accounts
U. S. T r e a s u r e r - General Account
Other Deposits
Total Deposits

$2,655,848,626.09
101,887,281.36
50,467,947.38
$2,808,203,854.83

$2,366,136,539.01
65,227,171.74
68,163,011.09
$2,499,526,721.84

$

$

LIABILITIES

Deferred Availability Items
Other Liabilities
Total Miscellaneous Liabilities
Total

Liabilities

$

372,809,057.01
2,336,935.09
375,145,992.10

$

265,651,182.65
1,885,674.25
267,536,856.90

$7,819,918,001.93

$7,340,207,468.74

$

23,826,650.00
66,217,133.72
1,429,383.78
2,361,883.94

$

22,434,650.00
65,077,906.26
1,429,383.78
2,309,387.23

$

93,835,051.44

$

91,251,327.27

CAPITAL ACCOUNTS

Capital Paid In
Surplus (Section 7)
Surplus (Section 13B)
Other Capital Accounts
Total

Capital

Accounts

TOTAL LIABILITIES AND
CAPITAL ACCOUNTS

PAGE

38

$7,913,753,053.37

$7,431,458,796.01

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

FEDERAL

RESERVE

BANK

OF

EARNINGS HISTORY

CHICAGO

STATEMENT OF EARNINGS, EXPENSES, AND DISPOSITION OF NET EARNINGS
NOVEMBER 16, 1914 (Date of Incorporation) TO DECEMBER 31, 1947
DISPOSITION OF NET EARNINGS

EARNINGS AND EXPENSES

CURRENT
EXPENSES

CURRENT
EARNINGS

$

268,885

CURRENT
NET
EARNINGS

$

245,584

$

23,301

$

TRANSFERRED TO SURPLUS

DEDUCTIONS
FROM
CURRENT NET
EARNINGS

ADDITIONS
TO
CURRENT NET
EARNINGS

-

$

3,210

NET
EARNINGS

$

20,091

DIVIDENDS
PAID

$

SECTION 7

$

$

FRANCHISE
TAX

SECTION 13B

$

-

69,307

25,000
269,343
198,356
985,630
332,600

403,206
1,231,879
6,805,081
8,576,204
25,875,749

361,319
862,259
604,635
700,807
792,769

15,648,070
2,668,806
2,138,335
1,255,733
1,680,624

4,826
572,019
41,903
27,857
12,646

1,147,779
1,835,610
1,001,883
374,467
571,997

14,505,117
1,405,215
1,178,355
909,123
1,121,273

853,785
876,203
904,371
909,123
934,016

3,824,437
3,887,058
3,696,679
4,092,369
3,805,117

2,742,606
2,280,294
5,239,739
5,797,082
1,029,036

13,098
13,061
11,833
8,050
298,510

501,781
365,710
488,143
380,467
273,218

2,253,923
1,927,645
4,763,429
5,424,665
1,054,328

985,959
1,029,990
1,099,761
1,170,363
1,211,418

1,267,964
897,655
3,663,668
3,651,464
- 157,090

4,143,601
5,613,671
6,764,554
8,152,371
6,177,615

3,524,401
3,432,693
3,854,009
3,551,838
3,697,540

619,200
2,180,978
2,910,545
4,600,533
2,480,075

263,967
874,264
373,245
1,611,990
951,304

273,272
812,517
1,493,297
4,808,032
2,660,159

609,895
2,242,725
1,790,493
1,404,491
771,220

1,170,633
1,029,933
858,127
761,334
753,583

-

1936
1937
1938
1939
1940

4,423,476
4,575,583
3,954,026
4,254,602
4,831,217

3,453,380
3,199,558
3,318,002
3,316,352
3,471,164

970,096
1,376,025
636,024
938,250
1,360,053

1,526,060
811,188
1,637,141
521,313
1,530,021

1,563,978
499,607
1,182,207
476,646
282,100

932,178
1,687,606
1,090,958
982,917
2,607,974

725,553
763,115
791,007
819,532
826,919

153,241
883,370
279,031
158,265
1,770,131

1941
1942
1943
1944
1945

5,089,095
6,590,508
8,738,325
14,204,919
20,076,761

4,227,534
5,177,403
5,850,233
6,757,377
6,551,011

861,561
1,413,105
2,888,092
7,447,542
13,525,750

163,061
386,898
4,137,334
383,895
422,552

157
602,842
1,266,073

896,766
955,508
993,684
1,115,422
1,215,381

100,484
237,632
4,765,619
6,710,302
12,212,414

1946
1947

21,235,190
21,318,967

7,789,344
8,843,097

13,445,846
12,475,870

243,136
447,858

328,214
154,505

13,360,768
12,769,223

1,311,792
1,380,234

12,048,976
1,139,227

_

$17,360,464
$155,264,785
$284,623,151
$129,358,366
ADJUSTMENTS
F . D. I. C. Stock
1934 - Purchase
1947 - Retirement (proceeds to T r e a s u r y )

$25,676,791

$146,948,458

$29,665,301

$81,557,570

$

-

517,991

1,024,465
1,197,161
5,759,353
7,831,437
13,430,311

1916
1917
1918
1919
1920

665,937
2,083,164
8,481,747
12,012,078
30,303,218

237,731
584,069
1,478,310
2,450,244
4,164,176

428,206
1,499,095
7,003,437
9,561,834
26,139,042

1921
1922
1923
1924
1925

20,382,170
6,748,863
6,511,359
5,202,169
5,424,663

4,734,100
4,080,057
4,373,024
3,946,436
3,744,039

1926
1927
1928
1929
1930

6,567,043
6,167,352
8,936.418
9,889,451
4,834,153

1931
1932
1933
1934
1935

Totals

2,127

OTHER
TRANSFERS

$ -

$

BALANCE
TO
PROFIT
& LOSS

$20,091
41,887
-61,978

-

-

10,394,480
11,576,009
1,186,301
246,586

-

-

-

187,257
-

-

560,738
121,279
932,366
669,479

602,838

-

1,091,513

-

-26,322
25,030
12,767
206

17,637

-

-

$

11,681

28,354
28,354
20,714
5,120
10,924
27,215
4,021
50
5,713
2,516

-

-

-

-

-

427
$25,313,526

10,249,335

$ 151,045

$ 10,249,335

- 19.748.517

$

$

19,748,517
1,417,702

Transferred from Surplus to R e s e r v e s for Contingencies, Y e a r s 1940, 1942, and 1943
Transferred to Surplus (Section 7) from Reserves for Contingencies, Year 1945

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

-

2,075,323
657,289
27,398

Payments from U. S. Treasury, Section 13B loans, Y e a r s 1934 and 1935

Totals

-

215,799

215,799
6,200,446
7,875,397
14,688,500
-

PAID U. S. TREASURY
INTEREST ON
F. R. NOTES
OUTSTANDING
SECTION 13B

$29,665,301

3,207,763
7,615,843

$66,217,133

$1,429,383

$25,313,526

$151,045

$ 10,249,335

$19,748,517

$PAGE 39

DIRECTORS AND OFFICERS

DIRECTORS
CLARENCE W. AVERY
President and Chairman, The Murray Corporation of America
Detroit, Michigan
Chairman of the Board and Federal Reserve
Agent
PAUL G. HOFFMAN, President
The Studebaker Corporation
South Bend, Indiana
Deputy
Chairman
WALTER J. CUMMINGS, Chairman
Continental Illinois National Bank
and Trust Company of Chicago
Chicago, Illinois

WILLIAM C. HEATH, President
A. O. Smith Corporation
Milwaukee, Wisconsin

HORACE S. FRENCH, President
The Manufacturers National Bank of Chicago
Chicago, Illinois

VIVIAN W. JOHNSON, President
First National Bank
Cedar Falls, Iowa

WILLIAM J. GREDE, President
Grede Foundries, Inc.
Milwaukee, Wisconsin

ALLAN B. KLINE, President
American Farm Bureau Federation
Chicago, Illinois

NICHOLAS H. NOYES, Vice President in Charge of Finances
Eli Lilly and Company
Indianapolis, Indiana

OFFICERS
C. S. YOUNG, President
C. B. DUNN, First Vice

President

J. K. LANGUM, Vice President

N. B. DAWES. Vice President

O. J. NETTERSTROM, Vice

W. R. DIERCKS, Vice President

A. L. OLSON, Vice President

President

J. H. DILLARD, Vice President

A. T. SIHLER, Vice President

E. C. HARRIS, Vice President

A. M. BLACK, Cashier

W. C. BACHMAN, Assistant Vice
L. H. JONES, Assistant Vice
M. A. LIES, Assistant Vice

President

F. A. LINDSTEN, Assistant Vice

President

President

L. G. MEYER, Assistant Vice President

President

F. L. PURRINGTON, Assistant Vice

President

W. W. TURNER, Assistant Vice President
E. D. BRISTOW, Assistant

Cashier

C. T. LAIBLY, Assistant Cashier

P. C. CARROLL, Assistant

Cashier

H. J. NEWMAN, Assistant Cashier

E. A. HEATH, Assistant

Cashier

W. A. HOPKINS, Assistant
P. C. HODGE, General

I. J. PETERSEN, Assistant

Cashier

C. M. SALTNES. Assistant

Counsel

Cashier
Cashier

J. W. GARVY, Assistant General

O. C. BARTON, Assistant

Counsel

Counsel

J. J. ENDRES, Auditor

Continued on next page
FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947

PAGE

40

DIRECTORS

AND

OFFICERS-CONTINUED

MEMBER OF FEDERAL ADVISORY COUNCIL
EDWARD E. BROWN, Chairman of the Board
The First National Bank of Chicago
Chicago, Illinois

MEMBERS OF INDUSTRIAL ADVISORY COMMITTEE
EDWARD J. DOYLE. President
Commonwealth Edison Co.
Chicago, Illinois

EDWARD M. KERWIN, Vice President
E. J. Brach and Sons
Chicago, Illinois

WALTER HARNISCHFEGER, President
Harnischfeger Corporation
Milwaukee, Wisconsin

G. BARRET MOXLEY. President
Kiefer-Stewart Company
Indianapolis, Indiana

JAMES L. PALMER, Executive Vice President
Marshall Field & Company
Chicago, Illinois

DETROIT BRANCH
DIRECTORS
CHARLES T. FISHER, JR.. President
National Bank of Detroit
Detroit, Michigan

CHARLES A. KANTER, President
The Manufacturers National Bank of Detroit
Detroit, Michigan

ERNEST GILBERT, Farmer
Waldron, Michigan

BEN R. MARSH, Vice President & General Manager
Michigan Bell Telephone Company
Detroit, Michigan
RUDOLPH E. REICHERT, President
Ann Arbor Bank
Ann Arbor, Michigan

O F F I C E R S
E. C. HARRIS. Vice President

R. W. BLOOMFIELD, Assistant

H. J. CHALFONT,

A. J. WIEGANDT, Assistant

Manager

H. L. DIEHL, Cashier

PAGE 41

Cashier

Cashier

K. E. HAEFELE, Asst. Cashier and Asst. Counsel

FEDERAL RESERVE BANK OF CHICAGO-PRESIDENT'S ANNUAL REPORT TO MEMBER BANKS-ACTIVITIES FOR THE YEAR 1947