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FEDERAL RESERVE

B A N K OF

CHICAGO

Presidents' Annual Report
TO MEMBER BANKS

ACTIVITIES

FOR

THE

YEAR

1952

FEDERAL RESERVE BANK OF CHICAGO

January 30, 1953

OFFICE OF THE PRESIDENT

To the Member Banks of the
Seventh Federal Reserve District:
In order that you may be informed concerning the activities
of the Federal Reserve Bank of Chicago, this detailed report has
been prepared. It is a pleasure to submit it to your bank and I
hope that you will find it both interesting and informative. May I
direct your particular attention to the section dealing with the check
collection activities, as it covers rather completely one function
which is used directly or indirectly by every bank in the Seventh
Federal Reserve District.
May I express the sincere appreciation of the directors,
officers, and staff for the helpful advice and counsel so generously
given by both member and nonmember banks in this District.
Very truly yours,

President

Well over a million persons are engaged in Seventh District agriculture

Table of Contents

Economic Summary

1

Check Department

7

Departmental Summaries
Services to Member Banks
Safekeeping of Securities

16

Investments

16

Discounts and Other Credits

17

Examination of Banks

17

Currency and Coin

18

Economic Research

20

Collection of Non-Cash Items

21

Services to Treasury Department
Servicing of Government Securities

22

Issuance of Government Securities

23

Redemption of Government Securities

24

Collection of Federal Taxes

24

General Bank Activities
Personnel

25

Communications

25

Comparative Statement of Condition

26

Comparative Statement of Earnings and Expenses

27

History of Earnings

28

Directors and Officers

30

Seventh District manufacturing provides employment for about three and a half million people.

ECONOMIC SUMMARY

CIVILIAN AND DEFENSE NEEDS MET-WITHOUT INFLATION!
The American economy, in 1952, proved itself capable
of supporting a preparedness program, while at the same
time providing record supplies of goods and services for
a rapidly growing population. Although plagued by
a number of inflationary forces and by numerous work
stoppages, productive capacity expanded sufficiently to
meet most demands.

consumer price index was only slightly above the level
prevailing at the start of the year. In fact, a number of
items—such as TV sets, household appliances, apparel,
and in some cases food—cost less at retail in December
1952 than a year earlier.

Defense expenditures continued to rise until midyear,
then levelled off at an annual rate about one-third above
that of 1951. National income rose by 14 billion to a
new peak of 292 billion dollars. Output of steel during
the 54-day strike in June and July was reduced to a
trickle and production of many durable goods had to be
sharply curtailed. But industrial production quickly
surged to a new peacetime high following the strike, and
civilian employment rose to a record 62 million. Consequently labor markets in most centers were very tight
at year end.

Consumer income rose in the last half of 1952 and
consumer buying picked up considerably. The biggest
gain was registered in nondurables, which rose about 5
billion. Expenditures for services also increased, but durable goods sales were moderately lower than in 1951.
This resulted largely from the steel strike and heavy buying during the first year of the Korean fighting. In
the last half of the year, however, production of furniture, home appliances, and TV sets rose sharply, stimulated by the removal of credit controls, inventory reordering, and the seasonal upturn in buying. By fall, output
was at the highest point since early 1951.

Throughout 1952 prices remained relatively stable
with many items selling below their ceilings. In general,
wholesale prices declined slowly for most of the year,
largely as a result of falling prices of imported raw
materials and domestic farm products. At year end the

Consumer instalment debt began to climb rapidly last
spring following a year and a half of virtual stability.
From the beginning of April through November, instalment debt jumped nearly three billion dollars or more
than 20 per cent. The renewal of the upward movement

Manufacturing
production recovered
peacetime high after the mid-year
interruption . . .

. . . with non-agricultural
employment
reaching record levels in both the nation
and the district . . .

to a

index*
(1935-39=100)

index*
(jan 1952=100)

300

105
100

280

S V N H DISTRICT
EET

100
ILLINOIS

100

DURABLES

IOWA

100

200

WISCONSIN
100
MICHIGAN

240

100
INDIANA

100
220

<5
?

AL MNFCUIG
L A U A T RN

MAR

and

in iqsz
+l0

200

JUN

SEP

1952

per cent
change

weekly

average
earnings.

. .

. . . outpaced
consumer prices.

+5
180

N NUALS
ODRBE
MAR

JUN

1952
* Seasonally adjusted.

SEP

-5

Manufacturing Con- Retail
D R BE N N struction Trade
U A L JRflBLE
O°'

All
Food.
Commodities

Rent
Apparel

ECONOMIC SUMMARY
Stocks at district department stores remained
stable in the last half of 1952 while sales
increased sharply . . .
last
year

and

. . . with Indianapolis showing the
greatest strength, relative to both
the
1947-49 average.

INDEX*

(1941-49=100)
140

INDEX
(1941-49=100)

130

SALES

120

STOCKS

110

120

100

Chicago
110

130

Detroit Indianapolis Milwaukee

STOCKS

120
100

110 100MAR

JUN

SEP

1951

DEC

MAR

JUN

SEP

1952

* Seasonally adjusted
coincided closely with the ending of Regulation W early
in May. Subsequent relaxation of down payment and
monthly repayment requirements attracted new marginal
buyers of consumer durable goods and made possible an
upgrading in the quality of merchandise purchased on
time.
The expansion in instalment debt added about three
billion dollars to consumer purchasing power last year.
Since a large part of all time-payment credit is extended
for the purchase of durable goods, the effect has been to
stimulate production in these lines.
Although inflationary in nature, the rise in credit buying last year did not bring any appreciable price increases in consumer durable lines because its effects were
largely offset by other developments. Some retailers welcomed the rise in credit-based demand as an opportunity
to reduce inventories, thus "short-circuiting" a part of
the demand before it was reflected in manufacturing
activity. In addition, excess capacity existed for production of virtually every consumer durable good, with
the result that output could be expanded quickly and
with relative ease. Finally, the spurt in credit buying
has been offset in part by a further decline in the amount
of cash purchases of durable goods.
2

DEC

•

1951

•

1952

In contrast to the rapid rise in defense purchases of
goods and services during the first year and a half after
Korea, 1952 was a year of relative stability in defense
spending. During the last three quarters, outlays were
steady at an annual rate of about 50 billion. Despite the
fact that national security expenditures did not rise as
much as had been expected, the Federal Government
showed a small cash deficit in calendar 1952, as opposed
to a small cash surplus the preceding year. Government
expenditures continued to be an important force in the
economy as outlays for all units totaled about 78 billion
dollars, nearly one-fourth of the value of all goods and
services produced.
State and local capital outlays as a whole were up only
moderately from 1951. Some categories, however, notably highways and public housing, rose sharply. In general, the sharpest rises took place in those types of projects financed by borrowing. As a result, state-local
borrowing increased rather spectacularly—from 3.2 billion last year to 4.5 billion in 1952.
In Seventh District states the trends in state and local
capital spending have been mixed. Illinois, in particular,
as well as Indiana and Wisconsin, showed increases
greater than for the country as a whole. Total outlays in

ECONOMIC SUMMARY

Iowa declined because of a decline in highway construction. Throughout the District, school programs were
either about the same or below the levels of the previous
year.
Outlays on new plant and equipment reached 27 billion in 1952, topping those of 1951 by about 4 per cent.
A substantial part of this total is slated for five-year
amortization. In some cases, material shortages caused
the temporary postponement of expansion programs.
Recent surveys indicate a continued high level of capital expenditure during the coming year. There are some
signs, however, that the peak has been passed in the
Midwest. Construction contract awards for new manufacturing and commercial buildings were off about 40
per cent from 1951 and new orders for machine tools
were declining rapidly toward the end of the year. On
the other hand, many previously shelved projects will
now be revived as material allocations loosen. This is
particularly true of new shopping centers and television
stations.
Business inventories

remained

remarkably

stable

through most of 1952. The swift upward movement of
inventories which started in mid-1950 was halted. Manufacturers continued to increase holdings somewhat,
mainly because of defense needs, but this was offset to
a great extent by a decline in distributors' stocks.
Mindful of their experience in early 1951, businessmen
were wary of large additions to inventory.
SEVENTH DISTRICT FARMING
District farmers marketed a larger volume of products
in 1952 than in the preceding year but due to lower
average prices, gross income remained about the same.
As usual, livestock and livestock products accounted for
the lion's share of District farm income.
The Midwest experienced an excellent crop year.
Corn, the leading crop, turned in a near-record harvest
of high quality. Other feed crops also were produced in
adequate volume to support a continued high level of
livestock production. Adverse weather in other regions,
however, increased pressure on feed supplies. This,
along with lower prices for most livestock, narrowed
feeding margins and caused farmers to plan further cut. . . accounted for most of the year-end
slump in wholesale prices.

Sharp declines in prices of major
midwest farm commodities . . .
INDEX

(1947-49=100)
110

processed foods

PER CENT CHANGE DURING 1952

-30

"20

"10

0

+10

105

lambs
beef cattle

farm products
100

JUN

MAR

DEC

SEP

wool
turkeys

115

eggs

corn

industrial commodities

110

oats
hogs
butterfat

105

100 1 —'— L —t
MAR

J

I

JUN

I

1

1

SEP

1

L

DEC

wheat
soybeans
milk

lie

all-commodity index

barley
chickens

105
100

MAR

JUN

SEP

DEC

3

ECONOMIC SUMMARY

backs in 1953 hog production. These range from 6 per
cent in Iowa to 18 per cent in Michigan.
Cattle feeding, nevertheless, continued in large volume and profit prospects from the 1952-53 operation
are decidedly more promising than the generally disappointing results obtained in 1951-52. The more favorable outlook reflects primarily the much lower prices for
feeder cattle and a degree of flexibility in feeding programs which was lacking last year due to "soft corn."
Land values, responding to the continued favorable
farm situation, advanced gradually during the year. Activity in the farm real estate market was at a low ebb,
however, as most owners saw little advantage in disposing of their holdings.
Financial requirements of agriculture continued to
grow in response to higher land values, additional mechanization, high cash production costs, and a further
build-up in cattle herds. Farm mortgage debt continued
its postwar rise but remains at a relatively low level.

Land values, having risen relative to farm income in the
past two years, now probably reflect quite fully the current level of farm income.
Farmers' requirements for non-real estate loans eased
as cattle prices turned downward, although the volume
of cattle on feed at year end probably was at a record
level. Most loan repayments were on schedule this fall,
and the fourth-quarter rise in outstandings was smaller
than in 1950 or 1951.
Although there are individual instances of burdensome farm debts, the over-all financial position of Midwest agriculture was very strong at the end of 1952. The
decline in farm product prices relative to production
costs narrowed profit margins but they still were generally adequate to assure a vigorous and progressive farm
economy.
HOME BUILDING BOOM CONTINUED
Residential construction activity in the Seventh District continued at a relatively high level through 1952.

Residential building authorizations
in district states were about the same
as in 1951 and well above most postwar years, while other construction
was off about one-fourth from a year ago.

$ million

1000

WISCONSIN

DISTRICT STATES

•46

800
$

'48

'50

bl

million
360-

MICHIGAN

600

320
280-

240
400-

200

160
120
200-

$ million
100-

80
0

INDIANA

46
60

1946
'46

'48

'SO

'52

w]
40200

4

1949

1950

1951

1951

$ MILLION

10
0

1947 1948
, 0 W A

Residential
Non-Residential

i i i i i i i
•46 '48 '50 '52

48

50

52

ECONOMIC SUMMARY

The number of dwelling units for which building permits were issued during the year was only five per cent
less than in 1951, the second best year on record. District home building was off relatively more than in the
nation generally, where housing starts slightly exceeded
1951's 1,090,000 and were only 20 per cent under those
of 1950.
In the Chicago area, the number of units started increased five per cent from 1951 to 1952, while the
Detroit area experienced a decline of about 20 per cent.
Building permits issued within the city limits of Indianapolis ran about 35 per cent ahead of 1951, but were
six per cent behind in Milwaukee and 20 per cent lower
in Des Moines. These variations in activity from one
community to another within the District evidence the
purely local nature of housing markets and the building
industry.
Suspension of controls over mortgage credit in October apparently had little effect on home-building activity
in 1952. Heavy demands for funds by business and consumers continued to restrict the supply of mortgage
money, thus limiting the pressure of competition on
lenders to liberalize terms. As a result, most lending
institutions have not reduced their requirements on
conventional loans appreciably below those formerly
required by Regulation X. Down payment requirements
have been relaxed substantially on VA-guaranteed mortgages, but funds seeking investment at the comparatively
unattractive fixed interest rate of 4 per cent continue
relatively scarce. Since credit controls were not ended
until late in the 1952 building season, however, conclusive evidence of the effects on home-building activity
will not be available until the 1953 season is well under
way.

Major assets and liabilities
of district
member
banks continued to grow in 7 9 5 2 , but their loans
and discounts remained well below their
holdings of Governments
. . .
i billion

SEVENTH DISTRICT
15

Demand Deposits

U.S. Government Securities
10

Time Deposits
5

Loans & Discounts

1948

1949

1950

1951

1952

. . . in sharp contrast to the
national
picture.
$ billion
110

UNITED STATES
100

Demand Deposits
DISTRICT BANKING CONTINUES POSTWAR
GROWTH
Loans of District member banks increased by 9 per
cent during 1952, about the same as the average for
all banks in the nation. Midyear outstandings were at
the same level as at the start of the year, in sharp contrast with 1951 when District banks expanded their loans
over 300 million during the first half. Loans continued
to edge upward in the third quarter of 1952, then
climbed rapidly as the year came to an end. During the
last half of the year the loan increase was about 600
million, compared with 500 million in the last half of
the preceding year. Although the dollar increase in
District bank loans was evenly divided between the
larger city banks and those in smaller centers, the percentage rise in the smaller banks was over double that
of the city banks.

90

80

70

U.S. Government Securities

60

50

40 " Loans & Discounts"

Time Deposits
30
1948

1949

1950

1951

1952

5

ECONOMIC SUMMARY

District banks expanded their holdings of Governments by over 7 per cent during 1952. This increase
accounted for approximately half of the total dollar
rise in Governments held by all U. S. member banks
and was concentrated in country banks. Larger city
banks were constrained from purchasing Governments
by tight reserve positions and active loan demands. Since
District banks began the year with 53 per cent of their
total earning assets invested in Governments, compared
to a 46 per cent national average, their large net purchases were largely for the purpose of investing available
funds rather than an attempt to boost their holdings
of this type of security.

credit demands, the Federal Government also became a
substantial net borrower. Furthermore, the suspension
of the voluntary credit restraint program, combined with
the discontinuance of Federal Reserve selective controls
on consumer and real estate credit, removed restraints
that in previous years had helped retard credit expansion.
Member bank borrowings from the Federal Reserve
Banks rose sharply during 1952. In December, daily
borrowings, averaged for reserve-weeks, reached 1.8
billion, a 31-year peak. A large share of these Federal
Reserve credits passed through the Chicago Bank's discount window. Borrowings from the Chicago Fed
ranged from a low of 44 million in May to almost 400
million in early December. At one time during the year
District banks' borrowings made up one-third of the
U. S. total; the average for the year was about 20
per cent.

FEDERAL RESERVE CREDIT POLICY
In 1952, the Federal Reserve System continued to
pursue the monetary policy established as a result of the
Treasury-Federal Reserve "accord" of March 1951. The
objective of this policy of limiting bank credit expansion
to "amounts consistent with the reasonable requirements
of a growing economy operating at a high level without
inflation" was more difficult to achieve than in the previous year. Added to increased private and state-local

Despite this expansion in member bank borrowings,
however, the net increase in total outstanding Federal
Reserve credit—including Government security purchases, all loans and advances and float—was considerably smaller in 1952 than in thefirst year of the "accord."

The rise in district business loans in the
last eight months of the year was less than
in 1951 for
. . . most industries

. . . and purposes

( $ MILLION)
-100

0

( $ MILLION)
+ 100
+200

+100

+300

1

FOOD, LIQUOR
AND TOBACCO
DEFENSE

METALS AND
METAL PRODUCTS
TRADE

NON
DEFENSE

SALES FINANCE
COMPANIES

11951

6

1952

NUMBER OF CHECKS HANDLED
millions

Country
City
Government

400

Postal
Money Order

300

CHICAGO
200

DETROIT

100

1951
1949

1952

1950

1948

THE CHECK DEPARTMENT

less, unstoppable flow. Each day's paper mountain must
The story of the Check Department is VOLUME—
be attacked to clear the way for the avalanche that's sure
Never ending, ever present volume—approximately a
million and a half items a day—-Today, Yesterday, and to come tomorrow.
Tomorrow . . .
The process of assimilating this forced feeding requires the services of 1,000 employees, almost half of
the Bank's entire personnel. Lights in the Check DeOne of the largest paper-work operations in the world
partment burn constantly day and night, as the work is
is performed by the Check Department of the Federal
carried on 24 hours a day on a three-shift basis. Three
Reserve Bank of Chicago. The continual pressure of the
stories of the Federal Reserve Bank building are devoted
incoming work is staggering. Like the stream from a
to the functions of the Check Department.
hydrant with a broken valve the checks pour in—an end7

CONTROL BLOCKS
ARE PREPARED
CHECKS
ARE
RECEIVED
FROM
BANKS

ILL

IN
MAIL
1ND.

IOWA

MICH.

CHECKS ARE
MAILED TO
DRAWEE BANKS

WIS.

ABINGDON BANK AND TRUST CO.
NATIONAL BANK OF ALEDO
THE FIRST NATIONAL BANK IN AMBOY

THE FIRST NATIONAL BANK OF ASSUMPTION
THE ATLANTA NATIONAL BANK
AURORA NATIONAL BANK

Processing checks is essentially a proving and sorting
operation. A bundle of checks as received from a sending bank is called a "cash letter" and may contain a few
checks or several thousand, depending on the size of
the forwarding bank. All the checks in the cash letter
8

are drawn on banks other than the forwarding bank and
vary from small personal payments of household expenses, to million dollar corporate payments for purchases of securities. Viewed thru the eyes of a production
specialist in the Check Department, the amount of the

ABINGDON

BARRINGTON

CAMBRIDGE
PROOF MACHINE

CHECKS ARE
SORTED
ALPHABETICALLY
BY CITY

VILLA GROVE

WALNUT

YORKVILLE

CHECKS ARE
SORTED
ACCORDING TO
DRAWEE BANK

A

B

C

4
CHECKS ARE
ASSEMBLED
FOR
FINAL SORT

V

check means little. Each check, large or small, adds one
more to the daily item count.
As the incoming checks are received each day, they
are totaled or "proved" to determine the amount to be

w

_Y

credited to each sending bank. Following the proof,
these checks are sorted until all the checks drawn on an
individual bank are together in an outgoing cash letter.
The total of the outgoing cash letter is charged against
the drawee bank.
9

Receiving Cash Letters at Mail Tables

The hurried tour of a cash letter thru the Check Department begins on the mail table. The deft thrust of
a mail clerk's knife removes the wrapper, and our cash
letter, along with hundreds of others, enters the work
flow. The proving and sorting operation is performed
on a proof machine—a machine so basic in the Check
Department function that a closer look might be worth
while.
A proof machine contains a revolving drum with more
10

than a score of compartments or pockets, and a separate
adding register for each compartment. As the operator
reads each check she depresses a key to select the proper
pocket depending on the name and city of the drawee
bank. The drum revolves and the amount of the check
is indexed on to the keyboard by the operator as she
feeds the check into the proper compartment. The
amount of the check is added and recorded on a tape
for the pocket selected as well as on a tape for the grand

Sorting and Listing Incoming Checks on a Proof Machine

total of all the compartments. At any given time the
sum of the totals for all the individual pockets will agree
with the grand total in the machine. Several hundred
proof machines are required to keep up with the daily
volume handled by the Check Department.
Our cash letter, along with many others, will be
proved and "prime-sorted" by an operator of one of these
machines. At the end of the prime-sort the total of the

cash
11 letter submitted by the sending bank is compared
with the grand total in the machine, thus proving the
cash letter and providing the amount of the credit due
to the sending bank. The checks from our cash letter
now repose in various pockets in the drum of the
machine according to the initial letter of the city in
which the drawee bank is located. A further sort now
is necessary to arrange the checks so that all those drawn
on an individual bank are together.

Indiana-Illinois Forwarding Units
PREPARING OUTGOING

The checks from each of the pockets of the primesort machine are sent to another proof machine along
with a tape total for that particular pocket. During the
secondary sort or "outgoing operation", the checks are
added and dropped into pockets according to the name
of the drawee bank. At the end of the sort each pocket
in the drum contains the checks drawn on an individual
bank, and the total for that compartment indicates the
amount of the debit or charge against that particular
bank. The grand total in the machine, the sum of all
12

the pockets, is compared with the tape total received with
the checks from the prime-sort machine. The checks
now are ready to be wrapped and returned to their
"home" bank, the bank on which they were drawn.
The entire operation of the Check Department is practically continuous as the work flows thru with assembly
line precision. The process is of such magnitude that the
floor area in the Check Department exceeds that of forty
newfive-room homes. More people are employed in this
one department than are employed by ninety-five per

Other Districts and Michigan-Wisconsin Forwarding Units
CASH LETTERS

cent of the manufacturing establishments in the nation.
Unlike a manufacturer, however, the Check Department
has no control over its source of raw material. Time
never can be taken to "work off inventory". The volume
is always there and the trend has been upward every
year in the last decade.
As the department strives for increased efficiency and
greater accuracy it does so with an acute awareness that
the primary obstacle consists of man's most inflexible
element—Time. Each employee shares in the knowledge

that a "plus" effort is required from all. Perhaps the foremost characteristic apparent to an outsider is the atmosphere of hyperactivity that infuses every division of the
Check Department.
The individual clacking of each proof machine merges
into a perpetual, acoustically subdued clamor — background music for the daily performance of "Beat
the Clock."
13

Recording Payments Received for Cash Letters
CHICAGO

NUMBER OF CHECKS HANDLED
1952
City
Country
Government—Paper
Card
Postal Money Order**. . .
Totals
:

DETROIT BRANCH
1951

1952

1951

34,115,000

57,955,000
244,937,000
4,898,000
46,360,000
58,420,000

54,121,000
228,125,000
4,694,000
44,891,000
28,501,000

17,123,000
36,122,000

412,570,000

360,332,000

68,272,000

1,393,000
5,522,000
8,112,000

16,100,000
1,339,000

5,374,000
3,763,000

60,691,000

*New Activity July 1, 1951.

The number of cash letters sent out to banks each day
averages about four thousand throughout the year. Payments are received thru the payoff division of the Check
Department and generally are made by bank draft or
advice to charge the reserve account. In many cases items
14

are returned and credit toward payment is given by the
return items division. When the banks pay for the
amount of the checks received, the production cycle
is complete.

Processing Government Checks
DOLLAR VALUE
OF CHECKS HANDLED
City
Country
Government—Paper
Card
Postal Money Order**. . . .
Totals
**New Activity July 1, 1951.
Daily Avg. No. of Cash Letters Dispatched

CHICAGO
1952

DETROIT BRANCH
1951

1952

1951

$ 69,326,494,000
46,983,674,000
5,419,881,000
3,238,880,000
785,381,000

$ 66,735,237,000
45,493,769,000
4,417,370,000
2,936,524,000
370,504,000

$ 18,134,430,000
7,665,415,000
2,570,356,000
377,212,000
152,964,000

$ 16,976,870,000
7,913,200,000
1,485,630,000
343,608,000
72,032,000

5125,754,310,000

$119,953,404,000

$ 28,900,377,000

$ 26,791,340,000

3,842

3,958

546

549

U. S. Government checks are handled separately from
the general work flow as most of them are issued in the
form of punched cards and are processed on punch card
equipment. All sorting and proving of these checks
can be done mechanically. Government checks both
paper and card, account for about thirteen per cent of
the total volume during a year.

Postal money orders also are channeled to a separate
division of the Check Department. They, too, are a form
of punched card and are mechanically processed preparatory to their return to the proper Regional Post
Office of Issue. This operation is relatively new to the
department as the conversion to punch card money orders
by the Post Office was effective July 1, 1951.

SERVICES TO MEMBER BANKS

SAFEKEEPING OF SECURITIES
A special arrangement for the safekeeping of custodianship bonds was made with the Veterans' Administration in 1952. As a result, the number of savings bonds
in safekeeping increased over holdings of a year ago.
The additional activity is reflected in the net increase

of $3,561,492 in savings bonds held at the end of the
current year as compared with a net decline of $1,111,436
during 1951. Also, 175,902 savings bonds were received
in 1952, a 60% increase over the 110,203 pieces taken
in during the previous year.

CHICAGO

DETROIT BRANCH

1952
SAFEKEEPING—MEMBER

180,172
155,727
1,204,132

198,878
150,794
1,143,517

38,771
38,423
183,886

31,159
25,964
180,405

$9,326,290,973
9,431,291,152
4,995,952,049
99,532,080

59,561,411,853
9,579,972,640
5,100,952,229
98,635,596

56,263,580,783
6,060,574,856
821,571,294
11,020,502

54,207,921,000
4,156,262,000
618,565,000
9,158,912

116,547
110,870
603,188

BANKS,

1951

72,988
105,677
597,511

59,355
52,400
279,463

37,215
54,476
272,508

8,781,420
9,313,381
65,539,142

5,968,440
4,596,465
25,745,330

3,881,600
4,461,075
24,373,355

1952

1951

ETC.

PIECES

Securities—Received
Released
Coupons Detached From Securities
DOLLAR V A L U E OF PIECES

Securities—Received
Released
Held as of December 31
Coupons Detached From Securities
SAFEKEEPING—SAVINGS

BONDS

PIECES

Received
Released
Held as of December 31
DOLLAR VALUE OF PIECES

Received
Released
Held as of December 31

$

11,579,104
9,389,586
67,728,659

$

INVESTMENTS
The dollar volume of security transactions handled by
the Investment Department at Chicago during 1952 was
practically equivalent to that of the previous year. However, purchases were somewhat larger and sales somewhat smaller.

CHICAGO

At the Detroit Branch, the dollar volume of securities
purchased was approximately 11% less in 1952 than in
the previous year whereas sales for 1952 exceeded 1951
figures by 56%.

DOLLAR VALUE OF SECURITY TRANSACTIONS
PURCHASES
SALES

1948
1949
1950
1951
1952
$ MILLIONS

16

DETROIT

100

200

300

400

30

SERVICES TO MEMBER BANKS

DISCOUNTS AND OTHER CREDITS
Member bank borrowings from the Federal Reserve
Bank expanded substantially in 1952. Borrowings by District banks during the year aggregated $12,489,567,000
at the Head Office—almost 3^2 times the previous
year's amount—and $1,854,780,000 at the Detroit
Branch, somewhat less than twice the 1951 level.
Weekly average outstanding borrowings were significantly greater in the second half of the year and hit a
peak of close to 400 million dollars in December. This
growth in total indebtedness reflected an increased number of borrowing banks requiring greater dollar amounts
more frequently or for longer periods.
The step-up in borrowing activity, stemmed from increasingly high levels of economic activity, heavy bank
loan expansion, and protracted periods of money market
tightness particularly in the latter half of the year.
Coupled with these developments was the Reserve System's general reluctance to purchase Government secur-

ities in the open market, an anti-inflationary policy consistent with the Treasury-Federal Reserve accord of
1951. Member banks, which had formerly sold securities, therefore, resorted to Reserve Bank loans and advances, largely secured by Government obligations, as
a means of replenishing reserves.
Regulation V Loans Guaranteed for
Defense Production

While the volume of guaranteed loans to industries
engaged in defense production diminished somewhat
during the year 1952, the program nevertheless was very
active. Pursuant to the requirements of the Defense
Production Act, the Federal Reserve Bank served as
fiscal agent in administering Regulation V guarantees
for the Departments of the Army, Navy, and Air Force,
as well as for the General Services Administration and
the Atomic Energy Commission.

ADVANCES TO MEMBER BANKS

DETROIT

CHICAGO

0
0
0

1948
1949
1950
1951
1952

M
0
$

2

4

6

8

10

12

0

2

BILLIONS

EXAMINATION OF BANKS
Membership in the Federal Reserve System in the
Seventh District totaled 1,008 on December 31, 1952.
This membership was composed of national and state
banks as follows:
National Banks
State Member Banks

566
442

Examinations of member banks during the year 1952
are summarized below:
Regular Examinations
442
Trust Department Examinations
153
Special Examinations
4
Other Investigations
34

Annual examinations of state member banks usually
were made jointly with representatives of the state banking department concerned.
In addition to the regular examinations, field investigations were required in connection with applications
to organize national banks, applications for the establishment of branch offices, and applications for permission to exercise trust powers.
Field work on examinations and related activities was
handled by a staff of forty men. Twenty-two of these
men are headquartered in Chicago, while the remainder
reside in various cities in Indiana, Iowa, and Michigan.
17

SERVICES TO MEMBER BANKS

CURRENCY
During 1952, the upward trend in currency shipments
continued. Shipments of currency to banks were greater
than ever before measured either in dollar value or
number of pieces. Aggregate receipts of currency were
up somewhat from a year ago.

Further evidence of increased activity in currency
operations was reflected by the $4,997,357,000 in our
Federal Reserve Notes in circulation on December 26,
1952—higher than ever before.
CHICAGO

DETROIT BRANCH

1952

1951

1952

1951

PIECES
Incoming from Banks
Incoming from U. S. Treasurer
Outgoing
Unfit—Forwarded for Redemption
Unfit—Retained in Reserve

586,318,134
163,348,000
612,680,757
209,936,266
—

568,354,571
168,708,000
595,210,696
160,874,176
47,050,000

156,916,056
30,564,000
173,256,679
34,580,552

142,578,000
41,356,000
159,368,000
32,001,000

DOLLAR VALUE OF PIECES
Incoming from Banks
Incoming from U. S. Treasurer
Outgoing
Unfit—Forwarded for Redemption
Unfit—Retained in Reserve

$3,403,019,091
230,404,000
3,699,344,500
785,279,091
—

$3,305,304,478
215,960,000
3,591,359,000
535,958,978
260,550,000

$1,007,490,621
43,332,000
1,142,896,611
141,806,754

$ 955,815,000
54,468,000
1,054,240,000
145,444,000

108,940,000
73,282,000

102,278,000
78,184,000

18,440,000
16,788,000

13,680,000
13,648,000

$1,292,600,000
862,180,000

51,148,420,000
880,780,000

256,500,000
224,640,000

186,500,000
189,860,000

FEDERAL RESERVE NOTE ISSUES—FEDERAL
RESERVE AGENT
Pieces
Received from Washington
Issued to Bank
Dollar Value of Pieces
Received from Washington
Issued to Bank

CURRENCY
(MILLION

600

PIECES)

500

400

INCOMING

500

400

300

300

OUTGOING

200

200

100

100

CHICAGO
CHICAGO

0

0

100

DETROIT
1948 1949 1950 1951 1952

18

1948 1949 1950 1951 1952
DETROIT
1948 1949 1950 1951 1952

SERVICES TO MEMBER BANKS

AND COIN
More widespread popularity of the coin wrapping
service of the Cash Department marked the year 1952.
During 1951, 59% of the outgoing coin from Chicago
was wrapped. Increased demand for this service throughout the year resulted in 71% of the outgoing coin being

wrapped in 1952. At Detroit 47% of the coin shipped
in 1952 was wrapped compared with 35% during the
previous year. Dollar value of coin received from the
Treasury Department during the current year was considerably greater at both Chicago and Detroit.

COIN

Chicago

1250

(MILLION PIECES)

1000

1000

OUTGOING
150

INCOMING

150

500

from Banks
250

500

from Mints
250

Detroit

Detroit

0

1948 1949 1950 1951

1948 1949 1950 1951 1952

1948 1949 1950 1951 1952

19481949195019511952

DETROIT BRANCH

CHICAGO
1952
PIECES
Incoming from Banks—Counted
Incoming from Banks—Diverted
to Coin Wrapping
Received from Mints
Received from Other F. R. Banks.. .
Outgoing
Total Wrapped During Year

DOLLAR VALUE OF PIECES
Incoming from Banks—Counted
Incoming from Banks—Diverted
to Coin Wrapping
Received from Mints
Received from Other F. R. Banks
Outgoing
Total Wrapped During Year

1952

1951

1952

1951

541,082,692

727,568,424

119,801,889

113,527,000

632,237,000
165,524,000
4,100,000
1,334,890,333
947,959,000

484,194,000
138,910,000
3,240,000
1,360,753,205
803,485,000

45,054,000
425,000
176,063,189
83,415,000

45,425,000
231,000
173,142,000
60,448,000

64,091,237

12,130,572

11,302,000

2,332,000

1,190,000

265,100
15,027,126
7,516,650

231,000
13,561,000
5,537,000

$

48,749,560
63,562,050
12,481,200
925,000
123,754,299
82,352,600

$

47,965,150
7,665,000
1,720,000
121,389,161
77,612,150

19

SERVICES TO MEMBER BANKS

ECONOMIC RESEARCH
As business and government executives encounter
problems of increasing complexity, the role of economic
research grows in importance. Effective policy decisions
require a continuing flow of timely and dependable
economic information. Questions of how much, where,
when, and why are asked with ever increasing persistence. An important function of economic research
therefore—whether in private business, government, or
a Federal Reserve Bank—is the provision of background
information on which policy decisions may be based.
The growing demand for economic information has
resulted in a mounting number of inquiries to the Research Department by mail, phone, and in person. As in
the past, three major groups were served—the Board of
Governors and its staff, the Bank's directors and officers,
and a wide range of Midwest bankers, businessmen, and
public officials. Information is made available in numerous memoranda, special reports, periodic statistical
releases, conferences, and monthly and weekly interpretative publications. Also, there is a continuing demand
for speeches. Research officers and staff made over 90
addresses during the year at banking, business, and agricultural meetings.
In keeping with this growing demand for up-to-date
information the Research Department in 1952 placed
additional emphasis on both timeliness and completeness
of its reports. The wizardry of modern mechanization
was extended to more of the statistical operations. Many
bankers and retailers were asked to provide more detailed
reports of their operations and the lists of co-operators
were re-examined to assure statistical results that would
accurately reflect developments in the areas and subjects studied.
The raw material of economic research, of course,
is the flow of reports from bankers, retailers, industrialists, and government units. Without the prompt
co-operation of such groups up-to-date knowledge of
business trends could be no broader than the first-hand
knowledge of individuals, usually limited to a few lines
of activity and covering a relatively small area.

20

Statistical material was received regularly on retail
trade from firms representing about 2,500 stores, and
data on instalment loans were received from about 500
firms other than commercial banks. Banking data were
provided through the co-operation of the more than 1,000
Seventh District member banks.
After the data were processed and analyzed, the results were made available to interested users. Altogether,
39 periodic statistical summaries were sent to a total
mailing list of about 13,000, with over half a million
individual reports being distributed. The Bank's monthly
review, Business Conditions, has reached a circulation
of 23,000, about 8,500 copies being provided at cost in
bulk subscriptions to 107 member banks which redistribute them to their customers. The Agricultural Letter,
issued weekly, reached a circulation of about 11,500, of
which 8,000 are subscribed in bulk by 68 member banks
for distribution to farm leaders and customers in their
area.
Last spring, District member banks were provided a
report of their own operating results compared with
those of other banks of similar size in a Member Bank
Operating Ratios booklet. Also, other special bank reports were made available during the year on deposit
ownership, changes in condition, and loan and investment trends.
The administration of regulations in the fields of
consumer and real estate credit necessitated special surveys and, as usual, the shifting currents of loan demand
at District banks stimulated continuing study of the requirements and uses of credit by business and other borrowers. Bank capital requirements were the subject of a
detailed study.
In retail trade, the regular weekly and monthly releases
on sales and stocks at department stores were supplemented by a Retail Credit Survey. Financial developments in agriculture were followed closely through a
periodic sampling of country bankers' opinions and
studies of trends in farm credit.

SERVICES TO MEMBER BANKS

Typing Collection-Letter Forms

COLLECTION OF NON-CASH ITEMS
Collection-letter forms were prepared on new and improved equipment during 1952. Electric typewriters
equipped with pin-feed platens replaced manual typewriters and fanfold billing attachments. Factory-interleaved carbon, precise alignment of all parts of each

form, clearly readable copies, and effortless typing are
some of the advantages Collection Department personnel have been enjoying since the installation of this
new equipment.
DETROIT BRANCH

CHICAGO

* Includes direct sendings to other Federal
Reserve Banks by our member banks

20,187
13,808
173,943

21,354
14,788
153,054

834,971

207,938

189,196

103,676

$

28,807
158,186
647,978

881,172

* Includes direct sendings to other Federal
Reserve Banks by our member banks

Totals

1951

25,952
156,898
698,322

Totals

Dollar Value of Transactions
City
Country*
Coupon and Security

1952

1951

Number of Transactions 1952
City
Country*
Coupon and Security

105,101

5,311

5,775

58,785,000
361,531,000
757,689,000

$

75,693,000
381,287,000
870,066,000

$

27,009,000
41,604,000
85,223,000

$1,178,005,000

$1,327,046,000

$

153,836,000

$ 282,339,000

$ 302,840,000

$

35,490,000

$

38,069,000
33,874,000
57,414,000

$

129,357,000

$

25,175,000

21

SERVICES TO TREASURY DEPARTMENT

SERVICING OF GOVERNMENT SECURITIES
The reduction in securities exchanged in 1952 was
mainly due to a smaller volume of coupon bonds presented in exchange for registered bonds and likewise a
much lesser amount of registered bonds exchanged for
coupon bonds.

Reissues of Savings Bonds remained high and followed
the pattern of previous years.
Payments made by credit through Treasury Tax and
Loan Accounts in 1952 exceeded the 1951 total by $1.4
billion. This large increase was due to depositaries receiving credit for more tax money during the year and
for the payment of new cash offerings of Treasury securities, including the 2 3/8% Bonds of 1958.

The additional activity in the Government bond market at various times during the year was reflected in the
increase of about 16% in telegraphic transfers of securities handled in 1952.

DETROIT BRANCH

CHICAGO

1952

1951

$2,637,696,800

$3,341,627,100

143,500

147,800

$9,971,755,000

$8,843,888,300

$2,417,025,000

$1,773,850,300

115,900

112,300

15,100

15,600

$ 414,081,500

$ 432,973,500

1,272,500

1952

1951

MARKETABLE ISSUES
DENOMINATIONAL

AND OTHER

EXCHANGES

Par Value
Pieces

TELEGRAPHIC TRANSFERS

$

46,359,250
4,177

$

79,186,000
3,480

(CPD)

Par Value
Pieces

SAVINGS BONDS
REISSUES

Maturity Value

$

29,471,500

$

27,478,100

1,226,800

224,100

180,200

$5,700,000,000

$4,700,000,000

$1,950,000,000

$1,600,000,000

623,421,000

398,702,000

211,088,500

129,825,600

Number of Entries to Deposit and
Collateral Accounts

321,200

307,600

38,629

34,958

Number of Qualified Depositaries
as of December 31

1,712

1,697

137

139

Pieces

DEPOSITARY BANKS—TREASURY TAX
AND LOAN ACCOUNT
Payments by Credit
Depositary Balances as of December 31

22

SERVICES TO TREASURY DEPARTMENT

ISSUANCE OF GOVERNMENT SECURITIES

SERIES E SAVINGS BONDS SOLD
D L A VALUE
OL R
PIECES

$millions

millions

800

Marketable securities issued at Chicago and Detroit
increased about 12% in 1952. Larger weekly offerings
of Treasury Bills and greater interest in these offerings
because of higher yields accounted for this increase.

9

loo
feoo

The decline in sales of Treasury Savings Notes during
1952, because of the greater attractiveness of other short
term Treasury issues, accounted for the dollar reduction
in savings securities issued. More Series E Bonds were
sold by issuing agents, both in dollar value and number
of pieces, the latter increasing over 22%.

CHICAGO

8
7
CHICAGO

500

6
5

400

4
30C

3
20C

1948 49 50 51 52

IOC

0

,0

1948 49 50 51 52

1951

1952

1952

SAVINGS

1

DETROIT BRANCH

CHICAGO

MARKETABLE SECURITIES
Par Value Issued
Pieces Issued
Number of Subscribers

2

DETROIT

DETROIT

1951

$12,012,001,000
132,000
31,100

$10,580,908,000

$

$

$

115,200
24,100

735,451,000
10,976
1,275

$

180,598,000
208,045,000
6,993,400
25,111,600

$

420,748,000

$

560,614,000
11,884

1,122

SECURITIES

MATURITY

VALUE

Treasury Savings Notes
Series E—By Issuing Agents
Series E—By FRB
Other Savings Issues
Total Maturity Value

334,403,000

702,147,000
553,549,575
21,287,425
171,670,850

$

$ 1,265,573,300

$ 1,448,654,850

$

22,580
9,197,543
467,657
130,900

28,554
7,092,416
470,584
141,204

4,535
4,259,000
253,000
14,272

6,749
3,877,000
239,400
14,251

9,818,680

7,732,758

4,530,807

4,137,400

3,096

3,109

349

366

415,653,000
621,004,850
20,816,150
208,099,300

189,339,000
6,520,400
19,410,500
549,672,900

N U M B E R OF PIECES

Treasury Savings Notes
Series E—By Issuing Agents
Series E—By FRB
Other Savings Issues
Total Pieces
Number of Qualified Issuing Agents

23

SERVICES TO TREASURY DEPARTMENT

REDEMPTION OF GOVERNMENT SECURITIES
Redemptions of Treasury Coupon Bonds in Chicago increased from $7,842,000,000 in 1951 to $9,715,000,000
in 1952, but total redemptions showed a decline because
of decreases in redemptions of Registered Bonds and
Armed Forces Leave Bonds. Redemptions in Detroit
during 1951 included large amounts of called issues, a
nonrecurring factor in 1952.

The decline noted in the volume of Savings Bonds
redeemed in the District during 1952 followed the
national downward trend of such redemptions.
Over 1,600,000 coupons aggregating $122,970,000
were forwarded to this bank and its branch for payment.
This is an increase of about 8% in dollar value over 1951.
DETROIT BRANCH

CHICAGO
1952

$

SAVINGS BONDS
Redemption Value
By Paying Agents—A-E
By FRB
—A-E
By FRB
—F-G

1951

245,400
$10,281,552,000

TREASURY ISSUES*
Number of Pieces
Maturity Value

Number of Pieces
By Paying Agents—A-E
By FRB
—A-E
By FRB
—F-G

582,408,000
37,922,000
207,271,600

1950

1951

$ 8,808,678,400

31,000
$ 1,971,692,700

51,300
$ 2,503,894,300

$

$

$

318,000

10,647,800
291,500
197,600

U. S. GOVERNMENT AND OTHER
GOVERNMENTAL AGENCY COUPONS
Number of Pieces
Dollar Value

$

1,495,200
102,026,392

687,699,200
41,978,800
239,808,000

167,263,300
4,023,100
19,613,500
4,371,409
49,549
15,555

11,127,100
281,100
218,500

$

1,580,400
94,728,276

4,582,491
43,727
17,889

181,900
$

20,943,600

188,285,900
4,549,700
17,020,900

$

185,500
19,771,300

*Includes Savings Notes and Armed Forces
Leave Bonds.

COLLECTION OF FEDERAL TAXES

RECEIPTS
$BILLIONS
THOUSANDS

3

750

500

2

1

250

The dollar value of validated receipts processed during 1952 ran well over three billion dollars, an increase
of 22% over the previous year. Instructions from Directors of Internal Revenue which changed remitting habits
of many employers primarily were responsible for the
1952 increase in volume. Prior to April, 1952, many
employers remitted quarterly to various offices of Directors of Internal Revenue. After April, these employers were instructed to remit tax payments monthly to
Federal Reserve Banks. Statistics on receipts processed
during 1952 and 1951 are as follows:
1952

0

Number

A
1948 4 9 505152

24

1948 49 50 51 52

Dollar Value

1951

970,000

801,000

$3,424,000,000

$2,797,000,000

GENERAL BANK ACTIVITIES

PERSONNEL
Defense demands for industrial workers and military
personnel continued to encroach on available sources
of clerical help. Increased wages, improved working conditions and transportation-free jobs in factories in outlying and suburban areas added to recruitment problems.

NUMBER OF EMPLOYEES
2500

Comparativefigures as of the last day of the year show
an increase in personnel in Chicago of about 7.5% and a
decrease in Detroit of about 3.6%. The continuing upward trend in Chicago was the result of a marked additional volume of work throughout the Bank. To meet
demands for staff, advertising and solicitation of high
school seniors for part time training was intensified.
Training classes in proof machine and keypunch operation and in typing and page work were successfully conducted throughout the year.

200
1500

CHICAGO
1000
500
DETROIT

0

An increase in salary structure to meet market conditions resulted in starting salaries showing a favorable
comparison with those in effect in the district.

1948 1949 1950 1951 1952

COMMUNICATIONS
Messages handled by the Codes and Telegrams Division increased slightly during the current year despite
the loss of commercial wire facilities during April and
May because of the strike of Western Union Telegraph
Company employees.
Approximately 1,370,000 telegrams were processed
during 1952 by the Chicago office of the Federal Reserve
leased wire system—up 5% from the volume handled
during 1951. Early in 1952, a new direct wire from

Chicago to New York was added to the leased wire
system. This new wire reduced by 40% the messages
formerly sent through the Washington relay center of
the system.
Transfers of funds were up at Chicago and Detroit
with both offices registering an increase of 13% in dollar amount. The number of pieces of mail received
and dispatched approximated the record levels reached
in 1951.
DETROIT BRANCH

CHICAGO
1952
TELEGRAMS PROCESSED
Messages Received
Messages Dispatched
Total
WIRE TRANSFERS OF FUNDS
Number of Transfers
Total Dollar Value
Average Value Per Transfer
MAIL VOLUME
Pieces Received
Pieces Dispatched
Total

1951

1952

1951

113,448
94,558

28,269

28,621

32,187

30,881

210,585

208,006

60,456

59,502

224,591
$103,336,345,000
$
460,109

216,256
$ 91,112,727,000
$
421,319

48,350
$ 26,094,914,000
$
539,709

45,299
$ 23,008,248,000
$
507,920

2,332,921
4,477,856

2,332,279
4,706,444

306,672

302,617

323,149

335,007

6,810,777

7,038,723

629,821

637,624

111,307
99,278

25

FEDERAL RESERVE BANK OF CHICAGO

COMPARATIVE

STATEMENT

OF

CONDITION

DECEMBER 31, 1952, AND DECEMBER 31, 1951

ASSETS

Dec. 31, 1952
$4,430,854,137.32

$4,221,263,933-92

119,452,700.00

122,652,645.00

54,784,083.66

53,922,299.04

$4,605,090,920.98

$4,397,838,877.96

7,360,500.00

340,600.00

3,437,028,000.00

3,521,975,000.00

$3,444,388,500.00

$3,522,315,600.00

6,680,636.02

GOLD CERTIFICATES O N HAND AND DUE FROM U. S. TREASURY

Dec. 31, 1951

6,342,488.93

REDEMPTION FUND—FEDERAL RESERVE NOTES
OTHER CASH

Total Cash
BILLS DISCOUNTED
U. S. GOVERNMENT SECURITIES

Total Bills and Securities
BANK PREMISES
FEDERAL RESERVE NOTES OF OTHER BANKS

23,133,000.00

22,180,500.00

704,039,961.48

652,609,324.88

22,954,908.03

19,336,519.88

$8,806,287,926.51

$8,620,623,311.65

$4,971,415,290.00

$4,764,080,565.00

3,066,257,823.23

3,227,709,792.94

28,709,863.68

6,862,718.83

UNCOLLECTED ITEMS
OTHER ASSETS

Total Assets

LIABILITIES
FEDERAL RESERVE NOTES IN ACTUAL CIRCULATION
DEPOSITS:

Member Bank—Reserve Account

Treasurer—General Account
Other Deposits
U. S.

85,944,791.80

102,613,235.40

$3,180,912,478.71

$3,337,185,747.17

519,439,776.68

392,025,045.87

1,962,285.84

1,835,009.47

$8,673,729,831.23

Total Deposits

$8,495,126,367.51

DEFERRED AVAILABILITY ITEMS
OTHER LIABILITIES

Total Liabilities

CAPITAL
CAPITAL PAID IN

(Section 7)
SURPLUS (Section 13b)
SURPLUS

OTHER CAPITAL ACCOUNTS

Total Liabilities and Capital Accounts

26

ACCOUNTS

$

32,341,950.00
84,628,184.18
1.429,383.78
14,158,577.32

$8,806,287,926.51

$

30,375,250.00
79,601,206.22
1,429,383.78
14,091,104.14

$8,620,623,311.65

FEDERAL RESERVE BANK OF CHICAGO

COMPARATIVE STATEMENT OF EARNINGS AND EXPENSES
YEAR ENDED DECEMBER 31, 1952, AND YEAR ENDED DECEMBER 31, 1951

1952
EARNINGS

1951

$

67,492,987.62

$

58,699,425.22

$

13,227,178.27
572,900.00
1,755,196.48

$

11,993,932.03
566,300.00
1,540,691.88

$

15,555,274.75

$

14,100,923.91

$

51,937,712.87

$

44,598,501.31

$

293,142.06
6,171.30

$

—
18,330.10

$

299,313.36

$

52,237,026.23

EXPENSES:

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

$18,330.10
$

44,616,831.41

DEDUCTIONS FROM CURRENT NET EARNINGS:

Loss on Sales of U. S.Government Securities
Other Deductions
Total Deductions from Current Net Earnings

77,357.86

$

68,599.16

Net Earnings After Payments to United States Treasury
Dividends Paid

52,159,668.37

38,297,505.75

6,920,988.34

6,028,319.63
1,772,556.58

5,026,977.96

4,255,763.05

$

Transferred to Surplus (Section 7)

291,006.03
44,325,825.38

1,894,010.38

Paid United States Treasury (Interest on Federal Reserve Notes)

77,357.86

45,238,680.03

$

Net Earnings

222,406.87

$

$

FEDERAL RESERVE BANK OF CHICAGO

SURPLUS ACCOUNT (Section 7)
YEAR ENDED DECEMBER 31, 1952, AND YEAR ENDED DECEMBER 31, 1951

1952
SURPLUS

$ 79,601,206.22

January 1

TRANFERRED TO SURPLUS—AS ABOVE
SURPLUS DECEMBER

31

1951
$

5,026,977.96

$

84,628,184.18

75,345,443.17
4,255,763.05

$

79,601,206.22

27

FEDERAL RESERVE BANK OF CHICAGO

S T A T E M E N T OF E A R N I N G S A N D

EXPENSES

NOVEMBER 16, 1914 (Date of Commencing Business) TO DECEMBER 31, 1952

YEAR

CURRENT
EARNINGS

1914-15
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952

$

Totals

$542,934,925

28

268,885
665,937
2,083,164
8,481,747
12,012,078
30,303,218
20,382,170
6,748,863
6,511,359
5,202,169
5,424,663
6,567,043
6,167,352
8,936,418
9,889,451
4,834,153
4,143,601
5,613,671
6,764,554
8,152,371
6,177,615
4,423,476
4,575,583
3,954,026
4,254,602
4,831,217
5,089,095
6,590,508
8,738,325
14,204,919
20,076,761
21,235,190
21,318,967
43,407,727
47,051,999
41,659,635
58,699,425
67,492,988

CURRENT
EXPENSES
$

245,584
237,731
584,069
1,478,310
2,450,244
4,164,176
4,734,100
4,080,057
4,373,024
3,946,436
3,744,039
3,824,437
3,887,058
3,696,679
4,092,369
3,805,117
3,524,401
3,432,693
3,854,009
3,551,838
3,697,540
3,453,380
3,199,558

3,318,002

CURRENT
NET
EARNINGS

$

23,301
428,206
1,499,095
7,003,437
9,561,834
26,139,042
15,648,070

2,668,806
2,138,335
1,255,733
1,680,624
2,742,606
2,280,294
5,239,739
5,797,082

1,029,036
619,200
2,180,978
2,910,545
4,600,533
2,480,075
970,096
1,376,025
636,024
938,250
1,360,053
861,561
1,413,105

3,316,352
3,471,164
4,227,534
5,177,403
5,850,233
6,757,377
6,551,011
7,789,344
8,843,097
10,843,513
11,608,341
11,909,847
14,100,924
15,555,275

7,447,542
13,525,750
13,445,846
12,475,870
32,564,214
35,443,658
29,749,788
44,598,501
51,937,713

$193,376,266

$349,558,659

2,888,092

ADDITIONS
TO
CURRENT NET
EARNINGS

FROM
CURRENT NET
EARNINGS

$

3,210

NET
EARNINGS
(See disposition,
next page)

299,313

517,991
328,214
154,505
5,961,421
6,419,630
56,411
291,006
77,358

20,091
403,206
1,231,879
6,805,081
8,576,204
25,875,749
14,505,117
1,405,215
1,178,355
909,123
1,121,273
2,253,923
1,927,645
4,763,429
5,424,665
1,054,328
609,895
2,242,725
1,790,493
1,404,491
771,220
932,178
1,687,606
1,090,958
982,917
2,607,974
1,024,465
1,197,161
5,759,353
7,831,437
13,430,311
13,360,768
12,769,223
27,718,412
33,424,543
34,833,017
44,325,825
52,159,668

$ 28,333,881

$ 38,482,617

$339,409,923

$

—
—

2,127
—
—

69,307
4,826
572,019
41,903
27,857
12,646

13,098
13,061
11,833
8,050
298,510
263,967
874,264
373,245

1,611,990
951,304
1,526,060

811,188
1,637,141
521,313

1,530,021
163,061
386,898
4,137,334
383,895
422,552
243,136
447,858
1,115,619
4,400,515
5,139,640

18,330

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

332,600
1,147,779
1,835,610
1,001,883
374,467
571,997
501,781
365,710
488,143
380,467
273,218
273,272
812,517
1,493,297
4,808,032
2,660,159
1,563,978
499,607
1,182,207
476,646

282,100
157
602,842
1,266,073
—

$

FEDERAL RESERVE BANK OF CHICAGO

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

OF NET

EARNINGS

NOVEMBER 16, 1914 (Date of Commencing Business) TO DECEMBER 31, 1952

PAID U. S. TREASURY

TRANSFERRED TO SURPLUS
Net
Earnings
Year

Dividends
Paid

(See detail,
previous page)

20,091
1914-15. .$
403,206
1916..
1917..
1,231,879
6,805,081
1918..
8,576,204
1919-•
1920.. . 25,875,749
1921.. . 14,505,117
1,405,215
1922. .
1,178,355
1923.•
1924..
909,123
1925..
1,121,273
2,253,923
1926..
1,927,645
1927..
4,763,429
1928. .
5,424,665
1929.1,054,328
1930..
609,895
1931.•
2,242,725
1932..
1,790,493
1933..
1934..
1,404,491
771,220
1935..
932,178
1936..
1,687,606
1937..
1,090,958
1938..
982,917
1939.•
2,607,974
1940..
1941..
1,024,465
1,197,161
1942..
5,759,353
1943.1944..
7,831,437
1945..
13,430,311
1946.. . 13,360,768
1947.. . 12,769,223
1948.. . 27,718,412
1949.. . 33,424,543
1950.. . 34,833,017
1951.. . 44,325,825
1952.. . 52,159,668

$

Totals . . 4339,409,923

$38,031,121

ADJUSTMENTS—
—19,748,517
19,748,517
1,417,702
— 3,207,763
7,615,843
Totals . . .$345,235,705
NOTES:

—

Section 7

$

—

361,319
862,259
215,799
6,200,446
604,635
7,875,397
700,807
14,688,500
792,769
853,785
2,075,323
876,203 — 657,289
27,398
904,371
—
909,123
934,016
187,257
1,267,964
985,959
1,029,990
897,655
3,663,668
1,099,761
3,651,464
1,170,363
1,211,418 — 157,090
1,170,633 — 560,738
1,029,933
121,279
932,366
858,127
761,334
669,479
—
753,583
153,241
725,553
883,370
763,115
791,007
279,031
819,532
158,265
1,770,131
826,919
100,484
896,766
237,632
955,508
993,684
4,765,619
6,710,302
1,115,422
12,212,414
1,215,381
12,048,976
1,311,792
1,380,234
1,139,227
2,624,684
1,472,491
3,187,004
1,556,097
1,670,666
3,316,622
1,772,55 6
4,255,763
5,026,978
1,894,010

$

—

$99,968,621

Franchise
Tax

Section 13b

—
—

$

—
—

215,799

Section
13b

$ —

Interest on
F. R. Notes
Outstanding

$

—

$

$ 20,091
41,887
— 61,978

—
—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

10,394,480
11,576,009

—

—

—

—

—

—

1,186,301

—

—

—

—

—

246,586

—

—

—

—

-—•

—

—

—

—

—

•—•

—

—

—

—

•—-

—

—

—

—

—

—

—

—

—

—

—

—

•—-

—

—

—

—

—

—

—

—

—

—
—

—

602,838

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—
—

—

1,091,513

—

—

—

—

—

— 26,322

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

25,030
12,767
206

—
—
—

—

—

—

—

—

—

—

—

—

—

17,637
28,354
28,354
20,714
5,120
10,924
27,215
4,021
50
5,713

—

—

—

—

—

—
—

—

—

—

—

—

—

2,516

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

427

—

—

—

—

—

—

—

—

—

—

—

—

—

$

—

—

—

—

11,681

$25,313,526

$151,045

10,249,335
23,621,237
28,681,442
29,845,729
38,297,506
45,238,680
$175,933,929

—19,748,517 ( l a )

(1)
(1)
(2)
(3)
(4)

Other
Transfers

—

—

Balance
to
Profit
& Loss

—

—

—

—

$ —

$ --19,748,517 ( l b )

1,417,702 (2)
3,207,763 (3)
7,615,843 (4)
$38,031,121

$84,628,184

$1,429,383

$25,313,526

$151,045

$175,933,929

$19,748.517

$

(1) F. D. I. C. Stock:
(a) 1934—Purchase.
(b) 1947—Retirement (proceeds to Treasury).
(2) Payments from U. S. Treasury, Section 13b loans, Years 1934 and 1935.
(3) Transferred from Surplus to Reserves for Contingencies, Years 1940, 1942, and 1943.
(4) Transferred to Surplus (Section 7) from Reserves for Contingencies, Year 1945.

29

—

r

DIRECTORS A N D OFFICERS
I
DIRECTORS
J O H N S. COLEMAN,

President

Burroughs Adding Machine Company
Detroit, Michigan
Chairman

WALTER J . CUMMINGS,

Chairman

VIVIAN W . JOHNSON,

Continental Illinois National Bank
and Trust Company of Chicago
Chicago, Illinois
WILLIAM J . GREDE,

President

First National Bank
Cedar Falls, Iowa
ALLAN B. KLINE,

President

President

American Farm Bureau Federation
Chicago, Illinois

Grede Foundries, Inc.
Milwaukee, Wisconsin
WALTER E. HAWKINSON, Vice President

in charge of Finance, and Secretary
Allis-Chalmers Mfg. Co.
Milwaukee, Wisconsin

NUGENT R. OBERWORTMANN,

President

The North Shore National Bank of Chicago
Chicago, Illinois

WILLIAM R. SINCLAIR, Chairman of the Board

Kingan and Co.
Indianapolis, Indiana

OFFICERS
CLIFFORD S. YOUNG,

President

ERNEST C. HARRIS, First Vice President

Louis G. MEYER, Vice President

HARLAN J. CHALFONT, Vice

GEORGE W . MITCHELL, Vice President
ARTHUR L. OLSON, Vice President
ALFRED T . SIHLER, Vice President
WILLIAM W . TURNER, Vice President

President

NEIL B. DAWES, Vice President and Secretary
WILFORD R. DIERCKS, Vice
WALTER A. HOPKINS, Vice

President
President

LAURENCE H . JONES,

Cashier

ERNEST T. BAUGHMAN, Assistant Vice President
PHIL C. CARROLL, Assistant Vice President
CLARENCE T. LAIBLY, Assistant Vice President
MARK A. LIES, Assistant Vice President

FRANK A. LINDSTEN, Assistant Vice President
HAROLD J. NEWMAN, Assistant Vice President
INGOLF J. PETERSEN, Assistant Vice President
FRANKLIN L. PURRINGTON, Assistant Vice President
H. FRED WILSON, Assistant Vice President

EDWARD D . BRISTOW, Assistant
Cashier
HERBERT H . CONKLIN, Assistant
Cashier
EDWARD A. HEATH, Assistant Cashier and

CARL M . SALTNES, Assistant
Cashier
ELMER F. SHIREY, Assistant
Cashier
BRUCE L. SMYTH, Assistant
Cashier
GEORGE T. TUCKER, Assistant
Cashier

Assistant Secretary

PAUL C. HODGE, General

Counsel

ORVILLE C. BARTON, Assistant General Counsel
and Assistant Secretary

30

JOHN J. ENDRES, General

Auditor

ARTHUR M. GUSTAVSON, Assistant General Auditor
C. PAUL VAN ZANTE, Chief

Examiner

DIRECTORS A N D

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, D i r e c t o r

EDWARD M . KERWIN, V i c e

Commonwealth Edison Co.
Chicago, Illinois

President

E. J. Brach and Sons
Chicago, Illinois

WALTER HARNISCHFEGER, P r e s i d e n t

G . BARRET MOXLEY,

Harnischfeger Corporation
Milwaukee, Wisconsin

President

Kiefer-Stewart Company
Indianapolis, Indiana
JAMES L. PALMER,

President

Marshall Field & Company
Chicago, Illinois

DETROIT BRANCH
DIRECTORS
WILLIAM M. DAY, Vice President and General Manager
Michigan Bell Telephone Company
Detroit, Michigan

JOHN A. HANNAH, President
Michigan State College
East Lansing, Michigan

JOSEPH M . DODGE, C h a i r m a n

HOWARD P . PARSHALL, P r e s i d e n t

The Detroit Bank
Detroit, Michigan

Commonwealth Bank
Detroit, Michigan
JOHN A. STEWART, Vice President and Cashier
Second National Bank and Trust Company of Saginaw
Saginaw, Michigan

O F F I C E R S
HARLAN J . CHALFONT, Vice

President

and

Manager

RICHARD W . BLOOMFIELD, Assistant Vice President
RUSSEL A. SWANEY, Assistant Vice President

HAROLD L. DIEHL,

Cashier

JOSEPH J. SRP, JR., Assistant Cashier
ARTHUR J. WIEGANDT, Assistant Cashier
GORDON W. LAMPHERE. Assistant General Counsel

31

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