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FEDERAL RESERVE BANK OF CHICAGO PRESIDENT’S REPORT TO DIRECTORS ACTIVITIES FOR THE YEAR 1943 PRESIDENT'S REPORT TO DIRECTORS ACTIVITIES OF THE HEAD OFFICE AND DETROIT BRANCH During the Year 19^3 COMPARATIVE STATEMENT OF EARNINGS AND EXPENSES Years 19^3-19^2 COMPARATIVE STATEMENT OF CONDITION December 31>19^3 -December 31>19^2 and STATEMENT OF EARNINGS AND EXPENSES - DISPOSITION OF NET EARNINGS Years 191^— 19^-3 Inclusive NEW FUNCTIONS ADDED DURING YEAR 194} THREE NEW FUNCTIONS WERE ADDED TO THOSE ALREADY BEING PERFORMED BY THE FEDERAL RESERVE BANK OF CHICAGO DURING THE YEAR 1943. RATION CHECK DEPARTMENT COMMENCED OPERATIONS IN THE MONTH OF FEBRUARY, MONTH OF APRIL, WAR BOND CUSTODY DEPARTMENT IN THE AND WITHHELD TAX DEPARTMENT IN THE MONTH OF JULY. THE ACTIVITIES OF THESE NEW DEPARTMENTS ARE SHOWN UNDER THEIR RESPECTIVE NAMES ELSEWHERE IN THIS REPORT. * * I N D EX** Page ACCOUNTING DEPARTMENT: Bookkeeping Division.............................................. 1 Federal Reserve Books Division ................................ 1 General Books Division............................................ 1 BANK EXAMINATION DEPARTMENT .............................................. BANK RELATIONS DEPARTMENT.................................................. BINDERY AND OLD RECORDS DIVISION............................................ BUILDING DEPARTMENT........................................................ 1 5 6 6 CAFETERIA ................................................................ CASH DEPARTMENT............................................................ CHECK DEPARTMENT............................................................ CODES AND TELEGRAMS DIVISION................................................ COLLECTION DEPARTMENT..................... CONSUMER CREDIT DEPARTMENT.................................................. 7 7 8 8 8 9 DISBURSING DEPARTMENT..................................................... 11 DISCOUNT AND CREDIT DEPARTMENTS........................................... 11 FEDERAL RESERVE NOTE ISSUE DEPARTMENT..................................... 12 FILES DEPARTMENT........................................................... 12 FOREIGN FUNDS CONTROL DIVISION............................................. 13 GOVERNMENT BOND DEPARTMENT................................................. 13 INVESTMENT DEPARTMENT.................................... 15 LEGAL DEPARTMENT........................................................... 17 MAIL D I V I S I O N ............................................................. 17 MEMBER BANK ACCOUNTS DIVISION . . '......................................... 17 OFFICE MACHINE REPAIRS..................................................... 18 PERSONNEL DEPARTMENT....................................................... 18 PLANNING DEPARTMENT....................................................... 20 PURCHASING DEPARTMENT..................................................... 21 RATION CHECK DEPARTMENT................................................... 21 R.F.C. CUSTODY DIVISION .................................................. 21 RESEARCH AND STATISTICS DEPARTMENT......................................... 22 SAFEKEEPING DEPARTMENT.................. 23 TELEPHONE DIVISION......................................................... 2k WAR BOND CUSTODY DEPARTMENT............................................... 2k WIRE TRANSFER DIVISION..................................................... 25 WITHHELD TAX DEPARTMENT................................................... 25 DETROIT BRANCH............................................................. 26 COMPARATIVE STATEMENT OF EARNINGSAND EXPENSES - Years 19*0-19^2............ 31 COMPARATIVE STATEMENT OF CONDITION - December 31, 19^3-December 31> 19k2. . 32 STATEMENT OF EARNINGS AND EXPENSES - DISPOSITION OF NET EARNINGS Years 191^ - 19^3, Inclusive. . ...................................... 33 * * - 1 - ACCOUNTING DEPARTMENT: bookkeeping Division This division functioned 2,371*000 entries during the year 19U3 to the accounts of our member hanks, as compared with 2,379*000 entries during the year 19l - a decrease of approximately .3$. Hie number *2 of active accounts at the end of the year 19^3 stood at 759* representing 89% of the total head office territory membership as of that date. This compared with 733 active accounts at the end of 19^2 . Federal Reserve Books Division Effected 2,030,000 entries during the year 19^3 in maintaining accounts with other Federal Reserve banks and branches and with our Detroit Branch. This compared with 2,082,000 entries effected during 19^2, and represented a decrease of 2$ over that year. The decrease in the actual number of entries func tioned, however, was more than offset by a continua tion of the conditions experienced in 19^2, involv ing the necessity of investigating and adjusting errors due for the most part to inexperienced help in the offices of banks originating cash letters sent to us for credit in other districts. General Books Division Effected 33^*700 entries during the year 19^3* com pared with 278,900 during the year 19^2 - an increase of 205t the greater part of which occurred in connec , tion with activities in the account of U.S.Treasurer. BANK EXAMINATION DEPARTMENT: Record of Examinations Tfiim har Of BftrikH Regular - State member banks - Joint with State Examiners Regular - State member banks - Independent Membership - Joint with State Examiners Membership - Independent Follow-Up Investigations - Joint with State Examiners Follow-Up Investigations - Independent Nonmember banks - Independent Total Trust Departments - State member banks - Joint with State Examiners Trust Departments - State member banks - Independent Trust Departments - Membership - Joint with State Examiners Trust Departments - Membership - Independent Total 377 2 12 16 2 lh 2 1*25 103 5 6 117 -2- All State member banks and their trust departments vere examined during the calendar year of 19^3 with the exception of nineteen banks. Failure to examine them was due to the fact that the State Departments were unable to complete their schedules and we felt it more practical to defer examining these banks until after January 1, 1 9 ^ , when Joint examinations could be made. BANK EXAMINATION DEPARTMENT: (Continued) Applications for State Bank Membership Acted upon or in Process Applications approved - Admitted to membership Applications approved - Incomplete Applications pending in Chicago on December 31, 19^3 32 1 _2 25 On the application "approved - incomplete" time for admission has been extended to January 15, 1 9 ^ . There should be no difficulty in completing the two applications now pending in Chicago. Changes in State Bank Membership during the Year Number of State member banks as of December 31> 19^2 New State Members Withdrawals 392 32 _8 Number of State member banks as of December 31> 19^3 Ul6 New State Members - 32 Illinois Bloomington Chicago Forest Park Grayslake Hammond Hartsburg Knltf Aff-l Latham Melvin Newman Sidell Winnetka American State Bank of Bloomington,Illinois Austin State Bank First State Bank of Forest Park First State Bank of Grayslake The State Bank of Hammond Hartsburg State Bank Kansas State Bank State Bank of Latham Commercial State Bank of Melvin First State Bank of Newman Sidell State Bank Winnetka Trust and Savings Bank -3BANK EXAMINATION DEPARTMENT: (Continued) Nev State Members Indiana Akron Clay City Columbus Fort Wayne Medaryville North Manchester Sunman The State Bank of Akron Farmers and Merchants Bank Irwin-Unlon Trust Company Dime Trust and Savings Bank The Medaryville State Bank Indiana Lawrence Bank and Trust Company Peoples Bank and Trust Company Iowa Columbus Junction Des Moines Farnhamville Lake View Renvick Waterloo Columbus Junction State Bank Capital City State Bank Security Savings Bank Farmers State Bank Renwick Savings Bank The Waterloo Savings Bank Michigan Centreville Leslie Lincoln Park Saline The Wolf Bros. State Bank Centreville, Michigan The Peoples Bank of Leslie The State Savings Bank of Lincoln Park, Michigan The Saline Savings Bank Wisconsin Brodhead Greenwood Howards Grove Withdrawals - The Bank of Brodhead Farmers and Merchants Bank State Bank of Howards Grove 8 Chicago Illinois Austin State Bank Converted into a National bank on November 27, 19^3 Chicago Illinois Lake Shore Trust and Savings Bank Converted into a National, bank on December 1, 19^3 -4BANK EXAMINATION DEPARTMENT: (Continued) Withdrawals Metamora Illinois Metamora State Bank Converted into a National bank on August 25, 19^3 Battle Ground Indiana The Battle Ground State Bank Voluntary liquidation June 30, 19^3 Gary Indiana The Gary State Bank Converted into a National bank on August 17 ) 19^3 Maquoketa Iowa Jackson State Savings Bank Voluntary withdrawal June 30, 1<43 Niles Michigan State Bank of Niles Voluntary liquidation June 30, 19^3 Assets purchased by First National Bank of Niles South Haven Michigan The First State Bank of South Haven and The Citizens State Bank of South Haven merged June 1, 19^3* under charter of The Citizens State Bank of South Haven, and changed title to Bank of South Haven. NATIONAL BANKS Total number of National banks as of December 31> 19^2 Additions during the year Withdrawals during the year Total number of National banks as of December 31> 19^3 533 7 __2 538 Additions - 7 Chicago Illinois Lake Shore National Bank, December 1, 19^3 A conversion of Lake Shore Trust and Savings Bank (member). Chicago Illinois National Bank of Austin, November 27, I9U3 A conversion of Austin State Bank (member). Chicago Illinois University National Bank, April $0, 19^3 A conversion of University State Bank (nonmember). -5BANK EXAMINATION DEPARTMENT: (Continued) Additions Maywood Illinois First National Bank of Maywood September 7> 19^3 New organization Metamora Illinois Metamora National Bank, August 2k, 19^3 Conversion of Metamora State Bank (member) Riverside Illinois Riverside National Bank September JO, 19^3 Conversion of Riverside State Bank (nonmember) Gary Indiana Gary National Bank, August 18, 19^3 Conversion of The Gary State Bank (member) Hume Illinois The First National Bank of Hume April Ik, I9U5 Voluntary liquidation Fennimore Wisconsin The First National Bank in Fennimore December 21, 19^3 Voluntary liquidation. Succeeded by The First State Bank (nonmember) Withdrawals - 2 BANK RELATIONS DEPARTMENT: During the calendar year 19^3, calls, other than scheduled examinations, Mere made on National banks, State member banks, State nonmember banks and group meetings by the Baiik Relations Department, and staff of examiners and assistant examiners, as follows: National banks State member banks State nonmember banks Group meetings Conferences Special investigations 191 108 290 32 kl ■_k 666 During the year addresses were made before trade associations, credit associations, bankers associations, credit uni chi associa- -6- tions, finance companies, clubs and various other organizations, as follows: BANK RELATIONS DEPARTMENT: (Continued) Credit Department - Regulation V Consumer Credit Department - Regulation ¥ Research and Statistics Department 3 17 335 555 BINDERY AND OLD RECORDS DIVISION: In the Bindery section 15,500 Jobs involving several hundred high-grade cloth-bindings of magazines and pamphlets, repairs of Library books, and simple bind ings of bank records were completed during 19^3 , an increase of 25$ over 19k2. As for Old Records, at the end of 19k2 we had a storage capacity of 2k , 000 units, (the unit equalling one ordinary file drawer), and dur ing the year this was increased to 31/500 units through the acquisition of 7/200 sq. ft. of additional outside storage space, in at least partial anticipation of the enormous volume of storage in the making. At the end of 19k3 our material in storage equaled 26,856 units. Our Obstruction Schedule in peace time provided a turn over of stored bank records which left space require ments more or less static, but the Fiscal Agency records arising out of war financing have created a problem, as will be seen from the fact that though we have doubled our storage capacity in the last two years it is already 85$ absorbed. B U H D I N G DEPARTMENT: The building organization has been most active in pro viding space for the expansion and changes incident to Fiscal Agency and like operations. As will be seen from the tabulation, 100,000 sq. ft., the equivalent of nearly six floors of our building, are being rented in four outside buildings. Reimbursement from the Treasury and other government divisions is being re ceived for about 75$ of all space used, an indication of the extent to which this bank is serving the war effort.* Sq. ft. Used Owned Rented * - 230 S. LaSalle - 120 S. LaSalle 166 W. Jackson 725 S. Wells (Warehouse) 523 S. Plymouth Court (Warehouse) Security Trust Building Indianapolis, Indiana * 2k3,963 78,201 12 ,k0k 6,000 Reimbursed by Agencies ft.) 169/617 78,201 9/553 3/595 ____m 3^k,36l 257/371 The Federal Reserve Building contains 307,138 sq. ft., the differ ence 63,175 sq. ft. being rented, mostly on long term leases, to k tenants. -7- We are co-operating with government efforts to preserve material and labor and have accordingly restricted ourselves to necessary alterations and to improvements calculated to Increase effi ciency by relieving eye-strain and reducing noise. BUILDING DEPARTMENT: (Continued) Recommendations for post-var renovation,at pres ent necessarily broadly outlined, have been pre sented to our management and reserves have been set aside from this year's earning to carry out the program. The Cafeteria and Dining Rooms served a daily average of 2,187 meals during the year 19*43; against 1,336 in 19* . Of this apparent increase 42 about *450 meals are accounted for daily by the late afternoon light lunches inaugurated toward the end of 19* . The average Cafeteria check 42 continued as in the past several years at about 23 cents. We have been able to continue the service for 25 cents of full meals consisting of meat and potatoes, bread and butter, dessert and beverage. We absorbed $25;629.91 of the expenses or 15.9# in 19^3> against $20,887.52 or 17.8* in 19*42. We served 660,^33-meals in 19*0; against *401,000 in the previous year. CAFETERIA: CASH DEPARTMENT: r The dollar value of currency paid out during the year 19*0 amounted to $ 2,183;623,500 as compared with $1,933; 3^5; 000 during the year 19*42 - an increase of 13*. The number of pieces of currency paid out during the year 19*0 amounted to 398,0*46,*486 as compared with 385; 375;*^93 during 19*42 - an increase of 3*. The dollar value of currency received and counted during the year 19*0 amounted to $1 ;823,521,756 as compared with $ 1 , * * ;616,013 during 19 4 2 - an in 544 *crease of 18*. The number of pieces of currency received and counted during the year 19*4-3 amounted to 381,221,759 as compared with 35*4; 058,17*4 during 19*42 - an in crease of 8*. The dollar value of coin paid out during the year 19*43 amounted to $*47;297;50*4 as compared with $*41,052,*411 during 19*42 - an increase of 15*. The number of pieces of coin paid out during the year 19*43 amounted to 53*4,033;255 as compared with 512; 136;*4 *4 during 1 * - - an increase of *4*. 8 942 -8- CASH DEPARTMENT: (Continued) The dollar value of coin received and counted during the year 1943 amounted to $34*690,327 as compared vith $30,729,690 during 1942 - an increase of 13%. The number of pieces of coin received and counted during the year 1943 amounted to 366,846,083 as com pared vith 361,731*29^ during 1942 - an increase of 1*. CHECK DEPARTMENT: This department handled 33*519*038 City Checks dur ing the year 1943* with a dollar value amounting to $30*208*220,000, which Is an increase of 12.06$ in City Checks handled and 23.08$ in the dollar value of City Checks handled compared with the year 1942. The number of Country Checks handled was 125*555*909* vith a dollar value of $18*208,741*000* which is an increase of 2.51$ in Country Checks handled and 17.45$ in the dollar value of Country Checks handled* com pared with the year 1942. 24,886,274 Government Checks were handled, with a dollar value of $13*600,079*000, which is an increase of 100.34$ in Government Checks handled and 77.16$ in the dollar value of Government Checks handled com pared with the year 1942. Total number of checks handled for the year 1943 was 183,961,221, vith a dollar value of $62*017,040,000* vhich Is an increase of 11.62$ in total checks handled and 29.95$ in dollar value of total checks handled compared with the year ‘1942. CODES AND TELEGRAMS DIVISION: During 1943* 866,158 telegrams were handled through the Chicago relay office of the Federal Reserve Leased Wires System (the Chicago "turret") as against a total of 765*15 ^ for the year 1942 - an Increase for 1943 of 13 over 1942. During 1943* 156,978 telegrams were handled by the Codes and Telegrams Division of the Federal Reserve Bank of Chicago, as against a total of 145*775 for the year 1942 - an increase of 7 .7$ for 1943 over 1942. COLLECTION DEPARTMENT: The number of City items handled during the year 1943 was h7 ,925* compared vith 1 9*8l 6 during 1942 - a de + crease of 3 .80$. The number of Country items handled during the year 191+3 was 252,304, compared with 305*377 during the year 1942 - a decrease of 17.38$. -9COLLECTION DEPARTMENT: (Continued) The number of Coupon and Security transactions handled during the year 19*0 wan 149,325, com pared vith 147,832 during the year 1942 - an increase of 1.01$. CONSUMER CREDIT DEPARTMENT: The activities of the Consumer Credit Department during the year of 1943 included the answering of about 9,000 inquiries regarding particular phases of the regulation (through correspondence, tele phone and personal interview), addressing groups of registrants on the subject of the regulation, conducting investigations of the books and records of approximately 3>467 dealers and vendors in or der to determine the extent of their compliance with the provisions of the regulation and the licensing of 1,580 registrants under Regulation W, one-half of which were department stores and con tractors . CORRESPONDENCE: During the year 2,171 letters were received requiring a direct reply involving an interpretation of the Regulation or an appli cation of interpretations to specific instances. The 1,235 other written inquiries received were answered with form letters in most canes. 2,668 letters were written regarding incorrect Registra tion Statements received and letters to Registrants regarding violations disclosed in Investigators' reports, as well as other letters such as follow ups. Miscellaneous Form Mailings: On May 4, June 14, and September 9, 1943, form letters were mailed to credit and trade associations and daily and weekly publications in connection with three disaster areas pursuant to Section 8 (h) of Regulation W. On April 21, June 25, and December 30, 1943, copies of press releases were mailed to trade associations and daily and weekly publications concerning the voluntary surrender by a large loop Jewelry store of their license under Regulation W, the one week suspension of the license of the Mitchell Clothing Company, St. Louis, Missouri, and the revocation for one week of the license of the Consumers Home Equipment Company, Detroit, Michigan, under Regu lation W, respectively. In August, 1943, Amendment No. 10 to Regulation W was forwarded to 35,120 Registrants and 1,292 Credit Bureaus, Chambers of Commerce and others on our special mailing list. -10CONSUMER CREDIT DEPARTMENT: (Continued) Miscellaneous Form M a i l i n g (Continued): In November, 19^3 > Circular Letter #1183 concerning the revision of the National Housing Administrator's Order NHA 60-hB was mailed to 12,069 banks, bankers, trust companies and others concerned in the Seventh Federal Reserve District. SPEAKERS FURNISHED: During the year the Consumer Credit Department conducted twenty talks on Regula tion W. The meetings were called by various trade and credit associations for the purpose of enabling members and other interested individuals to obtain answers to their problems under Regulation W. In these meetings those in attendance were given the opportunity to submit questions from the floor and every effort was made to provide the questioner with a complete and satisfactory answer. INVESTIGATIVE ACTIVITY: Although there was less cor respondence and fewer personal interviews and tele phone calls pertaining to interpretations of the Regulation than during the preceding year, the activ ity of the Consumer Credit Department has increased greatly with respect to conducting investigations. During the year 6f 19*0> approximately 3 investi gations were made, about 1,850 of which disclosed a total of some 7>822 violations. There are at the present time 9 men actively engaged in conducting investigations in this District, 7 working out of the Head Office and 2 out of the De troit Branch. In most cases the investigations are conducted by one investigator; however, where large organizations are concerned, two or more investiga tors conduct the investigation, depending upon the size of the Registrant. During the past year the ac tivities of the large mail order houses and department stores were investigated by this department. Over 320 towns were visited by Regulation W investi gators for the first time during this past year in order to obtain almost complete coverage of communi ties with population of 2,000 or over. The investigations disclosed that the violations were in most cases inadvertent. Where it appeared that the violations were apparently willful, reinvestigations of the Registrants Involved were conducted and in most cases disciplinary letters were written, or the Regis trant was called into the bank for a conference. Such disciplinary action has in most cases been effective in obtaining compliance. -11CONSUMER CREDIT DEPARTMENT: (Continued) V ATTITUDE OF REGISTRANTS: The attitude of Regis trants towards investigations has in the most part been favorable. In this connection 2^5 Registrants have urged the continuance of Regula tion V during the post-war period, and only four have indicated that they would desire to have the Regulation abolished as soon as conditions permit. CONTACT WITH OTHER SUPERVISORY AGENCIES: Although we have maintained continuous, contact with State and Federal supervisory agencies co-operating in the Enforcement Program, the activities of these agencies are admittedly limited in this respect. V DISBURSING DEPARTMENT: Due to a general expansion in activities through out the bant and particularly in the Fiscal. Agency units, operations in this department showed an in crease of approximately 60$ in 19^3 over 19^2 . During the year 19^3* monthly vouchers were sub mitted for a total of $^,^9^>500.00 to 37 Govern mental agencies or subsidiaries. DISCOUNT AND CREDIT DEPARTMENTS: During 19^3 activities in connection with the functioning of guarantees on behalf of the War Department, Navy Department and Maritime Commis sion under the provisions of Regulation V con tinued in substantial volume. 595 applications for guarantees were received at the Head Office, amounting in the aggregate to $713*^2^,kbk. Each application required special study and analysis. In some instances it was necessary to make plant investigations, following which analyses and recom mendations were prepared for submission to the Board of Governors of the Federal Reserve System. 4-58 guarantees were issued during the year in con nection with loans aggregating $595>l8**->206. It should be borne in mind that aside from the new applications functioned during the year 19^3 there were outstanding as of January 1, 19^3> 332 guar antees aggregating $269,250,973.63. All outstand ing guarantees require periodical reviews, both from the standpoint of progress being made by the borrower and to determine whether the financing institution is conforming with the requirements specified in the guarantee agreement. As the volume of outstanding guarantees increased, the burden of the servicing increased proportionately. During the year 393 guarantees were terminated as the result of payment of the loans guaranteed. As of September 1, 19*+3> the latitude for Regula tion V guarantees was broadened so as to permit -12DISCOUNT AND CREDIT DEPARTMENTS: (Continued) entering into commitments for loans to manufactur ers who theretofore had "been considered ineligible because they had adequate working capital of their own. The purpose of this broadened latitude was to enable such manufacturers to arrange for a credit commitment which would enable them to release their own investment of working capital from cancelled contracts. This broadened latitude is generally re ferred to as the "7T" guarantee. Advances to Member Banks: During the year five dif ferent member banks had occasion to borrow on their own notes secured by Government bonds. These banks borrowed on twenty different occasions in amounts aggregating $22,332,000. FEDERAL RESERVE NOTE ISSUE DEPARTMENT: Federal Reserve Notes received from Washington by the Federal Reserve Agent amounted to $961,500,000, an increase of 13 .7% compared with the amount re ceived in the year 19^2 . Federal Reserve Notes issued to the Federal Reserve Bank of Chicago by the Federal Reserve Agent amount ed to $893)010,000, an increase of 7 *5# compared with the amount issued during the year 19^2 . CAPITAL STOCK Paid-In Capital $17,915,750 Increase Number of adjustments in stock holdings due to increases in capital and surplus Number of adjustments due to decrease in capital and surplus FILES DEPARTMENT: 95^ 925 * 1.609.800 December 31, 19^3 December 31, 19^2 No. of Members M 6^5 20 This department was operating until April 1, 19^3, as a general files, receiving from any division of the bank papers which for efficiency were thus made available in one place to auditors, checkers, and the like. However, with the opening in another building of our Fiscal Agency Annex and the enormous expansion -13- FILES DEPARTMENT: (Continued.) in security issues a separate Redemption File Department was established at 120 South LaSalle and another independent file department was es tablished for the Issuing Agents Division. FOREIGN FUNDS CONTROL DIVISION: License Division Received Applications for license under Executive Order 8589 3»6l7 Acted on by Federal Reserve Bank of Chicago Forwarded to Washington for action Census Division Reports on Form TFR-500, foreign-owned property subject to the Jurisdiction of the U.S. Processed and forwarded to Washington Reports on Form TFR-500> relating to property in foreign countries in which persons subject to the Jurisdiction of the U.S. had an interest 27 .*644 Processed and forwarded to Washington Other miscellaneous activities included distribu tion on behalf of the Treasury of over 700,000 copies of forms, circulars and other public docu ments relating to Foreign Funds Control. GOVERNMENT BOND DEPARTMENT: The operations of the Government Bond Department for the year 19*0 continued to show considerable expansion, the larger portions of which are re flected in the handling of War Savings Bonds for redemption, the processing of applications and the issuance of securities in connection with the Second and Third War Loan drives as well as the continued servicing of 4,500 issuing agents in connection with the sale of Series E War Savings Bonds. The dollar value of subscriptions to the Second and Third War Loan drives, exclusive of sales to commercial banks for their own account, amounted to $1 ,772,000,000 and $2,485,000,000 respectively. -l^- G-OVERNMENT BOND DEPARTMENT: (Continued) The comparative figures for 1943 with the year 194-2 follow: U. S. SAVINGS BONDS REDEEMED ALL SERIES 1942 1243. Total number of Pieces Maturity Value Total Number of Checks Issued $ 7 ,878,000 301,805,000 $ 1,375,000 88,230,000 807,000 3,540,000 $ of Increase 473.£ 242.$ 339.$ aasiiHi red: OTHER BONDS/NOTES/CERT./BILLS Maturity Value: Coupon Form Regis. Form $ $ 7,004,967,000 $ 899,720,000 $ 2,649,150,000 340,280,000 164.$ 164.$ 2 ,190,000 74,260,000 59.$ 1 ,073,000 12 .$ $ 23,670,750,000 $ 13 ,887,700,000 70.$ $ 12,904,640,000 $ 9,384,000,000 38.$ 14,419,000 873,695,000 80.$ 60.$ 136,000 81,000 583,067,000 - 32.$ 9.$ 27 .$ COUPONS REDEEMED Number of Pieces Dollar Value $ 2 ,279,000 118,164,000 $ NEW ISSUES Number of Subscriptions and Applications Received Amount of Subscriptions and Applications Received Amount of Subscriptions and Applications Allotted 1 ,200,000 SERIES E SAVINGS BONDS SALES BY ISSUING AGENTS Number of Pieces Maturity Value 25,998,000 $ 1,399,654,000 $ DENOMINATIONAL EXCHANGES MARKETABLE ISSUES Number of Pieces Received Number of Pieces Issued Maturity Value 93,000 88,000 $ 741,900,000 $ -15- GOVERNMENT BOND DEPARTMENT: (Continued) 1943 $ 0f Increase 1942 C.P.D. TRANSACTIONS Number of Pieces Received for Transfer Maturity Value Number of Pieces Issued on Transfer Maturity Value $ 24,000 36,000 1 ,909,605,000 $ 1 ,122,766,000 $ 21,000 1 ,19^ 676,000 $ 16,100 655,953,000 50.$ 70.$ 30.5 6 82 ., j WAR LOAN DEPOSIT ACCOUNT Number of Active Qualified Depositaries Depositary Bank Balances (December 31) 450 198.56 1 ,199,900,000 $ 1 ,018,832,000 18.56 1,342 $ BOND CUSTODIAN Number of Pieces Received from Treasury Department Number of Pieces Prepared for Delivery 32,494,000 19 ,596,000 66.56 28,365,000 16 ,900,000 68.56 744,000 259.56 18 ,166,000 58.$ INCOMING REGISTERED MAIL Number of Pieces of Mail Received 2,674,000 SHIPPING AND DELIVERY Number of Pieces Shipped INVESTMENT DEPARTMENT: 28,780,000 The tremendous expansion in the total transac tions during the calendar year.1943 is obviously due to the popularity with hanks in Chicago, De troit and elsewhere in the district of the ar rangement for the sale of Treasury hills to us under repurchase agreement, which was instituted in the latter part of 1942. In the early part of the year, the privilege was availed of principally hy a dozen or so large hanks here and in Detroit. However, during the year more and more hanks in other cities became familiar with the value to them of the service offered, and transactions -16- INVESTMENT DEPARTMENT: (Continued) . were executed for the account of many more member banks. It 1b expected that this trend will con tinue in 1944. There was also a noticeable increase in the purchase of other Government securities for member banks, par ticularly in the later months of the year, as banks had recourse to the market for their investments in Government securities due to their exclusion from subscription privileges in the Treasury offerings. U. S. SECURITIES PURCHASED Transactions ishi 121*2 3201 168 1550 89 15 36 A m o u n t 13 31 1478 4891 -21 1942 l2hl Member Banks and Others Other Federal Reserve Banks Retirement System System Open Market Account Repurchase Agreement 1765 $ s 83,70^,170 $ 26,964,900 1,480,050 3,538,025 19 ,850,000 9,110,000 122,026,000 161 ,752,000 7,396,884,000 $7,626,002,195 751,620,000 $950,926,950 OTHER SECURITIES PURCHASED 38 49 -11 -21 77 Member Banks and Others Retirement System 122 $ $ 266,500 $ i/57^poo 1,841,500 186,500 1 ,283,000 $ 1,469,500 $ 18 ,205,230 U. S. SECURITIES SOLD 5356 194 3 949 547 7049 5485 290 16 5 74 a m Member Banks and Others $ 64,988,225 Other Federal Reserve Banks 1,789,875 Retirement System 7 ,300,000 System Open Market Account Repurchase Agreement 5,278,589,000 Repurchase Agreement (Matured) 1,645,567.000 $6,998,234,100 1,379,850 10,475,000 44,000,000 633,455,000 - — $707,515,080 OTHER SECURITIES SOLD 129 1 11 1^1 208 4 11 Member Banks and Others Other Federal Reserve Banks Retirement System $ $ 328,050 20,000 528,000 876,050 $ $ 596,000 2,700 344,000 942,700 -17- LEGAL DEPARTMENT: There has been a substantial increase in the work of this department during 1943 > primarily as a re sult of the leasing of additional office space, the large volume of legal questions arising from War Manpower, Selective Service and Salary Stabi lization regulations; also as a result of the extension of Bank’s Fiscal Agency functions and enforcement proceedings under Regulation W. Numerous conferences with and written opinions prepared for officers and heads of operating de partments concerning various legal problems. Practically all of the legal work of the Detroit Branch was handled by this department. This department examined and approved applications of national banks to exercise fiduciary powers and all applications for membership and other documents evidencing changes in corporate status of state member banks and trust companies. Extensive cor respondence with member banks concerning regula tions and rulings of the Board of Governors and other legal matters was carried on. This department prepared about 450 Guarantee Agree ments involving nearly $400,000,000 and also a large number of supplements to outstanding Guaran tee Agreements for this Bank as Fiscal Agent for the War Department, Navy Department, and Maritime Commission, pursuant to President's Executive Order No. 9 H 2 and Regulation V. In this connection, nu merous loan agreements between banks and their bor rowers were examined by this department. MAIL DIVISION: Increases reported last year continued at an accel erated pace during 194-3 due to the servicing of government securities, the circulating of advertis ing material in the War Loan Drives, and the opera tions of Foreign Funds Control, Regulation W, Army Savings Bond Custodianship, Ration Banking, and Withheld Tax. Incoming mail received during 1943 totaled about 3 f > 300,000 pieces, an increase of 50$ over 1942; while outgoing mail dispatched totaled 9,200,000 pieces, an increase of ll4$. The outlay for postage was $334,000 this year against $165,000 last year, with reimbursement by the Treasury of about $206,000 of this year's postage against the amount of $84,000 for last year. MEMBER BANK ACCOUNTS DIVISION: Analyses reflected 192 deficiencies in reserves of 122 member banks (Head Office territory) for com putation periods ending in the year 194-3. Penalties -18- MEMBER BANK ACCOUNTS DIVISION: (continued) covering these deficiencies amounted to $3>3*+9.66, and were assessed in accordance with regulations. Comparative figures for computation periods ending in the year 19*+2 reflected 88 deficiencies in the accounts of 65 member hanks and the amount involved was $1,067.2*+. The maximum number of penalties assessed against any one bank during 19*0 was seven (in one instance), as against five (in one instance) for 19*+2. The reserves of all member banks in the Seventh Dis trict for the year 19* > adjusted on the basis of 0 semi-monthly periods, reflected a maximum excess over requirements of $3*O>000,000 or 22.67$ for the period April 16-30, and a minimum excess of $156,000,000 or 8.79$ for the period December 1-15. Maximum and mini mum excess reserves over requirements for the year 19*+2 were $ 527,000,000 or 37.82$, and $255,000,000 or l6.8l$, and occurred during the periods January 16-31 and October 16-31 respectively. There were no changes during 19*+3 in the per cent of demand and time deposits of member banks constituting their reserve requirements. A new law, however, be came effective April 13, 19*+3> providing that until six months after the cessation of hostilities in the present War as determined by Proclamation of the President, or concurrent resolution of the Congress, no deposit payable to the United States by any member bank arising solely as the result of subscriptions made by or through such member bank for United States Government securities issued under authority of the Second Liberty Bond Act as amended, shall be included in net demand deposits or in time deposits which are subject to reserve requirements. OFFICE MACHINE REPAIRS: The work of this division increased substantially dur ing 19*+3 over 19*+2, due principally to a large in crease in the amount of purchased and rented mechani cal equipment in use which is maintained and serviced. The skill of the employees of this division, and their value to the bank, is further emphasized by the fact that in order to keep important mechanical equipment In continuous operation, it has been often necessary for these men to improvise parts when replacements were not available at the suppliers. PERSONNEL DEPARTMENT: Since September 1, 19*+0, enter military service - 296 employees have left to 27* men and 22 women. + -19- PERSONNEL DEPARTMENT: (Continued) During the year of 19*Q: 2,420 persons were hired and ploy, a net increase of 699. turnover 55 .1 $. 1,721 left our em The percentage of 71 loans were granted to 6l employees totaling $8,881.74. As of December 31, 194-3, there were outstanding 54 loans to 49 employees, totaling $4,568.57. 203 students were enrolled in a typing class. Classes were conducted for 4 hours each Satur day morning. Arrangements were made to train similar manner. 55 pages in a 93 students were enrolled in a typing class, and were in training 5 days a week for a total of 35 hours. There was instituted in the hank the Joh Instruc tion Program of the Training Within Industry Sec tion of the War Manpower Commission. This program consists of a group of 12 employees participating in 5 two-hour sessions on alternate week-days un der an instructor furnished without cost to the hank hy the State Department of Education. We were able to accommodate no more than two groups on any one day and as a result, 48 employees finished the Joh Instruction Program in the first two-weeks* program designated for our purposes as Flight 1. By the end of the year 8 additional groups (Flights 2 and 3 ) or a total of 134 employees had completed the Joh Instruction Training. A follow-up session for 4 employees was conducted in the hank hy the War Manpower Commission on December 15th. In addition twenty completed a course in Joh Re lations provided hy the Training Within Industry Section of the War Manpower Commission. This in cluded officers, supervisors, and key men. The Medical Department examined 2,755 prospective employees, administered treatment to 26,864, and visited 1,452 employees absent because of illness. Men Women Total Annual Salaries 901 1,556 63.3$ 2,457 $3,959,191.00 2,206 3,121 $5,323,629.00 Employees as of: December 31, 1942 $ of Total 56.7$ December 31, 1943 $ of Total 915 29.5$ 70.7$ -20PLANNING DEPARTMENT: During the early part of this year a recommendation vas made by the Planning Department to change the procedure used by our Government Bond Department in handling Weir Savings Bonds received for redemption. The recommended change vas made in the month of June at the Chicago Office and in the month of August at our Detroit Branch. The actual saving in expense from the time this plan vas placed in operation until December 31 of this year, in both offices, is in excess of $300>000. Based on our present volume of redemptions, the saving in ex pense on a yearly basis is estimated at over a million dollars. The nev system eliminated the typing, checking and filing of redemption forms, and at the same time ex pedited the issuance of checks mailed in payment 6f bonds redeemed. The personnel, space and equipment problems vere relieved to a large extent, in our Re demption Unit, by the adoption of the nev plan. The cost, at the Chicago Office, of handling War Sav ings Bonds received for redemption, shove a reduction of $66.86 (or ^9.^$) per thousand in the month of De cember compared vith the cost for the month of May (vhich vas the last month previous to adoption of the nev procedure). A plan vas vorked out, vith the co-operation of the Assistant to the Register of the Treasury, vhereby the vork of tventy-four clerks in our Numerical Sorting Unit of the Government Bond Department vas eliminated. In this connection a manual of operations vas prepared by the Planning Department vhich received very favor able comment from the Assistant to the Register of the Treasury, and a number of officials of other Federal Reserve Banks vho requested copies of the Manual. The Planning Department, for some time past, has been developing jointly vith the Treasury Department an overall system for the recording of redeemed War Sav ings Bond numbers. During the year a portion of this plan vas put into operation and as a result a force of 300 employees vill be made available for use in other divisions of the Treasury Department. The payroll records and procedure of our Personnal De partment vere revised to provide for the nev vithholding tax vhich vas inaugurated during the year. Changes vere also made in the methods of handling and computing overtime payments and the payroll vas transferred from a cash to a check distribution basis. The construction of accounting systems capable of carry ing the hank's huge volume in the most efficient manner -21- PLANNING DEPARTMENT: (Continued) necessarily requires considerable development work, and during the past year some time was spent on such projects. Research was started along lines that will yield results in the post-war period when new types of equipment and new technique are available to us. The routine work in the department, like most of the work in the bank, increased considerably. PURCHASING DEPARTMENT: During the year 19^3> this department issued 10,353 purchase orders totaling approximately $900,000 for building and office supplies, printing and station ery, furniture and equipment, and for such other expenses as were necessary to the conduct of our business. These figures compared with 8,455 orders with a dollar value of $620,000 during 1942, and represent an increase of 22$ in the number of or ders and 45$ in the dollar value over that year. As in 19^2, this increase in the dollar ■value in ex penditures consisted mostly of the cost of furniture and equipment, printing and other supplies used in connection with the greatly expanded and new Fiscal Agency functions. Building alterations, greater ac tivities in various departments of the bank, and a moderate increase in inventories, also helped to ac count for a smaller portion of the increased cost. Prices remained fairly stable throughout the year. The expansion described above was reflected in great ly increased activities in the related Stock Room, Print Shop, and Addressograph sections, which also were particularly affected by Treasury financing and related transactions. RATION CHECK DEPARTMENT: This department was organized in the month of Febru ary, 1943, to function the clearance of ration checks and handled 7 ,780,588 ration checks during the year. R.F.C. CUSTODY DIVISION: The RFC Custody Division, acting as Custodian and Fiscal Agent for the Reconstruction Finance Corpora tion and through it for various subsidiary and af filiated corporations, made disbursements during the year 1943 aggregating $2 ,261,000,000, compared to disbursements in 1942 of $1,274,000,000. Receipts in 1943 aggregated $554,000,000 or more than double the receipts of $250,000,000 in 1942. The increased volume of disbursements is accounted for largely by increased activities for Defense Supplies Corpora tion in connection with their Alcohol Purchase Program and payments made for their account in connection -22- R.F.C. CUSTODY DIVISION: (Continued) with butter and meat subsidies. Activities of Com modity Credit Corporation also accounted for substan tial increase in volume. There are some 55 programs maintained for Commodity Credit Corporation, but the principal volume was in connection with Dairy Products Purchase Program covering butter and cheese and the Lend-Lease Program. The Soybean Program was also a large factor in the increased activity. A new unit, Defense Plant Corporation Analysis Section, was formed in January 19^3 to take over certain work which had previously been handled by the Washington office of the Reconstruction Finance Corporation. This work involved the analysis, preparation and mainten ance of accounting records and the establishing of an inventory control in connection with all machinery and equipment located in various plants of the Defense Plant Corporation assigned to this Custodian. There are 280 of these industrial plants on which these rec ords are being maintained. Defense Supplies Corporation disbursements increased approximately 950$. Some twenty programs were added in connection with Defense Supplies Corporation. These additional programs have substantially added to the work of the Division because the nature of the pro grams required not only the work of making disburse^ments but required considerable additional work in the nature of verification, audit, and maintenance of in ventory records. RESEARCH AND STATISTICS DEPARTMENT: During 19^3 the Research and Statistics Department stressed in its studies the impact of war upon the Seventh District economy and probable post-war adjust ments. The personnel of the Department was further strengthened through additions to the staff and through training of employees. A series of studies of leading industries in the Seventh District received major attention. These studies cover the structure of the given industry, the impact of the war, prospects for post-war markets, financial position of firms in the industry, reconversion problems, and the role of the industry in the national economy, par ticularly from the standpoint of achievement and main tenance of a high volume of productive employment by private enterprise. The first such study, the machine tool industry survey, has been distributed to every machine tool firm in the country at the request of the National Machine Tool Builders Association. Studies were made of wartime trends and post-war prob lems in the key cities of the Seventh District. This -23- RESEARCH AND STATISTICS DEPARTMENT: (Continued) involves in a sense an integration of all our research work which hears upon specific areas in the District. The survey of country hanker opinion as to farm land values and farm credit conditions became known thruout the nation as the outstanding source of such in formation for this part of the country. The meeting of country hankers to discuss food and agricultural policies, held at the Bank, represented an important first step in that field of regional leadership. The Federal Reserve survey of the ownership of de mand deposits of individuals and businesses was initiated as a Seventh District research project. A thorough study was continued of the factors which determine the amount and distribution of reserve funds at Seventh District member banks. Special emphasis has been placed upon continuing close contacts by the Research staff as representa tives of the Federal Reserve Bank of Chicago with leaders in industry, trade, agriculture, and bank ing. No better way exists for obtaining a thorough understanding of the basic economic activities which the banking system serves and upon which it depends for its existence than establishing such personal contacts. No better way exists for strengthening the work of the Bank an a regional center of economic information and leadership. SAFEKEEPING DEPARTMENT: The total amount of securities received during 19^3 was $21,625,471,814-4 as compared with a total of $8,099>080,030 during 1942, an increase of 167%. Securities released during 1943 amounted to the sum of $20,228,354,261 as compared with $5,971,081,890 during 1942, an increase of 238. $. 8 Total securities held at close of business Decem ber 31* 1943* amounted to $4,497,378,31*4 compared with $3,096,631,231 as of December 31* 1942, an increase of 45.2$. Number of receipts outstanding at close of business December 31* 1943* was 57*240 as compared with 53*627 as of December 31* 1942, an increase of 6 .7$. Number of pieces held at close of business Decem ber 31* 1943* was 367*829 as compared with 346,908 as of December 31* 1942, an increase of 6$. Number of coupons detached from securities on cou pon maturity dates was 761,571 as compared with 611,918 on December 31 of the respective years 1943 and 1942, an increase of 24-1/2$. -24- SAFEKEEPING DEPARTMENT: (Continued) Total amount of coupons detached and credited as of December 31, 1943, amounted to $61,578*696 as compared vith $32,063,737 as of December 31* 1942, an increase of 92^. War Loan Collateral: Total amount held for 1*550 member and nonmember banks participating in War Loan Credit vas the sum of $1*255*705*575* as at close of business Decem ber 31* 1943. TELEPHONE DIVISION: Local telephone calls averaged 28,000 per month in 19^3 against 19,000 in 1942. In December, 19^3* 419 terminals vere in operation as compared with 338 in December, 1942. VAR BOND CUSTODY DEPARTMENT: A new department, designated War Bond Custody Depart ment, was organized in April, 1943. This department provides custody for War Savings Bonds purchased by the army personnel and issued by the finance officer of the War Department located at Chicago. In April we began to accept for safekeeping War Sav ings bonds issued by the Army War Bond Office in Chicago. During the year, War Savings bonds received from the War Department amounted to $13*767*675, representing 3^4,642 transactions. Total amount of War Savings bonds released to service men during the year amounted to $739*775* representing 12,784 transactions. Total amount held at close of business December 31, 1943* vas $13,027,900. Outstanding receipts - 322,862. The custody of War Savings Bonds held by the public was taken over from the Member Bank Safekeeping De partment in the middle of the year. During the year there were received from individuals and nonmember banks War Savings bonds in the amount of $10,089,125 * representing 26,136 transactions. During the year there were released to individuals and nonmember banks War Savings bonds amounting to the sum of $2,425,425, which represented 5*742 transactions. Total amount of War Savings bonds held at close of business December 31, 1943* vas $32,977,526. Outstand ing receipts - 51 ,213 . -25- 145 #035 transfere of funds vere made during the year 1943# compared vlth 144,257 during the year 1942 - an increase of 5 .39$• WIRE TRANSFER DIVISION: The dollar value of the transfers made during the year 1943 amounted to $34,511 #507>000# compared with $27 ,011,317,000 during the year 1942 - an increase of 27 .77$. WITHHELD TAX DEPARTMENT: The Current Tax Payment Act of 1943# approved June 9, 1943, created the "Withheld Tax" Depart ments in Federal Reserve Banks. Shortly after July 1, 1943, the Federal Reserve Bank of Chicago "began to organize its "Withheld Tax" Department and gradually added to its personnel, keeping pace vith the Depositary Banks' volume of "With held Tax" deposits made with us. I,6l8 hanks in District No. 7# up to the close of business December 31# 1943# Lad qualified as De positaries for "Withheld Taxes". Remittances re ceived by the Federal Reserve Bank of Chicago from its Depositary Banks, at the close of business December 31# 1943# amounted to approximately 365 millions of dollars, represented by over 200,000 receipts issued in settlement of "Withheld Tax" deposits made with them by employers. A total of 473#200 receipt forms were shipped to Depositary Banks during the year. * * * * * * * -26D E T R O I T B R A N C H The year 19^3 has "been significant in that the program to make Detroit a full service Branch practically has teen completed. The announcement, at the first of the year of the contemplated plan for Detroit to he a full service unit,was acclaimed ty the press, on behalf of the community, and by the banks as a most progressive move. On February 1, a Vice President vas assigned to the Branch. Ration Check clearings began in February. In July functioning started on With held Taxes. In 19^3 these two services were new to other Federal Reserve Banks as well as to the Detroit Branch. On October 31 all War Loan Accounts for the district were transferred from Chicago and since that time these accounts have been serviced in Detroit. The establishment of an Examining staff in Detroit in April, for the examina tion of banks not only in this territory but for the entire southern peninsula of Michigan, was a very constructive step. It has given the Branch a much closer public relations tie up with its member banks. Detroit having been declared an "acute manpower shortage" area, this Branch adopted the forty-eight hour work week on April 2, 19^3. On May 11, 19*0> by its own petition, the Branch was declared an "essential activity.” \ Additional space amounting to 12,000 sq.. ft., was acquired in May by the pur chase of the old Mortgage and Contract Building located at 150 West Fort Street. This addition, adjoining the main office on the east, was made to relieve the congested working conditions at 160 West Fort Street and to take care of the ex panding business of the Branch. Alterations and renovations were completed in November, and the building is now in full use. To accommodate expanding Fiscal Agency activities, six thousand feet of additional space has been rented in the Transportation Building, adjacent to the Annex at 735 Griswold Street. In October a Medical Unit was established and equipped. All physical examina tions are now made by a doctor on the premises, and a nurse is in attendan ce at all times. The following data indicates that, in general, nineteen hundred and forty-three has been a year of increased activity for the Branch. ACCOUNTING RESERVES Considerable progress was made during the year in inducing Detroit city banks to reduce their excess reserves through the purchase of Bills. This became evident after mid-year and the last four months indicated real progress. At the end of the year excess reserves amounted to only 1.1$. BANE EXAMINATION DEPARTMENT This department was established at the Branch in April. In addition to the Branch territory, coverage from Detroit extends to all the lower peninsula of Michigan, -27D E T R O I T B R A N C H CASH DEPARTMENT Percentage relation to 1942 activity Currency Deposits: Number of Notes Amount 85,158,000 $572,9^3,000 3/10 of 1% Dec. IO5 Inc. 6 Currency Payments: Number of Notes Amount 111 ,722,000 $867,876,000 1# Dec. 7$ Inc. Coin Deposits: Number of Coins Amount $ Number of Coins Amount $ Coin Payments: 19 ,82k , 000 1,462,000 122,852,000 9,437,000 15* Inc*_ 4-5$ ftec. 21$ Inc. 6$ Inc. CHECK DEPARTMENT Number of Items: City Country Government Total Dollar amount of checks handled 1 1 ,235,000 15 ,189,000 4,300,000 17$ Inc. 3$ Inc. 98$ Inc. 30,724,000 17$ Inc. $21,740,720,000 26$ Inc. Ration Checks O.P.A. (February-December, inclusive) ItBms Representing V J r 1 ,126,000 7,684,631,000 units COLLECTION DEPARTMENT During the past year the activity in this department has shown a decrease. Items handled: 1942 19^3 87,039 67,108 A substantial part of this reduction is in City items. CONSUMER CREDIT 916 investigations were made during 1943. -28- DETROIT BRANCH DISCOUNT AMD CREDIT Practically all efforts in this division vere absorbed in handling "V" and "VT" loans. Only one industrial advance under 13B, for $250,000, was made, and two loans to a member amounted to $25,000. Guaranty Agreements issued under Regulation: Iyl tl 98 for $271 ,661,500 _7 for 258,200,000 105 for $529,861,500 GOVERNMENT BOND DEPARTMENT Extensive borrowing by the Federal Government to finance the war has continued to increase the volume of bond transactions which the Branch as Fiscal Agent, handles for the Treasury Department. A continuation of this trend is evident. 1943 Percentage relation to 1942 activity"* Market Transactions: Purchases Sales Subscriptions to Government Securities (Marketable Issues) 817,200 515,500 85$ Inc 83$ Inc $2,839,511,900 102$ Inc 21$ Dec 42$ Inc $ Savings Bonds and Tax Notes Issued: Number Amount $ 824,050 563,795,700 Savings Bonds Issued by Agents: Number Amount $ 596,150,500 N.A. N.A. Savings Bonds Shipped to Agents: Number Amount $ 15,555,700 655,654,900 N.A. N.A. $ 7,752,000 $ 2,760,300 90,853,000 $ 585,489,900 25$ Inc 219,250 4$ Dec Reissues of Savings Bonds and Tax Notes: Number Amount Redemptions: Series E War Savings Bonis: Pieces Amount Other Bonds, Tax Notes, Bills, Notes and Certificates: Amount Coupons Paid: * Number N.A. 14,647,200 81,300 313$ Inc 119$ Inc N.A. N.A. Indicates that comparison with year 1942 is not available because this particular function was carried on for only a part of that year. -29D E T R O I T B R A N C H PERSONNEL On December 31, 1943, the personnel of the Branch vas composed of 6 officers and 690 clerks. This represented an Increase of 1 officer and 139 clerks over December 1942. To obtain this additional, help, it was necessary to hire 699 persons as separations were 560. Seventy-five per cent of the total em ployees now are women. R. E. C. AGENCIES With the exception of Defense Plant Corporation, Fiscal Agency activities of the Reconstruction Finance Corporation and its subsidiaries, or affiliates, showed no material increases, and in some cases decreases were experienced during the year. The increase in activities of the Defense Plant Corporation was due to the transfer to Detroit of several functions formerly handled by the Washington office. These augmented duties have made it necessary to increase the per sonnel of this section from 25 persons at the first of the year to 83 per sons at the present time. During 1943, 128,000 checks, totaling $362,800,000 were issued in payment of invoices tendered for the account of Defense Plant Corporation. Number Member Banks: Receipts Issued Receipts Released Balance December 31,1943 Amount 3,350 $381,182,500 383,97^,700 165,080,700 168# 64736 $ 4,736,500 547,800 7,360,500 5736 34356 13256 Inc. Inc. Inc. $124,474,800 35,077,700 102,328,800 51936 Inc. 69156 Inc. 2536 Inc. 2,600 War Savings Bonds: Receipts Issued Receipts Released Balance December 31,1943 9,090 1,293 War Loan Collateral: Receipts Issued Receipts Released Balance December 31,1943 250 100 Special Custodies: Receipts Issued Receipts Released Balance December 31,19^-3 200 150 $ 6,381,500 4,946,500 5,452,100 to 1942 activity 26 3 Inc. Inc. Dec. 2636 Inc. 1836 Dec. 36$ Inc. 6 -30- D E T R O I T B R A N C H WAR LOAM DEPOSITARY B A M S Amount Percentage relation to 19^2 activity $ 52, 983,300 N.A. Withdrawals 202,886,700 N.A. Balance December 31, 19^3 257,^17,^00 N.A. Deposits * * N.A. - Indicates that comparison with 19^2 is not available because this particular function was carried on for only a part of that year. WITHFETD TAX Number Receipts issued by Depositaries Amount 53,050 $ ^5, ,^ 0 0 2 ^ -31- FEDERAL RESERVE BANK OF CHICAGO COMPARATIVE STATEMENT OF EARNINGS AND EXPENSES Years 1943 and. 1942 1942 19*0 EARNINGS .......................................... $8,738,325.32 6 590, 508.20 $ * EXPENSES: Operating Expenses ............................ $4,794,017*64 .$4,186,455*57 Assessment for Board, ofGovernors ............... 294,208.73 213,773*02 Cost of Federal Reserve Currency ............ . 762,007.20 777*174*36 Total Net Expenses ...................... $5*850,233*57 $5*177,402.95 Current Net Earnings .......... $2,888,091.75 $1,413*105.25 . . . . . ADDITIONS TO CURRENT NET EARNINGS: Profit on Sales of U. S. Government Securities . $4,135*903.91 Other Additions ................................ 1*430.59 Total Additions to Current Net Earnings Total Current Net Earnings and Additions to Current Net Earnings . $4,137>334.50 . . . $ 378,310.71 8*538.17 $ 386,848.88 $7,025,426.25 $1*799,954.13 Retirement System (increased Benefits to Members) $ 986,400.18 Retirement System (interest Base Adjustment). . . 279*673*00 Reserves for Losses on Industrial Advances. . . . ______ -_____ 592*793.00 10,000.00 DEDUCTIONS FROM CURRENT NET EARNINGS: Total Deductions fromCurrent Net Earnings $1,266,073*18 Net Earnings...................................... $3*739*333*07 $ 602,793*00 $1,197*161.13 DISTRIBUTION OF NET EARNINGS: Paid United States 'Treasury (Section 13B) . . . . Dividends Paid ................................ Transferred to Surplus (Section 7).............. $ 50.21 993*684.20 4,765*618.66 $ $5*759*353*07 $1,197*161.13 4,021.06 955,507.94 237*652.15 SURPLUS ACCOUNT (Section 7) Surplus January 1 .............................. $22,924,752.06 $22,924,752.06 Transferred to Surplus ........................ 4 ,765,618.66 237,632.13 Transferred from Surplus to Reserve for Contingencies.................... 1,200,000.00 257,632.13 Surplus December 31 $26,490,370.72 $22,924,752.06 -32- FEDERAL RESERVE BANK OF CHICAGO COMPARATIVE STATEMENT OF CONDITION December 31, 1943 December 31, 1942 A S S E T S GOLD CERTIFICATES ON HAND AND DUE FROM U. S. TREASURY ................................. $ 3 , 808 , 3 8 3 , 2 1 0 .7 0 REDEMPTION FUND - FEDERAL RESERVE NOTES. . 19,758,171.97 OTHER CASH ...................................................................... 40,409,037-39 Total Reserves ................ $3,868,550,453.06 BILLS DISCOUNTED ........................ $ 4,000.00 INDUSTRIAL ADVANCES .................... 4,000.00 Total Bills .................. $ 1,393,993,000.00 U. S. GOVERNMENT SECURITIES ............ Total Bills and. Securities . . . $ i,3 9 3 ,9 9 7 ,o o o .o o BANK PREMISES............................ 2,9 4 7,8 63 .09 9,905,9^0.00 FEDERAL RESERVE NOTES OF OTHER BANKS . . . UNCOLLECTED ITEMS........................ 306,817,379.35 OTHER ASSETS ............................ 5,823,376.15 Total Assets .................. $ 5 , 588 , 042 , 0 1 1 .6 5 $3,570,030,564.76 1,475,245.00 40,018,518.91 $3,611,524,328.67 $ 3 0 5 , 000.00 110,164.66 $ 415,164.66 8 7 6 , 894 , 500.00 $ 877,309,664.66 2 ,9 1 6,7 63 .48 6 ,415,500.00 244,938,202.40 10,864,571.65 $4,753,969,030.86 L I A B I L I T I E S FEDERAL RESERVE NOTES IN ACTUAL CIRCULATION .......................... DEPOSITS: Member Bank - Reserve Account ........ U. S. Treasurer - General Account . . . Other Deposits ...................... Total Deposits ................ DEFERRED AVAILABILITY ITEMS.............. OTHER LIABILITIES........................ Total Liabilities C A P I T A L ............ $ 3 , 1 6 3 , 1 9 9 , 8 95.0 0 $2,419,593,470.00 $1,9 43 ,25 0 ,3 4 8.3 9 $ 1,925,895,804.05 56,515,396.47 71,445,225.97 1 5 8 , 000 , 5 3 4 .6 1 89,583,328.63 $ 2 , 1 5 7 , 7 6 6 , 2 7 9 .4 7 $ 2 , 086 , 9 2 4 , 3 5 8 .6 5 2 1 0 , 6 8 7 , 2 5 0 .2 2 197,775,582.81 333,752.66 6 7 1 , 3 0 1 .5 6 $5,532,324,726.25 $4,704,627,164.12 A C C O U N T S CAPITAL PAID IN.......................... SURPLUS (Section 7)...................... SURPLUS (Section 1JB).................... OTHER CAPITAL ACCOUNTS .................. Total Liabilities and. Capital Accounts ............ $ 17,915,750.00 $ 2 6 , 490 , 3 7 0 .7 2 1 ,^ 2 9 , 3 8 3 .7 8 9 , 8 8 1 , 78 0 .90 16,305,950.00 2 2 , 9 24 , 7 5 2 .0 6 1 ,^ 2 9 , 3 8 3 .7 8 8 , 6 8 1 , 78 0 .9 0 $5,588,042,011.65 $ ^,7 5 3 ,9 6 9 ,0 3 0 .8 6 -33FEDERAL RESERVE BANK OF CHICAGO CURRENT EARNINGS, CURRENT EXPENSES, CURRENT NET EARNINGS, ADDITIONS TO CURRENT NET EARNINGS, DEDUCTIONS FROM CURRENT NET EARNINGS, NET EARNINGS AND DISPOSITION OF NET EARNINGS EARSI NGS and 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 19^3 Current Earnings $ 268,885 665,937 2,083,164 8,481,747 1 2 , 012,078 30,303,218 20 , 3 82,170 6 , 748,863 6,511,359 5,202,169 5,424,663 6,567,045 6,167,352 8,936,418 9,889,451 4,834,153 4,143,601 5 , 6 1 3 ,6 7 1 6,764,554 8 , 1 5 2 ,3 7 1 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 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 3,316,352 3,471,164 4,227,534 5,177,403 5,850,233 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 2,919,545 4,600,533 2,480,075 970,096 1,376,025 636,024 938,250 1,360,053 8 6 1 ,5 6 1 1,413,105 2 , 888,092 T otal $207,787,314 $99,417,537 $108,369,777 Year 1914-15 19 16 1917 1918 1919 1920 19 2 1 1922 DI SP 0S I TI 0 N EXPENSE S Additions to Current Net Earnings Deductions from Current Net Earnings $ 3 ,2 10 25,000 269,343 198,356 985,630 of NET E AR NI NGS T ransferred to Surplus (Section 7) $ 215,799 6,200,446 7,875,397 14,688,500 2,075,323 - 657,289 27,398 187,257 1,267,964 897,655 3 , 663,668 3,651,464 - 157,090 - 560,738 1 2 1 ,2 7 9 932,366 669,479 153,241 883,370 279,031 158 ,26 5 1,770,131 100,484 237,632 4 , 7 6 5 ,6 19 17,637 28,354 28,354 20,714 5 ,12 0 10,924 27,215 4,021 50 $ 4,137,334 Dividends Paid $ 361,319 862,259 604,635 700,807 792,769 853,785 876,203 904,371 909.123 934,016 985,959 1,029,990 1,099,761 1,170,363 1,211,418 1,170,633 1,029,933 8 5 8 ,12 7 761,334 753,583 725,553 763,115 791,007 819,532 826,919 896,766 955,508 993,684 T ransferred Paid U.S. Treasury to Surplus (Section 13B)(Section 13B) 157 602,842 1,266,073 Net Earnings $ 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 1,404,491 771,2 2 0 932,178 1 , 687,606 1,090,958 982,917 2,607,974 1,024,465 1,197,161 5,759,353 $15,863,023 $24,676,081 $99,556,719 $24,642,472 $49,446,651 $ 142,589 $ $ - 2,127 69,307 4,826 572,019 41,903 27,857 12,646 13,098 1 3 ,0 6 1 11,833 8,050 298,510 263,967 874,264 373,245 1,611,990 951,304 1 , 526,060 8 1 1 ,1 8 8 1,637,141 521,313 1 , 530 ,0 21 - 16 3 ,0 6 1 386,898 332,600 1,147,779 1 , 8 35,610 1 , 001,883 374,467 571,997 501,781 365,710 488,143 380,467 2 7 3 ,2 18 273,272 812,517 1,493,297 4,808,032 2,660,159 1,563,978 499,607 1 , 182,207 476,646 282,100 Deductions from S urplus(Section 7 ) Purchase of F .D .I.C . Stock Year 1934 T ransferred to Reserves fo r Contingencies Years 1940, 1942 and 1943 - $19,748,517 3,207,763 ,956,280 $26,490,371 22 $ - - 26,322 - - - - 25,030 12,767 206 Franchise Balance Tax to Paid U.S. P ro f it & Loss $ 20,091 $ 41,887 -61,978 215,799 - - - - - - 10,394,480 11,576,009 1 , 18 6 ,3 0 1 246,586 602,838 1,091,513 - - - - - - - - - - - - - - - - - - 1 1 ,6 8 1 1,417,702* $ 1,429,383 $25,313,526 $ * Payments from U.S. Treasury Years 1934 and 1935. - t