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FEDERAL RESERVE BANK OF CHICAGO PRESIDENT’S REPORT TO DIRECTORS ACTIVITIES FOR THE YEAR 1944 3 • # PRESIDENT'S REPORT TO DIRECTORS ACTIVITIES OF THE- HEAD OFFICE AND DETROIT BRANCH During the Year 1 9 ^ COMPARATIVE STATEMENT OF EARNINGS AND EXPENSES Years 19kb-19k3 COMPARATIVE STATEMENT OF CONDITION December - December 31A9^3 and STATEMENT OF EARNINGS AND EXPENSES - DISPOSITION OF NET EARNINGS Years 191^-19^ Inclusive m - I N D E X - Page ACCOUNTING DEPARTMENT: Bookkeeping Division ....................................... Federal Reserve BooksDivision ............................... General Books D i v i s i o n ........................ 1 1 1 BANK EXAMINATION DEPARTMENT............................................ BANK RELATIONS DEPARTMENT.............................................. BINDERY AND OLD RECORDS DIVISION ...................................... BUILDING DEPARTMENT.................................................... 1 5 5 CAFETERIA.............................................................. CASH D E P A R T M E N T ...................................................... CHECK DEPARTMENT...................................................... CODES AND TELEGRAMS DIVIS I O N .......................................... COLLECTION DEPARTMENT.................. ' .............................. CONSUMER CREDIT DEPARTMENT ............................................ 7 7 6 8 9 9 9 DISBURSING DEPARTMENT................................................ . 10 DISCOUNT AND CREDIT DEPARTMENTS.......................................... 10 FEDERAL RESERVE NOTE ISSUE DEPARTMENT.................................... 12 FILES DEPARTMENT........................................................ 12 FOREIGN FUNDS CONTROL DIVISION ........................................ 12 GOVERNMENT BOND DEPARTMENT.............................................. 13 INVESTMENT DEPARTMENT.................................................... 17 LEGAL DEPARTMENT........................................................ 17 MAIL DIVISION............................................................ 18 MEMBER BANK ACCOUNTS DIVISION............................................ 19 OFFICE MACHINE REPA I R S .................................................. 19 PERSONNEL DEPARTMENT . ,.................................................. 20 PLANNING DEPARTMENT. . ................................................... 21 PURCHASING DEPARTMENT.................................................... 22 RATION CHECK DEPARTMENT.................................................. 23 R.F.C. and C.C.C. CUSTODY DIVISIONS...................................... 23 RESEARCH DEPARTMENT...................................................... 2b SAFEKEEPING DEPARTMENT.................................................. 25 TELEPHONE DIVISION...................................................... 25 WAR BOND CUSTODY DEPARTMENT.............................................. 25 WIRE TRANSFER D I V I S I O N .................................................. 26 WITHHELD TAX DEPARTMENT...................... 26 DETROIT BRANCH ........................................................ 27 COMPARATIVE STATEMENT OF EARNINGS AND EXPENSES - Years 19^-19^3 . . . . COMPARATIVE STATEMENT OF CONDITION - December 31; 19^-December 31; 19^3. STATEMENT OF EARNINGS AND EXPENSES - DISPOSITION OF NET EARNINGS Years 191^ - 19^; Inclusive 3^ 35 36 ' , .... 1 2 .................... ................ ’ . -1- ACCOUNTING DEPARTMENT: Bookkeeping Division functioned 2,503,000 entries during the year 1944 to the accounts of our member banks. This compared with 2,371*000 entries during the year 1943 and reflected an increase of 5*6$* which, for the most part, was due to the handling of transactions involving United States financing and redemptions of War Savings Bonds. The number of active accounts at the end of the year 1944 stood at 802, representing 92$ of the total head office territory membership as of that date. This compared with 759* or 89$ of the active accounts at the end of 1943• Federal Reserve Books Division effected 1,919*700 entries during the year 1944 in maintaining ac counts with bther Federal Reserve Banks and Branches and with our Detroit Branch. This compared with 2 ,030,000 entries effected during 1943 and repre sented a decrease of 5.4$ over that year. The decrease in actual number of entries functioned was offset to a considerable degree by a continua tion of the conditions experienced in 1943 and 1942, in which the investigation and adjustment of errors in cash letters sent direct to other districts by our member banks constituted a substantial part of the work of the division. General Books Division functioned 377,400 entries during the year 19^* compared with 334,700 during the year 1943 - an increase of 12 .8$, the greater part of which occurred in connection with activi ties in the account of the United States Treasurer. BANK EXAMINATION DEPARTMENT: Record of Examinations Number of Banks Regular - State member banks - Joint with StateExaminers Regular - State member banks - Independent Membership - Joint with State Examiners Membership - Independent Follow-up Investigations - Independent Total Trust Departments - State member banks - Joint with State Examiners 'Trust Departments - Independent Trust Departments - Membership - Joint with State Examiners Trust Departments - Membership - Independent Total 428 1 9 18 __2. 465 127 5 4 2 138 -2- BANK EXAMINATION DEPARTMENT: (Continued) All State member bankB and their trust departments were examined during the calendar year of 19^4 with the exception of the Harris Trust and Savings Bank, Chicago, Illinois, and The Northern Trust Company, Chicago, Illinois. Arrangements had "been made to con duct examinations of these two hanks hut were called off because the State Department could not complete their schedule in order to Join u s . Applications for State Bank Membership Acted upon or in Process Applications Applications Applications Applications Applications approved - Admitted to membership approved - Incomplete withdrawn pending Washington pending in Chicago on December 31, 1 9 ^ 21 142 1 __jj Changes in State Bank Membership during the Year Number of State member banks as of December 31, 19^3 New State members Withdrawn 21 k Number of State member banks as of December 31, 19-h-h- New State Members - 21 Illinois Colfax Galesburg Mansfield Saybrook Windsor Indiana Hammond Milford Junction (P.0.Milford) Pierceton Peoples State Bank of Colfax Bank of Galesburg People 1s State Bank of Mansfield State Bank of Saybrook Windsor State Bank Mercantile Bank Citizens State Bank of Milford Pierceton State Bank Iowa Belmond Manchester Pocahontas hl6 First State Bank Farmers & Merchants Savings Bank The Commercial State Bank *<•33 -3BANK EXAMINATION DEPARTMENT: (Continued) Nev State Members Michigan The Peoples State Bank of East Tavas, Michigan Fanners State Bank of Middleville, Michigan Ypsilanti Savings Bank East Tavas Middleville Ypsilanti Wisconaln Brillion Cleveland Delavan Kiel Orfordville Racine Spring Green Calumet County Bank Cleveland State Bank Wisconsin State Bank The Citizens State Bank Farmers & Merchants Bank of Orfordville American Bank and Trust Company State Bank of Spring Green Withdrawals - 4 Akron Indiana The State Bank of Akron A voluntary liquidation effective September 1, 1 9^. Renwick Iowa Renwick Savings Bank A voluntary withdrawal effective October 20, 19^-. Objected to reserve requirements and filing reports. Holly Michigan First State and Savings Bank of Holly A voluntary withdrawal November 30, 19Mf. Withdrew from System in order to establish a branch in neighboring town. Lincoln Park & 4 Michigan The State Savings Bank of Lincoln Park Consolidated with Ecorse Savings Bank, Ecorse, Michigan on June 3> 1 9 ^ > un der charter of the latter institution and under title of Wayne County Bank, which bank on June 12, 1 9 ^ changed its title to Ecorse-Lincoln Park Bank. Now operated as a branch of EcorseLincoln Park Bank. -4BANK EXAMINATION DEPARTMENT: (Continued) NATIONAL BANKS Total number of National banks as of December 31> 19*0 538 Additions during the year Withdrawals during the year 4 __4 Total number of National banks as of December 31> 1944 538 Additions - 4 Chicago Illinois Lincoln Security National Bank A primary organization. - 7- 1-44 Mason City Illinois Mason City National Bank New organization. - 10- 3-44 Oak Park Illinois Oak Park Nations! Bank A conversion of Prairie State Bank, Oak Park, Illinois (non member) . - 12- 30-44 Palatine Illinois Palatine National Bank A primary organization. - 12 - 2-44 South Bend Indiana The City National Bank and Trust Company of South Bend and The Merchants National Bank of South Bend consolidated at the close of busi ness March 31 j 1944. The consolidation was effective under the charter of The City National Bank and Trust Company of South Bend, and under the title of "The National Bank and Trust Com pany of South Bend." Keokuk Iowa Keokuk National Bank A Voluntary liquidation. Absorbed by Security State Bank, Keokuk (nonmember). Remsen Iowa The First National Bank of Remsen A voluntary liquidation. Absorbed by First Trust & Savings Bank, Remsen (nonmember). Stuart Iowa The First National Bank of Stuart - 10- 5-44 A voluntary liquidation. Succeeded by First State Bank,Stuart (nonmember). Withdrawals - 4 ' - 10- 3-44 2-24-44 -5- BANK RELATIONS DEPARTMENT: During the calendar year 19M+, calls, other than scheduled examinations, were made on National hanks, State member hanks, State nonmemher hanks and group meetings, hy the Bank Relations Depart ment, examiners and assistant examiners, as fol lows National hanks State member hanks State nonmemher hanks Group meetings Conferences Special investigations 178 113 286 25 8 16 626 During the year addresses were made before trade associations, credit associations, hankers asso ciations, credit union associations, finance com panies, clubs and various other organizations, as follows Credit Department - Regulation V Consumer Credit Department - Regulation W 3 14 Research Department Addresses at bankers meetings 2k Addresses at other meetings 63 Participation in meetings and conferences 200 Calls on member hanks or visits of hankers at the Bank 200 Several thousand inquiries from hanks, business firms, Government agencies, etc. were answered. BINDERY AND OLD RECORDS DIVISION: The Bindery Section completed a total of 15>730 cloth bindings of magazines and pamphlets and simple bindings during 1 9 ^ - a moderate increase over the 15,000 jobs completed in 19*0• The Old Records Section completed another extremely active year, which found our archive space in this build ing and two outside warehouses 91$ absorbed. How ever, the acquisition of 16,000 square feet of additional storage space at 326 South Wells Street.*^ will immediately relieve the congestion and is ex-' pected to provide ample space until early 19^7 when all our leases expire and a clearer view of the future may be possible. BUILDING DEPARTMENT: The need for additional space continued during 1944, although not at the tempo of 1943 when fourteen sepa rate leases for about 62,000 square feet were entered into. Only two leases, totalling 37>000 square feet, were made during 1944. One, in the Insurance Exchange Building, took approximately 21,000 square feet for the use of the Issuing Agents and Sales Analysis Sec tions of the Government Bond Department. This lease, like others made for the Government Bond Department, has a clause permitting cancellation by six months' prior notice on and after eighteen months. The other lease involved around 16,000 square feet in a ware house at 326 South Wells Street for the storage of old records. This additional storage capacity is designed for estimated needs through early 1947/ at which time the lease terminates. It is hoped there will then be a clearer view on which to base plans for future old record storage provision. Tabulated below are owned and rented quarters as of January 1, 1945: Owned Square Feet 230 South LaSalle Streec 243/963* Rented 120 South LaSalle Street 83,246 166 West Jackson Boulevard 13,600 175 West Jackson Boulevard 20,945 (insurance Exchange Building,South) 725 South Wells Street (Warehouse) 6,000 523 South Plymouth Court (Warehouse) 7/191 326 South Wells Street (Warehouse) 16,278 Security Trust Building, Indianapolis, Indiana 198 Total 391.421 * The Federal Reserve Bank Building contains 307,138 square feet, the difference 63/175 / being rented on term leases to four tenants. War time restrictions/ as outlined in War Production Board's Order L-41, continued to confine alterations to those dictated by utility or improved working con ditions for employees. Of the-former, the only ex ample is the enlargement o f ‘the Directors' Room to a capacity of one hundred people, and, of the latter, the extending of floor covering and acoustical treat ment in limited amounts, the equipping of several lounge rooms for women employees, and the installa tion of a music system - all in cooperation with the departments concerned. -7- BUILDING DEPARTMENT: (Continued) Ideas for post war renovation are "being kept alive "by informal conversations among officers and "build ing key men. As it becomes timely, the main out lines of a renovation plan can promptly be placed in the hands of the architects and engineers. CAFETERIA: There were 687,051 meals served in our cafeteria and dining rooms during 1944, against 660,433 in 1943. This was a daily average of 2,298 in 1944, against 2,188 for the year 1943. Included in these figures are light lunches served in the late afternoon and evening, which numbered 519 daily during 1944, against 450 daily for 1943. Total cafeteria receipts were $145,379.01. Meals provided at the expense of the bank totaled 8,415, of which 1,447 were served to business guests of our officers, and 6,968 were served to bank em ployees on the occasions of our 30th Anniversary Dinner on November 16, the annual complimentary Christmas Dinner, and in connection with the spon sor program and departmental conferences. In spite of the rise in prices, we continue to serve the special cafeteria luncheon, which in cludes meat, potatoes, or other vegetable, bread, butter, dessert, and beverage, for 25 cents. This year we absorbed $38,868.20, or 21.1$, of the ex pense, against $25,629.91> or 15.9$> in. 1943. To produce a restful atmosphere, the employees* dining room was redecorated with wall paper and Venetian blinds, and a contract has recently been signed for the supplying of music by wire during meads. CASH DEPARTMENT: The dollar value of currency paid out during the year 1944 amounted to $2,428,013,000 as compared with $2,183,623,500 during the year 1943 - an in crease of 11$. The number of pieces of currency paid out during the year 1944 amounted to 405,949,900 as compared with 398,046,486 during 1943 - an increase of 2$. The dollar value of currency received and counted during the year 1944 amounted to $2,030,378,372 as compared with $1,823,521,756 during 1943 - an in crease of 11$. The number of pieces of currency received and counted during the year 1944 amounted to 392,812,450 as compared with 381*221,759 during 1943 - an in crease of 3$. -8- CASH DEPARTMENT: (Continued) The dollar value of coin paid out during the year 1944 amounted to $ 50,555,062 as compared vith $47,297,304 during 1943 - an increase of 7$. The number of pieces of coin paid out during the year 1944 amounted to 641,472,086 as compared with 534,033,255 during 1943 - an increase of 20$. The dollar value of coin received and counted dur ing the year 1944 amounted to $36,043,315 as com pared with $34,690,327 during 1943 - an increase of 4$. The number of pieces of coin received and counted during the year 1944 amounted to 323>457*622 as compared with 366,846,083 during 1943 - a decrease of 12$. The dollar value of coin received from the Mint dur ing the year 1944 was $16 ,250,000 as compared with $12 ,827,000 during 1943 - an increase of 27$. The number of pieces of coin received from the Mint during the year 1944 amounted to 340,000,000 as compared with 161,475,000 during 1943 - an increase of 111$. CHECK DEPARTMENT: This department handled 37*724,128 City Checks dur ing the year 1944, with a dollar value amounting to $33,523,104,000, which is an increase of 12.55$ in City Checks handled and 10.97$ in the dollar value of City Checks handled compared with the year 1943. The number of Country Checks handled was 132,647,312, with a dollar value of $20,277*356,000, which is an increase of 5 .65$ in Country Checks handled and 11.36$ in the dollar value of Country Checks handled, com pared with the year 1943. , 38,013,272 Government Checks were handled, with a dollar value of $15,418,031,000, which is an increase of 52.75$ in Government Checks handled and 13.37$ in the dollar value of Government Checks handled compared with the year 1943. Total number of checks handled-for the year 1944 was 208,384,712, with a dollar value of $69,218,491,000, which is an increase of 13.28$ in total checks han dled and 1 1 .61$ in dollar value of total checks han dled compared with the year 1943. -9- CODES AMD TELEGRAMS DIVISION: During 19kk, l,Olk,738 telegrams were handled through the Chicago relay office of the Federal Reserve Leased Vires System (the Chicago "Turret") as against a total of 806,158 for the year 19k3 .an increase for 19kk of 17 .2$) over 19^3 . During 19kk, 163,388 telegrams were handled by the Codes and Telegrams Division of the Federal Reserve Bank of Chicago, as against a total of 156,978 for the year 19^3 - an increase of k.l$ for 19kk over 19^3. COLLECTION DEPARTMENT: The number of City items handled during the year 19kk was kl,210, compared with k7,925 during 19^3 a decrease of lk.01$. The number of Country items handled during the year 19kk was 220,646, compared with 252,30k during the year 19k3 - a decrease of 12 .55$. The number of Coupon and Security transactions handled during the year 19kk was 138,299, compared with 1 ^9,325 during the year 19^3 - a decrease of 7.38$. CONSUMER CREDIT DEPARTMENT: During 19kk the books and records of 3,k66 dealers and vendors have been reviewed in order to determine the extent of conformance of their credit transac tions to the provisions of Regulation V and approxi mately 8,200 inquiries concerning the Regulations (through correspondence, telephone, and personal in terview) have been answered. In addition, 1,276 new licenses were issued under the Regulation. The bank, acting under the authority contained in Section 12(m) of the Regulation, notified eight department store Registrants that they were permitted to adopt systems of cycle billing. All communities in this District with a population of 2,000 or over have been visited by an investigator at least once since the inception of Regulation V and the records of a representative number of merchants have been reviewed. Out of 5,k66 investigations con ducted during the year 19kk (sales organizations for the most part), 1,819 disclosed a total of 7 >035 vio- * latione. A total of’288,195 credit transactions were reviewed In the investigations. Detailed reports covering each investigation or reinvestigation were prepared and are kept on file. Two hundred and seventy-three towns were visited by Regulation W investigators during this past year, 57 -10- COWSUMER CREDIT DEPARTMENT: (Continued) for the first time, and a definite and accelerated trend from credit to cash sales was noted in nearly every instance. A large majority of Registrants have urged that Regulation W "be continued in the post-war period. Disciplinary action taken in connection with 52 ap parently willful violators has "been confined to let ters to the Registrants involved but in 55 cases con ferences were held with the Registrants (21 at the Head Office and 11 at the Detroit Branch); one con ference was held at a Registrant’s place of business (Sheboygan, Wisconsin) since he pleaded that the trip to Chicago would be of great inconvenience. Thirteen talks on Regulation W were conducted by the Consumer Credit Department; seven by the Head Office and six by the Detroit Branch. The meetings were arranged by various associations in order that their members could have clarified any problems they might have concerning the Regulation. A part of the meet ings was generally devoted to a question and answer period. The number of Registrants as of December 51, 1944 was 55#074. DISBURSING DEPARTMENT: The operations of this department steadily increased during the year due to a general, expansion of activi ties throughout the bank, particularly in connection with Fiscal Agency work, and the added function of prepaying emergency expenses incurred by the State War Finance Committees in this district on account of War Loan Drives. Expense items covering bank operations, for a total of $5 #904,757 .57, were functioned during the year, as compared with $5 ,118 ,717*70 for the previous year an increase of 15.4$. Fiscal Agency expense charges functioned, including War Finance Committees, for which monthly vouchers were submitted to 50 Governmental agencies or sub sidiaries, totaled $5,197,541.26, as compared with $4,478,848.48 for the previous year - an increase of 16$. DISCOUNT AND CREDIT DEPARTMENTS: Guarantees under Regulation 7. Effective September 11, 1944, Regulation V was revised so as to make available termination protection, pursu ant to the intent of the Contract Settlement Act of 1944, -11- DISCOUNT AND CREDIT DEPARTMENTS: (Continued) approved July 1, 1 9 ^ • During the year 19^ , *+78 ap plications for guarantees were received at the Head Office, amounting in the aggregate to $1+70,257 >323 > of which 59 applications were for termination guar antees aggregating $37>913>08l. 1+50 guarantees were issued during the year in connection with loans ag gregating $5^ , 676,081. Aside from the new applica tions functioned during the year 19^ > there were out standing, as of January 1, 1 9^> 1+19 guarantees ag gregating $501,559^1^9. All outstanding guarantees require periodic reviews, loth 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 agree ment. Each new application required special study, analysis, preparation of and recommendations with respect to appropriate terms. In some instances, it was necessary to make plant investigations. During the year 587 guarantees were terminated as the result of payment of loans guaranteed, development of new guarantees to supersede the previous guarantees, or because the guarantee was no longer necessary on ac count of completion of contracts. Guarantee fees collected during the year for credit to the Guaran tors aggregated $1,985,21+2, and commitment fees col lected aggregated $212,1+15, making total guarantee and commitment fees collected $2,197>658. Our ex penses incident to handling the Regulation V activi ties aggregated $191,809. Advances to Member Banks During the year 51 advances were made to member banks on their own notes, aggregating $55>380,000, secured by Government bonds. Miscellaneous Complete individual credit files are maintained with respect to each guaranteed loan. Interim financial statements and operating figures arc made available to us, all of which data is carefully analyzed with a view to detecting any unfavorable trends. Appropri ate action is taken in all cases with a view to pro tecting the Guarantors and the financing institutions. Credit files are also maintained on approximately 100 brokerage concerns to which our Collection Department delivers securities from time to time under trust re ceipts. The Credit Department advises the Collection Department as to the maximum trust receipt privileges which should be accorded to the various concerns. -12- FEDERAL RESERVE NOTE ISSUE DEPARTMENT: Federal Reserve Notes received from. Washington by the Federal Reserve Agent amounted to $1,552,300,000 during the year 1 9 ^ - an increase of 59.1*# compared with the amount received in the year 19^3 . Federal Reserve Notes issued to the Federal Reserve Bank of Chicago, by the Federal Reserve Agent during the year 1 9 ^ amounted to $1,098,570,000 - an increase of 23# compared with the amount issued in the year 19*0. CAPITAL STOCK December 31, 1 9 ^ December 31 > 19^3 Increase Paid-In Capital No. of Members $19,598,700 .17^915,750 971 95^ 1 ,682,950 17 $ New members Memberships terminated Number of adjustments in stock holdings due to increases in capital and surplus Number of adjustments due to decreases in capital and surplus 25 8 713 18 FILES DEPARTMENT: In the General Files 1,800,000 pieces were received, indexed, sorted, and filed. This material was re ceived from both bank and fiscal agency operations conducted at the main bank building. A new sorting method, which employs a large number of 'flat' sort ers, enables several times the previous number of clerks to quickly put the day's volume of material into such order that urgent needs for reference to the previous day's work can be satisfied before the final filing stage has been reached. FOREIGN FUNDS CONTROL DIVISION: The following are details of fiscal agency operations for the Treasury Department handled by the Foreign Funds Control Division during 19^: -13- FOREIGN FUNDS CONTROL DIVISION: (Continued) License applications received ^,920 oik License applications forwarded to Washington License applications acted on by the Federal Reserve Bank of Chicago k,3^>6 Reports on Form. IFR-300 of all foreignowned property subject to the jurisdiction of the United States, received lk9 Reports on Form TFR-300 forwarded to Washington Reports on Form TFR-500, relating to property in foreign countries in which on May 31, 1943, persons subject to the jurisdiction of the United States had an interest, received 6,434 Reports on Form TFR-500 forwarded to Washington 6,434 Number of Mailings Mailing List Total of Pieces Public Documents 20 3,200 64,000 The Proclaimed List of certain Blocked Nationals 15 3,250 48,750 Special Blocked Nationals Miscellaneous GOVERNMENT BOND DEPARTMENT: 44 16 « (84 pieces) 3,696 3,200 Operations for the year show an increase re fleeted in the handling of savings bonds for redemption, the processing of subscriptions and applications in connection with the sale and issuance of securities covering the Fourth Fifth and Sixth War Loan Drives, and the serv icing of 4,550 Issuing Agents in connection with the sale of Series E War Savings bonds. The dollar value of subscriptions and applica tions to the three War Loan Drives in 1944, ex -14- GOVERNMENT BOND DEPARTMENT: (Continued) elusive of sales to commercial banks for their own accounts, are as follows: Sales Fourth War Loan Drive Fifth War Loan Drive Sixth War Loan Drive Totals Quota $ 2 ,652,000,000 3.207.600.000 3.241.400.000 $2 ,013,000,000 2.414.000. 000 2.176 .000. 000 $ 9,101 ,000,000 $ 6,603,000,000 (Figures indicated above represent sales covering the entire states of the district, and are not merely the figures lit the seventh district.) To expedite the payment of savings bonds of Series A through E presented for payment, incorporated banks and trust companies numbering 2,294 have been quali fied for this service in the 7th district. This op eration was effective October 2, 1944. Comparative figures for 1944 with the year 1943 fol low: NEW ISSUES 1944 Number of subscription and application forms received 1241 Percentage of Change 993,000 1 ,200,000 -17* 1,540,500 1 ,682,500 - Amount of subscriptions and applications received $27,875,765,000 $23,670,750,000 +1856 Amount of subscriptions and applications allotted $17,928,514,000 $12,904,640,000 +39* 4 Estimated number of subscrib ers involved SERIES E WAR SAVINGS BONDS BY ISSUING AGENTS Number of Pieces Maturity Value 85c SAT.FR 31,414,000 25,998,000 +21* $1 ,751 ,271,000 $1,399,654,000 +25* -15- GOVERNMENT BOND DEPARTMENT: (Continued) 19hb 191+3 Percentage of Change u. S. SAVINGS BONDS REDEEMED Number of Pieces By Paying Agents By F.R.B. Total Pieces 5,200,000 10.679.000 -0 7.878,000 +100$ + 36$ 15.879.000 7 ,878,000 +102/i 1J,282,000 6,811,000 + 95$ $11+0,186,000 350,555,000 -0$229,857,000 +100$ + l+l+$ $1+70,739,000 $229,857,000 +105$ 3,1+1+3,000 3 ,51+0,000 $25 pieces (included in above) Redemption Value By Paying Agents By F.R.B. Total Redemp tion Value Number of Checks Issued - 3$ 1+83,000 + 16$ $10,776,888,000 $7 ,90I+,687,000 + 36$ REDEEMED - OTHER BONDS/NOTES/ CERTIFICATES/BILLS Number of Pieces Maturity Value 562,000 COUPONS REDEEMED Number of Pieces Dollar Value 2 ,086,000 2 ,279,000 - 8$ $87,1+1+7,000 $118,161+, 000 - 26$ DENOMINATIONAL EXCHANGES MARKETABLE ISSUES Pieces Received 96,000 93,000 + 3$ Pieces Issued 90,000 88,000 + 2$ $1,158,299,000 $71+1 ,000,000 + 56$ Maturity Value -16 - GOVERNMENT BOND DEPARTMENT: (Continued) 19^5 Percentage of Change C.P.D. TRANSFERS Pieces Received Maturity Value Pieces Issued Maturity Value 40 ,600 36,000 +13# $2,746,111,000 $ 1 ,909,605,000 +44# 26,200 21,000 +25$ $1,646,749,000 $1 ,194,676,000 +38'$ WAR LOAN DEPOSIT ACCOUNT Number of Qualified Depositaries Depositary Bank Balances (December 31) 1,60 6 1,436 $2,457,642,000 $1 ,199,900,000 +12# BOND CUSTODIAN Number of Pieces Received from Treasury Department 35,361,000 32,494,000 ON + Number of Pieces Prepared for Delivery 32,810,000 28,365,000 +16# INCOMING SECURITY MAIL Number of Pieces of Mail Received 2,651,500 2,674,000 - 1# 28,780,000 +15# SHIPPING AND DELIVERY Number of Pieces Shipped 33,119,000 -17- INVESTMENT DEPARTMENT: U. S. SECURITIES PURCHASED A m o Transactions IJkk 1943 3662 3201 168 200 22 2082 u n t s 1943 1244 Member Banks and Others Other Federal Reserve Banks Retirement System System Open Market Acct. Repurchase Agreement 13 31 1476 3966 $ 161 ,061,250 10,610,650 12 ,635,000 10,334,853,000 $10,719,161,900 $ 83,704,170 3,538,025 19,850,000 122,026,000 7,396,884,000 $7,626,002,195 OTHER SECURITIES PURCHASED 23 1 24 Member Banks and Others Retirement System 38 39 $ $ 77 142,000 200.000 342,000 $ $ 266,500 1,575,000 1,841,500 • U. S. SECURITIES SOLD 5230 394 8 - 1357 _2§Z 7976 5356 194 3 - 949 _54Z 7049 $ 84,339,400 Member BankB and Others 6,102,000 Other Federal Reserve Banks 7 ,310,000 Retirement System System Open Market Account 7,452,878,000 Repurchase Agreement Repurchase Agreement (Matured) -2i3S5qglq020 $10,506,180,400 $ 64,988,225 1,789,875 7 ,300,000 - 5,278,589,000 1,645,567,000 $6,998,234,100 OTHER SECURITIES SOLD 68 54 129 1 11 122 l4l - Member Banks and Others Other Federal Reserve Banks Retirement System LEGAL DEPARTMENT: $ 304,500 $ 2,284,000 $ _ 2,588,500 328,050 20,000 528,000 - $ 876,050 The activities of this Department hare continued to expand during the past year, primarily as a result of the large volume of Regulation V Loan Agreements reviewed and Guarantee Agreements and Supplements thereto prepared for this Bank as -18 - LEGAL DEPARTMENT: (Continued) Fiscal Agent for the War and Navy Departments; also, ty reason of the increasing number of legal ques tions arising under the War Manpower, Selective Serv ice, Salary Stabilization, Fair Labor Standards, and Withheld Tax Regulations. Moreover, the development end establishment of the Federal Reserve Share-theLoss program, which has been centered at this Bank, has entailed a considerable amount of additional legal work. Other legal matters handled by this Department in clude the following: examination and approval of a.l1 applications for membership, applications of national banks to exercise fiduciary powers and all documents evidencing changes in the corporate status of state bank and trust companies; extensive corres pondence with member banks concerning regulations and rulings of the Board of Governors and other legal matters; correspondence with and preparation of legal memoranda for Board of Governors; examination and ap proval of leases for additional space in other build ings; legal questions involved in purchase of site for addition to the Detroit Branch; protesting of real estate tax rates and quadrennial assessment on our Bank building; negotiation of revised fiscal agency contracts with Commodity Credit Corporation and Reconstruction Finance Corporation; numerous questions relating to our safekeeping and check clearing operations, and to our fiscal agency func tions for the Treasury Department and RFC; questions in connection with our administration of Regulation W and Foreign Funds Control regulations; and, claims arising under our Bankers Blanket Bond. Several members of this Department are also engaged in a variety of administrative activities in the Bank. An Assistant Counsel has been assigned to the Detroit Branch to take immediate charge of its extensive le gal matters. MAIL DIVISION: A slight recession in number of pieces of mail re ceived and dispatched took place this year to break the run of increases to which we have become accus tomed in the past several years. Increase in post age and express company rates, forced substitution of United States mail facilities for points no longer reachable by express due to war time conditions, and heavier pieces of outgoing mail caused the postage and express expense to run counter to the piece trend. -19- MAIL DIVISION: (Continued) Reimbursable postage showed a sizable increase, to reflect the increasing services being per formed for Governmental agencies. 19^4 12hi Decrease Percent Total pieces received 3,091,621+ 3,276,7211 185,100 5.02 Total pieces dispatched 8,778,106 9,224,033 1+45,927 5 MEMBER BANK ACCOUNTS DIVISION: Analyses reflected 267 assessable deficiencies in reserves of 200 member banks (Head Office territory) for computation periods ending in the year 1944. Penalties covering these deficien cies amounted to $5 ,576.75 and were assessed in accordance with regulations. Comparative fig ures for computation periods ending in the year 19)+3 reflected 192 deficiencies in the accounts of 122 member banks, involving assessments to talling $3,349.66. The maximum number of penal ties assessed against any one bank during 1944 was 7 (la one instance) as against seven (in one instance) for 1943• The reserves of al1 member banks in the Seventh District for the year 1944, adjusted on the basis of semi-monthly periods, reflected a maximum ex cess over requirements of $188,000,000, or 10.1+8$ for the period July 1 - 1 5 , and a minimum excess of $120,000,000, or 6.68$ for the period April 1 6 30. Maximum and minirmnn excess reserves over re quirements for the year 1943 were $343,000,000, or 22.67$, and $156,000,000, or 8.79$, and oc curred during the periods of April 16 - 30 and December 1 - 15, respectively. OFFICE MACHINE REPAIRS: The usual service was maintained by this divi sion throughout the year on a substantially in creased amount of purchased and rented mechani cal equipment in use in the bank and fiscal agency divisions. .This work was carried on under conditions similar to those existing during 1943, which included the improvising of parts by our mechanics in instances where replacements could not be secured from the suppliers. -20- PERSONNEL DEPARTMENT: Since September 1, 1940, 351 employees have left to enter military service - 318 men and 33 women. During the year of 1944: 1,107 persons were hired and 1,264 left our employ, a net decrease of 157 * 48 loans were granted to 45 employees totaling $5,008.50. As of December 31, 1944, there were outstanding 35 loans to 30 employees, totaling $2 ,760.67 . 129 students were enrolled in a typing class. Classes were conducted for 4 hours each Saturday morning. Arrangements were made to train pages in a similar manner. Training Within Industry The following in-plant courses were conducted in 1944: Job Instruction Training: These classes were given in five sessions of two hours each and covered the period January 3 to February 11, 1944, inclusive. One hundred thirty employees com pleted the course satisfactorily. Job Relations Training: These classes were given in five sessions of two hours each and covered the period February 28 to April 14, 1944, inclusive. One hundred sixty nine employees com pleted the course satisfactorily. Job Methods Training: These classes were given in five sessions of two hours each and covered the period July 24 to December 15, in clusive. Seventy two completed the course satisfactori ly- American Institute of Banking During 1944, there were 195 class (including January and September enrollments) enrollments in A. I. B. courses. Of this number, all but 43 of the courses were taken by women of the Bank. The Medical Department made 1,585 physical examinations and administered approximately 38,000 treatments to employees. The Education Program was established during the year; its punpose is to encourage enrollment of employees in worth while study courses outside of business hours. -21PERSONNEL DEPARTMENT: (Continued) Employees as of: December 31, 1944 $ of Total December 31, 1943 $ of Total PLANNING- DEPARTMENT: Men Women Total Annual Salaries 862 29$ 2,102 71$ 2,964 $5,489,732.00 2,206 3,121 70.7$ $5 ,323,629.00 915 29.3 $ During the year this department made a survey of the overall handling of redeemed War Bonds, both In the Treasury Department and In the Federal Reserve Banks. The result of this survey was the development of a routine under which tabulating cards now being punched in the Federal Reserve Banks would become the numeri cal registers of the Bureau of the Public Debt. At the present time, these cards are destroyed after the Banks have used thenf to run their lists of redeemed bonds as the registers of the Bureau are being post ed manually. Such a plan, if adopted, would result in a substantial saving of manpower (several hundred employees) in one of the Bureau's most critical rou tines; also a considerable saving in manpower in the Federal Reserve Banks. Complete details were sub mitted to the Treasury, and are now being studied by their technical staff. A numerical control was devised and installed for use in connection with redeemed War Bonds. This routine permits the accurate listing of a month's redemptions in one group. Because Treasury Department operations are greatly facilitated by any reduction in the num ber of transmission groups; and because the probabili ties of mechanical performance alone make the accurate listing of several million nine-digit bond serial num bers in one group difficult, this control scheme has been reduced to printed specifications and made avail able to the Treasury Department and to all Federal Re serve Banks. Research work done in connection with the foregoing revealed certain operational economies, which were put into effect at this Bank and later wide ly adopted throughout the System at the recommendation of the Treasury Department during the Fiscal Agency Conference held in Cleveland, Ohio, in October, 1944. This procedure enables the Federal Reserve Banks to reduce the sorting of tabulating cards on this par ticular job by approximately 20$ or a total of 500,000,000 digits per year. The accounting for the handling and sales of War Bonds was transferred during the year to mechanical routines developed by this department, and revision work was also done in connectiop. with the analysis of War Bond sales. -22- PLANNING DEPARTMENT: (Continued) The ledgers of the Accounts and Record Division of the Government Bond Department were transferred to mechani cal equipment at the recommendation and under the super vision of the Planning Department. A table indicating the overtime payments for each five minutes of overtime worked, for each salary bracket, was designed for use in figuring and checking overtime payments in our Employment, Disbursing and Auditing Departments. As in previous war years, the operation of the Bank's accounting systems was made progressively more diffi cult by shortages of mechanical equipment and trained personnel; and these difficulties were accentuated by unprecedented volumes of transactions and by the many new operational demands made on the Federal Reserve Banks by the wartime economy. As a result, a substan tial portion of this department's effort was directed toward the deficiency servicing of existing systems. In line with current national policy, every effort was made to effect reductions of manpower requirements and to avoid wherever reasonably possible the use of criti cal mechanical accounting equipment. Development and systems research work continued throughout the year, and substantial additions were made to the backlog of systems revisions now held in abeyance pending the end of the war and the availability of improved equipment and methods. PURCHASING DEPARTMENT: During the year 19^- the Purchasing Department issued 10,171 purchase orders, totalling approximately $861,000, for building and office supplies, printing and stationery, furniture and equipment, and for such other expenses as were necessary to the conduct of our business. These figures compared with 10,353 orders with a dollar value of $ 900,000 during 19^3 , and rep resent a decrease of 1.8$ in the number of orders and h.b'fc in the dollar value over that year. Inventories were maintained at about the same level as in 19^3 and prices in general reflected a slight up ward trend during the year. The activities of the related Stock Room, Print Shop, and Addressograph Sections continued at a high level and, as in the year 19^3 > were particularly affected by Treasury financing and related transactions. -23- RATION CHECK DEPARTMENT: This department handled 8,798,778 ration checks dur ing the year 1944 compared vith 7,780.588 handled in the eleven month period oi February to December,1943 an increase of 13 .09>. R •F •C• and C•C •C • CUSTODY DIVISIONS: These divisions acting as Custodian and Fiscal Agent of the Reconstruction Finance Corporation, its vari ous subsidiaries/ and for the Commodity Credit Cor poration, made disbursements during the year 1944 aggregating $2,208,000,000, compared vith disburse ments totaling $2,261,000,000 for the year 1943. Receipts during 1944 aggregated $497,000,000, com pared vith $554,000,000 in 1943. The aggregate num ber of transactions handled during the year 1944 vas 5,607,785 compared vith 2 ,898,789 in 1943. In connection vith loans and investments of the Re construction Finance Corporation, total disbursements for the year 1944 vere $28,992,000, compared vith $18,396,000 for 1943. Receipts for the year 1944 to taled $57 ,255,000, compared vith $30,627,000 in 1943. The increases vere largely attributable to transac tions on loans to business enterprises engaged in the var effort and liquidation of collateral under the Central Republic Trust Company loan. Disbursements to encourage production or to provide for stock piling of strategic materials under the programs of Defense Supplies Corporation increased to $ 597,603,000 during 1944 from a total of $330,209,000 luring 1943. An increased volume of disbursements under the Alcohol Purchase Program and the Butter and Meat Subsidy Programs accounted for most of the in crease. Receipts under these programs totaled $20,598,000 in 1944 and $25,778,000 in 1943. Disbursements for purchases of plant sites, construc tion of plants, and purchases of equipment for ac count of Defense Plant Corporation decreased from $302,454,000 in 1943 to $106,982,000 in 1944, vhereas receipts representing rental collections and sales of equipment, etc., increased from $25,024,000 in 1943 to $40,140,000 in 1944. Transactions for Commodity Credit Corporation vere handled under instructions of the Reconstruction Fi nance Corporation until the close of business August 31, 1944. Beginning September 1, 1944, the Federal Reserve Banks handled these activities directly as Fiscal Agents of Commodity Credit Corporation. Total disbursevents for account of Commodity Credit Corpor- -24- B«P«C« Audi C.C.C. CUSTODY DIVISIONS: (Continued) ation for the year 1944 amounted to $1,463,000,000 compared vith $1,594,000,000 for the year 1943. Re ceipts for the year 1944 vere $365,057,000 compared vith $432,265,000 in 1943. Decreases in the aggregate transactions under the several grain programs, the dairy products purchase programs and lend lease pur chases, vere partly offset hy increased activities in the Dairy Production Draft Program and the War Hemp Industries program. Activity under a new program of the Reconstruction Finance Corporation covering the disposal of surplus government property under the Surplus Property Admin istration vas started in the latter part of 1944. This program is expected to he one of the major ac tivities of the Reconstruction Finance Corporation and transactions during the last quarter of 1944 vere rapidly increasing in volume although the re ceipts under this program to the end of 1944 amounted to hut $883,000. RESEARCH DEPARTMENT: During 1944 the Research Department continued to place emphasis upon strengthening the vork of the Bank as a regional center of economic information and leader ship and upon services rendered hy the research staff to officers and departments vith in the Bank. Issues of Business Conditions during the year con tained 48 special articles on industry, agriculture, trade, labor, and finance. Press releases from many of these articles have been used hy nevspapers and periodicals throughout the country, and some articles vere reprinted for mass distribution. The regular hanking, retail trade, and consumer credit statistical series vere continued. Pointing the vay to greater use of collected data hy reporting firms received much attention. Special series included the retail credit survey, the survey of ownership of de mand deposits, and the survey of country hanker opin ion as to farm land values and farm credit conditions. An inquiry into W impact,of the war upon the Chicago industrial area and its postwar problems and prospects is being undertaken in collaboration vith the Chicago Committee for Economic Development and the Chicago As sociation of Commerce. The research staff made 24 addresses at hanker meetings and 63 addresses at other meetings during the year. A meeting of country hankers to discuss agricultural and -25- RESEARCH DEPARTMENT: (Continued) farm credit policies was held at the Bank. Sever al thousand inquiries for economic data and inter pretation from ‘banks, business firms, and Govern ment agencies were answered. SAFEKEEPING DEPARTMENT: The total amount of securities received during 1944 was $35>271,596,575 as compared with $24,629*101,344 during 1943, an increase of 43$. Securities released during 1944 amounted to the sum of $34,601,517*211 as compared with $23*228,354*261 during 1943* an increase of 49$. Total securities held at close of business December 31 * 1944, amounted to $5,167,457*677* compared with $4*497*378*314 as of December 31* 1943* an increase of 15$. Number of receipts outstanding at close of business December 31* 1944, was 58,551 as compared' with 57,240 as of December 31* 1943* an increase of 2.3$. Number of pieces held at close of business December 31 , 1944, was 379*066 as compared with 367*829 as of December 31* 1943* an increase of 3.05$. Number of coupons detached from securities on coupon maturity dates was 860,288 as compared with 761,571 on December 31 of the respective years 1944 and 1943* an increase of 13$. Total amount of coupons detached and credited as of December 31* 1944, amounted to $87,471,200 as com pared with $61,578,696 as of December 31* 1943* an increase of 42$. TELEPHONE DIVISION: Outgoing calls increased from an average of 28,000 per month in 1943 to 28,800 in 1944. 449 terminals were in operation in December, 1944, as compared with 419 at the close of the year 1943. 19 public telephones located in convenient places throughout the bank's quarters materially reduced the traffic of employees' personal calls and aided in keeping our lines free for bank business. WAR BOND CUSTODY DEPARTMENT: During 1944 United States Savings bonds received for the men in service amounted to $25,713 *295* rep -26- WAR BOOT) CUSTODY DEPARTMENT: (Continued) resenting 582,251 transactions. There vere released from custody $4,573*110, representing 41,966 transac tions. Total amount held at close of "business Decem ber 31 , 1944, vas $34,168,085, represented by 784,370 safekeeping receipts outstanding. United States Savings bonds received for custody from the public during 1944 amounted to $9,450,900, repre senting 29,204 transactions. Withdrawals from public custody during the year amounted to $3 ,125,000, rep resenting 8,112 transactions. Total amount held as of December 31* 1944, was $39*303*^24, represented by 72,305 safekeeping receipts outstanding. The public safekeeping division had a steady growth throughout the year. Thft number of receipts at the close of the year repre sented an increase of approximately 40 per cent over the previous year. WIRE TRANSFER DIVISION: 152,228 transfers of funds were made during the year 1944, compared with 145,035 during the year 1943 an increase of 4. 96$. - The dollar value of the transfers made during the year 1944 amounted to $35*232,170,000, compared with $34,511,507,000 during the year 1943 - an increase of 2.09$. .- WITHHELD TAX DEPARTMENT: As at close of business December 31* 1944, there were 1658 banks in District No. 7 qualified as depositaries for "Withheld Taxes". 1515 of these depositaries were located in our head office territory and 143 in the Detroit Branch territory. Here at the head office, depositaries during the year 1944 paid to us 910 mil lions of dollars, represented by over 475*000 receipts, which were issued by these depositaries to employers for the 20$ Withheld Tax deducted from salaries and wages paid to their employees. Offices of the Internal Revenue Department deposited with us at the head office their Certificates of Deposit amounting to approximate ly 898 millions of dollars, represented by over 472,000 receipts. 1811 receipts were reported by employers as either lost or not received, necessitating the issu ance of duplicate receipts by the Withheld Tax Depart ment. * * * * * * * * * -27- D E T R O I T 19 B R A N C H 4 4 Nineteen hundred, forty-four has "been generally one of increas ing volume in many departments of the Branch. It also saw the fur ther extension of activities performed in Detroit. In June, the Branch established its own legal department by the appointment of an assistant counsel assigned full time. The function of issuing, adjusting and paying interest on 2# Depositary Bonds-Second Series for the qualified holders in this territory was transferred from Main Office on August 1. In March, bond stock was received in amount and variety to enable the Branch to give full CED and DX service. This completed plans made therefor in 1943. Tn March, also, the publication of condition of weekly reporting member banks in Detroit was begun. Beginning with the Fifth War Loan •Drive in June and for the Sixth War Loan Drive in November and Decem ber, the Branch made the statistical compilations and reports for the state of Michigan. This step seemed tb be of considerable value to the Drive Chairman for this state. To get ready to handle the volume expected when commercial banks started cashing war savings bonds in the last quarter of the year, it was necessary to rent approximately 13,000 square feet of additional space in the Transportation Building. In December, negotiations were completed and approval given for the acquisition of the 90 feet frontage on West Fort Street immediately adjoining the Branch on the east. This step was taken looking to the time when it will be possible to construct a building of sufficient size to house all activities of the Branch under one roof. A lunch room has been installed on the fourth floor of the Annex at 735 Griswold Street for the employees working there and in the bonnecting quarters in the Transportation Building. Approximately onehalf of our entire sta^f work in these two buildings. By permission of the War Manpower Commission, the work week at the Branch was reduced from 48 hours to 44- hours, effective September 29th. ACCOUNTING-RESERVES Excess reserves of city banks were maintained at mininum levels. -28DETROIT ACCOUNTING-RESERVES: (Continued) BRANCH Country banks continued to maintain substantial excess reserves, but the average percentage was reduced from last year. Per Cent of Excess 1?44 12hi City Banks High Low Average Last period of year 2 .6* 0.5# 2 6 .0$ i.k* i.k* 11.4# 3 1* 3 1* 2k* 3 1* 25 * 0.5* 1 .8* Country Banks High Low Average Period ending Dec.15 17 * 22# 25% CASH DEPARTMENT: Percentage relation to*1945 activity Currency Deposits - Number of Notes Amount 85,544,000 $ 548,761,000 No Change Dec. Currency Payments - Number of Notes Amount 108,049,000 $ 815,187,000 3* Dec. 6* Dec. Coin Deposits - Number of Coins Amount $ 27,385,000 2,142,000 Number of Coins Amount $ 135,785,000 9,198,000 Coin Payments - 38# 4 6* Inc. Inc. 10* Inc. 2.5* Dec. CHECK DEPARTMENT: Number of Items City Country Government 10 ,729,000 Dec. .6* Dec. k2* Inc. h* Inc. $ 17,998,143,000 12* Dec. Total Dollar amount of checks handled 4.5* 15,098,000 6,140,000 51 ,967,000 Ration Checks O.P.A; Items Representing 1 ,226,000 7,351,836,000 (milts) No Change -29D E T R O I T B R A N C H COLLECTION DEPARTMENT: Activity in this department shows a small decrease from 19^5s Items handled: I9I+3 194U _ 67,108 65,670 City, items decreased 4,600 and Country items increased U,800. CONSUMER CREDIT: 689 investigations were made in 19^4. were conducted. Eight Disciplinary Conferences DISCOUNT AND CREDIT: Following several years of virtually no activity, last year several member banks frequently made use of our credit facilities to adjust their reserve positions. This trend to increased borrowing was ac celerated in the last quarter, loans in this period numbering 53 as compared to 13 in the first three quarters. Guaranteed loans were off approximately 30$ in number and were less than half in dollar volume. 12U I2i£ Loans to member banks: No. of banks accommodated No. of loans Amount Outstanding loans at close of year 8 k6 $35^,600,000 $ 0 1 2 25,000 0 0 0 $ 0 1 250,000 . 0 Industrial loans, Section 13b: Number Amount Outstanding loans at close of year Guarantee Agreements issued - Regulation V; Number Amount of loans 7^ $230,905,000 105 $529,861,500 -30- D E T R O I T B R A N C H EXPENSE OF OPERATING DETROIT BRANCH: Gross Expense Reimbursable Expenses Net (after adjustment of notaryfees) 1944 1945 $2,208,128 1,355,488 $1,971,139 1,239,623 852,639 731,515 61.4# 62.9% Percent of Gross Recovered GOVERNMENT BOND DEPARTMENT: 1944 Percentage relation to 1943 activity Market Transactions Purchases Sales 40 26 628,500 23% Dec 376,300 20 % Inc 7,644 $3,398,684,500 2 1% Inc 38# $ 512,957 416,030,875 13% Dec Inc $ 15 ,666,578 499,568,182 1% 16 % Inc, Dec, $ 15,946,209 689,403,100 1 9 .6% $ 105,477 8,475,165 $ Subscriptions to Government Securities (Marketable Issues) Number Amount Savings Bonds & Tax Notes Issued Number Amount Savings Bonds Issued by Agents Number Amount Savings Bonds Shipped to Agents Number Amount 9% Inc, Inc, Reissues of Savings Bonds & Tax Notes Number Amount 30% Inc, 9% Inc, -31- D E T R O I T B R A N C H GOVERNMENT BOND DEPARTMENT: (Continued) 194k Percentage relation to 1943 activity Redemptions Series A to E War Savings Bonds (paid "by us) Pieces Amount $ 4,583,153 117,035,475 Series E War Savings Bonds (received from Banks - last quarter) Pieces • Amount $ 2,609,87^ 64,851,521 Total Redemption Series A to E Inclusive Pieces 7,193,027 Amount $ 181,886,996 160$ Inc. 100$ Inc. Redemption Series F and G Pieces Amount $ 3,435,000 Other Bonds, Tax Notes, Bills, Notes and Certificates Amount $ 500,790.400 14$ Inc. 206,977 6$ Dec. Coupons Paid PERSONNEL: Number 3,882 On December 31, 1944, personnel of the Branch wap comprised of 7 officers and 708 employees. This was an increase of 1 officer and 18 employees over the end of the previous year. In order to hold our own and accomplish this small increase, 508 vere hired as 490 were released. Percentage of turnover was 15$ less than in the previous year - 1943, 83$ - 1944, 67$, Annual Basic salaries increased $01,6*1-0. The Training in Industry program was participated in By 77 persons who are in supervisory capacities. 214 certificates were issued on the satisfactory completion of courses. -32- DETROIT R. F. C. AGENCIES: BRANCH Disbursements for the account of the Defense Plant Cor poration during 1944 amounted to $168,000,000. This represents a reduction of $194,800,000, or approximately 54$, from the amount disbursed during 19*0 • There was a steady increase in the volume of sales and transfers during the year. During the year the surplus property disposal program was inaugurated. While the sales to date total only a mil lion dollars, a large volume of transactions is contem plated when hostilities cease. The last of the closed bank loans was paid in full during the year. This marks the end of a function that began in 1932 and which for a long period represented the major ac tivity of the department. There was no material change in the activities of the other subsidiaries or affiliates of the Reconstruction Finance Corporation during the year. SAFEKEEPING DEPARTMENT: Amount Number Percentage relation to 1943 activity Member Banks: Receipts Issued Receipts Released Balance Dec. 31 , 1944 3,724 3,261 $1 ,211 ,500,000 856,918,000 519,564,000 11$ 25$ 215$ Inc. Inc. Inc. War Savings Bonds: Receipts Issued Receipts Released Balance Dec. 31, 1944 11,431 2,599 $ 6,751,000 1,348,000 12 ,763,000 26$ 101$ 73$ Inc. Inc. Inc. 282 116 $ 233,957,000 167,614,000 158,672,000 16$ 13$ 55$ Inc. Inc. Inc. 1,931,000 4,580,000 3,290,000 44$ 25$ 40$ Dec. Dec. Dec. War Loan Collateral: Receipts Issued Receipts Released Balance Dec. 31, 1944 Special Custodies: Receipts Issued Receipts Released Balance Dec. 31, 1944 111 113 $ -33D E T E 0 I I B R A N C H WAR LOAN DEPOSITARY BANKS: Deposits $ 1,375,6*4-8,000 Withdrawals 1,170,088,000 Balance December 31# 1 9 ^ 1462,977,000 WITHHELD TAX: Number Amount Receipts issued by Depositaries 120,391 $561,120,000 Receipts credited to U.S. Treasurer as Income Tax 120,833 $577,375#000 Balance December 31# 19*+** 2h,988 $100,157,000 (Not compared to 19*0 as there was only 6 months’ activity in that year.) * -» vJ. ■ * * * * * * Sets 4k -34- FEDERAL RESERVE BANK OF CHICAGO COMPARATIVE STATEMENT OF EARNINGS AND EXPENSES Years 1944 and 1943 1944 1943 $14,204,919.31 $8,738,325.32 $ 5*518,956.74 285,802.95 952^17,5.8 $4,794,017.64 294,208.73 762.007.20 Total Net E x p e n s e s .................... .. $ 6,757*377.27 $5*850,233.57 Current Net Earnings .................... $ 7*447*542.04 $2,888,091.75 $ 371*579.89 12,315.23 $4*135*903.91 1*430.59 $ 383,895.12 $4*137*334.50 $ 7*831*437.16 $7,025,426.25 Retirement System (increased Benefits to Members) Retirement System (interest Base Adjustment). . . $ - $ Total Deductions from Current Net Earnings $ - $1,266,073.18 EARNINGS .......................................... EXPENSES: Operating Expenses ............................ Assessment for Board of Governors .............. Cost of Federal Reserve Currency................ ADDITIONS TO CURRENT NET EARNINGS: Profit on Sales of U. S. Government Securities . Other Additions ................................ Total Additions to Current Net Earnings . Total Current Net Earnings and Additions to Current Net Earnings. . . . DEDUCTIONS FROM CURRENT NET EARNINGS: Net Earnings.................................... 986,400.18 279*673.00 $ 7*831*437.16 $5*759*353.07 $ $ DISTRIBUTION OF NET EARNINGS: Paid United States Treasury (Section 13B) . . . . Dividends Paid.................................. Transferred to Surplus (Section 7).............. 5*713.45 1,115*421.66 6.710.302.05 $ 7*831*437.16 50.21 993*684.20 4.765.618.66 $5*759*353.07 SURPLUS ACCOUNT (Section 7) Surplus January 1 ................................ Transferred to Surplus ............................ Transferred from Surplus to Reserves for Contingencies . . . . . . ...................... $26,490,370.72 $22,924,752.06 6,710,302.05 4 ,765,618.66 Surplus December 31 $33*200,672.77 $26,490,370.72 .............................. - 1,200,000.00 -35- FEDERAL RESERVE BANK OF CHICAGO COMPARATIVE STATEMENT OF CONDITION A S S E T S December 31, 1944 December 31, 1943 $ 3,236,811 ,089.87 $3 ,808,383,243.70 REDEMPTION FUND - FEDERAL RESERVE NOTES. . 97,906,719.42 19 ,758,171.97 OTHER C A S H .......... ................ 29,840,551.40 40,409,037.39 Total Reserves ............ $3,364,558,360.69 $3,868,550,453.06 $ - $ 4.000.00 $ - $ 4,000.00 GOLD CERTIFICATES ON HAND AND DUE FROM U. S. TREASURY.............. BILLS DISCOUNTED .................... INDUSTRIAL ADVANCES.......... .. . . . Total Bills .............. 2,881,806,000.00 i7?9?/995jQ0P.-QP $2,881,806,000.00 $i,393,997,o0o.oo 2,879,402.98 2 ,947,863.09 14,752,000.00 9,905,94o.oo 306,817,379.35 OTHER ASSETS ............................ 361,578,547.39 10,170,872.22 Total Assets .................. $6,635,745,183.28 $5,588,042,011.65 $3,978,834,945.00 $3,163,199,895.00 DEPOSITS: Member Bank - Reserve Account ........ $2,169,949,572.21 U. S. Treasurer - General Account . . . 27,826,^51.39 148,148.173.06 Other Deposits........................ Total Deposits ................ $2 ,345,924,696.66 $1,943,250,348.39 56,515,396.47 158.000.534.61 245,947,244.42 210,687,250.22 927,759.75 671,301.56 $6,571,634,645.83 $5,532,324,726.25 U. S. GOVERNMENT SECURITIES . . . . . Total Bills and Securities . BANK PREMISES........................ FEDERAL RESERVE NOTES OF OTHER BANES . . . UNCOLLECTED ITEMS . ..................... L I A B I L I T I E S . FEDERAL RESERVE NOTES IN ACTUAL CIRCULATION .............. DEFERRED AVAILABILITY ITEMS OTHER LIABILITIES........ Total Liabilities C A P I T A L 5,823>376.15 $2,157,766,279.47 A C C O U N T S $ 17,915,750.00 CAPITAL PAID IN.......................... $ 19,598,700.00 SURPLUS (Section 7)...................... 33,200,672.77 26,490,370.72 SURPLUS (Section 15B).................... 1,429,383.78 1,429,383.78 .................. 9,881,780.90 9,881,780.90 Total Liabilities and Capital Accounts ............ $6,635,745,183.28 $5,588,042,011.65 OTHER CAPITAL ACCOUNTS ' , . ' . ■ ur . ■ -36- FEDERAL 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 E A R N I N G S Current Earnings Year Current Net Earnings Current Expenses E X P E N S E Additions to Current Net Earnings 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 14,204,212 245,584 237,731 584,069 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 ___6,757^77 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 2,888,092 ___7,447,542 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 .-^85,895 Totals $221,992,233 $106,174,914 $115,817,319 $16,246,918 1914-15 1916 1917 1918 1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929 1950 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1*43 1944 $ $ and $ $ Deductions from Current Net Earnings $ - D I S P 0 S I T I 0 N S . 2,127 - 69,307 4,826 572,019 41,903 27,857 12,646 13,098 13,061 3,210 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 Net Earnings 157 602,842 1,266,073 - 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 $24,676,081 $107,388,156 282,100 $ 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 1,029,933 858,127 761,334 753,583 725,553 763,115791,007 819,532 826,919 896,766 955,508 993,684 1,115.422 $25,757,894 Transferred 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 - 560,738 121,279 932,366 669,479 153,241 883,370 279,031 158,265 1,770,131 100,484 237,632 4,765,619 6,710,302 $56,156,953 Transferred to Reserves for Contingencies Years 1940, 1942 and 1943 N E T E A R N I N G S Paid U.S. Transferred Treasury to Surplus (Section 13B)(Section 13B) $ - $ $ - - - - - - - - - - ■ - - 17,637 28,354 28,354 20,714 - 26,322 25,030 12,767 206 - 5,120 10,924 27,215 4,021 50 5,713 $ 148,102 - _ $ Franchise Tax Paid U.S. 11,681 Balance to Profit & Loss $ -■ 215,799 - - - 10,394,480 11,576,009 1,186,301 246,586 602,838 1,091,513 - - - __ $25,313,526 $ $19,748,517 * Payments from U. S. Treasury Years 1934 and 1935. 3,207,763 22,956,280 $33,200,673 20,091 41,887 -61,978 - - 1,417,702* $ 1,429,38? Deductions from Surplus (Section 7) Purchase of F.D.I.C. Stock Year 1934 of . r> 0 . ;.lB 1 ■ 'i ■ ' ‘ . ■ J»I < ■ . 1951 • ■ « . ■ 5SCI , ' • . ' 8 *5 1 * 2 0 d t - ^ £ t tf ' ' I ■■■ . . ' . • . • 1 » ■ C-
@FedFRASER