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AMONG

THE

PURPOSES:

13, as amended,
preamble and section 4.)

with branches at £.~£.~~~T.

and P.IY§HIIHGH

January 19,1953

To the Banks in the Fourth Federal Reserve District:
Following our custom of recent years, we are pleased to

son~ yOU this report of the bank' s operations and a discUssion of
economic

developments during the year 1952.
We take thiS opportunity to record appreciation

of the

outstanding services which have oe en rendered to thO Feder'" Reserve
Bank of Cleveland. and through it to tne bankin< and business community. by two members of our organization who retired from active
service with the bank at the end of the year 1952.
George C. Brainard, Chairman and Federal Reserve

Agent,

advised the Board of Governors of the Federal Reserve system earlY
in the year that it was not his wish to stand for reappointment as a
Class C director of the bank. In replying to his letter •• r. Wm •• cC.
Martin,

Chairman

of the Board of Governors,

wrote:

"The purpose of this letter is to say again to you. for myself
and for the other members of the Board. hOW highlY we regard
the interest and effective service you have given to the
System in the years that you have been a director. That service was not only to the Federal Reserve Bank of Cleveland but.
through the Chairmen's Conference and in other ways. to the
entire Federal Reserve System.
"You justlY can take pride in having been a director for more
than 16 years __ longer than any other present ClasS C director -and in the fact that for 14 of these years yoU have carried the
responsibility of the chairmanshiP. Of all the Chairmen who
have served the Reserve BankS. none has been more faithful or
constructive than you. Your demonstrated concern for the
Federal Reserve system and its proper functioning assures us
that it will have your continued support and active interest in

the years to come."
Everyone
in the Federal Reserve Bank of Cleveland will
sed
••re to the appropriateness of the sentiments e.pres
by Chairman e
.artin. All of us whO have worked with .r. Brainard have had
opportunity to reco.nize and appreciate the fine qualities of keen
judgment. understanding and ability to work with associates which
made his chairmanship of our board so successful. our d,epest thanks
to Georg' C. Brainard as.he completes his term of service .ith

.0

our bank. William H. Fletcher,

First Vice president

of the bank

since 1945 and a vet,ran of thirty-five years in its service.rmanc
alsO
retired at the end of 1952. FaithfUl and distinguished perfo
,
of important and often arduouS duties. as well as length of servic'.
have characterized .r. Fletcher's record with this bank. He hoS
made a distinguiShed record. winning high place in the esteem of the
bank,rs and businessmen in th' Fourth Federal Reserve District and
the highest measure of respect and affection from hiS associates in
thO bank. We give him our thOnks and best wisheS as he goes into
formal retirement.
It is pleasing

to record that 1952 has been a good year in

banking. co••
• industry and ••riculture in the Fourth Federal
erce
Res,rve District. We are very appreciative of the Sympathetic and
friendly understanding and cooperation which have be,n accord,d the
Federal Reserve Bank of Cleveland by leaders in all lineS of activity.

ECONOMIC REVIEW OF 1952

T

HE year 1952 is tallied as one more of fullblown economic activity, both in the civilian
and defense aspects of American business. Some
records were newly broken; many already high
positions were maintained. And as was the case
in 1951, except for the latter's beginning, a fairly
effective stand-off between inflationary and deflationary forces was somehow achieved.
But the year had its own pattern. A serious
and not altogether foreseen steel strike had a clearcut effect on the timing of industrial activity,
with perhaps less obvious consequences for the
net balance of the year. Because of the strike,
an appreciable volume of industrial activity was
deferred from summer to fall, at which time the
effects of such a fortuitous stimulus converged
with psychological lifts to business which were
stemming from other sources. A strong pace of
business was maintained during the passing excitements of the presidential election, and the
post-election tone of business was, if anything,
stronger than before. In general, fourth-quarter
business statistics were easily the strongest of any
quarter of the year, and in many cases the finalquarter reports served to firm up an annual
average which might otherwise have been somewhat weak.

Using the U. S. Department of Commerce's
estimates of Gross National Product or Expenditure, it appears that the total monetary value of
goods and services produced in the nation rose
during each quarter of the year, reaching in the
final quarter a seasonally adjusted annual rate of
more than $350 billion. (See chart.) Business
expenditures, government expenditures, and consumer takings were all very high in 1952, whether
expressed in dollars or physical units.
Defense and Capital Expansion
Government expenditures for defense purposes
continued to rise during the year, as many particular phases of the defense program swung into
high gear. The rate of rise, however, was definitely slackening. In spite of considerable public
discussion, especially toward the end of the year,
as to whether defense expenditures were nearing
a peak or plateau, it was evident that defense
activity was still helping to spark the economy
and that the program in general was by no
means finished.
Expenditures by business on plant and equipment continued in huge volume during 1952.
The aggregate for the year appears to have set
another record, at variance with earlier forebodings in some quarters. A large volume of residential construction again served as a buttress to
the economy although the phenomenal record of
1950 housing starts was not matched.

THE GROSS NATIONAL PRODUCT
AND TWO OF ITS
IMPORTANT PARTS
(Seasonally adjusted
IIlliONS

400

25 0

------

~-------

-,

400
50

GROSS NATIONAL PRODUCT

---_ ....
, -.• •..-.. .---

300
250
200

PERSONAL CONSUMPTION EXPENDITURES

I50
I00

,----;-

-

Consumer Takings

OF DOLLAIS

/.....--

100
0

rates)

IIlliONS

-

300

150

at annual

OF DOllARS

350

200

quarterly,

50

GOVERNMENT PURCHASES ~F GOODS AND SERVICES
1941

1949

1950

1911

1m

[ 5]

Even with the unfolding of the defense program
and the expansion of private business facilities
already mentioned, it would have been impossible
to reach the 1952 business scores actually attained
without a rise in consumer expenditures from the
1951 rates. In the aggregate and in many lines
of trade such a' rise occurred, partly in response
to larger wage-and-salary personal incomes and
partly due to somewhat freer spending habits.
Thus, the total of consumer expenditures for
goods and services as a measured part of the Gross
National Product or Expenditure reached a seasonally adjusted annual rate of about $220 billion
during the fourth quarter. (See chart.)

Economic

Review of 1952

The various types of retail enterprises did not,
of course, share uniformly in the rising volume.
During some parts of the year, consumer demand
for household appliances, for example, was somewhat weak. Department stores traced a zigzag
course in sales volume during the year, and ended
the year's husiness with a dollar total and a
physical volume within one or two percentage
points of 1951.
The Inventory

PRODUCTION OF DURABLE AND
NONDURABLE MANUFACTURES
(Physical
%

Of' 1947-49

Volume)

AVERAGE

% OF 1947-49

AVERAGt

150
.-----""T""----r-----,,...----T'"""---...,150

125
t----+_----+--------:;I

•••••.
-=~"""-+____.r___cl____i

Turnabout

An outstanding development during 1952, and
one which goes far to explain the tipping of the
scales toward a year of full activity, was the 50~---~---_+----~---+_---~~
swing toward renewed inventory accumulation
which became apparent in the second half. This 251-----+-----+----1----+-----125
must be understood against the background of
previous events. From about the middle of 1951
1M.
IM9
1950
1951
1952
to the middle of 1952 a planned decline in accumulation of stocks of civilian goods occurred at
almost all levels of transactions. (Such a move
the second half of the year. While this was true
in turn had been a corrective response to previous
scare-buying excesses.) It is significant that the
of both durable and nondurable goods in general,
reduction in business outlays which accompanied
the year's pattern was not identical for the two
sectors of manufacturing. During the early part
such a policy from mid-'51 to mid-'52 was about
of the year the production of nondurables was
equal in dollar amounts to the concurrent rise of
defense outlays by the Federal Government.
still in a declining phase, and was at a level
By the second quarter of 1952, the inventory
appreciably below that of a year ago. (See acaccount in national bookkeeping had reached a
companying chart, based on the Federal Reserve
position of "neutral"; that is, neither net accumuBoard index.) The turnabout of nondurables
lation nor net reduction was occurring, as conproduction in the second half was one of the
trasted with the situation a year earlier when
notable features of the year from an economic
inventories were being built at a rate of more than
standpoint.
For nondurables manufactures in
$15 billion a year. During the third and fourth
general, the year's output averaged slightly below
that of 1951.
quarters of 1952, a positive inventory accumulation again occurred in significant amounts. (This
Durable goods production, on the other hand,
was at a time when government defense expendiwas in a rising phase during a considerable protures were beginning to show a leveling tendency.)
portion of the year, with the notable exception of
Such an inventory turnabout is explainable partly
the sharp summer dip produced by the steel strike,
as a response to the brisker tone of consumer buyas may be noted on the chart. For the entire year
ing and its reflection in business orders, and partly
the output of manufactured durable goods exceeded by a shade that of 1951. The defense
by a general feeling that the readjustment process
had finally been completed. Intensifying such a
program can account for a part, but by no means
development during the latter part of the year
all, of the relative strength in hard goods during
was the special need for the replenishing of many
the year.
types of hard-goods inventories following the
Mixed Price Trends
emergency drawing down which had been occasioned by the steel strike.
The rather precarious balance between inflationary and deflationary forces which was a hallDurable and Nondurable Goods
mark of 1952 is portrayed by the mixed picture
Reflecting the changes in consumer and business
of price developments. Whether average prices
demand already mentioned, the physical volume
should be described as falling or rising during the
of production was in a sharply rising swing during
year depends upon the level of transactions or

[6 1

Economic

Review of 1952

the price index which is selected. (There is no
single comprehensive indicator of all commodity
prices, let alone "prices" in general.) An accompanying chart shows the course of all wholesale
prices, of wholesale prices of 22 basic commodities,
and of consumer prices (or "cost-of-living"). All
three indicators are drawn from official Bureau

during most months of 1952. Delayed rises in
rents and other consumer services accounted for
a good part of this tendency.
During many
months of the year, the important item of food
prices at retail was also on the rise, although some
easing of retail food prices occurred toward the
close of the year.
Business Finance

PRICES

Record-breaking
expenditure for plant
and equipment, main% OF 1947-49 AVERAGE
% OF 1947-49 AVERAGE
140
r------"""T"------r------"""T"------r-------,14o
tenance of large inventories, expanding
CONSUMER
payroll, taxes, and
6:-----+------+------,,J'--+---'k---f--1----I120
other capital-needs
costs, imposed added
100 burdens on the working capital of business
during the year. Increased depreciation
allowances provided
some of the funds
Monthly indexes; 1947-49=100
------4-----~~----~60 needed, but retained
The line represents the consumer
price index, or "cost of living" index
profits were smaller
The _
line represents the index of 011
in 1952 than in the
-------~----------~----------~40
"wholesole" prices, about 2,000
previous year, and
manufactured or farm commodities
priced at primary merkets
business had to seek
The _
line represents prices of 22
increased capital from
------~-----~-----~20
sensitive (ommodities at
outside sources. Shortprimary markets
term borrowings rose
to record heights and
1948
1949
1950
1951
1952
the volume of new security financing in
of Labor Statistics data, reduced to a common
1952 was larger than in any previous year
basis of comparison with the average of the years
except 1929.
1947-1949.
In the aggregate, most of the increased capital
It is apparent that the average prices of the
requirements of business were met out of savings,
22 basic commodities, which are highly sensitive
both individual and corporate, with little direct
to shifts in business currents, continued a declinrecourse to bank credit. Business loans outstanding trend during 1952. Such a development may
ing at commercial banks showed only a moderate
be interpreted in part as a lingering corrective
net growth for the year as a whole. Business loans
of the speculative rises which had occurred in
were reduced during the first half of the year, as
late 1950 and early 1951, although special influis customary for that season, and then increased
ences have recently been at work in several
(seasonally or more) in the last half of the year
important commodity markets such as nonferrous
to new record levels. The growth in the last half
metals and certain agricultural products.
of the year was probably greater than that reThe all-wholesale price index, as represented
corded in the comparable period of 1951, but
by the heavy black line, showed a slight sagging
was considerably less than in the last half of 1950
tendency during 1952, also in continuation of the
when the banks were called on to finance plant exprevious year's direction.
pansion and the accumulation of large inventories.
The consumer price index, on the other hand
The reduction in business loans of banks in
(shown by the red line), kept edging upward
the first half of the year reflected chiefly the
(1947 -49

= 100)

[7 1

Economic

Review of 1952

MEMBER BANK LOANS (U.S.)
(Weekly reporting
BILLIONS
4

rnernber

banks)
BILLIONS

Of OOllARS

DOLLARS

2

r
/

0

6--..../

OF

'VJ

/

hJ

1

BUSINESS LOANS

1

2

a

a
(

~

4

"OTHER"

'-

1-

LOANS'

~

REAL ESTATE LOANS

4

"ether loans inJlude consumer
loans; do nol lndude loons for
punhosing 01 (oflying SI!(Urilies,

(Monthly avelnges10f
0

2

or loans 10 lKIois.

weekly figuru)

0
1941

1949

1910

1911

1912

amounts of government securities from other
lenders who loaned the proceeds on mortgage
security.
Estimates of residential mortgage debt outstanding in 1952, as shown in the accompanying
chart, indicate that mortgage lending continued
at a high pace during the year. The continued
growth in loans to new record levels reflected
high levels of construction, of real estate transfers,
and of real estate prices-all contributing to the
maintenance of boom conditions in real estate in
1952. In September Regulation X, imposing restraints on conventional loans on new construction, was terminated, and the restraints on VA
and FHA loans were modified.
Consumer Credit
The volume of consumer credit, which had
leveled off at seasonally stable record positions following imposition of consumer credit controls in
September 1950, rose to new high levels in late
1952 following termination of Regulation W in
May. The growth was chiefly in instalment
credit, and reflected increased sales on instalments of automobiles, furniture and household
appliances.

TWO KINDS OF PERSONAL DEBT
repayment of loans by commodity dealers and
by processors of food, liquor and tobacco as
IILUONS Of DOllARS
IILUONS Of DOLLARS
seasonal inventories were worked off. Curtail- 70
70
ment of output at textile mills was also accompanied by loan liquidation.
Expansion of textile output and seasonal accu- 60t-----f-----+-----1f----+----:::;I
•••
mulation of commodities by dealers and by processors of food, liquor and tobacco products were
chief factors in the resumption of loan growth in 50
t----+----+----1-~~-+---_I50
the last half of the year. Sales finance companies
also increased their borrowings at commercial
banks as the volume of their loans to consumers 401-----+-----t._1I<.--~------~----~40
expanded rapidly in the second half of the year.
RESIDENTIAL MORTGAGE DEBT
(1-4 family housel)

Real Estate Finance
The growth of real estate loans of commercial
banks in 1952 was part of a widespread growth
of mortgage debts, only a relatively small part
of which was financed by bank credit. This was
in contrast to the rapid growth in real estate
credit in 1950 and early 1951 which was financed
in considerable part by the banking system.
During 1950 the banking system accounted directly for about one-fifth of the growth in real
estate loans, and in addition purchased substantial

194.

[ 8]

1949

19S0

19S1

19S2

Economic

Review of 1952

Government Finance

cies and trust funds. The remainder was shared by
the banking system and other investors.

The major fiscal problems of the Federal Government during the year involved refinancing of
maturing issues and the issue of securities to
finance a reappearing cash deficit. The increased
financial needs of the Treasury were reflected in
part in a growth in bank holdings of U. S. Government securities. The Federal debt increased
approximately $7 billion in 1952. About half of
this expansion was reflected in increased holdings
of U. S. Government securities by Federal agen-

The growth in debt reflected the issue for cash
in June of $47i billion of 6-year bonds, and in
October and November of $4Y2 billion of tax
anticipation bills due in 1953. In effect, the
$4Y2 billion of tax anticipation bills represented
the borrowing by the government of taxes to be
paid in the following year. The bills, however,
will come due during a period in which tax receipts
usually run substantially higher than expendi-

FEDERAL RESERVE CREDIT OUTSTANDING
(Monthly

averages

of daily figures)

BILLIONS Of DOLLARS

BILLIONS Of DOLLARS

25

25

~

~

~~

0

20
\ HOLDINGS

I ••••

OF U. S. GOVERNMENT

SECURITIES

~

5

15

0

10

'"
J FMAMJ

JASONDJ

DISCOUNTS

AND ADVANCES

JASONDJ

FMAMJ

FMAMJ

1950

.-l

1951

~
--:

JASOND

o

1952

BILLIONS Of DOlLARS

...
the volume oj Federal Reserve
credit outstanding
in the [orm oj
hol{lings oJ govern men t securities has
in recent years been many-fold larger
than the volume represented by discounts and advances to banks (upper
chart) ... since the Treasury-Federal
Reserve "accord" oj March 1951,
however, the cumulative increase in
discounts and advances has overtaken
the cumulative increase in security
holdings (louer chart) ...

-

2.0,..----------r-----------,

BILLIONS Of DOLLARS

2.0

CUMULATIVE CHANGE SINCE MARCH,1951

1.5
1.0
0.5

o
-0.5L---------.....I.---------J FMAMJ

JASONDJ

1951

[91

FMAMJ

JASON

1952

Economic

Review of 1952

tures, and their use has the effect of regulating
somewhat the flow of cash through the Treasury's accounts.
Debts of States and local governments increased
during 1952, and bank holdings of such obligations probably increased by about $1.5 billion.
The Money Supply
Demands on the banking system in 1952 led
to a growth of about $9 billion in the money
supply to an all-time record figure of over $200
billion at the close of the year. This increase was
only slightly less than that recorded in 1951.
In comparison with the 1951 experience, a much
larger proportion of the expansion was in the
form of time deposits.
Federal Reserve Policy
That the growth in bank credit and in the
money supply was held within reasonable bounds
and did not contribute to a renewal of inflationary
price rises was due to a variety of factors. Federal Reserve policy during the year had as its
objective the checking of inflationary pressures,
which were latent, with a minimum of interference with the legitimate credit needs of business
and agriculture. A more or less steady pressure
was maintained on bank reserves. Except for
temporary support of Treasury financing from
time to time, and for occasional switches in hold-

ings from one issue to another, the Federal
Reserve System largely refrained from activity
in the U. S. Government security market, permitting prices and yields to be determined chiefly
by market forces. The decline in Federal Reserve
holdings of U. S. Government securities during
the early part of the year reflected chiefly the
return of currency from circulation. The increase
in September reflected purchases in support of
the Treasury's refinancing operations. These purchases brought Federal Reserve holdings back to
the level of the beginning of the year.
Increased requirements of the banking system
for currency and reserves were met largely by
member-bank borrowing from the Reserve Banks.
During 1952 member-bank borrowings rose to
the highest figure since the 1920's. As the chart
shows, such borrowings were still small in relation
to Federal Reserve holdings of U. S. Government
securities. However, the necessity of borrowing
from the Reserve Banks tends to put banks under
some pressure and exerts a restraining influence,
whereas the provision of reserves by Federal
Reserve purchases of securities tends to relieve
pressure on the commercial banks and tends to
lessen the restraint on credit expansion.
The Federal Reserve policy of mild restraint
during the 1952 period of active demand for
credit was reflected in a moderate firming of
money rates.

[ 101

The Fourth Federal Reserve District

MAIN

OFFICE

Areas and Branches

[ 11)

INNATI AREA AND BRANCH

T

HIS map shows the area within the Fourth District which is served by
the CINCINNATI
Branch of the Federal Reserve Bank of Cleveland.
It includes southern Ohio and eastern Kentucky, with principal centers of
population and industry at Cincinnati, Dayton and Springfield (Ohio) and
Lexington (Kentucky). About 40% of the land area and 27% of the population of the Fourth District fall within this territory.

The location of all member banks of the area is
indicated
on the map.
Classification is according
to amount of capital and
surplus, as prescribed by
the Board of Governors
of the Federal Reserve
System
for the election
of directors, in accordance
with the provisions of the
Federal Reserve Act. (See
p. 21.)

KEY

o Group
o

•

[ 12 ]

1 banks:
capital
and surplus of $2,000,000
or more.
Grou p 2 hanks: capital and surplus of more than
$300,000 and less than $2,000,000.
Group 3 hanks: capital and surplus of $300,000 or less.

RECENT BUSINESS
DEVELOPMENTS
The defense program has had an unusually
hea vy impact on the industry of southwestern
Ohio. The new jet-engine plant at Cincinnati is a
major source of engines for the nation's current
plane-production program.
Cincinna ti 's
important
machine-tool
industry went
into an expanded scale
of operation during 1952. A plant is under construction at Fernald, near Cincinnati, which will
manufacture some of the ingredients used in the
atomic process. Steel-making facilities were expanded at Middletown and at Ashland, Kentucky
-both
within the area served by the Cincinnati Branch.
The huge atomic energy project at Waverly
(between Chillicothe and Portsmouth) was just
getting under way at year end, taking the form
of acquisition of land, development of transportation facilities, and the beginning of construction.
To serve the project, two new electric power
generating plants are to be built-one
at Madison, Indiana, with a capacity of 1,200,000 kilowatts, and one at Cheshire, Ohio (near Gallipolis),
with 1,000,000-kilowatt capacity. Fifteen power
companies are
cooperating
in the power
program, with
the new installations to
be linked in a
grid with existing facilities. The new plants will provide an
outlet for substantial quantities of coal mined in
nearby Kentucky or southeastern Ohio.
At Dayton also, enlarged manufacturing payrolls and bank clearings have been the rule during
recent years. Although defense production is
important at Dayton, the manufactured products

are predominantly for civilian use. The WrightPatterson Air Force Base, engaged in experimental and administration work in aviation, continues to employ many thousands, although the
trend during the year was toward transfer of
personnel to other points.
Machinery, motor trucks and magazines continue to be the leading products of Springfield,
Ohio, with all lines in full production during 1952.
In southeastern Ohio, at Marietta and other
centers along the Ohio River, the building of new
chemical plants has been noteworthy. The products of the new installations are both for civilian
and defense uses.
The Lexington area of Kentucky, which is an
important part of the Fourth Federal Reserve
District, is in process of a relative shift from
agricultural to industrial emphasis. While Lexington is still the largest burley tobacco market
in the world, its importance in manufacturing has
been growing; new products include electrical
goods, textiles, clotbing and parachutes. Employment of women is especially marked in these
industries.
An industrial tendency of major importance
in southern Ohio and Kentucky is the geographical dispersion of small plants. In many cases,
major plants in Cincinnati or northern manufacturing centers have moved part of their operations to smaller towns of southern Ohio and
northern Kentucky.

OPERATIONS AT THE
CINCINNA TI BRANCH
Operations involving the provision of currency
and coin to member banks, as well as the collection of checks and other items, reached new

Towboat and oil barges
on the Ohio River

[ 13]

The Branch for several years has been mechanized to a high degree in its check collection,
currency and coin operations. Achievements in
lowering the cost of processing items have been
outstanding.
As of August 31, 1952, Henry N. Ott retired
as Cashier of the Cincinnati Branch, a position
which he had held since March 1, 1935. Altogether, Mr. Ott served 35 years with the Cincinnati Branch of the Federal Reserve Bank of
Cleveland.

records in the Cincinnati Branch during 1952.
Recruitment of adequate personnel for the
Branch has been made difficult by the large
demands for labor in the Cincinnati area on the
part of defense industries-especially
in the case
of women employees. Employment on an hourly
basis, as well as other part-time arrangements,
has been a device used with increasing frequency
at the Branch. Thus, about 50 out of approximately 350 employees at the Branch during 1952
were hourly or part-time workers.

Cincinnati Branch
T. BLAIR, Vice President

'~~l"""

G. JOHNSON, Cashier
GEORGE W. HURST, Assistant Cashier

DR. ERNEST H. HAHNE, Chairman of the Board of
Directors of the Cincinnati Branch, President of Miami
University, died November 25, 1952. Dr. Hahne had been
a director of the Cincinnati Branch since January 1, 1949.

r

14]

Dr. Baker

Mr. Dabney

HENRY C. BESUDEN; member sipce January I,
1956; owner and operator of Vinewood Farm, Winchester,
Ky.; director, American South down Association; superVi8Or, loeal Soil Conservation District.

Mr. Besuden

Mr. Dowd

Mr. Lohnes

Mr. Campbell

Mr. Hall

URGH AREA AND BRANCH

T

HE map shows the area within the Fourth District which is served by the
PITTSBURGH Branch of the Federal Reserve Bank of Cleveland. In
addition to Pittsburgh and other industrial centers of western Pennsylvania,
the area includes six counties of the northern tip of West Virginia, with Wheeling as their main center of population and industry. Altogether, the area
accounts for about 28% of the total population and 20% of the land area of
the Fourth District.

The loea lion of all memo
ber banks of the area is
indicated
on the map.
Classification is according
to amount of capital and
surplus, as prescribed by
the Board of Governors
of the Federal Reserve
System
for the election
of directors, in accordance
with the provisions of the
Federal Reserve Act. (See
p.21.)

KEY

o Group

o
•

[ 161

1 banks: capital and surplus of $2,000,000
or more.
Group 2 banks: capital and surplus of more than
$300,000 and less than $2,000,000.
Group 3 hanks: capital and surplus of $300,000 or less.

RECENT BUSINESS
DEVELOPMENTS
Recent economic changes in and around Pittsburgh have added to the already large needs for
banking services of all types. The concentration
of about 375,000 industrial workers in the Pittsburgh metropolitan area is the pivot around which
the recent developments have occurred.
While Pittsburgh has long been the steel capital
of the nation from an industrial standpoint, it
was as recently as 1952 that the home offices of
the nation's largest steel-producing corporation
were shifted to Pittsburgh.
The city also contains the home offices of the largest manufacturers
of aluminum, air brakes, plate and window glass,
rolling-mill machinery, and a very large electrical
equipment company.
A definite program for the civic and industrial
expansion of Pittsburgh was in full swing and
approaching completion during the year under
review. The integrated character as well as the
large scale of the program have been matters of
national interest. On the strictly industrial side,
the expansion of productive capacity has been
noteworthy in steel and utilities. On the civic
side, developments which are changing the physical aspects of Pittsburgh include: large new office
buildings, renovation with landscaping of the
downtown or "Point" area of the city, through

The photo below shows Pittsburgh's new Golden
Triangle, including the Point development as it will
look when fully completed.

highways, modernized airport, and expanded educational facilities.
The industrial expansion has not been confined
exclusively to Pittsburgh, for throughout the

entire area served by the Branch there has been
considerable expansion in the industries supplying
steel, chemicals, and public utility services.
A tendency toward the extension of branch
banking operations in western Pennsylvania,
which has been observable in recent years, continued during the past year. New branch banks
are providing banking facilities in a number of recently developed urban and suburban areas.

OPERATIONS AT THE
PITTSBURGH BRANCH
The volume of central banking business done
at the Pittsburgh Branch has always been large.
In fact, in numerous measures of volume the
Branch stands at or near the top of the list of
reserve branch banks. But during 1952 the impact
of the national defense program, together with
the local expansion program 'noted above, brought
fresh demands upon ithe capacity of the Branch
and carried the statistics of work done
to new record levels.
During the year it became necessary
to obtain new working space for Branch
operations. A lease was arranged with
a large adjoining office building which
provides 12,883 square feet of additional office space, with an overhead
ramp connecting the two buildings.
The large and expanding industrial
payrolls of the area have required corresponding increases in currency and
coin supplies by the Branch. Where
it was possible to do so, services to
member banks in the form of door-todoor delivery of currency and coin
were inaugurated during the year.
During 1952 the Branch completed
its shift to the use of modern auto-

matic machines for the sorting, verification and
tabulation of checks in process of collection. Truck
delivery and pickup of checks during the night
has been an important new development, paralleling similar services which had been instituted
in eastern Federal Reserve districts. At present,
such deliveries from Pittsburgh banks are made
to 188 banks in 12 counties in western Pennsylvania. The saving of time is an important element in processing checks, and this new service

insures the delivery of checks to banks prior to
their opening for the day's business.
In connection with its operations as fiscal agent
for the U. S. Government, the Branch has continued to carry a large work volume in the issuance, exchange and redemption of savings bonds.
The payroll deduction plan for savings bonds
has been an especially popular one in the area;
in the single month of January 1952, for example,
a record total of 315,000 savings bonds was
inscribed by the Pittsburgh Branch.

Pittsburgh Branch
G. FOSTER, Cashier
NOLTE, Assistant Cashier

[ 18

1

Mr. Jones

Mr. McFall

HlJGO E. L4tJFP; member Binee Jonaary 1.1"1;
President. ~
Dollar SaviDgs and Trust ~1.
W'heeIinJ. W. Va.; Vice President for West Virairua.
merican Bankers A.8soclation; President, Wheelin« Clearing House A.8soclation; past president, West \Tirgirua
Bankers A8IIOCiation.
PAUL MALONE; member beginning January' 1,
1953; President, Second National Bank of Uniontown,
Uniontown, Penna.; President, National Bank and Trust
Company of Connellsville, ConnellsviUe,. Penna.; Chairman of Group 8, Pennsylvania Bankers Association.

Mr. Laupp

Mr. Moorhead

Mr. Hood
WILLIAM B. McFALL; member since January 1,
1952; President, Commonwealth Trust Company, Pittsburgh; teustee, Pittsburgh Foundation Ramage Estate;
member, Pennsylvania Banking Board and Pennsylvania
Hospital.Advisory Conncil.

Mr. Malone

Mr, Roemer

OFFICE TERRITORY

T

HE map below shows the area served directly by the main office of the
Federal Reserve Bank of Cleveland, and indicates the location of member
banks. About 44% of the population and 40% of the land area of the Fourth
District are included here. The area accounts, however, for close to threequarters of the population and about 71% of the land area of Ohio.

• ••

•

•

•
•

••
•

•

o

••
o.

•

•

•

KEY

o Group

o
•

[201

1 banks, as classified by the Board of Governors
of the Federal Reserve System, comprising banks with
a combined capital and surplus of $2,000,000 or more.
Group 2 banks: capital and surplus of more than
$300,000 and less than $2,000,000 .
Group 3 banks: capital and surplus of $300,000 or less.

INDUSTRIAL DEVELOPMENT
IN THE AREA SERVED
DIRECTLY BY THE MAIN OFFICE
As a manufacturing center of steel and machinery, and a focal point of iron ore shipping,
Cleveland continues to be strategic for defense as
well as civilian industry.
The year 1952
saw further
expansion of
steel and ore
facilities, and
large-scale activity at the important tank-manufacturing plant.
Also the year was noteworthy for further growth
of the civilian auto industry in Cleveland; always
outstanding
in the 'manufacture
of
trucks
and
certain auto
parts, the city
has only recently turned
to the construction of auto engines and transmissions on
a large scale.
Steel and machinery output continued in record
or near-record quantities (except for some temporary interruptions occasioned by the steel strike)
at the other manufacturing centers of northeastern Ohio including, among others, Youngstown-Warren, Canton, Akron and Lorain-Elyria.
Production of some of the fabricated metal products, however, such as household appliances,

showed slackness during the early part of the
year, due in part to pauses in civilian demand;
recovery trends were evident in the fall.
Akron, as rubber-manufacturing
capital, had
another large volume year, although demand for
truck tires was somewhat irregular. The large
rubber concerns, whose headquarters are in Akron,
are in an increasingly diversified line of products,
many of which are of a defense character. One
of these companies during 1952 was awarded the
contract for operating the billion-dollar atomic
energy project to be constructed at Waverly in
Pike County, Ohio.
New developments in Columbus have centered
around airplane manufacture and other aviation
activity. The city, among others in Ohio, has
been designated as a critical defense housing area.
Toledo in recent years has become an increasingly important center of oil refining, in addition
to its traditional importance in the glass and auto
industries, and in lake shipping. In the northwestern corner of Ohio beyond Toledo, new
small industries are appearing with increasing
frequency as a supplement to the longer-established agricultural pattern.
Manufacture of heavy machinery and oil refining predominates at Lima, Ohio, which has only
recently been classified for Census purposes as a
standard metropolitan area.
The operations of the Federal Reserve Bank
are vitally influenced by developments such as
those just mentioned. In the pages which follow,
some of the more important of these operations
are summarized, with special reference to 1952.
The information applies to the consolidated activities of the main office and the Cincinnati and
Pittsburgh Branches.

Nnte ml Classificatinn nf Member Banks fnr Selectinn nf Directnrs
The Board of Directors of a Federal
Reserve Bank "shall consist of nine
members, holding offiee for three years,
and divided into three classes, designated as classes A, B, and C.
"Class A shall consist of three memo
hers, who shall be chosen by and be
representative
of the stock-holding
banks.
Class B shall consist of three
members, who at the time of their
election shall be actively engaged in
their district in commerce, agriculture
or some other industrial pursuit. Class
C shall consist of three members who
shall be designated by the Board of
Governors
of the Federal
Reserve
System ...
"The Board of Governors
of the

Federal Reserve System shall classify
the memher banks of the district into
three general groups or divisions designating each group by number.
Each
group shall consist as nearly as may
be of banks of similar capitalization ...
No officer or director of a member
bank shall be eligible to serve as a
Class A director unless nominated and
elected by banks which are members
of the same group as the member bank
of which he is an officer or director."
(From the Federal Reserve Act of 1913,
as amended, Section 4.)
In electing Class A and Class B
directors of the Federal Reserve Bank
of Cleveland, all of the group 1 banks
of the District (the locations of which

[ 21)

are shown on the maps on pages 12, 16
and 20) are classified together
for
voting purposes, all the group 2 banks
are classified together, etc. Each group
elects one Class A and one Class H
director every third year.
Selection of members of the boards
of directors of the Branches,
on the
other hand, is entirely by appointment.
Four of the seven Hoard members of
the Cincinnati
Branch, for example.
are appointed by the Board of Directors of the Federal Reserve Bank of
Cleveland;
the other three are ap.
pointed hy the Board of Governors.
The Board of Directors of the Pittsh.ur!,h Branch
is constituted
in a
Similar manner.

Among the Departments

CURRENCY AND COIN

The table below and the illustration on the facing page refer to this
bank's operations in supplying the
public's demands for coin and handto-hand currency. In the adjoining
photo, President Gidney is observing the use of one of the new automatic machines for counting and
wrapping coin.

Currency and Coin operations during 1952
Currency

and Coin on hand December

31, 1951

$109,941,520

Receipts during 1952:
From Public (chiefly via banks)
Fit
Unfit
.
From
and
From
From

.
. . .. $1,110,903,891

543,866,435

Treasury
(Silver Certificates,
coin)
Other F. R. Banks"
F. U. Agent (new notes).
.

U.

S.

Notes

.
.
.

Payments during 1952:
To Banks in Cleveland, Cincinnati, and Pittsburgh
To All Other Banks
To Other 1". U. Banks**
.
To Treasury (unfit) for Uedemption
.
Total Outgoing

Currency

during

*Notes originally
**Notes originally

$2,684, l62,657

.
.

$ 884.,055,455

1,063,569,899
181,535,200
543.866,435

.

2,673.026.989

1952

and Coin on hand December

158,720,756
24.7,491,575
623,180,000

.

Total Incoming

Net Increase

$1,654,770,326

.
31, 1952

$ 11,135,668
.

issued by this bank.
issued by the other eleven F. U. Banks.

[ 22]

$121,077 ,188

TRAVELS

(in th

e form

OF A $5 BILL

of
Note is printed at the Bureau
of Engraving
and Prtnting
in
Washington (at our expense)
· .. shipped to the Federal
Reserve Agent at this bank, and
on our posting of 100% collateral
is issued by him to this bank
ready for use
· .. is sent to a member bank
which has requested
currency
for day-to-day needs; the hank's
account with us is debited a
corresponding amount
· .. is paid out by the member
bank to one of its depositors, e.g.
a manufacturer
with payroll to
meet
· .. passes thru many hands as
goods and services are exchanged
· . . is deposited in another
local bank, then withdrawn by a
different depositor
· .. takes a vacation trip (in a
wallet) to the West Coast
· .. is acquired by a fillingstation operator, who deposits it
in a San Francisco bank
· .. goes to the Federal Reserve Bank of San Francisco,
which returns it to us if fit for
further circulation
· .. after several re-issues and
further travels, note is found to
be badly worn; scheduled for
retirement

*As an obligation of this bank while in circulation, the note
is matcbed
by an equivalent
amount
of this bank's
assets held by the Federal Reserve Agent, including not
less than 25% in gold certificates.
Although not the only
form oflaper
money today, such notes account for an
estimate
four-fifths of the value of all currency in circulation in this District.

[ 23]

Among the Deport.merits

CHECK COLLECTIONS
The number of checks handled for collection
in the three offices of this Bank has approximately doubled every ten years, as may be seen
on the chart below. During 1952 the number
reached an average per working day of close to a
million items for the three offices combined.
The total for the year might have been even
larger had it not been for a slight decline in the
number of government checks passing through
this District, explainable by the shift during the
year in the location of certain regional disbursing
offices of the United States Treasury Department.
The handling of these mountains of checks
takes manpower and womanpower as well as
machinery and organization. More than 250 employees are required at the main office alone, of
which about 40 are part-time employees. They
work on three shifts with 21 different starting
times; there have been numerous problems in the
recruiting of personnel.
Employees in the check collection department
are aided by the most modern type of equipment.
At the end of the year in the three offices combined there were 200 proof machines used for
sorting checks, adding dollar volumes, and verifying totals of shipments from the clearing banks.
While substantial gains in efficiency of opera-

NUMBER OF CHECKS HANDLED
300,000,000---------------300,000,000

I

- 250,000,000

I

200,000,000-

200,000,000

I

150,000,000

I

100,000,000-

100,000,000

1937

[ 24]

tion have already been achieved, the problems
arising from sheer volume are such that this
bank as part of the Federal Reserve System is
at present engaged in cooperation with other
banking agencies in a thorough study of the entire
check collection procedure with a view to further
gains in efficiency.
Collections of other items. In addition to check
collection, a related department of the bank performs the service of making collections on numerous types of commercial instruments and securities. Such operations, known as "non-cash" collections, are performed with respect to: collection
of interest on bonds or maturity value of securities
due; collection of notes, drafts or trade acceptances; collection of warrants on state and local
governments; and certain transactions dealing
with letters of credit. For most classifications
the number of collections and the value involved
showed some increase during 1952. The number
of security drafts, however, which were collected
during the year, as well as the dollar volume of
such transactions, showed a moderate decline.

Among the Departments

FISCAL AGENCY
Acting as fiscal agent of the United States, the
bank conducted a large volume of transactions
during 1952 with banks and the public, especially
in the issue and redemption of savings bonds, the
handling of Treasury marketable issues, and administration of Tax and Loan Accounts.
«uuons
Of

MIlliONS
OF BONOS

BONO!)

25

NUMIlEIl
SOLD

OF SERIES
IN TilE

"E"

FOURTH

SAVIN(;S

1l0NDS

20

DISTIlICT

15

10

1951

1952

As shown by the accompanying chart, the number of savings bonds sold during the year represented a further increase. Looking back over the
postwar record, it may be seen that even in 1948,
the year of lowest volume in respect to number
of bonds sold, nearly 8 million "E" bonds were
sold in the Fourth District. (This figure includes
sales by post offices.)
Sales of savings bonds during the year were
strengthened by the terms of the new issue announced in May. The effective interest rate was
raised slightly on "E" bonds by a reduction of
the length of term from 10 years to 9 years and
8 months. Even more important was the acceleration of redemption values; for example,
under the new terms, earnings start at the end of
six months rather than at the end of a year.
Redemptions of savings bonds were rather
heavy during certain parts of the year, particularly at the time of the steel strike. For the
entire year, however, the dollar volume involved
in redemptions fell short of sales. The economic
significance of comparisons between sales and
redemptions on a District basis is modified by

[ 251

the fact that there are numerous cases of bonds
purchased in this District and redeemed elsewhere, or vice versa.
The volume of business done in various forms
of Treasury marketable issues is shown in an
accompanying table. The "roll-over" was large,
especially during the latter part of the year when
Treasury refunding operations were in full swing.
Treasury Tax and Loan Accounts. Commercial
banks, qualified as Treasury Tax and Loan Depositaries, made payment during the 12-month
period ended Nov. 30, 1952, of $3,882,881,000.
Under the Tax and Loan Account procedure,
incorporated banking institutions designated as
"special depositaries" may pay for purchases of
Government securities made by themselves or
customers, and for the collections of Social Security and withholding taxes, by credit to a
special account kept by the depositary under
terms prescribed by the Treasury.
Calls for
withdrawals on such accounts are made by the
Federal Reserve Bank on instruction by the
Treasury. Under such an arrangement the large
sums of money raised by the Treasury through
financing operations and certain tax collections
are left on deposit in local banking institutions
until the Treasury needs to withdraw them, thus
avoiding dislocations in the economic system
which might result from immediate withdrawal
of funds.

Face AIllount of U. S. Cover-nrnerrt Securities
Handled by Treasury Marketable Issues Division
1952
Issues, total ..
BiUe .

Certificates
Notes ..

. $1.510.928,000

of ·II~d~b·t~dne88.

Bonds

.

Treasury

Savings

Hedeniptions ; tutul
Bill..

Noles
.

..

................

. . . .

.

Certificates of Indebtedness.
Notes. . .
Bonds.
Treasury Savings Notes-Cash.
-Taxes.
E:tchange.5 and Transfers,
Wire Transfers

Other

.. $2,902,105,000
781,254,000
181,901,000
204,253,000
441,415,000

$2,564,500,000
1,007,700,000
125.150,000
370,800,000
73;1.330,000
$4,6H,800,000

$2,811 ,665,000 $2,344,600,000
l,094,08R,OOO
121,900,000
1,792,000
802,000,000
82,702,000
636,400,000
395,648,000
524,200,000
..
543,165,000
205,700,000

t ot.al .

.
Coupons..

. $6,119,534,000

$5,320,400,000

.. $5,539,690,000
579,844,000

..

United States Government

$4.929.060,000

1951
$4,801,480,000

54,882,800,000
437,600,000

..

S

95,846,000

99,181,000

Among the Departments

ADVANCES TO MEMBER BANI(S
During 1952 borrowings from the Federal Reserve on the part of member banks, at times
when they needed to replenish their reserves,
increased in importance and significance. This
was part of a national trend, marking a change
from previous periods when the importance of
such borrowings was largely eclipsed by reliance
on sale of government securities; the connection
between such a development and Federal Reserve
credit policies has already been noted. (See p. 10.)
Advances made by this bank to Fourth District
member banks increased appreciably during the
spring of the year and reached new high positions later in the year, as may be seen from the
chart below. The tighter reserve positions which
were inducing such a development are indicated
by a tendency toward lower "excess reserves",
or reserve accounts held by member banks at
this bank in excess of legal requirements.
The Regulation -V program, involving guarantees of loans made by financial institutions
rather than advances to them, continued active to

meet the needs of the expanding defense program.
While the number of new applications received
was somewhat less than in 1951, the fact that
many loans were reset in increased amounts and
for longer periods maintained the loan volume and
activity at approximately the same level as in 1951.
The making of new loans or the extending of
existing loans in increased amounts measures only
in a small way the activity generated under the
V-Loan program. Many loans are set up as revolving lines of credit. For example, one small-sized
line of credit for $60,000 involved during 1952
thirty disbursements aggregating $628,000 and
85 repayments aggregating $672,000. Similarly, a
moderate-sized line of credit for $3,000,000 had
45 disbursements aggregating $11,263,000 and 133
repayments aggregating $10,313,000. In both
cases, the unpaid balance of advances was always
within the maximum credit available.
Industrial loan commitments under Section 13b
of the Federal Reserve Act continued during the
year, although there were no direct loans made.

FOURTH DISTRICT MEMBER BANK BORROWINGS
COMPARED WITH EXCESS RESERVES
MILLIONS

(Monthly

averages

of daily standings,

1950-52)

MILLIONS

OF DOllARS

OF DOlLARS

100~----------------------------+---------------------------~--------------------------

100

90~----------------------------+---------------------------~--------------..r

90
80
70
60

50~----------------------------+---------------------------~--------------..r

50

40r------------------------------+--

40

30~--------------------------~--

30
20
10

JJASOND

1951
[ 26]

fMAMJJASOND

1952

Among the Departments

~HALKING UP THE S~ORE
OF BANK RESERVES
The Accounting department has the responsibility of keeping at all times the official standings
of the member banks in respect to their deposit
accounts at this bank; such deposit accounts are
the reserves of the member banks within the
meaning of the Federal Reserve Act, At the same
time, the department ascertains whether the reserves of individual member banks are in conformity with the minimum legal requirements as
established from time to time by the Board of
Governors of the Federal Reserve System, within
limits prescribed by Congress.
At present the reserve requirements, which
have not been changed since early 1951, are as
follows: For large banks in Cleveland, Cincinnati, Pittsburgh, Columbus and Toledo: a sum
equal to 20% of net demand deposits plus 6% of
time deposits. For all other banks in the District,
a sum equal to 14% of net demand deposits plus
6% of time deposits.
Through its wire transfer service, the Accounting department makes possible a fast exchange
of funds by telegraph for the account of member
banks in this District. By using wire service facilities a member banker can make the funds of
his bank available for immediate use in any city in
the United States where another member bank is
located. During 1952 the amounts transferred in
this way, as well as the number of transactions,
showed an appreciable increase from the previous year.

BANK EXAMINATION
State member banks are examined once each
year by examiners for the Federal Reserve Bank
of Cleveland. Examinations are usually conducted
jointly with representatives of the banking department of the State in which the bank is
located. The Federal Reserve Bank of Cleveland
wishes to acknowledge the active cooperation of
State banking authorities in joint examinations
and in all other undertakings which require
collabora tion.
Factual banking information is accumulated,
and statements of condition and earnings as well

[ 27]

as dividends reports of both State and National
banks are functioned here. Also a report summarizing operating ratios of member banks in
this District is prepared in the bank examination department.
Change in Capital Requirements for Federal Reserve Membership. During the past year, Congress
enacted legislation amending Section 9 of the
Federal Reserve Act and Section 5155 of the
United States Revised Statutes.
The changes
removed capital requirements relating to membership in the Federal Reserve System which for
some time had been regarded in banking circles
as arbitrary and unrealistic.
A State bank, within certain other limitations, may now be admitted to membership if it
possesses capital stock and surplus which, in the
judgment of the Board of Governors of the
Federal Reserve System, are adequate in relation
to the character and condition of its assets and
to its existing and prospective deposit liabilities
and other corporate responsibilities.
Under previous provisions of law a member
bank which desired to establish an out-of-town
branch was required to have a capital stock of
at least $500,000. This statutory requirement has
been eliminated. The amended law also provides
that in-town branch offices, as well as out-oftown branches of State member banks, may be
established, henceforth, only after prior approvals
of the Federal Reserve Board and the appropriate
State authority.
In accordance with the new legislation, Regulation H, issued by the Board of Governors of the
Federal Reserve System, relating to membership
of State banking institutions in the Federal Reserve System and containing provisions regarding
the establishment of branches, has been revised
and copies are available upon request.

Among the Departments

PERSONNEL
The total of full-time employees at the Main
Office and Branches held approximately steady
at 1700 during 1952.
The problem of recruiting adequate personnel
for replacement continues to be a formidable one
in the face of competitive demands by defense
industries in the three areas. However, this situation has been partially alleviated by the employment of many part-time and odd-shift workers.
This bank participates in a very liberal retirement plan, including group life insurance coverage.
The retirement plan, together with hospital and
surgical benefits, and the maintenance of fine
cafeteria, medical and recreational facilities are
factors responsible for a large percentage of
workers with long years of service.
At the end of the year, 51% of the employees
had been with the bank five years or longer,
29% ten years or more, and one out of eight had
observed his twenty-five-year anniversary.

RELATIONS WITH BANKS
AND THE PUBLICEconomic Information
Acting mainly through its member banks, but
also with numerous direct contacts with the public, the Federal Reserve is a definite part of the
business community. At the base of the relationship lies the fact that the Board of Governors
and the twelve Federal Reserve Banks are charged
with responsibility for an important contribution
to economic stability by way of determination of
policies influencing the availability and cost of
credit. "The accommodation of commerce, industry, and agriculture" (in the language of the
Federal Reserve Act) is an important part of the
ultimate aim.
A two-way set of exchanges, both of information and of attitudes or viewpoints, is required in
order to fulfill this obligation.
First, on the incoming side from the standpoint
of the Federal Reserve, it is necessary to collect
a substantial quantity of incisive and relevant
information concerning current business trends,
both national and local. Such information in
considerable part is gathered in the first instance
by the twelve Federal Reserve Banks, including
this one, and is finally synthesized into policyguiding information available to the Board of
Governors, the Open Market Committee of the
[ 28]

System, and the directors and officers of the
Reserve Banks.
Second, on the outgoing side from the standpoint of the System, the business information
available to the Federal Reserve is reformulated
in a fashion designed to be useful to business and
to the general public, and is regularly distributed
gratis, through numerous channels, as a general
public service.
Third, and also on the outgoing side from the
standpoint of the Federal Reserve, the information required to explain the policies or activities
of the System is transmitted as necessary to the
member banks and to the public.
Day-to-day functioning of such a two-way set
of communications is carried on by the officers of
the bank, assisted by the staffs of the Bank and
Public Relations department and the Research
department.
Among the numerous mechanisms for contacts
with the member banks and the business public
are: (I) regular visits by officers or staff to banks
and to business concerns; (2) banking and business meetings in various localities; (3) gatherings
at the offices of the bank as well as guided tours
through the bank; (4) publication of economic
reviews and newspaper releases; (5) public addresses and radio talks; (6) preparation of motion
pictures available to the public. Among the subjects discussed are: general business trends, industry, trade, agriculture, banking and financial
trends, operations of the Federal Reserve, credit
policy.
An example of the joint activities of the Research department and the Bank and Public
Relations department is indicated on the adjoining page with respect to agriculture.

STATEMENT

GOMPARATIVE

Decerrrber

COND

31, 1952, and Decorrrbe

ASSETS

Gold certificatcs ....
Redcmption fund for Federal

Reserve

Dec. 31, 1962

GOLD

CERTlFLCATE

RESERVES

TOTAL

$1,519,769,426
75,407,470
1,595,176,896

21.490,858
l,W.6OO,402

..

19,113,546
1,614,290,442

CASH .......•....•.............•....

Other cash

.

670,000

Discounts and advances ...
U. S. Government securities:
Bills. . . .
.
Certificates.
Notes
.
Bonds
.

43,703,000
1,188,604,000
4.73,409,000
499,195,000
2,204,911,000
2,205,581,000

.

TOTAL

U.

TOTAL

LOANS

S.

GOVERNMENT
AND

SECURITIES

SECURITIES

....

....

l2.S12,OOO
383.176,806
4,745,838
15,735,369
$4,312.855,415

Federal Reserve notes of other banks.
Uncollected cash items ..
Bank premises ..
Other assets ...
TOTAL

Dec. 31, 1951

$1,446,634.734
85,474,810
1,532,109,544

notes.

TOTAL

TION

ASSETS

.......•...

11,121,000
383,721,074
4,763,860
12,771,485
$4,232,248,861

$2,410,657.455

$2,286,835,610

LIABILITIES

Federal Reserve

notes

.

Deposits:
Member bank-reserve
U. S. Treasurer-general
Foreign
Other deposits
TOTAL

Deferred availability
Other liabili tics.

11.-.so1
t.s12.~1

DEPOSLTS

LLABILITIES

CAPITAL

Capital paid in. . . . . .
Surplus (Section 7). . . . .
Surplus (Section 13b).
Other capital accounts. .
TOTAL

Contingent liability on acceptances
Industrial loan commitments

24,,214,800
54,0M,65O
1.005.665
9,789,294

22,497,850
50,648,4.68
1,005,665
9,753,084
$4,232,248,861

~1~

..

.
....•....•......•......•........

ACCOUNTS

.
........
.
.
...........
LIABILITIES

323,937,998
1,288,990
4,148,343,794

l,497,699,OaO
15,316,010

.

cash items

TOTAL

1,471,669,874
3,733,226
4.8,4.06,500
12,471,596
1,536,281,196

299,245,872
1,431,138
4,283,781,006

accounts ...
account
.
.

AND

.
.
.
.
CAPITAL

purchased
.

ACCOUNTS

.
.

for foreign correspondents.

[301

$
$

1.820,876
750,500

$
$

1,988,517
901,734

GOMPARISON

OF

ENSES

EARNINGS

FOR THE

YEARS

1952

AND

1951

Earnings ..
Expenses ..

:I)
NET

ADDITIONS

TO

NET

EARNINGS.

EARNINGS:

Profit on U. S: Government
All other ..
TOTAL
DEDUCTIONS

FHOM

NET

TOTAL

-0-

securities sold (net).

30,189
30,189

ADDITIONS.
EAHNINGS:

Loss On U. S. Government
All other

148,481
9,904
158,385

securities sold (net) ..
.

DEDUCTIONS

...•......•....•......•....•....•.

-0-

Net additions ..
Net deductions.
Transferred to reserves for contingencies
Paid U. S. Treasury (interest on :F. R, notes) ..
Net earnings after reserves and payments
Dividends paid.. .. .
.
Transferred

36,566,612
8,731,626
27,834,986

.

to U. S. Treasury

.
.

s

to surplus (Section 7) ..

[ 31]

128,196
37,072
23,708,414
3,961,304
1,327,030
2,634,274

~TATEMENT

OF EARNINGS
SINCE

THE

BANK'S

OPENING,

AND

NOVEMBER

AD()lTIONS
NET
YEAR

EARNINGS

EXPENSES

TO

EXPENSES
16, 1914

DEDUCTIONS
FROM

NET
EARNINGS

[ 32

1

NET

NET

BEFORE

EARNINGS

EARNINGS

EARNINGS

DISPOSITION

STATEMENT OF DISPOSITION
BY YEARS,

YEAIt

NET
EARNINGS
BEFORE
DISPOSITION

SINCE

TRANSFERRED
TO SURPLUS
DIVIOENDS
PAlO

SECTION 7

OF NET EARNINGS

NOVEMBER

16, 1914

-----PAlD

SECTION
13b

[331

U. S. TREASUHY----INTEHEST ON
FItANCH1SE SECTION F. R. NOTES
OTHEIt
TAX
13b
OUTSTAND1NG TUANS.'EItS

BALANCETO
PHonT
& Loss

BOARD

OF

DIRECTORS
Federal Reserve Bank

JOHN C. VIRDEN, Chairman; member of the Board since January I, 1951; Deputy Chairman, 1951-52; Chairman of the Board
and Federal Reserve Agent for the Fourth Federal Reserve District.
beginning January I, 1953; Chairmau of the Board, John C.
Virden Company, Cleveland.

LEO L. RUMMELL, DepUly Chairman; member oj the Board
since January I, 1949; Dean of the College of Agriculture. tbe
Ohio State University; Director, Ohio Agricultural Experiment
Station, Wooster, Ohio.

Mr. Virdeu

JOHN D. BAINER; member oj the Board since Jane 13, 1947;
President of the Merehants National Bank and Trust Company
of Meadville, Meadville, Pennsylvania; examiner and secretarymanager of the Cleveland Clearing House Association, 1920-3?i.

JOEL M. BOWLBY; member oj the Boord since January 1, 1948;
Chairman of the Board of Directors of the Eagle-Picher Compan~,
Cincinnllti; member and general partner of Barrow, Wade, Guthrie
& Co., certified pnblic accountants, Chicago, 192141.

Mr. Rum melt

Mr. Bowlby

Mr. Bainer

[ 34]

1953

FOR
of Cleveland

EDWARD C. DOLL; member oj the &ani since JtuIllDry I, 1950;
President of the Lovell Manufacturing Company. Erie. Pennsylvania, whicb be joined in 1925; President. Board of Directors. Erie
Y.M.C.A.
EDISON HOBSTETrER;
member oj the Board since JanlUlry I,
1952; President of the Pomeroy NatiOnal Bank., Pomeroy, Ohio;
past president of the Meigs County Bankers Association; Vice
President of tbe Ohio Bankees Association, 1952.
LAWRENCE N. MURRAY; member 01 the &ani ,inceJtmlUlry
1.1951; President and director of the Mellon National Bank and
Trust Company, Pittsburgh. director of several larg~ companies.
including the Koppen Company and the New York Central
Railroad.

Mr. Doll

CHARLES I. STILWELL; member oj the Board ,ince JanlUlry
I, 1951; President of the Warner & SwalleYCompany, Cleveland, •
whieh he joined in 1911; trustee of the Case Institute of T~,
Cleveland, and of. the National Indnstrial Conference DomI,
New York.

Mr. Hobstetter

]VIr. Murray

Mr. Stilwell

[ 35 J

Mr. Swensrud

OFFICERS

FOR

1953

Federal Reserve Bank of Cleveland
RAY M. GIDNEY, President
WILBUR D. FULTON, First Vice President
WILBUR T. BLAIR, Vice President
ROGER R. CLOUSE, Vice President and Secretary
JOHN W. KOSSIN, Vice President
ALFRED H. LANING, Vice President and Cashier
MARTIN MORRISON, Vice President
H. E. J. SMITH, Vice President
PAUL C. STETZELBERGER, Vice President
DONALD S. THOMPSON, Vice President
PHILLIP B. DIDHAM, Assistant Vice President
GEORGE H. EMDE, Assistant Vice President

JAMES R. LOWE, Assistant Vice President
JOSEPH M. MILLER, Assistant Vice President
CHARLES J. BOLTHOUSE, Assistant Cashier
CHARLES E. CRAWFORD, Assistant Cashier
ELWOOD V. DENTON, Assistant Cashier
ELMER F. FRICEK, Assistant Cashier
GEORGE R. ROSS, Assistant Cashier
HUGH M. BOYD, Chief Examiner
CARL :F. EHNINGER, General Auditor
HARMEN B. };~LINKERS, Assistant Secretary
MERLE HOSTETLER, Manager, Research Department

MEMBER OF FEDERAL ADVISORY COUNCIL
(from Fourth

District)

GEORGE GUND, President
The Cleveland Trust Company, Cleveland, Ohio

INDUSTRIAL ADVISORY COMMITTE~
HERMAN R. NEFF (Chairman)
President, The George S. Rider Company-Engineers,
H. P. LADDS (Vice Chairman)
President, The National Screw and Manufacturing
Company
Cleveland, Ohio
SAM W. EMERSON

President, The Sam W. Emerson Company
Cleveland, Ohio

Cleveland, Ohio

JOHN P. McWILLIAMS

Chairman of the Board, Youngstown Steel Door
Company
Cleveland, Ohio

ARTHUR W. STEUDEL

President, Sherwin-Williams Company
Cleveland, Ohio

WILLIAM H. FLETCHER
First Vice President,

retired, December 31, 1952