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1968

ANNUALREPORT~~~

===

federal

reserve bank of cleveland

===

CONTENTS
Bank Regulation and Structural Changes
in Fourth District Banking.
. . . .

4

Comparative Statement of Condition.

14

Comparison of Earnings and Expenses .

14

Directors and Officers

15

. . .

Branch Directors and Officers

. . ..

16

FEDERAL RESERVE BANK
OF CLEVELAND

To the Banks in the
Fourth Federal Reserve District:
We are pleased to present the Annual Report of the
Federal Reserve Bank of Cleveland for 1968, and to
express our appreciation to the agricultural, business,
and financial community in the Fourth District for cooperation and encouragement in helping us fulfill our
responsibilities.
This year's Annual Report reviews the effects of the
regulatory framework on banking structure and structural changes in the Fourth Federal Reserve District.
Banking regulation has played an important role in
banking structure in the District in recent years. The
impact of the Bank Merger Act of 1960 on the size of
acquiring banks is significant in the District. In particular,
the merger activity of the larger banks declined sharply
after the adoption of the 1960 Act.
With the advent of one-bank holding companies, the
expansion of registered bank holding companies, and
the continued large number of bank mergers, analysis
of banking structure has become increasingly important.
Hopefully, the information provided in this Annual
Report will promote understanding of this subject.

CHAIRMAN

OF THE BOARD

PRESIDENT

BANK REGULATION AND STRUCTURAL
CHANGES IN FOURTH DISTRICT BANKING
The structure of commercial banking has changed
substantially in recent years, with branch banking,
mergers, and holding companies the major avenues of
bank expansion. Although many factors influence the
structure of banking, the nature and dimensions of
bank regulation are particularly significant. This article
reviews the regulatory framework that applies to bankIng structure and, against that background, examines
structural changes in banking in the Fourth Federal
Reserve District during the 1954-1967 period.

REGULATION OF BANKING STRUCTURE
The number, size, and geographical distribution of
banks and banking offices represent the major elements

4

of banking structure. As presently arranged. a complex
set of state and Federal regulations affect that structure.
Broadly, these regulations attempt to promote an efficient banking system, one that affords the largest
possible volume of banking services to the public at
the lowest possible cost. Although the economic theory
of competition provides a standard for evaluating the
structure of banking, economic theory provides little
operational guidance for the regulatory authorities,
since it is difficult to reduce competition to measurable
dimensions. Consequently, bank regulation has little
theoretical guidance in attempting to achieve an "optimum" banking structure. Ironically. there is even a
question as to whether an optimum banking structure
is feasible or attainable.

In general, bank regulation can alter banking structure by restricting or encouraging entry into bankingthe formation of new banks and the dissolution of existing banks-and
by limiting or encouraging growth
of banks through branching, mergers, and holding
companies. Restriction of bank entry, a fundamental
structural regulation, is achieved by limiting the issuance of new bank charters, which in turn influences
the number of banks. The Comptroller of the Currency
has authority to issue new charters for national banks,
and state banking authorities issue new charters for
state banks. Although state laws establish the broad
geographical limits of new branches, the Comptroller
of the Currency, the Federal Reserve System, and the
state banking authorities are able to influence the
number and location of new branches within these
broad limits.
Regulation of bank mergers has become an increasingly important means of influencing the structure of
banking. Before 1960, a loose combination of capital
requirements and branching restrictions were applied
to bank mergers. However, the Bank Merger Act of
1960 established specific criteria to evaluate bank
mergers. Depending on the type of charter held by the
resulting bank, prior written consent must be obtained
from the Comptroller of the Currency, the Federal
Deposit Insurance Corporation, or the Federal Reserve
System for all mergers involving banks insured by the
Federal Deposit Insurance Corporation. During the
1960's, the Antitrust Division of the Department of
Justice and the courts also entered into bank merger
regulation through an extension of antitrust laws to
banking.
Authority to regulate bank expansion through holding companies was lodged with the Federal Reserve
System under the Bank Holding Company Act of 1956,
which applied the general objectives of antitrust laws
to banking and restricted the connections between
bank holding companies and nonbank businesses.
Recently, bank holding companies have generated additional interest among regulatory authorities because
of the increased number of registered bank holding
companies and one-bank holding companies.

HOLDING

COMPANIES

Under the Bank Holding Company Act of 1956, a
bank holding company is required to register with the

Federal Reserve System if the holding company controls 25 percent or more of the voting shares of each of
two or more banks. Registration is not required if a
holding company owns only one bank-a one-bank
holding company. One-bank holding companies can
be bank or nonbank originated. A one-bank holding
company can enter into activities either related or unrelated to banking that are prohibited to an individual
bank or a registered bank holding company. The Comptroller of the Currency authorizes national banks (under
their incidental powers) to organize subsidiaries, but
80 percent of the stock of the subsidiary must be owned.
The Federal Reserve System also recently authorized
state member banks to have certain subsidiaries; however, a state member bank must own virtually all of the
stock of the subsidiary.
At present. information on one-bank holding companies (either bank or nonbank originated)
is still
sketchy and incomplete. Nevertheless, there are at
least presumptive differences between nonbank corporations or conglomerates that own a bank and banks
that acquire both financial and nonfinancial subsidiaries through a bank originated one-bank holding
company. Most recently, the emphasis has been on
banks that establish a holding company structure in
order to acquire both related and unrelated business
subsidiaries. The rapidly increasing popularity of bank
originated one-bank 'holding companies has raised a
number of questions about the implications of a greater
range of nonbank activities for the banking system.

MERGER LEGISLATION
Although bank holding companies are currently the
center of attention, during the past two decades, merger activity accounted for the major structural changes
in banking in both the United States and the Fourth
District. For example, during the 1950's in the nation as
a whole, 1,503 banks with assets of more than $25
billion were absorbed through mergers. The upsurge
of merger activity in the 1950's, coupled with the lack of
clear standards for judging the desirability of proposed
mergers, prompted Congress to pass the Bank Merger
Act of 1960. Briefly, the Act states that:
no insured bank shall merge or consolidate with
any other insured banks ... without the prior written

5

consent (i) of the Comptroller of the Currency if
the ... resulting bank is to be a national bank or a
District bank, or (ii) of the Board of Governors of
the Federal Reserve System if the ... resulting bank
is to be a state member bank (except District bank),
or(i ii) of the Federal Deposit Insurance Corporation
if the ... resulting bank is to be a nonmember insured bank.
Moreover, seven factors were to be considered in
evaluating a merger:
1. The financial history and condition of the banks
involved;
2. The adequacy of the resulting bank's capital
structu re;
3. The future earnings prospects of the resulting
bank;
4. The general character of the resulting bank's
management;
5. The convenience and needs of the community
to be served;
6. Whether or not the corporate powers of the resulting bank are consistent with the purpose of
the Act; and
7. The effect of the transaction on competition
(including any tendency toward monopoly).
In addition, the 1960 Act stated that the Attorney
General and the banking agencies should provide advisory
reports on the competitive effects of proposed mergers.
Although the Federal agencies generally believed
they had the final authority over bank mergers and that
no one of the seven factors was to be regarded as controlling, there was considerable uncertainty about the
weight to be attached to the competitive effects of a
merger. The uncertainty regarding the role of competitive effects was resolved in 1963, however, when the
Supreme Court ruled that the proposed merger of two
Philadelphia banks was in violation of Section 7 of the
Clayton Act. In general, this section of the Clayton Act
prohibits a corporation engaged in commerce from
buying the stock or assets of another corporation if the
acquisition would substantially lessen competition, or
tend to create a monopoly. In addition, the Supreme
Court held that a merger cannot be saved by some reckoning of social benefits to the community if the merger
violates antitrust laws. The Supreme Court further defined the role of competition and antitrust laws in 1964,
when it ruled against the proposed merger of two banks

6

in Lexington, Kentucky, on the grounds that if a merger
eliminated a substantial competitor in banking, the
merger violated the Sherman Act.
The confusion about the application of antitrust laws
to bank mergers led to Congressional reassessment of
the 1960 Act and eventually to the Bank Merger Act
Amendment of 1966. The Amendment
which was
also incorporated in the Bank Holding Company Act
presented a revised set of standards that the supervisory agencies, the Justice Department and the courts
were to apply to bank mergers. Essentially, the Amendment incorporates Section 2 of the Sherman Act and
Section 7 of the Clayton Act into the Bank Merger Act.
The relevant section now reads:
The responsible agency shall not approve
(A) any proposed merger transaction which
would result in a monopoly, or which would be in
furtherance of any combination or conspiracy to
monopolize or to attempt to monopolize the business of banking in any part of the United States, or
(B) any other proposed merger transaction whose
effect in any section of the country may be substantially to lessen competition, or tend to create
a monopoly, or which in any other manner would
be in restraint of trade, unless it finds that the anticompetitive effects of the proposed transaction are
clearly outweighed in the public interest by the
probable effect of the transaction in meeting the
convenience and needs of the community to be
served. In every case, the responsible agency shall
take into consideration the financial and managerial resources and future prospects of the existing
and proposed institutions, and the convenience
and needs of the community to be served.
As in the 1960 Act advisory reports on proposed
mergers are required from the Justice Department and
the banking agencies. After approval, a merger cannot
be consummated until a 30-day waiting period elapses
to allow the Justice Department time to initiate antitrust action. If the Justice Department begins antitrust
action, an approved merger cannot be consummated,
unless the court orders otherwise.
Although the 1966 Amendment removed some uncertainty about the standards to be applied to bank
mergers, it did not resolve all of the issues. Nevertheless,
since 1966, competitive effects of proposed mergers
have been given prime consideration. If there are no

Table I
United States and Fourth District

Se~ed Period~954-1967
1

Total

19641960

19811987

19641987

United States
Fourth Dislrict

734
12

1.358
24

2.092
36

United Stites
Fourth District

1.250
161

1.038
129

2.288
280

United States
Fourth District

4.462
499

7.812
516

12.264
1.216

1956

1960

1967

63
2

47
2

74
3

428
23

426
24

603
29

Registered
Holding Companies
United States
Fourth District
Affiliates
United Stltel
Fourth District

• Includes conversion of banksacquired through merger Into
bl'llnches of the acquiring institution.
Sources: Board of Governors of the Federal Reserve System
and Federal Reserve Bank of Cleveland

7

· ..

1954-1960

existing or potentially adverse competitive effects, the
proposed merger is usually approved, assuming capital
structure, managerial, and other factors are satisfactory.
If it is determined that the proposed transaction would
have adverse competitive effects, then it must be established that the benefits to the public will exceed the
anticompetitive effects. For example, the banks participating in the merger must establish that there are
needs for banking services that are either unserved or
not conveniently available. Moreover, the banks must
prove that there are no alternative ways to obtain conveniently the needed banking services with less anticompetitive effects. If there are such alternatives, it
must be shown that the alternatives either were tried
and failed or would be unlikely to succeed. However,
since the Supreme Court has not sustained the convenience and needs defense in any case reaching the
court. the competitive factors must be considered as
dominant in evaluating proposed bank mergers.

FOURTH DISTRICT
1954-1967

DEVELOPMENTS,

A number of factors-new
bank charters, branching,
mergers, and holding companies were important in the
evolution of banking structure in the nation during
1954-1967, although these factors had different relative effects in the Fourth District and in the nation (see
Table I). Bank mergers and the establishment of branch
offices were clearly the two major avenues of change
in banking structure in the Fourth District during 19541967, as shown in Table I.
The most significant difference between the Fourth
District and the nation appears to be in the relationship
between the number of new bank charters and the
number of mergers. During the 1954-1967 period, the
number of mergers in the District greatly exceeded the
number of new banks established, in contrast to the
nation as a whole, where the number of new banks
was nearly equal to the number of mergers. As a result.
although the net decline in number of banks was about
the same in the District and the nation, the decline in
the District represented a reduction of 23 percent. while
that in the nation was less than 1 percent.
As shown in Table II, the number of branches in the
nation tripled during the period under review, while the
number of branches in the Fourth District increased

8

Table II
United States and Fourth District
January 1, 1954 and December 31, 1967
Percent
Change

1954

fourfold. Reflecting the contrasting patterns between
the District and the nation in the number of banks and
branches, the relative growth of banking offices (banks
plus branches) was about equal (see Chart 1).
In the United States as a whole, the relative decline
in the number of national and state banks was nearly
the same during the period under review (see Table II).
In the District, however, there was a 25.2 percent
decline in the number of state banks, compared with a
19.7 percent decline in the number of national banks.
Differences between the District and the nation are
also apparent with respect to membership in the Federal
Reserve System (see Table II). (Because national banks
are required to be members, data are shown for state
banks only.) In the nation as a whole, 15 percent of
state banks were members of the Federal Reserve System in 1967, compared with 21 percent in 1954. On the
other hand, the proportion of state member banks in the
Fourth District only declined from 34.6 percent to 30.6
percent between 1954 and 1967.
As indicated in Chart 2, during 1954-1967, the
District portion of Pennsylvania experienced the sharpest drop in the number of banks (43 percent). In Ohio
and the District portion of Kentucky, the number of
banks declined moderately (16 percent and 7 percent,
respectively), while the number of banks in the District
portion of West Virginia was, on balance, unchanged.
During 1954-1967, the number of branch offices
increased at about the same rate in both Ohio and the
District portion of Pennsylvania. (In Ohio and Kentucky,
branches may be operated throughout the home office
county; in Pennsylvania, branches may be operated
throughout the home office county and contiguous
counties.WestVirginia does not permit branch banking.)
Few branches were in operation in Kentucky in 1954,
but the number grew rapidly thereafter.
As shown in Chart 2, the number of banking offices
increased at about the same rate in Ohio and Pennsylvania, somewhat less rapidly in Kentucky, and remained
unchanged in West Virginia.

1967

United States
Banks
Branches
Banking offices

13.886
5.816
19.702

13.641
18.080
31.721

Fourth District
Banks
Branches
Banking offices

1.069
435
1.504

823
1.650
2,473

- 23.0
+279.3
64.4

United States
National banks
State banks

4.856
9.030

4.758
8.883

2.0
1.6

Fourth District
National banks
State banks

431
638

346
477

19.7
25.2

21.0%

14.8%

48.0

44.5

34.6

30.6

61.0

59.7

United States
State member banks
as percent of all
state banks
Member banks as
percent of all banks
Fourth District
State member banks
as percent of all
state banks
Member banks as
percent of all banks

-

0.8%
+210.9
61.0

+
+

Sources: Board of Governors of the Federal Reserve System and Federal Reserve Bank of Cleveland

Table III
United States and Fourth District
1954-1967
Year

United States

Fourth District

1954
1955
1956
1957
1968
1959
1960

209
235
191
158
168
169
130

35
28
21
11
17
25
14

Annual Average 1954-1960

MAJOR ASPECTS OF FOURTH DISTRICT
MERGER ACTIVITY
Bank mergers obviously played an important role in
changing the banking structure of the Fourth District

180

21

1961
1962
1963
1964
1966
1966
1967

147
183
156
133
149
137
134

21
29
23
16
18

Annual Average 1961-1967

150

19

9
13

Sources: Board of Governors of the Federal Reserve System and Federal Reserve Bank of Cleveland

during the 1954-1967 period. However. the nature of the
change is not apparent from the number of mergers
only. The Bank Merger Act of 1960 and Bank Merger
Act Amendment of 1966 changed the regulatory framework for the evaluation of mergers. especially with
respect to the competitive effects of proposed mergers.
For this discussion. the 1954-1967 period is divided
into two subperiods-1954-1960
and 1961-1967.
Although it is too early to assess the effects of the 1966
Amendment on merger activity. some preliminary judgments of the effects of the Bank Merger Act of 1960
can be made. One fact is immediately clear: there was
a reduction in the annual average number of mergers in
the nation in the seven years following the Bank
Merger Act. compared with the seven years preceding
the Bank Merger Act (see Table III). In the United
States. there was an annual average of 180 bank
mergers for the 1954-1960 period. compared with an
annual average of 150 for the 1961-1967 period. In the
District. the average number of bank mergers was 21 a
year in the period preceding the Bank Merger Act.
compared with 19 in the period following the Act.
Information on the size of banks in the District involved in merger activity before and after the Bank
Merger Act provides further insight on the merger
movement. As a general matter. acquiring banks were
much smaller in the period following the Bank Merger
Act. Acquiring banks with over $250 million in assets
dropped from nearly one-third of all acquiring banks to
one-eighth. while banks with assets under $50 million
rose from 30 percent to 56 percent of all acquiring
banks (see Chart 3). Acquiring banks with $100 million
or more in total assets were involved in nearly 46 percent of mergers in the District during 1954-1960.
compared with slightly less than 30 percent during
1961-1967. In fact. in the seven years preceding the
Bank Merger Act. banks with assets in excess of $1
billion acquired six banks. while no billion dollar bank
was involved in merger activity in the District after
1960. The opposite situation is apparent for smaller
banks. For example. the proportion of acquiring banks
in the $10 to $25 million asset class rose from 16 percentto 23 percent between the two periods. This pattern
is also apparent for other small size classes (see Chart 3).
The shift in the asset size patterns of acquiring banks
reflects in part the impact of the Bank Merger Act of
1960 and in part the various Supreme Court decisions

10

that emphasized the anticompetitive effects of mergers.
However. the shift did not necessarily result from denials
of merger applications. but rather from a reduced number of merger applications by larger banks because of
the belief that it would be more difficult to obtain
approval of such mergers.
Changes between the two periods are also evident
in the size of acquired banks (see Chart 4). In the 19541960 period. banks with less than $2 million in assets
accounted for 26 percent of all acquired banks. in contrast to only 13 percent during 1961-1967. Banks in
the next three asset size classes accounted for higher
proportions in the latter period. There was relatively
little change in the larger asset size classes ($25 million
and over) between the two periods.
More significant than the changes in the size of
acquired banks between the two periods is the heavy
concentration of acquired banks within the smallest
asset size classes. Over the entire 14-year period. onehalf of the acquired banks had less than $5 million in
assets. and three-fourths had less than $10 million inassets. In other words. the great majority of District
mergers involved the acquisition of relatively small
banks.
A number of factors are undoubtedly related to bank
merger activity. From the standpoint of many of the
small acquired banks. lack of management succession
is one important factor. This factor seems to be particularly significant in nonmetropolitan areas where small.
independent banks are often unable to pay the salaries
required to attract capable young managers. Moreover.
the attractive prices and terms offered to the stockholders of the acquired banks are also important influences on merger decisions. Stockholders of the
merged banks frequently obtain the assessed value of
their holdings in place of the open market price of the
stock. which is often depressed due to the limited
market for the shares of small banks.
On the other hand. the management of the acquiring
bank often bel ieves that a merger is a more efficient way
to establish a branch in an area than to try to open a
new branch. Expansion by merger is particularly attractive when the bank to be acquired has strong community
ties and/or a convenient location. Such an acquisition
brings the acquiring bank the "good will" of an established concern that a new branch might not be able to
develop for many years. Finally. mergers increase the

11

lending limit of banks, thereby permitting them to make
larger individual loans.

SIZE DISTRIBUTION OF
FOURTH DISTRICT BANKS
Between 1954 and 1967, the distribution of banks by
asset size changed considerably, largely reflecting the
fact that three out of every four mergers in the District
involved acquisition of a bank with $q 0 million or less
in assets. As shown in Chart 5, at the beginning of
1954, more than one-half of the member banks in the
District held less than $5 million in deposits. (Because
data for nonmember banks are limited, the size distribution of banks in the District includes member banks
only. As a result. the distribution has some upward bias
because larger state banks are usually members of the
Federal Reserve System.) In sharp contrast. only onefourth of all member banks in the District held less than
$5 million in deposits at yearend 1967. The sharpest
decline occurred in the proportion of banks with less
than $2 million in deposits. In 1954, banks in this group
accounted for 21 percent of member banks in the
District. compared with only 3 percent in 1967. The
proportion of member banks in the District with $10
to $25 million in deposits showed the sharpest increase,
rising from 14 percent in 1954 to nearly 30 percent in
1967. Although some of the increase can be attributed
to normal deposit growth, banks in the $10 to $25
million deposit size class absorbed 54 of the 280 banks
acquired in the District during the period under review.
In the United States, the proportion represented by
the smallest banks (less than $2 million in deposits)
dropped from more than one-third of all banks in 1954
to slightly more than one-eighth in 1967. The largest
gains occurred in the two classes ranging from $5 to
$25 million in deposits; the proportion of banks in these
classes rose from 24 percent to 44 percent of all commercial banks in the nation.

DEPOSIT CONCENTRATION
Although deposit concentration is one indicator of
competition in banking, changes in deposit concentration over time can also be used to show the relative
growth of banks. (The bars in Chart 6 represent the
share of total deposits held at the largest 1 percent of
the banks in the nation, at the next largest 4 percent. at

12

the next 10 percent. etc.) Despite the large number of
mergers in the nation and the upward shift in the size
distribution of banks, there was virtually no change in
the concentration of deposits during the period from
June 1957 to June 1967. Although there were more
than 13,500 banks in the United States at mid-1967.
the largest 1 percent (136 banks) held virtually onehalf of all bank deposits, and the largest 0.1 percent
(14 banks) held nearly one-fourth of all bank deposits.
In fact. the largest 5 percent of the banks in the nation
(those over $60 million in deposits in 1967) held 70
percent of all bank deposits, underscoring the high
concentration of deposits at the large banks in the
nation. As of mid-1967, 95 percent of the nation's
banks had deposits of less than $60 million but held
only 30 percent of the deposits in the nation.
In contrast to the absence of any change in deposit
concentration in the nation between mid-1957 and
mid-1967, noticeable changes occurred in Ohio (see
Chart 7). At mid-1957, the largest 1 percent of Ohio
banks held 39 percent of all bank deposits in the state,
compared with 33 percent at mid-1967. On the other
hand, the next largest 4 percent of the banks (with
deposits ranging from $90 to $500 million in 1967)
increased their share of deposits from 25 percent to 29
percent over the period. The next largest 10 percent
of banks in Ohio (from $30 to $90 million in 1967) also
increased their share of deposits (see Chart 7). Interestingly, there was virtually no change in the share
of deposits held by banks in the four smallest size
classes. In short. the share of deposits held by the
largest 1 percent of the banks in Ohio dropped between
mid-1957 and mid-1967, while the shares held by the
next largest 4 percent and the next largest 10 percent
of the banks increased, due largely to the extensive
merger activity of the banks in these two size classes.
The experience of banks in Pennsylvania was essentially the same as that of banks in Ohio (see Chart 8).
The share of total deposits held by the largest 1 percent
of banks in Pennsylvania declined very slightly (from
44 percent at mid-1957 to 43 percent at mid-1967),
while the proportions held by the next largest 4 percent
of the banks ($100 to $700 million in deposits in 1967)
increased sharply (from 17 percent in mid-1957 to 22
percent in mid-1967). The share of deposits held by the
next largest 10 percent of Pennsylvania banks (from
$30 to $100 million in deposits) remained about the

same, while the share of deposits held by banks in each
of the four smallest size classes declined.
In both Ohio and Pennsylvania, changes in deposit
shares were due largely to the merger activity of
medium-sized banks. In other words, while the mediumsized banks grew externally through merger as well as
internally, the growth of the largest banks was primarily internal.
There were very few mergers in Kentucky and West
Virginia during the period under review; as a result.
little change occurred in deposit concentration in the
two states.

CONCLUDING

COMMENTS

Since 1954, regulation of the nation's banking structure has become more formalized through the Bank
Holding Company Act of 1956, the Bank Merger Act
of 1960, the Bank Merger Act Amendment of 1966,
and numerous Supreme Court decisions. In particular,
specific criteria were established to evaluate proposed
holding company acquisitions and mergers, with special
emphasis placed on the competitive effects of proposed transactions.
In addition to changes in the framework of banking
structure regulation, significant changes in the nation's
banking structure occurred through a combination of
new bank formations, new branch offices, mergers, and
the formation and expansion of bank holding companies. Within the Fourth District. branching
and
mergers were the two most important means of structural change. Interestingly, the net decline in the number of banks in the District during 1954-1967 about
equalled the net decline in the number of banks in the
nation.
The Bank Merger Act of 1960 apparently had a
significant effect on the course of merger activity in the
District. as the size of acquiring banks in the District
was decidedly smaller in the period following the Act
than in the period preceding the Act. Bank merger
activity, coupled with normal deposit growth, shifted
the size distribution of member banks in the District
toward the middle of the range, as most of the mergers
in the District involved the acquisition of small banks.
As a general matter, during the 1957 -1967 period, the
share of deposits held by the largest banks in Ohio and
Pennsylvania declined, while the share of deposits held
by medium-sized banks in the two states increased.

13

$ 739.174.302
66.500.994
23.827.000
11.200.000

Dec. 31. 1967
$ 921.534.181
64.876.776
48.188.824
500.000

1.479.245.000
2.263.966.000
431.758.000
4.174.969.000
4.186.169.000
806.896.292
4.789.980
224.264.090
$6.051.621.658

1.220.706.000
2.056.860.000
465.076.000
3.742.642.000
3.743.142.000
740.247.276
4.799.415
169.534.321
$5.692.322.793

$3.700.086.690

$3.404.389.597

1.538.328.399
512.836
19.800.000
17.856.952
1.576.498.187
632.266.337
30.755.044
$5.939.606.258

1.448.512.687
66.320.161
12.600.000
13.658.388
1.541.091.236
617.152.276
21.920.484
$5.584.553.593

56.007.700
56.007.700
$6.051.621.658

53.884.600
53.884.600
$5.692.322.793

Dec. 31, 1968

ASSETS
Gold Certificate

Reserves.

Federal Reserve Notes of Other Banks.
Other Cash . . . . . .
Discounts

and Advances.

U. S. Government
Bills.
Notes
. . .
Bonds . . .

.

Securities:
.
.

.
.

.
.

.
.

.
.

Total U. S. Government

Securities.

Total Loans and Securities.

.

Cash Items in Process of Collection.
Bank Premises.
.
Other Assets
. .
Total Assets
LIABILITIES
Federal Reserve Notes.
Deposits:
Member Bank - Reserve Accounts.
U. S. Treasurer - General Account
Foreign.
. . . .
Other Deposits.
. . . .
Total Deposits

.

Deferred Availability
Other Liabilities
Total
CAPITAL

.

.

Cash Items

Liabilities

ACCOUNTS

Capital Paid In.
Surplus.
. . .

.
.

.
.

Total Liabilities

.
.
and Capital Accounts

Contingent
Liability on Acceptances
Purchased for Foreign Correspondents.

Net Earnings

Additions to Current Net Earnings:
Profit on Sales of U. S. Government
Securities (Net) .
Profit on Foreign Exchange Transactions
All Other . . . . . .

(Net) .

Total Additions
Deductions
Net Additions
Net Earnings

from Current

Payments

Dividends Paid.
Payments to U. S. Treasury
Transferred to Surplus.
Total

14

Net Earnings.

.
before

$

14.085.000

$211.217.526
17.607.834
193.609.692

Total Current Earnings.
Net Expenses
.
Current

9.828.000

$

to U. S. Treasury.

$169.185.295
16.334.774
152.850.521

61.657
724.448
3.254
789.359
17.631
771.728
$194.381.420

59.194
128.800
13.288
201.282
685
200.597
$153.051.118

3.296.071
188.962.249
2.123.100
$194.381.420

$

$

(Interest

on F. R. Notes) .

3.130.507
147.164.761
2.755.850
$153.051.118

As of March 1, 1969

Chairman
ALBERT G. CLAY,
Clay Tobacco

Company,

President
Mt. Sterling, Kentucky

Deputy Chairman
J. WARD KEENER,

Chairman of the Board and Chief Executive
The B. F. Goodrich Company, Akron, Ohio

JOHN L. GUSHMAN
President and Chief Executive Officer
Anchor Hocking Glass Corporation
Lancaster, Ohio

J. WILLIAM

HENDERSON, JR.

President
Buckeye International, Inc.
Columbus, Ohio

RICHARD R. HOLLINGTON
President
The Ohio Bank and Savings Company
Findlay, Ohio

Officer

GEORGE F. KARCH
Chairman of the Board and President
The Cleveland Trust Company
Cleveland, Ohio

R. STANLEY LAING
President
The National Cash Register Company
Dayton, Ohio

SEWARD D. SCHOOLER
President
Coshocton National
Coshocton, Ohio

Bank

HORACE A. SHEPARD
President
TRW Inc.
Cleveland, Ohio

Member, Federal Advisory Council
JOHN A. MAYER
Chairman of the Board and Chief Executive Officer
Mellon National Bank and Trust Company
Pittsburgh, Pennsylvania

President
W. BRADDOCK HICKMAN

First Vice President
WALTER H. MacDONALD
GEORGE E. BOOTH, JR.
Vice President

and Cashier

PAUL BREIDENBACH
Vice President

and General Counsel

ROGER R. CLOUSE
Vice President

and Secretary

ELMER F. FRICEK
Vice President

CLYDE HARRELL
Vice President

WILLIAM

H. HENDRICKS
Vice President

JOHN J. HOY
Vice President

HARRY W. HUNING
Vice President

FRED S. KELLY
Vice President

FRED O. KIEL
Vice President

CLIFFORD G. MILLER
Vice President

ELFER B. MILLER
General Auditor

MARGRET A. BEEKEL
Assistant

Vice President

and Economist

R. JOSEPH GINNANE
Assistant

Vice President

ROBERT G. HOOVER
Assistant

Vice President

LESTER M. SELBY
Assistant

Vice President

and Assistant

Secretary

LARRY R. SHOTWELL
Assistant

Vice President

and Economist

H. MILTON PUGH
Chief Examiner

OSCAR H. BEACH, JR.
Assistant

Cashier

ANNE J. ERSTE
Assistant

Cashier

THOMAS E. ORMISTON, JR.
Assistant

Cashier

ROBERT E. SHOWALTER
Assistant

Cashier

DAVID J. WEITZEL
Assistant

Cashier

HAROLD J. SWART
Assistant

General Auditor

15

As of March 1, 1969

Chairman
GRAHAM E. MARX, President and General Manager
The G. A. Gray Company,

ORIN E. ATKINS
Ashland

Oil & Refining
Ashland,

Cincinnati,

Ohio

ROBERT B. JOHNSON

President

President

Company
Kentucky

Pikeville National Bank & Trust Company
Pikeville, Kentucky

ROBERT J. BARTH

FLETCHER E. NYCE

President

President

The First National Bank
Dayton, Ohio

The Central Trust Company
Cincinnati, Ohio

JOHN W. HUMPHREY

PHILLIP R. SHRIVER

Chairman of the Board

President

The Philip Carey Manufacturing
Company
Cincinnati, Ohio

Miami University
Oxford, Ohio

FRED O. KIEL

DONALD G. BENJAMIN

Vice President

Assistant

ROBERT D. DUGGAN

Cashier

JOSEPH W. CROWLEY

Cashier

Assistant Cashier

HOWARD E. TAYLOR
Assistant

Cashier

Chairman
LAWRENCE E. WALKLEY, President and Chief Executive Officer
Westinghouse

Air Brake Company,

CHARLES M. BEEGHLY

Chairman of the Executive Committee
Jones and Laughlin Steel Corporation
Pittsburgh, Pennsylvania

CHARLES H. BRACKEN
President

Marine National Bank
Erie, Pennsylvania

GEORGE SCULL COOK
President

Somerset Trust Company
Somerset, Pennsylvania

CLYDE HARRELL
Vice President

JAMES H. CAMPBELL

Cashier

Pittsburgh,

RICHARD M. CYERT

Dean

Graduate School of Industrial
Carnegie-Mellon
University
Pittsburgh, Pennsylvania

16

Administration

BOB RAWLS DORSEY

President

Gulf Oil Corporation
Pittsburgh, Pennsylvania

THOMAS L. WENTLING
President

First National Bank of Westmoreland
Greensburg, Pennsylvania

CHARLES E. HOUPT

Assistant

Vice President

J. ROBERT AUFDERHEIDE

Assistant

PAUL H. DORN
Assistant

Pennsylvania

Cashier

Cashier

==

fourth federal reservedistrict====

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