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AN N UAL STATEMENT 1954 FEDERAL RESERVE B A N K OF M I N N E A P O L I S L e s l ie N . P e r r in Chairman of the Board Federal Reserve Ban\ of Minneapoli FOREWORD I T IS a pleasure to present the report of this Federal Reserve Bank to its stockholders, covering events of the year 1954. During the past year the bank commemorated its Fortieth An niversary, for on November 14, 1914, it commenced operations. During the intervening years a tremendous amount of his tory was written by the United States, much of which directly affected the operations and growth of this bank. Through it all, the bank has developed not only in size, but in the quality and scope of its services. Indeed, several new activities were embarked upon during the latest year. Its efficiency has continued to im prove in line with the best traditions of American business. In closing this letter of transmittal, we particularly wish to congratulate our staff on the high morale which has been main tained in spite of badly cramped quarters. In spite of these handi caps, the bank has operated with a low turn-over of employees and an increasing individual level of efficiency, which is most gratifying and for which the staff, collectively and individually, have our sincere thanks. Chairman The Transition Examined which has been A PROBLEM rare in America for many taken to correct the problem were successful, or both. years, a fairly large volume of unem ployment, eclipsed all others con fronting the national economy in 1954. The threat of excessive spend ing and inflation had vanished; it was replaced by the threat of inade quate spending and deflation. The economic intelligence and instru ments of the government and mone tary authorities were brought to bear in an effort to relieve the evidences of distress which were associated— in a large measure—with the transi tion from a wartime to a more nearly peacetime economy. Perhaps the most remarkable fea ture of the reduction in output was the absence of damage to consump tion of the goods and services which constitute the “ standard of living.” Americans removed from the mar kets a larger total quantity of such goods and services than ever before in history. With an enlarged popu lation, consumption per person was maintained at the record 1953 level. This was accomplished by allocating a lesser share of output to govern ment and to private capital forma tion. Workers are likely to be laid off when business sales fall, and busi ness sales fall when spending is cur tailed. Spending was curtailed for such items as war material, business inventories and equipment, and automobiles in 1954. While spend ing for some other things increased, the declines exceeded the gains with the result that total spending for out put was lower than in 1953. A reduction in spending can pro duce either lower prices or lower physical output and employment. Since overall prices changed very little in 1954, the spending cutback was translated into fewer jobs. Un employment, however, did not reach as high a level as in 1950, consid ered by many to be a good year. The comparison suggests that the magni tude of the employment problem in 1954 was not great, or that measures O u t p u t a n d C o n s u m p t io n Bil li ons of Dollars ♦Preliminary estimates. Government Spent Less Purchasers of the nation’s output are classified by the Department of Commerce into three major groups —consumers, government, and busi ness—in order of their importance as spenders. Smaller budgets in govern ment and in business were responsi ble for the reduced flow of spending in 1954. The federal government—as the largest single buyer of the nation’s 5 product—exerted the most depress ing influence on economic activity by paring expenditures for national security. This action was permitted by the end of fighting in Korea and by the changing character of war fare; also, the military buildup of re cent years is nearing its goal in terms of weapons, airplanes, etc., so that purchases of such items have slowed. A reduced need for military goods, by permitting a smaller federal claim on output, released men, ma terials and factories from production for war and made them available to satisfy the needs of our growing population. The foundation was thereby laid for an accelerated growth of living standards by reducing the economic waste associated with ex penditures for war. The benefits of the transition from war to peace were realized almost immediately by many people who found the amount of federal tax withheld from the pay envelope had been reduced. Government expenditures other than those for defense were little changed. The amount of spending by all government did not fall as much as did federal spending owing to larg er budgets at the state and local level. Indeed, spending by non-federal governments was higher than ever before. Evidence of larger outlays by state and local governments was visible throughout the nation in the form of schools, highways, bridges, sewers, and other public wealth new to the landscape. Such expenditures have been oc casioned in part by the virtual ex 6 plosion of population in America since World War II. More and bet ter transportation facilities are being built to cope with the mounting number of automobiles on the roads. More sanitary facilities are being constructed to service the unparal leled movement of population to the suburbs. The high postwar birth rate —which confounded the experts— has created a demand for school space which is still intense despite the large number of schools erected since the end of the war. And more babies were born in 1954 than in any other year—more than 4 million— so the tide of population growth does not yet appear to have ebbed. But additions to state and local spending amounted to only a frac tion of the cutback in federal spend ing so that purchases by all govern ment—at an annual rate—fell from $85 billion in the third quarter of 3:953 to $75 billion in the same quarter of 1954. Business Budgets W ere C ut Too Aggravating the disturbance pro duced by retrenchment at the federal level was a business policy of inven tory liquidation. Besides spending much less for inventory replacement, business also purchased less durable equipment such as machinery, than in 1953. To a minor degree, these cut backs were offset by larger business expenditures for construction, but the construction industry was less in need of new orders than were the industries from which inventory and durable equipment originate. G o ver n m en t and I n vestm en t S p e n d in g Bi ll ion s of Dollor* ♦Preliminary estimates. Part of the decline in business in ventories can be traced to shutdowns at factories which had produced war goods. Too, with markets for many products weakened, sellers were anxious to dispose of raw materials and stocks of goods in an effort to minimize the danger of inventory depreciation from price declines. Industries which produce th e things that go into inventories then, suffered the most from the cutback in business spending. Producers of the durable equipment used by busi ness also received fewer orders, while contracts received by the con struction industry from business amounted to somewhat more than earlier. Public capital, business facilities and residential housing were all con structed in larger volume during 1954 than in 1953. The record spending for public and private facilities brought more construction activity than ever before. Since most con struction is financed with borrowed money, and since the cost of borrow ing fell after 1953, a changed credit picture figured importantly in this one notable exception to the general down trend in the economy. Consumption Spending Moved Up That tremendous group of spend ers known as consumers buys a larger proportion of total output than gov ernment and business together; ap proximately two thirds of everything produced has been removed from the marketplace by consumers in recent years. These people stepped up their spending moderately be tween 1953 and 1954 and thus helped to overcome the depressing influence on the economy which originated in the business and the government sectors. Several developments operated in 1954 to raise the level of disposable income made available to Ameri cans, despite the growing unemploy ment. Out of this enlarged flow of income, stepped up consumption ex penditures were financed and the previous high rate of saving was maintained almost unchanged. The total of wages and salaries received by workers did not fall in proportion to the decline of employ ment because rates of pay continued to rise as they have in other postwar years. Larger paychecks received by those who continued to work offset in part the loss of wages suffered by those who became unemployed. Federal income taxes were reduced with the result that incomes after taxes (disposable income) did not fall in proportion to incomes before taxes. The tax reduction, associated with the reduced federal budget, 7 permitted taxpayers to substitute their own spending for that of the government—concrete evidence to the contrary for those who believe that war brings prosperity. The unfortunate workers from industries with a scarcity of custom ers—those who became unemployed —drew larger cash unemployment benefits than in any other year, thereby helping to break the danger ous chain reaction of fewer jobs and lower spending. The liquidation of unemployment reserve funds thus provided more cash to consumers than would otherwise have been available. Hence, well-heeled consumers were in a position to buy more—not less—than in 1953. The same phe nomenon—rising consumption with falling employment—occurred in the recession of 1949. The behavior of consumers is tremendously impor tant in the determination of econom ic activity since they absorb such a large fraction of all production. But the drop in outlays by gov ernment and by business was greater than the gain in consumer spending so that unemployment was larger in 1954 than in 1953. The fact that many who lost jobs were formerly producing instruments of w a r , which add nothing to living stand ards, did not mitigate the distress suffered by them from being out of work. While historical comparisons suggest that unemployment had not assumed extremely serious propor tions, the amount was regarded as serious enough so that its reduction became one of the most important objectives of national economic policy. Some Unemployment is Normal The level of unemployment which should be regarded as dangerous is a matter of controversy. The resolu tion of this controversy has serious implications for monetary policy. This is because the danger that addi tional spending will produce infla tion rises as the proportion of the labor force which is unemployed falls. Thus, measures aimed at re lieving unemployment by encour agement to spending may produce rising prices. The behavior of prices is, of course, a matter of great con cern to the monetary authorities. The economic history of the Unit ed States since 1940 demonstrates the effectiveness of high spending in eliminating all but transitional un employment; but it also demon strates the effectiveness of high spending in reducing the value of money by raising prices. A level of spending which is neither so high as to produce inflation nor so low as to induce serious unemployment is one object of monetary policy. Some unemployment is the neces sary price of economic freedom. So long as people are free to produce and consume what they choose, errors of judgement by producers will occur which necessitate cut backs in some industries and expan sion in others. One of the most im portant functions of an economic system is to transfer resources from the production of things less wanted to the production of things more wanted. Such transfers cannot be accomplished without layoffs and unemployment in some industries. Changes in consumer preference are painful to firms confronted with re duced demand, but the problem of weakness in particular markets will always be with us if consumers are allowed to “call the tune” as every one agrees they should. the unemployment last year or in any year can be traced to these changes. Estimated movements in the composition of purchases by con sumers are indicated by the table which covers a number of years. However, when unemployment r i s e s beyond the “transitional” amount associated with the normal P r o p o r t io n o f N a t i o n 's W o r k e r s Last year, for example, industries producing durable goods suffered not only from a scarcity of military contracts, but also from a decision by consumers to acquire fewer auto mobiles, appliances, and other hard goods. At the same time, consumers decided to buy more homes, soft goods, services, and other things. Each year brings changes in the com position of total demand. Some of U n em plo yed P ercent Unem ployed- DISTRIBUTION OF PERSONAL CONSUMPTION EXPENDITURES (Percent) TOTAL 1929 ............................ 100.0 1944 100.0 1948 100.0 1949 [00.0 1950 100.0 19 5 1 100.0 19 52 100.0 1953 1954 100.0 100.0 6.2 12 .5 4.1 I 3 *1 5.2 14 .7 6.4 13.0 5.2 12 .3 4.8 12.9 5.7 12.3 •7 6.0 6.7 6.1 5-7 5.6 5-4 1.8 i -7 i -7 i -7 i -7 1.6 53-6 5 1.7 5 3 -i 5 X*5 9-5 3 i -3 2.6 30.3 2.6 53*3 9-5 31-9 5 x-7 10 .3 9.2 32.0 2.7 8.6 3 1 .2 2.9 3 i -3 3 -o 1.2 2.4 1.2 1.2 2.3 2.3 1.1 2.3 1.1 2.3 1.1 2.2 Durable Goods ..................... Automobiles and parts. . . . Furniture and household equipment ..................... 1 1 .7 4.1 6.0 3-5 6.5 Other durable goods........ 1-5 2.0 1.9 59-5 13-3 3 4 -i i -3 55.6 11 .1 32 .3 2.4 i .3 2.5 i -3 2.3 Nondurable goods ............... 47-7 Clothing and shoes........... 11.9 Food & alcoholic beverages 24.7 Gasoline and o il................. 2.3 2.7 5-3 8.4 Semidurable housefurnishings ................... Tobacco .............................. 2.1 Other nondurable goods. . 5.8 7.0 6.3 5-9 5.8 5.8 5-7 5.6 5-6 Services .................................. 40.6 Household operation . . . . 5 -i Housing .............................. 14 .5 Personal services ............... 2.3 Recreation .......................... 2.1 Transportation ................. 3-2 Other services ................... 13-3 34-3 5-3 3 i -9 4-5 33-3 4-7 33-5 33-7 34-6 35-4 10.8 2.4 2.4 9.9 2.2 2.2 10.8 2.1 2.1 3-4 3-3 3-2 10.0 9.9 10.4 4.8 11.0 2.0 2.0 3 -o 10.6 5.0 1 1 .2 2.0 2.0 3 -i 10.5 5 -i 1 1 .7 1.9 1.9 3 -i 10.8 5.2 12.0 1.9 1.9 3 -i 1 1 .2 36.2 5.2 12.6 1.9 1.9 •9 3-1 1 1 .5 9 functioning of free markets, the public, through i t s government, looks to ways of correcting the dis order. The presence in 1954 of stable prices and of unemployment averag ing twice as much as in 1953 suggest ed that spending could be stimulated without the danger of inflation which accompanies additional spend ing when unemployment is at a minimum. The failure of overall price indexes to register gains vindi cates this judgement. Perhaps the most important stimu lus to spending was afforded by a substantial increase in the lending power of the nation’s commercial banks. The increase resulted from a reduction of reserve requirements for member banks of the Federal Reserve System. The effectiveness of this device in promoting credit ex pansion and deposit creation was demonstrated as the year ended with more debt lodged at the commercial banks of the nation than ever before. At the same time, more debt than ever before was lodged with the na tion’s insurance companies, mutual savings banks, savings and loan asso ciations and pension funds. The total of all debts in the country—public and private—established a new rec ord as it has in most recent years. Spending by borrowers was encour aged with a substantial decline in the cost of credit which in turn was produced by the large addition to its supply. cial bank credit grew faster than in any year since the end of World War II; this growth supplied America with the largest stock of money in history. The earning assets which were acquired by banks through credit expansion were mostly U. S. government securities. In contrast, during 1953, loans constituted the most important addition to commer cial bank assets. Sources o f Lendable Funds The reserves of the banking sys tem at the end of 1954 were lower than at the beginning. The ability to expand credit in the face of dimin ishing reserves arose from a reduc tion in the ratio of reserves to de posits which the banks are required by law to maintain. This reduction in reserve requirements was the most important measure taken by the monetary authorities to make credit more plentiful. In the summer of 1954, reserve requirements against net demand deposits were lowered from 22 per cent to 20 percent at central reserve city member banks, from 19 percent to 18 percent at reserve city member banks, and from 13 percent to 12 per cent at country member banks. Re quirements against time deposits were lowered from 6 percent to 5 percent at all member banks. Since member banks of the Federal Re serve System hold approximately 85 percent of the nation’s commercial bank deposits, the lending power of the banking system was greatly aug mented. Despite a weakened demand for some types of loans in 1954, commer Also, twice in 1954, the discount rate or cost of borrowing at Federal 10 Reserve Banks was lowered. In Feb ruary the discount rate was dropped from 2 percent to i% percent, in April from i% percent to i l/2 per cent. The reduction of discount rates was not, however, accompanied by more loan applications at Reserve Banks; rather, the contrary was true, as member banks in need of cash had alternative sources of funds available to them at much lower in terest rates than in 1953. The yield on Treasury bills, for example, remained below the dis count rate in 1954, so that banks in need of cash found it less costly to liquidate bills than to borrow. At times in 1953, bill yields were higher than the discount rate. Y ie l d s o n L o n g a n d S h o r t T e r m G overnm ent S e c u r it ie s * Percent --------------------- — ---------------------------------— ----------------------- 1953- I --------1954 *01d Series—Fully taxable, marketable 2y2 percent bonds first callable after 12 years ; New Series—The 3% percent bonds of 1978-83, issued May 1, 1953. Short term series represents bill yields. The decline of interest rates which attended the expanding supply of credit last year is best illustrated with reference to the market for U. S. government obligations, the valua tion of which does not reflect the variable credit risk carried by other securities. Government bonds of the longest maturity declined in yield from 2.93 percent early in the year to 2.58 percent in the summer, as lenders bid up the price, competing for a limited supply. Short term gov ernments, characterized by 91 day bills, fluctuated even more widely in yield from 1.5 percent early in the year to less than .7 percent in the summer. The yield on other govern ments traced a similar path. Besides commercial banks, finan cial institutions in the market look ing for investments included the intermediaries which channel the savings of individuals into the mar ket for loans. The life insurance industry, for example, enjoyed such an inflow of cash that total assets owned grew faster than in the boom year of 1953. The same was true for savings and loan associations, for mutual savings banks, and for pen sion funds. American savers provid ed these institutions with the wherewithall to finance expeditions to the market in search of loans. The search, of course, helped to keep the market value of loans (securities) high and the yields low. More important, financial inter mediaries accomplished a gigantic transfer of funds from owners of money unwilling to spend, to spend ers anxious for loans. Without such transfers, total spending would have suffered, and the problem of unem ployment would have been aggra vated. The most important kind of direct lending by individuals, purchases of 11 U. S. Savings Bonds, was also con ducted in large volume. A larger amount of E & H bonds was pur chased than in any other peacetime year. But because of redemptions and a large concentration of ma turities, the total of all savings bonds outstanding was little changed for the year and did not constitute an important net source of lendable funds. ment agencies were operating on funds derived from their own bor rowings rather than on Treasury funds. Except for this development, Treasury debt would be higher. In addition to Treasury debt and the debt of federal government agen cies, state and local government debt was issued in large volume during 1954. The increase in state and local debt outstanding was the largest in history, amounting to $7 billion, or Demand For Lendable Funds The identity of the net borrowers 25 percent more than the 1953 in in our economy last year is fairly crease. This statistic, of course, is di well known. Some lending and bor rectly related to the record level of rowing circumvent the principal public works, mentioned earlier. financial institutions or are not pub Individuals borrowing money to licized so that not all debt lends it purchase homes added more to their self to accurate measurement. But debts than did state and local gov the largest components of total debt ernments. In 1954, home mortgage in the United States can be meas debt went up by $8.7 billion; this ured. Such measurements indicate compares with a gain of $7.6 billion in that total debt last year set a new 1953. Near the end of 1954 the seas record, as in other recent years. onally adjusted rate of home build Largest single borrower, of course, ing was higher than in 1950 when was the U. S. Treasury. The national more homes were built than in any debt rose by almost $4 billion in 1954. other year. The construction of these Despite important cutbacks in fed new homes is one component of eral spending, Treasury deficits con private capital formation which tinued as tax collections fell in re partly offset the decline in business sponse to reductions provided by the inventories, another component. new tax law and in response to a An immense stimulus was pro shrunken base of taxable income. vided to home building when Con Legislation was passed during the gress passed the Housing Act of year which lifted temporarily the 1954. This law lowered the down $275 billion limitation previously payment and amortization rate re imposed by Congress on the size of quirements for government insured Treasury debt. mortgage loans, thereby adding to U. S. government debt at the end the number of people who could of 1954 was not strictly comparable qualify for such loans. Applications with the total of other years. To a for mortgage insurance at the offices greater extent than formerly, govern of the Federal Housing Administra 12 tion subsequent to passage of the new legislation were more numerous than ever before. Also, government insured and guaranteed mortgage loans were more attractive to lenders last year than in 1953. While interest rates on alternative investments were falling, the return on F.H.A. and G.I. loans was unchanged, making such loans relatively more attractive to invest ors. In the capacity of consumers for other things than housing, individu als were less willing to incur debt last year. The total of consumer debt leveled off; it had been rising rapidly since the removal of Federal Reserve controls on such debt in May, 1952. Late in 1954, with the advent of a business recovery movement, con sumer debt once again moved up ward, possibly reflecting confidence that incomes could be maintained. Corporations, too, were competing for lendable funds in 1954. While a lower volume of corporate stocks and bonds was marketed for new money than in 1953, it is likely that when all the figures are in, they will show an increase in corporation stocks and bonds outstanding ap proximating the addition to state and local debts. It is not surprising to find corpor ate flotations falling when sales of the things corporations produce are falling. Too, the accumulation of business plant and equipment—the chief purpose of such flotations—has proceeded at such an uncommonly high rate since World War II that future needs for such capital may be less, in proportion to total output, than formerly. Much of the postwar industrial capital formation repre sented the replacement of plant and equipment depreciated in the war years. The demand for short-term busi ness loans weakened in 1954. Much of this debt is incurred for inventory financing, and since inventory liqui dation was the rule last year, there was a downward pressure on short term business debt. Reflecting this was the largest drop in commercial and industrial loans of banks since 1949, when inventory liquidation was also the rule. Debt Formation— Spending With the major sources of supply and demand in the market for loans having been examined, the role of debt formation and monetary policy in the determination of spending is easier to appreciate. Without the stimulus to credit expansion provid ed by the Federal Reserve in 1954, interest rates would doubtless have been higher with the result that spending financed by borrowings would have been discouraged. The reluctance to borrow when interest rates are high was demonstrated in 1:953 when plans for many debtfinanced projects were abandoned owing to the high price charged by lenders or investors for accommoda tion. Many such projects, delayed ear lier, were undertaken in 1954 after the level of interest rates had fallen. l3 Thus, the influence of the Federal Reserve System on the cost of credit served to discourage spending in early 1953, when the danger of infla tion was great, and it served to stim ulate spending in 1954, when the danger of deflation and unemploy ment from lack of spending was present. The remarkable stability of prices in America since a flexible monetary policy was adopted in 1951 is a trib ute to the effectiveness of the central bank in providing an environment where spending is neither so great as to depreciate the dollar nor so small as to induce serious unemploy ment. P r ic e I n d e x e s PERCEN T Base period 1947-49. The principal instruments of mon etary control—open market opera tions, reserve requirements, and the discount rate—have all been em ployed since the economic decline originated to insure that inadequate credit would not intensify the spend ing cutbacks. Response to the use of these instruments has been gratify ing, thanks to the presence of a strong demand for credit in almost every sector of the economy. The analogy between pushing on a string and increasing the lending power of commercial banks in time of recession had no relevance to eco nomic conditions in America during 1954. The condition which gave rise to the statement of this analogy was the failure of easy credit to promote recovery after the bank holiday in 1933. The experience of the Thirties did much to undermine confidence in the usefulness of monetary policy in promoting economic stability. The experience of 1954 should do much to restore that confidence. The year witnessed a combination of developments which has been absent for years, that is, the total of debts was rising while interest rates fell and prices were stable. The si multaneous occurrence of these movements had been a rare event since 1940. As 1955 opened, considerable evi dence was present that output was rising, in contrast to a movement in the other direction a year earlier. More encouraging, the increments to output were not in the form of weapons and such, which add noth ing to the standard of living, but con sisted of such things as autos and homes which make life more pleas ant for everyone. Interest Rates Moved Up A t Y ear End At the same time, signals from the marketplace indicated that condi tions of supply and demand were changing in a way which threatened to raise prices. Too, unemployment, after allowance for seasonal varia tion, showed signs of falling. These traditional indicators of excessive spending prompted the monetary authorities to allow the great demand for credit to express itself partly through higher interest rates rather t h a n through credit expansion. Thus, the level of market interest rates at the end of the year was high er than at mid-year but lower than at the beginning of the year. This effort to defend the purchas ing power of the dollar while at the same time providing sufficient credit to maintain a level of spending com patible with high employment illus trates the way in which flexible instruments of monetary control can contribute to economic stability. It is doubtful that the transition from an economy dominated by the needs of war to a more peacelike economy could have been accom plished with much less disturbance than in fact occurred. The unhappy feature of economic conditions in 1954 was not the lowering of arma ments production, it was the failure to substitute more completely the production of consumer goods and capital goods. economic conditions in the district compared favorably with the rest of the nation. Sales at department stores, for ex ample, moved up slightly in our area, while in the rest of the nation a slight decline was reported. Although the magnitude of these movements was not large, their direction does not suggest distress in the district. Nor do the year-end statements of our banks suggest distress. In com mon with banks throughout the na tion, member banks in the Minne apolis Federal Reserve District saw their deposits and earning assets rise to the highest level in history during 1954. Also, the most recently tabu lated profit and loss statements sub mitted by our members show the highest earnings ever. M em ber The cutback in spending for de fense and for other things was not without repercussions in the area served by the Minneapolis Federal Reserve Bank. But spending for the district’s most important product— agricultural commodities—was well maintained with the result that D e p o sit G r o w t h W is c o n si n M ichigan Montana N or th Dakota Ninth D is tri ct South Dakota Minnesota 0 Ninth District Statistics Encouraging Bank November ’53 to November ’54 1 2 3 4 5 6 7 8 ----------------------------------Per ce nt In c r e a s e ----------------------------------- A sample of district banks reports that a larger dollar volume of checks was drawn in 1954 than in 1953; the gain was larger in the rest of the nation suggesting that, relatively, district bank customers practiced re straint in spending despite the larger volume of checks drawn. 15 The average amount of loans held during the year moved up propor tionately more—compared to the previous year—at district banks than at banks elsewhere. The opposite was true for holdings of investment securities. This development should make for earnings’ comparisons fa vorable to district banks. D N e p o s it s in t h D and ist r ic t E A a r n in g M em ber ssets B a n k s* kinds of work, but residential con struction makes up an important part of the total. Statistics of employment indicate that slightly fewer people were at work in the district during 1954 than a year earlier. On the Iron Range and at Duluth, employment suffered from a weakening in demand for products made of steel, such as weap ons and automobiles and farm ma chinery. Billions of Dollars - 41953 r~~~l 1954 l / .V W J I- IN V E S TM E N TS if lJ D A N S m j_ *Amounts represent averages of balances re ported for last Wednesday of each month during the respective years. The demand for commercial and industrial loans was stronger here than in other districts; this strength accounted for much of the interdis trict difference in the behavior of total loans. Mortgage loans on resi dential property were granted in large amounts in the district, as well as in the rest of the country. The continued growth of mortgage loans at our banks is due in part to the high level of residential building ac tivity reported by district communi ties. The dollar value of building per mits issued by a sample of such com munities was 15 percent higher in 1954 than in 1953. Gains were re ported in every state except North Dakota. Permits are issued for many l6 Adverse weather conditions stunt ed agricultural production in a few district localities, but in general the weather was favorable. In contrast, serious damage to crops and live stock was produced by drought in other parts of the nation. N in t h D is t r ic t P ercen tag e C C ro p P r o d u c t io n h ange, 1953 to 1954 ■ IN C R E A S E - ■DECREASE- Durum W h e a t O j% W h e a t ( a ll) - 5% - 2% O a ts H ay | j C orn + 10% F la x +13% Potatoes + 14% Barley Soybeans +43% +57%V Source: U. S. Department of Agriculture. The government’s cutback in ex penditures for national security was felt in the Twin Cities as a large number of men was laid off at the local ordnance plant. But since our area is much less industrialized than other parts of the nation, the unem ployment problem here was less serious than in those other areas. Food processing, an important dis trict activity, was aided by the large amount of products moving off the farms. The physical volume of grain produced was the third largest on record and cattle shipments may have established a new record. Price trends were not the same for everything produced on district farms. Hogs, wheat and corn aver aged somewhat higher in price during 1954 than in the previous year. Most other commodities aver aged somewhat lower in price. In comes on dairy farms in particular were pinched as the price support level for milk products was lowered. Estimates by the U. S. Department of Agriculture place cash farm in come for the district approximately 3 percent lower in 1954 than in 1953. A larger drop was estimated for farmers outside the district. Operations and Management C H A N G E S in banking, as in other economic affairs, often occur so gradually that they come about almost unnoticed. It is only when one pauses now and then to add up the totals and to make com parisons that the full i m p a c t of change is visible. Yearends seem to be good places to stop and take a backward look, for the events of even a single year may, in retrospect, represent significant happenings. The year 1954 was somewhat of a milestone in the history of the Fed eral Reserve Bank of Minneapolis in that it not only marked the fortieth anniversary of the bank’s opening on November 14, 1914, but it also saw the launching of plans for greatly expanded and modernized banking quarters. Preliminary plans for the new construction, approved early in 1954, call for eight stories to be added to the present four-story bank build ing at Fifth Street and Marquette Avenue, plus an extensive remodel ing of existing facilities. Detailed plans for the proposed expansion have been drawn, and work is sched uled to begin in the spring of 1955. An inspection of the volume statis tics for the bank’s operating depart ments reveals the need for larger quarters. The number of checks, for example, which flowed through the check collection department in 1954 was three times larger than twelve years earlier. The tempo of activity in the currency and coin department has understandably quickened too, with the public now holding four times as much paper money and coin as was true before World War II and with more currency services now being provided. The scope and vol ume of services rendered to the U. S. 17 Treasury by the bank’s fiscal agency department have also been greatly enlarged. Non-cash collections, safe keeping, and educational services are just a few of the other bank functions which have been expanded. Federal Reserve Banks are con stantly seeking to improve efficiency and thereby reduce the cost of opera tions. The introduction of new ma chinery in many departments of the bank has accomplished a great deal in this respect. But costs have also been reduced in other ways, a good example being the new procedure for paying out currency. An amendment to the Federal Re serve Act in July allowed Federal Reserve Banks to pay out the notes of other Reserve Banks without penalty. The purpose of this legislation was to eliminate in large part the shipping and handling costs which had been unavoidable so long as Federal Re serve notes could be paid out only by the bank of issue. One result of the legislation, so far as the Federal Reserve Bank of Min neapolis was concerned, was a drop in the total amount of its Federal Re serve notes outstanding. From June 30, 1954, to December 31, 1954, the bank’s note circulation fell from $622 million to $584 million or 6 percent, although the total note circulation of the twelve Federal Reserve Banks combined increased approximately 3 percent for the same period. A sec ond result of the legislation, as it affected the Minneapolis Reserve Bank, was the piling up of used cur 18 rency in the bank vaults at an un precedented rate. These particular effects of the amendment on the Minneapolis bank resulted from the fact that the Ninth District regularly receives a greater volume of notes of other Federal Reserve Banks than those banks receive in notes issued by the Federal Reserve Bank of Min neapolis. Since the currency thus accumulat ed was still “fit-for-use,” even though it had been in circulation, member banks were asked to fill their cur rency needs by ordering used cur rency rather than new bills wherever possible. Just what will be the full effect of the legislation on the bank’s operations will not be known until there has been at least a full year’s experience with the new procedure. July also saw another important change in the bank’s operations when it began for the first time to receive direct deposits from more than three thousand Ninth District post offices. The Federal Reserve Bank of Minne apolis, along with the other Federal Reserve Banks, had been asked to assume this additional responsibility for the Post Office Department in order to effect economies in its op erations. More than 150 thousand post office deposits with a total value of over $100 million were received at the head office in the last six months of 1954. Of this total, almost $18 million was in cash; the new operation added an estimated 1,500 thousand pieces of currency and 35 thousand coins to the work volume of the currency and coin depart ment. It also boosted the total items handled by the check collection de partment by 350,000 checks, money orders, stamp albums, etc., and helped in a minor way to swell the volume of work handled in that de partment to a new high. Total checks and money orders handled at the Minneapolis head office and Helena branch reached almost 112 million and topped i953*s record volume by more than 5 percent. August 1 saw still another altera tion in the bank’s operations. This one affected the fiscal agency de partment. On that date the Federal Reserve Banks, at the request of the Treasury, discontinued the examina tion of paid savings bonds received from banks and other paying agents and began forwarding such bonds to regional offices of the Treasury for examination and audit. The purpose of this move was to effect economies of operations through consolidation of Treasury Department machine operations and personnel. These and other developments helped to increase the efficiency of bank operations. The bank continued in 1954 to make changes in and addi tions to its equipment. An interesting addition was a new currency shred ding machine. This machine is used VOLUME OF OPERATIONS IN PRINCIPAL DEPARTMENTS (Dollar amounts in thousands) ---------- Amount---------1953 Advances to member and non-member banks secured by U. S. Government obligations ...............................................$ 2,854,009 Currency counted during year................... Coin counted during year............................ 11,347 Coin wrapped during year.......................... 7,041 Currency shipped and paid out................. 43i,9 i 9 Coin shipped and paid out.......................... 17,979 Unfit notes sent to Treasury for redemption 16 9 ,0 19 3,0 26 ,19 5 U. S. Government checks handled*........ Other checks handled.................................. :25 ,053,779 ^Includes Postal Money Orders as follows 178,466 Grain drafts handled.................................. 624,080 Country and other city collections............. 1 2 8 ,7 12 Securities held in custody for banks on last day of year........................................ 1,52 7 ,70 4 Coupons cut from securities held for banks Coupons paid from U. S. Government 32 ,2 36 direct obligations .................................... Issues, redemptions and exchanges of U. S. Government direct obligations............... 3 ,992,943 Purchases and sales of Government securi ties, and Government securities cleared through the Federal Reserve Bank for the account of banks in the Ninth Dist. 1,13 6 ,2 0 8 U. S. Savings Bonds sales (also included 17 3 ,8 2 5 in U. S. Government direct obligations) 2 1 2 ,5 5 7 U. S. Savings Bonds redemptions............. Number of employees at end of year. . .. $ -------------- Number— 1953 1954 860 7 1 ,5 7 1 ,9 8 8 11 8 ,7 2 7 ,2 3 4 86,007,500 480 70,753,48 8 14 0 ,8 7 1,4 6 5 107,398,500 3 5 ,10 6 ,3 3 6 26 ,410 ,0 52 79,899,840 10 ,6 6 3 ,5 13 3 42,9 6 1 30 ,624,376 26 ,8 0 3,214 8 5,10 0 ,579 10 ,4 8 1,2 16 792,967 400,857 289,507 281,900 3 1 ,6 9 1 333,748 2 6 4 ,8 13 5 ,10 3 ,3 0 3 3,861,66 2 4 ,327,137 1,6 80 ,735 4,748 4,891 236,600 2 33,0 46 1,409,597 2 ,3 M ,659 1,693,829 2,457,0 58 676 1954 945,901 13,609 9,450 385,066 17,430 14 0 ,35 2 3,0 4 1,6 6 7 2 6 ,6 25,232 175,753 6 9 7 ,2 11 152 ,6 0 5 778,376 1,674,664 7 10 19 to facilitate the destruction of wornout silver certificates and United States notes. These types of currency have been destroyed on bank prem ises since July i, 1953, thereby saving the cost of shipment to a central de struction point. Volume Figures Continue Up In general, the volume figures for the operating departments at Minne apolis and Helena show a work load for 1954 slightly above that for 1953. The increase in check collection vol ume has already been mentioned. Other departments showing substan tial increases in the volume of work handled were the non-cash collec tion department, which had a gain of approximately 16 percent in the dollar volume of grain drafts and other collections handled; the wire transfers division with a 17 percent rise in the dollar amount of funds transferred; and the coin division which counted 20 percent more and wrapped 34 percent more coin (dol lar value) than in 1953. Although the fiscal agency de partment lost some small part of its duties with the change in procedure which became effective August 1, its work volume increased in several areas. For example, there was a 28 percent rise in the dollar value of issues, redemptions, and exchanges of government obligations handled by the bank. There was also a 48 per cent increase in the dollar amount of purchases and sales of government securities made for Ninth District banks. Savings bond transactions also 20 increased as savings bond sales in the district rose 20 percent in num ber and 36 percent in dollar value over 1953. Redemptions of savings bonds were also up slightly. Another department showing increased vol ume was the safekeeping depart ment which on December 31, 1954, held in custody for member banks, securities totaling $1,675 million, up 10 percent from the December 31, 3:953, total. On the other hand, some phases of the bank’s work showed modest declines. Currency and coin depart ment figures showed an 11 percent drop in the dollar amount of curren cy shipped out and a 3 percent de cline in outgoing coin. Currency re ceived and counted during the year added up to almost 71 million pieces, but that was still 1 percent less than the 1953 total. In the discounts and credit department advances to mem ber banks were down roughly twothirds from a total of $2,854 million in 1953 to $946 million in 1954. While the overall work load was probably somewhat above that of 3:953, total employees on the staffs of the head office and Helena branch dropped from 710 at year-end 1953 to 676 at the end of 1954. The reduc tion in personnel, at a time when work volume was undiminished, speaks well for the new methods adopted in the never ending struggle to boost efficiency. New Directors and Officers The year witnessed several changes in the membership of the boards of directors of both the bank and its Helena branch. The bank suffered a heavy loss with the death in Febru ary of Mr. Charles W. Burges, Class A director from North Dakota. Mr. Burges had been vice president and cashier of the Security National Bank of Edgeley. This vacancy was filled in May through a special elec tion, with Mr. John W. Scott, presi dent, First State Bank of Gilby, North Dakota, being named to serve out Mr. Burges’ unexpired term end ing December 31, 1954. In August, Mr. Paul E. Miller, Chairman of the Board and Federal Reserve Agent, resigned as Class C director to accept appointment as a member of the Board of Governors of the Federal Reserve System. Mr. Miller’s place was filled by designa tion of Mr. Leslie N. Perrin, Deputy Chairman, as Chairman and Federal Reserve Agent for the remainder of the year. Mr. Perrin is a director of General Mills, Inc., Minneapolis. Later in the year he was redesignated Chairman and Agent for 1955. In October, only a few weeks after Mr. Miller had begun his new assign ment in Washington, the bank was saddened by his death. Another change in the head office board came in November with the election of Mr. Harold C. Refling, cashier, First National Bank, Bot tineau, North Dakota, as Class A di rector for a three-year term begin ning January 1, 1955, to succeed Mr. Scott. Mr. Ray C. Lange, president, Chippewa Canning Company, Inc., Chippewa Falls, Wisconsin, was re elected Class B director for the same three-year term. One of the three Class C directorships on the head office board was vacant at year end. Mr. Joseph F. Ringland, president of the Northwestern National Bank of Minneapolis, was reappointed mem ber of the Federal Advisory Council for 1955. Mr. Carl McFarland, president, Montana State University, Missoula, Montana, Mr. J. Willard Johnson, financial vice president and treasurer of the Western Life Insurance Com pany of Helena, Montana, and Mr. George N. Lund, chairman of the board and president of the First Na tional Bank, Reserve, Montana, were all reappointed directors of the Hel ena branch for two-year terms end ing December 31, 1956. Mr. McFar land will serve as chairman of the branch board during 1955, and Mr. George R. Milburn, manager, N Bar Ranch, Grass Range, Montana, will be vice chairman. Among the bank’s officers, March saw the untimely death of Dr. J. Marvin Peterson, vice president and director of research. The vacancy caused by his loss was filled with the election in August of Mr. Franklin L. Parsons as director of research. Mr. Parsons had formerly been as sociate director of research. In Oc tober Mr. Harold C. Core, vice president in charge of personnel, retired from active service, and Mr. Frederick J. Cramer was named per sonnel officer, effective November 1. Also elected to the official staff, effec tive January 1, 1955, were Mr. Carl 21 E. Bergquist, assistant cashier, Mr. Roger K. Grobel, chief examiner, and Mr. Oscar F. Litterer, business economist. A full program of bank and pub lic relations activities was carried on in 1954, highlighted by the second Member Bank Directors and Officers Assembly in May. Other meetings held during the year included the sixth annual Money and Banking Workshop for college teachers of money and banking, and the eleventh annual Examiners’ Conference for all Ninth District bank examiners. Nine additional sessions of the ever-popular, one-week Short Course in Central Banking were held by the bank during the year with a total attendance of 150. This brings the grand total of member bankers who have completed the course since its inception in 1948 to more than 800. Again, this year, as part of the bank’s training program, a number of senior men spent one week each in member banks to become more familiar with commercial bank op erations. Representatives of the bank also continued the practice of mak ing calls on all banks in the district, attending b a n k e r s ’ conventions, group and clearing house meetings, clinics, and banking and credit schools. Speakers from the bank ap peared before a wide variety of groups totaling nearly 13 thousand persons; the bank’s own movie and other movies on the Federal Reserve System were in good demand; two currency displays were in almost con 22 stant use by banks for special oc casions; almost 10 thousand copies of the booklet “ Your Money and the Federal Reserve System” were dis tributed; and almost 4 thousand persons toured the head office and witnessed its operations. One national bank went into vol untary liquidation during the year; one new national bank was organ ized; and one state bank converted to a national charter, for a net gain of one bank as far as Federal Reserve membership in the Ninth District was concerned. With 40 years of central banking now history—many years which have seen great and constant change in the variety and scope of the services per formed for the banks and people of the Ninth District—the Federal Re serve Bank of Minneapolis enters 1955 dedicated to the ideal of meet ing the banking and credit needs of this district to the fullest extent and confident that that goal can be achieved. Financial Statements Reflecting the continued growth of member banks in the Ninth Dis trict was a gain of almost 7 percent in the capital stock account at the Minneapolis Federal Reserve Bank during 1954. The stock is issued to member banks as they enlarge the amount of their capital and surplus. Notable among changes in the deposit accounts was a loss of mem ber bank reserves which was only partly offset by additional balances in other accounts. As noted earlier, the reduction of reserve require ments made it possible for member banks to hold a larger amount of deposits with a lesser amount of re serves than formerly. Outstanding notes issued by the Minneapolis Federal Reserve Bank declined in amount for the second consecutive year in 1954. Fed eral Reserve notes constitute the most important component of the nation’s currency supply; the retirement of these notes accompanied a reduced demand for paper money by the public last year. Also, legislation was passed au thorizing Reserve Banks to pay out fit Federal Reserve notes without re gard to the bank of issue. Deposits of fit notes issued by other Reserve Banks were thus employed to fill some requests for currency, whereas formerly these notes were returned to the bank of issue. By the same token, Minneapolis notes were paid out by other Reserve Banks. Unfit notes are destroyed and charged to the bank of issue. A lower amount of securities was owned at the end of the year than at the beginning. This change resulted from a system move to reduce bank reserves by liquidating investments. The expansionary effect of lower reserve requirements was thus partly offset. A shift from bonds and notes into certificates of indebtedness re flects a T r easury refunding exchange. Earnings from government securi ties were lower in 1954 than in 1953, partly because a lesser average amount of securities was held and partly because the average rate of re turn was lower. Similarly, earnings from discounts and advances were lo w e r b e c a u se a le s se r a v e r a g e amount was held than in 1953 and because the rate of interest charged for such accommodation was reduced twice early in 1954. The continued high level of ac tivity in the operating departments of the bank permitted only a small decline in expenses so that net earn ings fell by almost as much as earn ings from loans and investments. W ith a larger number of shares outstanding, dividends on our stock were somewhat higher in 1954 than in 1953. Payments to the Treasury as interest on Federal Reserve notes and transfers to the bank’s surplus account were both reduced. 23 STATEM EN T O F C O N D IT IO N A SSETS Dec. 3 1 , 1 9 5 4 Gold Certificates ............................................................................. $ Redemption Fund for F. R. N otes............................................... 4 2 1,32 7 ,5 0 4 Dec. 3 1 , 1 9 5 3 $ 24,644.008 Total Gold Certificate Reserve...................................... $ 445,9 71,60 2 F. R. Notes of Other F . R. Banks............................................... # 8,567,000 Other Cash ........................................................................................ $ 8,848,300 484,485,384 25,562,203 $ 510 ,0 4 7,587 7.847.000 $ 7.657.573 Bills Discounted ................................................................................ 450,000 1.350.000 Foreign Loans on G old ..................................................................... 3>333>333 375,000 Industrial Advances ......................................................................... 96,071 99,089 U. S. Government Securities: Bonds ........................................................................................ 68,802,000 89.868.000 Notes ........................................................................................ 148,257,000 327.360.000 Certificates of Indebtedness................................................... 340,909,000 1 43.558.000 53,215,0 0 0 64.080.000 Bills ........................................................................................... Total U . S. Government Securities..............................$ 6 11,18 3,0 0 0 $ 624,866,000 Total Loans and Securities.......................................... $ 615,062,404 $ 626,690,089 Due from Foreign Banks................................................................ 559 567 Other Assets ...................................................................................... 105,646,706 i i 7 »5 6 i ,334 Total Assets .....................................................................$1,18 4 ,0 9 6 ,5 71 $1,26 9 ,80 4 ,150 L IA B IL IT IE S Federal Reserve Notes in Actual Circulation..............................$ 5 8 3 ,5 11 ,3 6 5 $ 644,292,545 Member Bank— Reserve Accounts........................................ 443,526,944 468,968,085 U. S. Treasurer— General Account...................................... 27,338 ,9 8 9 1 7 .790,974 Foreign ...................................................................................... 12,050,000 10,230,000 Other Deposits ......................................................................... 2 ,3 15 ,7 4 4 3.848,599 4 8 5 ,2 3 1,6 7 7 $ 500,837,658 86,437,796 96,521,780 346,672 703.064 Total Liabilities .............................................................. $ 1 ,1 5 5 ,5 2 7 ,5 1 0 11,2 4 2 ,3 5 5,0 4 7 Deposits: Total Deposits .................................................................$ Deferred Availability Item s............................................................ Other Liabilities .............................................................................. C A P IT A L A C C O U N T S Capital Paid I n .................................................................................. $ 6,360,250 5,952,400 Other Capital Accounts................................................................... 2 2,20 8 ,8 11 21,496,703 $ 1,18 4 ,0 9 6 ,5 7 1 $1,26 9 ,8 0 4,150 Total Liabilities, Capital Accounts 24 EARNINGS AND EXPENSES Earnings from: 19 5 4 Discounted B i l l s ..................................................................................$ J953 144,803 $ United States Government Securities.............................................. 10,679,996 Industrial Advances 546,742 14 ,30 8 ,6 15 ......................................................................... 5 ,13 4 5,579 All Other ............................................................................................ 5,482 7,9 71 Total Current Earnings.............................................................$ 10 ,8 3 5 ,4 1 5 $14,868,90 7 Operating Expenses ........................................................................... $ 3 ,2 1 8 ,1 1 0 $ 3,256,830 Expenses: Assessment for Expenses of Board of Governors.......................... 10 5,500 103,700 Original Cost .............................................................................. 147,988 2 15 ,4 3 8 Cost of Redemption................................................................... 17 ,1 4 3 28,306 Net Expenses .....................................................................$ 3,4 8 8 ,74 1 $ 3,604,274 Current Net Earnings............................................................................. . $ 7,346 ,6 74 $ 11,2 6 4 ,6 3 3 Federal Reserve Currency: Additions to Current Net Earnings: Profit on Sales of U. S. Government Securities ( N e t ) ............... 14,804 61,029 A ll Other ............................................................................................ 3 >45 ° *6 1 Total Additions ................................................................. ----- $ 18 ,2 5 4 $ 6 1,19 0 Deductions from Current Net Earnings: Reserve for Contingencies........................................................ $ All Other .................................................................................... Total Deductions .............................................................. Net Addition to or Deduction from Current Net Earnings. . . . ----- $ 4 >4 <M Net Earnings before payments to U. S. Treasury........................ ----- $ 7 >3 5 i >°78 Paid to U. S. Treasury (Interest on Federal Reserve Notes) Dividends Paid . . ----- 6 ,2 8 7,237 3 6 5 ,16 3 .................................................................................. 19,930 77 ,2 76 4 21 $ 97,206 $ 36 ,0 16 $ 1 1 ,2 2 8 ,6 1 7 9 ,791,772 34 8 .77 4 1,0 88 ,0 71 Transferred to Surplus (Section 7 ) .................................................. Surplus Account (Section 7) $ 1 5 ,1 3 1 ,2 9 7 Balance at Close of Previous Y e a r.................................................. Transferred from Profits of Y ear.................................................... Balance at Close of Year . ... 698,678 1,088,071 $ 16 ,9 18 ,0 4 6 $ 16 ,2 19 ,3 6 8 25 DIRECTORS OF THE FEDERAL RESERVE BANK OF MINNEAPOLIS AND HELENA BRANCH DIRECTORS L e s l i e N . P e r r i n , Chairman and Federal Reserve Agent Class A Term Expires December 3 1 E d g a r F. Z e l l e , Chairman of the Board, First National Bank of Minneapolis, Minneapolis, Minnesota 19 55 H a r o l d N . T h o m s o n , Vice-President, Farmers & Merchants Bank, Presho, South Dakota 19 56 H a r o l d C . R e f l i n g , Cashier, First National Bank in Bottineau, Bottineau, North Dakota 19 5 7 Class B H o m e r P. C l a r k , Honorary Chairman of the Board, West Publishing Company, Saint Paul, Minnesota 19 55 J. E . C o r e t t e , President and General Manager, Montana Power Company, Butte, Montana 19 56 R a y C. L a n g e , President, Chippewa Canning Company, Inc., Chippewa Falls, Wisconsin *957 Class C F . A l b e e F l o d i n , President and General Manager, Lake Shore Engineering Company, Iron Mountain, Michigan 19 55 L e s l i e N . P e r r i n , Director, General Mills, Inc., Minneapolis, Minnesota 1956 ( Vacant) 19 57 FEDERAL RESERVE BRANCH BANK HELENA, MONTANA DIRECTORS C a r l M c F a r l a n d , Chairman G e o r g e R . M i l b u r n , Vice-Chairman Term Expires December 3 1 A. W . H e id e l , President, Powder River County Bank, Broadus, Montana G e o r g e R. M i l b u r n , Manager, N Bar Ranch, Grass Range, Montana 19 55 19 55 J . W i l l a r d J o h n s o n , Financial Vice-President and Treasurer, Western Life Insurance Company, Helena, Montana 19 56 G e o . N . L u n d , Chairman of the Board and President, The First National Bank of Reserve, Reserve, Montana C a r l M c F a r l a n d , President, Montana State University, Missoula, Montana 26 19 56 19 56 OFFICERS OF THE FEDERAL RESERVE BANK OF MINNEAPOLIS AND HELENA BRANCH OFFICERS O l i v e r S. P o w e l l , President A l b e r t W . M i l l s . First Vice-President Audit Department Banking Department K y l e K . P o s s u m , General Auditor C a r l E . B e r g q u is t , Assistant Cashier F r e d e r i c k J . C r a m e r , Personnel Officer Bank Examination Department J o h n J. G i l l e t t e , Assistant Cashier H a r o l d G . M c C o n n e l l , Vice-President A r t h u r W . J o h n s o n , Assistant Vice-President R o g e r K . G r o b e l , Chief Examiner A r t h u r R . L a r s o n , Assistant Vice-President M i l f o r d E. L y s e n , Operating Research Officer O r t h e n W . O h n s t a d , Assistant Vice-President O t i s R . P r e s t o n , Vice-President Fiscal Agency—Government Securities E a r l B . L a r s o n , Vice-President M e l v i n B . H o l m g r e n , Assistant Cashier Legal Department C h r i s t i a n R i e s , Assistant Vice-President G e o r g e M . R o c k w e l l , Assistant Cashier M a r c u s O . S a t h e r , Assistant Cashier S ig u r d U e l a n d , Vice-President, Counsel and Secretary Research Department M a u r i c e H . S t r o t h m a n , J r ., Vice-President F r a n k l i n L . P a r s o n s , Director of Research C l e m e n t V a n N i c e , Assistant Vice-President O s c a r F . L i t t e r e r , Business Economist Helena Branch C l a r e n c e W . G r o t h , Vice-President assigned to Helena Branch H a r o l d A . B e r g l u n d , Assistant Cashier assigned to Helena Branch MEMBER OF FEDERAL ADVISORY COUNCIL J o s e p h F . R i n g l a n d , President, Northwestern National Bank o£ Minneapolis, Minneapolis, Minnesota INDUSTRIAL ADVISORY COMMITTEE S h e l d o n V . W ood , Minneapolis, Minnesota, Chairman J o h n M. B u s h , Ishpeming, Michigan A . H . D a g g e t t , Saint Paul, Minnesota A. B . H e i a n , Chippewa Falls, Wisconsin W a l t e r M. R i n g e r , S r ., Minneapolis, Minnesota 27
@FedFRASER