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FEDERAL

RESERVE

BANK OF NEW YORK

April 16, 1984

To the Depository Institutions in the
Second Federal Reserve District

I am pleased to present our sixty-ninth
Annual Report, reviewing major economic and financial
developments, at home and abroad, in 1983.




Anthony M. Solomon
President




Federal Reserve Bank
of New York

SIXTY-NINTH
ANNUAL REPORT
For the Year
Ended
December 31, 1983

Second Federal Reserve D istrict

Contents:

Page
RECOVERY AT H O M E.........................................................................................................................

3

The Domestic Economy.....................................................................................................................

4

The Financial M a rk e ts .....................................................................................................................

6

Monetary P o lic y ................................................................................................................................

7

UNEVENNESS A B R O A D ..................................................................................................................... ..... 13
The United States Import Surge..................................................................................................... ..... 14
Foreign Industrial C o u n t r ie s .......................................................................................................... ..... 16
The High-Debt C o u n tr ie s ................................................................................................................ ..... 19

Financial S ta tem e n ts....................................................................................................................... .....25
Changes in Directors and Senior O ffic e rs .........................................................................................28
List of Directors and O fficers.......................................................................................................... .....31




Sixty-ninth Annual Report
Federal Reserve Bank of New York

R EC O V ER Y A T HOM E

In contrast to the first three years of this decade, 1983 was a year of generally good
econom ic news in the U nited States. Real output rose strongly, the unem ploym ent
rate fell dram atically, inflation was quite low, interest rates were fairly stable, and
the m onetary aggregates cam e in pretty much as desired by the Federal Reserve.
Still, even with all the good new s, the financial markets rem ained nervous about
the large budget deficits projected for upcom ing years (Chart 1). The m arkets also
w orried about the im plications of the record foreign trade deficit and the strong
dollar for interest rates and the future perform ance of the economy.
The Federal R eserve shared these concerns, in particular w hether the potential
budget deficits projected beyond 1983 would cause interest rates to rise over the
longer run, choking off the investm ent needed to maintain the economic expansion
w ith low inflation. In general, m onetary policy in 1983 continued the flexible, more
judgm ental approach begun in 1982 when it became apparent that financial
innovation and deregulation were distorting the behavior and significance of the
m onetary aggregates. N onetheless, even though it became necessary to view the
m onetary aggregates in the broader context of what was happening in the econom y,
the Federal Reserve during 1983 reaffirm ed its intention to keep monetary growth
in line with low rates of inflation.




3

Th e Domestic Economy
In 1983, the econom ic recovery exceeded m ost expectations. Even so, real GNP for
the year as a whole looked typical com pared with the first years of previous
recoveries. Consum ption spending, inventory accum ulation, residential con­
struction, and business investm ent all added to the rebound. Only net exports
represented a drag on the econom y, due largely to the strong dollar and the w eaker
econom ies o f our m ajor trading partners.
W ith the benefit of hindsight, some of the factors behind the stronger than
expected recovery can be seen clearly. First, the depressing influence on the
econom y o f the high levels of interest rates was overem phasized, and the
stim ulative effects of the large decline in rates after m id-1982 were not given
enough attention. The decline in rates helped strengthen credit-sensitive sectors
such as autos and housing. It also was a factor behind the large increase in the stock
m arket that boosted consum er wealth and contributed to the overall advance in
consum ption expenditures. In addition, the drop in energy prices also stim ulated
consum er spending but not by nearly so much as the wealth effects from the stock
m arkets. Finally, the grow ing budget deficit during a period of considerable unused
capacity provided additional stim ulus as the economy emerged from recession.
W hile aggregate dem and exceeded expectations, the decline in the unem ploy­
m ent rate associated with the advance in the economy was even more surprising. In
the first years of previous recoveries, the unem ploym ent rate typically had declined
slow ly. This tim e around the drop was 2x percentage points. Because the growth
h
of the labor force was w eaker than expected as the economy recovered in 1983, the
increases in production and em ploym ent brought the unem ploym ent rate down to
8.2 percent by the year-end from 10.7 percent at the recession trough.
D espite the greater than anticipated econom ic growth and the decline in
unem ploym ent, inflation did not accelerate significantly in 1983. There were,
how ever, some signs o f pickup in the second half of the year from the very low
rates prevailing around the trough of the recession. Over the year, the GNP deflator
rose 4 percent, the low est rate on a fourth-quarter to fourth-quarter basis since
1967. O ther m easures of inflation showed sim ilar or even more pronounced
im provem ent. In part, the slow dow n in inflation was due to special factors such as
the strong dollar, the decline in world oil prices, and com petitive forces associated
with the deregulation of some industries. But the real test of policy is not w hether
inflation can be reduced when there is a considerable amount of unused capacity in
the econom y and when productivity increases are typical of the early stage of a
4




business recovery. R ather, the real test will be to hold down inflation as the
econom y clim bs tow ard higher levels of utilization.

C h a r t 1.

C o m p a r e d w i t h t h e f ir s t t h r e e y e a r s o f t h i s d e c a d e , 1 9 8 3

s h o w e d strong g r o w t h . . .

m o d e ra te in flatio n . . .

Pe rc e n t

6

4

2

0

-2
1980-82
Average

1983

a n d s t a b le interest ra tes . .

P e rc ent ag e
p o in ts

1980-82
Average

1983

b u t the size o f the d eficit c a u s e d c o n c e rn .

S p r e a d b e tw e e n the h ig h a n d low
th r e e - m o nt h T r e a su r y bi ll rate

10

8

6

4

2

0




1 98 3

5

The Financial Markets
The financial markets also remained concerned about the long-term outlook for
inflation as the expansion continued against the backdrop of unprecedented
projected budget deficits. But for these markets 1983 was a surprise in that a strong
recovery took place without private and government credit demands putting
upward pressure on interest rates. Once again, one can give at least a partial
explanation of what happened in 1983 with the benefit of hindsight.
First, aftertax corporate profits and hence internal cash flows were much
improved. These gains resulted from productivity increases that had begun during
the 1982 recession, a substantial slowdown in the growth of compensation, and the
effects of more liberal depreciation rules and other changes in the tax codes. Thus,
businesses were not so dependent on borrowed funds as they might have been
under more normal circumstances. Second, high U.S. interest rates and economic
and political uncertainty around the world meant that foreign capital flowed into
the United States, and this relieved some of the upward pressure on interest rates
that might have occurred otherwise.
But neither of these factors can be relied on to be permanent. As the economic
expansion continues, productivity gains may slow, wage demands could stiffen as
the number of unemployed falls, and the prices of raw materials are likely to rise.
Hence, profit growth will not be as strong. Firms will need to turn to the financial
markets and banks for financing as internally generated cash flows slow.
Moreover, recent surveys and normal cyclical patterns suggest that spending on
plant and equipment may continue at a rapid pace. Thus, upward pressure on rates
could develop if the Federal Government also has a large presence in the financial
markets.
And the capital inflows from abroad, attracted by high U.S. interest rates, have
been a double-edged sword. They have contributed to the strong dollar and thus
have helped enlarge our trade deficit. At the same time, the savings these capital
flows represent have helped directly and indirectly to finance the budget deficit
without large increases in interest rates. But these deficits obviously pose problems
both in terms of their damage to domestic industries and in terms of the longer run
implications of the mounting foreign debt that is the counterpart of these deficits.
In any case, the willingness of foreigners to finance the United States cannot be
counted on indefinitely. The risk is that the dollar could decline precipitously as
foreign investors lose confidence in our ability to manage our affairs and control
inflation in the long run. As capital leaves the United States and the dollar falls,
6




and the Federal Government and private borrowers compete for the relatively small
amount of domestic savings, upward pressures on interest rates would be
inevitable.
Under such circumstances, housing, investment, and other credit-sensitive
sectors are bound to be hurt as would the prospects for keeping down inflation. The
fear of such an outcome helps explain why interest rates are high not only in
absolute terms but also when compared with recent inflation rates. Markets remain
skeptical about this country’s ability to maintain the recent progress on inflation.
Too often in the past they have seen inflation and interest rates fall during a
recession only to rise to new highs during the expansion phase of the new cycle.
And this has occurred even with budget deficits less out of line with the size of the
economy than currently. Until there are some clear signs that the enormous deficits
now ahead of us will be reduced significantly, the markets are likely to remain
unconvinced.

Monetary Policy
Large prospective budget deficits combined with the Federal Reserve’s commit­
ment to maintain anti-inflationary monetary policy sparked considerable discussion
during 1983 about the long-run effects on the economy of a tight-monetary, easyfiscal policy mix. Such a mix is, of course, uncomfortable because of the high rates
that result. However, the ability of monetary policy to reduce the discomfort is
very limited. An easier monetary policy under present circumstances would lead
only to higher inflationary expectations and, with a lag, higher inflation and
interest rates. In 1983 the economy did very well despite the tight-monetary, easyfiscal policy mix. But over the long run such a mix would tend to skew the
economy’s output toward consumption and away from capital investment. Thus, it
would slow the growth of productive capacity and increase inflationary pressures.
It would also work against the export sector and cause many more export-oriented
firms to relocate plants and jobs abroad in order to compete better in world
markets.
While monetary policy in 1983 maintained its long-run strategy of containing
inflation by keeping money growth under control, innovation and deregulation
continued to make the interpretation of the monetary aggregates in general and M-l




7

Chart 2. The g ro w t h of N O W

19 8 0 - IV

has b e e n a sso cia ted w ith

a ccounts as a p e r c e n t a g e of M -l

19 81 - IV

w eaker than

198 2-I V

19 83- IV

a v e r a g e g r o w t h o f v e l o c i t y in r e c e n t y e a r s , r a i s i n g

t h e q u e s t i o n o f w h e t h e r a s i g n i f i c a n t p o r t i o n o f N O W s is u s e d f o r n o n t r a n s a c t i o n s p u r p o s e s .

reco ve rie s

in particular very difficult (Charts 2 and 3). Beginning in late 1982, the Congress
authorized two new accounts, the m oney m arket deposit account (included in M-2)
and the Super NOW account (a com ponent of M -l). Because these new accounts
offer both savings and transactions features and because they were likely to be
attractive com pared with both existing accounts and assets outside M -l and M -2,
the Federal Open M arket Com m ittee (FOM C) em phasized the need for judgm ent
and flexibility in reacting to m ovem ents in the monetary aggregates during 1983.
8




C h a r t 3. W i t h M - 2 a n d M - 3 b e c o m i n g d o m i n a t e d b y a s s e t s b e a r i n g
m a r k e t rates of in tere st . . .

Inst ru m ent s p a y i n g m a r k e t - r e la te d r a t e s as a

1978-IV

1979-IV

1980-IV

1981-IV

19 82- IV

19 8 3 - IV

t h e i r g r o w t h r a t e s i n r e c e n t y e a r s d o n o t s e e m to h a v e b e e n s e n s i t i v e . . .

1978

1979

1980

1981

198 2

1983*

to c h a n g e s i n i n t e r e s t r a t e s .

* M -2 adjusted fo r m oney m a rk e t de p osit a cco u n ts in 1983.

M oreover, given the unusually large decline in M -l velocity in 1982 (high M -l
grow th caused by strength in NOW accounts combined with low nominal GNP
grow th), it was not certain as 1983 began how much weight should be given to M -l
in the policy process. In these circum stances, the FOMC set a broad and, by the




9

standards of the past few years, high range for M-l growth in 1983 of 4 to 8
percent. At the same time, because of the large volume of funds that were likely to
flow into money market deposit accounts from outside M-2 over the first few
months of 1983, the FOMC set a range of 7 to 10 percent for M-2 with the
February-March average to be used as the base. It was not expected that M-3 or
total credit would be much affected by the new accounts, and their respective
ranges were set at Qh to 9*/2 percent and 8^2 to IV/2 percent over the full year.
In the first half of 1983, M-l growth remained very rapid relative to GNP,
reflecting continued strength in NOW accounts. This decline in velocity was a
puzzle of sorts that analysts spent a great deal of time trying to explain during the
course of the year. It now seems that the rapid growth of M-l relative to GNP in the
last half of 1982 and early 1983 in part stemmed from the fact that NOW accounts
are more sensitive to changes in interest rates than the other components of M-l. As
a result, consumers showed a greater willingness than they did previously to
increase money holdings as interest rates declined. Moreover, since some
consumers also use their NOW accounts for savings purposes, it appears that the
high level of unemployment and the low level of consumer confidence in late 1982
and early 1983 may have added a precautionary motive to the buildup in NOW
account balances.
In any case, at its mid-1983 review of the monetary targets the FOMC concluded
that the earlier spurt in M-l had in part reflected such special factors and thus would
not prove to be inflationary. Accordingly, M-l continued to be assigned consider­
ably less weight in the policy process. Its monitoring range was raised to 5 to 9
percent and its base was moved to the second quarter of 1983 from the fourth
quarter of 1982. As it turned out, M-l seemed to return to a more normal
relationship with GNP in the second half of the year, and its growth ended the year
close to the midpoint of the newly established monitoring range. M-2, M-3, and
total credit also ended the year generally in line with the objectives set by the
FOMC for 1983.
Even though the M-2 and M-3 performance generally met the Federal Reserve’s
1983 objectives, changes in the financial markets in recent years also have raised
questions about the interpretation of these aggregates (Chart 3). In particular, with
more and more of M-2 and M-3 bearing market-related rates, it is no longer clear
that their growth would slow appreciably should the Federal Reserve restrict the
supply of reserves and should interest rates rise, because the rates on M-2 and M-3
assets would move in step with market rates. Under such circumstances, M-2 and
M-3 would slow only as the economy is affected by the change in interest rates.
10




Indeed, M-2 and M-3 may prove more sensitive to the shifting tides of investor
sentiment than to GNP, given the enormously increased importance of moneymarket-rate instruments now included in these measures. Hence, although the
Federal Reserve placed primary weight on M-2 and M-3 in 1983, it was necessary
to view their behavior in the larger context of what was happening to real output,
inflation, and the financial markets.
In one sense, this has been a particularly frustrating period for those who would
prefer to see monetary policy develop along neat and simple lines. For quite some
time, the monetary aggregate targets had seemed to provide a clear conceptual
basis for monetary policy. However, since at least mid-1982 it has been difficult, if
not impossible, to make sensible policy just by reference to targets for any one of
these measures, or even to all of them taken together. System policymakers have
had to interpret the meaning of these various measures in light of their changing
character.
For the long run, the function of monetary policy—really the only long-run
function it can perform— is to stabilize the value of money within a context of
general financial stability. In the short run, it has powerful effects on other matters
also of great public concern— on real growth and employment. Monetary policy
neither can, as a practical matter, nor should entirely ignore these important shortrun concerns. But it does remain true that pressures to focus on short-run concerns
at the expense of long-run goals tends to be a constant problem in monetary
policymaking. A basic function of the monetary targeting approach, both here and
abroad, has been to keep the attention of the policymakers and the public focused
on the essential long-run price stability role of monetary policy— to put a little
distance between monetary policy and the constant pressures to tinker for the sake
of short-run objectives.
When financial innovation and deregulation impinge on the economic meaning
of the monetary measures, however, some of their value as a means of focusing on
the longer run is lost— perhaps permanently, certainly temporarily. Ideally, the
monetary targets should serve as a means of communicating Federal Reserve
objectives to the public, of referring day-to-day decisions to longer run criteria,
and as a means of accountability. When the monetary targets must be subject to
frequent review, adjustment, and reevaluation, some of the pristine simplicity of
the approach is bound to be lost. Major elements of judgment inevitably become
involved in policymaking, and some of the sense of clear longer term direction may
be compromised.
This is undoubtedly unfortunate. But the alternative is to ignore the problems of




11

the monetary measures, to treat as sacrosanct numerical values whose meaning is
necessarily surrounded by uncertainty. Such an approach would not make sense.
And it is likely that this kind of ambiguous situation with regard to the aggregates
will remain with us for some time to come.
Recent events have also forced the Federal Reserve to make some modification
in the tactics of monetary policy. Before October 1979, the FOMC announced
monetary targets as it does now, but it focused short-run tactics almost exclusively
on interest rate objectives. Experience in the late 1970s with accelerating inflation
showed that such an approach inhibits forceful action when it is needed. It proved
just too difficult to raise interest rate targets fast enough to deal with the gathering
inflationary momentum. Despite a series of increases, nominal interest rates fell
behind the accelerating inflation.
Then, at the highly publicized Saturday meeting of October 1979, the Federal
Reserve changed procedures. The approach adopted then put increased emphasis
on the growth of bank reserves and less emphasis on interest rates in the conduct of
day-to-day operations. With interest rates no longer targeted directly in the new
approach, there was room for some automatic interest rate response to short-run
deviations of money growth from targets. A major advantage of the new approach
was that, with these semiautomatic interest rate responses, the interest rate levels
which were really needed to bring down money growth and inflation could emerge.
The disadvantage was that the automatic aspects generated a lot of interest rate
volatility in response to erratic movements in M-l.
In 1983 the FOMC employed operating procedures that lie somewhere between
the pre- and post-October 1979 approaches. On the one hand, precise interest rate
targets were no longer set as was done before October 1979. But, on the other hand,
the new focus on a “ degree of reserve availability” (that is probably best measured
by the volume of discount window borrowing or by excess reserves less such
borrowing) did not provide for automatic responses to short-term money
movements of the kind that were put in place after October 1979. Clearly, the
Federal Reserve was more prepared to respond to significant and persisting
deviations of money growth from target— provided they were seen to be significant
for the economy at large— than it was before October 1979. But, at the same time,
the new approach to controlling money growth was less mechanical than the
approach used between October 1979 and late 1982.
In the present circumstances, the changing character of the monetary aggregates
not only requires more flexibility in setting— and resetting if need be— the long­
term targets. It also argues for a less mechanistic response to their shorter term
12




movements. The current procedures should be fully compatible with the Federal
Reserve’s basic long-run commitment to provide a stable monetary environment
that can contain inflation. The experience we as a nation have been through in
recent years should help us in that regard. This experience has taught us a
heightened awareness of the broad need to restrain money and credit growth. This
need remains entirely valid despite the current problems with specific measures of
money. Given broad appreciation of this, there is a good chance the FOMC can
continue to run a policy that avoids excessive money growth without resorting to
undue reactions to short-run money behavior. With past experience as a guide, it
should be possible to deal more promptly and vigorously with sustained monetary
excesses than was done before October 1979.

U N EV E N N E S S A B R O A D

Internationally, 1983 was a year of uneven economic performance. Canada’s
recovery and inflation slowdown paralleled those of the United States; Japan had
moderate growth and low inflation but, in Europe, expansion and inflation rates
were more ragged. Several developing economies in Asia did very well. Yet, for
many other developing countries, international debt problems remained a
frustrating, painful, ongoing ordeal.
Economic growth in the United States was of particular worldwide importance
last year. Along with a rising dollar, it stimulated a strong demand for imports and
thus served as a major propellant for expansion elsewhere. U.S. import purchases
provided more than half the increase in total world trade from the end of 1982 to the
end of 1983 and by the fourth quarter were running at an annual rate $43 billion, or
18 percent, above the level in the last quarter of 1982.
U.S. exports, in contrast, remained on the weak side for most of the year,
primarily due to the strength of the dollar and slow economic growth in the rest of
the world. As a consequence, the United States recorded its largest merchandise
trade deficit in history, over $60 billion, and a current account deficit of over
$40 billion. By the fourth quarter of 1983, the excess of our payments abroad for




13

goods and services over corresponding receipts was running about $60 billion at an
annual rate and it was becom ing increasingly apparent that this dependence on
foreign capital inflows was not sustainable in the long run.

The United States Import Surge
The increase in U .S . im ports was unevenly distributed across products and among
countries o f origin (Chart 4). A large part o f the rise in imports during 1983 was in
autom otive products and capital goods. Asia had some of the biggest gains in
exports to the United States, with Japan, South K orea, and Taiwan doing

C h a r t 4 . T h e s h a r p 1 9 8 3 g r o w t h o f U .S . i m p o r t s w a s . . .

u n e v e n ly d istrib u te d

a n d a m o n g su p p liers.

a m o n g products * . . .

Food , feed,

Lat in

Other

Western

C h a r t sh o w s d is t r i b u t io n of the i n c r e a s e in U.S. im po rts from the
last q u a r t e r of 1982 to the last q u a r t e r of 1983.

* E x c lu d in g p e tro le u m , w hich a ctu a lly declined.

14




C hart 5. East A sia m a in ta in e d its com petitiven ess th rou gh price
ra th er than e x c h a n g e rate m ovem ents.

’• Average for Japan, So uth K orea, and Taiw an w eighted by trade with
‘
the U nite d Sta te s.
1" A verage for France, G erm any, Italy, and the U nited K ingdom w eighted
by tra d e w ith the U nited States.

particularly well. These Asian exporters, selling the products for which U.S.
import demand was strong, were price competitive with those of European
countries, their chief competitors. They maintained their relative price attractive­
ness by making significant cuts in the dollar prices they charged. These cuts
compensated for the much sharper depreciation of European currencies against the
dollar (Chart 5).
Europe’s sales increases to the United States were considerably smaller than
Asia’s, although European sales of automotive products did reasonably well
(table). Europe, however, had much more difficulty than Asia in selling capital
goods, particularly business machines. One significant factor affecting European
sales of capital goods may have been the rising capital goods price level in
Germany, which provides about 30 percent of Europe’s capital goods sales to the
United States. Japan also continued to increase significantly the dollar value of its
automobile sales by selling larger and more fully equipped cars. This offset the
voluntary export restraints that limited the total number of automobiles sold.
Canada, with its close trade ties to the United States, showed a large increase in




15

G R O W T H R A T E S O F S E L E C T E D U .S . I M P O R T S F R O M A S I A A N D W E S T E R N E U R O P E
Percentage change from the fourth quarter of 1982 to the fourth quarter of 1983

Japan

Total ............................................................

Other Asia

41

44

Western Europe

5*

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

52

68

11

Automotive products............................................

43

64t

44

Other consumer goods ........................................

32

33

10

Capital goods

* Total growth is low because imports of petroleum and petroleum products declined over 40 percent,
f This represents primarily automobile parts which grew from a very small base ($60 million) in the last quarter of 1982.

exports to this country— over 20 percent. Sales of automobiles, which are covered
by a special trade agreement between Canada and the United States, accounted for
almost three quarters of the rise. Latin America’s trade gain in the United States
was, in contrast, fairly small despite strong sales increases in some product areas
such as steel. This relative weakness largely reflected declining world prices of
petroleum, which accounts for almost half of Latin American exports. Similarly,
U.S. imports— mostly oil— from members of the Organization of Petroleum
Exporting Countries showed no increase at all.

Foreign Industrial Countries
Exports to the United States played a significant role in generating expanded
economic activity in many countries. The industrializing countries in Asia that had
large export increases to the United States grew very rapidly. Taiwan’s real GNP
jumped an estimated 7 percent, with increased sales to the United States equal to
about half the total rise in output. For South Korea, growth was almost 9 percent,
and U.S. sales gains accounted for about one quarter of the total.
Among the industrialized countries, Japan and Canada had the largest increases
in exports to the United States in 1983 and also had the fastest domestic growth
rates (Chart 6). Canada’s GNP grew about 7 percent over the course of 1983 and
Japan, with more constrained domestic demand, had GNP growth of about
4 percent. Increased U.S. sales accounted for more than one third of Japan’s total
16




C h a rt 6.

In d u stria l cou n tries’ grow th rates d iffe re d g re a tly .

198 2

1983

in part because in flation rates posed d iffe rin g constraints on m acroeconom ic p o licie s.

1981




1982

1983

17

expansion. The Western European economies, less successful at taking advantage
of strong U.S. demand, had smaller increases in output.
The relatively weak European export performance was indicative of broader
economic problems. For many European countries, unemployment continued to
rise even as inflation remained a pressing concern. Meanwhile, currency values
were falling to new lows against the dollar while exports remained slack. As they
entered 1983, the European countries faced thorny policy dilemmas: balancing
pressures for expansion versus contraction, low versus high interest rates, and
social welfare expenditures versus funds for private investment.
Except for Switzerland, unemployment was high throughout Europe. At the start
of 1983, Europe as a whole had an unemployment rate of about 10 percent. Yet
inflation was not coming down nearly so fast as in the United States and was
generally regarded as unacceptably high (Chart 6). Even Germany’s inflation, at
4l > percent, was considered too high in terms of its traditional domestic standards.
A
Most European countries also remained concerned over the size of their
government sectors and over their large government budget deficits. Fiscal policies
generally remained little changed and in some cases moved toward restraint. At the
same time, capital outflows, in part induced by higher interest rates in the United
States and sharply falling exchange rates relative to the dollar, were a factor behind
the maintenance of fairly restrictive monetary policies.
The strength of the dollar remained a constraint on European policies throughout
the year. The dollar, originally buoyed by rising interest rates in the United States
in 1981 and the first part of 1982, continued to rise in 1983 despite a widening U.S.
current account deficit. Interest rate differentials continued to favor dollardenominated assets, and the good performance of the U.S. economy made dollar
investments doubly attractive. Political and quasi-political considerations, includ­
ing the debt crisis, stimulated further “ safe haven” flows to the United States. The
foreign exchange market became gripped by a bandwagon mentality, as
psychological factors all worked one way and the dollar kept reaching new highs
against European currencies. The yen-dollar relationship, in contrast, changed
little over the course of the year.
Individual European countries differed in the seriousness of their economic
problems and in their degree of policy restraint. Germany and the United
Kingdom, starting with lower inflation and declining government deficits relative
to GNP, followed slightly more expansionary policies than in the previous year.
However, the aggregate growth of output in both countries was slowed by their
foreign trade sectors. Germany’s exports to other European countries, accounting
18




for about two thirds of German sales abroad, were sluggish until the end of the
year. For the United Kingdom, exports were also weak while higher imports
satisfied about one third of the total increase in British domestic demand. As a
result, real output grew only about 3 percent in Germany and 2Vi percent in the
United Kingdom from the end of 1982 to the end of 1983.
France and Italy faced the most serious inflation problems among the major
European countries. For France, this was compounded by balance-of-payments
difficulties. These two countries, therefore, followed relatively restrictive
macroeconomic policies. Balance-of-payments positions in both Italy and France
improved substantially in 1983. While both countries made some progress on the
inflation front during the year, their inflation rates remained above the European
average by the year-end, allowing for no policy relaxation. Real GNP changed
little in France and rose only modestly in Italy over the course of 1983.
As the year ended, there were signs of an increase in confidence in most
European countries. Domestic orders (especially those for investment goods), as
well as export orders, picked up in Germany. For the United Kingdom, survey
reports suggested that business investment was about to begin expanding once
more. In Italy, production declines bottomed out around midyear and moderate
economic growth resumed. France also experienced economic growth at the yearend, as consumer spending recovered and external demand continued strong.

The High-Debt Countries
For many heavily debt-burdened, less developed, countries 1983 was a period of
massive austerity with little sign of economic revival as the year ended. These
countries continued to suffer declines in economic activity as ongoing foreign debt
problems, coupled with related collapses in domestic economic confidence, forced
painful economic retrenchment. At the beginning of 1983, almost thirty countries
were embroiled in financial difficulties so severe that they required large-scale debt
rescheduling along with major domestic economic adjustment. More countries
found themselves in that predicament as the year progressed. Among the major
borrowers in the group were Argentina, Brazil, Chile, Mexico, Nigeria, the
Philippines, Poland, and Venezuela. For these borrowers and their creditors, 1983
was a year-long struggle to try to restore financial and economic viability.




19

Countries with large debt payments problems generally adopted very stringent
economic and budgetary policies during the past two years. Their prime concern
was to reduce their current account deficits in the least jarring manner possible to

Chart 7.
forced the h igh-debt countries to

and their per capita incom e

slash im ports d ra m a tica lly . . .

fell sh a rp ly.

20




meet foreign financing constraints. They also needed to adjust their fiscal policies
to their sharply curtailed access to foreign funds and to lower tax revenues. Tax
receipts fell both because of declines in economic activity and because of lower
tariff receipts as imports were slashed. At the same time, these countries also had
to deal with soaring inflation rates, often reaching new records, as large
devaluations added to already exceedingly strong price pressures.
The austerity measures undertaken reduced real per capita income in virtually
every heavily indebted country. For Argentina, Brazil, Chile, Mexico, and Peru,
the declines ranged from more than 5 to nearly 20 percent since 1981 (Chart 7). The
construction and industrial sectors were almost always the hardest hit, the very
sectors on which most of these countries had pinned their hopes for rapid economic
growth and increased employment. Instead, these countries experienced rising
unemployment, generally well above 20 percent, while underemployment, always
a grave problem, worsened considerably.
The measures undertaken did achieve dramatic reductions in import purchases.
Latin America, accounting for most of the debt problems, imported less than $70
billion in 1983, down from $90 billion in 1982 and over $100 billion in both 1980
and 1981. Individual countries showed even more impressive cuts (Chart 7).
Mexico’s imports in 1983 were only about one third of the 1981 level. In
Venezuela, 1983 imports fell 50 percent from the 1982 figure. In Argentina,
imports were down 22 percent in 1983 after dropping 42 percent the year before.
Chilean imports, having fallen 45 percent in 1982, were down another 10 percent in
1983. Brazil’s 23 percent cut in imports last year, after a 12 percent drop in 1982,
left its import volume below even the 1974 level.
These massive import reductions fed on each other as many of the high-debt
countries had provided important export markets for each other. Import cuts in one
country became export declines in another, leading to further cumulative import
cuts. This trade dependence was very clear in Latin America. Between 1981 and
1982 total Latin American export receipts declined by nearly $10 billion. Almost
half of the fall was in trade with other Latin American countries which were cutting
their own imports. Most of the remaining decline was in shipments to debt-troubled
Eastern European economies. These trade feedback effects continued in 1983, as
imports fell even further in Latin America. At the same time, imports of investment
goods and key production materials were among those that were cut sharply,
making it more difficult for the debt-burdened countries to increase or even to
maintain production capabilities.
While most high-debt countries reduced their imports dramatically, overall




21

economic restructuring plans were more difficult to implement. Measures
recommended by the International Monetary Fund (IMF) under its conditional loan
programs often clashed with traditional domestic policies, such as complete
indexation for inflation, large government subsidies, or rigid public-sector wages.
Working out generally acceptable programs was often difficult, and the time it took
to reach agreement between the IMF and the borrowing countries varied
considerably from country to country.
The speed with which countries could deal with their financial problems in part
depended on the amount of adjustment required and on factors underlying their
basic payments imbalances. Mexico and Brazil were examples of these
differences. Both countries had been running significant current account deficits,
averaging 5 percent of GNP from 1979 to 1981. Both then cut their imports sharply,
back to their nominal levels of 1978. With these measures Mexico, which had
substantially increased its oil exports over the intervening period, managed to
achieve a current account surplus by 1983. In contrast, Brazil’s current account
deficit remained over $6 billion in 1983, mainly because its oil import payments
doubled after the second oil price shock.
Mexico, among the first of the major borrowers to announce debt-servicing
difficulties during the current crisis, was the first country to show significant
improvement. Mexico had a relatively less difficult time than other countries in
cutting imports because its foreign purchases had grown exceedingly rapidly
during the last oil boom. This, along with an earlier resolution of domestic
economic policy debates, allowed Mexico to proceed with debt restructuring more
rapidly. The country gained significantly from the process. The rescheduling
agreements reduced Mexico’s near-term debt service burden, including short-term
debt due, by over $25 billion in 1983. The turnaround in Mexico’s current account
reduced new financing needs. New economic policy measures gave significant
incentives to Mexico’s manufacturing industries. And confidence began to build
again in the Mexican economy, as evidenced by a sharp recovery in Mexico’s stock
market. For other countries, achieving such a degree of adjustment is taking longer
as they have had to deal with more protracted economic policy debates and larger
current account imbalances.
The international debt crisis posed difficult problems for lenders as well as
borrowers. At the beginnning of the year, international banks had $330 billion in
loans to non-OPEC developing countries. Some large banks had overall loan
exposures in high-debt countries much greater than their capital base. About half of
these loans were either short-term or longer term loans scheduled to come due
22




within the year. A number of countries found they were unable to meet the original
payments schedules and, by the end of 1983, banks had requests to reschedule
close to $100 billion of their loans. In addition, borrowers were seeking substantial
amounts of new loans to meet their continuing financing needs.
The rescheduling negotiations were very arduous, partly because of the large
number of creditor banks involved, often in the hundreds for major borrowing
countries. The diverse interests of the banks compounded problems. Banks of
different sizes and nationalities had different viewpoints and commitments to the
international credit market. It was, consequently, extremely difficult to portion out
the task of refinance among these creditors. Different regulatory treatment of bank
loans in various countries also contributed to coordination difficulties.
Banks were in general accord on one aspect of the rescheduling negotiations,
however: the requirement that borrowing countries adopt IMF programs. Banks
viewed these programs as commitments by the debtor countries to follow policies
necessary to resolve underlying financial difficulties. Consequently, conditional
IMF loans became an integral part of the adjustment process since banks usually
linked to them the disbursal of their own new loans.
An expansion of IMF funding therefore became crucial in 1983. Without a quota
increase, the role of the IMF would have had to change as its resources were
extended to the limit. Hence, the protracted U.S. Congressional debate on IMF
funding prior to its passage last fall added a major degree of uncertainty to the
rescheduling process.
Governments and central banks from creditor countries took an active part in
encouraging debt rescheduling negotiations. Emergency financing was provided
through Bank for International Settlements swap loans, increased Export-Import
Bank credit guarantees, U.S. Commodity Credit Corporation loans, and other
arrangements. Official loans were also rescheduled (in what are commonly referred
to as “ Paris Club” agreements).
Aside from this encouragement and the rescheduling of official debt, however, a
firm stance was taken that banks must bear the ultimate responsibility for the loans
they had extended. Although some observers called for official assumption of
problem country loans or establishment of a multilateral institution to undertake
that task, this was not done. In the United States, the Congress passed legislation
mandating that there be increased bank provisioning for possible loss against the
loans outstanding to several countries with the most serious debt problems. Bank
regulatory requirements for foreign loan reporting were also increased. Restric­
tions on bank accounting of reschedulings and other fees were introduced. The




23

Securities and Exchange C om m ission required fuller disclosure of banks’ problem
loans in published financial statem ents.
As 1984 began, with many o f the more difficult reschedulings negotiated, the
deepest w orries about the international debt crisis appeared to have subsided. The
problem s were not resolved and probably cannot be in any com prehensive way for
a long tim e. But progress was being made. Clearly, all the participants still faced
m onum ental challenges. The com m ercial bank lenders cannot shrink from the
problem . A long with other financial institutions in the developed countries, their
governm ents, and the IM F, the banks will have to work out some appropriate forms
of channeling capital to the developing countries. Short-term variable-rate bank
loans are not the means for transferring savings from rich nations to poor nations.
The industrial countries have to provide growing markets for the products of the
debtors since expanding exports are obviously essential for the needed
restructuring of the debtor co untries’ econom ies. And the high-debt countries must
follow more viable policies. In particular, they must maintain com petitive
exchange rates, prices, and interest rates so that they can avoid the past m istakes
that have encouraged capital flight and wasted scarce resources on inefficient
production for protected m arkets.

24




Fin a n cia l S ta te m e n ts
S T A T E M E N T O F E A R N IN G S A N D E X P E N S E S F O R
T H E C A L E N D A R Y E A R S 1 9 8 3 A N D 1 9 8 2 (in dollars)

1983

1982

Total current earnings..................................................................

5,141,341,063

5,092,376,638

Net expenses ...............................................................................

196,785,846

178,434,858*

Current net earnings

4,944,555,217

4,913,941,780*

Profit on sales of United States Government securities and Federal
agency obligations (net)................................................................

6,693,696

27,142,214

All other.....................................................................................

20,850

17,408

Total additions

6,714,546

27,159,622

37,253,441

Additions to current net earnings:

Deductions from current net earnings:
Loss on foreign exchange (net).......................................................

111,336,562

All other.....................................................................................

116,615

656,034*

Total deductions

111,453,177

37,909,475*

Net deductions.............................................................................

104,738,631

10,749,853*

Assessments by the Board of Governors:
Board expenditures........................................................................

17,513,200

15,383,800

Federal Reserve currency costs.......................................................

41,636,586

22,400,628*

Total assessments

59,149,786

37,784,428*

Net earnings available for distribution

4,78 0 ,6 66,800

4,86 5 ,4 07 ,49 9

Distribution of net earnings:
Dividends paid..............................................................................

20,884,084

19,582,450

Transferred to surplus..................................................................

25,823,850

12,929,400

Payments to United States Treasury (interest on
Federal Reserve notes)..................................................................

4,733,958,866

4,832,895,649

Net earnings distributed

4,78 0 ,6 6 6,80 0

4,86 5 ,4 0 7,49 9

SUR PLUS A C CO U N T

Surplus— beginning of year...........................................................

331,612,700

318,683,300

Transferred from net earnings.........................................................

25,823,850

12,929,400

Surplus— end of year

3 57 ,4 36,550

3 31 ,6 12,700

★ Restated to reflect changes in Federal Reserve System accounting procedures.




25

S T A T E M E N T O F C O N D IT IO N
In dollars

Assets

D EC. 3 1 , 1 9 8 3

D EC. 3 1 , 1 9 8 2

Gold certificate account......................................

3,058,029,344

3,211,909,363

Special Drawing Rights certificate account...........

1,335,000,000

1,335,000,000

Coin................................................................

24,192,328

31,564,944

4,417,221,672

4,578,474,307

Total

Advances .........................................................

124,125,000

90,470,000

Acceptances held under repurchase agreements.

..

418,160,108

1,479,978,181

★Bought outright.................................................

49,294,020,471

42,656,356,801

Held under repurchase agreements.......................

1,384,200,000

3,704,305,000

Bought outright.................................................

2,830,462,845

2,811,153,205

Held under repurchase agreements.......................

207,700,000

587,795,000

54,258,668,424

51,330,058,187

Cash items in process of collection.......................

1,361,852,987

1,629,966,743

Bank premises.................................................

25,117,643

24,757,834

United States Government securities:

Federal agency obligations:

Total loans and securities

Other assets:

Due from Federal Deposit Insurance Corporation
for indebtedness assumed..................................

142,666,667

285,333,333

t All other...........................................................

2,086,313,647

2,509,328,674

3,615,950,944

4,449,386,584

447,748,455

871,255,883

Total other assets
Interdistrict settlement account..........................
Total Assets

★ includes securities loaned—

fully s e c u r e d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

t Includes assets denominated in foreign currencies revalued m onthly at market .ra. te .s.
. ..

26




62,739,589,495

61,229,174,961

743,870,000

S T A T E M E N T O F C O N D IT IO N
In dollars

Liabilities

DEC. 3 1, 1983

DEC. 3 1, 1982

Federal Reserve notes (net)...................

49,474,467,588

44,812,432,506

Depository institutions..........................

6,227,619,079

8,882,084,540

United States Treasury— general account.

3,660,842,946

5,033,451,366

Foreign— official accounts.....................

77,415,895

170,570,230

Other .................................................

513,168,084

586,685,060

10,479,046,004

14,672,791,196

Deferred availability cash items.............

1,215,482,355

484,833,832

All other.............................................

855,720,448

Reserves and other deposits:

Total deposits

Other liabilities:

Total other liabilities
Total Liabilities

2,071,202,803
62,024,716,395

595,892,027*
1,080,725,859
60,565,949,561

Capital Accounts

Capital paid in ....................................

357.436.550

331.612.700

Surplus...............................................

357.436.550

331.612.700

Total Capital Accounts

714,873,100

663,225,400

Total Liabilities and Capital Accounts

62,739,589,495

61,229,174,961

★ Includes exchange translation account balances reflecting the monthly revaluation of outstanding foreign exchange commitments.




27

C h a n g e s in D i r e c t o r s a n d S e n io r O f f ic e r s
in d i r e c t o r s .
In November 1983, the Board of Governors of the
Federal Reserve System redesignated John Brademas Chairman of the board of
directors and Federal Reserve Agent for the year 1984. Dr. Brademas, President of
New York University, New York, N .Y ., has been serving as a Class C director and as
Chairman and Federal Reserve Agent since January 1983. Also in November, the
Board of Governors reappointed Gertrude G. Michelson Deputy Chairman for the year
1984. Mrs. Michelson, Senior Vice President of R.H. Macy & Co., Inc., New York,
N .Y ., has been serving as a Class C director since February 1978 and as Deputy
Chairman since January 1983. At the same time, the Board of Governors reappointed
Clifton R. W harton, J r ., a Class C director for the three-year term beginning January 1,
1984. Dr. W harton, Chancellor of the State University of New York System, Albany,
N .Y ., has been serving as a Class C director since January 1983.
In December 1983, member banks in Group 2 elected T. Joseph Semrod a Class A
director and reelected John R. Opel a Class B director, each for a three-year term
beginning January 1, 1984. Mr. Semrod, Chairman of the Board of United Jersey
Bank, Hackensack, N .J., succeeded Peter D. Kieman, Chairman and President of
Norstar Bancorp In c ., Albany, N. Y ., who served as a Class A director from January 1,
1981 through December 31, 1983. Mr. Opel, Chairman of the Board of International
Business Machines Corporation, Armonk, N .Y ., has been serving as a Class B director
since January 14, 1981.

changes

Buffalo Branch. In October 1983, the board of directors of this Bank redesignated
M. Jane Dickman Chairman of the Branch board for the year 1984. Miss Dickman, a
partner in the accounting firm of Touche Ross & Co., Buffalo, N .Y ., has been a
director of the Branch since January 1977 and has been serving as Chairman of the
Branch board since January 1983. At the same time, the Bank’s board appointed
Herbert Fort a director of the Buffalo Branch for a three-year term beginning January 1,
1984. Mr. Fort, President of The Bath National Bank, Bath, N .Y ., succeeded Carl F.
Ulmer, President of The Evans National Bank of Angola, Angola, N. Y ., who had been
a director of the Branch since January 1981. In January 1984, the Board of Governors
of the Federal Reserve System appointed Laval S. Wilson a director of the Buffalo
Branch for a term ending December 31, 1986. Dr. Wilson, Superintendent of the
Rochester City School District, Rochester, N .Y ., succeeded John Rollins Burwell,
President of Rollins Container C orp., Rochester, N. Y ., who served as a director of the
Branch from January 1979 through December 31,1983.
28




i n s e n i o r o f f i c e r s . The following changes in official staff at the
level of Vice President and above have occurred since the publication of the previous
Annual Report:
Robert C. Thoman, formerly Vice President, Check Processing Function (Utica
Office), retired on June 1, 1983. Mr. Thoman joined the Bank’s staff in 1950 and
became an officer in 1960.
Neal M. Soss, Vice President, was assigned to the Foreign Relations Function upon
his return, on October 17, 1983, from a leave of absence as Special Assistant to
Chairman Volcker of the Board of Governors of the Federal Reserve System. Effective
February 7, 1984, Mr. Soss resigned from the Bank. He had joined the Bank’s staff as
an officer in 1981.
changes

Effective January 1, 1984:
Suzanne Cutler, Senior Vice President in charge of the Management Planning
Group, was assigned responsibility for the Pricing and Promotion Function in addition
to her continuing responsibility for the Personnel and the Planning and Control
Functions.
Chester B. Feldberg, formerly Vice President, was appointed Senior Vice President
with responsibility for the Loans and Credits Function.
Margaret L. Greene, formerly Vice President, was appointed Senior Vice President
with responsibility for the Foreign Exchange Function.
Israel Sendrovic, formerly Vice President, was appointed Senior Vice President with
responsibility for the Automation Group. Effective March 29, 1984, Mr. Sendrovic
resigned from the Bank. He had joined the Bank’s staff in 1970 and became an officer
in 1975.
Robert M. Abplanalp, formerly Assistant Vice President, was appointed Vice
President and assigned to the Planning and Control Function.
Jorge A. Brathwaite, Vice President, formerly assigned to the Government Bond
and Safekeeping Function, was assigned to the Electronic Services Function.
Ralph A. Cann, III, Vice President, formerly assigned to the Service Function, was
assigned to the Fiscal Services Function.
John M. Eighmy, formerly Assistant Vice President, was appointed Vice President
and assigned to the Service Function.
Charles M. Lucas, formerly Assistant Vice President, was appointed Vice President
and assigned to the Foreign Exchange Function.
Herbert W. W hiteman, Jr., Vice President, formerly assigned to the Pricing and
Promotion Function, was assigned responsibility for the Security Control Group.




29

Jeffrey R. Shafer, Vice President, formerly assigned to the Research and Statistics
Function, was granted a leave of absence on January 16, 1984 to serve as a consultant
to the Organization for Economic Cooperation and Development, Paris, France.
Richard Vollkommer, formerly Vice President, Cash Processing Function, retired
on M arch 1,1984. Mr. Vollkommer had joined the Bank’s staff in 1940 and became an
officer in 1970.
Paul B. Henderson, J r ., formerly Senior Adviser for Strategic Developments, retired
on April 1, 1984. Mr. Henderson had joined the Bank’s staff as an officer in 1974.

30




D ir e c t o r s o f th e F e d e ra l R e s e rv e B a n k o f N e w Y o r k

Term expires Dec. 31 Class Group

D IR E C T O R S

A lfred B r itta in I I I .......................................................................................................... ....................................
Chairman of the Board, Bankers Trust Company, New York, N.Y.

1985

A

1

T. J oseph S e m r o d ............................................................................................................... ....................................
Chairman of the Board, United Jersey Bank, Hackensack, N.J.

1986

A

2

R o b er t A. R o u g h ............................................................................................................... ....................................
President, The National Bank of Sussex County, Branchville, N.J.

1984

A

3

W illiam S. C o o k ................................................................................................................. ....................................
President and Chief Executive Officer, Union Pacific Corporation, New York, N.Y.

1985

B

1

J ohn R. O p e l ........................................................................................................................ ....................................
Chairman of the Board, International Business Machines Corporation, Armonk, N.Y.

1986

B

2

E dw ar d L. H e n n e ssy , J r .................................................................................................. ....................................
Chairman of the Board, Allied Corporation, Morristown, N.J.

1984

B

3

J o h n B r a d e m a s , Chairman and Federal Reserve A gent......................................... ....................................
President, New York University, New York, N.Y.

1985

C

G e r t r u d e G. M ic h e ls o n , Deputy Chairm an.......................................................... ....................................
Senior Vice President, R.H. Macy & Co., Inc., New York, N.Y.

1984

C

C lifton R. W h a r t o n , J r ................................. ................................................................. ....................................
Chancellor, State University of New York System, Albany, N.Y.

1986

C

D IR E C T O R S — B U F F A L O B R A N C H

M. J a n e D ic k m a n , Chairman..........................................................................................................................

1985

Partner, Touche Ross & Co., Buffalo, N.Y.
E d w a r d W. D u f f y ...................................................................................................................................................
Chairman of the Executive Committee, Marine Midland Banks, Inc., Buffalo, N.Y.

1984

G e o r g e L. W e s s e l ...................................................................................................................................................
President, Buffalo AFL-CIO Council, Buffalo, N.Y.

1984

F r e d e r ic k

G.

Ra

y

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

198 5

Chairman of the Board, Rochester Community Savings Bank, Rochester, N.Y.
D o n a l d I. W ic k h a m .................................................................................................................................................
President, Tri-Way Farms, Inc., Stanley, N.Y.

1985

Herbert Fo

1986

r t

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

President, The Bath National Bank, Bath, N.Y.
La v a l

S.

W i l s o n .................................................................................................................................................................................

1986

Superintendent, Rochester City School District, Rochester, N.Y.

M E M B E R O F F E D E R A L A D V IS O R Y C O U N C IL — 1 9 8 4

L ew is T. P r e s t o n .....................................................................................................................................................
Chairman of the Board, Morgan Guaranty Trust Company of New York, New York, N.Y.




1984

31

O f f ic e r s o f th e F e d e ra l R e s e r v e B a n k o f N e w Y o r k
A n th o n y M. S o l o m o n , President
T h om as M. T im l e n , F irst Vice President

S am Y . C ross , Executive Vice President
Foreign Group

R on a ld B. G r a y , Executive Vice P resident
Bank Supervision
J am es H. O l t m a n , G eneral Counsel

P eter F o u s e k , Executive Vice President
Research and Statistics

P eter D. S te r n l ig h t , Executive Vice President
Open Market Operations

A U D IT

AU TO M A TIO N GROUP

and D irector o f Research

J o h n E. F l a n a g a n , G eneral Auditor
R o b er t J. A m b r o se , A ssistant G eneral Auditor
L o r etta G. A n sb r o , Audit Officer
E dw ar d J. C h u r n e y , M anager,
Auditing D epartm ent

H. A llan V ir g in ia , M anager,
Audit Analysis D epartm ent

D A T A P R O C E S S IN G

P eter J. F u l l e n , Vice President
H o w ar d F. C r u m b , A ssistant Vice P resident
G eo r g e L u k o w ic z , A ssistant Vice President
R on a ld J. C l a r k , M anager,
Communications and Technical Services D epartm ent

J am es H. G a v e r , M anager,

AD M INISTRA TIVE SERVICES GROUP
E d w in R. P o w e r s , Vice P resident
J e ro m e P. P e r l o n g o , M anager (Night Officer)

Analytical Computer D epartm ent
P eter M. G o r d o n , M anager,
Computer O perations Support D epartm ent
J o hn C. H e id e l b e r g e r , M anager,
Telecommunications O perations D epartm ent
K enn eth M. L e f f l e r , M anager,
G eneral Purpose Computer D epartm ent

S Y S TEM S DEVELO PM ENT
A C C O U N T IN G

C a th y E. M in e h a n , Vice President
L e o n R. H o lm e s , A ssistant Vice President
D o n a l d R. A n d e r s o n , M anager,
Accounting D epartm ent

K a th leen A. O ’N e il , M anager,
Accounting D epartm ent

Jo sep h R. P r a n c l , J r . , O perations Analysis Officer

S E R V IC E

S usan C. Y o u n g , Vice P resident
B a r ba r a R. B u t l e r , A ssistant Vice President
O m P. B ag a r ia , M anager,
Funds Transfer System s Staff
V iera A. C r o u t , M anager,
O perations Systems D epartm ent
P atr ic ia Y. J u n g , M anager,
D ata Systems D epartm ent
H arry Z. M e l z e r , M anager,
Common Systems D epartm ent
M o n ik a K. N o v ik , M anager,
D ata Systems D epartm ent

J oh n M . E ig h m y , Vice P resident
R o n a ld E. L o n g , Assistant Vice President
M a tth ew C. D r e x l e r , M anager,
Building Planning D epartm ent

B A N K S U P E R V IS IO N

J o seph C. M e e h a n , M anager,

RONALD B. G r a y , Executive Vice P resident
A. M a r sh a ll P u c k e t t , Vice P resident
F red er ic k C. S c h a d r a c k , Vice P resident
St e ph en G. T h ie k e , Vice President
G eo r g e R. J u n c k e r , C h ief Com pliance Examiner

Building O perating D epartm ent
J ason M. S t e r n , M anager,
Records, Printing, and Postal Services Departm ent
R uth A nn T y l e r , M anager,
Service D epartm ent

32




O ff ic e rs

(Continued)

L e o n K o r o b o w , Assistant Vice President
R o b e r t A. O ’S u l l i v a n , C h ief Financial Examiner
B e n e d ic t R a f a n e l l o , Adviser
W illia m L. R u t l e d g e , Assistant Vice President
Jam es P. B a r r y ,
Assistant C hief Examiner

J oh n M. C a sa z z a ,
Assistant C hief Examiner
E u g e n e P. E m o n d , M anager,
Supervision Support D epartm ent

A. J o h n M a h e r ,
Assistant C h ief Examiner

T h o m a s P. M c Q u e e n e y ,
Assistant C hief Examiner

G e r a l d P. M in e h a n , M anager,
Foreign Banking Applications D epartm ent
D o n ald E. S c h m id , M anager,
Bank Analysis Departm ent

LEG AL

Jam es H. O l tm a n , G eneral Counsel
E r n e s t T. P a t r ik i s , D eputy G eneral Counsel
D o n N. RlNGSMUTH, Assistant G eneral Counsel
D o n a ld L. B i t t k e r , Assistant Counsel
R o b e r t N. D a v e n p o r t , J r . , Assistant Counsel
J e f f r e y F. I n g b e r , Assistant Counsel
and A ssistant Secretary

J o y c e E. M o ty le w s k i, Assistant Counsel
B r a d l e y K. S a b e l, Secretary
and Assistant Counsel

* M in d y R. S ilv e r m a n , Assistant Counsel
W a l k e r F. T o d d , A ssistant Counsel
R a le ig h M. T o z e r , Assistant Counsel

L O A N S A N D C R E D IT S

E C O N O M IC A D V I S E R

R ic ha rd G. D a v is , Senior Economic A dviser

C hester B. F e l d b e r g , Senior Vice President
R o b er t T. F a l c o n e r , Assistant Vice President
G ary H a b e r m a n , M anager,
C redit and D iscount Departm ent
F r anklin T. L o v e , M anager,
C redit and D iscount D epartm ent

FOREIGN GR O UP
S am Y. C r o s s , Executive Vice President

M A N A G E M E N T PLANNING GROUP
F O R E IG N E X C H A N G E

M a r g a r et L. G r e e n e , Senior Vice President
C h a rles M. L u c a s , Vice P resident
PETER S. HOLMES, Foreign Exchange Trading Officer
P a tricia H. K u w a y a m a , M anager,
Foreign Exchange D epartm ent

F O R E IG N R E L A T I O N S

Irw in D. S a n d b e r g , Senior Vice President
Jo h n H o p k in s H e ire s , A dviser
GEORGE W. R y a n , A ssistant Vice President
G e o r g e R. A r r i n g t o n , M anager,
Foreign Relations D epartm ent
G eo rge H. B o s s y , M anager,
Foreign Relations D epartm ent
F rancis J. R eisc h a c h , M anager,
Foreign Relations D epartm ent

S u zan ne C u t l e r , Senior Vice President
PERSONNEL

R ob er ta J. G r e e n , Vice President
* T err en c e J. C h e c k i , A ssistant Vice President
C a rl W. T u r n ipse e d , Assistant Vice President
R o b er t C. S c r iv a n i , M anager,
Personnel D epartm ent

P L A N N IN G A N D C O N T R O L

R o b er t M. A b pl a n a l p , Vice President
A a ron S. D r il l ic k , M anager,
M anagement Information D epartm ent
N ir m al V. M a n e r ik a r , M anager,
M anagement Information D epartm ent

*On leave of absence.




33

O ff ic e rs

(Continued)

P R I C IN G A N D P R O M O T I O N

WHITNEY R. Irw in , Senior Bank Services Officer
B r u c e A. C a s s e l l a , Bank Services Officer
M a r c o s T. Jo n e s , M anager,
Pricing Administration D epartm ent
B etsy B u ttrill W h it e , M anager,
Pricing Administration D epartm ent

C H E C K P R O C E S S IN G
Jam es O. A s to n , Vice President
t Louis J. B r e n d e l , Regional M anager
(Jericho Office)

H arry A. C u r t h , J r ., Regional M anager
(Utica Office)

F red A. D e n e se v ic h , Regional M anager
(Cranford Office)

A n tho ny N. S a g l ia n o , Regional M anager
(Jericho Office)

O P E N M A R K E T O P E R A T IO N S

P eter D. S te r n l ig h t , Executive Vice President
E d w ar d J. G e n g , Senior Vice President
P aul M e e k , Vice President
and M onetary Adviser

M a r y R. C l a r k i n , Assistant Vice President
EDWARD J. O z o g , Assistant Vice President
J o a n E. L o v e t t, M anager,

* Jo h n F. S o b a l a , Assistant Vice President
J a n e t L. W y n n , Assistant Vice President
S te v e n J. G a r o f a l o , O perations Analysis Officer
P a u l L. M c E v ily , M anager,
Check Services D epartm ent
D on a ld R. M o o r e , M anager,
Check Processing Departm ent
T hom as E. N e v iu s , M anager,
Check Adjustment D epartm ent

Securities D epartm ent

C h r isto ph er J. M c C u r d y ,
Research Officer and Senior Economist
A nn -M ar ie M e u l e n d y k e , M anager,
Securities D epartm ent

O F F IC E O F T H E P R E S ID E N T

B ar ba r a L. W a l t e r , Assistant to the President

E L E C T R O N IC S E R V IC E S

J o r g e A. B r a t h w a it e , Vice President
H enry F. W ie n e r , A ssistant Vice President
H. J ohn C o s t a l o s , M anager,
Securities Transfer Departm ent
R ob er t W. D a b b s , M anager,
Funds Transfer Departm ent
A nd rew H e ik a u s , M anager,
Funds Transfer D epartm ent

OPERATIONS GROUP
H enr y S. F u ja r sk i , Senior Vice President
W illiam M. S c h u l t z , Adviser
C A S H P R O C E S S IN G

JOSEPH P. B o t t a , Assistant Vice President
M a r t i n P. C u s ic k , M anager,
Paying and Receiving Departm ent
T h o m as J. L a w l e r , M anager,
Currency Verification Departm ent
C harles E. R o c k e y , M anager,
Currency Services D epartm ent
L il l i e S. W eb b, M anager,
Currency Verification Departm ent

F IS C A L S E R V IC E S

R a lp h
C a ro l
F ra n k
Jo sep h

A. C a n n , III, Vice President
W. B a r r e t t , Assistant Vice President
C. E isem an , A ssistant Vice President
J. G rim sh a w , M anager,

Safekeeping D epartm ent

A ngus J. K e n n e d y , M anager,
Government Bond D epartm ent

J ohn J. S t r ic k , M anager,
Savings Bond D epartm ent

P U B L IC I N F O R M A T I O N

*On leave of absence.
t Retires May I, 1984.

34




P eter B a k st a n s k y , Vice President
R ich a rd H. H o e n ig , Assistant Vice President
M ar g a r et E. B r u s h , M anager,
Public Information D epartm ent

O ff ic e rs

(Continued)

D a v id L. R o b e r t s ,

R ES EA R CH A N D S T A T IS T IC S

P eter F o u s e k , Executive Vice P resident
and D irector o f Research

R o g er M. K u b a r y c h , Senior Vice President

Research Officer and Senior Economist

L eo n a r d G. S a h l in g ,
Research Officer and Senior Economist

and D eputy D irector o f Research
R ich a rd J. G e l s o n , Vice President

*J effrey R. S h a f e r , Vice P resident
M . A k b ar A k h t a r ,

S E C R E T A R Y ’S O F F I C E

A ssistant D irector o f Research

E d w a r d J. F r y d l ,

B r a dley K. S a b e l , Secretary

Assistant D irector o f Research

and A ssistant Counsel

W illiam J. G a s s e r ,

J effr ey F. I n g b e r , A ssistant Counsel

Assistant D irector o f Research

and A ssistant Secretary

J oh n W e n n in g e r ,

T h eo d o r e N. O p p e n h e im e r , Assistant Secretary

A ssistant D irector o f Research

N an cy B e r c o v ic i , M anager,
Statistics D epartm ent

t S teph en V. O. C l a r k e ,

SECURITY CONTROL GROUP

Research Officer and Senior Economist

P atr ic k J. C o r c o r a n ,

H er b er t W. W h it e m a n , J r ., Vice President

Research Officer and Senior Economist

E dna E. E h r l ic h ,

E L E C T R O N IC S E C U R IT Y

Research Officer and Senior Economist

R ic h a rd P. P a ssa d in , Security Officer

A a ron S. G u r w it z ,
Research Officer and Senior Economist
G er a ld H a y d e n , M anager,
Research Support D epartm ent
S u sa n F. M o o r e , M anager,
Statistics D epartm ent

C arl J. P a l a s h ,
Research Officer and Senior Economist

P R O T E C T IO N

R o b er t V. M u r r a y , Assistant Vice President
S E C U R IT Y C O N T R O L

J ohn C h o w a n s k y , Security Control A dviser

O FFICE R S — B U FFA LO

BRANCH

J ohn T. K e a n e , Vice President and Branch M anager
PETER D. L u c e , Assistant Vice President
A C C O U N T IN G ; C A S H ; C R E D IT ,
D IS C O U N T , A N D F IS C A L A G E N C Y

G ary S. W e in t r a u b , Cashier
B A N K S E R V I C E S A N D P U B L IC
IN F O R M A T IO N ; P E R S O N N E L ;
P R O T E C T IO N

R o b er t J. M c D o n n e l l , O perations Officer
B U IL D IN G O P E R A T IN G ; C H E C K ;
S E R V IC E

D avid P. S c h w a r zm u el ler , O perations Officer
* O n le a v e o f a b s e n c e .
t R e t i r e s M a y 1, 1 9 8 4 .




35