Full text of Annual Report of the Federal Reserve Bank of Philadelphia : Banking and Business in War : 1942 Annual Report

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BANKING
ANDBUSINESS
IN WAR
Twenty-eighth

Annual

Report

of the

FEDERAL RESERVE BANK
OF PHILADELPHIA

Third

Federal

Reserve

District

CONTENTS

Page
1

Genera summary ..............

.....

war .. "....
Relation of the work of the Bank tote
Treasury finance
....
Credit policy
.............................
.........
Consumer credit
......
..................
Foreign funds
...........................
Operations for RFC
. ..................
..............
Regulation N'
............
...............
.................
..........
Volume of operaticros

Business conditions

.....

9
1l
12
12

ý,

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

14
............

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

Banking and credit conditions:
Member hanks
................

19
.

Banking trends
..............
Reserves
...............................
Investments
.........................
oalls .................................
Deposits
.................................
Capital funds
.....................................

-1(1

13
27
28
29
29

Earnings and expenses
...............................
Money and capital markets
............................
Federal Reserve Bank:
Reserve Bank credit

Z(1
31

35
...

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

i,,. i..... ..:... ....... _
{ arnings and expenses
,
..
Membership
................
Directors

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

and officers ...................

38
t9

.......

}l)
....

BANK

RESERVE

FEDERAL

OF PHILADELPHIA

July

1,1 943

7'o the Member Banks iir the
77iird Federal Recer:,e District:

In recognition
and business
District,

of the tact

in the "Third

as well
been

as in

has

pletely

by the requirements

conditioned

"Twenty-eighth

Annual

Bank,

herewith,

presented

"Banking

and

Federal

the

whole,

Business

that

banking
Reserve
as a

country
almost

com-

of the war,
Report

the
this

is <izivcn the title
in \V'ar,..

Ai. ricEi, Fl. AVii. i. iANis
l'nside,, t.

Geueral Srnumag

The
Federal

highly

developed
and diversified
resources of the Third
into the
Reserve District
integrated
have been completely
have
in this district
war effort of the nation. Varied industries
conday
verted their well-equipped
war,
working
plants to the ways of
and night to turn out the implements
the
means of
of war and
fronts.
'I'bis transformation,
getting them to the fighting
particularly
Pearl
Harbor
has been swift and thorough,
since
showing the
ability of management and labor to meet the great emergency.

INCOMEAND INDUSTRIALPRODUCTION

Tzventy-eighth Annual Reporl, Federal Reserve Bank of Phila"Ielphi",
The President, on January 6,1942, set national production

gods

and old
were constructed
As
incredible
speed.
to war purposes with
output of war materials climbed steadily.
President could report to the Congress that
New

facilities

that startled the world.
facilities were converted
they came into production,
On January 7,1943, the
confidence in the ability of the American people to establish records,
In
upon which the production
goals had been based, was justified.
1942 the country produced 4 tines as much munitions
as in 1941 ;
large,
6%
shipping
the output of ordnance was
times as
merchant
5 times, aircraft 37/ times, and naval ships 2; 3%,times that of 1941.
despite
These records were being established
in production
an
increase in the number serving in the armed forces from it little
The number of war workers increased
over 2 million to 7 million.
from
This tempo of
6,900,000
over the same period
to 17,500,000.
has
in
1943,
activity
the early months of
with the volume
continued
of output and deliveries establishing
new high records.
'I he financial

The authorized
war
side of the effort is enormous.
30,1941,
to
program was increased from $64 billion on November
5246 billion by the end of April, 1943. War activities,
that cost
$28 billion in the fiscal year
be
ended June 30,1942, are expected to
$77 billion in the current fiscal year and $l(1O billion in the fiscal
The public debt which was $72 billion
year ending J une 30,1944.
June
30,1942,
on
may reach $210 billion by dune 30,1944.
A major objective of national policy is to maintain
equilibrium
between the material and the monetary aspects of the war. The real
burden, of course, must be borne as the war progresses.
Battles can
be fought only with existing planes,
tanks,
ships,
guns, ammunition,
and the great variety of other materiel.
Production
of these articles
does not add to the supply
for civilians
but pa.,
of goods available
ment for them adds to income. 1)iseyuilibrium
is inevitable
unless
the distribution
between
of expenditures
the Government
and
civilians parallels the distribution
Increases in revenues
of goods.
borrowings
from current
and in Government
incomes
civilian
are
methods

of securing

equilibrium.
2

Twenty-eighth lunual Report, Federal Reserve ß'ank
of Philadelphia
.
In tie field
of revenues, expanded tax programs

incomes

and larger

From
resulted in considerable increases in Federal receipts.
about $8 billion
in the fiscal year ended June 30,1941,
revenues
increased
billion in the fiscal year 1942 and to an expected
to $13,
$24L billion
'2
in the fiscal year 1943. Various proposals for further
increases in taxation
at the end of the
were under consideration
year. llespite these
'Creasrapid increases in Federal tax revenues,
ury deficits have grown
increased at
sharply
as war expenditures
an enormous rate.

One of the
most urgent jobs, therefore, has been and is to secure
the greatest possible investment
of current incomes in Government
securities. The financial
requirements though tremendous, are not
out of proportion to
the capacity of the people to invest. Government expenditures in large
bank
part pass into the pockets or
accounts of individuals
and business concerns. Such income at a
time when the
amount of goods available for consumers is declining
is resulting in
accumulations of finds for investment.
In 1142
nonhanking investors added about $24 billion to their
holdings
of Government securities and they are in a position to
make even large,
Such purchases restrain
inflation. haven - purchases this year.
higher
with
taxes people will have more money to
spend at a time
when the supply of goods is declining because of
the demands
of war production.
if they try to spend this excess
purchasing power,
the
upward pressure on prices will be serious.
If, on
the other hand, individuals lend
money to the Government,
they transfer for
the time being that amount of purchasing power
from themselves
to the Government. Not only does the Government
have
more money for essential
war purposes, but investors have
that much less
to spend on the restricted volume of civilian goods.
The Federal Reserve
Baal: of Philadelphia
has exerted its efforts
to assist the 'Treasury
in selling securities
to non hank investors.
And the drive
by
conducted
the War Savings Staff of the Treasury
3

T°wenty-eighth zinnual Report, Federal Reserve Bank of Philadelphia
Department was intensified to obtain the fullest possible participation in the payroll savings plan. Largely as a result of these efforts,
in this
the sales of Savings Bonds in 1.942 amounted to $530 million
district, and $9 billion in the country as a whole. In the first fur
$41
months of 1943 these sales were respectively $231 million and
large
billion.
Despite these excellent results, very
additional
amounts had to be borrowed by other methods.
the Secretary of the Treasury adopted a plan to
in the
coordinate the efforts of the banking and securities industries
banks.
sale of Government securities to others than commercial
Under this plan a Victory Fund Committee was established in each
Federal Reserve district under the chairmanship of the president
of the Federal Reserve Bank to recruit salesmen and to direct their
efforts in periodic drives to sell Ghwernment securities.
In May

The First War Loan Drive was conducted by the Victory Fund
Committee during December. The total amount of Government
securities distributed aggregated $12,900 million as compared with
an announced goal of $9 billion. The amount of securities sold in
this district totaled $545 million. About 60 per cent of the securities
sold in the country was purchased by others than commercial banks
accepting demand deposits.
For the Second \Var Loan Drive, the Victory Fund Committee
and the War Savings Staff were consolidated into the United States
Treasury War Finance Committee in March, 1943. The Secretary
of the Treasury became head of the National Committee and the
presidents of the twelve Federal Reserve Banks acted as chairmen
of the district committees. The national goal was set at $13 billion
of which not less than $8 billion was expected to come from individuals, business concerns and institutions. The final result showed
that the total placement of securities was $181 billion. 'l'he .uiiount
purchased by nonbank investors was $131,.. billion or more than the
-;
Commercial banks, of
quota originally set for the entire drive.

Twenty-eighth Annual Report, Federal Reserve Bank of Philadelphia
course, met their full share of about $5 billion and the volume of
subscriptions was so enormous that allotments were among the
lowest on
record.
The original quota for the Third Federal Reserve District was
fixed at $757
less than $475
million. From nonbank investors not
The
from
$282
million and
commercial banks
million were expected.
final results
$982
million or about
showed that total sales exceeded
129 per cent
banks
of the original quota. Others than commercial
purchased $659 million or about 138 per cent of the assigned quota.
Commercial banks
acquired $323 million or 115 per cent of expectation on the allotment basis, but on the subscription basis their share
was about four times the expected quota.

Relation of the Work of the Bank
To the War

The Federal Reserve Bank
bank is
of Philadelphia as the central
of strategic importance in the smooth operation of the complex war
economy of the Third Federal Reserve District, which covers 60
Counties in Eastern Pennsylvania, Southern New Jersey, and Delaware. 7'he most dramatic
part of its work is in connection with new
or greatly expanded
activities, such as distribution of Government
securities or controlling foreign funds, arising directly out of the
war" But the importance
is revealed
of the functions of the Rank
not so much in their dramatic
loss
in
that
the
would
character as
result to the war
if
inefficiently
effort
they were
performed.
For example,
functions
one of the most routine, most mechanical
Of the Bank is that
One
of check clearance.
need only recall the
delays,
in
;annnoyances, inefficiencies,
and wastes of check collection
Pre-l"edcral Reserve
in
time
(lays to appreciate the value, especially
of war, of
More
a service that we have come to take for granted.
5

7'weniv-eighth /}route! Report, Federal Reserve Rank of Philadelphia
,
Cash Offerings of Treasury Securities
Third

Federal

Reserve District

Commercial
I)atc

(Thousands

1942
Special offerings
Bonds:
21,/2',; Lunds..
Lo(lds.
2I2'i
Lunds...
2%
2%'. r Lunds.
2'i
bonds. ".
2'7ý, Lunds.
2', ir. bonds.
I? 1',, Lunds..
Notes:
I2
(lutes.
i1('r
notes....
Cert. of indelt.
C/I....

May
Aug.
Dec.
Feb.
May
July
Oct.
Dec.

"1', (./1...
N. l.

0.65'
"w',

('/I.
(/1...
(/I....
(/1....

Subscript ions

5
3
1
25
15
15
19
I

l1)t hcrs t han r0mimcrcial

hanks

Allotments

`/o of
U. S.
allot-

Subscript ions

lý.ýn ý"

I..S.

Allot Ille1118

allot
mcnts
_'ý:

I11C11I S

59,319
44561
77,433
8(1,85()

27,275
77,514

132,164
121,362
22,398
57,0i8
21 O83
,
17,420

132,164
39,505
9, (154
31, (122
21,083
17,420

b3
d%
$ (1
2. (1
3.5
2.;
1
.a

117,624

104,226

8.3`
5.3
6.4
7.1
5.2

Oct. 15
Sept. 25

78,345
105,844

78,345
47,891

5.5
4.6

14,793
41, (r12

14,793
17,907

2.1
3.2

Aug.
Nov.
Dec.
Sept.
June
Apr.

107,126 1
87,2711
128,239 I
50,848
87,946
67,317

53,349
49,627
81,557
38,689
45,286
33,478

4.5
3.0
3.9
3.0
4.0
3.9

34,993

17,059

4. ii

8,241 i
18,691
17,307
32,543
14,482

8,241
18,691
13,078
16,546
22,135

ý.:
;. n
ý
.;.
aý
.; ý

1,352,287

794,611

4 9a
.

786,185

100,506

2. i%,

185,1)09
114,092
141,777
80,850

15 1
2
1
21 1
25
15

1 01.11 SIICCInI
offerings.......

Continuous
offerings

lulls......
.
'lax notes.
Savings bollds

'futil
cunt 11111m),
u0uriug4..
(rand

total,

786,185

1942.2,138,472

1,195,117

_
1943; January
April,
1
Special
offerings

2 V21, bonds.
2',; Iwnds..
(/1.

x`.;. C/1
I utal shecial

rýffenngs..

J Apr. 15
ýpr. 15
Peb. 1

.. Apr.

. ..!

Continuous
offerings
kills
'fax notes
savings Lunds.
total cull inuuus
offerings
Grand
total.
1943.
4 months
Note:

lmenlititric"t

400,506

608,12.i !
194,215

137,407
46,954

3.9'%

f, .,-,
S. 0' '

177,048
230,973

i 4'i
S0,

3.4'%,

706,3911

dS1, "}y1

427,353

oOlltted.

080J

d51,191

5.1 "/,

1,820,130

980,447 i

1,691), 433 1 1,493,934

0',

i i'd4
2.7
3
.;,

279,037

427,353

451,89. i
528,554

211(1,73"1
I23,169
25,861
101,727

1,207,910

451,893
528,554

I-ý3

21111,7
3.1
123,101)
25,961
1111,7'27

94,676

612,220

513,4E7

6.5
3.7
4.4

405,572

612,220

illlocRllons

2.7'%

718,980

3.4'/,,
3.9'%.

-2'i

408,021

_108,021

S 41"

859.512

859,512

4.7'

Ttweniv-eighth lnintal Repot, Federal Reserve Bank of Philadelphia
.
than 10 million checks, arising from myriads of business transactions
and operations of the "Treasury, are cleared each month. Should this
central clearing of checks slow down, the tempo of business in war
It
plants employing millions of war workers would be retarded.
he
into
would
the gears of the master clock
as though one put sand
of a timing system. The department which handles this seemingly
unimportant household detail has now been assigned the function
of clearing ration checks, because it is recognized as an efficient,
labor-saving
distribution
organization. The equitable and smooth
diminishing
depends,
of the
among other
supply of civilian goods
factors,
This
upon the efficient operation of the Transit Dcpartllicllt.
work may lack some of the glamour attributed to direct production
of munitions but it is nonetheless indispensable to the war effort and
it cannot he
performed efficiently without an adequate force of
cnmpercnt supervisors and clerks.

Another routine function that is indispensable to our economic
life, especially in
time of war, is the receipt and disbursement of
currency and coin. In 1942 this Bank counted 195 million pieces of
currency and over 400 million coins, totaling nearly $1 billion. It is
important to the war
effort that businesses, workers, and the general
public have their legitimate demands for currency supplied promptly.
Treasury
finance

One

of the more spectacular activities of the Bank hac
durbeen the
sale of Government securities, especially
ing the 1,,irst and Second War Loan drives. As fiscal
"gent
of the United States, this Bank, in common with the other
Reserve Banks,
concentrated its efforts upon securing for the
Government
the largest possible amount of funds from current
income
and from savings. Since not all the funds that had to be
lx,rrowed
could he secured from these sources, however, hanks were
ttrged to utilize
their available funds more fully. The effectiveness
',f these efforts is
revealed by the fact that in 1942 placements it,
this district
of all Treasury issues were over 312' times and those of
marketable issues
more than 41;ý times as great as in 1941.
7

Twenty-eighth Annual Report, Federal Reserve Bank of Philadelphia
A wide variety of securities was offered during the year. United
States savings bonds-Series F, F, and G-and
tax savings notes
in
bills
were offered each week
were continuously on sale. Treasury
in
amounts ranging from $1S0 million in January to $600 million
December and $900 million in May, 1943. In addition, nine bond
issues (including one refunding), six issues of certificates of indebtedness, and three note issues (including one refunding) were offered
during 1942. A summary of Treasury securities offered for cash
subscription in 1942 and early 1943 is shown in the accompanying
table.

This district purchased $1.3 billion or 4.3 per cent of all special
issues offered during 1942 and subscribed to an additional $700
million. It also purchased $1.4 billion or 4.0 per cent of bills and
issues continuously on sale.

The sale of securities obviously is a direct part of the war effort.
These operations, however, cannot be fully successful unless they
are bolstered by an enormous amount of routine work, especially
in connection with the issuance and redemption of Government
securities. In 1942 the Fiscal Agency Department of the Bank
handled 8 million separate items having a
value of almost $4 billion.
Most of this total value
was represented by securities payable to
hearer, with all the integrity
and extreme care that this implies.
The work calls for accuracy in typing,
verification, accounting, and
general clerical work and ability to follow strict Treasury regulations. The volume of work fluctuates very greatly, but even peakloads must be handled with dispatch
under pressure. Failure to give
prompt and accurate service to buyers of Government securities
would be quickly reflected in complaints. In enlarging its facilities
to handle the increased volume of work the personnel of the Fiscal
Agency Department has been increased from about 25 in December
8

i
V

Twenty-eighth ihrnual Report, Federal Reserve Bank of Philadelphia
1940 to 170 a year ago, 284 in December of 1942, and 313, excluding
part-time employees, in early May 1943.
Actions in the field of credit were designed to implement
the policy announced by the Board of Governors when
the United States entered the war in December 1941.
]'art of the
statement issued at that time reads:

Credit
policy

i
i

The System is
prepared to use its powers to insure that an ample
supply of funds is available at all times for financing the war effort
and to exert its influence toward maintaining conditions in the United
States Government
from the
security market that are satisfactory
standpoint of the Government's

requirements.

Continuing the
policy which was announced following the outbreak of
in
Europe,
Federal Reserve Banks stand ready to advance
war
funds on United States Government
securities at par to all banks.

Both local policies
by this
and participation in national policies
Rank
directed
were
to the accomplishment of these objectives. In
the local sphere the Bank
21 and again
reduced its rates on March
on October 17.
TO

farilýr",
"'"""

f.,

Iwe -

... 7: __-___ -- _. _ UI
-r
auJuSLI11el1C

-I-, - ...........
[IIC
uu)IICy

.......
1I
I'

1.
-ýr
nýý

rhnnnltlST

... b

conditions, this Bank, in
from the
conformity with directions
Federal Open Market
Committee, has stood ready since April 30,
1942 to
purchase all Treasury bills offered to the Bank at a rate
of NI of 1 per
cent per annum. Since early August, also in confI'rmity
with directions from the Committee, the seller of 'T'reasury
hills has been
granted the option of repurchasing a like amount
and maturity
of bills at the same rate of discount. As a conquence, "Treasury bills held by
as
member banks are virtually
liquid
as excess reserves and member banks are enabled to keep
their funds fully invested
in the war effort. The effect of this
act")" has been
in
broaden
to
substantially the market for bills
this district
in
as
the country.
9

T, reuhV-eighth /Iaaunal Report, Federal Reserve Bank o%Philadelphia
On May I5,1942, the President of this Bank sent it letter to
banks, trust companies and others calling attention to the increased
The Bank
attractiveness of bills, both as to yield and liquidity.
bills after
was particularly successful in securing additional bids on
Circular No. 1068 was issued on July 2,1942, to show in nonMay
technical terms the method of bidding for Treasury hills. In
$290
1943 weekly reporting banks in the district held
million of bills,
as compared to about $20 million it year earlier.
This Bank also participated in open market operations which
were largely responsible for an increase in System holdings of
Government securities from $2.3 billion in April to $6.2 billion at
the end of the year and to it peak of $6.7 billion in the following
April; by the end of May 1943 they again approximated $6.2 billion.
On November 20,1942,
Circular No. 1102 was addressed to all
banks in this district
of
to the advantages
calling their attention
for
loan
These
deposit
qualifying
war
accounts.
accounts enable
banks to paN' the 't'reasury
for securities by deposit on their books
to the account of the Government.
The number of banks which
increased
from 299 in October 1942 to 629 in May 1943.
qualified

Just as the issuing and redemption section of the Fiscal Agency
.
Dcpartment
provides a foundation
upon which the whole war loan
drives must be built,
so the Department
of Research and Statistics
furnishes data on employment,
incomes, production,
distribution,
inventories,
banking
basic
prices,
and credit upon which
policies
Summaries and analyses are prepared for the Board
are formulated.
of Directors and officers of this Bank and for Governmental
agencies
including the \Var Production
Board and Office of Price :\dministraI )cpart tic lt, :ltd the
tion, the Department
of Labor, the Treasury
Board of Governors
Federal
Reserve
System.
\lore
of the
than
4,5(X) respondents
basic
inforti;
provide
the
primary
ati m upon
which many of these analyses are based.
W

i
I
ý
`

i
i

Twenty-cight/r
Consumer
r -1;

,-Innual
(',..,...... _

Report,
crculr

Federal

- control,
-- ._I".,.

Reserve Bank
nrst

LlnaerraKen

Philadelphia
'in

JCpretnUer

1941, was designed to facilitate the change from it
civilian to it war economy, promote a sound credit

!
ý

structure on which post-war
consumer demands may be satisfied,
and assist in restraining
inflationary
the
tendencies by encouraging
liquidation
of debt out of current incomes. The scope of Regulation
"' was broadened
on May 6,1942
to include charge accounts and
"n91"-Payment
loans; and other extensions of consumer credit were
further
restricted by broadening the list of articles included, shortening maxlniUm Inaturities
generally to twelve months, and increasing
required down payments.
This increased the number of establishments generally
by
in this district
from
affected
the regulation
approximately
15,000 to 50,000.
"These measures were among the
tactors instrumental
in reducing consumer credit outstandings
from
$9", lnlbon in
I
September 1941 to $5% billion at the end of April
1943; the decline included
$3 billion in instalment
sale credit and
$1 billion in
the instalment
loan field.

"I'hc Board
of Governors also issued a joint announcement with
Other federal bank
supervisory agencies indicating the procedure
to he followed by
their respective organizations to encourage the
reduction of individual debt by
amortization of bank loans.
Foreigp
%uuds

-another

special

assignment

directly

to the war

Is the administration over the control
of foreign funds
for the United States Treasury. This is
one of the most
important instruments
employed by this country in the field of
ecunorte warfare.
All transactions in
which designated foreign
countries
and their nationals have any interest
are subject to
regulation and
scrutiny.
This impairs the ability of the enemy
Ix, wers to finance
propaganda, sabotage, and similar subversive
:utivities.
Since the
establishment of foreign funds control,
billion
of funds in this country belonging
to enemy and enemyOxcupied
falling intocountries and their nationals has been prevented from
the possession the
of
enemy countries.
II

Twenty-eighth Annual Report, Federal Reserve Bank of Philadelphia
This Bank also acts as fiscal agent for the Reconstruction Finance Corporation in its special war programs
which cover the accumulation of strategic war materials
such as aviation gasoline, tung oil, alcohol, silk, nylon, and automobile tires. As fiscal agent, the Bank performs the accounting and
disbursement functions in all these activities. It carries out similar
functions with respect to the settlement and financing of defense
housing and war plant construction and war damage insurance.

Operations
forRFC

Regulation V

Another war time activity of the Bank is to represent
the War Department, the Navy Department, and the
Maritime Commission in the guarantee of certain loans
for war production purposes. This activity is conducted under
Executive Order No. 9112 and Regulation V issued to implement it
by the Board of Governors of the Federal Reserve System in April
1942. The purpose of these guarantees is to assure the production
of war materials by enabling prime and sub-contractors to finance
their requirements, even if these should exceed the amounts to
which they ordinarily would be entitled on the basis of their credit
standings.
In the performance of their functions as agents of the Governnment departments, the Reserve Banks make careful investigation
Through April
of each application and submit recommendations.
1943, this Bank received 250
for
applications
guarantees on loans
aggregating $177 million. Some were for small amounts, but they
were given the same careful consideration as those involving larger
sums. An indication of the close relationship of this activity to the
war effort and of the desire to process applications quickly is the
fact that
an Army officer is detailed as a liaison, has an office in the
Bank, and is in daily
conference with officers of the Credit De_
part1 ent.
Volume of
operations

Some indications of the absolute amount and
of the
increase in the volume of
work performed at the Bank
are shown in the accompanying table.
12

'I weuty-eighth Annual Report, Federal Reserve Bank of Philadelphia

Volume of work
federal Reserve Bank
of Philadelphia
I )iscounts and advances
.............
Currency counted
...................
Coins counted
Ordinary checks......................
Checks handled ....................
in packages by auto-

mobile run service
.................
S. 1'overnment checks
\\'ork
.............
relief checks ...................
Collection items:
Coupons of U. S. Government and
agencies.......................
All other (notes,
drafts and coupons).
Transfers funds
of
...................
Issues, redemptions
and exchanges by
fiscal agency depart
ment:
1"S. Government direct
obligations..
All other
.........................

Dollar
amounts
(000,000's

Pieces or transactions handled
(000's omitted)
1941

1942

1
185,500
365,350
109,12.1

1
195,492
}19,613
109,701

18,567
5,439
2,797

17,801
10,236
1,250

1,077
318
55

1,129
271
59

881
13

onlittC(l)

1
$

7,654*
32

1942

1941
l5
799
32
33,882

2`)
932
37
38,748

1,446
91

3,520
52

47
232
4,366

57
202
5,470

1,0_3*
ý
100

3,751*
108

`Includes savings bonds
sold through other issuing agents.

With greatly increased issues
of Treasury securities, the volume
of all types of securities held in custody for member banks increased
from $753
million to $1,192 million during 1942. The number of
savings bonds held increased from 19,000 to 59,000.
The increased
work of the operation departments placed a
heavier burden
upon the service departments, particularly personnel.
securing
and maintaining a staff competent and able to handle this
Work was among the
Bank.
most difficult problems faced by the
The number
increased from about 900 on
of
December 31,1941 employees was
es,
to about 1,300, including part-time emlploye>,
May 1943. This
fails
large
it
is,
to reflect adequately
expansion,
as
e Increased work
To accomplish
the Personnel Department.
of
Ie
net addition of 327 to the
May 1943, it
staff in the year ended
as necessary to
employ 951 persons, as 87 additional employees
'tied the armed forces
of the country and 537 left the service of the
ank for other
reasons, many of them to secure the higher comnsaton offered by
by war
the civiln
services of the Government,
ndustries,
and other activities.
13

lweutv-eighth

Iraarxal Report, Federal Reserve Bank of Philadelphia

Business Conditions
The stimulus of war produced a tremendous rise of businc''
activity in the Third Federal Reserve District during 1942 and early
1943. At the same time it sharpened critically the problems of
inflation, manpower, and civilian standards of living.
Production for war expanded rapidly; the value of major war
contracts placed in the Third Federal Reserve District nearly tripled
during 1942. Although this growth was considerable, the district's
share of these war contracts up to early 1943 was about 6 per cent
as compared with S per cent to the end of 1941. In the initial stages
of the war effort this district, as a highly developed industrial area,
In
was relied upon for immediate production of war materials.
however,
time,
new plants were constructed and conversions were
completed in other areas, reducing the Third District's share of
the total.
Industrial
production
at the end of 1942 was i1 per cent and in
April 1943 was 80 per cent above the level prevailing
at the beginin the
ning of the war in 1939. Most of the expansion occurred
production
of durable goods, which experienced
a growth of 41 per
cent last year and in the spring of 1943 was 270 per cent greater than
in August
1939. The fact that the production
conof so-called
sumers' goods by 1942 had returned to about 1939 levels is at once
indicative
for war and the extent
of the district's
to
production
for
which civilian
consumers were necessarily forced to sacrifice
that end, as an increasingly greater proportion
of consumers'
goods
for civilian
beint,
diverted
previously
available
to
the
use was
"These sacrifices took the form of more
and lend-lease.
Sugar,
widespread rationing
of scarce and essential commodities.
fell
fuel
automobile
tires and tubes, coffee, gasoline, and
oil
under
ration controls during 1942, and it was becoming obvious that even
1: arly in 1943 the
greater restrictions
would have to be exercised.
rationing of foodstuffs and shoes was begun. Production
of certain
military

7'weuhy-ei,
Lrb/b . /unnal Repo-l, /'edrral Re,cerve Rank of Yhilade/p/hia

PRODUCTION,INCOME AND PRICES
THIRD

FEDERAL

RESERVE

DISTRICT

INDEX
1935-39=100
DURABLE
GOODS 1"V

350,

300,

Iý'
PRODVCTION
JSni
.. vv

.I.

ý.

TOTAL
PRODUCTION

fýý'r

200
.1

150,

100

150r

0J...
^ ý__
ý

FACTORYEMPLOYMENT
-PA

EMPLOYMENT

# PA
-- TOTALEMPLOYMENT

100

250'.

IACIORY

Twenty-eighth Annual Report, Federal Reserve Bank of Philadelphia
durable goods for civilians, notably automobiles, mechanical
frigerators, radios and the like, had already been abandoned
make way for the production of war materials.

reto

The role of transportation in the war effort, of course, has been
Complementing
productive
well-rounded
of vital importance.
resources, the district is equipped with excellent facilities-both
land transportation, and the Port of Philadelphia
rail and truck-for
serves as a major point of distribution for overseas and coastal
shipments of materials. Record-breaking amounts of raw materials,
semi-finished and finished goods have been handled with extrahigh points
ordinary efficiency. Passenger travel has risen to new
as a result of troop movements, greatly expanded operations which
drew upon labor supplies over broad areas, and restrictions on the
use of private automobiles. Accomplishment of this task has been
made possible by the well-coordinated use of railroad and other
facilities, and constitutes one of the major achievements of the
war effort.
Employment in leading lines of trade and industry, which hay
risen about 30 per cent since the inauguration of the war, remained
steady through 1942, as increases in manufacturing were offset by
declines in other lines. The stability of employment during 1942 did
not indicate complete absorption of available labor. In fact classifications by the W ar Man power Commission at the end of 1942 of area,
according to the degree of labor utilization indicated that no section
of this district suffered from shortage. Development of a more
critical situation in 1943, however, was indicated in May by the
classification of Wilmington, Trenton, and Chambersburg as areas
where the shortage of labor had become acute.
Increased wage rates, longer hours,
and overtime
payment.
doubled payrolls during the war
period and raised them by one-fifth
during 1942 alone.
In the case of Pennsylvania
factories
the
increase of 8 per cent in
the 16 months
average hours during
1943 acted in part to raise average
ended April
weekly
wage16

ý
ý

Twenty-eighth Annual Report, Federal Reserve Bank of Philadelphia
The
26 per cent as
against 16 per cent in average hourly wages.
resulting expansion of incomes sent the dollar volume of retail sales
to new high levels, many purchases being anticipatory buying of
scarceitems which depleted stocks in some lines of consumers' goods.
'hhe problem of the inflationary gap has become ever more acute
as a result of the interaction of production and income. The amount
of consumers' goods available for civilians has been cut considerably;
increased income has
meant increased purchasing power and potential demand for that smaller amount of goods. The cost of living,
as the indicator of the success of inflationary pressure, has risen
27 per cent in Philadelphia from
April
the beginning of the war to
1943, although
price control measures immobilized to some extent
the pressure on prices.

Early in 1942, Congress
bill authorizing
passed the Price Control
But
the establishment of maximum prices on most commodities.
no provision was made for wage stabilization, and special exceptions
Were made for agricultural
products below 110 per cent of parity.
Maximum
price regulations were put into effect in May. But prices,
mainly those of foods
by
and farm products, continued to rise and
September,
the cost of living in Philadelphia had gone up 2 per cent
since the inauguration of
At that time the President
controls.
called for Congressional
action which would authorize him to
stabilize the cost
of living and wages. Additional legislation was
passedearly in October.
"'he Office
of Economic Stabilization was subsequently established
to "formulate and develop a comprehensive national economic Policy
relating to the control of civilian purchasing power,
prices, rents,
wages, salaries, profits, rationing, subsidies, and all
related matters. " Although
the rise in the cost of living has been
restricted to 27
per cent, in cases where controls have not been
vxerclsed prices have increased
It became
much more sharply.
increasingly evident during 1942
that existing
Would not
succeed in holding down inflation.
17

price controls alone
Means were being

Twenty-eighth

Report, Federal

/Innual

Reserve Bank

of Philadelphia

he drained
purchasing
power could
levels and exemptions
were raised to new high
tax
many millions of persons were added to the
repaygreater efforts were made to encourage
investfinds through
ment of debts and voluntary
saving of surplus
ment in Government
securities.

considered whereby
off; income tax rates
were lowered so that
rolls. Concurrently,

Importance

civilian

of the Third

Federal Reserve District
in the national
economy
Land

area

1940

'T'hird Federal
Reserve District

37,023

Apr. 1,1940............
Ruf
form.........
force

Apr.

7,7 77,9111
704,181)

1,1940.3,233,317

Manufacturing1939
Wage earners.........
Value added by nianu-

facture

....

Per (-eilt of

Slates

Mining
Bit ominous coal-1939:
\1'age earners.........
ne of production....
Pennsylvania
anthracite1939:
\\age earners
Value of product ........
ion

1
1

52,840,762
7O6,99ä

.......

2,977,128
131,669,275
30,216,188

SI, 994,319,258

25,523
$41,838,770

369,1i6
,
$737,357,537

82,822
S18), 047, )13

8?, 82?
$189,04 7 91.3
,

2'. i

5.9
2-";

6.1
O 1)

7,887,242
824,7 10,504,73,;

State

I niiecl

miles

--square

.................
Population
- total
Labor

I sited

I,
15

6. ý)
.8
100 11
100 11

Retail

trade
- 1939
I.:nyiloyces
Sales
................
Wholesale
trade1939
I": inplýn"ces...........
.
Sales
................
Agriculture
\ clue of farm products
1939
............

Income
3 states

payments

Cash farm
.3states
"Including

1942

........

income'
1942
.........
Government

281,105
$2,559,170,0(10

4,600,917
S42,03'), 138,000

6.1
01

78,014
$2,576,188,000

1, i02,121
$$5,265,640,00(1

50
4,7

$230,194,01)0

S7,913,645,000

2.9

$114,030,000,000

11.9

$13,557, I100,000
$5')5 )01t, 000
,
payments.

S16,138,319,000

3. /

Twenly-eight!, , roue l Report, Federal Reserve Bank of Philadelphia
.

Banking and Credit Conditions
Member Banks
Banks are playing
To help curb
a vital role in the war effort.
inflationary
oft
tendencies, they have actively
assisted in siphoning
the steadily expanding volume of buying power by selling Government securities to individuals,
business concerns, and institutional
investors.
'T'heir officers, directors,
and key men have aggressively
during
issues, particularly
assisted in the marketing
Government
of
bankers have
the First and Second War Loan drives.
individual
served as chairmen,
of regional and local
members, and solicitors
committees.
During the drives a great many banks organized their
own teams to canvass important
prospects in their own communities,
and this method of personal approach proved to be very successful.
Banks
also have bought heavily of the issues made available to them.

Practically

all commercial and savings banks assumed the
responsibilities of acting as authorized agents for W'ar Savings bonds.
many have
provided booths or other facilities with full-time staffs
to sell bonds to the
public and a great many have inaugurated payroll allotment or savings
plans. Bankers wrote letters and made calls
on their customers to
urge the purchase of Government securities,
and in their private
capacities demonstrated the sincerity of their
appeal by Purchasing
securities themselves.
Banks have
participated in the war effort in many other ways.
I hey have
extended credit to establishments engaged in war .1,11d
other essential
activities and have restricted credit to nonessential
activities. They
cooperated with the "Treasury in the control of
foreign
They worked closely with the Office of Price Administration in devising
and implementing the ration banking plan
which began operation
on a national basis on ýanuary 27,1943.
lender
this plan they provide facilities
and accounting knowledge
in handling
deposits and
by
exchanges
check. By reason of this
arrangement the Office
price
is able to ascertain
Administration
of
19

Twenty-eighth flnnual

Report, Federal Reserve Bank of Philadelphia

the exact amount of coupons outstanding at any time and an
is
efficient method of disposing of the billions of ration coupons
provided.
Any appraisal of banking conditions in this district
during the past year must take into account the part
developments
played by the area in the major banking
The
outstanding characteristic
of the country in the past decade.
is that member banks in this district, though influenced by the same
factors that affected banks throughout the country, have grown at a

Banking
trends

Third
Fed. Res. District
Resources:
Loans
.......................
Investments.
.................
Cash assets
..................
Real estate assets
.............
Other
.......................

Total

Liabilities
and capital accoupts:
Deposits
.....................
Other liabilities
Capital accounts ...............
..............

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

United
States
Resources:
Loans
.......................
Investments
('ash assets ..................
Real estate ...................
assets .............
Other
......................
'T'otal
......................
Liabilities
and capil al accounts:
I)eposits
.....................
( )t her IiabiIities
Capital accounts ..............
..............

Total

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

1941

1940

-9
+71

124
18

-17
+48
-9
-10
-14

$4,647

+10

$4,145
21
481

$ 925
2,363
1,217

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

Total

Per cent change from
December 31

Dec. 31,
1942

Member banks
(Dollar figures in millions)

-12
-1y
-18

1'i2'+

1933

13
+132
+248

511

-}-1ti5
-1-1 5t)

- 22

+17

+ 78

+12
-5

+20

-5

1-106
- 84
-{- 2

$4,647

+10

+17

+ 78

$16,088
43,175
24,281
1,132
241

-11
+69
+5
-5
-15

-F 5
+98
-}- 1

+ 25
+24')
+271

-111
-23

$84,917

+25

+36

+151

$78,277
539

+27
+4
+4

+39

6,101

-4-1Rs
-61)
+ 23

$84,917

+25

-i-3(i

+151

3o)

38
+"; 31
+102
-

-f-

+100
87
ý

(ý

ý
ý
(

Twenty-eighth flnnual

Report, Federal Reserve Bank of Philadelphia

ALL MEMBER BANKS

CASKASSETS
.. "

1930

1931

IIIIIIIIIII
1933
1934

1932

1935

1936

1937

1936

1939

1940

1941

1942

ý
,
Twenty-eighth tlnnu al Report, Federal Reserve Bank of Plailadelphi, a
have
much slower rate. While their losses from 1929 to 1933 may
been less severe than in certain other areas, they apparently have
failed to maintain their relative proportion of the country's banking
The accomassets either prior to the outbreak of the war or since.
panying data indicate this trend.
assets and deposits from the end of 1933 to
the end of 1940 was a result primarily
of the increase of about $18
billion in our monetary
The accumulation
of gold ingold stock.
far
in excess
creased the cash holdings of banks and created reserves
In the absence of an active demand for loans, banks
of requirements.
Expansion

in bank

'I'reasury issues marketed
purchased additional securities, principally
deficits.
The
deposits
to meet
was
over this period
expansion of
based upon increased cash and investments.
Member
batiks in the
in this process to a greater degree
country as a whole participated
than members

in this district.

The dominant
role of gold in the expansion of bank assets and
deposits virtually
came to an end in 1940. In its place there was an
increase in bank credit to help finance a rapidly developing
defense
Increased business activity
deprogram.
was reflected in greater
mand for loans, but the upward trend in this type of credit
was
A peak was reached early in 1942, followed by it subshort-lived.
decline as the credit requirements
in nonstantial
of concerns
essential lines diminished.
When the United
States became
an
effort after Pearl Harbor,
war
Government
paramount,
and banks purchased
securities in sharply increasing amounts.
But again neither deposits
nor investments
of the banks in this district
expanded
nearly
as
rapidly as those of banks throughout
Since there was
the country.
no substantial difference between the Third District
and the country
as a whole in the relative importance
of member banks to all hanks,

active participant
financing became

in the total

war

these observations

in the national
as to the declining importance
economy of member banks in this district are applicable
to all banks
in the district.
22

Twenly-eighth
Reserves

'hnau al Report, Federal Reserve l3aek of Philadelphia

Three factors
virtually

have determined

the reserve

position of member banks in this district during recent
years. They are: (1) the movement
of funds that results from private commercial
and financial
transactions
with other districts;
(2) the movement
funds
into
of
and out of the district as a result of
differences between
in
expenditures
and receipts of the Treasury
this district; and (3)
in
changes in the amount
of currency
circulation.
Other factors have
during
not been significant
the past
decade, although
changes in the amount of Reserve Bank credit
extended locally were important
in the twenties and would become
important
individual
again should
member banks borrow to restore
deficiencies in
from purchases
reserves resulting
of Government
securities,

The most important
single factor affecting reserves in the pasr
four years has been
the constant gain of funds by this district as a
result of private
transactions with other districts.
In 1942 the net
inward
movement amounted to $876
million as compared with $484
million in 1941
and $170 million in 1940. Gains, though usually
smaller in amount, have been
registered for all years of the past
decade
except 1934,1935 and 1938. it has been
through these
transactions
which include security operations, that
funds
part of the
put into the New York
market
through
purchases of Governments by the Reserve
System were transferred to this district.
'I he
second most important factor in
recent years has been the
net result of
operations of the United States Treasury in this
district. The
Treasury takes funds
out of the market when it
collects taxes
or receives payment for
funds into
sales of new securities. It puts
the market when it
redeems or pays interest on its
ohligarions
and pays its bills. In 1942
the "Treasury secured $659
million more
it spent in
than
district.
The corresponding figure
for 1941
this
was $368 million. In
earlier years of the past decade net
gains or losses
through Treasury
operations were smaller, but,
except for 1933
and 1937, the 't'reasury
than it
spent more in the district
withdrew.
23

Twenty-eighth flnnual

Report, Federal Reserve Bank of Philadelphia

Twenty-eighth Annual Report, Federal Reserve Bank of Philadelphia
The increased demand for currency has absorbed reserves persistently since 1934. Although the annual amount was comparatively small in earlier years, it has expanded for the past six years
in 1942.
until it reached $168 million in 1941 and $280 million
The magnitude of each of these three forces in the past two
years was unprecedented, but the effects on reserves of two of them
in currency-were
-losses from Treasury operations and increases
interfrom
largely
by
offset
private
the effect of the third-gains
district transactions. The net effect of all three and of the minor
both in 1941
factors was a
small decrease in member bank reserves
bank
and 1942. A complete picture of factors affecting member
in
the
reserves in this district for the past three years is given
accompanying table.

member

Changes

bank reserves
and related
"Third federal Reserve District
(Millions
of (1ollars)

items

1940

1941

1942

+0
+170
+
-k
+ 19

-7
+484
+3
-368

+ 39
+876
-}- 2
- 659

+193

+112

+258

+75

+168
42
- 14
-0

+280

+113
+5
-0
+ 193

+112

+258

Sources of funds:

Reserve Rank
credit extended in district.......
Interdistrict
commercial
transfers
flint
..............
gold purchases, net
treasury
......................
operations
..........................

Total
...................................
Uses of funds:
Currency demand
'ICmler bank
............................
reserve deposits
"( )t her deposits"
.................
Reserve Bank
at
Other Federal Reserve
.............
accounts ...............
Total
...................................

--8 10
-

For the banking
influence
system as a whole, the only major
that tended to reduce
in money
reserves in 1942 was the increase
in circulation,
which represented cash withdrawn from banks but
I1otdeposited in others. The effect of this factor was offset by funds
released to the market by
Federal
purchases of securities by the
Reserve System.
25

Twenty-eighth Innual

Report, Federal Reserve I3ank qJ' Philadelphia

The period under review clarified for many bankers the effect

and
flow of money exerts upon investments
the interdistrict
purchase
reserves. At first many banks were prone to assume that it
drain upon their reserves.
of securities would lead to it corresponding
Such
drain, of course, would occur if a single bank in it banking
it
than other banks.
system increased its earning assets more rapidly
While the single bank may lose reserves, the banking system as a
by one hank are
whole usually does not, because reserves lost
banks
at the same
are expanding
gained by other banks. When most
purchases
time, the tendency to lose reserves as it result of security
is offset by the tendency to gain reserves from purchases by other
that

banks.

Some individual
banks experience net gains and others net
losses, depending upon various factors. Under conditions
of expanding Government
Security
issues those that experience
persistent
increases in excess reserves as a result of this process are not bearing
for war finance, since they gain at
their share of responsibility
amount
the expense of those banks that purchase
an adequate
Government
of
securities.
Banks also found that in wartime
the tendency to lose reserves
for new Treasury
as it result of payment
was offset in
securities
large part by deposits arising from
by the 'T'reasury
t
payments
As banks became familiar
other customers of the bank.
with thi,,
Partly
in
process, they kept their reserves more fully employed.
consequence, excess reserves have declined substantially
over the
in considerable
past year. 'Nevertheless,
reserves have continued
This is in addition
volume in this district.
to the balances mainheavy
tained with correspondent institutions,
which are particularly
in the case of the country
banks.
Banks also have access to the
federal Reserve should they need reserves as
it result of purchases
based
of Government
securities
of it return
upon an expectation
flow of funds which fails to materialize.
The temporary
strain upon
by
reserve positions imposed by heavy purchases of Governments
banks and their customers was
in
April
1943,
eased considerably
when the Federal Reserve Act was amended to eliminate
reserve
requirements
against war loan deposits; this in effect deferred
the
26

7'weulY-eighth
/-Innual

Report,

Reserve Bank

Federal

need for reserves from the time securities
the 'T'reasury spent the funds.

of Philadelphia

were bought

to the time

Changes in the
reserve position of member banks in this district
are indicated by the following table.
Member
bank reserves
'fhir(1 I-e(leral Reserve
District
(Dollar figures in
millions)
Philadelphia
banksI
fan.
1- 1......
1741:
942: )
.......
1943: Jan. 1--15
M:iy 16_31 ...............
...............
Country
banks:
1941: I: u(" 1-- 15
1942: J: ut" 1-- 15 ..............
1943: Jan.
1_.-15 ..............

All members:

Excess

Required

Ratio of
to

excess

required

I ---- -Si14
449
418
387

...............
-31 ...............

May II

1941: fan.
1')12: Jan.
17.13: J:
u("

Actually
held

1
i
1 -11i ...............
15 ..............
...............

N1:ty 16 31
...............

S232
294
358
350

$282
155
60
.37

122'
53
17
11

202
224
256
246

103
145
184
181

(). s

7 1)

55
39
3o

716
673
674
633

335
439
542
5,31

3H1)
234
132
102

72
05

11. ý
24
19

In the period May 1631,1943, balances due from other hanks
averaged $96 million
at the member banks in Philadelphia
and $198
million at the
"These amounts were equal
country member banks.
respectively, to 27
and 109 per cent of required
reserves of these
institutions.
Int(ýst»teiu,

ý"ý
I ne impact

-of the first

llrulcipally

in sharply expanded Icans, mostly

111(lUstrit

(; c>vetntnenT

ara

World

War Upon banks

r ýýýtr. rý.. r. " r-

ti-,.,,

resulted

to war

., ýýr. -hac, n

In the present war, bank credit is being
secut"ities.
emended in large
measure through direct bank purchases c>f'I'reasttrv
securities.
'Toy the
extent that the Treasury's
needs have not been met by
funds from
(others, com mercial banks have bought
for
securities
their own
aee( ants. Assured of access to the Federal Reserve Banks
27

Twenty-eighth Annual Report, Federal Reserve Bank of Philadelphia
for maintaining adequate reserves, they have invested available
funds to an increasing extent. Member banks in this district inby over $800
creased their investment in Government securities
million or 78 per cent in the year. These securities comprised about
£0 per cent of member bank investments and 56 per cent of all
half of the Governearning assets on December 31,1942. Well over
bills, certifiments purchased during the year were the short term
bonds
acquired matured in 5 to
cates and notes, and most of the
10 years. Holdings of Governments were increased sharply further
in the early months of 1943, particularly as a result of the Second
War Loan Drive in April.
The increase in Government securities during 1942 was accompanied by a further decrease of $46 million to $522 million in holdings of other securities. Of the decrease, $16 million was in state
and municipal government obligations and the remainder in corporate and miscellaneous securities. Holdings of non-Federal government securities have been reduced 17 per cent since the outbreak
of the war in Europe. Most of the reduction has been at country
banks.
Loans and
discounts

The administration of a loan policy adapted to war
It is
conditions has become increasingly complex.
difficult in particular cases to reconcile the several
objectives of bank policies which are to extend credit where justified,
earn profits, and protect depositors. As a matter of policy, no
possible contribution to the war effort should he impeded because of
lack of credit; and at the same time bank
credit should not be used
to ccmpete with the war effort. Credit risks are more difficult to
evaluate because of the many new factors that affect the standint-T
of individual borrowers.
In conformity with the general
policy of extending credit to
activities related to the war and of reducing credit extended to non_
essential activities, loans of member banks declined $193 milli
or 17 per cent during the year, and dropped further early in 1943.
28

Twenty-eighth 4Innual Report, Federal Reserve Bank of Philadelphia
Many of the initial demands to finance
had been met
war industries
increasing
and
restrictions upon the civilian economy and trade
reduced operations and credit requirements in those lines. In contrast with the preceding year, when 80 per cent of the increase of
$98 million in loans
less than
was at member banks in Philadelphia,
half of the decline during 1942
Philadelphia
member banks.
was at
Fundamental
loans
are granted
changes in the purposes for which
were revealed in an analysis made in the spring of 1942, wh en loans
wholly or partly to finance war industry accounted for 44 per cent
of the new loans made to industry and commerce. The proportion,
of course, has increased since that time.
Deposits

Deposits continued to expand at an accelerated rate
in 1942. The gain, though concentrated mainly with
individuals and business concerns, was the result of purchases of
Government
securities in amounts more than sufficient to coºnpensate for decreases in other assets. Bank purchases of Government
securities led to increases in private deposits. Although many banks
pay for new issues
with credits to War Loan Deposit accounts, the
Treasury
disburses
soon
the funds to individuals and corporations
that again deposit
such funds in their banks. Total deposits at
member banks in this district increased $440 million or 12 per cent
b during 1942 to $4,145
million, and would have been somewhat
larger if it had
been
for
not
the exclusion of reciprocal bank balanc es
ºn current reports. Expansion in deposits
banks in
at all member
the United States in
27
per cent.
the same period amounted to
Additional
gains were reported in 1943, aggregate deposits of
members in the Third Federal Reserve District
showing a further
rise to $4,572 million in
last
half
May.
the
of
Capital
feuds

The ratio of
capital accounts to deposits at the end of
1942 was one-half as great as at the end of 1933. In the
interval deposits have
little
more than doubled with

increase in
capital funds.
The simple capital
not reflect
accurately
the amount of deposit
29

does
however,
A
more
protection.
ratio,

Twenty-eighth

, -Innual

Report, Federal Reserve Bank

of Philadelphia

the
factor is the quality of assets, as in the final analysis
its
intrinsic
assets
value of
solvency of a bank depends upon the
from
or
shiftof
marketability
whether
the
standpoint
viewed
29
to
At
1942,
per
cent
assets
were
equal
ability.
the close of
cash
deposits
States
Government
to
addiUnited
an
obligations
of
and
tional 4S per cent. The combined ratio of 74 per cent compares with
6; per cent in 1941 and about 28 per cent in the years 1927 to 1929.
Other assets, in which risks are inherent, have declined considerably

significant

since the twenties.

Relative stability since 1933 in earnings of member
banks both in the Third Federal Reserve District and
in the country as a whole is in sharp contrast to the
growth in assets and deposits. Earnings, assets, and
deposits reached peaks in 1929; thereafter all three suffered severe
shrinkages until 1933. But, whereas assets and deposits recovered
in amounts indicated previously, current and net current earnings
have shown far
smaller gains from their 1933 levels. Net profits,
though much more erratic from year to year because of shifting

Earnings
and
expenses

amounts of charge-offs, recoveries, and profits on security sales,
have generally been considerably below the levels of the late twenties.
Net profits of member banks in this district, aggregating $18
million in 1942, were nearly one-half again as great as in the prebanks, howceding year. Analysis of the figures of individual
ever, shows that for the most part profits were smaller than in
1941. Excluding a few instances that
clearly were not typical,
averages of individual ratios show that net profits declined from
2.9 to 1.6 per cent
on the basis of capital accounts, and from 12.5
to 7.2 per cent in relation to total earnings.
aggregate

income

from investments
in 1942 exceeded
the
loans.
Although
earned on
the yield is less on securities,
averaging 2.7 per cent as compared with 5.2 per cent on leans
last year, total income from them is
certain to form an increasing;
amount

7'weutvv-eighth
/Irauaaal Report, Federal Reserve Bank of Philadelphia
Member
banks
Federal Reserve District

Third

Per cent change from

1942
'\Iillions$)

1941
Current earnings:
)n loans

On invest .......................
nients
Trust depart
................
meat
Service
..............
c-harl es on deposit s......
chher....
.................

.
.

Total
.... ................
-----------Current expenses:
ti, daries
Wages
Interest and deposits...
.............
on

axes
,ý ncr. .

Total
Net current

$41.9
44.0
9.7
3.2
8.9

-s
+9
+1

$107.7

......

.....................
...................
earnings...........

I<cco%crü'S,
profits on sales...
I. ossesan l uu1
Icprcc int ion
..........
\cc profits
ý ash liý i len lsýleclarcýl
......

1940

+
_7

+18

+o
+?

S30.2
10.0
10.3
20.6

+5
-19
+2
n

S71.8
,

-1

$35.9

-2G
+28
-i- 5

10_)9

-20
+ 11
+ -1')
+372
+ 43

-61
-3
+28

-, i7

-F- 26-2
- 65
+148
+ 25

- 80
+22

-4

-0I

514.6
32.5

-2q
-26

$jK: O

+48 i+R
8

1933

-29
-19

+
-

-1i

-17
-30

-13

87
47

+45

+94
-61
-52

* Net Intis in
193.1.

juror, >rtion of total
current earnings, at least for the duration of the
war, h reason
of increased investments in Government securities.

Mow), curd Capital Markets

h" dominant
influence on interest
rates in 1942 was action
l') the vederal
Reserve System to
attain
the objectives
announced
on the dad
after the Japanese attack on Pearl harbor:
mainte-nance of
in the Government
stability
security
market
and
assur
all"" of ade(luate
reserve funds to banks.
'These objectives
were
not interpreted
to mean that prices or yields on Government
s"curities
would he fixed or that excess
reserves would be maintaied at
a rigid level. As the
year progressed the amount of excess
reserves was
reduced.
fields
on short term securities, which had
fallen
to "xtr"melt'
low levels hecause
of the plethora
of funds in
31

Twenty-eighth Annual Report, Federal Reserve Bank of Philadelphia
but stabilized after
previous years, rose somewhat early in the year
buying
the establishment at the Reserve Banks of the % per cent
Fluctuations in yields on non-Governrate on Treasury bills.
high
mental securities were small and the spread between yields on
and lower grade securities narrowed slightly.
long term capital
complete data on the amount of
are
reflected in the
requirements are not available, major changes
long
term security offerings.
proceeds of new
Although

New security offerings by type of issuer
(In millions of dollars)
U. S. Government
direct and guaranteed`.........
State and municipal
............................
Industrial
corporat ions ..........................
Public utility
corporations
.......................
Railroads
All other .....................................
......................................

Total.

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

1940

1941

1942

2,517
1,238
992
1,203
324
290

8,987
956
848
1,357
366
164

27,742
518
509
448
48
8

6,564

12,678

29,273

" Excludes U. S. Government "Special Series" issues, interagency
Treasury bills, certificates of indebtedness, and tax series notes.
Source:

Securities

and Exchange

sales, and

Commission.

The demand of the United States Government alone for lone
tern capital in 1942 was greater than the total demand of all issuers
in the preceding three years. Reduction in the volume of new offerings of non-Governmental issues was particularly marked after our
entry into the war. On the other hand, the net corporate demand for
new money, as contrasted with money to refund outstanding securities, comprised a much larger portion of offerings than in any other
recent year. About 45 per cent of corporate issues sold for cash in
1942 was for new money as compared
with 33 per cent in 1941 and
only 15 per cent in 1939. Nearly 60 per cent of the new money was
for plant and the balance for
working capital.
Estimates of the volume of savings by individuals, a factor
of
present and even greater future importance, are shown in the
accompanying table .
32

Twenty-eighth Annual Report, Federal Reserve Bank
of Philadelphia
Savings by individuals
(Billions of dollars)
c; rosssavings
Liquid savi.
ngs.................................
. ................................
Gross savings by type:
Currency
and bank deposits
Insurance and
...................
pension reserves .................
Securities
...................................
U. S. Government-included
in line above)
Durable
con stpners'goods
( )ther.........
.....................
............................

Source: Securities

1940

1941

1942

16.1
4.3

25.0
10.5

38.9
29.6

3.0
2.9

5.6
3.8
2.5
3.2
11.4
1.6

11.7
4.8
10.4
10.2
7.6
4.4

.1
.7
9.3
.9

and Exchange Commission.

Gross savings
more than doubled between 1940 and 1942 and
liquid
savings increased by more than five times. The large increase
in savings
arising from increased national income payments demonstrated the availability of funds to finance the war with a minimum
of inflation.

Rates on
commercial
and
industrial
loans
by
made
seven I'll iladelphia
banks
1040'5 omitted
in $ amounts)

i
I
I

percent
1 per cent .........................
Between I........
and 1
I% per
per cent.......
cent.
Between 1%
.
2
and
per cent
2 percent....
......
......
lictweer 2
and 3 per cent.........
.1percent
................... . .
13elween
..
3 and 4 per. cen.
{ per
t..........
cent...
Between 4
and
per cent.........
Per reiht
Between ......
5 and G.................
per
cent.........
per cent....

'Total dollar
amount.......
Total
number of loans......
.Averagerate based
on dollar volume

Dec.
1-15,
1940

.
.

so
254
600
8,960
200
2,306
1,028
4,290
1,032
3,514

8(1(1
2,052
124
792
$25,952
1,195
2.8%%,

Dec.
1-15,
19.11

June
I--15,
1942

Dec.
1-15,
1942

730
5,748
874
1,942
2,611
4,266
2,563
3,723
1,882
1,475
139
956

$10
7
0
5,900
100
2,358
2,100
6,879
2,549
2,787
1,207
1,687
346
653

3,4611
1,250
1,865
7,832
6,255
2,821
2,640
1,814
2,0.58

$28,156
1,336

$26,643
1,029

$32,667
ri94

3"UI%11

3.O',

so
1,247

2.9', o

so
813
500

538
721

T. cenhv-eighth : hnural Report, Federal Reserve Bank o/ Philadelphia
Rate Schedule of Federal

Reserve Bank

of Philadelphia

In Effect May 31,1943
Per cent
per annum

Rediscounts
(a)

for and advances

to member

banks:

Advances secured by direct or fully guaranteed
obligations of the 1'nited States which have one year or less to
13
Section
13)
(Pars.
8
to
and
of
run
call or maturity.
.....

, .;

Ih) Advances secured by direct or fully guaranteed obligat ions of the United States which have more t han one year
to run to call or to maturity. (Pars. 8 and 13 of Section 13)

(d)

Ada

i
i
iýi

13a..

Advances to nonmember

banks:

of the
: Advatices secured by direct obligations
Section 13)
-States. (Last par. of
..................

Malted

Advances
to individuals,
partnerships
and corporations
other than banks:
of the I'nited
.Adv: nrces secured by direct obligations
States. (Last par. if Section 13)
.......................
Industrial
Section
13b:
advances
and commitments
under
Advances
direct
to industrial
or coniniercial
organizations, including
made in participation
with
advances
other financinginstitutions
...........................
Advances to financing institutions:
(a) Un the portion
for which financing
ol, lig: tied .....................................

institution

Sarate
Inc

(b) ( )n t lie remaining port ion
......................
Advances taken over from financing
institutions
commitments
.....................................

.
under

Commit nt.ent sto make
advances:
(a)

Direct

(i)

To tinancinginstitIII

to industrial

or commercial
ions

organizations..

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

ZjytU5

as Iwrruwer

is charged
bitt not tu
exceed V, , , Luve prediscount
vailing
rate.
Same rate as burrower
is charged.

Saute rate as burrower
is charged on port ion
for which Federal Reserve Batik assumerisk.
10 to 2S',, of loan rate
with
miniuiunt
of
10
to 25' ; of rate
burrower
charged
with
minimum
of
%!: ('.; nu cutnmitntent
given
nn a loan
on
burrower
which
is
charged
more
than
S',.

Ii
i
i

TWertly-eight/,

'Innual Report, Federal Reserve Bank of Philadelphia

Rates

on commercial bank loans in 1942 were about the same as
those which have prevailed for the
past few years. Reports for both
June
December
from
and
large Philadelphia banks indicated an
average rate of 3 per cent,
as compared with 2.9 per cent in 1941.
Of the dollar
volume of commercial loans extended in December,
1942, nearly half
was at rates below 3 per cent and a relatively small
amount at rates in
excess of 4 per cent.
The Principal
changes in interest and discount rates charged by
the Federal Reserve Bank
of Philadelphia during 1942 were a reduction on March 21 from 1
to I per cent on discounts and advances
,1
to hanks under Section 13
and
a reduction of t" per cent on October
17on
notes of member banks
secured by United States Government
obligations having
one year or less to run to call or maturity; on
advances to individuals,
partnerships, or corporations other than
hanks
under the last paragraph of Section 13; and on advances to
members under Section 101). Since April
30,1942 the Bank has stood
ready to purchase
all 'T'reasury bills offered at a rate of : of 1 per
cent, and since August has
granted the seller of such 't'reasury bills
the option
of repurchasing a like amount and maturity of bills at
the same rare.

Federal Reserve Bank
Rese1e
Bank

The largest

Bank

change

that

occurred

in the assets of the

since the beginning of 1942 has been in holdings
credit
of United States Government securities, most of which
represent participation
in the System Open Market
ccount" I luldings increased
from $178 million to $458 million in
early january 1943.
Investments of this Bank in the first five
i»onths of 1943
generally
were somewhat less than this, save for one
day in March,
when the System held a special one-day Treasury
certificate to
promote stable conditions in the market during the
period of heavy
tax collections.
35

Twenty-eighthAnnual Report, Federal ReserveBank of Philadelphia
Statement of Condition
December 31

Federal
Reserve
Bank
of Philadelphia
(000's omitted
in dollar figures)

May 31,1
1943

1942

1941

RESOURCES
Gold certificates on hand and due from U. S.
$1,224,286
Treasury
Redemption ................................
Reserve notes.....
892
fund-Federal
.
19,344
Other cash
.................................

S1,147,114
5,666

$1,244,522

$1,173,970

Total reserves
.......................
Bills discounted:

Total bills discounted
................
Bills bought in open market
...................
Industrial
advances .........................
United States Government
securities..........

LIABILI'T'IES
Federal Reserve notes in circulation
........
Deposits:
Member bank reserve account
...............
I; nited States'I'reasurer-general
account...
Foreign
..................................
Other deposit s
............................
Total deposits
Deferred ava ilabil it y it .......................
ems ...................
Other liabilities
............................

Total liabilities
(apitnl

CAPITAL
paid

$394,436

2,700
84,370
4,866
4,061

$447,258
5
2,541
114,047
4,755
6,925

$1,522,648

$1,749,501

$1,774,768

fully

fi. i9

524

$1,488,161

$1,714,691

$954,630
G2.i, 278
1,252
7(), 165
8,7 59
$712,454
09,07 1)
t, 2tlb
$1,736,969

$11,747
15,670
-1,.303
3,000

S11,071)
15,670
4,303
0,057,

1$1,749,501 ý $1,774,76ri

Iý

ýi

81). 11 ;ý

72.3',

$2,617

$1,346

guaranteed

-1.000
>, 0ý4

$775,981
8), 503

$1,522,649

1,936
87,216

651,566
52,643
67,1(1O
4,672

$11,923
15,171
4,393
3,000

accounts.

$848,682

$821,729
90,557

. ...

bills secured by obligations

2,1(A

$182,124
5

661,703
73,577
74,057
12,392

I
1

=2,160
0
4.7(A
387,516

Ratio of total reserves to deposit and Federal
Reserve note liabilities
combine(l............

' Includes

$1,280,825

$2,380
0
4,710
440,168

$575,036

('onunitmerit s to make industrial
advances....

$674
0
3,468
177,982

......................
ACCOUNTS

..........................
Surplus
7
-Section
..........................
Surplus--Section
13b
Other capital accounts . ......................
.......................
Total liabilities
and capital

21,?

21,190

2,14()
240

Total bills and securities
.............
Due from foreign banks
Federal Reserve notes of......................
other F. R. banks.....
uncollected items
...........................
Bank premises
..............................
All other resources
...........................
Total resources
......................

A1ý

ýfC'f
$1,253,447
f. nu'

624
50

Secured by 11. S. Government
obligations*...
Other bills discounted
.....................

by I1. S. Governntent.

7,
$2,047

Twenty-eighth //urtrtal Report, Feder-al Reserve Bank of Philadelphia
While purchases of the System Open Market Account have been
made for the most part in the New York market, the funds made
available flow to this district and to other sections of the country
through the settlement of balances arising from commercial transactions. In recent months a larger proportion of the transactions in
Governments has been
taking place in the several. Federal Reserve
Districts,
Treasury
as banks adjusted reserve positions by sales of
bills to the Reserve Banks. At
held
bills
under
the end of May 1943,
the repurchase option accounted for $34 million of the $388 million
of Governments held by this Bank. The highest point reached in
direct borrowings
$2 million,
of member banks during 1942 was only
held at the
first five
in
the
end of the year, and the maximum
months of 1943 was less than $5 million.
l udush'iul

Industrial advances of this Bank outstanding under
Section 13b increased from $3.5 million at the beginning
of 1942 to $5.5 million in the summer. Toward the
larger
Ii0C of May 1943 the
volume was $4.8 million. This was a

loans

amount than was reported by
any of the other Reserve Banks and
more than one-third
fallen
of the total for the System. Inquiries have
off sharply and the
for loans has dropped
number of new applications
considerably.
Of the applications
in 1942, more than
reviewed
three-fourths both in
in
dollars
pronumber and
were approved;
portions were
higher
following.
Rejections
in the five months
even
were based principally
in management,
unsatisupon deficiencies
factory
condition of applicant
A
of
summary
or poor prospects.
industrial loans
first
to
since the Reserve Banks were
authorized

i
i
t

make them in June 1934 is
presented in the accompanying

Drum
industrial

table.

one 1934 through 1942 the Bank earned $1,639,000 on
loans
$463,000 or
Of this amount,
and commitments.
28 per
has
cent
been paid to the Treasurer
States,
of the United
accounting for
37 per cent of payments
bN' all
'I'rcastn"er
to the

37
37

Twenty-eighth

flnnual

Federal

Report,

loans
Applications
for industrial
Federal Reserve Bank of Philadelphia
Number;
Approved
.......................
Rejected
Withdrawn ........................
......................
t"nderconsideration
..............
Total

number

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

Philadelphia

June 30,1934Jlay 31,1943

54
9
b
1

;i, i i
457
67
1

860

$4, ä19, G89
333,80(1
971 3(1(1
,
15(1,0(1(1

Brack

Jan. -May
1943

194

Amount;
Approved
.....................
Rejected
Withdrawn ......................
...................
Yoder consideration
..............

Total amount

Reserve

$5,974,6K9

$3,270,871
30,000
35, (100
6(1,001)

$54,388,090
17,126ü0

$3,395,871

575,066,139

3,191.700
004)
o).

to surplus were $391,000 or 24 per cent
$785,000-- covered expenses, chargeof gross, and the remainder-offs, and reserves.
llcserve

Earnings
and
expenses

Banks.

"Transfers

't'otal earnings of the Bank increased from $3.3 million
in 1941 to $4.2 million
in 1942, largely as it result of
increased holdings of United States Government
securi-

Reserve
Operating
ties.
note
expenses and federal
however,
increased,
costs,
to earnings
also
and net additions
were
less than in 1941, with the result that earnings available for distribuDividends
tion increased from $822,000 to $1,239,000.
to member
banks required $708,000, and $499,000 was transferred
to surplus.
In more than 29 years of operation,
this Bank has had gross
After diviearnings of $114 million and net earnings of $57 million.
dends, franchise taxes paid in the earlier years, and certain
miscellaneous payments, there remained $31 million for addition
to the
regular surplus of the Bank. The fact that this surplus, accumulated
under Section 7 of the Act, amounted
to only about $151
million
at the close of 1942 reflected chiefly the charge-off of $141 2 million
in It)314"
paid for stock of the federal Deposit Insurance Corporation
38

(weal e-eighth Annual Reporl, Federal Reserve Rank
of Philadelphia
Profit and loss
Federal Reserve Bank account
of Philadelphia
(000's omitted)

1941

1942

$3,179
165

S3,947
227

$3,344

$4,174

82,283
184
1 71)

$2, -155
334
167

$2,646

$2,956

$699

$1,218

4S
11(1
2

$277
150

Earnings from:
sited States Government
h her sources............

Total eartlilig,;.

securities

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

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

Expenses:

tO)peratingexpenses
ust of Pedzral R*eser.. ve c.u..rren. c .....................
y....................
\svessme

it for expenses of Roar d of Governors ..........
'I'otalnetexpenses
...........................
Current
net earnings
Additions to
-- ý.. rý..., ý ..,.. . nruutgs:
I'rr fil
s on sales of I'. S.
ernme nl securities.........
'; III
rsofreservesinexcessofrequirements
(), her
-. -.
achlil ions

$127
3

S435
414

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

Deductions from
current net earnings
.............
Net additions
to current net earnings
................
Net
earnings available for distribution
... ..........
I)ktribution
I'; iirl 00'11 of net earnings:
r
..')tates
-.
II')ieidends r" ýý,,.....
!o ui c nuecl Danks
, Sec. 131). ........
ýra ns(erredpaid
nlenlher
.....................
to
surplus (Sec. 13D)
(r ccs(u'redtosurlclus(Sec.
...................
7)
......................
ý..
tier deducting

reiml, ursements

received

$21

$x22

$1,239

S81
713

...

s.
>>
51I;
i

0
27

_.. .. _...

exlxnscs.

$124

499

for

certain

fiscal

agency

and

other

'1eniher;
ch;p

'I he number
of member banks in the 'T'hird Federal
Reserve District
at the close of 1942 was 652, as
+egtinst (>Sg;t
Year earlier.
hand,
llbithe
these

other
of
exp;tnded 1()
admittbanks
Per
$4
lli >n. One State bank was
1
to
to membership
during the
year, while two members were absorbed
'ý' ntntmembers
and six by other members.
Of the 901 banks
247
or approximately
nt>nmemhers

in the 'T'hird District
at the end of the year,
27 per cent were nonmembers.
Assets of the
7 per cent in 1942 to over $112 billion, or
'11(!
ne-quarter
°I
tluarter of the
total for all banks.
39

7`wenty-eighth Annual Report, Federal Reserve Bank of Plhiladelphia
The absorption of five national banks in possession of fiduciary

full powers by another bank, and
powers, succession of a bank with
the total
the extension of limited
powers to one bank reduced
188
Of this number,
were it,
number with such powers to 241.
Pennsylvania,
44 in New Jersey, and 9 in Delaware.

Philadelphia

Hanks in
Federal
Reserve
December 31,1942

District

Pennsylvania*

New
Jersey *

I h"laNcaret

Total

(Dollar figures in millions)
Number
of banks
Total
.................................
Member 1,auks.
\onmentber
State banks & trust companies
Mlutualsavingsbanks
....................
Proport ions of total:
Member banks......
on metnberStatebanks&trustcompanies
Mutual savings banks
.................

745
547
192$
622

7.3.5%
25.7'j;
8"
.

106
87
17

82.136.0'
16.060.0'
1.9";

50
18
30

,
4.0',, '

9111
652
239
10

72.5'
26.4'
1.1'

Total assets
"1 ot, "tl
$538.5
$398.1
S6,223.2
$5,286.6
......
...........................
253.8
4,646.7
Member
3,975.9
417.0
banks
..............
\onutentber
87.5
State
banks & trust companies .
681.8
106.7
876. (1
14.8
56.8
700.5
\lutualsavingsb;
628.9
mks ....................
l'roportiousof
total:
Member banks
77.463.8'4
75.2'it
74.0( ,
........................
NonmentberStatebanks&trustcompauies
21_9'
12.9'%
19.8`ßr
14.1'
Mutual savings banks
11.9'r
2.8'%,
14.3'%.
11.3'
.................
* Portion of the State in Philadelphia
Federal
t Incltdes
G non meet er branch banks.

Reserve

District

$ Includes 12 private banks.

Directors
and
officers

The only change in the Board of Directors of the Bank
was a resignation effective September 11,1942,
of
Winfield W. Riefler, who had served as Class C director

since July 1,1941, to accept an appointment
as Special
Assistant to the American Ambassador
in London, with the rank of
Minister.
C. Canby Balderston,
Dean of the Wharton
School
of
Finance and Commerce
University
Pennsylvania
the
of
of
and Pro_
fessor of Industry
at that institution,
was appointed
on -April 9i,
1943, by the Board of Governors to fill the vacancy caused . by
the
resignation of Mr. Riefler.
40

Tweu/v-eighth

Report, Federal Reserve I3ank of Philadelphia
:I unual

"Thom as B. McCabe
Governors
was reappointed by the Board of
)anuary 1,
Class
beginning
as a
C director for the three-year term
F.
1943, and was
Warren
redesignated Chairman of the Board.
Whittier
was redesignated Deputy Chairman. At the regular election
in the fall
director
of 1942 George W. Reily was reelected as a Class A
by member banks
D.
Kerlin
was reelected as
of Group 2, and Ward
a Class 11director by member banks of Group 3.
William Fulton Kurtz, President
Company"
of the Pennsylvania
for Insurances
on Lives and Granting Annuities, was reappointed
by. the Board
of Directors as the member of the Federal Advisory
Council from
the Third Federal Reserve District.
The only
change in the official staff of
nation effective june 30,1942,
of Arthur
Secretary
and Assistant Federal Reserve
William G. McCreedy,
in addition to his
President,
was appointed Secretary'.

i
I

the Bank was the resigE. Post, who had been
Agent for many years.
duties as Assistant Vice

Twenty-eighth . Innaal

Report, Federal Reserve Bank of Philadelphia

Directors

i
as of May 31,1943
1', rnr r. r/, ru,

(; roil/)

l), ', 'rnzbrr 31

Class A:

1944

Iloward A. Loeb
.................................
Chairman, 'l'radesmens National Bank and "Trust
Company, Ph iladelph ja, Pennsylvania.
George W. Reily
.....................................
National
President, Harrisburg

10. x;

Bank,

Harrisburg, Pennsylvania.
John B. Ilennin"
................
President, Wyoming National Bank,
"1'unkhannock,

1943

Pennsylvania.

Class B:
C. Stout
.................................
President, John R. Evans and Comp: u»
,

1'1-13

Cannon
.....................................
President, 11.1'. Cannon & Son,
Bridgeville,
Delaware.

lull

C. Frederick

Camden, New Jersey.
IIarryL.

Ward

I). Kerlin
.......................................
Secretary and Treasurer,
Camden
Camden, New Jersey.

Inc.,

Forge Company,

1945

Class C:
Thomas

B. McCabe, ('bait-man
and Federal Reserve Agent
('resident,
Scott Paper Company,
Chester,
Pennsyl-

1945

vania.
Warren

F. Whittier,
Deputy Chairman
.................
Lonicera Farms, Douglassville,
Pennsylvania.

C. Canhy

Balderston
..................................
Dean and Professor of Industry,
AVharton
School of
Finance and Commerce,
university
of Pennsylvania,
Philadelphia,
I'ennsylvania.

1')4,;
1944

%'tventy-eighth

-Innual Report, Federal Reserve Bank of Philadelphia

Officers
as of May 31,1943

ALFREI

FRANK

H. WILLIAMS, President

J"DRINNEN,

\Vii i i1 i G. 1\1CCREEDY,
issist(ant Vice President
and Secretcarv

First Vice President

'nALIiI:

NNY,
ý

'lice President
a; trl Caslricý"

I)UNA].

UnUNý

1''tce President
, -IssTSClUIt

ý.r J.

D: 1vJ5,
v 1CC Pl'CStdCU6

PHILIP I". COLEMAN,
lssistcatat Tice Pr esideul

I: ýcra'r C.
Nice President

M.
JAAll75

1ý" A. SU,
Nht19NVICZ
""'0 h"esideut

Yýýýiar

rlssistaut Cashier

ý
ýi
i
43

N1. PcH)k1tAN,

1rr(lilo;.

Full text of Annual Report of the Federal Reserve Bank of Philadelphia : Banking and Business in War : 1942 Annual Report

FRASER