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FEDERAL RESERVE BANK CF SI. LOUIS r-- MAR 9 Pi. '2 40 SECREiARY fG PRESIDENT CONTENTS 4 President’s Letter 6 Changing of the Guard 8 The New Team 10 Third District Highlights 11 Departmental Reports 12 Accounting 13 Audit 14 Bank Examination 16 Bank Relations and Services 18 Meeting the Public 20 Cash 21 Collections 22 Credit Discount 23 Data Processing 24 Government Securities and Safekeeping 25 Personnel 26 Public Information 27 Research 28 Other Departments 31 Board Meeting 32 Organization Chart 34 Directors and Officers 35 Comparison of Earnings and Expenses 36 Comparative Statement of Condition 3 Assistant Vice President Al Spencer and Vice President Ed Aff discuss borrowing trends of member banks with Senior Vice President David Melnicoff. CREDIT DISCOUNT Federal Reserve Banks are empowered to supply funds under prescribed conditions to member banks through extension of credit. The Credit Discount Department administers loans to member banks. It is also responsible for administration of defense production loans on behalf of Government agencies guaranteeing the loans under the Regulation V Program, and for the administration of the Foreign Credit Restraint Program. In addition, the department maintains records of the earning assets of the Bank and of the accruals and income thereon, including participations in the System Open Market Account, holdings of Foreign Currencies and Foreign Loans on Gold. 22 Member banks borrowed more at this Bank’s discount window in 1969 than in any previous year in the decade. The number of advances was twice that of 1968 and daily average borrowings of $34.2 million more than tripled the previous year’s daily average. The need for funds coupled with the reduction of bank holdings of United States Government securities brought an increase in the use of items other than Governments as collateral for advances made to member banks. Sixty-four advances were made on eligible paper pledged as collateral, exceeding the number made in the preceding twelve years combined. These advances represented 46 percent of all advances made during the year and the amount, $2.9 billion, was more than had been advanced on eligible paper in the preceding thirty-five years. Obligations of Federal agencies were pledged as collateral on 147 advances made during the year. An amendment of the Federal Reserve Act late in 1968 made agency obligations, formerly acceptable only under Section 10(b), eligible as col lateral for advances at the Bank’s discount rate. Nine advances were made in 1969 under Section 10(b) of the Federal Reserve Act. This was more than the total number of such advances made at this Bank during the past twenty-six years. Under Section 10(b), collateral pledged by a member bank may consist of any asset acceptable to the Reserve Bank even though it is ineligible for advances at the regular discount rate. Reserve city banks became increasingly reliant on the Federal funds market in 1969. Net weekly purchases in most weeks exceeded the highest weekly purchases of the previous year. The combination of Federal funds purchased and Euro dollars acquired provided the city banks with more than 100 percent of required reserves in several weeks of the year. Country member banks in the District continued to supply large amounts of Federal funds to the market. The discount rate was raised from 5^) percent to 6 percent early in April. The present 6 percent rate matches the record high charged at this Bank in 1920 and 1921. For the second consecutive year, 76 percent of the advances made to member banks were based on telephone requests for credit. The Voluntary Foreign Credit Restraint Program, now five years old, was administered at this Bank during the year with no major difficulties. Guidelines for the program were revised by the Board in April and December, principally to give greater flexibility and more explicit recognition to the established priority for financing United States exports. The December revisions continued general ceilings applicable to banks and established separate, additional ceilings covering export term loans made by the banks. For nonbank financial institutions, the December revisions brought long-term credits and investments in Japan under the controls of the guidelines. These credits and investments were specifically exempted under former guidelines. A workman installs Data Processing Department’s new computer, an IBM System 360/40. DATA PROCESSING The Data Processing Department is primarily a service unit for other departments of the Bank. It takes source documents from these departments and transcribes them into punch cards that may be sorted, counted, and recorded by electronic and mechanical equipment. It then produces desired information and necessary records. In the final year of the sixties, the theme seemed to be “business as usual” despite the turmoil caused by continual change and expansion. In 1960 there was not a computer to be found in the Bank and the old Machine Tabulating Department numbered only thirty-nine employes. Today, three computers are housed in the Data Processing Department and fifty employes are involved in the operation. The first computer was installed in 1961. The equipment did a fine job for many years. However, as computer technology improved, it seemed evident that the bank should give con sideration to upgrading its general purpose equipment. As a result, during 1969, payroll checks and the deposit ledgers together with other related reports such as group clearings and automatic charges for cash letters were transferred to larger, more modern equipment. Changes have not been limited to those of a technological nature. Last year the automation of “Book Entry” accounting for United States Government Securities was completed, and an entirely new approach was developed for processing Govern ment Food Stamps. The Bank has also joined in the initial stages of a plan designed to automate the reconcilement of its accounts with other Federal Reserve Banks. Planning for the future still consumes a great deal of time. At present, a new computer room is under construction. In the seventies it is expected that the Bank will centralize all of its computational capabilities in one area and, as a result, will be able to use larger, faster equipment and do a more efficient job. By mid-1969 over fifty programs had been written to handle an integrated system of deposit ledger accounting and were in the testing stages. At that time management believed that progress would be more orderly if good administrative controls could be installed early in the development of our third genera tion system approach. It seemed desirable to make a separation between operations and programming. As a result, the Com puter Services Department was spun off from the Data Pro cessing Department. This new department is responsible for the planning, documentation, programming and implementation of accounting systems which are to be processed by the computer. 23 Customers line up to submit tenders for Treasury Bills. GOVERNMENT SECURITIES AND SAFEKEEPING As Fiscal Agents of the United States, Federal Reserve Banks sell new issues of Treasury marketable securities to the general public, conduct refunding operations, exchange and transfer bonds and notes, pay Government and agency coupons, maintain book-entry control of outstanding Treasury securities balances, and maintain Treasury Tax and Loan Accounts. Reserve Banks are authorized to issue, reissue, and redeem United States Savings Bonds and Retirement Plan Bonds, to issue and reissue United States Savings Notes, and to process and pay Armed Forces Leave Bonds. Reserve Banks qualify commercial banks and others as issuing agents of Series E Savings Bonds and of savings notes, and as paying agents of Series A through E bonds and of matured Series F, G, J, and K bonds. Reserve Banks also act as depositaries for securities owned by member banks. All securities are serviced as to collection of interest, redemptions, and exchanges. Purchase or sale of any Government security can be made through Reserve Barks by member banks without charge. 24 The past year brought a “new look” to the Government Securities and Safekeeping Department. New equipment was purchased including a Bell and Howell inserting and sealing machine. The antiquated equipment it replaced was declared surplus with the Treasury Department. In December the interest rate on U. S. Savings Bonds was upped to 5 percent. At the same time the Treasury Department announced that the sale of U. S. Notes (Freedom Shares) would be discontinued June 30, 1970. Magnetic tape is now being used for the issuance of Series E Bonds on computer in cases where large payroll deduction plans make it feasible. During the year all transferable Treasury securities held by this Bank were converted to Treasury Book-Entry securi ties. This includes not only all transferable Treasury securities held in safekeeping for the account of member banks but also the pledged accounts. The conversion made available needed vault space and eliminated the cutting and handling of cou pons and the processing of definitive securities on certain transactions. The prevalent high interest rates on Government securities has wakened the public to a greater awareness of the advantages of this type of investment. As a result, there has been a tre mendous increase in the number of Treasury Bill tenders sub mitted by individual subscribers. The volume of transactions of this nature reached new peaks during the last quarter of the year. Public interest was further stimulated when the Treasury Department offered 8 percent Treasury Notes in October in exchange for various securities maturing late in the year. The response to the exchange offering increased the work load in this Bank and other Reserve Banks and the resultant interest of the public in the high yield increased the number of trades handled by commercial banks. Purchasers, in most cases, re quested registered securities. Since this Bank is authorized to issue registered securities an unprecedented number of requests for registration was received and processed. The department is currently undergoing a test program on new high speed computer equipment for the wire transfer of securities. The new process, expected to be in use by mid1970, will increase the efficiency of the transfers and provide faster communications between the Reserve Banks on all wire transfers and conventional messages. BEEP boys meet with Phil Anderson (second from left) and Vice President Bill James (far right standing) for briefing on business practices. PERSONNEL The Personnel Department administers Bank policies and programs of employment, job classification, and salary administration, together with payroll operations, including Retirement System and Social Security matters. Employe counseling, the direction of the cafeteria, the Medical Division, and employe and supervisory development and education are among its other major responsibilities. Manning the ramparts isn’t easy these days. With compe tent personnel increasingly difficult to locate and attract in a tight labor market, the Personnel Department has found it necessary to reshuffle more than ever before in order to fill requisitions for help in the various departments of the Bank. In 1969, no fewer than 244 intradepartmental and 38 inter departmental transfers were effected. This resulted in the establishment of 27 new jobs and the re-evaluation of 19 others because of significant changes in duties and responsibilities. In order to smooth this transition, members of the depart ment conducted 80 supervisory training sessions. In addition, orientation meetings were held periodically for new employes. Last year, the turnover rate in the Bank reached 26.9 per cent-highest of the past decade. The silver lining began to peep through in the last quarter of the year, however, when the number of separations slowed considerably. This might be attributable to a slight easing of labor market pressures, but the department is more inclined to believe that it is because channels of communication within the Bank have been im proved. An attempt to unionize Bank employes brought to the surface individual grievances and misconceptions about per sonnel policies and practices. As a result, departmental super visors were urged to coordinate employe objectives with management objectives. Outside recruiting programs, including college visitations, were increased. In 1969, approximately 2,500 individuals applied for work at the Bank and of these, 276 were hired. The Bank continued to support employes’ efforts toward self improvement. Last year, 92 employes attended a variety of educational institutions. During the year several important changes were made to keep employe benefits competitive with other leading firms. A Thrift Plan became effective at year’s end and 93 percent of the employes are participating. At the same time, retirement, disability and death benefits were improved. Also, benefits under the hospitalization-surgical and major medical insurance programs were broadened. While the Bank continued its practice of granting merit salary increases where appropriate, bi-annual salary surveys showed that salaries in the Philadelphia area rose rapidly in 1968-1969. The Board of Directors approved a 5 percent in crease in January and a 4 percent increase in August for all employes. The Bank introduced fair employment practices nearly two decades ago—long before it became the thing to do. Presently, more than 18 percent of the Bank’s work force is non-white. The Business Experience-Education Program initiated two years ago to provide high school students with work experience and income, as well as motivate them to remain in school, is working well. The one solicitation for charity which is permitted in the Bank is for the United Fund Torch Drive. The Bank attained 105 percent of assigned quota in 1969 with 92 percent of the officers and employes participating. Members of the department, as well as others of the Bank staff, continued to assist community agencies in the develop ment and utilization of human resources in the Philadelphia area. 25 Mary Ann Powell helps area high school teacher select bank publications for classroom use. PUBLIC INFORMATION This function provides the business community and the public at large with information about the Federal Reserve System and its policies, this Bank, and the District and national economies. In cooperation with other departments, officers and staff members write articles, deliver speeches, organize seminars, and represent the Bank at various conferences. Improvement of economic education in local high schools and colleges is a major objective. Public Information personnel prepare and distribute press releases emanating from the Bank and maintain personal liaison with communications media. Guided tours of the Bank are conducted on a regular basis. 26 Much like the bouquet of a fine old wine, the Public Information function varies somewhat with each year. 1969 was a vintage year because it presented the department greater opportunity to acquaint the public with the purposes and functions of the Federal Reserve System. One of the year’s highlights was an all-day seminar for economics teachers held at the Bank in November. The seminar, co-sponsored by the Delaware Valley Council on Economic Education, was attended by 120 Philadelphia and suburban high school economics teachers for the purpose of discussing the “Economics of the Cities.” Dr. Ralph Kaminsky of New York University and Dr. Warren Gustus, Economic Advisor for the Bank, were the principal speakers. Late in the fall a series of four seminars was held at the Millersville, Bloomsburg, West Chester and Trenton State Colleges. These were attended by economics professors serving colleges in each of the areas visited. Current issues confronting the economy were discussed with economists from the Depart ment of Research. Early in December the department hosted a group of high ranking military officers enrolled as resident students of the Industrial College of the Armed Forces, Fort McNair, Wash ington, D. C. This program, initiated in 1968, has become a permanent departmental feature. The “top brass” has ex pressed a desire to visit our Bank regularly as part of a field trip they make each year to study industrial plants in the Philadelphia area. During the year the pamphlet, How to Interpret Federal Reserve Reports, was revised and made available for distribu tion. The pamphlet has been renamed Guide to Interpreting Federal Reserve Reports. Another of our publications, Defending the Dollar, is now being revised and updated. An addition to the Series for Economic Education was ready for distribution at year’s end. The new pamphlet, Truth in Lending/What it Means for Consumer Credit, is designed to help the consumer have a better understanding of Regulation Z. S.E.E. pamphlets continued to be a “hot” item. More than 1,500,000 copies were distributed during the year along with approximately 100,000 copies of other publications. Students and bankers continue to find tours of the Bank interesting and educational. More than 2,000 availed them selves of the privilege during the course of the year, and it is necessary to schedule tours well in advance. In 1969 all reasonable requests for speakers were accommo dated. Approximately 200 speeches were given by Bank per sonnel, including special talks on the new Truth in Lending Law. Warren J. Gustus, Economic Advisor for the Bank, discusses current monetary policy and economic trends before a luncheon meeting of educators in the Whittier Room. RESEARCH The principal functions of the Department of Research are to provide basic data and analyses needed in the formulation and evaluation of Federal Reserve policy; to keep abreast of national and international developments; to analyze regional growth within the District; to study banking and financial markets and the theory and techniques of central banking; to maintain a cooperative liaison with the financial, business, academic, and civic communities; and to contribute to the public’s understanding of monetary policy and the workings of the economy. The principal responsibility of the staff of the Research Department is to contribute to the formulation of the System’s monetary policy. To fulfill that responsibility requires collec tion of sufficient, accurate, and timely data; processing of data into the most usable formats; careful economic analysis; and appropriate dissemination of the research results. As changes take place in commercial banking, methods are being devised to gather information which will be useful to those who advise on policy decisions. During this past year, a statistical report was initiated which showed in detail the various sources of nondeposit funds tapped by commercial banks. Also, a new panel of reporting banks began to supply data regarding their activities in the consumer installment loan area, thereby furnishing more reliable information in this important aspect of economic activity. During the year, a panel of banks was selected to take part in a Demand Deposit Owner ship Survey which will be in full operation by mid-1970. Throughout 1969 efforts were made to improve the quality and timeliness of all statistical series, so that information could be disseminated as rapidly as possible. Plans have been made for significant improvements in computer support for research operations with the installation of an IBM 360/40 System in January 1970. The model 40 replaces the model 30 used by Research Department personnel for two years and is one of two similar systems to be shared by all computer users in the Bank. The increase in size and speed will upgrade current statistical operations and provide better service to the economists. Analyses made by the staff of economists were presented in Open Market briefing sessions, in meetings of the Bank’s Board of Directors, in System committee meetings and in meetings of civic, trade and academic groups throughout the District. The department has established a series of monthly seminars in which academic economists and other outside experts join with staff economists in discussing current theoret ical and policy issues. This enables the department to keep abreast of economic research being done elsewhere and pro vides a forum for presentation of the department’s research findings to other experts. Although research analyses are disseminated in many forms, a significant number are presented in the Business Review, the department’s monthly publication. The mailing list of the Business Review was revised in 1969. At the same time, a survey of subscribers was made in an attempt to learn some of the characteristics of the Review’s audience. Information gained through the survey should enable the staff to meet the needs of readers more effectively. 27 BUILDING OTHER DEPARTMENTS The Building Department is responsible for the care, clean ing, operation, maintenance and alteration of the physical plant. Alteration played a major part in the department’s activities in 1969 as every effort was made to keep an old building functioning like new. Security measures called for relocation of the Guard Control Station and the installation of new security doors in strategic areas of the Bank. New acoustical ceilings were installed on certain floors and lighting fixtures were redesigned and modernized. The Government Securities and Safekeeping Department was completely rear ranged and renovations in the vault, begun in 1968, were completed during the year. Department personnel are presently installing enclosed computer areas on the third and fourth floors of the Bank building. FEDERAL TAXES Federal Reserve Banks, as Fiscal Agents of the United States, are authorized to accept tax funds either from employes directly or through qualified commercial banks. In 1969 this department processed one million more receipts than in 1950. During that period the dollar volume rose from $6 million to $7 billion. Federal Tax procedures have been changed many times over the years in order to speed the collection of funds. To cope with these changes and the increase in volume more sophisticated equipment is acquired regularly. In 1970 the internal processing of the taxes will be committed to new third generation computer equipment. Tony Teti, Assistant Head of the Building Department, supervises the construction of a new computer room. MEDICAL Bank employes and their immediate families are again eligible to draw on the Red Cross Blood Bank this year. One hundred and sixty-six volunteer blood donors were accepted, exceeding the Bank’s required quota. And would you believe— again in 1969 more than 13,000 employe cases were examined and treated by medical personnel. CAFETERIA Cafeteria personnel, all Bank employes, managed to per form a modern miracle in 1969. Quality meals were served to approximately 650 employes each day plus an average of between 75 and 100 weekly guests at no advance in prices. This takes a bit of doing with the cost of food steadily moving upward. Somebody must be doing something right. EMERGENCY PLANNING In carrying out a program designed to provide “insurance” in the event a national emergency should force this Bank to cease operations, a “vest pocket” branch of the Bank has been established at the Relocation Office in Lewisburg. Reconstruc tion and test activities are performed on a regular basis by the Relocation Office staff and at least once each year employes of the Bank go to Lewisburg to test certain programs by recon structing the records. 28 GUARDS The Guard Department is responsible for safeguarding Bank property and personnel. The performance of this function requires continual updating and improving of safety features. In 1969 a new console was installed housing the complete alarm system, teletype, PA system, monitors and some other hush-hush equipment. Also, new doors controlled by maximum security devices were installed at Bank entrances. PRINTING This department bore the brunt of 1969’s paper explosion. Increased activity in the Regulations of the Board of Governors, a one hundred percent increase in the number of Bank circulars and a complete revision of the in-bank directory because of bank mergers, title changes, etc., kept the personnel of the department hopping all year. By year’s end the addressograph section of the department had been revised, a complete revision of the listings of emergency check and cash areas had been effected and new large binders to accommodate the changed format for Board Regulations were made available. The in creased work load made some changes of equipment necessary. One addition, an automatic plate maker, has proven to be a time and labor saver as it eliminates the making of negatives and metal printing plates. LEGAL The Legal Department has the responsibility of protect ing the Bank’s legal rights and delineating functions in the discharge of its legal obligations. It also represents the Bank in legal actions in which the Bank may become involved. Routine matters involve ascertaining the legal significance and inter pretation of regulations and laws as adopted by legislative assemblies and the Board of Governors of the Federal Reserve System. Moreover, the many contracts and agreements entered into by other departments in the Bank must be prepared or reviewed. Legal opinions are submitted on behalf of applica tions for mergers, branches and other matters involving legal questions. The new electronic console enables guard John Donaway to keep a close watch on all strategic areas of the Bank. 29 PURCHASING The Purchasing Department made a complete physical inventory of all Bank-owned equipment in 1969. Machines and furniture that could no longer be used by the Bank were sold at auction to interested firms in the Philadelphia area. The supply division of the department filled orders for nearly 2 million copies of Bank publications during the year. VAULT The Vault Department is accountable for the custody and servicing of United States Government and other securities, and the storing of currency and coin. These represent about $15 billion, so every precaution is observed to safeguard and facili tate the handling of this “hoard.” As an added security measure all persons entering the vaults are now required to sign a vault log. Early in the year, two compartments in the South Vault housing unissued U. S. Savings Bonds and Notes and Retire ment Plan Bonds were placed under the direct supervision of the Government Securities and Safekeeping Department. Angelo Patrone stands watch as Joe Mullen and Joe Moritz of the Cash Department deposit currency in the vault for safekeeping. 30 BOARD MEETING Director Henry A. Thouron and First Vice President-elect David C. Melnicoff seem satisfied with the results of Board meeting just finished. First Vice President Robert N. Hilkert and Directors Edward J. Dwyer and D. Robert Yarnall, Jr., discuss some unfinished business. Senior Vice President Joseph R. Campbell and Director H. Lyle Duffey tell newly elected Director William H. Cosby (right) that it’s “only the beginning” after Mr. Cosby’s first meeting of the Board. Chairman Willis J. Winn (left) and Deputy Chairman Bayard L. England “take a breather” after Board of Directors meeting at the Bank. Director Harold F. Still, Jr., Vice President Edward A. Aff and President-elect David P. Eastburn enjoy a chuckle after a vigorous session. 31 BOARD OF DIRECTORS FEDERAL RESERVE BANKING BUSINESS PUBLIC “A” DIRECTORS “B” DIRECTORS PHILIP H. GLATFELTER, 111-1970 PRESIDENT AND CHAIRMAN P. H. Glatfelter Co. Spring Grove, Pa. “C” DIRECTORS WILLIS J. WINN - CH. - 1970 DEAN, WHARTON SCHOOL University of Pennsylvania Philadelphia, Pa. HENRY A. THOURON - 1971 PRESIDENT Hercules Incorporated Wilmington, Del. BAYARD L. ENGLAND-DEP. CH. - 1972 CHAIRMAN OF THE BOARD Atlantic City Electric Company Atlantic City, N. J. EDWARD J. DWYER - 1972 PRESIDENT ESB Incorporated Philadelphia, Pa. D. ROBERT YARNALL, JR.-1971 PRESIDENT Yarway Corporation Blue Bell, Pa. H. LYLE DUFFEY-1970 EXECUTIVE VICE PRESIDENT The First National Bank of McConnellsburg McConnellsburg, Pa. BANK OF PHILADELPHIA HAROLD F. STILL, JR. - 1971 PRESIDENT Central-Penn National Bank Bala Cynwyd, Pa. WILLIAM R. COSBY - 1972 PRESIDENT Princeton Bank and Trust Co. Princeton, N.J. COMMITTEES OF THE BOARD CHAIRMAN EXECUTIVE DEPUTY CHAIRMAN WILLIS J. WINN CHAIRMAN OF THE BOARD BAYARD L. ENGLAND AND 3 DIRECTORS FEDERAL RESERVE AGENT BUDGET BUILDING PERSONNEL CHAIRMAN OF THE BOARD AUDIT WILLIS J. WINN SECRETARY V. P. & GENERAL AUDITOR W. F. STAATS G. W. METZ ASS'T FED. RES. AGENT E. D. KERNS I I ALTERNATES ASS’T GENERAL AUDITOR P. M. DiPLACIDO T. J. QUINN H. A. RICKERT, JR. A. L. MAGEE R. W. Yarroll PRESIDENT KARL R. BOPP OFFICERS’ OFFICERS’ COUNCIL FIRST VICE PRESIDENT DISCOUNT COMMITTEE OTHER OFFICERS’ COMMITTEES OPERATIONS AND INFORMATION SYSTEMS BUDGET AND PURCHASING BUILDING AND SPACE- ROBERT N. HILKERT EMERGENCY PLANNING PERSONNEL -- —------—1 SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT SENIOR V. P. & GENERAL COUNSEL SENIOR VICE PRESIDENT J. R. CAMPBELL D. P. EASTBURN J. V. VERGARI D. C. MELNICOFF L 1 LJ I ‘ l-iiiir _____________________ VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT W. A. JAMES R. E. HAAS E. A. AFF H. BARRIE VICE PRESIDENT N. G. DASH M.A. Schwinhart ECONOMIC ADVISER W. J. GUSTUS 1 ASS’T VICE PRES. SENIOR ECONOMIST SENIOR ECONOMIST ASS’T VICE PRES. ASS’T VICE PRES. ASS’T VICE PRES. ASS’T VICE PRES. J. M. CASE M. H. WILLES W. F. STAATS K. M. SNADER W. R. MOLL J. A. AGNEW A. A. KUDELICH E. C. Lodge J.J. Kiefer J. J. Brenner T. J. Quinn J. R. Traynor D. L. Matteo r ASS'T VICE PRES. A. SPENCER, JR. J. B. Everman ASS’T VICE PRES. ASS’T VICE PRES. ASS’T VICE PRES. ASS’T VICE PRES. D. R. CONNOR J. P. BESSE R. P. SUDDERS NELSON J. H. Muntz K. E. Wren L V. P. J. Arnold E. J. Fitzpatrick F. Phelan M. DiPlacido McAteer H. J. CHIEF EXAMINING OFFICER J. P. GIACOBELLO 1 E. D. Kerns r EXAMINING OFFICERS ASSISTANT PERSONNEL OFFICER ASS’T COUNSEL BANK SERVICES OFFICER PUBLIC INFOR MATION OFFICER SECURITIES OFFICER D. P. NOONAN H. H. HOLLOWAY S. J. CULBERT.JR. G. C. HAAG E. W. LOWE T. K. DESCH W. L. ENSOR J. R. Joyce A. J. Snyder, M.D. A. J. McKinley J. H. JAMES BANK RELA TIONS AND SERVICES LEGAL AFFAIRS CAFETERIA L. E. MARKFORD PUBLIC INFORMATION FUNCTIONAL COST ANALYSIS DATA PROCESSING PLANNING PROGRAMMING GOVERNMENT SECURITIES AND SAFEKEEPING CURRENCY VERIFICATION BANK VISITS BANK RESEARCH STATISTICS PERSONNEL EXAMINATION PUBLICATIONS LIBRARY MEDICAL REGULATIONS AFFECTING MEMBER BANKS CURRENCY AND COIN POSTMASTERS’ DEPOSITS POST OFFICE VAULT COLLECTIONS AND ADMIN ISTRATION FOOD STAMPS CHECK PROCESSING CHECK ADJUSTMENT AND CONTROL JANUARY 1, 1970 TRUTH IN LENDING CREDITDISCOUNT REGULATION "V” BALANCE OF PAYMENTS PROGRAM BUILDING ACCOUNTING PRINTINGCIRCULARS BUDGET EMERGENCY PURCHASING PROGRAM FILING AND TELEPHONE RECORDS STORAGE GUARDS DIRECTORS Chairman Willis J. Winn, Dean Wharton School of Finance and Commerce, University of Pennsylvania Philadelphia, Pa. Deputy Chairman Bayard L. England, Chairman of the Board Atlantic City Electric Company Atlantic City, N. J. William R. Cosby President Princeton Bank and Trust Company Princeton, N. J. Philip H. Glatfelter, III President and Chairman P. H. Glatfelter Co. Spring Grove, Pa. H. Lyle Duffey Executive Vice President The First National Bank of McConnellsburg McConnellsburg, Pa. Harold F. Still, Jr. President Central-Penn National Bank Bala Cynwyd, Pa. Edward J. Dwyer President ESB Incorporated Philadelphia, Pa. Henry A. Thouron President Hercules Incorporated Wilmington, Del. D. Robert Yarnall, Jr. President Yarway Corporation Blue Bell, Pa. OFFICERS Karl R. Bopp, President Robert N. Hilkert, First Vice President Joseph R. Campbell, Senior Vice President David P. Eastburn, Senior Vice President David C. Melnicoff, Senior Vice President James V. Vergari, Senior Vice President and General Counsel Edward A. Aff, Vice President Hugh Barrie, Vice President Norman G. Dash, Vice President Ralph E. Haas, Vice President William A. James, Vice President G. William Metz, Vice President and General Auditor James A. Agnew, Assistant Vice President Jack P. Besse, Assistant Vice President Joseph M. Case, Assistant Vice President D. Russell Connor, Assistant Vice President Alexander A. Kudelich, Assistant Vice President Warren R. Moll, Assistant Vice President Henry J. Nelson, Assistant Vice President Kenneth M. Snader, Assistant Vice President Albert Spencer, Jr., Assistant Vice President Russell P. Sudders, Assistant Vice President James P. Giacobello, Chief Examining Officer Thomas K. Desch, Examining Officer William L. Ensor, Examining Officer Jack H. James, Examining Officer Leonard E. Markford, Examining Officer Warren J. Gustus, Economic Adviser William F. Staats, Secretary and Senior Economist Mark H. Willes, Senior Economist Samuel J. Culbert, Jr., Bank Services Officer George C. Haag, Public Information Officer Hiliary H. Holloway, Assistant Counsel Eugene W. Lowe, Securities Officer A. Lamont Magee, Assistant General Auditor David P. Noonan, Assistant Personnel Officer MEMBER OF FEDERAL ADVISORY COUNCIL George H. Brown, Jr., Chairman of the Board, Girard Trust Bank, Philadelphia, Pa. January 1, 1970 34 COMPARISON OF EARNINGS AND EXPENSES CURRENT EARNINGS: 1969 1968 From U.S. Government securities.................................. From discounts and advances and miscellaneous sources.......................................................................... $ 164,711,277.68 $ 136,299,631.06 8,370,373.52 4,604,275.39 Total current earnings............................................. 173,081,651.20 140,903,906.45 Operating expenses (after deducting reimbursable or recoverable expenses)................................................... Federal Reserve currency................................................ Assessments for expenses of the Board of Governors. . . 10,700,943.23 1,262,303.71 778,500.00 9,584,109.40 1,384,812.91 749,900.00 Total net expenses................................................... 12,741,746.94 11,718,822.31 Current Net Earnings........................................................................... 160,339,904.26 129,185,084.14 Profit on sales of U.S. Government securities (net). . . . Miscellaneous non-operating income.............................. 319,339.61 40,879.36 426,673.50 Total additions......................................................... 319,339.61 467,552.86 Loss on sales of U.S. Government securities (net)........ Miscellaneous non-operatingexpenses............................. 316,619.68 25,103.59 8,869.37 Total deductions....................................................... 341,723.27 8,869.37 Net additions (deductions)...................................................... 22,383.66 458,683.49 Net earnings before payment to U. S.Treasury.................... 160,317,520.60 129,643,767.63 Dividends Paid........................................................................ Paid to U.S. Treasury (interest on Federal Reserve notes). . Transferred to Surplus............................................................ 1,999,838.29 157,082,482.31 1,235,200.00 1,933,570.76 126,754,046.87 956,150.00 $ 160,317,520.60 $ 129,643,767.63 NET EXPENSES: ADDITIONS TO CURRENT NET EARNINGS: DEDUCTIONS FROM CURRENT NET EARNINGS: 35 COMPARATIVE STATEMENT OF CONDITION ASSETS Dec. 31, 1968 Dec. 31, 1969 GOLD CERTIFICATE ACCOUNT............................. $ 525,670,746.02 $ 494,257,793.64 FEDERAL RESERVE NOTES OF OTHER FEDERAL RESERVE BANKS............................ 34,613,760.00 35,063,655.00 OTHER CASH................................................................. 5,034,092.41 4,901,516.20 LOANS AND SECURITIES: Discounts and advances............................................ United States Government securities....................... Total Loans and Securities................................ 650,000.00 3,071,751,000.00 3,072,401,000.00 100,000.00 2,810,204,000.00 2,810,304,000.00 OTHER ASSETS: Cash items in process of collection........................... Bank premises............................................................ All other...................................................................... 729,778,399.54 2,475,074.94 125,278,446.65 634,903,044.39 2,358,817.56 257,665,905.93 Total Assets..................................................................... 4,495,251,519.56 4,239,454,732.72 NOTE LIABILITIES: Federal Reserve notes................................................ 2,756,766,121.00 2,615,922,686.00 DEPOSITS: Member bank—reserve accounts.............................. United States Government........................................ Foreign........................................................................ All other...................................................................... Total Deposits.................................................... 986,466,483.93 70,869,685.64 6,760,000.00 17,964,564.87 1,082,060,734.44 991,103,096.04 522,375.94 11,660,000.00 13,321,161.21 1,016,606,633.19 OTHER LIABILITIES: Deferred availability cash items................................ All other...................................................................... TOTAL LIABILITIES..................................... 557,759,990.72 30,630,673.40 4,427,217,519.56 520,862,792.23 20,499,021.30 4,173,891,132.72 CAPITAL ACCOUNTS: Capital paid in........................................................... Surplus........................................................................ 34,017,000.00 34,017,000.00 32,781,800.00 32,781,800.00 Total Liabilities and Capital Accounts................. $ 4,495,251,519.56 $ 4,239,454,732.72 LIABILITIES 36