Full text of Annual Report of the Federal Reserve Bank of Richmond : 1970 Annual Report

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FEDERAL
RESERVE
BANK
OF RICHMOND




1970

Annual Repat







F E D E R A L R E S E R V E B A N K O F R IC H M O N D

W e are pleased to present the
Federal Reserve Bank o f Richm ond.

1970 Annual Report o f the
This report features a review

o f the grow ing international activities and rapid overseas expansion
o f United States banks.

It also includes com parative financial state­

ments, highlights o f the year’s operations, and current lists o f officers
and directors o f our Richmond, Charlotte, and Baltimore offices.

W e wish to thank you for your continued cooperation
support.

Sincerely yours,

C h a i r m a n of t he B o a r d

and







UNITED STATES BA N K IN G A B R O A D . . .

4

A Late Start
The Legal Underpinnings
Early Rise and Fall
The Recent Expansion
Incentives for Overseas Expansion
Recent Trends and Developments
International Banking in the Fifth District

4
5
7
9
14
19
21

H I G H L I G H T S ............................................................ 23

Summary of Operations

27

CO M PARATIVE S T A T E M E N T S ........................ 28

Condition
Earnings and Expenses

28
29

D IR E C T O R S .................................................................. 30
O F F I C E R S .................................................................. 31
BRANCH D I R E C T O R S .......................................... 32

UNITED STATES
BANKING ABROAD
W a r I, its financing continued fo r the most
part to be left to others. The United States
relied on the banking facilities and services
of its European trading partners, especially
those of G reat Britain. M ost o f its foreign
trade was financed by London banks in ster­
ling, the w orld’s forem ost trading currency
at that tim e. The dollar was still a stranger
in foreign markets and financial centers.
Even if economic conditions had warranted
it, however, active participation o f United
States banks in international finance was pre­
cluded by legal barriers.
National banks
were not em pow ered to create acceptances,
the principal financial instrument then used
to finance international trade. Nor were they
permitted to establish foreign branches or
subsidiaries.
Only a few private (unincor­
porated) and state-chartered banking organi­
zations conducted the nation’s limited inter­
national banking business. By the end of
1913, when the Federal Reserve A ct was
passed, 26 overseas branches were in opera­
tion. Only six of these were direct branches
of four N ew Y o rk b an k s; the remaining 20
were branches o f two state-chartered inter­
national banking corporations.
Several shifts in the international position
of the United States became discernible
around the turn o f the century and called for
greater United States participation in inter­
national finance. First, there was the rapid
expansion of United States exports, which
increasingly included m anufactured products
as well as agricultural goods and raw m a­
terials.
A growing share of those exports
went outside Europe to the relatively capitalpoor areas o f the Caribbean, South Am erica,
and A sia. The United States also shifted
from a net importer to a net exporter after
the turn o f the century and thus from a
debtor nation to a creditor nation. Recogni­

United States banks are relative newcomers
to the international scene. Economic realities
and legal barriers kept them at home during
the nineteenth century. By the turn of the
century, however, the growing United States
role in the world economy had set the stage
for an expansion of international banking
activities follow ing the removal of legal re­
strictions by the Federal Reserve A c t and its
early amendm ents.
The initial expansion,
however, was halted and reversed by the eco­
nomic downturn of 1 920-21 and the slowing
of the postwar foreign trade boom. Growth
resumed in the late 1 9 2 0 ’s but was inter­
rupted again, first by the Depression of the
1 9 3 0 ’s and then by W o rld W a r II. Recovery
after the W a r was delayed by lingering war­
time exchange controls and restrictions on in­
ternational trade and investment. O nly in the
past decade or so has international banking
finally come of age in the United States.
During the past decade, the number, size,
and activities of international departments
have m ultiplied sharply. Overseas branches,
affiliates, and subsidiaries have proliferated.
The dollar— the product of United States
banks— now stands at the center o f new in­
ternational m oney and capital m arkets. M ul­
tinational banks are emerging to serve multi­
n a t i o n a l business corporations.
Regional
banks are challenging N ew Y ork in the in­
ternational arena. Fifth District banks are
sharing in this international banking boom.

International banking in the United States
has a relatively brief history. A lth ough the
foreign trade of the United States expanded
tenfold between the Civil W a r and W o rld




4

member banks by virtue of the Banking Act
of 1933 and Section 9 of the Federal Reserve
A ct.

tion of these trends, together with the in­
creasing strength and importance of the
United States in the world economy, led many
observers to call for legal and institutional
changes that would permit Am erican banks
to engage in international banking. The N a­
tional M onetary Commission, established by
Congress to study the nation’s banking and
financial system and to make recom m enda­
tions, reported in 1911 as fo llo w s:

ACCEPTANCE FINANCING

Section 13 of
the Federal Reserve A ct authorized national
banks to accept drafts or bills of exchange
arising from import or export transactions.
It also authorized Federal Reserve Banks to
discount or purchase the resulting bankers’
acceptances. These provisions paved the way
for the development of a dollar acceptance
m arket of great benefit to the foreign trader.
Such a m arket enabled the importer or ex­
porter to transfer the burden of financing his
transactions to the banking system at a cost.
The Federal Reserve’s readiness to discount
acceptances gave the m arket depth and pro­
vided it with an ultimate source of liquidity.

We assume that it is not necessary to call at­
tention to the desirability of making every reason­
able effort to promote our foreign trade and to
establish closer commercial and financial relations
with foreign countries. The impediments in the
way of the development of our international trade
are numerous. Perhaps none of these is more im­
portant than the absence of American banking fa ­
cilities in other countries and the lack of knowledge
abroad of our financial resources and of the
strength and character of our banking institutions.
The status of the United States as one of the great
powers in the political world is now universally
recognized, but we have yet to secure recognition
as an important factor in the financial world.
This condition of affairs is likely to remain un­
changed as long as practically all our purchases
and sales abroad are financed by foreign bankers.

FOREIGN BRANCHES

Section 25 of the
Federal Reserve A c t permitted national banks
with capital and surplus of $1 million or over
to establish foreign branches, subject to the
approval of the Federal Reserve.
W h ile overseas branches of United States
banks are foreign entities subject to local
laws and regulations, they are also subject
to the regulations of the Board of Governors.
Before 1962, these regulations limited branch
activities to those permitted in domestic bank­
ing and were more restrictive than those of
many foreign countries. Dual regulation put
many of these branches at a competitive dis­
advantage by denying them many banking
practices common in their host countries. To
rectify this situation C o n g r e s s in 1962
am ended Section 25 of the Federal Reserve
A ct to authorize the Board to permit foreign
branches to exercise “ such further powers as
may be usual in connection with the trans­
action of the business of banking in the places
where such foreign branch shall transact
business.”
The revisions to the B oard’s Regulation
M, which resulted from the 1962 statute,
broadened the powers of foreign branches to
issue guarantees, to accept drafts, to take
liens on foreign real estate, to invest in the
securities of the local central bank, clearing

Accordingly, the Federal Reserve A ct, based
in large part on the Commission’s recom m en­
dations, opened the door to international
banking by United States banks.

c J lie J ^e c ja l l^riderpL rinL riq s
The Federal Reserve A ct of Decem ber 1913
and its amendments still form the legal
fram ew ork for the international operations
of Am erican banks. The A c t permitted na­
tional banks for the first time to accept drafts
to finance foreign tr a d e ; it also permitted
them to open foreign branches.
A 1916
am endm ent permitted national banks to in­
vest in state-chartered international banking
subsidiaries called “ A greem en t” corpora­
tions. A 1919 amendment to the Federal Re­
serve A ct, provided fo r the national charter­
ing of such subsidiaries called “ Edge A c t”
corporations. A more recent am endm ent per­
mits national banks directly to purchase
stock in foreign banks.
W h ile these pro­
visions refer specifically to national banks,
they are now generally applicable to all




5

houses, government entities, and development
banks, and to underwrite and trade in the se­
curities of the national government.
The
amendment specifically precluded the Board
from authorizing branches to underwrite
other securities or to deal in commodities.
The revisions to Regulation M also simplified
foreign branching procedures by requiring
Board approval fo r only the first branch of
a national bank in a given foreign country.
Additional branches in the same country may
be opened after giving 30 days notice to
the Board.

Jersey. The Edge A ct, which added Section
2 5 ( a ) to the Federal Reserve A ct, authorized
the Federal Reserve Board to charter cor­
porations “ for the purpose of engaging in in­
ternational or foreign banking or other in­
ternational or foreign financial operations
. . . either directly or through the agency,
ownership, or control of local institutions in
foreign countries. . . .”
E dge A ct corporations must have a mini­
mum capitalization of $2 million, with con­
trol remaining with United States citizens.
Their domestic transactions can be only inci­
dental to their international business. Their
banking powers are similar to those of inter­
national departments of commercial banks.
They m ay accept foreign dem and and time
deposits, m ake foreign loans and investments,
issue letters of credit, accept drafts, deal in
foreign exchange, and provide collection
services.
They m ay also operate overseas
branches and, unlike commercial banks, they
m ay in addition invest in foreign banks and
other foreign enterprises.
A commercial bank may derive important
advantages from an Edge subsidiary.
The
subsidiary m ay purchase stock in foreign en­
terprises not engaged in banking. Since the
subsidiary m ay be established outside a
parent bank’s own area, it can give a bank
located elsewhere the advantages of a N ew
Y ork or other convenient location. A n Edge
corporation m ay also establish subsidiary
banks and thus provide the only access to
foreign countries that prohibit or severely re­
strict direct foreign branches of domestic
banks.

AGREEM ENT CORPORATIONS The second
m ajor piece of legislation affecting interna­
tional banking structure was a 1916 am end­
ment to Section 25 of the Federal Reserve
Act.
This amendment permitted national
banks to invest, singly or jointly, in corpora­
tions chartered under federal or state law to
conduct i n t e r n a t i o n a l banking activities.
Since the am endm ent did not provide for the
federal chartering of international banking
corporations, its main effect was to enable
national banks to invest in existing or newly
created state-chartered corporations. Before
the Board could approve such an investment
by a national bank, however, the corporation
had to enter into an agreement with the
Board “ to restrict its operations or conduct
its business in such m anner or under such
limitations and restrictions as the said board
may prescribe. . .
The legislative provision fo r Agreem ent
corporations was designed to provide small
banks unable to afford their own foreign
branch an opportunity to expand abroad
through joint ownership of a foreign bank­
ing subsidiary. A greem ent corporations may
themselves establish overseas branches and
engage in many foreign activities not open to
foreign branches and their parent banks.

FOREIGN

B A N K OW NERSHIP
Until re­
cently Edge A ct and Agreem ent corporations
provided the only corporate vehicle for
United States banks to acquire an equity in­
terest in foreign banks. A 1966 amendment
to Section 25 of the Federal Reserve A c t and
the resulting regulatory changes in 1967 au­
thorized national banks directly to acquire
stock in foreign banks. The investment must
be approved by the Board of Governors and,
together with investments in E dge A c t and
Agreem ent corporations, shall not exceed 25

EDGE A C T CORPORATIONS The failure of
the 1916 amendment to provide fo r the fe d ­
eral chartering of international banking cor­
porations gave rise to the A c t of D ecem ­
ber 24, 1919, commonly called the Edge A ct
for its sponsor, Senator W a lte r Edge of New




6

percent of the investing bank’s capital and
surplus. The foreign affiliate m ay not con­
duct business in the United States beyond
what the Board considers incidental to its
international business.

state m em ber banks.
The foreign branch
records of state m em ber and nonmember
banks are subject to examination by state
authorities. Banks are generally required to
furnish periodic reports of condition and re­
lated financial statements of their foreign
branches to their exam ining agency.
Edge A c t and A greem ent corporations and
their foreign branches must also submit to
examination by the Board of Governors at
least once a year and must file reports of
condition on them selves and their controlled
subsidiaries twice a year. In addition, they
must report quarterly their acquisition and
disposition of shares. In fact, when the Board
permits an E dge corporation to acquire con­
trolling interest in a subsidiary, the condi­
tions it imposes generally have the effect of
subjecting the subsidiary to the same restric­
tions that apply to the Edge corporation
under Regulation K .

THE REGULATORY

FRAM EW ORK
Con­
gress through the years has delegated the
primary responsibility for regulating and su­
pervising the in te r n a tio n a l operations of
A m erican banks to the Board of Governors
of the Federal Reserve System. The Board’s
responsibilities are shared in part by other
federal regulatory agencies and various state
authorities.
The regulatory authority of the Board of
Governors over the foreign activities o f m em ­
ber banks is based on and governed by Sec­
tion 25 of the Federal Reserve A ct. To im­
plem ent that section, the Board has issued
Regulation M, which governs the establish­
ment and the operations o f m em ber banks’
foreign branches. Regulation M as amended
is also the regulation that governs m em ber
banks’ acquisition and holding of stock in
foreign banks.
Edge A c t corporations were placed under
the B oard’s regulatory authority by Section
2 5 ( a ) of the Federal Reserve A ct. To im ple­
ment the provisions of that section, the Board
issued Regulation K. Regulation K — the gen­
eral provisions o f which m ay be inferred from
the previous discussion of permissible ac­
tivities— applies both to Edge A c t corpora­
tions and to A greem ent corporations.
Of
course, since Agreem ent subsidiaries are
state-chartered corporations they are also
subject to state law and regulation.
Foreign branches of United States banks
are usually examined by the regulatory au­
thorities of their host countries, the United
Kingdom and Ireland being notable excep­
tions.
The home office records of foreign
branches are also subject to examination by
United States authorities, usually as part of
the examination of their parent banks. The
Com ptroller of the Currency examines the
foreign branches of national banks at their
overseas location; the Federal Reserve Sys­
tem examines the foreign branch records of




W o rld W a r I and its afterm ath provided a
setting especially congenial to the expansion
of the international activities of United States
banks.
A p a rt from the legislative changes
described in the previous section, the rapid
growth o f United States foreign trade, its
changing pattern and composition, the emer­
gence of the United States as a creditor na­
tion, heavy European demand for postwar
reconstruction credits, and the weakening of
the dominant role of sterling in international
finance invited enlarged United States par­
ticipation in international banking. Once the
legal barriers were rem oved, United States
bankers m oved prom ptly to make up for lost
time and in the space of three or four years
established an impressive position in the in­
ternational area.
But this promising start
proved to be a false one, as world economic
and political conditions conspired to undo
much of this advance.
The rapid developm ent of the new bankers’
acceptance m arket reflects the expansion of
international financing activities in the im­

7

mediate postwar years. A s shown in Chart 1,
the volume of acceptances outstanding rose
sharply, and by the late 1 9 2 0 ’s it exceeded
$1.5 billion, a level that would not be reached
again for three decades.
National banks and banking subsidiaries
lost no time expanding their overseas fa ­
cilities. By 1 92 0, state and national banks
together had 100 direct foreign branches.
Counting the branches of their subsidiaries
the total number of foreign branches reached
a peak of 181 in 1920.
In these early years
few er banks had overseas branches than did
their subsidiaries although multiple branch­
ing by some banks m ade the total of bank
branches greater. This early overseas ex­
pansion was concentrated largely in Latin
Am erica and the Far East.

Given the relative inexperience of A m eri­
can banks abroad, their initial overseas ex­
pansion under favorable conditions was prob­
ably too rapid. Banks that had overextended
their i n t e r n a t i o n a l operations were par­
ticularly vulnerable to the economic contrac­
tion of 192 0-2 1 and the abrupt halt in the
unusually rapid postwar expansion in world
trade in the early 1 9 2 0 ’s.
postwar

reconstruction

The drying up of

credits

was

also

a

factor unfavorable to the continued growth
of international banking.
Under the influence of the reverses of the
early 1 9 2 0 ’s, Am erican banks curtailed their
international

activities and

overseas branch network.

cut back their
The number of

foreign branches of Am erican banks and sub­

C hart I

VOLUME OF BANKERS' ACCEPTANCES OUTSTANDING
IN THE UNITED STATES
(b illio n s of d o lla rs)

1925
Source:




1930

1935

Federal Reserve Bulletins.

1940

1945

1950

1955

1960

1965

1970

sidiaries declined by one-half in four years,
from the 1920 high of 181 to 91 in 1924.
Edge A ct and Agreem ent corporations fo l­
lowed the same early pattern of rapid rise
follow ed by sharp contraction.
Agreem ent
corporations proved to be more popular than
Edge corporations in the early years. Fifteen
A greem ent corporations had been form ed by
1925. Thirteen of these were subsequently
liquidated or absorbed by other institutions.
Eleven of them had disappeared by 1 9 3 0 ; the
other two were dissolved in 1932 and 1947.
A s late as 1959 only three A greem ent cor­
porations were in operation.
Edge A ct corporations never really got
o ff the ground in this early phase of ex­
pansion into the international area. One was
chartered in 1920, and another in 1 9 2 1 ; both
were liquidated in 1925.
A third was
chartered in 1 92 6, but it was liquidated in
1933. The next three were chartered in 1930,
1949, and 1955. Edge A ct corporations did
not catch on in any significant way until
the 1 9 6 0 ’s.
The international operations of Am erican

Another slight recovery in international
banking and branching paralleled the mild
recovery from the Depression in the late
1 9 3 0 ’s. It was interrupted by W o rld W a r II
and its accompanying trade restrictions and
exchange controls. International operations
continued to contract, and by the end of 1945
the overseas branches of A m erican banks and
subsidiaries numbered only 78, and only five
Edge A c t and Agreem ent corporations were
in operation.

e Jvecent OxpansLon
THE ECONOMIC ENVIRONMENT

banks began to recover in the second half of
the 1 9 2 0 ’s.

Overseas branches grew in num­

ber from 91 in 1924 to 132 in 1931.

This re­

covery was cut short, however, by the Great
Depression of the 1 9 3 0 ’s.

In this greatest of

all world economic debacles, the volume of
world trade

declined precipitately and in­

ternational lending and capital movements
virtually dried up.

Trade restrictions and

capital controls m ultiplied.

Competitive de­

valuations and beggar-m y-neighbor economic
policies became the order of the day.

Given

this economic background and the specter of
domestic bank failures, active international
departments and overseas branch networks
became superfluous. By 1937, the number of
foreign branches of banks and subsidiaries
had fallen to

108, and the scope and ac­

tivities of those that remained were severely
restricted.

The volume of bankers’ accep­

tances outstanding, which had reached $1.7
billion

in

1929,

was

down

to

practically

nothing in the 1 9 3 0 ’s.




The

years im mediately follow ing W o rld W a r II
were not especially conducive to the develop­
ment of United States interest in international
banking. W h ile the United States emerged
from the war as the w orld’s forem ost eco­
nomic and financial power, the general cli­
mate in the world economy and in interna­
tional financial markets was not congenial to
private economic activity of any kind. The
erstwhile trading nations of the world— the
United Kingdom , the countries of Continental
W estern Europe, and Japan— were bent on
crash programs of economic reconstruction
and to that end carried over into the postwar
world the elaborate systems of exchange con­
trols characteristic of the depression and war
years of the 1 9 3 0 ’s and early 1 9 4 0 ’s. Private
capital movements and private business initia­
tives were closely circumscribed, and, while
foreign trade grew rapidly, much of it, along
with most capital movements, was under gov­
ernmental or intergovernmental auspices.
In the early and middle 1 9 5 0 ’s, however,
this situation began to change.
Under the
impetus of Marshall Plan aid, reconstruction
and recovery abroad proceeded rapidly, al­
lowing a progressive relaxation of both trade
and exchange restrictions. Private trade and
attendant capital flow s grew apace. The
grow th in world trade in the postwar period,
shown in Chart 2, accelerated with the estab­
lishment of the European Economic Com­
munity in 1958. Also after 1958, the m ajor

9

in m any cases made direct investment the
most attractive avenue fo r many firm s to gain
access to that expanding market.
The rela­
tive scarcity of capital outside the United
States, combined with the broad, w ell-de­
veloped capital m arkets in this country, also
made the United States an attractive place
for foreigners to flo a t debt and equity issues.
In addition to the growth in international
trade and investment in the postwar period,
the emergence o f the dollar as the key inter­
national currency increased the role of United
States banks in international finance.
The
use of the dollar worldwide as an interna­
tional trading currency and its use by foreign
monetary authorities as an intervention cur­
rency gave rise to a substantial foreign de­
mand for dollar balances. The United States
became the reserve center for private foreign
traders and foreign m onetary authorities
alike. By the end o f the 1 9 6 0 ’s the United
States banking community had a large stake

trading nations progressively dismantled their
exchange control systems and m oved over to
virtually free currency convertibility.
International lending and investment also
received a fillip from the relaxation of ex­
change controls and the return to currency
convertibility in the late 1 9 5 0 ’s and early
1 9 6 0 ’s.
W ith its productive capital stock
relatively unimpaired by W o rld W a r II, it
was natural that the United States should
resume and expand its role as capital ex­
porter once the restrictions were eased.
It
did so in a world o f increasing financial in­
tegration. The extent to which the interna­
tional investment of the United States grew
during the 1 9 6 0 ’s is shown in Table I.
W h ile attractive returns lured United
States capital to points all over the world,
investment in a newly resurgent W estern
Europe was especially popular with investors.
This was partly because the external ta riff
shields of the new European customs unions

C hart 2

TOTAL WORLD EXPORTS
(b illio n s of d o lla rs)
3 0 0

----------------------------------------------------------------------------

1946
Source:

1950

1954

1958

International Financial Statistics.




10

1962

1966

1970

Table I

UNITED STATES INTERNATIONAL INVESTMENT
BALANCE SHEET. 1960-1969
(billions of dollars)
U. S .-O W N E D F O R E I G N A S S E T S

U. S. L I A B I L I T I E S

TO F O R E IG N E R S

1960

1969'

$61.4

$126.7

Nonliquid U. S. Government
assets

17.0

30.7

Nonliquid U. S. Government
liabilities

Private

44.4

96.0

Private

31.9
9.5

70.8
18.7

1.7
1.4

3.0
3.6

Long-term assets:

Direct investments
Foreign securities
Claims reported by U. S.
banks
Other

24.4

Short-term assets:

Claims reported by U. S.
banks
Other
TO TAL

3.6
1.4

.3

9.6
4.5
$157.8

4.9

18.4

41.0

6.9

11.8

10.0

22.9

1.6

2.5
3.7

22.6

Short-term liabilities:

17.0
14.1

$85.8

Private

19691
$ 45.9

Direct investments
Corporate and other
securities
Liabilities reported by U. S.
banks
Other

31.1

19.4
5.0

Liquid U. S. reserve assets

1960
$18.7

Long-term liabilities

45.0

Liquid U. S. Government
liabilities

10.5

7.0

Private

12.1

38.0

Liabilities reported by U. S.
banks
11.1
Other
1.0
TO TAL
$41.2

35.0
3.0
$ 90.8

U. S. international net worth

44.6

67.0

$85.8

$157.8

1 Prelim inary.
S ource:

irrent Business, October

Compiled from D epartm ent o f Comm erce, Survey

in international finance,

1970, page 23.

international departments are employing over

with m any of its

m ajor institutions serving as bankers to the

14 percent of their assets abroad, with ap­

entire trading world.

proxim ately 15 percent of their total deposits
arising from overseas sources and up to 15
percent of their profits deriving from over­

THE RECORD OF G R O W T H Table II shows
that total claims on foreigners reported by

seas operations.
Chart

banks in the United States more than doubled

3

shows

that member

banks

in­

during the past decade to reach $ 12 .8 bil­

creased their overseas branch network four­

lion in Septem ber 197 0.

fold in the past decade.

Total foreign lia­

Over 50 member

bilities reported by United States banks also

banks were operating 460 foreign branches

doubled, reaching $ 42 .6 billion.

in 59 countries at the end of 1 96 9.

W h ile these

Total as­

figures include some claims and liabilities of

sets (and liabilities) of these branches, shown

the banks’ customers, the growth reflects a

in Table III, exceeded $41 billion, a sixfold

substantial international involvement of the

increase from only five years earlier.

banks them selves.
A recent Journal of Commerce survey esti­

total loans had reached almost $13 billion by

mates that the large United States banks with

total




1969, a fourfold increase from

11

number

of

member

Their

1964.

banks’

The

foreign

num ber in W estern Europe, including Eng­
land and Ireland, increased fivefold from
1960 to 116 in 1 9 7 0 ; the number of branches
in the Far East tripled in the past decade to
reach 79 in 1970.
Branching during 1970
favored Nassau.
A fte r approxim ately three decades of rela­
tive inactivity, Edge A c t corporations have
once again become prominent institutions o f

branches reached 532 by the end o f 1 9 7 0 ;
figures for their loans and total assets in 1970
are not yet available.
The regional d i s t r i b u t i o n of foreign
branches remained fairly constant over the
past decade. A s shown in Chart 3, the num ­
ber in Latin A m erica (including the Ba­
h a m a s), the area with the largest num ber of
branches, quadrupled to 280 in 1 9 7 0 ; the

Table II

FOREIGN CLAIMS AND LIABILITIES REPORTED BY BANKS
IN THE UNITED STATES
(millons of dollars)

1960

1965

1968

1969

September
19701

5,312

12,251

12,278

12,844

12,788

Short-term claims
Payable in foreign currencies
Payable in dollars
Loans
Collections outstanding
Acceptances made for foreign account
Other short-term dollar claims

3,614
480
3,135
1,296
605

7,734
492
7,243
2,970
1,272
2,508
492

8,711
450
8,261
3,165
1,733
2,854
509

9,606
516
9,091
3,278
1,954
3,202
656

9,646
479
9,167
3,253
2,275
3,052
587

Long-term claims
Payable in foreign currencies
Loans payable in dollars
To official institutions
To banks
To other foreigners
Other long-term claims

1,698

4,517
9
4,508

3,567
16
3,158
528
237
2,393
394

3,238
18
2,806
502
209
2,096
414

3,142
28
2,739
447
244
2,047
376

21,279

26,064

34,883

42,674

44,481

21,272
113
21,159

7,639
4,103

25,551
59
25,492
8,092
5,557
8,356
3,487

31,717
636
31,081
14,387
5,484
6,797
4,413

40,182
429
39,753
20,481
6,946
5,015
7,311

42,561
360
42,201
17,234
7,236
10,856
6,875

7

513

3,166

2,492

1,920

311
203

777
2,389
2,341
8
40

889
1,602
1,507
55
41

851
1,070
891
121
58

Total claims

__

1,233

Total liabilities
Short-term liabilities
Payable in foreign currencies
Payable in dollars
Demand deposits
Time deposits
U. S. Treasury bills and certificates
Other short-term liabilities

I
)

Q 41 7

Long-term liabilities
To international and regional
organizations
To foreign countries
Official institutions
Banks
Other foreigners
1 Prelim inary.
S ource:

Federal R eserve Bulletins.




12

Chart 3

FOREIGN BRANCHES
OF UNITED STATES MEMBER BANKS
500
Other
England and Ireland
Continental Europe
400

300

200

100

1950

1955

1960

1961

1962

1963

1964

1965

1966

1967

1968

1969

1970

Source: Board o f Governors o f the Federal Reserve System.

international

finance

although

Agreem ent

has increased rapidly since the revision of
Regulation M in 1967.

corporations have not enjoyed a similar re­
vival.

Chart 4 shows that the number of

A nother

the

of

the

phenom enal

grow th

to 63 at the end of 1969.

National banks

tivities of United States banks is the recent

had over $547 million of capital invested in

growth in the bankers’ acceptance market.

these subsidiaries.

in

measure

Edge firm s grew from 6 at the end of 1959

international

financing

ac­

There were 69 Edge cor­

Chart 1 shows that by the end of 1970 the

porations with an estimated total capitaliza­
tion of approxim ately $600 million and total

volume of dollar acceptances outstanding had

resources of $3 billion at the end of 1970.

cent of these acceptances financed United

Also, while precise data are not available, it

States imports, a quarter financed exports,

is clear that direct

and a third financed goods stored in or ship­

investment

by

reached the $7 billion level.

United

States banks in foreign banking institutions




A bout 40 per­

ped between foreign countries.

13

U nited States ban k in g services. T hese u n der­
lyin g fa cto rs, h ow ev er, do n ot fu lly explain
the in creasing ten d en cy o f U nited States
banks to seek fo r e ig n location s f o r their in­
ternational business. T w o sp ecial incentives
fo r overseas expan sion have been the r e ­
strictions on cap ital o u tflo w s o f the m id1960’s and the tig h t m on etary p olicies o f the
late 19 6 0 ’s.

1Incentives for
Overseas Expansion
G row th in in tern ation al trade and invest­
m ent and th e cen tral role o f the d o lla r in the
w orld e co n o m y h elp expla in the e x p o rt o f

Table III

U. S. M E M B E R B A N K S ’ F O R E IG N

BRANCHES

A B A L A N C E S H E E T R E C O R D , I9 6 4 - I9 6 9 f
1969

1968

1967

1966

1965

1964

Cash, total
England and Ireland
Continental Europe
Latin America
Bahamas
Far East
U. S. overseas areas and trust territories
Other areas

$ 8,004
5,806
1,178
267
507
146
59
41

$ 3,335
2,201
638
251

$ 2,397
1,543
441
212

150
42
53

137
43
21

$ 1,732
1,057
318
173
*
118
32
34

$ 1,510
877
301
175
❖
76
81

$ 1,140
489
362
138
*
69
*
82

Loans, total
England and Ireland
Continental Europe
Latin America
Bahamas
Far East
U. S. overseas areas and trust territories
Other areas

12,979
6,990
1,813
863
891
1,585
703
134

9,225
4,933
1,416
880
*
1,308
551
137

6,551
3,155
1,120
591
❖
1,047
500
137

4,951
2,169
753
576

4,610
2,020
664
465
*
866
*
595

3,217
1,156
377
403
*
784
*
497

Due from head offices and U. S. branches, total
England and Ireland
Continental Europe
Latin America
Bahamas
Far East
U. S. overseas areas and trust territories
Other areas

14,337
9,836
1,809
26
1,328
408
918
12

6,147
4,291
923
97
*
418
411
7

4,045
2,712
359
119
*
422
411
21

3,727
2,613
360
85

1,995
1,083
198
131
*
359
*
224

1,805
900
225
160
*
311
❖
209

Other assets, total
England and Ireland
Continental Europe
Latin America
Bahamas
Far East
U. S. overseas areas and trust territories
Other areas

5,800
2,121
1,664
428
267
1,118
124
78

4,311
1,752
1,144
508
❖
787
33
87

2,665
768
801
348
*
660
11
78

1,974
606
591
218
*
450
19
90

987
277
191
107
*
399
13

776
145
133
109
*
379
❖
10

Total assets
England and Ireland
Continental Europe
Latin America
Bahamas
Far East
U. S. overseas areas and trust territories
Other areas

41,120
24,753
6,464
1,584
2,993
3,257
1,804
265

23,018
13,177
4,121
1,736
❖
2,663
1,037
284

15,658
8,178
2,721
1,270
*
2,267
965
257

12,384
6,445
2,022
1,052
*
1,808
787
270

9,102
4,257
1,354
878
*
1,700
❖
913

6,938
2,690
1,097
810
*
1,543
*
798

ASSETS:




(Millions)

14

845
470
138

395
266
8

overseas fa cilities and seek fo re ig n sources
o f fu n d s in o rd er to pa rticip a te in interna­
tion al fin an ce.
T h e first o f these m easures w as the In­
terest E qu alization T ax, e ffe c tiv e July 1963.
Its pu rp ose w as to d iscou ra g e fo re ig n b o r­
row in g in U nited States ca p ita l m arkets by
raising the e ffe ctiv e interest cost to fo r e ig n ­
ers. T h e tax initially a p p lied to securities

C A P IT A L C O N T R O L S T h e restriction s on
cap ital o u tflo w s im posed in the m id -1 9 6 0 ’s
w ere design ed to cu rb the private capital
o u tflo w fr o m the U nited States in ord e r to re ­
d u ce the d e ficit in th e ba la n ce o f paym ents
to m a n ag eab le p rop ortion s. But in sh ifting
the dem and fo r cre d it fro m the U nited States
to E u rope and the E u ro d o lla r m arket, th ey
fo r c e d U nited States ban ks to ex p a n d th eir

L IA B IL IT IE S :

(Millions)

1969

1968

1967

1966

1965

1964

Demand deposits, total
England and Ireland
Continental Europe
Latin America
Bahamas
Far East
U. S. overseas areas and trust territories
Other areas

$ 4,102
1,508
791
614
86
630
402
71

$ 3,443
1,343
623
570
*
513
294
100

$ 2,705
838
569

$ 2,649
895
589
437
❖
402
237
88

$ 2,069
520
488
425
298
*
338

$ 1,918
573
388
373
*
258
*
326

Time deposits, total
England and Ireland
Continental Europe
Latin America
Bahamas
Far East
U. S. overseas areas and trust territories
Other areas

30,418
21,223
3,871
344
2,733
1,020
1,054
173

14,932
10,501
2,283
638

9,767
6,534
1,454
372

839
505
166

777
492
138

7,411
4,832
976
342
*
717
386
159

4,954
3,193
461
226
*
652
*
422

3,260
1,762
309
203
*
623
*
363

806
15
117
112
25
322
213
2

738
64
105
152
*
193
223
1

536
32
28
53
*
209
213
1

1,227
315
247
131
*
396
*
138

1,134
219
307
173
*
338
*
97

Cither liabilities, total
England and Ireland
Continental Europe
Latin America
Bahamas
Far East
U. S. overseas areas and trust territories
Other areas

5,794
2,007
1,685
514
149
1,285
135
19

3,905
1,269
1,110
376
*
1,118
15
17

2,650
774
669
334
*
842
15
16

1,717
663
410
181
*
430
14
19

852
229
158
96
❖
354
*
15

626
136
93
61
*
324
*
12

Total liabilities
England and Ireland
Continental Europe
Latin America
Bahamas
Far East
U. S. overseas areas and trust territories
Other areas

41,120
24,753
6,464
1,584
2,993
3,257
1,804
265

23,018
13,177
4,121
1,736

15,658
8,178
2,721
1,270

12,384
6,445
2,022
1,052

6,938
2,690
1,097
810

2,663
1,037
284

2,267
965
257

1,808
787
270

9,102
4,257
1,354
878
*
1,700
❖
913

Due to head offices and U. S. branches, total
England and Ireland
Continental Europe
Latin America
Bahamas
Far East
U. S. overseas areas and trust territories
Other areas

t A s o f December 31.
* N ot reported separately.
S ource: Board o f Governors o f the Federal Reserve System.




15

511
439
245
103

607
55
47
92
*
!
•
259
150
4

1,543
*
798

stitutions on foreigners, and a set o f guide­
lines was prom ulgated as ground-rules fo r a
cooperative effort to limit capital outflow s.
The second program applied to direct invest­
ment abroad by nonfinancial corporations
and was placed under the D epartm ent of
Com merce. This program , which was m ade
m andatory in 1968, limited the am ount of
United States financed direct investments
abroad but placed no restrictions on invest­
ment financed by borrowing abroad. These
constraints mean that beyond certain speci­
fied limits overseas expansion by Am erican
firm s must be financed from foreign sources.
They also mean that if United States banks

purchased from foreigners, but it was later
extended to commercial bank term loans to
foreigners.
N ext came the President’s Balance of Pay­
ments Program , inaugurated in February
1965.
This program encompassed two com ­
panion measures of voluntary restraint on
United States lending and investing abroad.
The first of these, the Voluntary Foreign
Credit Restraint Program , was administered
by the Federal Reserve and applied to the
lending and investing activities of commercial
banks and nonbank financial institutions.
U nder this program ceilings were established
on the outstanding claims o f individual in-

Chart 4

EDGE ACT AND AGREEMENT
CORPORATIONS
80

1950
Source:




1955

1960

1961

1962

1963

Board o f Governors o f the Federal Reserve System.

16

1964

1965

1966

1967

1968

1969

1970

the center of the Eurodollar m arket— so im ­
portant to United States overseas interests the
world over— has also attracted numerous new
branches. United States banks now have 38
branches in London, com pared to 21 as re­
cently as 1965. T able III shows that the total
assets of European branches have also in­
creased faster than those o f other m ajor
areas in recent years, although data fo r 1970
are not yet available.
The Foreign Credit Restraint Program has
also influenced the recent pattern of foreign
branching am ong United States banks. Since
the initial lending ceilings were historically
based— although this has since been m odi­
fied— the larger banks with established in­
ternational departm ents received higher ceil­
ings and were not as restricted as sm aller
banks just m oving into international business.
M any of the latter had low historical bases
(or if they had no historical base, received
relatively m odest special ceilings) and found
a foreign branch or some type o f foreign a f­
filiation helpful in getting their international
operations o ff the ground. This factor con­
tributed som ew hat to the recent increase in
foreign branching by sm aller, m edium -sized
banks. This, in turn, has been a m ajor factor
in the emergence o f Nassau as an inexpensive
access to the Eurodollar m arket.

want to participate in financing the overseas
operations of their domestic customers, they
must obtain access to foreign sources of
funds.
The indirect incentive for Am erican bank
expansion abroad provided by the direct in­
vestm ent controls is supplemented by the con­
trols applied to the banks them selves.
The
extension of the Interest Equalization Tax to
bank loans to foreigners of more than one
year put United States banks at a disad­
vantage in competing with overseas sources
of funds. M aking foreign loans at a foreign
branch or affiliate was one way to lessen this
handicap and was deliberately encouraged
by regulations.
A more im portant and a more direct in­
ducement for overseas expansion was pro­
vided by the ceilings on the foreign credits of
banks and their Edge and A greem ent sub­
sidiaries under the Foreign Credit Restraint
Program . Even if United States firm s had
been permitted to finance their overseas
operations from domestic sources, the re­
strictions on banks would have limited their
participation. Since these restrictions did not
cover their overseas branches or affiliates so
long as the funds used were raised abroad,
they provided an added incentive fo r banks
to seek foreign locations and foreign sources
of funds. This incentive, of course, was in
addition to the existing one o f financing
foreign customers.
Given the important role o f these capital
control program s in stimulating overseas ex­
pansion by United States banks, it is not sur­
prising that they should have affected its
geographical pattern as well. In the years
since the controls were instituted, the share of
new branches and affiliates has increased in
Continental W estern Europe, an area where
a large portion of United States direct over­
seas investment has been concentrated and
an area where the ceilings on foreign lending
have been especially restrictive.
From the
end of 1965 to the end o f 197 0, the number
of foreign branches in Continental W estern
Europe increased from 21 to 71. W h ile the
guideline restrictions on the United Kingdom
are less restrictive, its strategic location as




TIGHT M O NEY A N D R EGULATION Q
W h ile the various capital control program s
have encouraged banks to seek funds abroad
to finance their foreign lending, tight m one­
tary policies at hom e, especially in 1 96 9, sent
banks abroad in search of funds fo r domestic
use. Rising interest rates in 1 96 8 and 1969
coupled with interest-rate ceilings led to a
heavy run-off o f time deposits and forced
many larger banks to seek funds elsewhere.
Unable to attract domestic deposits, m any
of these banks, especially those with foreign
branches, turned to the E urodollar m arket.
Foreign branches in c r e a s in g ly b o rro w e d
Eurodollars and loaned the proceeds to their
parent banks. Since domestic banks’ Euro­
dollar borrowings were not classified as de­
posits, they were not subject to domestic re­
serve requirements or F D IC insurance pre­

17

miums. They were, therefore, not subject to
the same cost-increasing restrictions as do­
mestic deposits. Neither were they subject
to the interest-rate ceilings of Regulation Q.
The liabilities of United States banks to their
foreign branches, shown in Chart 5, reached
a peak of over $ 1 6 .5 billion in 1969 at interest
rates in excess o f 10 percent. The use of the
Eurodollar m arket fo r domestic liquidity pur­
poses is reflected in the composition of the
foreign branches’ balance sheet shown in
Table III.
O ver h a lf the increase in the
branches’ total deposits in 1969 was used to
increase claims on their home offices.
The Board of Governors, effective Sep­
tem ber 4, 1969, imposed reserve requirements
o f 10 percent on banks’ liabilities to their
foreign branches in excess of the daily
average am ount outstanding in the four
w eeks ending M ay 28, 1969. The provision
included an automatic downward adjustment

of the reserve-free base as borrowings were
repaid in order to retain their outstanding
liabilities. Nevertheless, banks began to re­
pay their borrowings, and that repaym ent
was accelerated in 1970 by the easing of
monetary policy and the partial suspension
of Regulation Q. Liabilities of United States
banks to their foreign branches declined from
their peak of $ 14.5 billion in A ugust 1969 to
$8.6 billion in N ovem ber 1 97 0. To curb this
repaym ent and its adverse effect on the o f­
ficial settlements measure o f the deficit in
the balance of payments, the Board raised
the marginal reserve requirement to 20
percent, effective Decem ber 23, 1970, and
changed the reserve-free base date to the
computation period ended N ovem ber 25.
These measures were designed to discourage
banks from losing their reserve-free bases by
further reducing their outstanding liabilities.
These regulatory changes have lessened the

Chart 5

LIABILITIES OF UNITED STATES BANKS
TO THEIR FOREIGN BRANCHES
(billions of dollars)
1 6 -----------------------------------------------------------------------

1964

1965

1966

1967

1968

(last Wednesday in each quarter)
Source:




Federal Reserve Bulletins.

18

1969

1970

incentive to open foreign branches to at­
tract deposits fo r domestic use. O f course,
the other incentives for overseas expansion
remain.

have total foreign assets o f at least $ 5 0 0 ,0 0 0
each, the minimum limit fo r reporting under
the program. This is, of course, quite apart
from credit extended directly to domestic
customers to finance their exports and im ­
ports.
Contrary to past experience, most o f the
banks establishing new foreign branches in
recent years have been banks outside N ew
York, with an increasing share o f these
b ra n ch es re p r e s e n tin g th e fir s t fo r e ig n
branch of banks ju st entering the interna­
tional field. The recent grow th in the num ­
ber of foreign branches, phenom enal as it
has been, does not adequately reflect the
growing number o f domestic offices involved.
The number o f foreign branches o f m em ber
banks increased from 2 44 in 1966 to 532 in
1970— an increase o f 118 percent. But the
number of m em ber banks represented by
these branches increased from 13 to 7 9 — an
increase of 500 percent.
Thus the num ber
of member banks with foreign branches in­
creased almost five tim es faster than the
number of branches.
This trend was es­
pecially pronounced in 1969 and 1 9 7 0.
A similar trend m ay be developing with
the reappearance recently o f m ultiple-ow nership Edge A c t subsidiaries. A s banks pool
their resources and reduce the costs o f inter­
national operations through m ultiple owner­
ship, the number of banks represented by
Edge subsidiaries increases faster than the
number of subsidiaries.
F or exam ple, one
Edge A ct corporation, organized in 1 96 8, is
now jointly owned by 18 regional banks in­
cluding two in the F ifth District.

In addition to the rem arkable overall
growth in international banking operations,
several recent trends and developments are
worth mentioning. A m ong the more notable
is the grow ing involvem ent of m ajor banks
outside N ew Y o rk .
Closely related to this
trend is the new prominence of Nassau as a
m ajor access to the Eurodollar m arket, es­
pecially for the newer entrants into the inter­
national field.
The emergence of m ultina­
tional banks to serve the new breed of m ulti­
national business corporations is another
recent developm ent of far-reaching conse­
quences.

MORE BANKS GOING INTERNATIONAL
International banking in the United States
has traditionally been dominated by a few
large banks concentrated largely in N ew
York. The deposits of their overseas branches
now account fo r about a third of the total net
deposits of N ew Y ork banks. But while in­
ternational banking is more important than
ever to N ew Y o rk banks, their relative share
has declined in recent years.
N ew Y ork
Clearing House banks now account fo r about
two-thirds o f all United States banks’ over­
seas deposits and assets, com pared to threefourths a couple of years ago.
Large and m edium size banks all over the
country have recently expanded previously
dormant international departments or moved
into the international field for the first time.
Figures on the total num ber of banks with
international departments or significant in­
ternational business are not available. There
are, however, approxim ately 170 banks cur­
rently reporting under the Foreign Credit Re­
straint Program . This means that 170 banks




THE TREK TO NASSAU Closely related to
the broadening o f the base o f international
banking in the United States is the recent
emergence of N assau as a m ajor center o f
Eurodollar activity in the W estern H em is­
phere. Nassau has becom e the most con­
venient and least expensive access to the
Eurodollar m arket fo r m any United States
banks, especially those in the early stages of
their international operations. A t the end of
1970 the Baham as had 60 direct branches
of member banks, 52 o f which were opened

19

the home office, in turn, m ay be a special file
cabinet or drawer, or a separate “ in” box
fo r the Nassau m ail,
xxiese suptjriiciai ar­
rangements are designed to provide a foreign
address fo r business that is conducted at the
home office.
They are necessitated by the
various capital controls and other restrictions
on the home offices. The main substance to
these arrangements is that loans made by
N assa u b ra n ch es be from funds raised
abroad.

in the past two years. M ost of the Nassau
branches represent the only branch of their
parent bank.
A N assau branch offers many of the ad­
vantages of a branch in Europe, but at a
fraction o f the cost.
Through a Nassau
branch an A m erican bank, even one with
limited resources, can attract offshore de­
posits without domestic interest-rate ceilings
or reserve requirements. It can make foreign
loans not subject to the Interest Equalization
T ax or the limits set by the Foreign Credit
Restraint Program . It is also eligible to fi­
nance, through funds raised abroad, the over­
seas operations of Am erican corporations
under the D irect Investment Control Pro­
gram . F inally, an Am erican bank can use
its Nassau branch, as well as foreign branches
elsewhere, to augm ent its domestic resources
with Eurodollar borrowings, although its
ability to do so has been severely restricted
by regulatory changes in 1969. A t the end
o f 1 96 9, Nassau branches had $1.3 billion in
outstanding claim s on their head offices out
o f $ 3.0 billion total assets. This 44 percent
repatriation exceeded that of any other area
except United States overseas areas.
W h e re a s branches in many areas offer a
full range of local retail banking services,
Nassau branches are essentially wholesale
operations in the Eurodollar market. Indeed,
Baham ian regulations permit only offshore
business fo r banks chartered to engage in
such business and prohibit the acceptance of
local deposits.
M ost Nassau branches— including all those
of F ifth D is tr ic t b a n k s — are essentially
“ shell” operations. A ll the business usually
originates at the home office and is trans­
acted there fo r the account of the Nassau
branch.
The “ typ ical” Nassau branch of
Fifth District banks m ay be characterized as
a local address, telephone number, and a
duplicate set of books.
The physical fa ­
cilities, usually a single office or even a
single desk in an office, are rented.
The
routine Nassau bookkeeping is done at the
instruction of the head office by a local
“ agent” firm on a fee basis. About the only
tangible evidence of the Nassau branch at




MULTINATIONAL BANKING

A nother sig­
nificant and far-reaching recent development
in international banking is the appearance o f
a new breed of multinational banks to serve
multinational business corporations in inter­
national financial m arkets. These m ultina­
tional consortia banks are the joint ventures
o f banks located in several different coun­
tries. They typically have their own identity
and small staffs but derive tremendous fi­
nancial strength from their large capitaliza­
tion and strong backing from their parent
banks.
The forerunner o f the new multinational
banks was established in 1964 without A m eri­
can participation. Others did not follow until
1967. M ost of the 20 or so multinational
banks in operation today are located in
Europe, with the m ajority of them in London,
and leading regional banks in the United
States are well represented.
For exam ple,
Rothschild Intercontinental, form ed in Lon­
don in 1969, is jointly owned by five Euro­
pean banks and banks in Cleveland, Houston,
and Seattle. A Fifth District bank recently
announced plans to form such a multinational
bank in London in conjunction with a London
m erchant bank and four other m ajor regional
banks in the United States.
W h ile these multinational banks usually
have broad charters that permit them to o f­
fe r a full range of commercial and investment
banking services, they specialize in large
medium -term loans to large international bor­
rowers utilizing funds acquired in the Euro­
currency and Eurobond markets. Loan m a­
turities generally range from two to eight
years and are designed to fill the gap between

20

short-term commercial bank loans and capital
m arket credit. The principal borrowers are
the large multinational business corporations,
foreign subsidiaries of Am erican corpora­
tions, and lately E u r o p e a n g o v e rn m e n t
agencies and public utilities. Loans may be
made by the banks directly, but more often
they are made through the private placement
of notes with other banks.

the country, began m oving into the interna­
tional area. They not only m ade a bid fo r a
share of the existing business, but many
began to generate new business by pointing
out the many profitable export and import
opportunities to their customers. By the end
of the decade there were probably 13 to 15
banks in the Fifth District th at could offer
“ full service” international banking.
A t the end of 197 0 ten Fifth District banks
had foreign claims large enough (at least
$ 5 0 0 ,0 0 0 ) to report under the Foreign Credit
Restraint Program .
These banks reported
foreign claims o f $85 million, most of which
were short term.
Their short-term liabilities
to foreigners were in excess of $14 0 million.
A s their international operations grew,
and because of the potential limitations on
that growth imposed by the restrictions on
capital outflows, Fifth District banks recently
began to supplement their netw ork of foreign
correspondents with their own overseas fa ­
cilities.
By the end of 197 0 six District
banks had direct foreign branches, all of
them in Nassau. Five banks had Edge A ct
corporations.
A s noted earlier, one Fifth
District bank, in conjunction with other re­
gional banks, recently form ed a multinational
bank in London. A nother recently pur­
chased considerable equity interest in a
London m erchant bank and opened two rep­
resentative offices in Latin A m erica.
Fifth District banks were am ong the first
to go to Nassau to gain access to the Euro­
dollar market.
Unlike m any other banks,
however, banks in the Fifth District have
made no attem pt to use those branches fo r
domestic liquidity purposes. T hey have used
them primarily as an external source of funds
for foreign lending outside the limits imposed
on home office lending under the Foreign
Credit Restraint Program .
If international trade and investment con­
tinue to grow at record rates and if the trend
of worldwide m onetary and financial in­
tegration continues, the opportunities in in­
ternational banking will expand further in
the next few years. M ore and more banks in
the nation, and in the F ifth District, will be­
come bankers to the world.

International CBankim] in the

S.

^Fifth CDistrict
International banking on a scale worthy
of the term has come to the Fifth Federal
Reserve District only recently. W h ile foreign
trade has always been important to Fifth
District states, its financing has traditionally
been left to N ew Y o rk banks. A few District
banks maintained token international depart­
ments, but these were m odest operations de­
voted for the most part to collections and
other miscellaneous services fo r regular do­
mestic customers.
M ost of the limited inter­
national services were handled through New
York correspondent banks.
Only a handful
of Fifth District banks could offer anything
close to a full range o f international banking
services as recently as 1965.
The late m ovement of Fifth District banks
into international finance is som ewhat sur­
prising in view of the District’s large stake
in international trade. N ot only does much
of the nation’s foreign trade originate in the
Fifth District, but a large part of it is shipped
through Fifth District ports.
During 1969,
for exam ple, almost a quarter of the nation’s
waterborne export tonnage went through
Fifth District ports, most of it through the
H am pton Roads ports o f Virginia. Fifth Dis­
trict ports accounted fo r a tenth of the na­
tion’s import tonnage in 1969. In value terms,
Fifth District ports accounted fo r 13 percent
of United States waterborne exports in 1969
and nine percent of the imports.
During the 1 9 6 0 ’s Fifth District banks,
along with the larger regional banks across




21




HIGHLIGHTS
OF 1970
EARNINGS A N D C APITAL ACCOUNTS

Y ork

N et earnings before paym ents to the United

Jacobus conducted a site evaluation and fe a ­

architectural

firm

of

Francisco

and

States Treasury increased $ 3 5 ,3 4 6 ,0 7 6 .7 2 to

sibility survey to determine the suitability of

a record $ 2 5 9 ,4 8 7 ,1 5 5 .6 4 in 1 97 0. Six percent

the location fo r a new bank building fo r the

statutory

Baltimore Branch.

dividends

totaling

$ 2 ,1 0 0 ,4 8 7 .0 9

The results of the study

were paid to Fifth District m em ber banks,

were that the proposed area is both desirable

and $ 2 5 5 ,8 8 9 ,4 6 8 .5 5 was paid to the T reas­

and adaptable to the needs o f the Federal
Reserve Bank. Planning is continuing on the

ury as interest on Federal Reserve notes.
C a p ita l

sto c k

rose

$ 1 ,4 9 7 ,2 0 0 .0 0

development o f this project.

to

$ 3 5 ,7 0 0 ,5 5 0 .0 0 as m em ber banks increased
their stockholdings, as required by law , to

DISCOUNT RATE

reflect

Richmond Reserve Bank, with the approval

plus.

the

rise

in their capital

and

sur­

The B ank’s surplus account increased

On

N ovem ber

11, the

of the Board o f Governors, low ered its dis­

$ 1 ,4 9 7 ,2 0 0 .0 0 to a total o f $ 3 5 ,7 0 0 ,5 5 0 .0 0 .

count rate from 6 percent to 5 %

percent in

an effort to bring the rate into alignm ent
with other short-term interest rates.

NEW BANK BUILDINGS Plans fo r the con­
struction of a new building on the north bank

In recognition o f the further dow nw ard

of the James River were announced M arch

trend in short-term interest rates, the

dis­

16. It is anticipated that the building will be

count rate again was reduced from 5 %

per­

a high-rise structure with considerable un­

cent to 5 i/2 percent on D ecem ber 11.

derground area fo r check processing, cur­
rency and coin operations, security courts,

CHANGES

and vaults.

On

A large portion of the site will

be open space which will be landscaped and

IN DISCOUNT

Decem ber

1,

the

PROCEDURES

Board

of

Governors

announced certain changes in the procedures

beautified to serve as a focal point fo r re­

connected

developm ent of the “ Main to the Jam es”

from

area in downtown Richmond.

changes, effective in February 1 9 7 1 , a re :

It is hoped

the

with

the

F ederal

borrow ing

Reserve

of

System.

funds
These

that construction will begin in 1972, with oc­
1.

cupancy by 1975.
In

D ecem ber

1969,

the

Departm ent

of

mal application and promissory note.

H ousing and Urban Developm ent of the city

tionally to repay all advances m ade pur­

the privilege o f exclusive negotiation fo r a

suant to the agreem ent.

lot in the Inner H arbor project developm ent
This

property,

approxim ately

A

m em ber bank would be obliged uncondi­

o f Baltim ore granted to the Baltim ore Branch

area.

The initiation o f a “ continuing lend­

ing agreem ent” as a substitute fo r the fo r­

2.

9 ,00 0

The adoption o f the practice o f col­

square feet, is bounded by Pratt, Calvert,

lecting interest on borrowings by m em ber

Lom bard, and South Streets and overlooks

banks

Baltim ore’s harbor.

rather than deducting interest in advance.




During 1970, the N ew

23

at

the

time

the

loan

is

repaid

3.

The m aking of any changes in the

January 1970 fo r installation of a third gen

discount rate im m ediately applicable to all

eration M odel B -35 0 0 check processing unit

outstanding borrowings.

at the Richmond office.

The equipment was

installed in 1970, and the system ’s design and

CULPEPER FACILITY On August 20, 1970,

program m ing work was almost complete by

the first “ live tr a ffic ”

new communications system located at our

the end of the year. It is expected that the
processing of checks through the new system

Communications

will begin during the first quarter of 1971.

peper, Virginia.

and

moved through the

Records Center,

Cul­

W ire transfers of funds and

securities constitute the bulk of the present

FISCAL AGENCY

traffic,

administrative

ury Departm ent increased the minimum for

communications

A lso, a new $ 1 5 ,0 0 0 Treasury Bill was in­

which

messages.
Conversion

also

includes

On M arch 2, the Treas­

Treasury Bill tenders from $ 1 ,0 0 0 to $ 10 ,0 0 0 .
to

the

new

system has proceeded in phases and by the

troduced, effective September 1.

end of 1970 approxim ately 60 percent of the

On June 1, the rate on U. S. Savings Bonds

total teletype traffic am ong Federal Reserve

held to maturity was increased from 5 per­

offices

throughout the

country was

being

cent to

51/2 percent.

The sale of U. S. Savings

transmitted over the new computer-controlled

Notes, commonly referred to as “ Freedom

network

Shares,” was terminated June 30.

of approximately

150

It is anticipated

that

Shares were first offered to the public on

com plete conversion to the new system will

M ay 1, 1967, with an approxim ate yield of

be achieved by the third quarter of 1971, at

5 percent if held to maturity.

words

at a speed

per

minute.

Freedom

which time economic research data will be

A switchover from the old 8 1 -D -l to the

moving over the netw ork at an approximate

new M -1 0 0 0 /M -3 7 system for wire transfers

speed of 3 ,0 0 0 words per minute.

of securities was made for all transactions

ACCOUNTING
The

AND

BANK

installation, testing,

except those involving the Federal Reserve

ACCOUNTS

Bank of N ew Y ork.

and final switch­

N ew Y ork Bank will begin participating in

over of the wire transfers of funds operation
to the

M -1 0 0 0 /M -3 7

early 1971.

private wire network

occurred during 1 9 7 0. This system is capable
o f transm itting

and

It is anticipated that the

receiving transfers

NEW MEMBER BANKS Seven Fifth District

of

banks became members of the Federal Re­

funds am ong Federal Reserve Banks at 150

serve System during the year.

words per minute, an increase in the overall

Citizens N a­

tional Bank of St. A lbans, St. A lbans, W e st

transmission rate o f 40 percent in comparison

Virginia,

with its predecessor, the 8 1 -D -l system.

opened

for

business

in January.

First Manassas Bank and Trust Company,

A private-line netw ork between this Bank

M anassas, Virginia, opened in A pril.
The
Suncrest National Bank, M organtown, W est

and its m em ber banks that will interface with
the M -1 0 0 0 /M -3 7 system is being developed.
Such systems will facilitate the transfers of
funds between our m em ber banks and those
in other Federal Reserve districts with auto­
matic processing of accounting entries and a
minimum o f physical handling.

W arrenton,

CHECK

tional Bank, Marion County, W e s t Virginia,

Virginia, and Barbour County Bank, Philippi,
W est

Virginia,

Jefferson

COLLECTION

with the




operations

Bank,

in June.

Lynchburg,

V ir­

ginia, opened in A ugust. Bank of W arrenton,
October.

signed

began

National

A contract was
Burroughs Corporation in

Virginia,

started

In Decem ber, the M iddletow n N a ­

began serving the public.

24

operations in

CHANGES IN DIRECTORS The election, by

Chairman of the Board, First National Bank

Fifth District m em ber banks, of one Class A

of

Director to a three-year term on the Rich­

Richmond Board also reappointed Jam es J.

mond Board of Directors was held in the fa ll.

Robinson,

Thom as P. M cLachlen, President, M cLachlen

Cashier, Bank of R ipley, Ripley, W e s t V ir­

National

was

ginia, as a director o f the Baltim ore Branch.

elected to succeed Giles H . Miller, Jr., Chair­

H. Phelps Brooks, Jr., President and Trust

Bank,

W ashington,

D.

C.,

M aryland,

Baltim ore,

E x e c u tiv e

M aryland.

V ic e

The

P re sid e n t

and

man of the Board, The Culpeper National

O fficer, The Peoples National Bank, Chester,

Bank,

Culpeper,

Virginia,

South Carolina, and C. C. Cam eron, Chairman

pired

D ecem ber

31.

H.

whose
Dail

term

ex­

Holderness,

of

the

Board

and

President,

First

Union

Carolina,

Char­

President, Carolina Telephone and Telegraph

National

Company, Tarboro, North Carolina, was re­

lotte, North Carolina, were reappointed to

elected to a three-year term as a Class B

three-year terms on the Charlotte Board of

Director of the Richmond Bank.

Directors.

Bank

of

N orth

W ilson H . Elkins, President, University of
M aryland, College Park, M aryland, was re­

FEDERAL A D V ISO R Y COUNCIL The Board

appointed Chairman of the Board and F ed ­

of Directors selected Joseph W . Barr, Presi­

eral Reserve A g en t for 1 97 1.

dent, Am erican Security and Trust Com pany,

Renamed as

Deputy Chairman of the Board of Directors

W ashington, D. C., to serve as the m em ber

for 1971 was Robert W . Lawson, Jr., M anag­

of the Federal A dvisory Council representing

ing Partner, Charleston

the Fifth Federal Reserve

Johnson,

Charleston,

O ffice, Steptoe

W e st

Virginia.

&

year 1971.

The

District fo r the

Mr. Barr succeeded Robert D. H.

Board of Governors also reappointed Stuart

H arvey, Chairman of the Board and Chief

Shumate, President, Richmond, Fredericks­

Executive O fficer, M aryland National Bank,

burg and Potomac Railroad Com pany, Rich­

Baltimore, M aryland.

mond, Virginia, to a three-year term as a
Class C Director of the Richmond Reserve

CHANGES IN OFFICIAL STAFF

Bank.

of changes were m ade in the official sta ff
during

The Board of Governors appointed Charles

the

year.

E ffective

M ay

Miss

W . D eBell, General M anager, North Carolina
W o rk s,

Vice President in the Research Departm ent.

Electric

Company,

Inc.,

was nam ed

1,

Elizabeth W .

W estern

A n g le

A number

Assistant

Jimmie R. M onhollon was appointed Senior

W inston-Salem , North Carolina, to a threeyear term on the Board of Directors of the

Vice President in charge

Charlotte Branch. Mr. DeBell succeeded W i l­

Branch effective July 1.

liam

mund F. Mac D onald, who elected to take an

B.

M cGuire,

President,

Duke

Power

Company, Charlotte, North Carolina, whose

early

retirement after

term expired. John H. Fetting, Jr., President,

of the

Charlotte

H e succeeded E d­

guished service.

24

years

of

distin­

A . H. Fetting Com pany, Baltimore, M aryland,

A lbert D. Tinkelenberg joined the sta ff of

was reappointed by the Board of Governors

the Culpeper Facility as Assistant Vice Presi­

to a three-year term on the Baltimore Board

dent on August 17.

of Directors.
The Richmond

were effective January 1, 1 9 7 1.

The
Board

of

Directors

ap­

follow ing

promotions

and

changes

Raym ond E.

pointed J. Stevenson Peck, President, Union

Sanders, Jr., was elected Senior Vice Presi­

Trust

Baltimore,

dent and given responsibility fo r the Person­

Baltimore

nel, Protection, General Service, M oney, and

M cCardell,

Printing and Supplies D epartm ents. W e lfo rd

Com pany

M aryland,
Branch

as a

of

director at the

succeeding




M aryland,
Adrian

L.

25

S. F arm er was appointed Senior Vice Presi­

Assistant Vice President in the Accounting

dent and Special Legal Adviser.

In addition

and Bank Accounts Departm ents and W i n i ­

to being in charge o f the Discount and Credit

fred O. Pearce was elevated to Assistant Vice
President in Check Collection.
H obert D.

D epartm ent, he has general supervision over
the new building program and will handle

Pierce was named Assistant Cashier in charge

special assignments. W illia m F. Upshaw was

of Building and Equipm ent and Barthonhue

nam ed Vice President and General Counsel

W . Reese was nam ed Assistant Cashier in the

and is now in charge of the Legal Depart­

Personnel Departm ent.

H . Ernest Ford was elevated to Vice

A t the Charlotte Branch, O. Louis Martin,

President and will be responsible for the new

Jr., was promoted to Assistant Vice President,

building program

and Charles H . Imel was named Assistant
Cashier o f the Culpeper Facility.

ment.

Farm er.

and will work with Mr.

G eorge B. Evans was promoted to




26

SuMManj o f Operations
CHECK CLEARING & COLLECTION

1970

1969

Dollar amount
Commercial bank checks1
Government checks2 _____
Return items ____________

L89,905,006,000
15,503,843,000
1,746,610,000

154,553,326,000
14,184,745,000
1,055,809,000

Number of items
Commercial bank checks1
Government checks2 _____
Return items ____________

636,923,000
68,261,000
7,359,000

499,162,000
66,058,000
5,898,000

CURRENCY & COIN

'
3,318,065,890
147,146,575
1,131,836,112

3,046,362,299
150,655,860
1,079,930,385

4,438,573
792,338

4,235,021
764,219

5,126,845,000
33,055,397
95

10,698,050,400
57,452,742
112

16,857,927,029
355,646

13,969,235,175
352,267

Coupons redeemed
Dollar amount .
Number _______

116,116,823
366,297

86,260,506
304,453

Savings bond and savings note issues
Dollar amount _____ _________________
Number ______________________________

361,648,172
9,408,269

371,618,450
10,389,683

531,196,284
11,946,924
‘V ' ' * '
*

546,468,910
12,309,004

9,028,901,905
2,134,725

8,591,714,516
1,975,201

Currency disbursed— Dollar amount
Coin disbursed— Dollar amount ______
Dollar amount of currency destroyed
Daily average of currency destroyed
Dollar am ount_________ _____________
Number _____________________________

DISCOUNT & CREDIT
Dollar amount
Total loans made during year ___________
Daily average loans outstanding _________
Number of banks borrowing during the year

FISCAL A G E N C Y ACTIVITIES
Marketable securities delivered or redeemed
Dollar amount ______________________________
Number ---------------------- ---------------------------------

.

Savings bond and savings note redemptions
Dollar amount _____________________________
Number ________________ ___ ________________
Depositary receipts for withheld taxes
Dollar amount ____ _ ____ ___________
_
Number ________ _____________________

TRANSFERS OF FUNDS
Dollar amount __________________________ _______-......... ......... ............ .....
Number _____ ________ ___________ ______________ _____ ____ _______ _____

1 Excluding checks on this Bank.
2 Including postal money orders.




27

384,495,547,822 I
425,529

289,995,671,461
389,437

COMPARATIVE STATEMENTS
Condition
ASSETS:

DEC. 31, 1970

DEC. 31, 1969

$1,043,808,340.57
36,000,000.00
82,642,870.00
12,797,592.30

$ 926,579,929.99

1,932,823,000.00

1,664,937,000.00

2,474,114,000.00
218,878,000.00

2,347,358,000.00
261,448,000.00

_________________

4,625,815,000.00

4,273,743,000.00

Gold certificate account ________ ____ ______________________
Special Drawing Rights certificate account _____________
Federal Reserve notes of other Federal Reserve Banks
Other cash _________________________ ____________ _____ _______
Discounts and advances ____________________________________
U. S. Government securities:
B ills ________________________________________________________
Certificates _______________________________________________
Notes _____________________________________________________
Bonds _____________________________________________________
TOTAL

U.

S. GOVERNMENT

SECURITIES

67,815,864.00
6,414,018.09
12,150,000.00

SECURITIES _____________ ___ _____ _____

4,625,815,000.00

4,285,893,000.00

Cash items in process of collection _______________________

996,018,127.33

1,070,079,540.79

Bank premises ______________________________________________

11,417,938.52

10,858,191.24

Other assets__________________________________________________

58,185,422.04

137,232,291.92

TO TAL ASSETS _____________________________

$6,866,685,290.76

$6,504,872,836.03

Federal Reserve notes _____________________________________

$4,604,378,958.00

$4,327,423,885.00

Deposits:
Member bank reserves ___________________________________
U. S. Treasurer— general account _______________________
F oreign ____________________________________________________
Other _______________________________________________________

1,306,815,256.74
38,828,985.64
6,375,000.00
30,087,116.20

1,089,525,344.69
130,767,416.21
6,760,000.00
30,296,932.65

1,382,106,358.58
766,518,464.43
42,280,409.75

1,257,349,693.55
808,930,309.66
42,762,247.82

6,795,284,190.76

6,436,466,136.03

Capital paid in ______________________________________________
Surplus ______________________________________________________

35.700.550.00
35.700.550.00

34.203.350.00
34.203.350.00

TO T AL L IA B ILITIE S AN D CAPITAL ACCOUNTS

$6,866,685,290.76

$6,504,872,836.03

$

$

TOTAL LOANS AND

LIABILITIES:

TOTL DEPOSITS ________________ ___ ______________________________

Deferred availability cash items __________________________
Other liabilities______________________________________________
T O T A L L I A B IL IT IE S ________________________

C A PIT A L A C C O U N T S:

Contingent liability on acceptances purchased for
foreign correspondents ___________________________




28

12,755,100.00

7,586,800.00

armnqs ana £(expenses
d >
£
1970

Discounts and advances _________________
Interest on U. S. Government securities
Foreign currencies ______________________
Other earnings __________________ _________
TOTAL CURRENT EARN INGS

2,086,332.79
281,255,061.17
2,488,230.63
37,585.36

& 3,404,671.02
236,068,720.12
6,333,270.83
49,694.63
245,856,356.60

23,289,429.24
1,084,700.00
2,815,300.03

$

1969

285,867,209.95

E A R N IN G S :

18,843,497.13
780,700.00
1,892,778.10

EXPEN SES:
Operating expenses (including depreciation on bank premises)
after deducting reimbursements received for certain Fiscal
Agency and other expenses ___________________________________
Assessments for expenses of Board of Governors ______________
Cost of Federal Reserve currency ______________________________
N E T E X P E N S E S __________________________

27,189,429.27

21,516,975.23

CURRENT N ET E A R N IN G S _____________

258,677,780.68

224,339,381.37

616,332.07
251,152.58

306,622.09

867,484.65

306,622.09

58,109.69

448,948.42
55,976.12

ADDITIONS TO CURRENT N ET E A R N IN G S:

Profit on sales of U. S. Government securities (net)
All oth er_________________________________________________
TOTAL ADDITIONS __________________________ -________
DEDUCTIONS FROM CURRENT NET E A R N IN G S:

Loss on sales of U. S. Government securities (net)
All other ______________________________________________
TOTAL DEDUCTIONS ______________________________________ ___ ____________________

58,109.69

504,924.54

N E T A D D ITIO N S OR DE D U CTIO N S _________________________

+ 809,374.96

-198,302.45

$259,487,155.64.

$224,141,078.92

$

2,100,487.09
255,889,468.55
1,497,200.00

$ 2,008,397.94
220,778,680.98
1,354,000.00

$259,487,155.64

$224,141,078.92

$ 34,203,350.00
1,497,200.00

$ 32,849,350.00
1,354,000.00

$ 35,700,550.00

$ 34,203,350.00

$ 34,203,350.00
1,674,150.00

$ 32,849,350.00
1,721,000.00

35,877,500.00
176,950.00

34,570,350.00
367,000.00

$ 35,700,550.00

$ 34,203,350.00

N E T E A R N IN G S BEFORE P A Y M E N T S TO U. S. TR EA SU R Y .
Dividends paid _________________________________________-_____________
Payments to U. S. Treasury (interest on Federal Reserve notes)
Transferred to surplus _______________________ _______________________
TO TAL

SURPLUS ACCOUNT
Balance at close of previous year . _____________________________
Addition account of profits for year __________________________
B ALA N CE A T CLOSE OF CU RREN T YE A R

CAPITAL STOCK ACCOUNT
(Representing amount paid in, which is 50% of amount subscribed)
Balance at close of previous year ___________________________________________
Issued during the year ______________________________________________________
Cancelled during the year _______________________________________
B AL A N C E A T CLOSE OF C U RRENT Y E A R




29

DIRECTORS
(December 31, 1970)

Wilson H. Elkins

Chairman of the Board and Federal R eserve A gen t

Robert W . Lawson, Jr.

D epu ty Chairman o f the Board

CLASS A
Hugh A . Curry

President, The Kanawha Valley Bank
Charleston, W est Virginia
(T erm expires D ecem ber 31, 1972)

Giles H. Miller, Jr.

Chairman of the Board, The Culpeper National Bank
Culpeper, Virginia
(T erm expired D ecem ber 31, 1970)
Succeeded b y :
Thomas P . McLachlen
President, M cLachlen National Bank
W ashington, D. C.
(T erm expires D ecem ber 31, 1973)

Douglas D. Monroe, Jr.

President, Chesapeake National Bayik
Kilmarnock, Virginia
(T erm expires D ecem ber 31, 1971)

CLASS B
H. Dail Holderness

President, Carolina Telephone and Telegraph Company
Tarboro, North Carolina
(T erm expires D ecem ber 31, 1973)

Charles D. Lyon

Retired President, The Potomac Edison Company
H agerstown, M aryland
(T erm expires D ecem ber 31, 1971)

Robert S. Small

President and Chief E xecu tive O fficer,
Greenville, South Carolina
(T erm expires D ecem ber 31, 1972)

Dan

R iver

Mills,

Inc.

CLASS C
Wilson H. Elkins

President, U niversity o f Maryland
College Park, M aryland
(T erm expires D ecem ber 31, 1971)

Robert W . Lawson, Jr.

Managing Partner, Charleston O ffice, Steptoe & Johnson
Charleston, W est Virginia
(T erm expires D ecem ber 31, 1972)

Stuart Shumate

President, Richmond, Fredericksburg and Potomac Railroad Company
Richmond, Virginia
(T erm expires D ecem ber 31, 1973)

MEMBER FEDERAL AD VISO R Y COUNCIL
Robert D. H. Harvey




Chairman of the Board and C hief E xecu tive O fficer, M aryland National Bank
Baltimore, Maryland
(T erm expired D ecem ber 31, 1970)
Succeeded b y : Joseph W . Barr
President, Am erican Security and Trust Company
W ashington, D. C.
(T erm expires D ecem ber 31, 1971)

30

OFFICERS
C ^ L ck m on ^
J
Aubrey N. Heflin, P resident

Robert P. Black, F ir st Vice P resident

Welford S. Farmer, Senior Vice President and

H. Ernest Ford, Vice President

Special Legal A d v iser

William C. Glover, V ice President

Upton S. Martin, Senior Vice President

Arthur V. Myers, Jr., Vice P resident

James Parthemos, Senior Vice President and

John L. Nosker, Vice President

D irector o f Research

John F. Rand, Vice President

Raymond E. Sanders, Jr., Senior Vice President

Aubrey N. Snellings, Vice P resident

John G. Deitrick, Vice President

William F. Upshaw, Vice P resident and General

J. Gordon Dickerson, Jr., Vice President

Counsel

Wenifred 0 . Pearce, A ssista n t Vice President

J. Lander Allin, Jr., A ssista n t Vice President
Elizabeth W . Angle, A ssista n t Vice President

Chester D. Porter, Jr., C h ief E xa m in er

Clifford B. Beavers, A ssista n t Vice President

Victor E. Pregeant, III, A ssista n t Vice President
and Secretary

Lloyd W . Bostian, Jr., A ssista n t Vice President

Frank D. Stinnett, Jr., A ssista n t Vice President

Wm. T. Cunningham, Jr., A ssista n t Vice President

Andrew L. Tilton, A ssista n t Vice P resident

George B. Evans, A ssista n t Vice President

Albert D. Tinkelenberg, A ssista n t Vice President

William C. Fitzgerald, A ssista n t General Counsel

William H. Wallace, A ssista n t Vice President

John E. Friend, A ssista n t Vice President

Jack H. Wyatt, A ssista n t Vice P resident

Fred L. Bagwell, Exam ining O fficer

Joseph C. Ramage, A ssista n t Cashier

Wyatt F. Davis, Exam ining O fficer

Barthonhue W . Reese, A ssista n t Cashier

Charles H. Imel, A ssista n t Cashier

Wilbur C. Wilson, A ssista n t Cashier

Hobert D. Pierce, A ssista n t Cashier

Joseph F. Viverette, General A uditor

John C. Horigan, A ssista n t General A u ditor

G. Harold Snead, Senior A d viser

arlotte ^Branch

Baltimore bran ch

Jimmie R. Monhollon, Senior Vice P resident

H. Lee Boatwright, III, Senior Vice President
A. A. Stewart, Jr., Vice President

Stuart P. Fishburne, V ice P resident

B. F. Armstrong, A ssista n t Vice President

Boyd Z. Eubanks, A ssista n t Vice President

E. Riggs Jones, Jr., A ssista n t Vice President

Winfred W . Keller, A ssista n t Vice President

Gerald L. Wilson, Assistayit Vice President

Fred C. Krueger, Jr., A ssista n t Vice President

Charles P. Kahler, A ssista n t Cashier

0 . Louis Martin, Jr., A ssista n t Vice President




31

BRANCH DIRECTORS
(December 31, 1970)

irnore
James R. Chaffinch, Jr.
Tilton H. Dobbin
John H. Fetting, Jr.
James M. Jarvis
Arnold J. Kleff, Jr.
Adrian L. McCardell

James J. Robinson

E xecu tive Vice President, The Denton National Bank
Denton, M aryland
(T erm expires D ecem ber 31, 1972)
President and Chairman o f E xecu tive Committee, Maryland National Bank
Baltimore, Maryland
(T erm expires D ecem ber 31, 1971)
President, A . H . F ettin g Company
Baltimore, M aryland
(T erm expires D ecem ber 31, 1973)
Chairman o f the Board, Jarvis, Downing & Em ch, Inc.
Clarksburg, W e st Virginia
(T erm expires D ecem ber 31, 1971)
Manager, Baltimore R efin ery, Am erican Smelting and Refining Company
Baltimore, M aryland
(T erm expires D ecem ber 31, 1972)
Chairman o f the Board, F irst National Bank o f M aryland
Baltimore, Maryland
(T erm expired D ecem ber 31, 1970)
Succeeded b y : J. Stevenson Peck
President, Union Trust Company o f Maryland
Baltimore, M aryland
(T erm expires D ecem ber 31, 1973)
E xecu tive Vice President and Cashier, Bank o f Ripley
Ripley, W e st Virginia
(T erm expires D ecem ber 31, 1973)

Ckartolte
H. Phelps Brooks, Jr.

C. C. Cameron

J. Willis Cantey
L. D. Coltrane, III
John L. Fraley
William B. McGuire

E. Craig W all, Sr.




President and Trust O fficer, The Peoples National Bank
Chester, South Carolina
(T erm expires D ecem ber 31, 1973)
Chairman of the Board and President, F irst Union National Bank of
N orth Carolina
Charlotte, N orth Carolina
(T erm expires D ecem ber 31, 1973)
President, The Citizens & Southern National Bank o f South Carolina
Columbia, South Carolina
(T erm expires D ecem ber 31, 1972)
President and Trust O fficer, The Concord National Bank
Concord, N orth Carolina
(T erm expires D ecem ber 31, 1971)
President, Carolina F reigh t Carriers Corporation
Cherryville, N orth Carolina
(T erm expires D ecem ber 31, 1971)
President, Duke P ow er Company
Charlotte, N orth Carolina
(T erm expired D ecem ber 31, 1970)
Succeeded b y :
Charles W . D eBell
General Manager, N orth Carolina W orks
W estern E lectric Company, Inc.
W inston-Salem , N orth Carolina
(T erm expires D ecem ber 31, 1973)
Chairman o f the Board, Canal Industries, Inc.
Conway, South Carolina
(T erm expires D ecem ber 31, 1972)

32