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A N N U A L R E P O R T 1957
V *W



' ,





In c o m e P ro d u c e rs in the 5 th D istrict

A Message to Our Member Banks
It is o u r p l e a s u r e to s e n d y o u this Forty-Third A n n u a l
the Federal R ese rve B a n k o f R ich m o nd.

Report o f

In this report w e attem pt

to po in t u p fo r y o u r i n f o r m a t i o n so m e o f the b a n k 's c a r d i n a l services
a n d activities f o r the y e a r just ended.

o f the


F ederal



im p o r t a n t ec o no m ic

activities a re p o r t r a y e d here in w o r d a n d picture.

N e e d le s s to say,

the indu strial a n d a g r i c u l t u r a l b u sin esses describ ed h a v e contributed
s ig n i f i c a n t ly

to the e c o n o m ic



the a r e a

s e rv e d


ou r

m e m b e r b a n k s a n d this institution.
Y o u m a y be interested in the sta tem ents of co nditio n a s w ell a s
the e a r n i n g s c o m p a r i s o n s fo r 1956 a n d 1957, both o f w h ic h a re in ­
clu d e d here.

A l s o pre sen te d is a s u m m a r y of c h a n g e s w hic h h a v e

ta k en pla ce in the b a n k 's directorates, a d v i s o r y g r o u p s , a n d official
sta ff d u r i n g the year.
O n b e h a lf of the directors a n d staff, w e extend our sincere a p p r e c i a ­
tion for y o u r c o n t in u in g f r ie n d ly c o o p e ra t io n t h r o u g h o u t 1957.

V e r y truly yours,


C h a i r m a n o f the B o a r d


contents . . .
M a j o r Incom e Producers
in the Fifth D i s t r i c t ...................................p

Y e ar's

A c t i v i t y ........................................p



C o m p a r a t i v e Statem ent
of C o n d i t i o n .............................................p 19
C o m p a r a t i v e Sta tem ent



E x p e n s e s ....................p 20

Directors a n d Officers,
Federal Reserve B a n k of R ic h m o nd

. . .

p 21

. . .

p 23

Directors a n d Officers,
Baltim ore a n d Charlotte Branches



“ W e located here because you’ve got a state full o f intelligent, ca p ­
able, and hard w orking people— the kind o f em ployees we want in
our plant.”
This statement was made to the governor o f one o f the
five states com prising the Fifth Federal Reserve D istrict; it could have,
in fact, been made about any one o f the other four. Each o f them
has the kind o f labor force that attracts new industry— an adequate
supply o f high quality workers.
The advantage o f excellent human resources enjoyed by the Fifth
District does not serve solely to attract new industry. It is one o f the
basic reasons fo r the better-than-average gains in per capita income
recorded by most o f the District states in the period since the beginning
o f W orld W a r II. Even during the period o f expansion since 1950
most o f the District states equalled or exceeded the nation’s grow th in
per capita incom e. This was a significant developm ent since it m ight
not be expected that areas in which agriculture, nondurable goods
m anufacturing, and service industries predominate would even hold
their own in a period m arked by expansion o f heavy industry.
It was a highly significant developm ent also because it indicated that
the low -incom e states o f the District were continuing the rise, set in
motion during the Great Depression, tow ard incom e equality with the
rest o f the nation. Unfortunately, equality is not imminent, but the
fa ct that the gap is narrowing is highly encouraging. A fter all, basic
structures o f em ploym ent are not the sort o f thing that can be changed
overnight, or over a decade.

M a n y b u sin e sse s a re f in d in g , as
h a s the ch em ical firm represented
in this picture, a path to profits
t h ro u g h research.

A griculture has always had a dominant part in the Fifth District
w ay o f life. The area is not half agriculture, as it has been carelessly
described at times, but the relative im portance o f the farm is greater
here than it is on the national scene. In North Carolina farm ing is
two to three times more important as a source o f personal incom e than
in the nation. In South Carolina the relative importance o f agriculture
is about tw ice as great as it is nationally. W hile the difference is not
nearly so pronounced as the foregoin g, farm ing is also relatively more
important in Virginia. In M aryland and W est Virginia its contribution
to personal income is considerably less than in the nation.
Note also the relative im portance o f agriculture as a source
ploym ent. Persons engaged in farm ing constitute about 11%
total civilian labor force in the United States and over 15%
Fifth District. The range is from about 6% in Maryland to
2 5% in North Carolina and South Carolina.

o f em­
o f the
in the

W hile farm ing may be “ a life fed by the bounty o f earth and
sweetened by the airs o f heaven,” it is not one o f our most remunerative
occupations. Hence, the depressive influence o f agriculture upon
over-all levels o f personal income is particularly noticeable in the Fifth
District. This is not a difficulty that is readily corrected. The scales
are tipping tow ard a better balance, however, and the changes marking
agricultural progress in the District in recent years have contributed
to the im provem ent in the com parative income position o f the District.

The pell-mell grow th o f m etropolitan areas and o f suburban rings
around cities tends to make us forg et occasionally, how ever, that the
Fifth District still has a large rural population. A ccord in g to the last
Census o f Population (1 9 5 0 ), slightly more than half the District’s
people lived in rural places— but fa r from all as farm ers.
It is likely that since then the District has m oved away from its
historical position as a rural region. H ow ever, the aggregate picture
o f population distribution is heavily weighted by the District o f Colum­
bia and the preponderant urban count in M aryland. W est Virginia,
North Carolina and South Carolina still have predom inately rural
populations, and Virginia’s urbanites are just a little more numerous
than her rural dwellers. Aside from Baltimore, which accounts fo r
around tw o-fifths o f M aryland’s population, the m ajority o f Old Liners
reside in rural areas.

Thus, even though much o f the rural population is rural nonfarm,
it is obvious that a large percentage o f the people in the Fifth District
live on farms. As stated earlier, about one-seventh o f the persons
engaged in all occupations in the District are in agriculture. The
com parable figure fo r the nation is around one-ninth. Here again the
aggregate conceals wide diversities. In North and South Carolina the
people making a living in agriculture account fo r between one-fifth
and one-fourth of the total civilian labor force in each state. One
reflection o f this heavier-than-average concentration o f em ploym ent in
agriculture is that North Carolina has, next to Texas, the largest num­
ber o f farms in the nation. However, the average acreage per North
Carolina farm is the smallest in the nation. This combination is one
o f the m ajor reasons fo r the relatively low level o f per capita income in
North Carolina.
Relatively small size o f farm s is a characteristic feature o f Fifth
District agriculture, and current trends do not indicate much o f a
change in this respect. The latest Census o f Agriculture, taken in
1955, shows only a negligible increase after 1950 in average size of
District farms, a grow th that lagged behind the national increase.
This Census disclosed also 67,000 few er farm s in our five-state area
than there were at the beginning o f this decade and nearly four million
acres less land in farms. This is the smallest num ber o f farm s in the
District since 1890 and the few est acres o f farm land in almost a
century. These changes are part o f agriculture’s contribution to a
more efficient utilization o f the District’ s resources.


The inimitable chant of the tobacco auctioneer, which radio has
made fam iliar to the w hole nation, is sounded mainly over tobacco
grow n in the Fifth District. This chant has almost becom e an oral hall­
mark o f District agriculture, so dominant is the District’s position in the
production o f this crop. A bout nine-tenths o f the nation’s output o f flue-


O n e of these w o r k e r s is e n jo y in g
the e n d -p ro d u c t of a lo n g p r o d u c ­
tive process that he is b e g i n n i n g
b y setting out to b acco plants. Fifth
District f a r m s p ro du c e a b o u t tw othirds of the n atio n's to b ac c o crop.

S o ld to the highest bidder!
the ro w s o f ba skets of to b ac c o
m o v e the c h a n t in g au ction eer a n d
p a r a d e of b u ye rs at a Fifth District
to b a c c o auction.

These e m p lo y e e s of a Fifth District
cigarette produ cer are m a k i n g tests
that disclose a n y lack of u niform ity
or d ep a rtu re from p e a k - h ig h s t a n d ­
a r d s required for each of the bil­
lions of cigarettes s h ip p e d a n n u a lly
fr o m District factories.

R e a d y for harvest, this cotton w a s
g r o w n on a Fifth District fa r m a n d
will likely be g in n e d , spun, w o v e n ,
a n d fin ish ed into fa b ric in District
mills. Cotton h a s a l w a y s been one
of the l e a d i n g a g r ic u ltu r a l products
of the District.

T w is tin g sliver into r o v i n g — a n in ­
p h r a s e w hic h
lan gu age
m e a n s
m aking
s tra n d of fiber, in this case cotton
fiber, to be used in the produ ction
of yarn .
This is a n in te gra l part
of the District's la rg e st source of
m a n u f a c t u r i n g w a g e s a n d salarie s.

A Fifth District cotton mill runs tw o
w id t h s o f cloth th r o u g h a fin is h in g
This is o n e of the m a n y
mills that m a k e this District the
textile center o f the nation.

cured tobacco and about two-thirds o f the total tobacco crop is raised
on Fifth District farms. From the days o f our founders tobacco has
been a leading crop in this area, and it still is, accounting fo r almost
one-third o f the cash receipts from all farm products sold by District
farm ers. In fact, the relative importance o f the “ tawney w eed ” to
District farm ers has increased substantially over the past quarter-century, rising to the one-third figure just mentioned from less than onefourth on the average from 1930 to 1934.
The other leading comm odities in the agricultural structure o f the
District and their approxim ate shares of total cash receipts from farm
marketings (1956 data) are: poultry and eggs 1 5 % , dairy products
1 1 % , cotton 7 % , cattle and calves 6 % , and forest products 5 % .
Together with tobacco, these comm odities represent around threefourths o f the District’ s total farm cash receipts.
Although cotton is still among the District’s leading agricultural
products, its relative importance has declined steadily and considerably
over the years. As just indicated, cotton provides Mr. District Farm er
with about seven cents out o f every dollar he receives from the sale
o f his total product. From 1945 to 1949 it was almost tw elve cents
on the average, in the period 1935 to 1939 it averaged fifteen cents,
and back in the last half o f the decade of the Twenties cotton really
was the king o f the crops in accounting fo r over one-fourth o f the
District’s agricultural cash receipts.

The pattern in each state contains important variations from the
over-all list just given fo r the District. In M aryland dairy products
and poultry and eggs account fo r about one-half o f total cash receipts
from all farm marketings. Truck crops are a specialty o f M aryland’s
Eastern Shore and have a relative im portance there unmatched in any
other area o f similar size in the District. T obacco and cattle com plete
M aryland’s list o f leading sources o f agricultural income.
T obacco, poultry and eggs, and dairy products provide Virginia
farm ers with around one-half o f their total receipts. Cattle are rela­
tively more important in Virginia than in most other District states,
ranking fourth as a source o f agricultural income. Peanuts are also
an im portant agricultural product in the Old Dominion.
The “ big three” of W est Virginia’s agricultural output consist of
poultry and eggs, dairy products, and cattle and calves. Fruit has a
particular importance in this state that puts it much higher in the
Mountain State’s agricultural hierarchy than is the case in any o f the
other fou r states.
T obacco dominates the agricultural scene in North Carolina, provid­
ing as much as one-half o f total cash receipts from all farm products.
Other important sources of agricultural income there are poultry and
eggs, cotton, dairy products, and forest products.
In South Carolina the agricultural spotlight shines with approxim ately
equal intensity on tobacco and cotton, the two together producing


around one-half o f the state’s cash sales o f farm comm odities. Even
this predom inance, however, is a fa r cry from the situation thirty years
ago when cotton alone provided South Carolina farm ers with almost
two-thirds o f their cash receipts.

A s an offset to the agricultural situation o f too little fo r too many,
District states have looked more and more in the direction o f manu­
facturing. As in the nation, m anufacturing is the largest em ployer
in the District and the leading source o f personal income. A ccordin g
to the latest Population Census, m anufacturing as a per cent o f total
civilian labor force ranges from about 19% in W est Virginia to 28%
in each o f the Carolinas. W hereas m anufacturing provided almost
one-third o f total personal civilian income from current production in
1956 in the nation, it accounted fo r the follow in g shares in the District:
Virginia 2 1 % , W est Virginia 2 7 % , M aryland 2 8 % , North Carolina
3 2 % , and South Carolina 3 6 % .
The grow th of total manufacturing em ployment has, naturally
enough, been distributed very unevenly among individual industries in
both the nation and in the District. One o f the results o f the skewed
distribution has been the postw ar em ergence o f durable goods indus­
tries as the dominant mem ber o f the durable— nondurable dichotom y.
This has been due in part to the slack growth in textiles, apparel, and
food . Just before W orld W a r II these three industries provided em­
ploym ent fo r one out o f every three factory workers in the United
States. A t last count this had declined to around one out o f every
four. These are leading em ployers in the Fifth District, and their
failure to exhibit the dynamic grow th characteristics o f most o f the
m ajor categories o f manufacturing activity has hit District states right
where it hurts most.

The textile industry is the kingpin o f m anufacturing industries in
this District. It is the largest em ployer and has, by far, the largest
payroll. It, largely the cotton textile industry, dominates the industrial
structures o f the Carolinas to the point o f accounting fo r around one
out o f every tw o m anufacturing job s in North Carolina and almost six
out o f every ten in South Carolina. Its predominance as a payer o f
wages and salaries is o f a similar magnitude in the tw o states.
The textile industry is the number one em ployer also in Virginia, but
there it accounts fo r only about one-seventh o f total m anufacturing
em ployees as com pared to one-half in North Carolina and six-tenths in
South Carolina. As a source o f m anufacturing wages and salaries,
how ever, textile operations rank second in Virginia, accounting fo r a
little less than one-eighth o f the state’s total.

Prop s h o p v i e w of so m e o f the products of the Fifth
District's a irc raft industry.



s ig n ific a n c e to the n ation is indicated in this im p re s s iv e a e rial photo.

F ollow ing hard on the heels o f an unsatisfactory year fo r the textile
people, it m ight not seem to be the most opportune time to refer to
the bright future fo r this industry. Nevertheless, the basket that holds
so many eggs in the economies o f North and South Carolina and of
Virginia is a very sturdy one with firm prospects o f substantial growth.
No one can review the Bureau o f Census estimates o f future population
grow th without being impressed by the m arket potentials it spells out
fo r the textile industry. The leading manufacturing source o f income
in the Fifth District is certain to grow with the nation.

History holds that the nation’s chem ical industry had its birth at
Jamestown in 1608. It is appropriate, then, that it has becom e V ir­
ginia’s largest m anufacturing industry so fa r as its wages and salaries
bill is concerned and that some o f the country’s largest chem ical plants
are located in Virginia and in its neighboring District states. Despite
its many years o f age, the chem ical industry is grow ing like a youngster.
Increasing in size at an annual rate o f around 7 % , as against an over-all
industrial grow th o f 3 % , it has becom e the nation’ s third largest indus­
try, with over 11,000 plants turning out some 9,000 different products.


G o n d o l a s — W e st V i r g i n i a style.

Freight cars lo a d e d w ith b itu m in o u s coal a b o u t

to b e g in their trip to distribution points for dom estic a n d o v e r s e a s m arkets.

In order to meet a burgeoning demand, this industry has had to
invest about a billion dollars a year since W orld W ar II in new plant
and equipment. In the Fifth District investment outlays o f chem ical
com panies have generally exceeded those of any other manufacturing
group. A large share o f these expenditures has been made in Virginia
and the Carolinas fo r plant and equipment used to produce synthetic
fibers. Much o f the intense competition faced by the District’s cotton
textile industry has developed right here in the District with the growth
o f the synthetic fibers industry. Indicative o f this grow th is the rise
in the share o f total fiber consumption in the United States accounted
fo r by man-made fibers from 10% in 1937 to 17% in 1947 to around
2 5% today. Synthetic fiber plants make up much o f the chemical
industry in Virginia and the Carolinas.

The chem ical industry, sans the synthetic fiber sector, is the leading
m anufacturing group in W est Virginia (excluding from the latter the
six panhandle counties not in the Fifth D istrict). Alm ost one-third of
this state’s total m anufacturing wages and salaries and over one-fourth
o f all m anufacturing employm ent originate in its chemical plants. The
bulk o f this industry consists o f a relatively small number o f huge plants
located along the banks o f the Kanawha River fo r a total stretch o f
about 55 miles above and below Charleston. These vast plants of
modern technological m agic stand like giant Sequoias in the Kanawha
V alley and constitute such a unique concentration o f chem ical facilities
that the valley is frequently described as the “ chemical Ruhr o f the
United States.” Drawing on the valley’s generous supply o f vital


The Fifth District is f a m o u s for its
q u a lit y


skilled c r a ft s m a n
tive m e m b e r

is one

is a

of a

h i g h l y
re p re s e n t a ­

l a b o r i n g force

of the District's

m ost

v a l u a b l e resources.

raw materials such as coal, oil, natural gas, and brine these plants
make W est Virginia one o f the nation’s leaders in the production of
producers’ chemicals.
Incidentally, chemical production is not so dominant in the Kanawha
V alley that it excludes other industries. Kanawha County is, for
example, included among the leading counties o f the nation in the pro­
duction o f stone, clay, and glass products. In fact, this industry group
is W est V irginia’s (excluding the six counties referred to earlier)
second largest source o f manufacturing wages and salaries. In none
o f the other District states does this industry group have a relatively
important ranking. But even as this is written an announcement is re­
ceived that one o f the w orld ’s largest continuous fibrous glass yarn
plants will be built in North Carolina.

The fo o d industry is the third largest source o f m anufacturing wages
and salaries in the District, follow ed by the transportation equipment
industry (ships and airplanes) and the apparel industry. Together
with textiles and chemicals, they account fo r over one-half o f total
m anufacturing wages and salaries. Such general statements suffer from
the omission o f m anufacturing groups that are o f vital im portance in
specific states or areas. For example, primary metals and fabricated
metal products are important m anufacturing income producers in M ary­
land. In Virginia and North Carolina tobacco, furniture, and lumber
and other w ood products are m ajor components o f the econom ies of


those states. In fact, there are no products o f the Fifth District that
are better known throughout the w orld than the tobacco products and
furniture made in North Carolina and Virginia factories.

W est V irginia’s, and perhaps the nation’s, greatest natural resource
is its vast deposits o f bituminous coal. These are so widespread in the
Mountain State that a construction crew struck a bituminous seam while
building a sector o f the W est Virginia Turnpike. It has been claimed
that if all the other coal mines in the nation were shut down, W est
Virginia would have no trouble in supplying the country with bituminous
coal fo r the next two centuries.
In recent years, however, this abundance has been a serious problem,
fo r W est Virginia has more mines and miners than its coal markets
require. A t the end o f W orld W ar II it was obvious that two o f the
coal industry’s largest markets— railroads and residential— would be
steadily and severely reduced. W hile this took place, the utility in­
dustry becam e coa l’s principal and fastest-growing customer. Its in­
creased consumption has not been large enough, however, to offset

This h e a v y e q u i p m e n t is indic ative


m en t

m u ltim illio n
th at


p ap erm akin g

d o lla r

built the



in ve st­
im pres­

s iv e p r o p o r tio n s since W o r l d W a r II.

declines in other markets, and so coal has bucked the trend o f an
expanding econom y over the postw ar period.
This has been, o f course, a very serious problem in W est Virginia
where coal mining, when at high levels o f operations, is a potent leaven
in its econom ic loaf. Around one-fifth each o f total civilian income
and total wages and salaries from all sources in W est Virginia is
derived from bituminous coal mining. Thus, coal mining is second only
to manufacturing as a source o f income to W est Virginians.
Despite its disappointing perform ance and frequently depressed state
during the postwar period, bituminous coal mining is classed as a
grow th industry by many authorities. A 50% increase in demand for
this product, fo r example, has been estimated fo r the decade follow in g
1955. Indeed, a rather sharp check has to be kept on one’s tendencies
to avoid forecasting a truly fabulous future fo r this industry. Presently,
fo r example, the United States leans heavily on imports o f liquid fuels,
and the prospects are that the amount needed to be im ported will
increase. H owever, if costs and military considerations intervene, coal
will be converted into liquid fuels and a really tremendous new market
will be created fo r W est Virginia coal. Again, considerable research
is being conducted on the basis o f the theory that coal will becom e the
basic source o f chemicals. This conversion would provide a sizable
increase in the demand fo r coal.
Another coal market with a strong grow th potential is the aluminum
industry. This is not only a fast-grow ing industry but by reason o f
its electrolytic methods o f production it is a very large consum er o f
power. A dramatic step in the direction o f realizing the potential of
this market fo r bituminous coal was the recent beginning of operations
at a $200 million aluminum processing plant at Ravenswood, W est Vir­
ginia. This may well be the forerunner o f other plants that will be
located near bituminous fields rather than near water power.
One spokesman for the coal industry has expressed the opinion that
“ the growth in demand can becom e great enough (from now on) to
strain the abilities o f the coal industry and of transportation facilities
to meet it.” Should this occur, W est Virginia and Virginia would be
prime beneficiaries.

Nowhere in the nation does the fa ct that “ Government has becom e
big business” have the significance that it has in the Fifth District.
W hat with the District o f Columbia and the spilling over o f its Federal
employment into Virginia and Maryland, government is more than half
again as important in the District as it is nationally as a source of
civilian income. On the basis o f civilian income derived from current
production, governm ent is the third largest o f the District’s m ajor
sources, outranked only by manufacturing and trade.
On this same basis, government is pushing m anufacturing hard as
the number one income producer in Virginia. The latest available
data show manufacturing ahead only by a very slim margin. Back in
the Twenties, Virginia could have been referred to as an agricultural
econom y. During the depression o f the Thirties, however, income from
every source except government declined, and by 1940 the latter had
exceeded agriculture in relative importance. At times during the


present decade governm ent civilian payrolls in Virginia have exceeded
m anufacturing wages and salaries. It should be noted that while the
Federal governm ent accounts fo r the larger part of such government
payments, the share emanating from the state and its municipalities
has been grow ing at a faster rate since the end o f W orld W ar II.
W orking fo r Uncle Sam or fo r the state or a local government also
produces larger-than-average relative shares o f total civilian income in
Maryland, South Carolina, and, o f course, in the District o f Columbia.
The rise in governm ent employment in the Fifth District at a faster clip
than in the rest o f the nation since 1939 has been a growth factor in the
above-average rise in personal income. Paradoxically, it should be
view ed also as a stability fa ctor fo r it probably heightens the ability of
the states involved to avoid as wide swings in total employment as may
occur in the rest o f the nation from time to time.

Changes in the industrial structures o f individual states from year
to year occur at a seemingly snail-like pace. Nevertheless, a new econo­
my is evolving in each Fifth District state that appears better suited fo r




s p e c ia lty

u n d e rgo in g
flavo r

fo r




District— h a m s

s m o k in g



w h ic h



delecta ble
a re

w o r ld

fam ous.



The la rg est private b ra n c h te lep ho n e e x c h a n g e in the w o r ld is located in the
Pe n tago n , one of the m a n y sources of g o v e r n m e n t e m p l o y m e n t in the Fifth District.

the accomplishment o f such objectives as higher per capita income and
reduction in the ranks o f the lowest income groups. The principal
differences to date are not in the comparative dollar gains of individuals
and businesses, but in the econom ic structure— the industrial arrange­
ment and composition.
One of the most impressive examples o f this is in the District growth
in research. An increasing number of companies are budgeting sizable
amounts for scientific work carried on in the firms’ own laboratories or
in professional and academ ic facilities. In recognition o f the facts that
there is a profitable bond between industry and scientific research and
that industrialization in the South now needs more and better scientific
facilities, North Carolina has created a non-profit agency to develop
and coordinate industrial research within the state’s “ Research Tri­
angle.” Comprised of three closely located educational institutions
with over 850 research scientists, this unique concentration o f facilities
offers special advantages to private businesses. Its contributions to
industrial progress in North Carolina and in the South should be lasting
and impressive.
The advantages o f modern facilities and scientific know-how offered
by this institutional triumvirate are also w idespread among the m ajor
income producers o f this District. In a very real sense, the progressive
nature of this research center is a m ajor characteristic o f the people,
businesses, and governments that together are called the Fifth Federal
Reserve District.



Y E A R ’S


One striking aspect of econom ic grow th in a dynamic region such as
described in the feature article o f this report is the constantly increas­
ing need fo r banking services. Our member banks saw this in more
checks written by customers, in more currency needed fo r tills of Fifth
District businesses, in the record demand fo r loans during most o f 1957,
and in the demand fo r the many other services provided their customers.
This expanding demand also shows up in the w ork o f this bank as it
helps its members provide these ever-increasing services, fo r the opera­
tions o f the Federal Reserve Bank o f Richmond are directly related to
those o f its members and to the econom ic life o f the District.
An illustration o f this expansion is the rapid grow th in the volume
o f checks handled by our transit department. The accom panying chart
shows this increase over the past three decades. The increase in the
dollar volume is equally impressive. In the past 20 years, fo r example,
the dollar volume o f checks cleared has increased almost sevenfold. In
1957 the three offices o f this bank helped speed on their way 251,000,000
checks totaling $88,000,000,000.






M illions of Checks

A lso essential to the health o f the Fifth District econom y is the cur­
rency and coin needed to support its many business transactions. W hen
people need more currency and coin they get it through m ember banks
which in turn get it from the Federal Reserve Bank. W hen they would
rather have a little more m oney on deposit and less in currency, the
currency returns to the Federal Reserve in the same way. Last year
this bank shipped to and received from District banks (and the Treas­
ury) 849,000,000 pieces o f currency worth $5,058,000,000 and 1,402,000,000 coins worth $116,000,000. A conscientious w orker counting
one piece a second and w orking an eight-hour day could count a little
more than one-third o f the currency in his working lifetime— if he didn’t
take too much time out fo r coffee breaks.












Billions of Dollars

Time is valuable to a businessman, and he frequently needs to transfer
money quickly over long distances. Through his member bank and this
bank’s facilities for wire transfers he does it for the cost o f a com m ercial
wire. In 1957 such transfers aggregated $62,000,000,000, almost twice
the total purchases o f all state and local governments.












Billions of Dollars

These are but a few o f the services this bank provides its member
banks and their customers. Am ong the others— Government securities
issued and redeem ed aggregated $6,761,000,000, an amount equal to a
one-third down payment on all the new cars sold last yea r; notes dis­
counted fo r member banks totaled $5,794,000,000 (enough to pay for
every mile of new highways built in the United States in 1957) ; $1.7
million o f non-cash items were collected every working day. All in all,
1957 was a very busy year at the Federal Reserve Bank o f Richmond.


Denver L. Morgan, vice president and cashier of The Charleston
National Bank, Charleston, W . Va., was elected a Class A director to
succeed Daniel W . Bell, president and chairman o f the Board of the
Am erican Security and Trust Company, W ashington, D. C. Robert O.
Huffman, president o f Drexel Furniture Company, Drexel, N. C., was
elected to a second term as Class B director.
The Board o f Governors redesignated as chairman o f the Head Office
Board and Federal Reserve Agent, John B. W oodw ard, Jr., chairman
o f the Board, N ew port News Shipbuilding & Dry D ock Company, N ew­
port News, Va. A lonzo G. Decker, Jr., executive vice president o f The
Black and D ecker M anufacturing Company, Towson, Md., was redesig­
nated as deputy chairman of the Board. D. W . Colvard, dean o f
agriculture o f North Carolina State College o f Agriculture and Engineer­
ing, Raleigh, N. C., was appointed to a second term as Class C director.
The Board o f Governors also appointed three branch directors during
the year. Gordon M. Cairns, dean o f agriculture, University o f Mary­
land, College Park, Md., was appointed to the Baltimore Branch Board
in February, succeeding Theodore E. Fletcher, agriculturist from Easton,
Md. In Decem ber, Clarence R. Zarfoss, vice president of Western Mary­
land Railway Company, Baltimore, Md., was reappointed to the Board
o f the Baltimore Branch, and George H. Aull, agricultural economist,
Clemson College, Clemson, S. C., was appointed to the Charlotte Branch
Board, succeeding Paul T. Taylor, president o f the Taylor W arehouse
Company, Winston-Salem, N. C.
The Head Office Board o f Directors appointed J. N. Shumate, presi­
dent o f The Farmers National Bank o f Annapolis, Md., to the Baltimore
Branch Board to succeed Charles A. Piper, president of The Liberty
Trust Company, Cumberland, Md. Ernest Patton, chairman of the
Board, Peoples National Bank o f Greenville, S. C., was appointed to a
second term on the Charlotte Branch Board.

The directors o f this bank appointed John S. Alfriend, chairman of
the Board and president o f the National Bank o f Commerce, N orfolk,
Va., to the Federal A dvisory Council to succeed Robert V. Fleming,
chairman o f the Board, Riggs National Bank, W ashington, D. C.

In February, Robert R. Fentress was elected to the position o f assist­
ant cashier. Robert G. H ow ard, assistant vice president, left the bank
in March to accept a position with the Am erican Bankers Association.
Three official prom otions and one change in official title were made
at year end. H. Ernest Ford was prom oted from assistant cashier to
assistant vice president, and John E. Friend and Raymond E. Sanders,
Jr., were elected assistant cashiers. The title o f R. Pierce Lumpkin
was changed from financial economist to senior economist.

On April 1 a member bank opened its doors to the public as a newly
chartered national bank. The new member is the City National Bank
o f Charleston, W . Va.



D ec e m b e r 3 1 ,1 9 5 7

D e c e m b e r 3 1 ,1 9 5 6

Gold certificate a c c o u n t___________________________________________________________



Redemption fund for Federal Reserve n o te s ____________________________________



T otal G old C ertificate R e s e r v e s ____________________________________



Federal Reserve notes o f other b a n k s ___________________________________________



Other cash ___________________________________________ __ _____ ______ _______________



Discounts and advances __________________________________________________________



U . S. G O V E R N M E N T S E C U R IT I E S :
Bills _______________________________________________________________________________



C ertificates_______________________________________________________________________



N o t e s ______________________________________________________________________________





s e c u r it ie s __________________________________



T otal U . S. G o v er n m en t

l o a n s a n d s e c u r it ie s ___________________________________________


Due from foreign banks __________________________________________________________

T otal



Uncollected cash items ___________________________________________________________



Bank p rem ises______________________________________________________________________




Other a s s e t s ________________________________________________________________________


T O T A L A S S E T S _____ __ _____________________________________



Federal Reserve notes _____________________________________________________________



Member bank— reserve a cco u n ts______________________________________________




D E P O S IT S :
U . S. Treasurer— general account ____________________________________________



Foreign ___________________________________________________________________________



O t h e r ______________________________________________________________________________






Deferred availability cash items _________________________________________________



Other lia b ilitie s_____________________________________________________________________



T O T A L L I A B I L I T I E S _______________________________________



T o t a l D e p o s it s

Capital paid in ____________________________________________________________________



Surplus (Section 7) _______________________________________________________________



Surplus (Section 13b) _____________________________________________________________



Other capital a cco u n ts_____________________________________________________________



T O T A L L IA B I L IT IE S A N D C A P IT A L A C C O U N T S _____________



Contingent liability on acceptances purchased for foreign correspondents






E a r n in g s :


Discounts and advances _______________________________________________________
Fees received on commitments to make industrial lo a n s ___________________
Interest on U . S. Government secu rities_____________________________________
Other earnings __________________________________________________________________
Total Current Earnings ________________....___________________________


$ 1,180,778.42


8 9 3 ,2 2 7 .4 6
2 5 .8 9
3 4 ,7 5 1 ,7 6 8 .7 7
1 5 ,5 7 8 .5 6


3 5 ,6 6 0 ,6 0 0 .6 8

Operating expenses (including depreciation on bank premises)
after deducting reimbursements received for certain Fiscal
Agency and other expenses _________________________________________________
Assessments for expenses of Board of G overn ors___________________________
Cost of Federal Reserve cu rren cy _____________________________________________


8 ,0 7 2 ,0 0 7 .0 4

N et Expenses _________________________________________________________


8 ,9 4 3 ,6 2 6 .7 6

Current N et E a r n in g s __________________________________________________________


2 6 ,7 1 6 ,9 7 3 .9 2

Profit on sales of U . S. Government securities (net) _______________________
Reimbursement for Fiscal Agency expenses incurred in prior y e a r s _____
A ll o th e r __________________________________________________________________________


1 6 ,9 6 0 .1 0

Total A d d itio n s________________________________________________________


2 0 ,9 9 9 .1 9

Reserves for contingencies _____________________________________________________
Retirement system (adjustm ent for revised benefits) ______________________
A ll o th e r __________________________________________________________________________


5 2 ,9 2 7 .7 5

Total Deductions _____________________________________________________


5 4 ,3 5 4 .0 7

N et Additions ( + ) or Deductions ( — ) _____________________________________

— 497,069.94

- 3 3 ,3 5 4 .8 8

U . S. T r e a s u r y ____________


$ 2 6 ,6 8 3 ,6 1 9 .0 4

Paid U . S. Treasury (interest on Federal Reserve notes) _________________
Dividends paid __________________________________________________________________
Transferred to surplus (Section 7) ___________________________________________


$ 2 3 ,2 3 7 ,5 3 4 .7 5
8 6 4 ,1 5 3 .9 0
2 ,5 8 1 ,9 3 0 .3 9

Total ___________________________________________________________________


$ 2 6 ,6 8 3 ,6 1 9 .0 4

Balance at close o f previous y e a r ________________________________________________
Addition account o f profits for y e a r _____________________________________________


$ 3 5 ,0 1 1 ,8 5 2 .6 8

B a l a n c e a t C l o s e o f C u r r e n t Y e a r _______________________________


$ 3 7 ,5 9 3 ,7 8 3 .0 7


$ 1 3 ,7 7 1 ,5 0 0 .0 0


1 4 ,8 2 3 ,2 0 0 .0 0

E xpenses :


d d it io n s to

D e d u c t io n s

Current N



2 7 2 ,1 0 0 .0 0
5 9 9 ,5 1 9 .7 2

E a r n in g s :

Current N


4 ,0 3 9 .0 9

E a r n in g s :

N et E a r n in g s B efore P a y m e n t s


1 ,4 2 6 .3 2

S U R P L U S A C C O U N T (Section 7)
2 ,5 8 1 ,9 3 0 .3 9

(Representing amount paid in, which is 5 0 % of amount subscribed)
Balance at close o f previous y e a r ________________________________________________
Issued during the year ___________________________________________________________

Cancelled during the year _______________________________________________________

B a l a n c e a t C l o s e o f C u r r e n t Y e a r _______________________________


1 ,0 5 1 ,7 0 0 .0 0

6, 100.00
$ 1 4 ,8 1 7 ,1 0 0 .0 0


Directors and Officers

D ire c to rs

John B. W o o d w a r d , jr.

C h airm a n of the Board and Federal Reserve A ge n t

A lo n z o G. Decker, Jr.

Deputy Ch airm an of the Board

Robert G a g e

President, The Com m ercial Bank
Chester, South Carolin a

Jo se ph E. H e a ly

President, The Citizens N a tio n a l Bank of Ham pton

D e n v e r L. M o r g a n

Vice President and Cashier, The Charleston N a tio n a l Bank

Ham pton, V irgin ia

Charleston, W est V irgin ia

L. V in to n Hershey

President, H agerstow n Shoe C o m p a n y
H age rsto w n, M a ryla n d

Robert O. H u f f m a n

President, Drexel Furniture C o m p a n y
Drexel, N orth C aro lin a

W m . A. L. Sib le y

Vice President and Treasurer, M o n a rch M ills
Union, South C a ro lin a

D. W . C o lv a r d

Dean of Agriculture, North C a ro lin a State C o lle ge of Agriculture and


Raleigh, North Carolin a

A l o n z o G. Decker, Jr.

Executive Vice President, The Black and Decker M a n u fa c tu rin g C o m p a n y
Tow son, M a ry la n d

J ohn B. W o o d w a r d , Jr.

Ch airm a n of the Board, N e w p ort N e w s Sh ip b u ild in g and Dry Dock C o m p a n y
N e w p o rt N e w s, V irgin ia

Mem ber
F ederal
A d v is o r y
C o u n c il


John S. A lfrie n d
C h airm an of the Board and President, N a tio n a l Bank of Commerce
N o rfolk, V irgin ia

O ffic e rs

H u g h Leach


E d w a r d A. W a y n e

First Vice President

N. L. A r m i s t e a d

Vice President

E d m u n d F. M a c D o n a l d

Assistan t Vice President

Robert L. C h e rry

Vice President

G e o r g e W . M c K i n n e y , Jr.

A ssistan t Vice President

J. D e w e y D a a n e

Vice President

John L. N o s k e r

A ssistan t Vice President

D o n a l d F. H a g n e r

Vice President

Victor E. P re g e a n t, III

A ssistan t G e n e ral Counsel

A u b r e y N. Heflin

Vice President and

G. H a r o ld S n e a d

Chief Exam iner

U pton S. M a r t i n

Vice President

C liffo rd B. B e a v e r s

A ssistan t Cashie r

J oseph M . N o w l a n

Vice President and Cashier

E. B. C o l e m a n

A ssistan t Cashie r

J a m e s M . S la y

Vice President

John G. Deitrick

A ssistan t C ash ie r

T h o m a s 1 Storrs

Vice President

J. G o r d o n Dickerson, Jr.

A ssistan t C ash ie r

C. B. S trathy

Vice President and Secretary

Robert R. Fentress

A ssistant Cashie r

C h a r le s W . W il li a m s

Economic Adviser

John E. Friend

A ssistan t C ashie r

H. Ernest Ford

A ssistan t Vice President

R a y m o n d E. S a n d e r s, Jr.

A ssistan t Cashie r

R. Pierce Lu m p kin

Senior Economist

W y t h e B. W a k e h a m

A ssistan t Cashier


R. S. Brock, Jr.

In d u s tria l
A d v is o ry
C o m m itte e

General Auditor

O v e r to n D. D e nn is

E d w in H yde

W a l k e r D. Stuart

Dom inion Oil C o m p an y

President, Miller & Rhoads, Inc.

President, Richmond

Richmond, V irgin ia

Richmond, V irgin ia

Richmond, V irgin ia

H a rd w a re

Com pany


D ire c to rs

Dean of Agriculture, University of M a ry la n d
College Park, M a ry la n d

W m . Purnell Hall

President, M a ry la n d Sh ip b u ild in g & Drydock C o m p a n y
Baltimore, M a ry la n d

J a m e s W. M c E lro y

President, First N a tio n a l Bank of Baltimore
Baltimore, M a ry la n d

J. N. S h u m a t e

President, The Farmers N a tio n a l Bank of A n n a p olis
Annapolis, M a ry la n d

J o h n W. Stout

President, The Parkersburg N a tio n a l Bank
Parkersburg, W est V irgin ia

S t a n le y B. Trott

President, M a ry la n d Trust C o m p a n y
Baltimore, M a ry la n d

C la re n c e R. Z a rfo s s

Vice President, W estern M a r y la n d R a ilw a y C o m p a n y
Baltimore, M a ry la n d

D o n a l d F. H a g n e r

Vice President

A. A. Stew art, Jr.


B. F. A r m s t r o n g

Assistant C ashier

E. R i g g s Jones, Jr.

Assistant Cashie r

A. C. W ie nert

O ffic e rs

G o r d o n M . C a ir n s

Assistant C ashier

D irecto rs

President, First N a tio n a l Bank and Trust C o m p a n y
Asheville, North C a ro lin a

Ernest Patton

Ch airm an of the Board, Peoples N a tio n a l Bank of Greenville
Greenville, South C a ro lin a

Ivey W. S te w a rt

Ch airm an of the Board. A m erican Com m ercial Bank
Charlotte, N orth C a ro lin a

G. G. W a t ts

President, Merchants and Planters N a tio n a l Bank
G affn e y, South C aro lin a

T, H enry W ils o n

President and Treasurer, Henredon Furniture Industries, Inc.
M o rgan to n , North C a ro lin a

Robert L. C h erry

Vice President

S. A. Ligon


R. L. Honeycutt

A ssistant C ashier

E. C. M o n d y


Executive Vice President, Rock Hill Printing and Finishing C o m p a n y
Rock Hill, South C aro lin a

C h a r le s D. Parker

Agricultural Economist, Clem son College
Clemson, South C a ro lin a

W il li a m H. G rier

O ffic e rs

G e o r g e H. Au ll

A ssistan t Cashier



2 —

V -C Chem ical C o rp oratio n

4 — V irgin ia C h am be r of Com m erce
The A m erican Tobacco C o m p a n y
V irgin ia C h am be r o f Com m erce
5 —

N a tio n a l Cotton Council of A m erica

8 —

Fairchild A ircraft Division, H a ge rsto w n

9 —

N e w p o rt N e w s S h ip b u ild in g

10 —
11 —


Dry Dock C o m p a n y

N a tio n a l C o a l A sso ciatio n
Furniture by B ig g s

12 —

Continental C a n C o m p a n y

14 —

V irg in ia C h am b e r of Com m erce

15 —

O fficia l Departm ent o f Defense Photo

16 —

Co lo n ia l Studios, Richmond

17 —

C o lo n ia l Studios, Richmond