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B u s in e s s a n d B a n k i n g in 1 9 5 3 _______


E c o n o m i c R e s e a r c h _____________________



Y o u r M o n e y ’ s W o r t h __________________


C e n t e r ______________________


G e n e r a l S e r v i c e s ________________________


T r a n s i t ____________________________________


V o l u m e o f O p e r a t io n s


T h e B a l a n c e S h e e t --------------

Y e a r ’ s A c t i v i t y ______________________

S w it c h in g

M o n e y ______________________________________
M o n e y t o B u r n ___________________________
F is c a l A g e n c y _____________________________




C o m p a r a t i v e S t a t e m e n t s _____________


_ ____

2 2 -2 3

D i r e c t o r s a n d O f f i c e r s ______________ 2 4 - 2 5 -2 6





O nce a g a in w e a re p leased to p re se n t to
y o u , o u r s to c k h o ld e rs , a re p o rt on th e m a jo r
a c tiv itie s o f th is b a n k d u rin g th e p re c e d in g
y e a r. As in th e p a st tw o ye a rs , w e h a v e
a tte m p te d to m a k e th is in fo rm a l re p o rt
m o re th a n th e m e re re c ita tio n o f fig u re s
w h ic h m a n y o f y o u h a ve a lre a d y seen in
o u r A n n u a l S ta te m e n t.
It is h o p e d th a t th is ty p e o f re p o rt—w ith
its b rie f c o m m e n ta rie s on business a n d
b a n k in g d u rin g 1 953, d e s c rip tiv e notes on
th e m a jo r d e v e lo p m e n ts in th e b a n k its e lf
a n d a fe w s id e lig h ts on th e s ig n ific a n c e
o f th e o p e ra tin g fig u re s —w ill p ro v id e a
c le a re r p ic tu re o f w h a t goes on w ith in th e
F e d e ra l R eserve B ank o f R ichm ond a n d , a t
the sam e tim e , p o in t up th e p a rt p la y e d b y
this b a n k in th e e co n o m y o f th e F ifth Fed­
e ra l Reserve D istrict.
O n b e h a lf o f th e d ire cto rs, o ffice rs, a n d
s ta ff o f th e b a n k I a g a in e x te n d a p p re c ia ­
tio n f o r th e c o o p e ra tio n a cco rd e d us b y
th e m e m b e r b a n k s o f th is D istrict.

S in c e re ly yo u rs,


In the future when we speak of “ the good old
days,” we are not likely to exaggerate so far as
1953 was concerned. The plus signs far out­
weighed the minuses. Economic activity, like
the climbers of Mt. Everest in 1953, scaled new
heights while, in the opposite direction, unem­
ployment plumbed new depths. Based on an
upsurge that began in the Fall of 1952 and hit
a peak the following Summer, the output of
goods and services during 1953 set another rec­
ord in both dollar amount and physical volume.






a rea




o f the








of cigarettes.


usual m oderate


rise in


Despite the boom







consumption, a slight decline occurred



form ance o f production in ge n e ral last
year, cigarette production in the Fifth
District w a s off about 5% .

(Seasonally Adjusted)











B U S I N E S S AND B A N K I N G IN 1953
The m ajor streams o f spending all rose
to contribute to a rise o f approxim ately $19
billion in the value o f all goods and serv­
ices produced, sw elling the latter to the
highest point in our history. Individual
consumers spent almost $11 billion more
than they did in 1952; business enterprise
boosted its aggregate outlays by almost $2
billion; and total governm ent expenditures
reached a record peacetim e high about $7.4
billion over the preceding year. 1953 was
the boom year o f the long boom period.
An important difference in the expansion
o f the econom y last year as com pared with
the preceding two years was that grow th in
1953 rested prim arily on increased private
spending. In 1951 and 1952, on the other
hand, outlays fo r defense purposes ac­
counted fo r about half the increase in all
goods and services. That was an im por­
tant difference, fo r it meant that m ore o f
the nation’s production was fo r personal
and business uses and thus raised our
standard o f living that much higher.


In Our Stride
F or the past few years there has been a
“ mourners’ bench” o f diehards who kept
croaking, “ It can’t last forev er.” They
were referring to the high level o f business
activity and were im plying that it would
soon be follow ed by severely depressed
conditions. Their forebodings were based
mainly on such reasoning as, “ W hat goes
up must come dow n.” There has been, of
course, general agreem ent that the boom
w ouldn’t go on forever, but its cessation
wasn’t anticipated w illy-nilly, and most
bankers and businessmen did not look fo r
it to be replaced by a knock-dow n, dragout depression. As one Fifth District busi­
ness leader expressed it a year ago this
time, “ I think we shall have some downturn
in 1953, but I don’t expect anything so seri­
ous that we shall not be able to take it in
our stride.” The record o f 1953 proved
that to be a “ smart” forecast.
A banker in this District recently wrote
to us about downtrends in business activity
evident at year-end. He said, “ The main

It is often a rgu e d that total business activity is not
likely to decline sharp ly w hile construction w ork is still
strong. If true, it's a g o o d sign for the District since
construction contract a w a rd s here in the fourth quarter
of 1953 ran close to the peak for the year. Total con­
struction contracts a w a rd e d in this District w ere -4 8 %
a h e a d of 1952, as com pared to a 37-state g a in of
3.9%. Residential a w a rd s, however, declined 10% in the
District and 2 .6 % nationally.



M .

(N o t S e a s o n a lly

A d ju s te d

I9 3 5 -I9 3 9 -IO 0 )









M a n u fa c tu rin g em ploym ent in 1953 reached the highest
point in the history of this five-state area. A t 163 last
Septem ber the District index o f m an u factu rin g em p lo y­
ment exceeded the previous record of 161 set a decade
earlier w hen the w ar-tim e econom y w a s at the zenith
of its economic achievement. However, 1953 m arked
also the first time since the recession-year 1949 that
factory em ploym ent w ou n d up the year at a low er level
than existed at the opening of the year.

thing about a recession or readjustm ent, or
w hatever you economists call it, is that it
w ould reflect a movement aw ay from ex­
tremes in business sentiment as well as in
business activity. I think that would be a
healthy change.” Extremes in business at­
titudes involve im moderate and unreason­
able expectations— a boom or bust philos­
As 1953 closed shop, business sentiment
and expectations were not m arked by ex­
tremes. In general, m oderate attitudes
prevailed despite the sharp contrast be­
tw een the volume and trend o f business
during the last few months o f the year and
the record fo r the full year. One o f the
interesting developments tow ard the close
o f 1953 was the rising optimism on the part
o f businessmen— concurrently with reports
o f production cutbacks, em ploym ent lay­
offs, declining order backlogs, and inven­
tory difficulties in this or that line.
Such optimism in the midst o f less opti­
mistic trends seemed to have considerable

support. That the bloom was off the boom
was generally recognized, but it wasn’t in­
terpreted as evidence o f a forthcom ing de­
pression. In general, it was regarded as
an interim o f adjustments from peak activ­
ity that w ould mark the com pletion o f the
transition from a sellers’ market to a
buyers’ m arket and the return o f com peti­
tion from its limbo o f the past decade and
more. The prevalent view o f the situation
was that we were in a short-run adjustment
to more “ norm al” conditions, but that in
the long-run we seemed to be still on the
w ay up.

Banking— At Record Levels
F or Fifth District m ember banks, the
year 1953 was one o f sustained operations
at record levels. It was, how ever, a year
o f slackening rate o f growth. Total assets
o f the m em ber banks increased during
1953, but at a rate less than one-sixth that
in 1952.
The prim ary cause of the failure to ex­
pand as rapidly as in 1952 lay in the deci­

sions o f bank borrow ers. A lthough bor­
row ers’ demands fo r credit were at the
highest level ever reached, their demands
did not expand to as great an extent as in
the year before. The banks’ loan expan­
sion was only about 6 per cent as com pared
with an 11 per cent grow th in 1952. The
sharpest difference between the two years
is found in the usually expanded demand
fo r bank credit in the Fall and early W inter
months. In 1952, this demand from both
business firms and consumers was sharply
above expectations. In 1953, demands
were much w eaker than expected— al­
though still at a very high level.
The increase in consumer loans over the
last three months o f 1953 was only about
one-third the increase in the com parable
period o f 1952. The change in the grow th
o f com m ercial and industrial loans was
even more striking. From Septem ber 30
through D ecem ber 31, 1953, repayments on
outstanding business loans were greater in
total amount than the sum o f all new loans
made so that the amount on the books of
the banks declined. In the same period of
1952, this group o f loans expanded by 11
per cent.
Bankers started the year with fairly tight
credit conditions which continued to tight­
en over the first fou r months. Free re­

serves were relatively scarce and to gain
additional reserve funds the banks resorted
to borrow ing from the Federal Reserve.
During this period, demand fo r credit was
strong and interest rates all along the line
w ere pushed upward. Beginning in early
M ay the Federal Reserve began purchasing
Treasury Bills as a measure to ease the
m oney tightness and, in the first half o f
July, the Board o f Governors low ered re­
serve requirements in anticipation o f sea­
sonal and Treasury credit needs. During
the relatively tight m oney situation over
the first half o f the year the District’s mem­
ber banks sold almost one-tenth o f their
Government securities as a means o f easing
their reserve needs. By July, how ever, re­
serve conditions had changed to such an
extent that it was possible fo r these banks
to purchase Government securities in an
amount equal to 60 per cent o f those they
had sold over the first six months. The
banks ended 1953 with holdings o f G overn­
ments just two per cent under the amount
held at the beginning o f the year.
Total deposits at the District’s m ember
banks experienced an unusually sharp de­
cline over the first five months o f 1953. By
the end o f May they had dropped 7 per
cent below their level at the beginning of
the year. By year’s end, how ever, total

B an kin g in the Fifth District in 1953 w a s characterized
by sustained operations at record levels. The rate of
grow th during the year w a s under that o f 1952, but
member b an ks closed the year with total loans on their
books ab o u t 5 % greater in am ou n t than they h ad at the
b egin n in g o f the year. In spite of the m oderate loan
expan sion , however, total deposits at District m em ber
ban ks declined over the year.




p :'



deposits had climbed back to just slightly
above the amount on the banks’ books a
year earlier. Demand deposits, considered
alone, actually declined over the year—
the first annual decline since 1949.
Because o f a slightly higher dollar level
o f earning assets during 1953 and higher
interest rates effective over much o f the
year, gross bank earnings in 1953 set an
all-time record. Increased operating costs
and a higher tax bill, however, kept net
profits from rising in the same proportion.
The District’s m em ber banks earned the
largest gross income in 1953 that has ever
been recorded. They also paid the largest
expense bill in their experience. O perat­
ing expenses o f the average bank took 63.7
cents o f every dollar o f current earnings—
leaving a net o f 36.3 cents per earnings
dollar. Provision fo r bad debt losses and
payment o f Federal income taxes absorbed
an additional 15.3 cents out of the gross
earnings dollar— leaving a net profit to the
stockholders o f 21.0 cents from each dollar
their bank earned from the year’s opera­
tions. This represents the smallest share
o f total earnings accruing to the benefit of
the stockholders in any o f the postwar
years. It is well under the peak o f 28.9
cents per earnings dollar the stockholders
of the average bank realized in 1947.

The net profits figure fo r 1953, fo r the
average bank in this District, represented
a net capital return of 8.3 per cent. The
banks declared 38.8 per cent o f their net
profits as cash dividends in 1953, giving
the stockholders a cash return on their
capital equity o f 2.9 per cent, slightly under
the 3 per cent rate which had been main­
tained in the preceding three years.
In 1953, one-third o f all the assets of the
average mem ber bank consisted o f loans
to customers. This one-third of total assets
provided almost tw o-thirds o f total earn­
ings— 60.7 cents o f every earnings dollar.
Over one-third o f all assets was in the form
of U. S. Government securities, but this onethird contributed less than twenty-five
cents to each earnings dollar.
On the expense side, the amount o f in­
terest paid on time deposits took a real
spurt in 1953. Thirteen and a half cents
o f each earnings dollar went to meet this
mounting cost; in 1952 interest payments
took 12.5 cents per dollar o f earnings. A
portion of the increased cost resulted from
larger amounts held on deposit in savings
accounts at the District’s m ember banks A
greater portion, however, probably came
from a higher rate o f interest paid by many
o f the banks in keeping with other interest
rate developments.

Farmers’ Income Declined
Fifth District farm ers had a further drop
in farm income in 1953 fo r the second con­
secutive year. The level o f farm product
prices has been falling most of the time
since the post-Korean peak was reached in
early 1951, while prices paid by farmers
have dropped to a much smaller extent.
Farm income has been low er despite the
generally high over-all level o f farm mar­

Fifth District farm income from livestock and livestock
products w a s fa irly evenly distributed throughout the
A year. Income from crops w a s unevenly distributed, with
] nearly three-fourths com ing w ithin the four month
period of A u gu st-N o v e m b e r. Since about three dollars
out of five come from crops, the se ason al pattern for
total farm income rather closely resembles the pattern
for crops.


Taking one consideration with another,
the year 1953 was a m em orable one fo r the
Federal Reserve Bank o f Richm ond and its
Baltimore and Charlotte branches. As it
was a year o f record or near-record busi­
ness in the Fifth District, so was it a year
o f record or near-record busy-ness at the
Federal Reserve Bank and branches that
serve the District.
The figures on the volum e o f principal
operations on Page 20 show an increase in
activity in almost every item. The com ­
parative statements on Pages 22 and 23
also reflect a busy year. But these figures
represent only the routine things— fo r al­
most tw o score years the bank has handled
checks, shipped money, reported earnings,
and paid dividends— and the only rem ark­
able thing about them is the evidence o f
satisfying and, it could be said, astonishing
Other things, operational and otherwise,
took place during the year. For instan ce:
In July the Federal Reserve Bank o f
Richm ond becam e the nerve-center o f the
Federal Reserve System’s Leased W ire net­
w ork. This operation is described on
Pages 8 and 9 o f this report.
In the same month the bank, as a service
to the Treasury, took over the destruction
o f unfit United States Notes and Silver Cer­
tificates fo r the Fifth District. This pro­
cedure is outlined on Page 15.


Tow ard the close o f the year the bank
was setting up a new office to accept and
hold deposits o f the thousands o f post
offices o f the Fifth District.
Outside the operational field there were
other new departures. F or instance:
Early in the year the bank produced an
educational motion picture— a treatise on
the ups and downs o f the dollar called
“ Y our M oney’s W orth .”
(See Page 18.)
In June, fo r the first time in history, the
Conference o f Presidents of the Federal Re­
serve Banks met here. The president of
this bank is the chairman o f that organi­
zation which is instrumental in the develop­
ment o f Federal Reserve policy.
In D ecem ber the bank conducted a Cen­
tral Banking Seminar fo r teachers o f m on­
ey and banking in Fifth District colleges.
The end o f 1953 brought to an end seven­
teen years o f service to the bank by Charles
P. M cCorm ick, who retired as a director
and chairman o f the board.
He was succeeded as chairman and F ed­
eral Reserve A gent by John B. W oodw ard,
Jr., chairman o f the board o f the N ew port
News Shipbuilding and Dry D ock Com ­
pany, a Class C director and deputy chair­
man since 1949. W . G. W ysor, m anage­
ment counsel o f Southern States C oopera­
tive, Inc., Richm ond, a Class C director
since 1937, was named deputy chairman.
A lon zo G. Decker, Jr., vice president o f the

Black and D ecker M anufacturing Com­
pany, was appointed a Class C director.
In N ovem ber the m em ber banks elected
W m . A. L. Sibley, vice president and treas­
urer o f M onarch Mills, Union, South Caro­
lina, a Class B director to succeed Cary L.
Page, president and treasurer o f Jackson
Mills, W ellford, South Carolina, who re­
tired from the board after six years o f serv­
ice on D ecem ber 31. John A. Sydenstricker, executive vice president o f the
First National Bank in Marlinton, W est
Virginia, was re-elected to his fifth term as
Class A director.
New directors named at the branches
were, at Baltimore, Clarence R. Zarfoss,
vice president o f the W estern M aryland
Railway Company, appointed to succeed
Mr. D ecker on January 1, 1954, and, at
Charlotte, T. Henry W ilson, president and
treasurer o f H enredon Furniture Industries,
Inc., M organton, North Carolina.
January 8, 1954, W illiam H. Grier, execu­
tive vice president o f the R ock Hill Print­
ing and Finishing Company, R ock Hill,
South Carolina, was appointed to the Char­
lotte branch board.]
The year also brought the retirement o f
First V ice President John S. W alden, Jr.
Mr. W alden had been with the bank fo r
more than thirty-four years and had been
first vice president since 1936. He was
succeeded in office by Edw ard A. W ayne.






The a b o v e

m ap

sho w s the Federal

netw ork w hich

Reserve Leased

sp a n s the continent.


P h oto grap hs

are view s o f the Sw itch in g Center in operation.


p an el keeps the o p e ra tor in constant touch w ith all o f the
points on the network.

One o f the Federal Reserve Banks’ ma­
jo r contributions to the efficiency o f the
Am erican banking system, and une little
known to the public generally, is the opera­
tion o f the Federal Reserve Leased W ire
network fo r the quick transfer o f funds.
Millions o f dollars in bank credit are
shifted about the country daily— in a mat­
ter o f minutes— over this network.
In 1953, with the installation o f a new
electronic Switching Center here, the F ed­
eral Reserve Bank of Richm ond becam e the
headquarters o f this vast com plex, which
links together forty-six stations in thirtyseven cities throughout the nation, bring­
ing the twelve Federal Reserve Banks and
their tw enty-four branches— and through
them the nearly 7,000 com m ercial member
banks— within seconds o f each other. In
addition, the Leased W ire system serves
the Federal Reserve System’s Board of
Governors, the W ashington and Chicago
offices o f the United States Treasury, and
the Reconstruction Finance Corporation
and the Commodity Credit Corporation.
Astronom ical figures are com m onplace to
the people concerned with the Leased W ire
operation. Over this netw ork in 1953 a
total o f $788,211,526,290.57 was trans­
ferred. Seven hundred and eighty-eight
billion dollars is almost three times the size
o f the national debt. It is almost $5,000
fo r every person in the United States.
As a service to its m ember banks o f the
Fifth District, the Federal Reserve Bank of
Richm ond in 1953 handled 86,675 o f their

messages, transferring $33,048,412,526.69
in funds via the Leased Wire. That was
an average o f some $130,000,000 daily.
This, in outline, is the transfer pro­
cedure : A customer of a m ember bank in
North Carolina needs to get $5,000 to Min­
neapolis quickly to com plete a business
deal. His bank asks the Federal Reserve
Bank to transfer the funds. The Federal
Reserve Bank, deducting the $5,000 from
the member bank’s reserve account here,
wires the Minneapolis Reserve Bank to
credit the sum to the account o f the desig­
nated bank there, with notice that it is fo r
the concern with which the North Caro­
linian is transacting his business. The en­
tire operation might be handled in less than
half an hour.
The Leased W ire service is not new, but
the system inaugurated in 1953 is new and
unique. D eveloped by the Bell Telephone
Laboratories and provided to the Federal
Reserve under contract by the American
Telephone and Telegraph Company, it is
a teletypew riter communications system al­
most entirely automatic in operation. A
coded message typed at the Jacksonville
branch o f the Atlanta Federal Reserve
Bank, fo r example, is fed into a machine
on punched tape and is transmitted instant­
ly at a rate o f 75 words a minute to any
one, several, or all of the stations on the
network, passing through the Switching
Center at Richmond to its destination “ un­
touched by human hand.”

During the course o f a year hundreds of
visitors are taken on guided tours of the
Federal Reserve Bank o f Richm ond and its
Baltimore and Charlotte branches, the visi­
tors including bankers, business people,
w om en’s groups, college classes, high
school students, and occasionally some
younger fry, like the lively pack of Cub
Scouts that came into the Head Office re­
cently. These lads were particularly in­
terested in the shooting irons of the Protec­
tion Force and the fascinating gadgets in
the furnace room and repair shops, but to
avoid short-circuiting their educational
tour the guides took them also through
some o f the banking areas, among these the
Transit, or check collection, Department.
Here the guide rem arked casually that
figures indicating the total dollar amount
o f the checks that w ould be handled by the
bank and its branches in 1953 would prob­
ably add up to more than $70 billion.
Said one o f the young tourists, incred­
ulously: “ There ain’t that much m on ey !”
W ell, there ain’t. A t least not in fo ld ­
ing money and jingling coin. The total
volume o f currency and coin in circulation
late in 1953 was some $30,807,000,000 for
the United States as a whole.

The important thing is, though, that that
$70 billion— in credit— does exist, does
flow, and that the business o f handling
money in the form o f checks is one o f the
most significant features o f the Am erican
banking system and, fo r that matter, the
fam iliar Am erican w ay o f life.
As it turned out the bank and its
branches in 1953 collected the huge total
o f $73,205,707,000 in checks, almost $5 bil­
lion more than in 1952, the previous record
year. That was a daily average (299 days)
o f $244,835,140. The average amount per
item was $333.

Acres of Checks
The total represented 219,709,000 indi­
vidual pieces of paper, an increase o f ten
million over 1952. Laid end to end these
pieces o f paper would make a continuous
ribbon some 21,000 miles lon g ; spread out
as a single sheet they w ould cover an area
o f some 420 acres, almost five times the
size o f the average Fifth District farm .
A breakdow n o f the figures by office
shows that the Richmond Head Office han­
dled 112,985,000 checks amounting to $39,011,318,000; Baltimore 60,859,000 amount­
ing to $16,342,211,000; and Charlotte 45,865,000 amounting to $17,852,178,000.

M Ml Ml M

The vast changes in the dollar am ount o f checks handled by the Federal Reserve Bank of Richmond a n d its Baltim ore and
Charlotte branches is illustrated in this chart, which show s the month by month totals for the boom year 1929, the deep
depression year 1933, an d the most robust boom year of all time, 1953. Total am ount in 1929 w a s $14,118,820,000; in 1933
it w a s $7,659,951,000, an d in 1953 it w a s $73,205,707,000.

A significant clutch o f figures, these
point up a number o f things that are taken
as com m onplace in the Am erican econom y
— fo r instance, the w hopping amount o f
m oney that flows about the country con­
stantly in the form o f checks and the part
played by the Federal Reserve Banks in
sim plifying and expediting this steadily
increasing flow.
A hundred years ago actual currency and
coin were in much more general use in the
transaction o f business. Since then the
use o f bank deposits has increased to such
an extent that some 90 per cent o f the na­
tion’s business today is carried on by check
payments— the estimated dollar volume o f
checks written in the United States in a

year is upward o f $1,750,000,000,000 (one
and three-quarters trillion dollars).

The Travels o f a Check
The use o f bank deposits is facilitated by
the services o f the Federal Reserve Banks
in clearing and collecting checks through
the reserve accounts o f m em ber banks.
This is the w ay that system op era tes:
Suppose a shoe m anufacturer in Lynch­
burg, Virginia, sells $1,000 worth o f shoes
to a dealer in Dry Gulch, Texas, and re­
ceives in payment a check on a bank in Dry
Gulch. The check is an order on the Dry
Gulch bank to pay the Lynchburg concern
$1,000. The Lynchburg m anufacturer does



to the Federal Reserve Bank o f Dallas,
which in turn sends it along to the bank in
Dry Gulch. The Dry Gulch bank charges
the check to the account o f the depositor
who wrote it, and either remits the amount
to the Dallas Reserve Bank or authorizes
the Reserve Bank to charge the amount to
the reserve account o f the Dry Gulch bank.
The Federal Reserve Bank o f Dallas there­
upon credits the Federal Reserve Bank of
Richm ond, and the Richmond Reserve Bank
credits the account of the Lynchburg bank.

not want to travel to Texas to get his mon­
ey, nor does he want to pay postage and in­
surance on a shipment o f currency. He
does not ordinarily want currency at all.
W hat he wants is to have the $1,000 cred­
ited to his bank account. So he deposits
the check in his bank. The Lynchburg
bank does not want currency fo r the c h e c k ;
it wants credit in its reserve account at the
Federal Reserve Bank o f Richm ond.
So it sends the check to the Richm ond
Reserve Bank. There the check is proved
and recorded and forw arded, along with
others drawn on banks dow n Texas way,

So, without the exchange o f any fold in g
money at all, the $1,000 from the bank ac­
count o f the Dry Gulch merchant is trans­
ferred to the bank account o f the Lynch­
burg m anufacturer. And it doesn’t take
very long. The check itself gets prom pt
handling all along the way. From the time
the Lynchburg firm deposits the check until
it gets back home to be deducted from the
Dry Gulch retailer’s account is only three
or fou r days, m aybe a little longer if w eath­
er slows the air mail from Richm ond to
Dallas. But the Lynchburg bank and the
shoe m anufacturer get credit fo r the $1,000
within tw o days after the check reaches the
Richm ond Reserve Bank, since a system de­
signed to expedite check collection enables
the Reserve Bank to credit the account of
the Lynchburg bank with the amount of
the checks received according to a pre­
arranged time schedule.

A Lot o f Paper W ork
Since promptness is so important in col­
lecting checks, member banks with a con­
siderable volume o f checks payable in

Ml Ml M_ <

other Federal Reserve districts may send
those checks directly to the Federal Re­
serve Banks o f those districts, in a sense by­
passing the local Reserve Bank. The
Lynchburg bank, therefore, might have
sent the $1,000 check directly to the F ed­
eral Reserve Bank o f Dallas, at the same
time notifying the Richm ond Reserve Bank
o f the action. The Richm ond Reserve Bank
w ould have credited the Lynchburg bank’s
reserve account, just as if the check had
cleared through Richmond.
This same procedure is follow ed at the
Baltimore and Charlotte branches, which
handle the checks and hold the reserve ac­
counts o f the m ember banks in their re­
spective territories.
W ith the hundreds o f millions o f dollars
in checks constantly flowing, the collection
procedure naturally involves a great deal
o f bookkeeping, o f debiting here and cred­
iting there. The Lynchburg bank got cred­
it in its account in the Richm ond Reserve
Bank fo r the Dry Gulch m erchant’s $1,000
and fo r hundreds o f other checks on the
same day. But also on the same day its
reserve account was charged fo r the many
checks its customers had written. Con­
stantly adjusting figures, the Federal Re­
serve Bank keeps tab to the penny each
day on the amount in the reserve accounts
o f hundreds o f member banks.
The Federal Reserve Banks themselves
settle their accounts with each other daily,
m aking telegraphic transfers o f funds
through the Interdistrict Settlement Fund
in W ashington. The Leased W ire network,

mentioned on Pages 8 and 9 o f this report,
is kept humming by this daily adjustment.

Collection Steadily Improving
The Federal Reserve Banks, w orking
with the Am erican Bankers Association
and the com m ercial banks o f the nation,
have made great progress in sim plifying
and otherwise im proving the process o f
clearing and collecting checks, in transfer­
ring money about the country. In days
gone by it was necessary to ship currency
and gold between financial centers— at
great cost, great risk, and great loss o f
time. Now, with the Federal Reserve’s
constantly im proving system, the means by
which payments are made fo r goods and
services and by which m onetary obligations
are settled is cheaper, faster, and safer.
Included in the w ork o f the Transit D e­
partment is the handling o f large numbers
o f Government checks, the dollar amount
o f which also runs into high figures. Last
year the Federal Reserve Bank o f Rich­
mond and its tw o branches handled
30,781,000 o f Uncle Sam’s checks (arm ed
forces, social security, etc.) in an amount
totalling $5,634,901,000. Both totals ex­
ceeded the 1952 figures o f 29,699,000 items
amounting to $5,235,191,000.
Under a new procedure instituted in
1952 Transit also handles United States
Postal Money Orders. Last year the bank
and its branches processed 28,847,000 of
these, $505,849,000 in dollar amount. The
previous year’s figures had been 29,427,000
items and $498,519,000.

M Ml Ml

Further evidence o f prosperity, or at
least w ell-being, in the Fifth District in
1953 may be found in figures of the Money
Departments o f the Federal Reserve Bank
and its Baltim ore and Charlotte branches.
In response to the demands of people for
currency and coin these departments han­
dled more than ever before. The total of
$5,672,118,202 in currency and coin re­
ceived and paid out exceeded 1952’s rec­
ord total by $105,369,776.
Interestingly, the gain was all at the
Baltim ore and Charlotte offices; the Head
Office handled few er dollars and cents than
in 1952. In amount o f currency received
and paid out R ichm ond’s total in 1953 was
$2,837,655,487 against $2,861,933,184 in
1952; Baltim ore’s $1,571,117,783 against
$1,503,242,647; Charlotte’s $1,160,551,444
against $1,097,718,177.
In coins received and paid out Rich­

m ond’s total amounted to $23,334,653
against $34,808,342 in 1952; Baltim ore’s
$64,073,440 against $54,615,290 in 1952;
Charlotte’s $15,385,395 against a total of
$14,430,786 in 1952.
Thus Richm ond’s total “ handle” o f cur­
rency and coin received and paid out was
down $35,751,386 from 1952; while Balti­
m ore’s was up $77,333,286 and Charlotte’s
up $63,787,876.
Reasons fo r the decline in the Head
Office territory and the increases in the
Baltimore and Charlotte areas are hard
com e by. They depend upon so many vari­
able factors, not excluding even weather
conditions, that pin-pointing them accurate­
ly is not possible.
It is possible, however, to relate the in­
crease in the use of spending money to such
things as the generally robust state o f busi­
ness and virtually full employment.

1929 w a s the peak year of the boom of the 1920s. 1933 w a s the darkest year of the grea t depression.
1953 w a s the b igge st boom year the nation h ad ever known. The chart show s the m arked contrast in
the public's d em an ds for currency an d coin in those significant years, a s represented in the do llar
am ount of currency and coin shipped to a n d received from member banks month by month by the
Federal Reserve Bank o f Richmond a n d its Baltim ore a n d Charlotte branches.



“ They have money to burn at the Federal
Reserve Bank o f Richm ond. And that’s
what they’re doing— burning $700,000
worth o f money every w orking day.”
So read the lead on a Page One story in
a Richm ond new spaper one day in 1953.
The story caused quite a stir. It was the
first public mention made in this area of
the new currency destruction procedure
w orked out between the Treasury and the
Federal Reserve Banks. U nder the new
system, unfit United States Notes and Silver
Certificates are destroyed by burning at the
Federal Reserve Banks instead o f being
sent back to W ashington to be burned.
That doesn’t mean, as the new spaper ac­
count went on to say, that the money is fo r ­
ever lost. Unfit currency w ould be with­
drawn anyway— and replaced with crisp
new bills. So no m oney is being lost; in
fact, money is being saved. The Treasury
figures that a billion and a quarter pieces
o f worn out currency, making, if laid flat,
a stack as high as 900 W ashington Monu­
ments, will be verified and destroyed an­
nually by the tw elve Federal Reserve
Banks at substantial savings to the G ov­
ernment. Reduced shipping costs alone
are expected to save some $200,000.
In an incinerator especially installed for
the job , the Richm ond Reserve Bank de­
stroys an average o f $700,000 a day. Unfit
United States Notes and Silver Certificates
($1 to $10 denom inations) returned to the
Reserve Bank from com m ercial banks are
sorted, counted, and canceled, their face
value verified and recorded, and then
tossed into the 2800 degree gas furnace,
where they go up in smoke. The ashes are
inspected to make sure o f total destruction.
The Federal Reserve Bank does not de­
stroy its own Federal Reserve Notes. In
accordance with law, when these becom e
unfit they are destroyed at the Treasury.


As long as the Federal Government is in
debt, as long as it has to service its debt
regularly, and as long as it has to borrow
new funds from time to time, Fiscal A gency
is going to be a busy shop. As “ Fiscal
Agent fo r the United States Government,”
Federal Reserve Banks issue, service, and
redeem Governm ent securities o f all kinds.
The task o f handling the multitudinous
public debt operations involved is the spe­
cial province o f the Fiscal A gency Depart­
ments. Last year, to give an idea o f the
size o f the job , Fiscal A gency— at Rich­
mond, Baltim ore, and Charlotte— handled
around 13.8 million individual Savings


M illions
of Pieces

of Dollars

Bond transactions in connection with the
issuance, redem ption, and safekeeping of
these popular investments.
Regardless o f where sales or redem p­
tions o f Savings Bonds are made (m ost o f
the transactions occur at com m ercial banks
or other qualified issuing agents), a m ajor
portion o f the bookkeeping is done in the
Fiscal A gen cy Departments of the Federal
Reserve Banks. This is a responsibility
that required each o f the 13.8 million items
handled to be treated as carefully as
though it were the only one o f the year.
Although belittled by com parison with
the preceding figure, other Fiscal A gen cy
operations arising from servicing the pub­
lic debt add up to an impressive amount o f
work. A ll told, the three Fiscal A gency
Departments handled some 630,000 indi­
vidual items in processing Governm ent se­
curities other than Savings Bonds and in
perform ing such other services as paying
Governm ent coupons.
Another principal service perform ed by
Federal Reserve Banks as fiscal agent fo r
the Government is the receipt o f such funds
as withheld income taxes and payments by
buyers o f Government securities which are
recorded to the credit o f the Treasury in
the Treasury Tax and Loan Account. Dur­
ing 1953 operations in connection with
Treasury Tax and Loan Accounts required
Fiscal A gen cy to handle about 141,000
transactions with a total value o f over $4
The $271 million of U. S. S a v in g s Bonds issued in this
District in

1953 w a s

10.7% greater than


1952— the

largest a n n u al g a in o f the post W o rld W a r li period.


The Research Departm ent o f the Federal
Reserve Bank is a fact-finding— and inter­
preting— agency, charged with the respon­
sibility o f keeping the bank’s officers and
directors and the Board o f Governors o f the
Federal Reserve System supplied with cur­
rent, accurate inform ation on business and
credit conditions. The by-product o f this
w ork is a steady stream o f information o f
interest and value to bankers, businessmen,
farmers, and others, made a v a i la b 1 e
through the bank’s publications, through
the press and radio, through individual re­
ports, lectures and personal visits.
Econom ic research fo r Federal Reserve
policy form ation consists mainly o f the col­
lection and interpretation o f inform ation to
answer such questions as: W hat is the
current condition o f the econom y?
W hat
role is credit playing?
W hat changes are
in prospect?
W hat changes in Federal
Reserve policy are indicated or what would
be the effects o f some policy if adopted?
Much o f this inform ation comes from
Government agencies, trade associations,
and private reporting services. It comes
in quan tity; in 1953 the bank received (and
economists and statisticians studied) more
than 10,000 reports from such sources. In
addition, the bank collects credit and trade
statistics directly from banks and other
concerns all over the Fifth District. Dur­
ing 1953 its economists and statisticians
pored over some 23,000 reports from banks,
department, f u r n i t u r e , and appliance

stores, building inspectors, consum er loan
companies, and credit unions. Some o f
these reports contained as fe w as tw o items,
some as many as 440 separate entries.
From this avalanche o f m aterial the R e­
search Department supplied m ore than
1,000 reports to banks and business firms
and some 500 detailed reports to the Board
o f Governors, in addition to providing facts
and figures fo r upw ard o f 500 news re­
leases and data fo r bank publications.
O f particular interest to Fifth District
member bankers in 1953, as in other years,
was the involved com pilation o f mem ber
bank operating ratios, individual studies
made for each o f the nearly 500 m ember
banks o f the District.
In addition, members o f the departm ent’s
staff participated in the preparation and
presentation o f such bank-sponsored p r o j­
ects as the Central Banking Seminar and
the illustrated lecture program , “ Y our
M oney’s W'orth,” and in a series o f agri­
cultural credit meetings sponsored by the
North Carolina Bankers Association.
Several basic research projects were be­
gun in 1953: A study o f the seasonal
factors in individual m em ber bank loans
and deposits; a study o f the im pact o f real
estate finance on financial institutions; the
first of a series o f studies o f the industrial
structure o f areas o f the Fifth D istrict; and
a further study in the analysis o f inter­
regional flows o f funds.

if n

ii d

If it is true that one picture is worth a
thousand w ords (anyone who ever wrote a
thousand w ords w ould dispute it), then a
picture produced by the Federal Reserve
Bank o f Richm ond in 1953 is probably
w orth a fe w in an annual report on the
bank’s activities. Your Money’s W orth, a
38-minute, 16-mm. film in sound and color,
has proved a genuine contribution to eco­
nom ic education. It was written, acted,
and prod uced by this bank.
Based on an illustrated lecture program
designed to explain the factors making fo r
changes in the value o f money and the role
o f the Federal Reserve System in contribu­
ting to econom ic stability— a program de­
scribed by a professor o f money and bank­
ing as a “ full course in economics and
m onetary p olicy in one easy lesson” — the
m otion picture Your Money’s Worth was
released in A pril. Since that time it has
been seen by m ore than 50,000 persons—
bankers, business men and women, indus­
trial m anagers and employees, trade union
members, college and high school teachers
and students, Federal Government person­
nel, farm ers, and others.
It has been booked fo r showing at “ Ex­
plaining Y our Business” Seminars o f the


Chamber o f Commerce o f the United
States, and that organization is publishing
a promotional brochure to recom m end the
film to local cham bers o f com m erce in all
sections o f the country.
The Industrial College o f the Arm ed
Forces used the film fo r a period o f several
months in courses in econom ics. The Asso­
ciation o f Am erican Law Schools is includ­
ing Your Money’s W orth in a list o f selected
films recom m ended fo r classroom work.
Typical o f the comments that have been
made are th e se : From a Texas banker—
“ It is one o f the most splendidly presented
films on the background of inflation that
I have ever been privileged to view ” ; from
a W ilm ington, Delaw are industrialist—
“ W e are glad to add Your Money’s W orth
to the films we will be able to recom m end” ;
from a W isconsin industrial concern—
“ . . . a very excellent explanation o f the
function o f m oney and the various causes
o f the changes in value o f m oney” ; from a
Fifth District college dean— “ A very fine
film” ; from a North Carolina banker— “ A
telling story of the effects every action has
upon our m onetary system. I wish it could
be seen by every thinking person in our
com m unity.”

tenance. Most o f this w ork is done, fo r
econom ical reasons, by staff personnel.
The bank has its ow n m echanics, steamfitters, plumbers, electricians, carpenters,
painters, m e t a l- w o r k e r s , j a n i t o r s and
maids, and others to do the job s that seem
ever in need o f doing.
The Head Office, fo r instance, has 314
typewriters that must be kept in writing
condition. It has 229 calculating machines
of various kinds. It has 640 desks and
2,881 chairs. It has seventeen elevators.
It has a heating system o f fou r boilers and
an air-conditioning system with tw o main
units and eight sub-units. It has 432 win­
dows to be kept clean.
Every item o f physical property acquired
by the bank comes through the purchasing
office, from an $11,000 incinerator to 100for-a-nickel paper clips. In 1953, fo r ex­
ample, the purchasing office bought 27,480
pencils (and, in case o f error, 1,823
erasers), 907 typew riter ribbons, tw o auto­
mobiles, 424 bottles o f ink (only 26 o f them
red ink), 5,498 light bulbs, 445 mops, 8,500
pounds of soap, 71,000 pounds o f paper.
It also bought 12,000 aspirin tablets, anoth­
er necessity o f bank operation.

As may be deduced from the foregoin g
and follow in g pages, it takes a sizeable
organization to do the amount o f w ork that
is done in the Federal Reserve Bank. Be­
hind the fron t office and the operating de­
partments are the people whose w ork is
essential to keeping the wheels turning.
These are the people o f the General Serv­
ice, the Building and Equipment, and the
Printing and Supplies departments.
Buildings o f the size of the Head Office
and the Baltimore and Charlotte branches
require a considerable amount o f main­

O f particular im portance is the Head
Office’s printing shop, which does most o f
the printing o f the m i l l i o n s o f form s,
notices, announcements, pamphlets, and
publications o f the H ead Office and the
branches. The shop, equipped with a Lino­
type machine, 1,000 fonts o f hand type,
seven printing presses (flatbed, vertical,
and jo b ), and other paraphernalia o f the
trade, is capable o f turning out almost any
kind of printing jo b .
(M any visitors ask
whether it prints cu rren cy; it doesn’t.)
Am ong the printing shop’s productions
in 1953 w ere: 84,625 copies o f the bank’s
Monthly Review, 60,000 o f the news letter
Agricultural Items, 395,150 operating cir­
culars, announcements o f various kinds to
banking institutions, and 13,314,481 form s
for internal use. This annual report was
printed in the bank’s shop.



C h ec k s H andled :

2 1 9 ,7 0 9 ,0 0 0

2 0 9 ,7 1 1 ,0 0 0

A m o u n t ___________________________________________________________________________

$ 7 3 ,2 0 5 ,7 0 7 ,0 0 0

$ 6 8 ,4 0 1 ,7 7 2 ,0 0 0

N um ber

N o n c a s h C o l l e c t io n I t e m s R e c e iv e d :
N um ber


Am ount


5 77 ,0 00

6 4 7 ,0 0 0

1 7 8 ,9 1 2 ,0 0 0


1 7 7 ,4 0 2 ,0 0 0

T r a n s f e r s o f F u n d s fo r M e m b e r B a n k s :
(In clu d e s tr a n s fe r s b y w ire and oth er m eans)
N um ber


1 16 ,5 87


Am ount


$ 4 6 ,3 0 8 ,3 5 8 ,0 0 0

$ 4 2 ,8 8 8 ,6 0 7 ,0 0 0

T o ta l received fr o m F . R . B a n k s and B r a n c h e s __________________________

$ 4 7 ,1 3 0 ,6 9 0 ,0 0 0

$ 4 5 ,9 9 7 ,5 6 3 ,0 0 0

T o ta l p aid to F . R . B a n k s and B r a n c h e s __________________________________

$ 4 7 ,0 7 7 ,1 4 6 ,0 0 0

$ 4 5 ,9 5 9 ,8 3 6 ,0 0 0

I n t e r d is t r ic t S e t t l e m e n t F u n d D a il y T r a n s it C l e a r i n g s :

C u r r e n c y a n d C o in H a n d l e d :
C u rren cy received (in clu d in g new notes) :
4 4 6 ,9 2 2 ,2 1 3

4 4 0 ,9 7 5 ,7 8 9

$ 2 ,7 9 9 ,9 8 6 ,5 6 1

$ 2 ,7 3 0 ,7 6 4 ,8 1 0

N u m b e r o f n o t e s ________________________________________________________________
Am ount


C u rren cy p aid out
(in clu d in g notes retu rn ed fo r redem ption) :
4 4 3 ,7 8 1 ,9 8 4

4 4 0 ,6 5 7 ,8 1 8

$ 2 ,7 6 9 ,3 3 8 ,1 5 3

$ 2 ,7 3 2 ,1 2 9 ,1 9 8

N u m b e r o f n o t e s ________________________________________________________________
Am ount


Coin received (in clu d in g new coin) :
N u m b e r o f c o i n s ________________________________________________________________
Am ount


6 9 2 ,7 5 5 ,2 9 8

6 6 5 ,1 5 3 ,7 7 7

5 1,7 9 3 ,0 9 9


5 1,9 6 9,4 0 4

Coin p aid out
(in clu d in g coin retu rn ed fo r redem ption ) :
N u m b e r o f c o i n s ________________________________________________________________
Am ount


6 95 ,0 8 9 ,5 2 1

6 5 5 ,7 3 9 ,9 8 6

5 1 ,0 0 0 ,3 8 9


5 1,8 8 5,0 1 4

U . S . G o v e r n m e n t S e c u r it ie s I n c l u d in g A r m e d F o rces L ea v e
B o n d s ( E x c l u s iv e of S a v in g s B o n d s ) I ssued , E x c h a n g e d a n d
R edeem ed :
N um ber


1 4 1 ,0 0 0


A m ount


$ 4 ,6 1 7 ,0 3 5 ,0 0 0

$ 4 ,5 3 8 ,0 5 9 ,0 0 0

U . S . S a v in g s B o n d s— I s s u e d :
N um ber


Issu e p r i c e _______________________________________________________________________

5 ,2 1 1 ,00 0

5 ,6 2 0 ,0 0 0

2 7 0 ,6 1 6 ,0 0 0


4 0 8 ,6 0 4 ,0 0 0


2 4 4 ,4 9 4 ,0 0 0


3 5 6 ,2 4 8 ,0 0 0

U . S . S a v in g s B o n d s— R e d e e m e d :
N um ber


R edem p tion v a l u e ______________________________________________________________


6 ,7 9 1 ,0 0 0

7 ,3 9 7 ,0 0 0

There are balance sheets, and then there
are balance sheets. To make head or tail
o f many o f them, regrettably, takes a prac­
ticed eye, but balance sheets o f Federal Re­
serve Banks may be even more puzzling to
decipher. Take a look at the Compara­
tive Statement o f Condition on the next
page, fo r exam ple. Under “ Assets” you
will see an item called “ Gold Certificates.”
Outside the Federal Reserve Banks no
other banking institution lists these in its
balance sheet. W h y ?
Briefly, this is the answer: In 1933 the
Government ordered all privately held gold
turned over to the Treasury. Then in 1934
Congress passed an act that prohibited the
ownership and circulation o f gold and in
effect “ nationalized” it as the base fo r our
circulating money. Only Federal Reserve
Banks can get close to the nation’s mone­
tary gold now, and even they are held at
arm ’s length— their holdings are in gold
certificates and entries on the Treasury’ s
books representing claims to gold certifi­
cates. Very little actual gold is ever seen.
Each Reserve Bank must have gold certifi­
cates equal to 25 per cent o f its deposit and
note liabilities. On D ecem ber 31, 1953,
this bank had gold certificates equal to 42.1
per cent o f its deposits and note liabilities
— sufficient to permit considerable expan­
sion in the nation’s basic money, should
the need arise.
Also, you will note that this bank’ s hold­
ings o f U. S. Government securities declined
from the total o f the year before. A ctual­
ly, the Federal Reserve System as a whole
made net purchases during 1953. Pur­
chases by the System increase member
bank reserves— the high-pow ered dollars
behind our deposit money.
(R ichm ond’s
decline m erely reflects a reallocation o f
System holdings am ong the tw elve Reserve
Banks and does not affect these reserves.)
Under “ Liabilities” appears the item
Federal Reserve Notes, something else that
never appears as such in com m ercial bank

statements. Federal Reserve Notes are
paper money issued by the Federal Reserve
Banks fo r the spending m oney o f the na­
tion; about 85 per cent o f the country’s
paper money is in Federal Reserve Notes.
This money is backed by gold certificates
and Government securities. It gets into
circulation as calls fo r currency are made
upon the com m ercial banks that are mem­
bers o f the Federal Reserve System. These
banks, to supply the dem and fo r currency
in their areas, get the m oney from the
Reserve Bank, w hich charges the w ith­
drawals to their reserve accounts.
These reserve accounts are probably the
most important single item on a Reserve
Bank’s balance sheet, fo r they are the
medium through which the Federal Re­
serve can influence the nation’s credit and
money supply. W hen com m ercial banks
make loans or investments they add to the
money supply. The extent to which they
can make new loans and investments is g ov ­
erned by the amount o f m oney they have
in their reserve accounts; the amount, that
is, over and above the legally required re­
serve of dollars that is based on a stated
percentage o f deposits. The Federal Re­
serve, therefore, by regulating the supply,
availability, and cost o f reserve funds exer­
cises a monetary influence with effects felt
throughout the entire econom y.
One thing worth rem em bering is this:
The Reserve Banks are em pow ered by law



T O Q iin


n u r

n . o vv

v n A M n ir



4-1% ^

tu t;

jl O i i i i

^ -P

u i

e lt n t jr

Federal Reserve Notes (cu rren cy) or de­
posit balances at the Reserve Banks (com ­
monly called reserve fu n d s). W hen the
Reserve Banks purchase securities or make
loans to member banks they use such new ­
ly created money to make payment. That
is, whenever the Reserve Banks acquire
earning assets they make additional reserve
funds available to m em ber banks— they do
not, and cannot, use fo r this purpose re­
serve funds already to the credit o f the
member banks.







Gold certificates


31, 1953

$ 1 ,0 6 4 ,8 9 1 ,9 4 9 .8 5

R edem p tion F u n d fo r F e d e ra l R eserve notes-




31, 1952

9 8 6 ,3 4 7 ,7 1 0 .8 6

7 6 ,9 7 4 ,0 5 0 .7 8

7 6 ,7 3 2 ,2 5 8 .2 6

1 ,1 4 1 ,8 6 6 ,0 0 0 .6 3

1 ,0 6 3 ,0 7 9 ,9 6 9 .1 2

O th er ca sh _________________

2 2 ,5 7 9 ,7 7 7 .9 3

2 7 ,6 1 6 ,0 7 1 .8 2

D iscou n ts and advances-

1 ,95 0 ,0 0 0 .0 0

5 ,7 0 4 ,5 0 0 .0 0

6 0 ,0 0 0 .0 0

5 5 ,9 7 2 .8 9


In d u stria l


G ol d Certificate R es erves .

lo a n s__________

U . S. G O V E R N M E N T S E C U R I T I E S :
B i l l s ________________________________________

1 5 3 ,9 6 2 ,0 0 0 .0 0

5 0 ,1 4 8 ,0 0 0 .0 0

C e r t ific a t e s _______________________________

3 4 4 ,9 2 1 ,0 0 0 .0 0

3 3 7 ,6 5 0 ,0 0 0 .0 0

N o t e s ______________________________________

7 8 6 ,5 3 6 ,0 0 0 .0 0

9 3 0 ,9 3 5 ,0 0 0 .0 0

B onds

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

3 0 5 ,6 3 1 ,0 0 0 .0 0

1 ,5 0 1 ,3 3 8 ,0 0 0 .0 0

1 ,6 2 4 ,3 6 4 ,0 0 0 .0 0

1 ,5 0 3 ,3 4 8 ,0 0 0 .0 0

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

T o t a l U . S. G
T otal





s e c u r i t i e s ____________

D u e fr o m fo re ig n b a n k s _________________

1 ,13 4 .38

1 ,1 5 7 .0 7

F ed era l R e serv e n otes o f oth er banks

3 0 ,1 4 7 ,3 2 0 .0 0

5 0 ,7 1 0 ,3 2 0 .0 0

U ncollected cash ite m s__________________

3 3 5 ,5 2 9 ,3 3 2 .9 9

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


p re m is e s____________________________

4 ,7 1 9 ,4 0 2 .5 6

4 ,8 3 9 ,1 0 5 .4 9

O ther

a s s e ts_______________________________

8 ,8 5 2 ,4 3 6 .0 9

1 0 ,8 8 7 ,1 0 4 .0 0

$ 3 ,0 4 7 ,0 4 3 ,4 0 4 .5 8

$ 3 ,1 3 1 ,7 0 7 ,4 7 5 .8 7

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

$ 1 ,8 8 7 ,0 6 2 ,6 1 0 .0 0


F ed era l R e serve n o tes__________________
D E P O S IT S :
M em b er ban k — reserv e accoun ts___

8 2 7 ,2 5 5 ,3 8 9 .3 7

8 4 9 ,0 2 4 ,5 5 8 .8 6

U . S . T re a s u r e r — g e n e ra l account

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

2 8 ,7 4 3 ,4 1 3 .1 7

F o r e ig n _________________________________

2 0 ,4 6 0 ,0 0 0 .0 0

2 6 ,6 9 8 ,5 0 0 .0 0

O th er ____________________________________

6 ,76 2 ,4 1 4 .2 4

7 ,7 0 7 ,0 6 8 .8 3

8 6 5 ,6 0 4 ,3 7 5 .0 9

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

D e fe rre d a v a ila b ility cash item s.

2 7 7 ,3 8 4 ,5 3 7 .5 7

2 8 0 ,7 9 1 ,1 8 0 .3 4

Other lia b ilitie s_____________________

7 6 2 ,4 4 7 .9 9

6 8 9 ,2 4 0 .9 3

2 ,9 9 2 ,8 4 4 ,6 3 0 .6 5

3 ,0 8 0 ,7 1 6 ,5 7 2 .1 3




e p o s i t s _________


C a p ital p aid in __________

1 1 ,6 5 5 ,2 0 0 .0 0

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

S u rp lu s

(S e ctio n 7 ) ___

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

2 9 ,2 4 7 ,9 3 7 .1 2

S u rp lu s

(S e ctio n 1 3 b ) .

3 ,3 4 9 ,1 4 4 .8 1

3 ,3 4 9 ,1 4 4 .8 1

O ther ca p ita l accou n ts.

7 ,4 4 4 .9 1 3 .5 4

7 ,3 8 0 ,0 7 1 .8 1

$ 3 ,0 4 7 ,0 4 3 ,4 0 4 .5 8

$ 3 ,1 3 1 ,7 0 7 ,4 7 5 .8 7

1 ,1 9 6 ,6 0 5 .2 4

1 ,0 0 9 ,3 9 8 .5 6

5 1,1 9 0 .5 5

7 0 ,4 2 2 .3 7


C o n tin g en t lia b ility on A ccep tan ces P u rch ased fo r F o reig n C orrespondents
In d u stria l L o a n


C o m m itm en ts_____________________________________________________

E a r n in g s :

195 2


D iscou n ts an d a d v a n ce s________________________________________________
In te re st earned on in d u strial loa n s under Section 1 3b ____________


7 1 0 ,2 9 7 .1 1



F e es received on com m itm en ts to m ake in d u strial lo a n s ____

7 0 5 ,5 1 5 .1 5
4 ,2 5 5 .0 5

2 ,2 7 4 .2 0
5 6 0 .3 8

In te re st on U . S . G o vern m en t secu rities___________________________

5 9 5 .8 8

3 3 ,3 4 3 ,1 0 5 .5 5


2 9 ,6 3 6 ,3 4 9 .0 3

In te re st on oth er U . S. G o vern m en t secu rities___________________________

4 .4 1 7 .8 1

O th er e a r n in g s ________________________________________________________

1 1 ,1 2 7 .9 6

7 .0 5 6 .8 2

3 4 ,0 6 7 ,3 6 5 .2 0

3 0 ,3 5 8 ,1 8 9 .7 4

O p e ra tin g exp en ses (in clu d in g d epreciation on bank p rem ises) a fte r ded ucting
reim b u rsem en ts received f o r certain F is c a l A ffen cv and other expenses

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

6 ,3 8 6 ,6 3 0 .0 7

A sse ssm e n ts fo r exp en ses o f B o a rd o f G o v e rn o rs_______________________ ---------------------------

2 0 6 ,4 0 0 .0 0

2 0 9 ,1 0 0 .0 0

C o st o f F e d e ra l R eserve C u rre n cy__________________________________________

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

9 6 4 ,7 8 3 .7 2

T o ta l N e t E x p e n s e s ____________________________________________________

8 ,2 7 3 ,2 2 0 .1 2

7 ,5 6 0 ,5 1 3 .7 9

2 5 ,7 9 4 ,1 4 5 .0 8

2 2 ,7 9 7 ,6 7 5 .9 5

1 29 ,5 7 4 .0 4

1 3 0 ,4 9 7 .4 4

T o ta l C u rre n t E a r n in g s __________________________________
E xpenses :

C u rren t N e t E a r n in g s ___________________________________
A d d it io n s to a n d D e d u c t io n s f r o m C u r r e n t N e t E a r n i n g s :
P rofits on sales o f U . S. G overn m ent s e c u r itie s _____________

... ...

S u n d ry ad d ition s_______________________________________________________________
T o ta l

3 3.0 2

R etirem en t S y ste m

(a d ju stm e n t fo r revised benefits)



1 ,6 9 3 .1 0

1 29 ,6 0 7 .0 6

A d d itio n s______________________________________________________

1 3 2 ,1 9 0 .5 4

1 6 7 ,5 7 6 .4 3

S u n d ry deductions______________________________________________________________ ---------------------------

2 ,1 2 4 .1 8

2 .2 2 5 .0 8

1 69 ,7 0 0 .6 1

T otal D ed u ction s____________________________________________________

2 .2 2 5 .0 8

N e t A d d itio n s________________________________________________________
N e t D ed u ctio n s________________________


1 2 9 ,9 6 5 .4 6


4 0 ,0 9 3 .5 5

T r a n s f e r r e d t o R e s e r v e s f o r C o n t in g e n c ie s

6 4 ,5 7 8 .8 0

A v a il a b l e for D iv id e n d s , P a y m e n t to T r e a s u r e r of U . S. a n d S u r p l u s A c c o u n t
D ividen ds paid m em b er b a n k s______________________________________________________ ____________

5 5 ,1 8 0 .9 3

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

$ 2 2 ,8 7 2 ,4 6 0 .4 8



6 7 6 ,5 0 2 .0 0

6 4 3 ,1 4 0 .7 4

P a y m en t to T re a s u r e r o f U . S .— In te re st on o u tsta n d in g F ed era l R eserve n o te s______

2 2 ,5 1 1 ,3 9 2 .2 7

2 0 ,0 0 6 ,0 7 0 .3 8

A d d itio n to S u rp lu s A cco u n t (S ection 7 ) ______________ ______________________ ______ _________

2 ,5 0 1 ,5 7 8 .4 6

2 ,2 2 3 ,2 4 9 .3 6

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

$ 2 2 ,8 7 2 ,4 6 0 .4 8

$ 2 9 ,2 4 7 ,9 3 7 .1 2

$ 2 7 ,0 2 4 ,6 8 7 .7 6

T ota l



B a la n ce a t close o f p revio u s y e a r
A d d ition a / c p rofits f o r y e a r
R ii.A N f iE







2 ,2 2 3 ,2 4 9 .3 6

$ 3 1 ,7 4 9 ,5 1 5 .5 8

C lose of C u rr en t Y ear

2 ,5 0 1 ,5 7 8 .4 6

$ 2 9 ,2 4 7 ,9 3 7 .1 2

(R e p re se n tin g am ou nt p aid in, w hich is 5 0 % o f am ou n t su bscribed )

Issu ed d u rin g the y e a r




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

. .


6 6 8 ,4 5 0 .0 0

6 3 8 ,3 5 0 .0 0

1 1 ,6 8 2 ,2 0 0 .0 0

B alan ce a t close o f p reviou s y e a r

1 1 ,0 2 1 ,2 5 0 .0 0

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

. _ ___

2 7 ,0 0 0 .0 0

7 ,5 0 0 .0 0

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 1 ,6 5 5 ,2 0 0 .0 0

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

Cancelled d u rin g the y e a r


.. ..


John B. W o o d w a rd , Jr.

Ch airm an o f the Board an d

W. G. W ysor

Deputy C h airm an

James D. Harrison


First N a tio n a l Bank
Baltimore, M a r y la n d

Federal Reserve Agent

of the Board



W arren S. Johnson

John A. Sydenstricker

Executive Vice President
First N a tio n a l Bank in M arlin ton
M arlinton, W est V irgin ia

Edwin Hyde

Miller & Rhoads, Inc.
Richmond, V irg in ia

H. L. Rust, Jr.

H. L. Rust C o m p a n y
W ash ingto n , D. C.

W m . A. L. Sibley

Vice President an d Treasurer
M onarch M ills
Union, South Carolin a

Alonzo G. Decker, Jr.

Vice President
The Black an d Decker M a n u fa ctu rin g C o m p an y
Towson, M a r y la n d

John B. W o o d w a rd , Jr.

C h airm an of the Board
N e w p o rt N e w s Sh ip b u ild ing and Dry Dock C o m p an y
N e w p o rt N ew s, V irgin ia

W. G. W yso r

[2 -5 1

Investment Counselor
Peoples S a v in g s Bank and Trust C o m p an y
W ilm ington, North C a ro lin a

M a n a g e m e n t Counsel
Southern States Cooperative,
Richmond, V irgin ia

- .......—-j'



Robert V. Fleming

Ch airm an

of the Board

R iggs N a tio n a l Bank
W a sh in g to n ,


D. C.




*1*1 * 1

H u gh



Ed w a rd A. W a yn e

First Vice President

R. W . Mercer

Vice President a n d Cashie r

C. B. Strathy

Vice President a n d Secretary

Robert L. Cherry

Vice President

Ch arle s W . W illiam s


Vice President

K. Brantley W atso n

Vice President

N. L. A rm iste ad


D o n a ld

Vice President

F. H agn e r


A u b re y N. Heflin

Vice President a n d

Upton S. M artin

G e ne ral

Vice President

R. S. Brock, Jr.

G eneral A u d ito r

Thom as 1. Storrs

A ssistan t V ice President

J. De w e y D a a n e

A ssistan t V ice President

Joseph M . N o w la n

A ssistan t Vice President

John L. N osker

A ssistan t Vice President

Jam es W . Dodd, Jr.

A ssistan t Vice President

G. H aro ld Snead

Chief Exam iner

E d w a rd

A ssistan t C ash ie r

W aller, Jr.

W ythe B. W a k e h a m


J. G. Holtzclaw, C h airm an

A ssistan t C a sh ie r

H. Ernest Ford

A ssistan t C ashie r

Robert G. H o w ard

A ssistan t C a sh ie r

V irg in ia Electric an d
Richmond, V irgin ia

Pow er C o m p a n y

O verton D. Dennis

Dom inion O il C o m p an y
Richmond, V irgin ia

Ross Puette

C a ro lin a Paper Board Corporation
Charlotte, North Carolin a

W a lk e r D. Stuart

Richm ond H a rd w a re C o m p a n y
Richmond, V irgin ia

John L. Whitehurst

President a n d Treasurer
Burt M a c h in e C om pan y, Inc.
Baltimore, M a ry la n d




Charles W . Hoff

Union Trust C o m p a n y of M a r y la n d
Baltimore, M a r y la n d

Charles A . Piper

The Liberty Trust C o m p a n y
C um berland, M a r y la n d

Lacy I. Rice

The O ld N a tio n a l Bank
M a rtin sb u rg, W est V irg in ia

H o w ard M . Taylor, Jr.,
Ch airm an

President an d Treasurer
International B edding C o m p a n y
Baltimore, M a ry la n d

Stanley B. Trott

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

Clarence R. Z a rfo ss

Vice President
W estern M a r y la n d R a ilw a y
Baltimore, M a r y la n d


Com pany

D on ald F. H a gn e r


A. A. Stew art, Jr.

C ashier


A. C. W ienert

A ssista n t C ashier

B. F. A rm stro n g

A ssista n t Cashier

E. R iggs Jones, Jr.

A ssista n t Cashier


G e orge S. Crouch

C h airm a n of the Board
Union N a tio n a l Bank
Charlotte, North C a ro lin a

Archie K. D a vis

Senior Vice President
W a c h o v ia Bank a n d Trust C o m p a n y
W in ston -Salem , N orth C a ro lin a

W illiam

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

H. Grier

Thom as J. Robertson

First N a tio n a l Bank o f South C a ro lin a
Colu m b ia, South C a ro lin a

Paul T. Taylor

T aylor W are ho u se C o m p a n y
W in ston -Salem , North C a ro lin a

T. Henry W ilson,
C h airm an

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


First N a tio n a l Bank
W ayn esville, North C a ro lin a

W oody


Robert L. Cherry

Vice President

S. A. Ligon

C ashier

E. C. M o n d y

A ssista n t Cashier

R. L. Honeycutt

A ssista n t Cashie r