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JUNE 1952

T H E

♦

BUSINESS
REVIEW
FEDERAL

RESERVE

BANK

PHILADELPHIA

HOW BANKS ADJUST THEIR RESERVES
Management of the reserve account
is a skilled art,
requiring sharp pencils and agile minds.
It has grown more important
since higher interest rates
make it more expensive
to hold excess reserves.
This article covers three methods
of adjusting reserves:
buying and selling Government securities,
borrowing from the Reserve Bank,

and borrowing or lending Federal funds.
Use of Government securities
has recently become less important.
Banks are borrowing more
from the Reserve Banks
and using Federal funds more extensively.
This reflects major changes
in Federal Reserve policy.

SUSPENSION OF CONSUMER INSTALLMENT
CREDIT CONTROLS
Regulation W was suspended on May 7.
This article reviews
the reasons for and the effects of
the regulation.

CURRENT TRENDS
Business trends in the Third District
were mixed during April.
Manufacturing production declined
and construction contract awards rose.
Business loans were steady in May,
following a decline in April.

Additional copies of this issue are available
upon request to the Department of Research,
Federal Reserve Bank of Philadelphia,
Philadelphia 1, Pa.

THE BUSINESS REVIEW

HOW BANKS ADJUST THEIR RESERVES
To the Federal Reserve official, member bank reserves
are the focal point of monetary policy; they are the pri
mary means of influencing the money supply in order
to help maintain economic stability at a high level of
activity. To the commercial banker, reserves are at the
core of everyday operations; they go up and down when
customers deposit or draw out currency, when they de
posit or write checks, when the bank sells or buys se
curities or engages in countless other transactions which
are an ordinary part of its business. Management of the
reserve account is one of the skilled arts of commercial
banking. It is more difficult now that interest rates on
Government securities move freely than when they were
being pegged by the Federal Reserve. But management
of reserves is more important because higher interest
rates make it more expensive to hold excess reserves
at the Federal Reserve Bank.
Each bank faces different problems in managing its
reserve account. No general formula can be applied to
all situations. Many banks maintain a cushion of excess

WHICH BANKS HOLD EXCESS RESERVES?
Member Banks—Third Federal Reserve District
(Last Half of April 1952)
Banks with total deposits (in m illions)—
Under
SI
Of the total amount,
of reserves held by
banks in each size
group this propor
tion was in excess of
requirements ........... 27%

81$2

82
85

$5
810

810§20

820$100

Over
All
8100 banks

22%

14%

12%

0.4%

reserves so that they do not have to make delicate ad
justments in their reserve positions. Of the total reserves
of member banks in the Third Federal Reserve District
in the last half of April, only about 3 per cent was in
excess of requirements. However, more than one-fourth
of the reserves held by the smallest banks were in ex
cess. In contrast, the few very large banks held less than
I per cent over requirements.

Banks which keep practically all of their available
funds fully loaned and invested have several ways of
adjusting reserves. These methods are of two general
types. The first is a redistribution of reserves, from banks
with excess reserves to those in need of additional re
serve funds. The second is a change in the total amount
of reserves. When the individual banker adjusts his re
serves, he is not primarily concerned with whether he
effects a redistribution or a change in the total volume of
reserves. The Federal Reserve is concerned with both a
redistribution and a change in total reserves to the extent
that they influence the total money supply and, hence,
the total volume of spending.
Although there are other ways member banks may ad
just their reserves, only three will be discussed here: (1)
purchases and sales of Government securities, which, de
pending on whether or not they involve Federal Reserve
holdings, either shift or change the volume of reserves;
(2) member bank borrowing from the Federal Reserve
Banks, which affects the total volume of reserves; and
(3) Federal funds transactions, in which banks simply
shift reserves among themselves by lending and borrow
ing reserves for very short periods.

Government Securities
Throughout World War II and during most of the post
war period, banks used Government securities extensively
to adjust their reserves. The types of issues they used,
however, changed from time to time. In the early war
period, banks used mostly Treasury bills. Through sup
port of the bill rate at % per cent and through an
option by which a bank might buy back at this rate
any bills sold to the Reserve Bank, Federal Reserve
policy made bills as liquid as excess reserves. Even at
the peak of bank holdings of bills in mid-1943, however,
bills were only used by the larger banks. Two-thirds of the
member banks in the Third Federal Reserve District
held no Treasury bills at all.
Treasury certificates, and even longer-term issues,
gradually supplanted bills as an adjusting medium. As ,

Page 3

THE BUSINESS REVIEW
long as a bank had them, the sale of bills was the cheap
est way of getting reserves. But Federal Reserve support
of the market made all issues, regardless of length of time
to maturity, very liquid. Banks found that they could
earn more and still adjust reserves easily by holding
longer-term issues. Short-term Governments lost much of
their importance as liquid investments for banks. By mid1947, over 90 per cent of the member banks in this dis
trict had no bills to use in obtaining reserves; almost
half of them had no bills or certificates.

WHICH BANKS HOLD WHICH
GOVERNMENTS?
All Member Banks—Third Federal Reserve District
Banks with total deposits (in millions)—
$2$5- $10- $20- Over
$1-■
U
$10
$20 $100 $100 Total
$2
$1
This was the percent
distribution of total
Government security
holdings in:
Bills ................. ...
Certificates .. ...
Notes .............. ....
Bonds .............. ...

1
4
5
90

2
7
5
86

1
6
6
87

#
9
7
84

8
6
86

2
9
8
81

6
8
3
83

2
8
6
84

Total .... ... 100% 100% 100% 100% 100% 100% 100% 100%

June 1949

Bills ................ ...
Certificates .. ...
...
...

1
6
2
91

2
7
2
89

2
10
3
85

2
11
3
84

5
12
4
79

11
9
1
79

5
10
3
82

in mid-1947. Somewhat over half of the banks still hold
no bills and about the same number have no certificates.
This is quite different, however, from the 1947 situation
already described, and even from the mid-1949 situation,
in which eight out of ten banks had no bills and half of
them had no certificates. Large banks still hold relatively
larger amounts of short-terms than do small banks, but
the difference has narrowed somewhat in the past three
years.

Member Bank Borrowing
Member banks are resorting more and more to borrowing
from the Reserve Banks as a means of getting reserves.
This has been one result of the Treasury-Federal Reserve
“accord” on debt management and monetary policies.
A major objective of the “accord” is “to permit the short
term (government securities) market to adjust to a posi
tion at which banks would depend upon borrowing at
the Federal Reserve to make needed adjustments in their
reserves.”
The following chart shows that average daily borrow
ings of all member banks in the United States during
1951 were consistently above 1950, and thus far this year
are still higher than last year.

BORROWING AT FEDERAL RESERVE BANKS

Total ___ ... 100% 100% 100% 100% 100% 100% 100% 100%

March 1952
Bills ................
Certificates ..
Notes ..............
Bonds ..............

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

6
3
5
86

6
5
7
82

6
5
10
79

5
8
15
72

6
8
18
68

8
12
20
60

10
9
13
68

8
9
15
68

All member banks II. S. (Daily averages)
MILLIONS $

Total .... ... 100% 100% 100% 100% 100% 100% 100% 100%

* Less than 1 per cent.

A number of things have happened since then to make
short-terms more important. The rise in the rates on
short-term Governments has made these issues more at
tractive for banks to buy and hold. The postwar demand
for private credit caused banks to sell large amounts
of Government bonds. In refunding most maturing securi
ties with short-term issues, the Treasury has increased the
concentration of the public debt in short-term securities.
And, finally, the removal of the pegs on Government
securities once more has made short-terms more liquid
than long-terms.
These developments have revived the importance of
short-term Governments in bank portfolios. Bills and
certificates now comprise 17 per cent of the total Govern
ment securities held by member banks in the Third Fed
eral Reserve District. This compares with 10 per cent

600

400

200

The same tendency has prevailed in the Third Federal
Reserve District. In 1951 the number of banks accom
modated by this Reserve Bank was the largest since 1948,

THE BUSINESS REVIEW
but the average daily volume of advances outstanding
was higher than at any time during or since World War
II. During the first four months of this year, however,
activity was running below the same period of a year ago.
Number of
banks
accommodated

Year
1952 (5 months)
1951
1950
1949
1948
1947
1946
1945
1944
1943
1942

Loans outstanding
(daily average in
millions of dollars)

7.0
11.3
2.7
3.6
7.1
9.9
8.4
8.9
4.7
1.7
0.7

148
103
126
164
153
113
73
69
50
53

Only about one-fourth of all district member banks bor
rowed from the Reserve Bank during 1951; but, as the
following table shows, all of the largest banks and onehalf of the banks in the next highest size group borrowed.
The large banks, of course, obtained larger dollar amounts
than the smaller banks, but relatively less compared with
their deposits. Most of the borrowing by the very large
banks was for very short periods to make up temporary
deficiencies. The smaller banks borrowed less frequently
but for longer periods, often using Reserve Bank credit
to tide them over seasonal peaks of credit demand.

MEMBER BANK BORROWING IN 1951
(Third Federal Reserve District)
Banks with total deposits (in millions)—
Under SI$1
S2

S2$5

$5S10

$10- $20$20 $100

$100

This percentage of all banks
in the size group borrowed

13%

17%

20%

28%

22% 49% 100%

Each bank, on the average,
borrowed this much each
time (in thousands)................

$48

$66

$147

$245

$382 $941

or this percentage of total
deposits ......................................

They borrowed this number
of days during the year........

and for about this number
of days each time..................

$8,697

Federal Funds
Banks have also been making more extensive use of Fed
eral funds transactions—that is, very short-term borrow
ing and lending of excess reserves. Generally speaking,
there is little information on the nature and volume of

these transactions, but considerable information on
Federal funds in Philadelphia has recently become
available.
In February 1949, a number of Philadelphia banks got
together and set up a unique system for dealing in Fed
eral funds. Short-term interest rates had been in an
upward trend for about a year and a half, making it
increasingly expensive for banks to hold excess reserves.
Some of the larger institutions were anxious to employ
their excess reserve funds, whenever they had them, but
found it inconvenient to canvass the other banks in Phila
delphia to find out which ones might need reserves tem
porarily.
The banks arranged with a large securities dealer,
therefore, to act as a clearing house for information on
Federal funds. Now, representatives of nine banks call the
dealer on the telephone every morning, stating whether
their banks are in the market to borrow or lend Federal
funds. Usually, but not always, they indicate the amounts
involved. The dealer simply puts borrowers and lenders
in touch with each other. There is no charge for this
service. Dealers in other cities frequently offer this same
service, but Philadelphia is the only place where infor
mation is pooled by all the larger banks as a regular
part of the daily routine.
Most banks review their reserve positions at the open
ing of business and try to anticipate the many factors
which will affect their position during the day. This is
easier for some banks than for others; also, some watch
their reserve positions more closely than others. By about
noon most banks have telephoned the securities dealer as
to whether they want to borrow or lend reserves. Almost
invariably the number of banks in a position to lend does
not equal the number of banks wanting to borrow; usu
ally there are more borrowers than lenders. This may well
be because the anxiety of a bank to make up a small
deficiency is greater than the desire of a bank to put
a small excess of funds to work. Some banks try to bor
row to build up excesses on days when rates are low
and then run deficiencies and lend when rates are high.
Because 75 per cent of borrowed capital can be added
to the capital base for excess profits tax purposes, bor
rowing of Federal funds has the additional advantage
therefore, of reducing tax liabilities. At any rate, banks
which indicate they want to borrow usually do bor
row; but banks which report a willingness to lend often
may not lend—at least in Philadelphia. If banks are

Page 5

THE BUSINESS REVIEW
unable to find all the funds they need or enough outlets
for their excess funds, they often go to the New York
market. Philadelphia transactions are made at the inter
est rate currently prevailing in New York.
.
During 1951, about three-quarters of a billion dollars
of Federal funds were borrowed within the city by the
nine participating banks. The volume of transactions
varied widely from day to day. On a few days as much
as $10 million changed hands; on about one-fifth of the
days there was no business at all. On the average, the
volume of transactions approximated $3% million a day.
Most frequently one bank was lending and one borrow
ing; less frequently two banks were lending and two
borrowing. A good part of the time the number of bor
rowers and lenders was the same, but fairly often there
were more borrowers than lenders. Less frequently there
were more lenders than borrowers.
Sizes of the paticipating banks vary so widely that
loans by several of the smaller banks sometimes cannot
make up a deficiency of one large bank. National banks
are prohibited from lending more than 10 per cent of
their paid-in capital and unimpaired surplus to any one
borrower, and from having aggregate borrowings in ex
cess of their capital stock. Since transactions in Federal
funds are considered borrowing and lending (although
commonly referred to as buying and selling), these re
strictions—which all participating banks observe—are
important factors in the Federal funds market. The lend
ing limits of the participating banks range from less than
half a million dollars to about $5 million. The greater
the differences in the sizes of participating banks the
more difficult it is for such a pool to function efficiently.
This, plus the fact that Federal funds operations are profit
able only when fairly large amounts are involved, suggest
that the arrangement is feasible only for groups of large
banks. Many small country banks undoubtedly participate
in the pool indirectly when they obtain funds from their
correspondents which, in turn, borrow in the Philadelphia
Federal funds market.
This arrangement for pooling information tends to
encourage Philadelphia banks to obtain needed reserves
or lend out excess reserves in the local market before
going to New York. To the extent that it lessens reliance
on the New York money market, it contributes in a small
way toward reducing the day-to-day in- and out-flows of
funds, often an important unstabilizing factor in the New
York money market.

Page 6

Some Factors Which Commercial
Bankers Consider
The choices which banks make among the above methods
of adjusting reserves are influenced by three closely re
lated considerations: (1) the time element, (2) costs and
earnings, and (3) liquidity and attitude toward bor
rowing.
Time element. All banks face the problem of funda
mental, long-run movements of funds. Some sections of
the country, some towns, some banks grow faster than
others. Such changes require permanent rather than tem
porary adjustments. Neither borrowing from the Reserve
Bank nor Federal funds can be used for permanent ad
justments, but Government securities do provide such a
medium.
It is the shorter-run, temporary movements which we
are primarily interested in here, however. Not all banks,
as pointed out earlier, attempt to adjust to these shifts.
Many simply hold excess reserves sufficient to absorb
them. Furthermore, member banks are not required to
maintain the prescribed ratio of reserves to deposits every
day—only as an average during a certain period. Coun
try banks must hold sufficient reserves to meet the pre
scribed ratio on the average during a half-month period;
all other member banks average their reserves and de
posits over a weekly period. This averaging method of
computing reserve requirements tends to decrease the
amount of adjustment necessary. It enables country banks
to ignore day-to-day movements which cancel out over
the half-month period. Some of the large banks, however,
frequently go out of their way to build up excess re
serves or run deficiencies in order to take advantage of
expected movements of funds and interest rates later
in the reserve period.
A number of banks resort to borrowing from the Fed
eral Reserve Banks to meet intermediate-term fluctuations
such as seasonal credit demands. Some banks in the
agricultural sections of Lancaster County, Pennsylvania,
for example, frequently borrow from the Philadelphia
Reserve Bank in the fall in order to finance farmers who
are fattening beef cattle, and in the spring to finance
crop farmers. Some banks in seashore resorts borrow in
the spring to meet demands for credit by businessmen
preparing for the vacation season.
The very short-run adjustments are mostly made by
larger banks, through borrowing from the Federal Re
serve Banks and borrowing Federal funds. At least two

THE BUSINESS REVIEW
other practices compete to some extent with these meth
ods, however. The very large banks sometimes put ex
cess funds to work overnight by buying Government
securities one day under an agreement to sell back on
the next. Transactions under such agreements have no
particular rate advantage compared with Federal funds;
but because they are considered purchases and sales,
they are not limited by the legal provisions which restrict
loans to any one borrower. Amounts many times the
volume of Federal funds transactions are invested in this
way. Banks do not use the reverse procedure to obtain
reserves nor do they make such deals among themselves;
the purchase-sale agreement is a one-way street as a
method of adjusting reserves. Large banks also employ
excess reserves by making very short-term loans to Gov
ernment security dealers, Government securities serving
as collateral. The effect is much the same as a purchasesale agreement, but amounts are limited to 25 per cent
of capital and surplus to any one borrower.
Costs and earnings. The choice among methods of
adjusting reserves also involves weighing costs against
earnings. Subject to other considerations, such as liquidity
and attitudes toward borrowing, banks attempt to get
reserves in the cheapest way possible and to put surplus
funds to the most profitable use.
A certain amount of expense is involved in keeping
close watch over the reserve position and in the process
of obtaining needed reserves or investing excess reserves.
This element of expense is, to a certain extent, fixed;
it does not rise proportionately with increases in the
amount of funds involved. Moreover, the amount of funds
involved must be fairly large to make close adjustments
worthwhile. As an illustration, investment of $1 million
for one day at 1 per cent yields only about $28. Large
banks find it more to their advantage to manage their
reserve accounts closely, therefore, than do the small
banks. This is one reason why the smaller banks hold
proportionately much larger excess reserves. But the
choice of holding excess reserves involves a cost, just as
truly as does borrowing from a Reserve Bank or ob
taining reserves by any other method. This cost is mea
sured by the rate which funds could have earned had
they not been held idle. Holding excess reserves is one
way of making close adjustments in the reserve account
unnecessary, but it is not a cost-less way.
The cost of obtaining Federal funds (and the return
on them) is the lowest of the three methods discussed.

On days when funds are plentiful and demand is light,
the Federal funds rate may be as low as 1/16 of 1 per
cent. It never drops below the point where the return is
less than the cost of paper-work involved, and never rises
above the rate at which banks can borrow from the Fed
eral Reserve Banks.
The discount rate, of course, is set by the Federal Re
serve authorities and can be raised or lowered depending
on whether the economic situation calls for restriction or
expansion of money and credit. The fact that the discount
rate has remained unchanged for almost two years while
rates on short-term Governments have risen, has increased
the attractiveness of borrowing from the Reserve Bank
in comparison with selling Governments to get reserves.
The cost of adjusting reserves by selling Governments,
like the cost of excess reserves, is measured by the income
which the securities would have yielded had they been
retained. One of the effects of the rise in Government
security rates since 1947, first in short-term issues and
later in long-term bonds, has been to make it more costly
to sell Governments to obtain reserves. The drop in the
prices of Governments after the market was unpegged
also has increased the cost of obtaining reserves by caus
ing a capital loss on sales of Governments.
Large banks which follow very short-run movements
in the money market closely are quick to take advantage
of changing relationships among different rates. If rates
on Treasury bills, for example, are above the discount
rate, banks may invest surplus funds in bills and then
borrow from the Reserve Bank if necessary. They may
also invest in bills rather than lend Federal funds at a
very low rate. If the Federal funds rate is above 1 per
cent, however, there are advantages in lending Federal
funds rather than buying bills, for a Federal funds trans
action, like any loan or repurchase agreement, is con
tractual—the return is certain. But an overnight invest
ment in bills can be made unprofitable by the spread
between bid and asked prices (now wider than before
the “accord”), or by a decline in market prices. The
danger of a loss becomes greater in the case of longerterm issues. These are only a few of the cost and
earnings considerations requiring sharp pencils and agile
minds.
Liquidity and attitude toward borrowing. Unpeg
ging Government security prices has affected the liquidity
of Government securities. Liquidity of an asset depends
on the ability to convert it into cash not only quickly

Page 7

THE BUSINESS REVIEW
but without a significant loss of value. Banks can no
longer be certain of getting at least par for securities
they sell. In contrast to the wartime situation in which
market support made all issues equally liquid, securities
closer to maturity are now more liquid than longer-term
issues. Although this has tended to some extent to restore
the use of short-terms as a medium for adjusting reserves,
uncertainties as to changes in market prices tend to favor
the use of Federal funds, borrowing from the Federal
Reserve Banks, and other such contractual arrangements.
Moreover, the rapid expansion of bank holdings of pri
vate debt during the postwar period has reduced over-all
bank liquidity. Many banks are reluctant to reduce
liquidity further by selling Governments.
Banks have long been loath to be in debt for extended
periods. They prefer to borrow for temporary needs only
and to pay off the debt as soon as possible. Over the
years this attitude has grown into a strong tradition
against borrowing.

Conclusions
Management of the reserve account is one of the difficult
arts of commercial banking. Many banks avoid the need
for making close adjustments by holding large excess
reserves. Banks which do make adjustments—mostly the
larger institutions—have several methods available. Of
the three methods discussed here, the use of Government
securities has recently become less important, despite a
revival of the role of short-term Governments in bank
portfolios. Use of borrowing from the Reserve Banks and
use of Federal funds, on the other hand, have increased.

This reflects, to a considerable extent, changes in Federal
Reserve policies.
The Federal Reserve is primarily interested in the total
quantity of reserves. For changes in the total volume of
reserves influence the total volume of bank deposits and,
in turn, spending. Since the “accord” between the Treas
ury and the Federal Reserve was reached over a year ago,
reserves have been less freely available. Because prices
of Government securities now move freely in response
to supply and demand conditions, banks have been dis
couraged from adjusting reserves by selling Governments.
In an unsupported Government securities market, banks
must find buyers other than the Federal Reserve. Any
reserves they obtain then constitute merely a shift from
other holders, not an increase in the total volume of
reserves.
With reserves less freely available from other sources,
banks have borrowed more extensively from the Reserve
Banks. This has definite advantages from the Federal
Reserve point of view. When a bank borrows from the
Reserve Bank the addition to reserves is much less likely
to be permanent than when a bank sells Governments to
the Federal Reserve. The reason is not only that banks
dislike to be in debt for extended periods but also that
the borrowing transaction is for a short, fixed period
and involves close contact between the member bank and
the Reserve Bank; excessive borrowing can be discour
aged directly, if necessary.
The increased use of Federal funds also reflects the
tightening in reserves. Banks have become more anxious
to economize the reserves available and to avoid the ex
pense of holding excess reserves.

SUSPENSION OF CONSUMER INSTALLMENT
CREDIT CONTROLS
On May 7, the Board of Governors of the Federal Re
serve System suspended Regulation W, the rules govern
ing the extension of consumer instalment credit. The
suspension was not required by Congress. It was the
Board’s decision, made under its discretionary powers.
The basic legislation authorizing the Federal Reserve
System to regulate instalment loans and sales—the De
fense Production Act of 1950—has remained in effect
and is still on the books as of the middle of June.

Page 8

Regulation W, like many other measures which restrict
long-established business practices, is a controversial mea
sure. The regulation is a relatively new addition to the
arsenal of anti-inflation weapons and it has been difficult
to gauge its effect and to measure the seriousness of the
administrative problems involved. Unfortunately, as long
as the international situation makes the threat of infla
tion a continuing problem, consumer credit controls may
yet have to be reimposed some time in the future. Now

THE BUSINESS REVIEW
that the regulation is not in effect, however, and we have
reached what appears to be a lull in the upward move
ment of prices, it may be possible more calmly to ap
praise consumer credit controls as an instrument of eco
nomic stabilization.
This is not the first time that lenders and merchants
have witnessed the suspension of Regulation W. The first
suspension occurred in November 1947, when many of
the World War II controls expired. It was reinstated in
September 1948, following a period of rising prices, and
again expired in June 1949. The present suspension fol
lows a 20-month period of regulation which began shortly
after the outbreak of the Korean war. While the regula
tion was in effect the terms under which consumer credit
could be extended were sometimes relaxed and sometimes
tightened. Although the particular dates of expiration
and re-imposition have been the result of a combination
of factors, the on-again, off-again pattern of consumer
credit regulation nevertheless provides an important key
to the reasons for Regulation W and to an evaluation of
its usefulness.

The Reasons for Regulation W
The regulation has been imposed and tightened at times
when prices were rising and more inflation threatened.
In 1941 and 1950, Regulation W was imposed in conection with intense defense and war efforts. In 1948 its
imposition was related to the extraordinary situation pre
vailing during the aftermath of war. Generally speaking,
Regulation W has been relaxed and suspended at times
when it was felt that inflationary pressures had subsided;
thus Regulation W—a so-called selective credit regula
tion—has been designed to help fight inflation in con
junction with other fiscal-monetary and direct controls.
It should be considered in the light of the special circum
stances—chiefly emergency situations—in which it has
been used. It is not an attempt to prescribe standards of
business practice or to maintain some pre-determined
level of credit outstanding. It is with current changes
in the level of credit outstanding and their relationship
to current market conditions that the administrators of
Regulation W are concerned. This is another key to an
understanding of consumer credit controls.
During periods of inflation, the amount of consumer
credit on the books is not nearly so important as the
speed with which the total is increasing. At all times,
new loans are being made and old loans are being paid

off. When consumers’ incomes are rising and employment
prospects are good, there is a tendency for new loans
to exceed pay-offs. When this situation is combined with
threats of shortages and rising prices, as was the case
at the outbreak of the Korean war, the-demand for con
sumer credit becomes very strong and the total outstand
ing rises rapidly. This simply means that in addition
to their growing incomes, new credit is giving consumers
more buying power. When there is room for expansion
of production in our economy this additional stimulation
can be constructive. There is, in fact, little doubt that the
institution of instalment credit has helped to create the
mass markets for durable consumers’ goods which manu
facturers require in order to put a product into mass
production. But when industry is straining under a de
fense production program, when steel, copper, aluminum
and other basic materials are short, when labor is scarce
—and all of these things were true at the beginning of
the current defense effort—then there is no possibility of
expanding production for the purpose of turning out
more washing machines and automobiles. Additional
buying power available to consumers as the result of
credit expansion under these conditions creates intense
competition for relatively short supplies of merchandise.
Prices are likely to shoot up, not only for goods at retail
but, as distributors and manufacturers scramble for addi
tional goods to restock depleted inventories, at all levels
of the production and distribution process.
Increased consumer credit is regarded as new buying
power, not merely as money transferred from one buyer
to another, by reason of the fact that most of it comes
ultimately from the commercial banking system, thus
contributing to an expansion of deposits and of the total
supply of money. The banks make many loans directly
but they also provide a large amount of the funds used
by finance companies and loan companies, and they fre
quently provide working capital which enables retailers
to carry their own instalment or charge accounts. Even
those loans which are made out of equity funds or bor
rowed savings may increase the total stream of spending
in the economy, since these funds otherwise might not
have gone into the market places so quickly and might
have been used for the purchase of Government securities.

Recent Experience
During 1950, instalment credit increased by $2.6 bil
lion, most of the gain coming between April and October.

Page 9

THE BUSINESS REVIEW
Dollar-wise, this was a very rapid expansion—the most
rapid in our history. This is not to say that the increase
in instalment credit was primarily responsible for the
inflation which took place during that period. A look
at the statistics will suffice to show that the main respon
sibility must be elsewhere, among a combination of many
factors. It cannot be denied, however, that once it was
started the buying spree and the price rises were accen
tuated by the creation of new consumer buying power,
and economic and financial difficulties of the defense
effort were thus intensified. The same effects occur during
any business upturn, whether it is induced by the danger
of war or not, but the likelihood of intensive periods of
scare buying during periods of international tension
aggravates the situation.
It is this problem to which Regulation W primarily
has been directed. The increase in required down pay
ments and monthly payments, which the regulation put
into effect, would have had a tendency to reduce credit
outstanding even if the rate of new instalment sales and
loans had remained unchanged. The probability is that
the tighter requirements actually delayed a large number
of sales of consumers’ durable goods during the periods
they were in effect. A precise determination of the impact
of Regulation W is impossible because of side effects
which are not measurable and the unknown influences of
other factors which contributed to the same results. The
pay-off, however, is the change in regulated credit out
standing and in this regard the experience of recent
months is significant.
The regulation which went into effect in September
1950 covered consumer instalment credit only—loans
repayable in two or more scheduled payments, and in
stalment credit arising out of the sale of listed consumers’
goods. Charge accounts and single-payment loans were
not affected. After rising rapidly during 1949 and the
first, nine months of 1950, instalment credit outstanding
leveled off during October 1950—the month following the
effective date of the regulation—and moved irregularly
downward until August of 1951, after liberalized terms
prescribed by Congress went into effect. There was a mod
erate increase from that time until the end of the year.
During the first quarter of 1952, another decline oc
curred, followed by a subsequent upturn in April.
As the chart shows, the rate of increase in loan credit
outstanding was slowed after the regulation went into
effect, but the total continued to rise. The declines

Page 10

CONSUMER INSTALMENT CREDIT OUTSTANDING
BILLIONS $

TOTAL INSTALMENT
CREDIT
:

INSTALMENT SALES
CREDIT

occurred entirely in instalment sale credit relating to
sales of automobiles, home improvements, television sets,
and other appliances. What has happened to the lines
on the chart since the regulation was suspended on May
7 is not yet known. There are fragmentary reports that
easier credit terms have stimulated sales in certain lines.

The Effects of Regulation W
On its face, this is a rather impressive anti-inflationary
record. Coming at a strategic point—the consumer level
—there is no doubt that another billion dollars of buying
power, more or less, would have made the situation more
difficult. However, this record should be qualified some
what. No one would argue, of course, that in a $330 bil
lion economy the relatively small amount of additional
credit which Regulation W prevented was the one factor
which stemmed the rising tide of prices. Moreover, there
is some question about the extent to which Regulation
W was aided, both by business factors and other controls,
in reducing instalment credit. To some extent, consumer
purchases of durable goods were probably due to fall off
during 1951, anyway. Obviously, there had been many

THE BUSINESS REVIEW
instances of forward buying and over-buying during the
early days of the Korean conflict, and some dampening
of the enthusiasm for buying was likely regardless of the
credit restrictions. To some extent too, other anti-infla
tion measures had some indirect influence. Wage and
price controls may have reduced expectations of higher
incomes and prices. The other actions of the Federal Re
serve—the withdrawal of fixed price supports for Govern
ment securities, for instance—created a business atmos
phere that was not conducive to inflationary financial
expansion.

Alternative Controls
This raises a further question with regard to the need
for Regulation W. Assuming the desirability of utilizing
free market forces to the fullest possible extent to bring
about necessary economic adjustments, would it not be
better to leave the fight against inflation completely to
increased taxation or to the indirect monetary controls
(such as variations in the discount rate and open market
operations) exercised by the Federal Reserve System?
It is generally agreed that these measures, directed as they
are to the control of the volume of money and spending,
get to the heart of the inflation problem. No anti-infla
tion program is likely to succeed without their effective
use. Why become involved with the administrative prob
lems incident to the regulation of thousands of financial
institutions and merchants? This is a question that will
receive continuing study. In general, the answer is that
the control of inflation during emergency situations
requires a flexible and many-sided program. There are
limits beyond which taxation affects incentives; more
over, increased tax rates often cannot go into effect as
quickly as may be necessary. The general credit instru
ments available to the Federal Reserve can be powerful
but their use has widespread ramifications which must
be taken into consideration. It is desirable that they be
supplemented by measures whose impact on the economy
is narrower, less powerful. In this connection also the
point has been made that the nature of consumer credit
makes it relatively unresponsive to over-all changes in
credit policy. If it is deemed necessary to slow the
expansion of consumer credit and a more specific meas
ure such as Regulation W is not available, then a more
aggressive use of general controls than is consistent
with other objectives might be required and one objec
tive or the other might have to be sacrificed; and if the

full complement of fiscal-monetary controls cannot be
fully effective, then there is a tendency to place greater
reliance on direct wage, price, and rationing controls
which are undoubtedly more burdensome and more likely
to create undesirable economic distortions than even the
most specific credit regulation.

What Regulation W Is Not
Regulation W has received some support on the grounds
that it keeps credit merchants from granting instalment
terms that are too lenient and does away with competi
tion in “easy credit.” This is not the purpose of the regu
lation: it is not a “fair trade” device. The extensive
use of unsound credit terms would be a matter for con
cern if it should develop; but Regulation W was not
concerned with it and the terms offered by individual
lenders or merchants were not in themselves a considera
tion in deciding to impose or suspend controls. Nor does
Regulation W attempt to set forth sound lending stand
ards as such. The effect of setting a limit on terms is to
narrow the differences among lenders, but it is the over
all situation, not the differences, with which the admin
istrators of the regulation were concerned.
There have been some who regarded Regulation W
primarily as a device for correcting the inventory posi
tion of certain consumers’ goods. The issue was never
stated so crudely as this; yet many argued that the
regulation might well be made more stringent when
inventories were depleted and that it had to be made more
lenient when inventories were rising. It is true that the
inventory situation is one of the factors that must be
taken into consideration in deciding whether to impose
stricter instalment credit terms or to relax them. But
it is only one of many factors, for the Federal Reserve is
primarily concerned with the supply of credit in relation
to the needs of the entire economy. Credit is fluid. Once
created, regardless of its origin, it moves into every part
of the financial mechanism. The effect of increasing in
ventories in any particular line has to be measured
against the general economic situation. This became a
difficult problem in 1951 when, despite rising stocks of
certain consumers’ goods, the outlook for defense needs
was such that creation of additional consumer credit ap
peared to be unwise. The accumulation of inventory at
some times may, in fact, be an indication of the effective
ness of the regulation and a wholly desirable development
both for the purpose of storing goods for future use and

Page 11

THE BUSINESS REVIEW
diverting productive facilities to defense production. In
ventory alone is therefore an unsatisfactory guide for
consumer credit regulation.

The Future of Regulation W
The full story on consumer credit regulation cannot yet
be written. The experience of recent years is insufficient
to allow such controls to be given the status accorded
the long-used general instruments of Federal Reserve
policy; yet Regulation W has been successful enough to
warrant further consideration for its use, particularly

PEN

Page 12

THE THIRD FEDERAL
RESERVE DISTRICT

during periods of international stress when consumer
reactions to events can be sudden and sharp. By itself,
its usefulness would be highly questionable. As a sup
plement to a well-integrated, fiscal-monetary, anti-infla
tion program, it appears to play a significant role, and
the Board of Governors has requested that the temporary
powers to regulate instalment credit contained in the
Defense Production Act be retained. Future use of
Regulation W requires a careful balance of the ad
ministrative difficulties it entails against the needs of
the developing economic situation.

THE BUSINESS REVIEW

CURRENT TRENDS
Business in the Third District continued to drift rather aimlessly during April. Declines in some lines were about bal
anced by gains in others.
The pace of activity in Pennsylvania factories slackened noticeably in April. After being steady for four months,
industrial output fell considerably during the month. All industries but one—lumber—shared in the decline, with the
major decreases being registered by apparel and furniture. Many of the declines were of a seasonal nature, but the labormanagement dispute in steel also was a factor. Employment showed little change, but a reduction in the work-week was
evidenced in lower payrolls.
Consumer buying was less active in April. Department store sales, after a special adjustment for the later Easter, were
below those of the preceding month as well as the previous year. Inventories held by department stores remained steady
and at the end of the month were 16 per cent under last year’s high level.
The volume of construction contract awards registered a sharp gain for the month but failed to equal that of a year
ago. All major fields shared in the increase over March, but only public works and utilities showed improvement over
1951.
The consumer price index for Philadelphia advanced for the first time in many months. Higher food prices were pri
marily responsible for the rise.
Business loans of weekly reporting member banks in the Third Federal Reserve District declined 6 per cent during
the first five months this year, as compared with an increase of 15 per cent during the same period in 1951. For the coun
try as a whole, business loans have declined 5 per cent thus far this year as against a 7 per cent rise in the first five
months of 1951.
The nation s privately held money supply rose $800 million in April as Treasury expenditures in excess of receipts
shifted funds from Government to private accounts.

Third Federal
Reserve District

United States

Per cent change

SUMMARY

April
1952
from

4
mos.
1952
from
year year
ago
ago

April
1952
from
mo.
ago

year
ago

4
mos.
1952
from
year
ago

OUTPUT
Manufacturing production. . _ 4* _ 7* - 3* -2
Construction contracts. . .
4-31 - 8 -21 4-18
Coal mining..........
4- 6 4-11 4- 3
-1

- 4
-14
- 8

-1
-9
-2

-1

- 3

-3

-2
+1

- 1
-16

-5

mo.
ago

EMPLOYMENT AND
INCOME
Factory employment.............. - 1* - 5* — 4*
Factory wage income.............. - 5* - 4* 4- l*
TRADE**
Department store sales..... - 7
Department store stocks. . . .
0

- 3
-16

- 5

BANKING
(All member banks)
Deposits........................................
Loans..........................
Investments........................... ..
U.S. Govt, securities............
Other...............................

44-

PRICES
Wholesale.............................
Consumers..............................

4- It 4- 2f 4- 2t

0
1
1
1
1

OTHER
Check payments....................... 4- 1
Output of electricity............... - 3

4- 9
+ 6
+ 1
- 1
4- 8

+ 2
4- 2

4- 3
4- 7
0
- 2
4- 7

4 1
4- 2

♦Pennsylvania
♦♦Adjusted for seasonal variation. fPhiladelphia.

Factory*

Department Store
Check
Payments

Employ
ment

Payrolls

Sales

Stocks

Per cent
change
April 1952
from

mo.
ago

year
ago

mo.
ago

year
ago

mo.
ago

Allentown............................

-2

- 3

-5

- 5

Harrisburg..........................

LOCAL
CONDITIONS

year
ago

Per cent
change
April 1952
from
mo.
ago

year
ago

-f l

+ 4

-3

4- 6

Lancaster.............................

- 3

-1

- 3

- 7

4-U

4-7

-12

4-3

4-20

Philadelphia.......................

-1

- 3

-3

4- 3

4-1

-17

4-2

4- 1

Reading................................

-2

-12

-6

-19

4-17

- 2

4-7

-18

4-2

4- 1

- 5

—7

- 1
4- 5

-1
+1
-1
-1
4-1

4
+
+
-14-

5
7
4
3
8

+5
+8
+4
+4
4-7

0
+1

4- 3

4-3

Wilkes-Barre......................

-1

- 3

- 9

-1

4- 8

4-4

York......................................

-1

- 1

—6

- 3

+ 8

4-17

+ 1

+ 6

— 12

4-4

4- 2

4- 1

4-3

-23

-7

4- 7

4-8

- 7

4-12

4-10

4-3

-13

•Not restricted to corporate limits of cities but covers areas of one or more counties.

Page 13

THE BUSINESS REVIEW

EMPLOYMENT AND INCOME

MEASURES OF OUTPUT
Per cent change
4 mos.
April 1952
1952
from
from
month
year
year
ago
ago
ago

(1939 avg. = 100)

MANUFACTURING fPa.)......................
Durable goods industries..........................
Nondurable goods industries...................

- 4
- 5
- 4

- 7
- 4
-10

- 3
+ i
- 8

Foods................................................................
Tobacco............................................................
Textiles.............................................................
Apparel.............................................................
Lumber.............................................................
Furniture.........................................................
Paper.................................................................
Printing and publishing............................
Chemicals........................................................
Petroleum and coal products..................
Ruhher.............................................................
Leather.............................................................
Stone, clay and glass..................................
Primary metal industries..........................
Fabricated metal products.......................
Machinery (except electrical).................
Electrical machinery...................................
Transportation equipment........................
Instruments and related products.........
Misc. manufacturing industries..............

- 1
- 8
- 6
-10
0
-10
- 3
- 2
- 3
- 1
- 8
- 7
- 3
- 6
- 4
- 3
- 4
- 7
- 2
- 3

- 2
-10
-20
-21
-11
- 7
-15
- 3
- 2
- 3
- 8
-11
-14
- 5
-11
- 2
+ 2
+ 12
- 3
-19

- 3
- 4
-19
-15
-11
- 6
-12
- 1
+ i
0
+ 3
-12
-10
+ 2
— 6
+ 2
+ 5
+ 25
+ 2
-18

COAL MINING (3rd F. R. Dist.)*____
Anthracite.......................................................
Bituminous......................................................

+ 6
+ 9
-10

+n
+ 16
-15

+ 3
+ 4
- 6

Primary metal

CRUDE OIL (3rd F. R. Dist.)**.........

- 2

- 1

Machinery (except

CONSTRUCTION—CONTRACT
A WAR US (3rd F. R. Dist.Jt............
Residential......................................................
Nonresident ial.............................................
Public works and utilities......................

+ 31
+ 34
+ 18
+ 49

- 8
-15
-26
+ 87

-21
-30
-33
+ 38

All manufacturing.. . .
Durable goods

Per cent
change
from

April
1952

%
chg.
from
year
ago

April
1952

%
chg.
from
year
ago

- 4

$64.14

+ i

$1.64

+ 5

- 1

70.29

+ i

1.75

+ 4

- 5
+ 1
- 8
- 6
-11
+ 1

- 9
+ 4
- 6
-20
-19
- 7

54.53
56.59
33.15
52.38
38.73
47.11

+
+

0
7
3
2
8
3

1.45
1.41
.96
1.41
1.15
1.14

+
+
+
+
+
+

365
404

-12
- 3

- 3
- 9

56.90
64.11

+ 7
0

1.31
1.57

+ 4
+ 8

- 2
- 8

322
410

- 2
- 4

+ 2
_ 4

77.14
69.20

+ 5
+ 4

2.00
1.62

+ 7
+ 3

0
-2
-1

+ 1
- 3
- 9

433
711
214

0
- 7
- 7

0
0
- 8

83.07
74.48
44.57

- 1
+ 3
+ i

2.07
1.94
1.22

+ 3
+ 11
+ 1

131

-11

367

- 3

-11

63.96

1.64

+ 4

142

-1

376

- 7

- 4

73.90

- 4

1.91

+ i

172

-1

- 8

478

- 4

- 8

65.94

1.64

+ 4

243

703

- 3

+ 3

73.34

+ 2

1.72

+ 5

272

-1

670

- 3

+ 12

68.96

+ 12

1.72

+ 11

174

-3

+ 8

483

- 8

+ 14

78.69

1.92

+ 3

186

545

- 2

66.66

- 1

1.64

+ 2

124

-17

335

- 4

-14

55.41

+ 3

1.35

+ 6

mo.
ago

year
ago

-1

- 5

385

- 5

-1

- 2

453

- 5

104
117
90
68
123
143

-2
-1
-1
-2
-3
-1

-10
- 2
- 3
-19
-12
-10

296
295
227
199
337
387

118
136

-7
0

- 9
- 9

118
141

0
-4

157
237
82

135
166

Furniture and lumber
Printing and...............
Petroleum and coal

Stone, clay and

Fabricated metal

Electrical

*IJ.S. Bureau of Mines.
**American Petroleum Inst. Bradford field.
fSource: F. W. Dodge Corporation. Changes computed from
3-month moving averages, centered on 3rd month.

Per cent
change
from

April
1952
year (Inago dex)

1952
(Index)

Nondurable goods

Transportation
Instruments and
related products. . .
Misc. manufacturing
industries...................

Average
Hourly
Earnings

Average
Weekly
Earnings

Payrolls

Employment

Pennsylvania
Manufacturing
Industries*

4
6
4
2
1
5

♦Production workers only.

TRADE
Per cent change
Third F. R. District
Indexes: 1947-49 Avg. = 100
Adjusted for seasonal variation

April
1952 April 1952 from
(Index)
month
year
ago
ago

4 mos.
1952
from
year
ago

-7
+4
0*

- 3
- 4
- 3*

-5
-1
+9*

0
+4
+ 1*

-16
- 9
-16*

SALES
Department stores............
Women’s apparel stores.
Furniture si ores.................
STOCKS
Department stores............
Women’s apparel stores.
Furniture stores.................

102
90

112p
109

Recent Changes in Department Store Sales
in Central Philadelphia

Week
Week
Week
Week
Week

ended
ended
ended
ended
ended

May
May
May
May
June

10....................................................................
17....................................................................
24....................................................................
31....................................................................
7......................................................................

♦Not adjusted for seasonal variation.

Page 14

p—preliminary.

Per
cent
change
from
year
ago

0
-4

+4
-6

Deparlmental Sales and Stocks of
Independent Department Stores
Third F. R. District

Sales

Stocks (end of month)

% chg. % chg.
April
4 mos.
1952
1952
from
from

% chg.
Ratio to sales
April
1952 ^months’ supply)
from
April

ago

1952

1951

+ 9

- 5

-19

3.2

4.2

+ 7
-13
+ 7
+27
+ 14
+21
-14
+25

- 6
-15
0
- 1
0
- 2
-15
- 4

-18
-27
- 9
-10
- 9
-16
-24
-29

3.6
4.6
4.2
2.8
1.9
4.3
5.1
3.2

4.6
5.4
5.0
3.9
2.4
6.3
5.7
5.3

+ 15
- 3
+ 32
+ 24
+20
-20
+ 25

+
+
-

0
4
5
2
3
8
3

-20
-42
-12
-10
-27
-19
-16

1.9
3.0
1.7
1.2
2.2
3.7
2.3

2.7
5.1
2.6
1.7
3.5
3.7
3.5

+ 8

+ 1

THE BUSINESS REVIEW

CONSUMER CREDIT

BANKING
Sales

Sale Credit

Receiv
ables
(end of
month)

% chg. % chg. % chg.
April 4 mos.
April
1952
1952
1952
from
from
from
yearago year ago year ago

Third F. R. District

Department stores
Cash...................................
Charge account......................
Instalment account.................

+10
+10
+ 9

Furniture stores
Cash........................................
Charge account........................
Instalment account.................

- 6
-14
+ 12

- 2
- 5
- 7

- 3
-16
+10

+7
-6

MONEY SUPPLY AND RELATED ITEMS
United States (billions $)

year

183.8

+ .8

+ 10.4

Demand deposits, adjusted.................
Time deposits..........................
Currency outside banks........................

95.1
62 8
25.9

+ .3
+ .2

+ 5.6
+ 3.5
+ 1.3

Turnover of demand deposits.................

21.3*

-1.4*

- 5.3*

132.3

- .2

+ 7.0

13.7

+ .1

+ 1.1

19.9

- .3

+ 1.0

19.1
.8

—

Money supply, privately owned. . ,

Commercial bank earning assets............

+2
Member bank reserves held..............
Required reserves (estimated)...................
Excess reserves (estimated)..........

Loans made

Loan Credit
Third F. R. District

% chg.

% chg. % chg.
April 4 mos.
April
1952
1952
1952
from
from
from
yearago yearago year ago

+ 33
+ 33
+ 27
+ 38

+ 39
+ 34
+ 16
+20

- 4
+ 14
+ 16
+ 7

PRICES
Monthly Wholesale
and
Consumer Prices

April
1952
(Index)

Wholesale prices—United States (1947-49 = 100). . .
Farm products...................
Foods................................
Other..............................
Consumer prices (1935-39 = 100)
United States.....................
Philadelphia............................
Food..................................
Clothing.................................
Fuel...................................
Homefurnishings.....................
Other..........................................

Weekly Wholesale Prices—U.S.
(Index: 1947-49 average =100)

Week
Week
Week
Week

ended
ended
ended
ended

May
May
May
June

13............................
20..............
27............
3.....................

modities

month
ago

year
ago

112
109
108
113

0
0
-1
0

-4
-7
-3
-3

190
189
228
198
154
213
174

+1
+1
+2
-1
0
-1
0

+3
+2
+4
-3
+1
-6
+2

products

Weekly reporting banks—leading cities
United States (billions $):
Loans—
Commercial, industrial and agricultural.
Security.................................................................
Real estate............................................................
To banks...............................................................
All other.........................................................
Total loans—gross.
Investments.................
Deposits........................
Third Federal Reserve District (millions $):
Loans—
Commercial, industrial and agricultural. .
Security.............................................................
Real estate..............................................................
To banks................................................... !
All other.............................................
Total loans—gross.
Investments.................
Deposits..........................
Member bank reserves and related items
United States (billions $).Member bank reserves held..........................
Reserve Bank holdings of Governments.
Gold stock............................................................
Money in circulation.......................................
Treasury deposits at Reserve Banks....

essed
foods

_ 3

* Annual rate for the month and per cent changes from month and year ago
at leading cities outside N. Y. City.

OTHER BANKING DATA

Per cent change
from

3
0

Changes in reserves during 5 weeks ended April 30,
reflected the following:
Effect on
reserves
Increase in Reserve Bank loans.........................................
+.5
Net payments to the Treasury.............................’*’[*[
_ ‘4
Decrease in Reserve Bank holdings of Governments.
— .2
Decrease in other Reserve Bank credit...........................
— .1
Increase of currency in circulation...............................’ ’
_j
Change in reserves.................................................................

Consumer instalment loans
Commercial banks............
Industrial banks and loan companies. . .
Small loan companies..........
Credit unions...............

Changes in—
five
weeks

Loans............................................
U.S. Government securities..............
Other securities..........................

Loan
bal
ances
out
standing
(end of
month)

April
30
1952

May
21
1952

Changes in—
four
weeks

year

20.6
2.3
5.7
.5
6.1

.2
0
0
+ .1
+ .1

+1.5
+ .3
+ .2
0
+ .2

35.2
38.7
83.2

0
+ .3
+ .8

+ 2.2
+1.8
+4.3

790
68
132
13
405

+
~
+

+
+
+
+

1
7
1
1
4

35
17
8
6
16

1,408
1,521
3,248

+ 8
- 10
- 23

+ 66
- 13
+ 46

20.1
22.3
23.3
28.5
.4

+ .3
- .1
0
+ .3
- .5

+1.5
- .1
+1.5
+1.2
- .4

+ 25
+ 2
- 41
-139
- 3.4%

+
+
+
+

Federal Reserve Bank of Phila. (millions $):

110.1

109.3

112.8

Federal Reserve notes.................
Member bank reserve deposits.
Gold certificate reserves............
Reserve ratio (%)..........................

1,412
1,720
888
1,245
46.4%

12
85
25
20
.3%

Source: U.S. Bureau of Labor Statistics.

Page 15

Full text of Business Review (Federal Reserve Bank of Philadelphia) : June 1952

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