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F E D E R A L R E S E R V E BANK
O F N E W YORK
Fiscal Agent of the United States
r Circular No. 2 7 9 8 T
L
May 10, 1944
J

REGULATIONS REGARDING UNITED STATES SAYINGS BONDS
To all Issuing Agents in the
Second Federal Reserve District:

For your information we are printing in this circular the text of the following:
(a) Fifth Amendment, effective May 1,1944, and Sixth Amendment, effective June 12,
1944, to Treasury Department Circular No. 530, Fifth Revision, entitled 4'Regulations
Governing United States Savings Bonds"; and
(b) First Amendment, effective June 12, 1944, to Treasury Department Circular
No. 654, Second Revision, dated Januarv 1, 1944, entitled "United States Savings Bonds,
Series F and G " .
The principal change effected by the Fifth Amendment to Circular No. 530 is the addition
of a new section 315.32(b) providing that if one of the coowners of a savings bond is unmarried
at the time of issuance of the bond and subsequently marries, the bond may be reissued upon
the request of both coowners to substitute the husband and wife as coowners. Forms for use
in requesting such reissue will be furnished upon request.
The Sixth Amendment to Circular No. 530 and the First Amendment to Circular No. 654
contain the technical changes necessary so that, as announced by the Secretary of the Treasury
in a press statement quoted in our Circular No. 2784 dated April 3, 1944, entitled "Information Regarding the Fifth War Loan", commercial banks may hold Series F and G bonds issued
on or after January 1, 1944, in limited amounts in relation to their time certificates of deposit
and savings deposits, but in no event in excess of $100,000 (issue price). The total amount of
such bonds together with the total amount of any other subscription that a commercial bank
may have entered for its own account for (a) 2 % % Treasury Bonds of 1965-70 or 2*4% Treasury Bonds of 1956-59 between January 18 and February 15,1944, and (b) 2% Treasury Bonds
of 1952-54 or the additional issue of 2V2% Treasury Bonds of 1965-70 between June 12 and
July 8, 1944, may not exceed in the aggregate 20% of the combined amount of its time certificates of deposit issued in the names of individuals, and of corporations, associations and other
organizations not operated for profit, and its savings deposits, as shown on its books as of
the date of the most recent call statement required by the supervisory authorities, or $400,000
(issue price), whichever is less.
Additional copies of this circular will be furnished upon request.




A L L A N SPROUL,

President.

REGULATIONS GOVERNING UNITED STATES SAVINGS BONDS
1944
Fifth Amendment to
Department Circular No. 530
Fifth Revision, dated
June 1, 1942
Fiscal Service
Bureau of the Public Debt

To

O W N E R S OF U N I T E D S T A T E S S A V I N G S B O N D S , A N D O T H E R S

T R E A S U R Y
OFFICE

OF

D E P A R T M E N T ,
THE

SECRETARY,

Washington, May 1, 1944.
CONCERNED:

Section 315.32 of Department Circular No. 530, Fifth Revision, dated June 1, 1942, as amended
by the Cumulative Amendment dated June 17, 1943, is hereby further amended to read as follows:
"SEC. 315.32. Payment or reissue.—A savings bond registered in the names of two persons as
coowners in the form 'John A. Jones O R Mrs. Mary C. Jones' will be paid or reissued as follows:
(a) Payment during the lives of both coozmers.—During
the lives of both coowners the bond
will be paid to either coowner upon his separate request without requiring the signature of
the other coowner; and upon payment to either coowner the other person shall cease to have
any interest in the bond. The bond will also be paid to both coowners upon their joint request, in which case payment will be made by check drawn to the order of both coowners in
the form 'John A. Jones and Mrs. Mary C. Jones', and the check must be endorsed by both
payees.
( b ) Reissue during the lives of both coowners.—If one of the coowners is unmarried at the time
of issue of the bond and subsequently marries, the bond may be reissued upon the request of
both coowners to substitute the husband and wife as coowners. Such request should be on
a form provided for that purpose by any Federal Reserve Bank or Branch or by the Treasury Department, Division of Loans and Currency, Merchandise Mart, Chicago 54, Illinois.
No other reissue will be permitted in any form during the lives of both coowners except as
specifically provided in these regulations.
( c ) Payment or reissue after the death of one coowner.—If either coowner dies without having
presented and surrendered the bond for payment to a Federal Reserve Bank or the Treasury Department, the surviving coowner will be recognized as the sole and absolute owner
of the bond, and payment will be made only to him: Provided, however, That if a coowner
dies after he has properly executed the request for payment and after the bond has actually
been received by a Federal Reserve Bank or the Treasury Department, payment of the bond,
or check if one has been issued, will be made to his estate (see Subpart P hereof). Upon
proof- of the death of one coowner and appropriate request by the surviving coowner (unless
a nonresident alien, in which case see Section 315.3) the bond will be reissued in the name of
such survivor alone, or in his name with another individual as coowner, or in his name payable on death to a designated beneficiary.
( d ) Payment or reissue on dea.th of both coowners in common disaster.—If both coowners die
in a common disaster under such conditions that it cannot be established, either by presumption of law or otherwise, which coowner died firsf, the bond will be considered as belonging
to the estates of both coowners, and payment or reissue will be made accordingly.
( e ) Payment or reissue after the death of the surviving coowner.—If a surviving coowner who
became solely entitled to the bond under the provisions of subsection (c) of this section dies
without having submitted the bond for payment or reissue, the bond will be paid or reissued as though it were registered in the name of such last deceased coowner alone. In this
case proof of the death of both coowners and of the order in which they died will be
required."




D. W . BEIX,
Acting Secretary of the Treasury.

REGULATIONS GOVERNING UNITED STATES SAVINGS BONDS
1944
Sixth Amendment to
Department Circular No. 530
Fifth Revision, dated
June 1, 1942
Fiscal Service
Bureau of the Public Debt

To

O W N E R S OF U N I T E D S T A T E S S A V I N G S B O N D S , A N D O T H E R S

T R E A S U R Y
OFFICE

OF

D E P A R T M E N T ,
THE

SECRETARY,

Washington, June 12, 1944.

CONCERNED:

Department Circular No. 530, Fifth Revision, dated June 1, 1942, as amended, is hereby further
amended as follows:
1. Section 315.5 is amended by striking out the second sentence of the first paragraph and inserting in lieu thereof the following:
"Bonds of these two series may also be registered in the names of fiduciaries, corporations,
associations or partnerships^ except that they may be registered in the names of commercial
banks, which are defined for this purpose as those accepting demand deposits, only to the extent
and under the conditions set forth in Section 315.9 ( c ) hereof."
2. Section 315.9 ( c ) is amended to read as follows:
"Series F and G—$50,000 (issue price) for the calendar year 1941, and $100,000 (issue
price) for each calendar year thereafter, of either series or of the combined aggregate of both:
Provided, however, That as to bonds of these series originally issued on or after January 1, 1944,
the amount held by a commercial bank holding savings deposits and issuing time certificates of
deposit (as each is defined in Regulation O of the Board of Governors of the Federal Reserve
System) shall not in any case exceed $100,000 (issue price) or 20 percent of such time certificates
of deposit (but only those issued in the names of individuals and of corporations, associations,
and other organizations not operated for profit) and savings deposits as shown on the bank's
books as of the date of the most recent call statement required by the supervising authorities
prior to the date of acquisition of such savings bonds, whichever is less; and Provided further,
That the amount of savings bonds of Series F and G originally issued on or after January 1, 1944,
held by a commercial bank together with 2 ^ percent Treasury Bonds of 1965-70, subscribed for
under Treasury Department Circulars Nos. 729 and 740, 2J4 percent Treasury Bonds of 1956-59,
subscribed for under Treasury Department Circular No. 730, and 2 percent Treasury Bonds of
1952-54, subscribed for under Treasury Department Circular No. 741, shall not exceed in the
aggregate $400,000, or 20 percent of such savings deposits and time certificates of deposit of such
banks as above defined, whichever is less."




D. W . BEL.X.,
Acting Secretary of the Treasury.

UNITED STATES SAYINGS BONDS
SERIES F AND SERIES G
1944
First Amendment to
Department Circular No. 654
Second Revision, dated
January 1, 1944

T R E A S U R Y
OFFICE

Fiscal Service
Bureau of the Public Debt

OF

D E P A R T M E N T ,
THE

Washington,

Section I V , Paragraph 1, and Section V , Paragraph 1 ( 2 ) , of Department
Second Revision, dated January 1, 1944, are hereby amended to read as f o l l o w s :
IV.

SECRETARY,

June 12, 1944.

Circular N o . 654,

LIMITATION ON HOLDINGS

1. T h e amount of United States Savings Bonds of Series F, or of Series G, or the c o m bined aggregate amount of both series, originally issued during any one calendar year to any
one person, including those registered in the name of that person alone, and those registered
in the name of that person with another named as coowner, 'that may be held by that person
at any one time shall not exceed $100,000 (issue price) : Provided, hozvever, That as to bonds
of these series originally issued on or after January 1, 1944, the amount held by a commercial
bank holding savings deposits or issuing time certificates of deposit (as each is defined in R e g ulation Q of the Board of Governors of the Federal Reserve System) shall not in any case exceed
$100,000 (issue price) or 20 percent of the combined amount of such time certificates of deposit
(but only those issued in the names of individuals and of corporations, associations, and other
organizations not operated for profit) and savings deposits as shown on the bank's books as of the
date of the most recent call statement required by the supervising authorities prior to the date of
subscription for such savings bonds, whichever is less; and Provided further, That the amount
of savings bonds of Series F and Series G, issued on or after January 1, 1944, held by a commercial bank, together with 2 ^ percent Treasury Bonds of 1965-70, subscribed for under Department Circulars Nos. 729 and 740, 2*4 percent Treasury Bonds of 1956-59, subscribed for
under Department Circular N o . 730, and 2 percent Treasury Bonds of 1952-54, subscribed for
under Treasury Department Circular N o . 741, shall not exceed in the aggregate 20 percent of
the combined amount of such savings deposits and time certificates of deposits of such bank
or $400,000, whichever is less. N o such bank shall hold more than $100,000 (issue price) of
Series F and Series G savings bonds (Series 1944) combined.
V.

AUTHORIZED FORMS OF REGISTRATION

1. United States Savings Bonds of Series F and Series G may be registered only in one of
the following f o r m s :
(2) In the name of an incorporated or unincorporated b o d y , in its o w n right, except
that they may not be registered in the names of commercial banks which are defined for this
purpose as those accepting demands deposits: Provided, however, That bonds originally issued
on or after January 1, 1944, may be registered in the name of a commercial bank holding savings deposits or issuing time certificates of deposit to the extent and conditions set forth in
Section I V hereof.




D. W . BEIX,
Acting Secretary

of the

Treasury.

/




e r a l Reserve Bank of N e w York

PRESIDENT'S REPORT
TO
DIRECTORS
FOR 1943

F e d e r a l R e s e r v e B a n k of N e w Y o r k




PRESIDENT'S REPORT
TO
DIRECTORS
FOR 1943

FEDERAL RESERVE
OF N E W

BANK

YORK

April 20, 1944.

To the Directors of the
Federal Reserve Bank of New Yorkj
Herewith is a detailed report on the work of the bank
during the year 1943.
i

As in the years of the first World War, which began at the
time of the organization of the Federal Reserve System in 1914* this
bank has again been called upon to participate in the formulation and
administration of the monetary policy and financing program of a nation
at war, to perform as fiscal agent of the Government an increasing
variety of services directly or indirectly related to the war effort,
and to deal with the problems, common to most undertakings, which have
attended the wartime increase in the volume and complexity of its
operations.
The Twenty-ninth Annual Report of the bank, recently issued,
describes the participation of the bank in the broader aspects of the
war financing pro,gram and the formulation and administration of Federal
Reserve policy, and describes briefly the principal developments in
operations of the bank during the year. The attached report is intended
as a supplement to the annual report, in order that you may be informed
of developments of interest and importance, in so far as the operations
of the bank are concerned, which were not of sufficient general interest
to warrant inclusion in the annual report, and also in order that you
may have available more detailed information concerning the volume and
character of the bank's operations during the year. At the end of the
report is an appendix giving additional information regarding the functions of various departments of the bank# which may be of interest to
you and perhaps of some assistance In explaining the statistical material
in Part II of the report.




Yours sincerely,
ALLAN SPROUL,
President,

CONTENTS
PART I
Page
OPERATIONS OF THE BANK DURING 1943
Operations in Aid of the War Financing Program - - - - - - "Tar Loan Drives - - - - - - - - - - - - - - - - - - - - Government Securities Issued - - - - - - - - - - - - - - Government Issues Redeemed - - - - - - - - - - - - - - - Savings Bonds in Safekeeping - - - - - - - - - - - - - - Open Market Operations - - - - - - - - - - - - - — - - - Pledge of Government Securities in System Open Market
Account to Secure Federal Reserve Notes - - - - - - - - Ration Checks - - - - - - - - - - - - - - - - - - - - - - Withheld Taxes - --- - - - - - - - - - - - - Government Check Operations - - - - - - - - - - - - - - - VT Loans
Pennies - - - - - - - - - - - - - - - - - - - - - - Planning Division - - - - - - ____________
Research and Bank Publications - - - - - - - - - - - - - - Second Federal Reserve District Studies
-------Other Studies in the Domestic Field
- International and Foreign Studies - - - - - - - - - - - - Executive Training - - - - - - -----------Personnel - - - - - - - - - - - - - - - - - - - - - - - - Buffalo Branch
•

I - 1
2
2
3
3
4,
5
6
7
8
10
11
12
13
13
14
14
14
15
15
17

PART II
Page
STATISTICAL SUMMARY OF PRINCIPAL OPERATIONS OF THE BANK
AND THE BUFFALO BRANCH (Folio-wing page 1-18)

II-

1

APPENDIX
Page
GENERAL INFORMATION REGARDING THE FUNCTIONS OF VARIOUS
DEPARTMENTS OF THE BANK (Following page 11-24)




AP - 1

PART I
OPERATIONS OF TH3 BANK DURING 1943
Daring 194-2, as set forth in my report a year ago, the Federal
Reserve Bank of New York faced many problems arising out of entirely newoperations undertaken during that year or the latter part of 1941, such as
guaranteed loans to war industries under Regulation V, the regulation of
consumer credit under Regulation W, foreign funds control of eneny property,
and work incident to the Government's program of war damage insurance, In
contrast, 1943> the second year of the war, was largely a settling down
period, during which the bank's problems and difficulties resulted principally from the tremendously increased volume of work and the introduction
by the Government of certain improved methods of operation requiring the
services of the Federal Reserve Banks.
The principal new operations involving the bank in 1943 were:
(1) the clearance of ration checks on a large scale which began in February;
(2) the receipt and verification of amounts withheld by employers as Federal
income taxes under the Current Tax Payment Act of 1943; and (3) the inauguration of an arrangement whereby a large volume of Government checks are
drawn in punch-card form payable "through" this bank, and are handled for
payment by this bank instead of being sent to the Treasurer in Washington
for payment.
Although there was a substantial increase in the volume of most
kinds of work performed by the bank during the year, the greatest increases
were in the issue and redemption of Government securities, open market
operations in Government securities, and the collection and payment of
Government checks, all of which directly reflected the increased expenditures




I - 1

and fiscal requirements of the Government.
Operations in Aid of the War Financing Program
Daring 1943 the public debt of the United States increased over
$57,000,000,000, all of which is represented by new securities issued. In
addition, a large volume of new securities was issued to offset obligations
that matured or were redeemed. A considerable part of the work incident to
the issue, redemption and servicing of these securities is done by the
twelve Federal Reserve Banks and their branches and a substantial portion
by this bank and its Buffalo branch.
War Loan Drives
The principal concentration of work, relating to the issuance of
Government securities, was preceding and during the Second and Third War
Loan Drives, which were conducted in April and September.

The sales

organizations - the Victory Fund Committee and the War Savings Staff
during the Second Drive and the State War Finance Committees during the
Third Drive - were kept informed daily by the bank of the progress of sales.
In order that such information might be as up-to-date as possible and,
therefore, have maximum usefulness for the committees, the Tabulating
Division of the Accounting

Department maintained an evening force during

the drives to prepare the reports.
In order to minimize transfers of funds for the purpose of
entering subscriptions in localities, where the subscriber wishes credit .
to be given but does not maintain funds, the Treasury established a
procedure whereby credit for a subscription entered in one locality might
be allocated to one or more other localities in accordance with the wishes
of the subscriber.




This interchange of credits was handled by the Federal

1-2

Reserve Banks. About 7>000 allocations involving subscriptions of slightly
less than one billion dollars were handled by this bank in the Third War
Loan Drive, when the procedure first became fully effective.
In connection with the Third Drive, this bank maintained facilities for the sale of securities and issuance of savings bonds at a booth
in the War Center in the midtown area of New York City.

The booth was open

seven days a week from August 30 to October 2, inclusive, from 9 a.m. to
11 p.m. In this period 9*995 customers purchased bonds having an aggregate
issue price of $1,592,072.25.

This total includes sales of savings bonds

amounting to $1,238,072.25, of which $716,609 was paid in cash.
Government Securities Issued
The number of pieces (individual certificates, notes, bonds, etc.)
delivered by the bank in connection with the original issue, and the total
issue price of such securities for the last four years were approximately
as follows:
YEAR

SAVINGS BONDS

OTHER TREASURY ISSUES

TOTAL

Number of Pieces

1940

310,000

107,000

1941
1942
1943

2,340,000
17,330,000
32,063,000

848,000

417,000

556,000

2,896,000

931,000

18,178,000
32,994,000

Issue Price
1940
1941
1942
1943

$

73*503,000
674,232,000
1,549,259,000
2,025,592,000

$ 4,954,183,000
7,756,006,000
29,649,259,000
58,030,565,000

$ 5,027,686,000

8,430,238,000

31,198,518,000
60,056,157,000

Government Securities Redeemed
Approximately 6,500,000 savings bonds of all series were redeemed
by the bank in behalf of the Government during 1943 compared with slightly




1-3

over 750,000 in 1942 and 120,000 in 1941.

The maturity value of savings

bonds, Series A through E, redeemed by the bank amounted to approximately
$280,000,000 ($175>000j000 redemption value) in 1943, and $63,000,000
($39,000,000 redemption value) in 1942. Nearly 85% of the Series E bonds
redeemed, during 1943 were in the $25 denomination.

The following schedule

of the number of pieces and maturity value of Series E bonds redeemed by
the bank in each month during 1943 illustrates the steady growth of this
operation:
Month

Number of Pieces

January
February
March
April
May
June
July
August
September
October
November
December

219,693
282,342
595,805
416,333
404,175
690,305
540,458
616,812
595,581
564,873
653,663
837,996

Maturity Value
$ 8,647,700
9,858,475
20,507,575
15,270,175
14,716,225
24,194,475
19,372,400
22,271,900
22,626,375
20,767,725
23,994,775
30,116,150

Redemptions of Government securities of all other issues increasd
from 407,035 pieces having a value of $12,873*703,000 in 1942 to 715,043
pieces having a value of $46,726,101,000 in 1943*
Savings Bonds in Safekeeping
Acting as fiscal agents of the United States, the Federal Reserve
Banks hold United States Savings Bonds in safekeeping for account of the
registered owners thereof. At the end of 1943 we had 28,447 such accounts
containing securities with a total maturity value of approximately
$42,204,000, as against 19,385 such accounts containing securities with a
total maturity value of approximately $30,302,000 at the beginning of the
year.

These accounts are becoming increasingly active, with frequent




1-4

withdrawals and an increasing amount of correspondence. Pressure of space
in the securities vault on ,fCM level made it necessary near the end of the
year to transfer many of the files containing these securities to the
locked grille room immediately outside the vault proper. Adequate measures
have been taken for the protection of these securities.
Open Market Operations
Since the problems of our war economy in the monetary and war
finance fields were much the same in 1943 as in 1942, the objectives of
Federal Reserve policy remained the same and operations in execution of
System policy differed only in degree and in detail. Open market operations continued to be the principal instrument with which reserve funds
were supplied to the banking system, to offset continuing increases in
currency circulation, to supply the reserve funds necessary to support
the increased deposit liabilities of the banks, and to a smaller extent
to offset gold losses. As shown in the table on page 26 of our Annual
Report total holdings of Government securities by all the Federal Reserve
Banks increased from $6,189,000,000 at the end of 1942 to §11,543*000,000
at the end of 1943* practically all of the increase being in the shorter
term securities, while holdings of longer torn securities declined. During
the year 1943* this bank as the agent of the Federal Open Market Committee,
purchased in the open market for the System Open Market Account securities
having a total face value of $8,610,726,000 and sold or presented for
payment securities having a face value of $6,510,489*000.

The face amount

of Treasury bills purchased by the bank for its own account during the year,
pursuant to the 3/8$ buying rate and repurchase option established in 1942,
amounted to $19*471,063*000 while bills amounting to ^17*583*311*000 were




1-5

sold or presented for payment during; the year.
Pledge of Government Securities in System Open
Market Account to secure Federal Reserve Notes
Most of the reserve funds supplied to banks through open market
operations of the System were absorbed by the increase of slightly over
5 billion dollars in the amount of currency outstanding. Because of this
tremendous expansion of currency circulation each of the Federal Reserve
Banks resumed the practicc of pledging Government securities with the
Federal Reserve Agent to secure Federal Reserve notes* which in addition
to the statutory gold certificate reserve requirement of 4-0 per cent* are
required by law to be secured by discounted paper or direct obligations of
the United States in an amount up to their face value.

The pledge of

Government securities for this purpose was authorized by the Glass-Steagall
Act of February 27* 1932. For periods of from five to nine years thereafter individual Federal Reserve Banks availed themselves of this privilege*
found it unnecessary in 194-1 and 1942*

and have now resumed its use.

Securities so pledged arc held in the joint custody of the
Federal Reserve Bank and the Federal Reserve Agent. Prior to September*
1943* it was the practice of various Federal Reserve Banks to pledge a
portion of their System Open Market Account holdings by authorizing this
bank to deliver such securities to the Federal Reserve Agent at New York*
as the representative of the Federal Reserve Agent at such other Federal
Reserve Bank* to be held in joint custody with this bank as agent of such
other Federal Reserve Bank.

This required the physical segregation of

such other Federal Reserve Bank's participation in a sufficient number of
issues to make up the required pledge. Luring the spring and summer of




1943, the amounts of System Account holdings so pledged increased to the
point where nearly every open market transaction involving a decrease in
the System Account holdings of a particular issue necessitated the release
of pledged securities and the segregation and pledging of other securities.
This involved an increasingly great amount of labor and eicpense, especially
in view of the activity of the System Account during the year. Accordingly, a plan was worked out by this bank, approved by the Federal Open
Market Committee, the Board of Governors and each of the Federal Reserve
Banks and. Agents, and made effective September 17, 1943, whereby all of
the securities in the System Account are now held in the joint custody of
the Federal Reserve Agent at New York and the Federal Reserve Bank of New
York, and any Federal Reserve Bank may pledge any portion of its undivided
interest in the securities so hold as collateral security for Federal
Reserve notes issued to it, 'without the necessity of segregating specific
securities.

This plan has worked satisfactorily, resulting in a substantial

saving of time and expense.

The total amount so pledged grew steadily

from about $1,000,000,000 on September 17, 1943, to over $4,000,000,000 at
the end of 1943, whereas $1,000,000,000 was approximately the highest
total reached in the previous pledging period in the 1930's.
Ration Checks
Commencing January 27, 1943* the Office of Price Administration
inaugurated a ration banking plan, which had been tested during 1942 under
normal operating conditions in thirty-three banking offices in the AlbanyTroy-Schcnectady area of New York. Originally applicable only to sugar,
coffee and gasoline, the plan has been extended to meats and fats,
processed foods, shoes and fuel oil. The coffee accounts were closed in




1-7

July when coffee rationing was suspended. Under the plan, retail sellers
of rationed commodities open with their banks "ration bank accounts" (one
for each category of rationed articles), deposit in such accounts ration
stamps and coupons received in the course of trade, and draw "ration checks"
against such accounts for use in obtaining additional supplies of rationed
articles. The wholesalers receiving such checks deposit them in their own
ration bank accounts, and the checks are cleared through the facilities
used for clearing ordinary checks. During 194-3 nearly 5,000,000 of these
checks were cleared by the bank.
In February, 1943, we cleared 17,876 ration checks. In May* when
the meats and processed food program got under way the volume reached
570,596*

Since May the volume has been consistently between 550,000 and

600,000 checks per month.
Withhold Taxes
One of the fiscal agency operations inaugurated during 1943
.was the handling of funds representing Federal income taxes which employers
are required to withhold from the wages and salaries of their employees
under the Current Tax Payment Act of 1943, which became effective June 11,
1943»

During July this bank qualified 817 banks in this district as

Depositaries for Withheld Taxes, supplied them with appropriate instructions
and forms, and commenced receiving from them deposits of withheld taxes.
Employers withholding more than $100 a month are required to deposit the
amounts withheld in a depositary bank, once each month, or more frequently
if they wish. The depositary bank credits the amount so deposited to an
account in the name of the Federal Reserve Bank as fiscal agent of the
United States, and issues an official, numbered depositary receipt for each




1-8

such deposit* giving the enployer one copy and sending one copy to the
Federal Reserve Bank. The balance in such account is remitted to the
Federal Reserve Bank for account of the Treasurer of the United States
each day that the balance reaches $5*000 or more* and on the last business day of each month. Each employer is required to file a quarterly
return with the Collector of Internal Revenue in his district* enclosing
the depositary receipts previously received from his bank as evidence of
payment of the amounts withheld.

The Collectors then deposit these receipts

with the Federal Reserve Bank where they are compared with the copies
received from the depositary banks in order to verify that the tax has
been received and credited to the Treasurer's Account.
By the end of the year 925 banks had been qualified as depositaries in the Second Federal Reserve District* and the Federal Reserve Bank
of New York* not including the Buffalo Branch* had received from such
depositaries a total of $644*277*000* represented by 322*482 separate
depositary receipts* and had received from Collectors of Internal Revenue*
i

and verified* 172*544 depositary receipts representing tax payments of
$336*552*000.
In order to offset the costs incurred by bank depositaries in
handling deposits of withheld taxes the Treasury authorized the issuance
to them of a

limited quantity of a special issue of 2% Depositary Bonds;

and about $15 millions worth of these bonds v/ere issued by this bank
during the year.

The bonds are registered in the name of* and held in

safekeeping by* the Federal Reserve Bank in trust for the depositary.
The maximum amount of bonds which may be issued to any depositary depends
upon the volume of withheld tax deposits handled and whether the bank




II- 9

»

makes payment from its own funds or elects to take a special Government
deposit and use those funds for such purpose. If the bank makes payment
from its own funds it may buy twice as many bonds as it could purchase if
it used the special Government deposit. In either case, periodic adjustments are made by the Federal Reserve Bank if the volume of deposits
handled varies substantially.
Government Check Operations
Since World War I the Federal Reserve Banks have handled
Government chocks (most of which arc drawn on the Treasurer of the United
States), receiving them from commercial banks for collection, giving
immediate credit therefor, charging the Treasurer's General Account and,
prior to May, 1943* forwarding nearly all of such checks to Vfashington
for examination and final payment in accordance with Treasury regulations.
The tremendous increase in the number of Government checks issued during
the first months of American participation in the present war (from
21,937,239 in 1942 to 61,242,056 in 1943) indicated that some decentralization of the function of examining and paying these checks Yfas desirable.
Accordingly, conferences were hold between representatives of the Treasury,
the Board of Governors and the Federal Reserve Banks of New York and
Chicago, as a result of which a plan was adopted in 1942 whereby certain
checks on the Treasurer of the United States would be drawn on punchcards, made payable "through" a designated Federal Reserve Bank, and such
checks would be examined and paid by such Federal Reserve Bank, as the
agent of the Treasurer, the canceled checks being transmitted to the
General Accounting Office in Washington. A similar arrangement had been




II - 10

in effect since 1935 with respect to Work Relief checks.
This plan was put into operation in May, 1943, when the War
Department Office of Dependency Benefits commenced making all Arnry
allotment and allowance payments by punch-card checks payable through this
bank. The volume of these checks was so great that in June the Government
check functions of the Check Department were transferred to a newly created
department of the bank, the Government Check Department.

In July the

disbursing officer at the Brooklyn Navy Yard commenced paying the civilian
payroll of the Navy Yard with such checks; and in October the Treasury
Regional Disbursing Officer in this district began converting his payments
to card checks payable through this bank. Commencing in September the
Arnry allotment checks (then amounting to about 1,425,000 a month) were
drawn payable through the Federal Reserve Bank of Philadelphia. This
relieved the pressure of work in this department temporarily, but the
volume continued to increase so that in December 4,403,594 card checks
were handled by the bank as compared with 1,904,948 Government paper
checks of the old style. Between May 12, 1943, and the end of the year
the bank handled a total of 33,658,542 card checks. 1,666,808 of these
were checks made payable through other Federal Reserve Banks which were
received by this bank, sorted, listed, charged to the Treasurer's account
under a special arrangement and forwarded to the designated Federal Reserve
Bank for inspection and payment.

VT Loans
On or about September 1, 1943, the War and Navy Departments and
the Maritime Commission authorized the issuance of a modified form of
guarantee agreement, designed to meet the needs of certain contractors




II - 11

who do not immediately require credit but may need some means of unfreezing working capital after the termination of their contracts for
the convenience of the Government. Such guarantee agreements, commonly
referred to as "VT" agreements, are issued by the Federal Reserve Banks,
acting as fiscal agents of the United States, pursuant to Regulation V
of the Board of Governors and Executive Order No. 9112 under which the
so-called "V loans" are also made to finance war production. During the
period from September 1, 1943* to December 1, 1943* the authorized "VT"
agreements numbered 32 and were in the aggregate amount of $538,705*000.
Six of these agreements involved $480,000,000.

Pennies
During the past two years the number of pennies in circulation
has increased sharply, and at times the demand has exceeded the supply
although this bank received from the mint and put into circulation
85*795*000 new pennies in 1942 and 92*000,000 during 1943•

The situation

was aggravated by the fact that the demand for copper in war production
caused the Treasury to discontinue minting copper pennies in 1942. Mintage
of the unpopular zinc-coated steel pennies was begun in February, 1943*
and discontinued December 31* 1943; and copper pennies (containing a
slightly different alloy) are again being minted. As a result of a public
campaign in December, 1942, sufficient pennies were turned in so that by
April, 1943* this bank held a record stock of 78,200,000 pennies; but by
September this stock was down to 2,900,000, and it was necessary to ration
banks during October and November to one-third of their September
withdrawals.

On November 9* 1943* we issued a new call for pennies from

banking institutions and the public; and receipts of 52,500,000 new




1-12

pennies from the mint during November and December enabled us to give
banks pennies during December in amounts up to their September withdrawals.
Planning Division
During the latter part of the year it was decided that* in
addition to its regular function of keeping the operating departments
abreast of new operating methods* the Planning Division of the Accounting
Department should conduct a series of surveys of the operations of most
of the departments of the bank and develop suggestions for more efficient
or economical operations. Surveys of the Savings Bond Redemption
Department and the payroll operations of the Disbursing Division of the
Accounting Department were completed before the end of the year* and the
suggestions developed are being studied.
I

Research and Bank Publications
During the year the program begun in 1942 to increase the usefulness and effectiveness of the bank's Monthly Review of Credit and
Business Conditions and semi-monthly Business and Financial Summary was
continued* both being altered somewhat as to form to make the content
more flexible with emphasis on the inclusion of material of timely interest.
During 3.943 the Monthly Review carried twenty-six special articles as
compared with thirteen in 1942 and five in 1941*
Special studies and memoranda dealing with problems of
sufficiently general interest or importance to warrant being mimeographed
and given wider distribution (but still .restricted) were prepared on the
following subjects during the year:




1-13

i

Sccond Federal Reserve District Studies
1. "Population Trends in the Second Federal Reserve District,
1900-1940" - January 1943* 17 pp.
2. "Survey of the Distribution of Demand Deposits" March 1943* 11 pp.
3. "Income Payments in the Second Federal Reserve District" April 1943* 15 pp.
4. "Rcsurvey of the Distribution of Demand Deposits" July 1943* 14 pp.
5. "The Working Population of Now York City" December 1943* 19 pp. Appendix 11 pp.
6. Revision of indexes of department store sales*
Second Federal Reserve District - December 1943* 4 pp»
Other Studies in the Domestic Field
7. "Liberty Ships After the War" - May 1943* 13 pp.
8. "Impact of War-on the Flow10 pp.
Consumers"
May 1943* of Goods and Services to
9»

"A Postwar Federal Tax System Based Mainly on the Personal
Income Tax" - August 1943* 11 pp.

10. "New Industries and Industrial Materials: Their Development
During the War Period" - November 1943* 20 pp.
11. "Changing Trends in War Finance" - November 1943* 10 pp.
International and Foreign Studies
12. Five studies on alternatives to the White ana Keynes plans
as a solution of postwar world monetary problems March to May 1943* 214 pp.
13. Five studies summarizing and analyzing various revisions
of the White and Keynes plans 0 1 postwar international
1
monetary organization - July to September 1943* 63 pp.
14. Six studies summarizing and analyzing international
monetary plans other than the White and Keynes plans
and the five alternatives covered in item 12 - May
to December 1943 - 80 pp.




v

1-14

15'

Three studies on postwar international reconstruction
and development - October and December 194-3 - 32 pp.

16. A study of the Italian money and banking system (for
the manual of military government for Italy) August 194-3 - 154- pp»
Executive Training
After a careful study by the officers' committee on welfare of
staff and consultation with the directors, an outline of a somewhat more
formal program of executive training and development than has existed
heretofore, was prepared.

The procedures provided therein were explained

at a meeting of all officers of the bank and the initial steps taken to put
the program in effect in the fall of the year. Even though the work of the
bank is in a fluid state and is being conducted under pressure it was felt
that further development of our executive training program should not be
postponed, because of certain opportunities for training in the present
situation, because the program is essentially a long range program, and
because our need for executives in the next decade, because of retirements,
will be large.
During the winter a program of instructing our supervisory staff
("non-commissioned officers") in the principles of job instruction was
inaugurated, in accordance with a plan originally established for industry
under the auspices of the War Manpower Commission.
Personnel
The increase in volume and variety of the bank's work during the
year involved an increase of 721 in the staff of the head office. During
the year we engaged 2,729 persons ana lost 2,008. The rate of turnover
(total separations during the year divided by average number of employees)
was 4-7.2$. The ratio of those interviewed for employment to those actually




1-15

hired was approximately 5 to 1. As might be expected, the greatest turnover
occurred in the junior clerical positions; and our greatest difficulty
occurred in hiring people for night work and for building maintenance and
operation.

Only a minor part of the turnover was due to temporary employ-

ment for the summer vacation period. 276 employees left the bank during
the year to enter the armed forces.
In general, the type of applicant for employment was less desirable
than in previous years. Apparently, many applicants had drifted from one
type of work to another, restlessly seeking a combination of good wages
and easy work•

There appeared to be somewhat less emphasis on salary,

however, than on short and regular hours. V e have been constantly aware
i
of the comparative attractiveness of the five-day week which is the regular
work week for many insurance companies and some other financial institutions in the city.
Absenteeism has not been a major problem. Excluding vacations,
our average daily absences for 1943 were 179* or 4»2$ of the staff, and
were chiefly for verified medical reasons.
Toward the end of the year (and at the beginning of 1944) there
were indications that the quality of job applicants is improving.
Apparently, some of the more thoughtful individuals are seeking opportunities for permanent positions in anticipation of a partial exodus from war
industry when the war in Europe is over.

There is some evidence also of

a slowing up in employee turnover.
Of the 4*415 enployees on our rolls January 1, 1944* 2,565 had
been with us less than two years.

The fact that this large number of

nevrcomers has fitted relatively smoothly and harmoniously into our




1-16

organization speaks well for the effectiveness and constructive attitude
of the older employees and department heads.
Another important factor in the assimilation of the new
employees has been a marked resurgence of activity in the Federal Reserve
Club* the employees1 social and welfare organization.

The Club has

developed new avenues of interest* social* recreational and educational*
all of which has helped maintain the morale of the staff.
Buffalo Branch
During the year the scope of the work of the Branch was expanded
to provide new and additional services for the Treasury* the Reconstruction
Finance Corporation* and for the convenience of the public and the banks in
the territory served by the Branch.
In addition to issuing Treasury Savings Motes and all series of
United States Savings Bonds* the Branch established early in the year
facilities for the redenption of Series E Savings Bonds in leased quarters
outside the Branch Office.

These services have been availed of to a

substantial extent by the public and by banks located in the area of
•

Western New York served by the Branch.
Following the passage of the Current Tax Payment Act* vfhich
became effective June 11* 194-3* a unit was set up to handle remittances
from depositary banks representing taxes withheld and deposited with them
by employers. During the first six months' period of operation under the
current tax payment method there was credited to the account of the
Treasurer of the United States $45*173*000* representing 22*569 depositary
receipts received by the Branch from the depositary banks.
For the Reconstruction Finance Corporation* the Branch has handled
the disbursement of funds for account of the Defense Plant Corporation.



1-17

Banking business transacted at the Branch in 1943 was generally
in larger volume than in 1942. Checks cleared reached an all-time peak,
both in number and in dollar value, amounting to f 6 l/2 billion, an
>
increase of 33$ over 1942, and representing approximately 16 million items
handled. The number of Treasury checks received increased very substantially, some in large amounts representing transfers of funds between
finance officers of the Government, advance payments on war contracts,
and repayments of Regulation V loans and renegotiated contracts. Operations of the Cash Division exceeded the volume of all prior years, except
during the abnormal interim period immediately preceding and following
the Bank Holiday in 1933'
The increased activities of the Branch were handled with an
increase of only 26 (from 153 to 179) in the staff.

This was accomplished

largely by extending the work week from 40 to 48 hours. The longer work
week was generally adopted, in the Spring of the year, by war industries
in Buffalo and other critical areas in accordance with the program of
the War Manpower Commission.
During the year special effort has been made further to
integrate the work of the Branch and the head office and to keep the
Branch, its officers and directors more fully advised regarding matters of
policy and operating technique. Continuing the program followed in recent
years the directors of the Buffalo Branch met with the board of directors
of this bank in November 1943*

The Managing Dirqctor of the Branch has

made several trips to New York where he has attended meetings of the
executive committee and the board of directors and has discussed with the
officers, and other members of the staff, matters affecting the operation
of the Branch.



1-18

/

FEDERAL RESERVE BANK OF NEW YORK

President's Report to Directors for 194-3

PART II

STATISTICAL SUMMARY OF PRINCIPAL OPERATIONS OF THE BANK
AND THE BUFFALO BRANCH

Page
Accounting, Personnel and Service Administration

2

Bank Supervision and Relations

5

Cash and Collection

7

Foreign

• , . .

11

Government Bond and Safekeeping

14

Loans, Credit and R. F. C. Custody

17

Open Market Operations and Treasury Issues .

20

Buffalo Branch

21

(Officers named under each function are those in charge March 1944)




II - 1

PART II
STATISTICAL SUMMA.RY OF PRINCIPAL OPERATIONS
OF THE BANK 3Y DEPARTMENTS
ACCOUNTING, PERSONNEL, AND SERVICE ADMINISTRATION FUNCTION
Officers in charge:
James M# Rice, Vice President
Edward O, Douglas, Assistant Vice President (Personnel)
George W. Ferguson, Assistant Vice President (Accounting)
Herbert H. Kimball, Assistant Vice President (Service Administration)
William A, Heinl, Manager, Personnel Department
Michael J. McLaughlin, Manager, Accounting Department
ACCOUNTING DEPARTMENT
Accounting Division: Transactions in member bank reserve accounts and nonmember
clearing accounts:
1942
3,314,203

Disbursing Division:

1943
3,499,230

72
3,079
15,412
5,360

140
2,682
13,732
16,910

12,334

Entries posted
Penalties assessed for reserve
deficiencies
Lost items charged back
Refunds and Adjustment entries
Errors adjusted
Canceled checks received and
forwarded for endorsement and
other reasons

12,618

1 9 4 2'
Number
Amount

1943..
Number
Amount

Payroll operations
Salary payments
Supplemental compensation payments
Overtime payments
Breakfast allowance payments
Supper allowance payments

86,728
39,696
-

$ 5,920,000
410,600
334,200
49,500
75,500

102,096
25,000
-

$ 7,424,600
708,800
512,100
54,200
129,200

Other expenses
Expense vouchers drawn
Air and rail reservations

18,515
556

13,124,500
-

20,679
662

15,938,900

Claims for reimbursement of
Fiscal Agency expenses

330

4,089,500

372

5,596,600

Withheld Taxes Division (organized in July 1943):
"
19 4 3
Number
Amount
TOOO Omitted)
Banks qualified as Depositaries for
Withheld Taxes
925
Depositary receipts received from
Depositaries '
322,482
$644,277
Depositary receipts received from
Collectors of Internal Revenue
172,544
336,552
TI - 2



PERSONNEL DEPARTMENT
Personnel Division:
(Officers not included in following statistics)

1942
3*694
14*550
1*970
1*179
358
705
87
20
9
4
0
$6*455*884
1,748

Total employees at year end
Applicants interviewed
Applicants hired
Total employees leaving service
A. Entering military service
B. Resigned
C. Dismissed
D. Retired
E. Died
Employees appointed officers
Employees retained in service after attaining
retirement age (65)
Rate at year end of annual salary liability
Rate at year end of average annual salary
Deductions from salaries
A. 5% victory tax (January - June)
B. Federal withholding tax (July - December)
C. Purchases of savings bonds
D. Contributions to Retirement System
E. Associated Hospital insurance
F. Group insurance premiums
G. Systematic savings
H. Tax note purchases
I. Salary savings insurance premiums
J. New York income tax on non-residents
K. Greater New York Fund
L. Garnishee orders
M. Repayments to Officers Loan Find




As of
Dec. 31,
1943
1
4

6
1
1
2
II - 3

$

-

$ 178,937
319*351
18,122
26,676
113*952
3*527
1*170
3*772
427
330
20,403
$686*667

•

As of
Jan. 1,
1943
1
4
5
1
1
1

13
$7*749*970
1*755

-

Confidential Loan s to Employees
1, From Officer s Loan Fund
A. Number of employees borrowing
B. Aggregate amount of loans
C. Number of outstanding loans at year end
D» Aggregate amount outstanding at year end
2. Educational Loan Pima
A. Number of employees borrowing
B. Aggregate amount of loans
C» Number of employees borrowing since 1924
D. Aggregate amount of loans since 1924
E. Number of employees receiving educational refunds
F. Aggregate amount of educational refunds
Medical Division:
Professional
Personnel
Medical director
Other doctors
Nurses
Dentist
Hygienist
Technician

1943
4*416
12*178
2,729
2,004
280
1*579
109
26
10
3

253
$ 26*728
156
ft 14*028

117
6*859
2,718
$119*335
146
$ 5*735

$

Total No. of
Examinations
of Applicants
for Employment
1942 - 3*143
1943 - 3*900

93*592
432,753
341*673
409*988
18*200
32*406
94*529
2,681
1*037
6*593
122
150
18,270
$1,451,994

161
19*394
127
$ "10*982
87
4*559
2*805
^123*894
135
$ 3*794

$

Total No. of
Contacts with
Employees and
Applicants
1942 - 30*033
1943 - 45*475

SERVICE DEPARTMENT
Food Supply Division:
194-2

1943

Number

Number

Amount

639,423
2,131
12,363
41

Meals served in cafeteria
Daily average
Meals served in dining room
Daily average

Amount
$159,747.01
532.49
12,284.49
40.95

752,508
2,508
14,557
48

$204,031.29
680.10
14,591.07
48.64

Post Office Division:
Pieces handled
1942
467,492
2,296,591

Registered mail
Incoming
Outgoing
Ordinary mail
Incoming
Outgoing

*

.
•

Pieces handled
1943
1,883,453
507,142 *

8,316,497
3,491,069

9,251,253
7,935,323*

Commencing January 1943, United States savings bonds, which had
been dispatched by registered mail, were sent out in the
ordinary mails under the franking privilege and the Government Losses in Shipment Act.

Telephone Section:
1942
Number of calls handled




1943

1,702,021

1,667,478

i

II - 4

BANK SUPERVISION AND RELATIONS FUNCTION
Officers in charge:
Ray M. Gidney, Vice President
William F. Sheehan, Manager, Bank Examinations Department,
and Chief Examiner
Norman P» Davis, Manager, Security Loans Department
Franklin E. Peterson, Manager, Bank Relations Department*
(Mr» Peterson was appointed Manager effective January 7, 1944,
Insley B. Smith formerly Manager, Bank Relations Department,
continuing as Manager, Government Check Department to which
he was assigned June 12, 1943*)

BANK EXAMINATIONS DEPARTMENT
Bank and trust examinations were made during 194-3 as follows:
Bank Examinations
Regular Examinations:
Jointly with New York State Examiners
Jointly with New Jersey State Examiners
Jointly with Connecticut State Examiners

166
58
3

227

3
1
14

18

For Membership:
Jointly with New York State Examiners
Jointly with F.D.I.C. Examiners
Independently

245

Total
Trust Department Examinations
Regular Examinations:
Jointly with New York State Examiners
Jointly with New Jersey State Examiners
Jointly with Connecticut State Examiners
Independently

34
1
2
118*

155

For Membership:
Jointly with New York State Examiners
Independently
Total

2
8

10
165

Includes 19 examinations in which the State Examiners
participated to the extent of checking the securities to
the records of the trust department involved.



II - 5

During 1943> all State member banks and their trust departments were
examined once with the exception of one bank which was examined for membership on
November 20, 1942, but which did not join the System until April 16, 1943' The
bank was examined by the New York State Banking Department in January 1943 and the
department will make another examination of this institution early in 1944* in
which we shall participate.
Seventeen State banks were admitted to membership in 1943 compared with
nine in 1942. Eight applications for membership were in process on December 31*
1943* compared with six on December 31* 1942.
BANK RELATIONS DEPARTMENT
During the past year members of the Bank Relations Department made 584
visits to member banks and 376 visits to nonmember banks as compared to 656 and
162 > respectively, for the year 1942. In addition, the officers of the bank made
42 calls on member banks and 7 to nonmember banks, as compared to 43 and 10,
respectively, in 1942. Members of the department attended 102 group meetings in
1943 compared with 100 in 1942.
Talks were made by members of the department before bankers associations,
clubs and various other organizations, as follows:




Subject

1942

II - 6

23
_8

4
1
1

31

War Finance
Regulation W
General Ruling No. 16
Other

1943

6

CASH AND COLLECTION FUNCTION
Officers in charge:
Valentine "Willis, Vice President
Dudley H. Barrows, Manager, Cash Department
Harold A. Bilby, Manager, Check Department
Edwin C. French, Manager, Collection Department
Insley B. Smith, Manager, Government Check Department
Frederick B. Stocker, Manager, Cash Custody Department
CASH DEPARTMENT

Receiving Division:

19 4 2
19 4 3
Number of
Number of
Amount
Deposits
Amount
Deposits
(000 Omitted)
(000 Omitted)

Received over counter checks
Received over counter currency
Received by mail currency
Received by express currency

-

30,523

$12,468,728

28,502

$21,992,303

61,136

2,599,961

62,019

2,970,940

37,145

788,847

36,483

825,595

15,730

67,699

15,003

64,474

Sorting and Counting Division:
1942

Errors found in deposits
of currency
Counterfeits detected
U. S. currency held as fiscal agent
under General Ruling No. 5:
Separate lots
Value




II - 7

360,345
12,348
136,999
164,327
42,145
8,279
177,003,000
$490,058,000

7,711
400

Currency sorted as unfit:
Number of pieces
Value

369,799
11,565
134,262
141,735
34,467
5,991
134,337,000
$376,950,000

Bundles of paper currency handled:
1's (1,000 piece bundles)
2's
"»
5»s
»
10»s
«
20»s
»
A H other denominations "

1943

10,319
401

1,320
$13,701,397.56

1,002
' $5,624,022.39

Paying Division;
19 4 2
Number
Amount
(000 Omitted)
Payments of currency to:
Individuals and Government officers
Banks over the counter
Shipped to banks

19 4 3
Amount
Number
(000 Omitted)

S3,235
43,382
87,313

87,527
43,560
86,334

$ 139,526
3,599,472
884,490

491

20

516

20

9,166,496

Cash payments of Government coupons
Federal Reserve notes
shipped to banks in
Boston and Philadelphia
districts

61,629
3,064,565
827,682

109,022

14,024,324

154,086

Coin and Bullion Division:
Coin handled:
Amount
Received
1942
1943

Pieces
Received
1,904,286,098
2,033,950,987

$136,417,747
145,926,147***
Amount
Paid Out

1942
1943
*

Pieces
Counted *
1,314,143,000

Pieces
Paid Out

$136,056,719
145,234,272

1,887,422,285
2,024,184,524

1,189,087,000
Amount
Trapped **

$12,080,300
12,877,000

The difference between Pieces Received and Pieces Counted is in
pennies only a percentage of which were counted up to the time
when our receipts of steel pennies made a 100% count
necessary,
new coin from the mint, and coin deposited under special arrangements for account of certain member banks pursuant to which some
• cr all of the coin is paid out to the banks the following day
without having been counted by us,

** This coin was wrapped in accordance with our practice of furnishing the smaller out-of-town banks with a limited amount of
wrapped coin.
This amount includes new coin received from the mint as follows:




$

920,000
1,765,000
2,400,000
4,900,000
1,100,000
550,000

$11,635,000

Cents
Nickels
Dimes
Quarters
Halves
Dollars
(included in above figure
of receipts for 1943)

II - 8

CASH CUSTODY DEPARTMENT
Currency* coin and earmarked gold are held in the vaults under control of
this department. Earmarked gold transactions during 1943 as compared with 1942 were
as follows:
1942
Number
Received for earmark:
Bars
Bags of coin

34,931
999

Released from earmark:
Bars
Bags of coin
Gold held under earmark
at year-end:
Bars
Bags of coin

Value
(000 Omitted)
$

1943
Value
(000 Omitted)

Number

503,373
7,125

54,153
4

§

776,859
10

6,028
609

61,227
4,009

3,286
1,043

46,124
8,880

186,525
13,025

2,596,313
87,352

237,392
11,986

3,317,049
78,482

CHECK DEPARTMENT
The following table shows the number of items handled in the Check Department in 1942 as compared with 1943:
1942
81,592,011
125,448,282

*

93,543,369
127,243,990

202,323
2,497,206
2,426,091
19,440,333
none

Clearings Division
Transit Division
City Collection Division-"- hand presentations
Work relief checks
Return items
Government checks
Ration checks

1943

91,045
**
2,575,813
4,911,570

The City Collection Division was transferred to the Check
Department August 27, 1943.

--- The divisions handling these operations were transferred to the
xx
newly created Government Check Department on June 21, 1943,
and the figures for the entire year are set forth under that
department.




II - 9

COLLECTION DEPARTMENT
1942
Noncash items handled for collection in
(a) Country Collection Division
(b) Coupon Collection Division
Peak day - January 2, 1942 and 1943

1943

946,209
708,695
30,524

578,959
688,299
24,426

4,761,773
518,089

5,424,734
559,012

157,127
$52,452,244

150,925
$82,964,440

Government coupons paid
Peak day - December 15, 1942 and 1943
Wire Transfers of funds
Number
Value (000 Omitted)

GOVERNMENT CHECK DEPARTMENT (created June 21, 1943)

„ ,^
1 9 4 3

n

Number
Treasury "paper" checks handled for
c oile ction
Work Relief checks
Punch-card checks payable "through"
this bank:
(a) Dependency Benefit checks*
(b) Brooklyn Navy Yard checks**
(c) Regional Disbursing Officer c e k - - - :
hcs"";Punch-card checks payable "through"
other Federal Reserve Banks****
Total Government checks handled
*

Amount
(000 Omitted)

26,022,668
351,578

$28,291,511
12,535

29,821,043
1,896,910
283,781

1,406,622
112,965
311,054

1,666,808
60,042,788

184,491
$30,319,178

Operation commenced April 7, 1943 - 3,411,246 checks handled
in December 1943.

** Operation commenced July 7, 1943 - 304,125 checks handled in
December 1943.
---- Operation commenced October 27, 1943 - 173,800 checks handled
xxx
in December 1943.
---- At the end of the year government card checks were being drawn
xxx*
payable "through" nine other Federal Reserve Banks - 514,423
of these checks were handled by this bank during December
1943.




II - 10

FOREIGN JUNCTION
Officers in charge:
L. 77erner
Horace L.
Norman P.
Daniel J,

Knoke, Vice President
Sanford, Assistant Vice President* Foreign Department
Davis, Manager, Foreign Funds Control Department
Liddy, Manager, Foreign Department

(Herbert H. Kimball, Assistant Vice President, who was assigned to
Foreign Funds Control during the entire year 1943, was assigned to
Service Administration effective January 10, 1944. Charles N.
Van Houten, Manager of the Foreign Funds Control Department during
the entire year 1943 was assigned as Manager of the Safekeeping
Department effective January 25, 1944.)
FOREIGN DEPARTMENT
Foreign Operations Division:
Foreign Accounts Section:
December 31, 1942
Number
Amount
(000 Omitted)

For eign
Accounts
Dollar
Earmarked gold
Security custody
U. S. securities
All other

48
40
12

$ 698,235
2,597,840

December 31, 1943
Number
Amount
(000 Omitted)
51
43
15

331,047
22,945

657,577

33,650,067

TOTAL

$ 5,189,945

23,280

1942
Volume of
transactions
Dollar payments and
receipts
Items received for
collection
Gold deposited or withdrawn from earmark
Receipts and deliveries of
securities and bills
Applications for Foreign
Funds Control licenses
Reports to Foreign Funds
Control of transactions
effected
TOTAL




$ 1,269,299
3,239,789

Transactions

1943

Amount
(000 Omitted)

Transactions

/.mount •
(000 Omitted)

57,570

$6,771,893

35,664

$ 5,975,506

23,115

134,882

21,922

574,957

309

916,882

278

835,882

943

1,670,933

1,167

3,623,491

639

-

642

-

346

-

275

-

82,922

$9,494,543
II - 11

59,948

$11,009,836

Foreign Exchange Section;
December 31, 194-2
Amount
Number
(000 Omitted)

Foreign
Accounts
Dollar
Earmarked gold
Security custody
U. S. securities

4
2

93,378
75,948

6
2

150,000

2

$

1

TOTAL

December 31, 1943
Amount
Number
(000 Omitted)

$

319,326

Transactions

Bank Functions
Foreign exchange and
related transactions
effected for foreign
correspondents and
member banks

478

Fiscal Agency Functions
Stabilization Fund
(a) Gold purchased
(b) Gold sold
(c) Foreign exchange

90,780
237,619
174,977

$

1942
Volume of
transactions

$

503,376

1943

Amount
1,000 Omitted)

Amount
(OCC Omitted)

11,692

540

143
91
43

512,089
495,553
38,089

52
150
198

825,696
792,240
54,566

12
2

43,038
150,000

16
20

161,671
406,977

148

474,105

584

676,582

Drafts, cable transfers,
and payments for account
of Treasurer

2,395

312,800

6,453

762,462

Interdistrict Settlement
Fund

8

125,000

38

756,000

24

9,077

25

378,195

914

562

8,990

$4,817,683

Foreign accounts held
as fiscal agent
(a) Gold earmarked
(b) Security custody
(c) Dollar receipts and
disbursements

Gold held for Treasurer
of U. S. and various
Government agencies

$

Transactions

Drafts, checks, etc., impounded under General
Ruling No. 5A
TOTAL




3,344

5)2,171,443

II - 12

$

2,732

Reports and Analysis Division:
1942

1943

Certification of exchange rates
r

Number of rates certified

6,476

7,707

Tabulation of reports
Number of reports tabulated

43,4-16

10,683*

*-Basis of reporting monthly, instead of weekly, as formerly.
Cable Division:
1942

1943

9,313

Number of cablegrams and
radiograms handled

8,610

FOREIGN FUNDS CONTROL DEPARTMENT
1942

Daily average of same
Census reports of foreign-owned property received
(TFR-300)

161,535

99,893

550

Number of applications for licenses received

1943

330

33,000

7,346

Census reports of American-owned property abroad
received (TFR-500)
Reports of transactions under licenses received
Average weekly number of reports of payments from
free foreign accounts received
Number of names on which files of enforcement
information are maintained
Personal interviews conducted

215,000
no figures

140,000*
no figures

* approximate




76,200

II - 13

191,811
750*

200,000*
25,000*

GOVERNMENT BOND AND SAFEKEEPING FUNCTION
Officers in charge:
J• Wilson Jones, Vice President
Harry M. Boyd, Manager, Savings Bond Redemption Department
Wesley W. Burt, Manager, Government Bond Department
William M, Kettner, Manager, Security Custody Department
Charles N. Van Houten, Manager, Safekeeping Department
John H. 7,'urts, Manager, Government Bond Department

GOVERNMENT BOND DEPARTMENT
Number of Pieces Handled
1942

1943

Par Value Handled
(OOP omitted)
1942

1943

United States Savings Bonds
and Stamps
Deliveries to agents on
. consignment
Payments and stubs received from agents
Direct sales

17,476,613

32,192,534 $ 1,239,728

14,644,278 29,475,095

$ 1,833,869

804,888

1,645,633

2,688,657

2,503,336

881,394

749,115

578,133

1,721,340

168

483

Payments for new issues

319,908

849,906

26,674,184

46,036,222

Denominational exchanges
and wire transfers

452,307

499,864

3,327,843

7,048,320

Redemptions and transfers
of registered securities
and exchanges

48,065

89,307

759,688

1,286,097

Redemptions of bearer se~
curities and tax notes

397,287

702,138

13,133,209

46,548,347

31,016

20,929

1,551

1,044

36,636,264

68,054,449

Savings stamps sales
and redemptions
All Other Government Issues

Redemptions of adjusted
service bonds
Volume Handled

$46,822,653 $105,149,130

War Loan Deposit Accounts; Banks qualified to maintain War Loan Deposit Accounts
are permitted to pay for Government securities, including all series of savings
bonds and notes, purchased for themselves or for account of their customers, by
deposit on their books to the credit of this bank as fiscal agent of the United
States, The activity in these accounts, as measured by the sum of deposits and
withdrawals, increased from #2,305,834,000 in 1941 to $16,018,341,000 in 1942
and to $42,009,508,000 in 1943.




II - 14

SAVINGS BOND REDEMPTION DEPARTMENT
Redemption Division:
U. S. Savings Bonds, Series A through E*
1942
(000 Omitted)

. 1943
(000 Omitted)

§38,772

$174,856

Redemption value of
bonds redeemed
Number and denomination
of pieces redeemed
1942
1943

$25

$50

558,885
5,000,551

$100

85,117
626,563

$500

$1,000

81,298
297,496

13,118
28,585

21,034
32,586

1 9 4 2
Pieces Maturity Value
(000 Omitted)
Bonds reissued, Series A
through E, or corrected,
Series A through G

85,898

$

15,455

1
Pieces

9 4 3
Maturity Value
(000 Omitted)

243,954

$

55,827

-"-Series F and G bonds are transmitted to the Division of Loans and
Currency, Treasury Department, in Chicago for redemption or reissue.
SAFEKEEPING DEPARTMENT
1 9
Accounts
Savings bonds
Member banks
Treasury and special
accounts
Notes and acceptances

19,385
876

4 2
Par Value
(000 Omitted)
$

1 9
Accounts
28,447
993

2,317,063
8,090

207
22

30,302
1,009,579

4 3
Par Value
(000 Omitted)
$

216
12

42,204
3,653,379
2,90$,037
4,063

The volume of pieces handled during 1942 and 1943 in the foregoing accounts
was as follows:
1 9
Number
Pieces received
Pieces delivered
Number of coupons
detached
~

4 2
Par Value
(000 Omitted)

1 9
Number

24,643,368
22,080,158

$91,207,712
62,385,153

38,033,264
36,854,906

1,917,629

-

4 3
Par Value
(000 Omitted)
S242,7o2,655
191,737,335

2,255,197

In addition securities impounded by the Treasury Department under General
Ruling No. 5 issued under Executive Order No. 8389 (Foreign Funds Control) were
handled as follows:
1
Number
Items received
Items released




17,855
21,264

9 4 2
• Par Value
(.000 Omitted)
$

II - 15

45,170
34,040

1 9 4 3
Number
Par Value
(000 Omitted)
10,105
7,751

$

32,080
28,243

SECURITY CUSTODY DEPARTMENT
The following table shows deposits and withdrawals of securities in the
vaults during 1943 as compared with 1942 in the following classifications:
(1) securities held in safekeeping and for the System Open Market Account including
(a) Treasury bills held by this bank in "Option Account" (b) member bank securities
held for safekeeping securities pledged as collateral in War Loan Deposit Account
and securities pledged to secure loans to member banks (c) securities held in
various accounts of the Secretary of the Treasury and (d) securities held for *
foreign correspondents and others, including savings bonds ov/ned by individuals,
(2) securities held for account of the Reconstruction Finance Corporation, (3)
unissued stock of United States Government securities, and (4) coupons clipped
(a) from unissued stock and held for destruction and (b) from securities owned by
member banks or by the System Open Market Account and delivered out for collection
at maturity.
19 4 2
Number of
Pieces
Par Value
(000 Omitted)

19 4 3
Number of
Par Value
Pieces
(000 Omitted)

(1) Safekeeping and
Open MarketsDeposits
Withdrawals

635,981
395,578

$18,113,014
9,084,810

657,720
728,421

$ 68,230,323
60,861,260

(2) R. F. C.
Deposits
Withdrawals

60,383
50,559

910,993
893,345

20,459
78,156

566,215
723,177

(3) Unissued stock
Deposits
Withdrawals

23,874,778
21,552,430

64,280,796
52,406,998

37,276,425
36,027,094

157,017,354
130,152,897

(4) Coupons
Detached
Re-attached

1,917,629
1,987

233,022
28

2,255,197

349,878

*0pen Market Account included in (l) are approximately
Deposit Tickets
3,134
$5,273,549
Withdrawals
256
1,945,391




II - 16

410

1,470
1,609

6
$12,262,535
10,172,320

LOANS, CREDITS AND R. F. C, CUSTODY
Officers in charge;
Arthur Phelan, Vice President
Loren B. Allen, Manager, Credit Department
Felix T. Davis, Manager, R F. C. Custody Department
CREDIT DEPARTMENT
Regulation V: 591 applications were received in 1943* 51 of
which were withdrawn before final action had been taken.
34 applications received in 1942 were acted on in 1943, and
45 applications received in 1943 were under consideration
at the end of the year.

Action

Aggregate Amount
of Loans
(000 Omitted)
$ 42,582
1,656,551
55,624
$1,600,927

Number

Applications declined
Guarantees authorized
Canceled or withdrawn
Net

55
474
61
413

Outstanding guarantees
as of 12/31/43
"V" loans
"VT" loans
Total

302
_5
307

$2,491,979
281,000
^772,979

Amount of
Guarantees
(000 Omitted)
$
1,386,396
46,297
$1,340,099

$2,150,314
225,500
02,375,814

Regulation ¥: (Enforcement Program)
3,282

Investigations
Transactions
Examined:
Single Payment Loans
Instalment Loans
Instalment Sales
Charge Sales

320
6,194
295,593
140,342

DISCOUNT DEPARTMENT
During 1943, 148 member banks availed themselves of the credit facilities
of the bank through the head office and the Buffalo Branch as follows:
1942
Number of applications received
Number of banks accommodated
Aggregate borrowings (000 Omitted)
Borrowings on peak day
Number of banks
Amount (000 Omitted)




II - 17

1943

585
108
$106,361

938
148
$1,541,748

$

9
8,380

$

44
95,355

R. F. C. CUSTODY DEPARTMENT
Transactions effected during 1943 as compared with 1942, for account of
the Reconstruction Finance Corporation and its subsidiaries were as follows t
1. Commodity Credit Corporation
Amounts
Disbursed

Commodities
Acquired

Year
1942
1943

200

300

Amounts
Received
Not computed
3315,197,380.51

$240,404,379.89
617,924,779.06*

-^Includes 66,447 disbursements on Commodity Credit Corporation Feed Drafts
in the aggregate amount of $2,113,641.30 since November 15, 1943.
/

2. Defense Plant Corooration

Year

Number of
Projects

.Amounts
Disbursed

1942
1943

214
290

$619,835,524.88
420,962,234.82

Amounts
Received
Not computed
^255,422,062.36

Defense Supplies Corporation
Year

Commodities
Acquir ea

1942
1943

63
149

Amounts
Receive4

Amounts
Disbursed
3210,297,654.67
225,624,685.63

$ 68,332,524.35
310,964,309.28*

*Includes $1,210,135.38 disbursed under the Idle Tire Program.
4.

Disaster Loan Corporation
Loans and advances
being serviced as at
December 31, 1942
December 31, 1943

5.

Number
on Books
68
36

Balance Due
$

127,709.58
71,466.38

Federal National Mortgage Association
Mortgage Loans and Purchases
being serviced as at

Number
on Books

Balance Due

December 31, 1942
December 31, 1943

349

$3,050,024.66

116

473,511.91

/mounts
Disbursed

Amounts
Received

6. Metals Reserve Company
Year
1942
1943



Commodities
Acquired
42
78

$328,862,064.76
474,865,292.08
II - 18

$221,870,373.14
336,972,112.82

7.

Reconstruction Finance Corporation
Year

Loans Made

Mounts
Disbursed

1942
1943

531
246

$90,759,737.85
64,610,398.32

Year

Loans Paid

Payments Received

Balance due as
of December 31

1942
1943

264
430

$ 72,740,281.19
126,290,231.87

$1,159,317,720.11
1,039,761,725.27

Collateral held on
December 31, 1942
December 31, 1943

$1,614,522,708.01
1,265,049,715.73

8, The RFC Mortgage Company
Mortgage Loans, Participations, Purchases, etc.,
being serviced as at

Number
on Books

Balance Due

978

$7,404,778.92

December 31, 1942
December 31, 1943

5,630,316.18

611

9. Rubber Reserve Company
Year
1942
1943

Amounts
Received

Amounts
Disbursed
$115,121,247.87
63,656,120.39

$165,256,713.57
183,997,194.62

10. U. S. Commercial Company
Year

Amounts
Disbursed

1942
1943

Ul, 8 36,281.99
85,649,500.15

11. 7?ar Damage Corporation




Year

Premiums
Received

Policies
Covered

1942
1943

$48,422,369t42
94,617,596.64

1,325,000
1,400,000

II - 19

I

OPEN MARKET OPERATIONS AND TREASURY ISSUES FUNCTION
Officers in charge:
Robert G. Rouse, Vice President
Silas A, Miller, Assistant Vice President
Marcus A. Harris, Manager, Securities Department
SECURITIES DEPARTMENT
Bill Division:
Transaction in bankers
acceptances for account of

1
Number

(a) System Open Market Account
(b) Member banks
(c) Foreign correspondents

9

4 3
Value

—
-

667

$10,774,675.49

Securities Division:
1 9
Transactions

4 2
Amount
(000 Omitted)

purchases of Securities
System Open Market Account:
Open market transactions
3,706 $5,107,467
16
Special certificates of indebtedness.
2,380,000
Received in exchange from Treasury
245,956
4
Federal Reserve Bank of New York U.S. Treasury bills under repurchase option
627,224
131
Member banks
14,326
523
Government accounts
75
38,353
Other F. R. Banks
1,200
4
Foreign correspondents
92
249,862
$8,664,388
4,551

1 19
Tran sactions

4 3
Amount
(000 Omittec

1,882
39
7

$ 8,610,726
16,325,000
1,535,290

3,163
840
65
42
124
6,162

19,471,063
31,387
80,282
14,075
385,227
$46,453,050

Sales and Redemptions of Securities
System Open Market Account:
Open market transactions
Redemptions
Special Certificates of Indebtedness
Tendered in exchange to Treasury
Federal Reserve Bank of New York U.S. Treasury bills under repurchase option
Member banks
1
Government accounts
Other F. R. Banks
Foreign correspondents




224
47
16
4

$ 395,754
1,368,555
2,380,000
245,956

1,964
71
39
7

$ 2,332,766
4,177,723
16,325,000
1,535,290

78
743
29
11
31
1,183

361,636
13,334
18,867
1,612
25,122
$4,810,836

2,057
1,161
248
io(
18
5,575

17,583,311
27,984
383,537
2,195
83,750
$42,451,556

II - 20

OPERATIONS OF THE BUFFALO BRANCH
Accounting Division:

1942
70
8

Member Bank Reserve Accounts
Nonmember Clearing Accounts
Number of entries posted

1943
72
10
95,000

125,000

"Vithheld Taxes: *
Number of receipts received from
depositary banks
Amount
Number of receipts received from
Collectors of Internal Revenue
Amount
Number transferred to other Federal Reserve districts
Amount
Cash Division:
paying Section:

22,569
$45,172,000
13,939
$27,797,000
$

Number of transactions

4,67??;

15,703

14,875

Cash disbursed to:
Banks in Buffalo
Banks outside Buffalo
Treasurer of the U. S.
All Others

$132,612,000
112,625,000
24,398,137
12,100,230

$131,279,000
115,887,000
27,141,070
16,044,200

Total Cash Disbursed

$281,735,368

$290,351,270

Receiving Section:
Cash received from:
Banks in Buffalo
Banks outside Buffalo
Treasurer of the U. S.
All Other Sources

$108,769,300
44,725,300
23,087,200

$115,733,000
43,309,000
119,671,000
14,853,000

$282,388,300

$293,566,000

105,806,500

Total Cash Received
Shipping Section:

Mutilated Currency
Fit Federal Reserve Notes
Currency to Banks
Mutilated Coin
Coin to Banks
Securities

1942
Pkgc.
5,307
254
7,479
31
3,048
9,385

Amount

$25,377,590
11,331,000
65,576,909
. 20,546
1,244,884

1943
Pkgs.
6,267
352
7,284
18
2,770
9,197

Amount
$27,132,290
14,372,000
71,937,204
9,300
1,143,019

Currency and Coin Sorting Section:
1942
Amount
Pieces
(OOtnSTtted)
Bills Counted
Bills Rehandled
Verification Count
Coin



1943
Pieces
Amount
. (000 Omitted)

37,688
1,776
7,307
34,220

34,889
2,266
5,564
47,002

$174,293
16,887
83,512
3,307
II - 21

^172,619
21,835
78,643
4,430

/

Wire Transfer Section:
1943

1942
Number
Wire Transfers
Mail Transfers

Amount

7,673
1,384

$1,183,013,408
7,456,645

Amount

Number

7,542 $1,577,646,383
1,244
4,450,799

Check Division:
1942
Pieces
Amount
(000 Cmitted)
Clearings
Other City Checks
Checks on Us
Country Checks
Return Items
Government Checks

$2,003,063
59,823
141,658
2,110,849
8,242
646,931
$4,970,566

4,124
508
4
9,481
71
771
14,959

Daily Average No. of
Checks Handled
No. of Cash Letters Sent
No. of Ration Checks Handled

1943
Amount
Pieces
(000~0mitted)
$2,291,169
66,701
170,788
2,914,084
7,836
1,144,892
$6,595,470

4,399
592
5
9,637
51
1,256
15,940

49,532
240,03?

52,784
187,240
698,819

Collection Division*
1942

1943

Number

Number

Amount

34,489

$24,424,040.31

23,252

$27,234,426.28

19,157
66,152
7,897

Country Items (except coupons)
City Items (except
coupons)
Coupons
Coupon Transactions
Registered Articles
Received

Amount

22,820,681.74
3,631,581.32

8,538
59,581
7,181

21,365,966.51
2,550,746.09

3,728

71,393*

* Includes 67,642 articles delivered to Savings Bond Redemption Division
which opened for business January 21, 1943.
Credit and Discount Division:
1943
Number

1942
Advances made
Rebates

Number
23T**)
17

50 (*)
31

$28,180,000
21,335,000

Amount

$8,615,000
7,920,000

(*) Thirteen banks
(**) Five banks




Amount

II - 22

Regulation W:
1942

150

1943
25

375

876

23,009
9,279

215
95,751
52,877

375

No, of inquiries received by letter
No. of verbal inquiries received
No, of investigations made
Transactions examined:
Instalment Loans
Instalment Sales
Charge Sales
No. of violations disclosed:
Wilful
1,344
Inadvertent
844

2,188

1,900

200

Office Service Division:
Personnel Section:
1942
Amount
Number
Payroll operations:
Salary payments
Supplemental Compensation payments
Overtime payments
Breakfast allowance
payments
Supper allowance payments

3,549

$202,039

1,695
1,370

1943
Number
4,386

14,366
4,738

87 2#
3,766

1,201

Amount
$259,114
25,358
55,745
1,320
2,340

187

C-laims for reimbursement of
Fiscal Agency expenses
Applicants interviewed
Applicants employed
Employees resigned:
Military service
Voluntary
Requested
December 31:
Number of employees
Annual salary liability

87

13,195

106

376

593

96

120

10
46
12

124,290

14
69
11
94

153

179
216,744

272,871

# Supplemental payments were combined with salary payments on June 15, 1943.
1942
Deductions from salaries of employees:
Percentage of total salary paid
Withheld Taxes
Savings Bonds purchases
Tax Note purchases
Retirement System contributions
Group Insurance premiums
Systematic savings
Hospital insurance
United War and Community Fund
Repayments to Officers Loan Fund



II - 23

1943

13.14$
- .
$ 6,657.25
299.52
10,143.43
587.10
6,949.00
928.05
164.15
827.77
$26,556.27

20.31$
$24,760.12
17,197.78
165.00
13,612.43
705.00
5,603.00
1,052.63
206.20
672.72
$63,974.88

R.F.C. Custody Division*
1942
29,142
$77,548,416 i 56

Number of checks issued
Amount

1943
27,995
$41,828,116.11

Savings Bond Redemption Division:
Number of pieces redeemed
Maturity value
Number of checks issued

514,191
$16,389,000
221,841

Securities Division:
1942

1943

Pieces
Redemptions:
Gov't Bonds (Except Svgs. Bds•)
Other Issues
Gov't Coupons
Coupons of Gov't
Guaranteed Issues
Sales:
U.S. Savings Bds.
U.S. Notes, Tax
Series

5,640
281
27,929

Amount

Pieces

.
.
.
$18,982,000f00
24,430
142,000.00
99
950,150.93
34,132

$114,192,000.00
66,000.00
1,183,352.30

9,173

195,456.00

7,551

133,620.18

7,269

1,060,025.00

20,125

18,293,450.00

1,309*

4,884,825,00*

6,614

66,052,800.00

# Operation started November 23, 1942.
1942
Accts.
Par Value
^Security Custody:
Safekeeping for Member
Banks
13
$968,000
Pledged Collateral of
Member Banks
1
25,000
Pledged Securities for
account of Treasury
Dept. and Agencies

5

* Securities held on December 31
Number of Transactions
Coupons clipped
Number of Cashier's checks issued




Amount

II - 2 4

436,570

1943
Accts,
par Value
11

$460,000

1

25,000

5

437,730

137
2,036

118
1,527

1,377

1,476

/

I

FEDERAL RESERVE BANK OF NEW YORK

President's Report to Directors for 1943
•

APPENDIX
GENERAL INFORMATION REGARDING THE FUNCTIONS
OF VARIOUS DEPARTMENTS OF THE BANK

Page
Accounting, Personnel and Service Administration . . . . . . . .

2

Bank Supervision and Relations

4

Cash and Collection

5

Foreign

7

Government Bond and Safekeeping

8

Loans, Credit and R. F. C. Custody

10

Open Market Operations and Treasury Issues

12




(March 1944)

AP - 1

ACCOUNTING, PERSONNEL AND SERVICE ADMINISTRATION FUNCTION
ACCOUNTING- DEPARTMENT
Accounting Division; Disbursing Division; Planning Division;
Purchasing Division; Tabulating Division; Withheld Taxes Division
The Accounting Division maintains- the General Ledger of the bank, member
bank reserve accounts, nonmember bank clearing accounts, settlement accounts with'
other Federal Reserve Banks, the general account of the Treasurer of the United
States, and other deposit accounts with the bank, except foreign accounts.
The Disbursing Division pays employees' salaries and all other items of
expense incurred by the bank, and prepares vouchers for reimbursement from the
United States Government for expenses incurred by the bank in fiscal agency operations .
The Planning Division supervises methods and practices throughout the
bank, and as a part of that program examines all purchase requisitions for equipment
and supplies, passes upon the specifications of all material ordered, and standardizes so far as practicable all printed forms. From time to time it conducts surveys
of the various departments to analyze their problems and to suggest improved operating methods. It prepares floor plans and equipment layouts v/henever new units are
set up or old units are moved. It also supervises the servicing and repairing of
any mechanical office equipment used by the bank which is not serviced by the manufacturers .
The Purchasing Division buys.all supplies for the bank and for the maintenance of its buildings. It stores the supplies, disburses them, on requisition
and maintains a perpetual inventory on all stock items.
The Tabulating Division prepares certain records on International Business
Machine equipment for various departments of the bank, the principal such records
being those relating to: check collections, departmental expense distribution,
securities held in safekeeping accounts, coupon cutting requisitions and coupon
credits, payrolls, inventory of furniture and. equipment, and sales of Series E War
Savings Bonds in the Second Federal Reserve District.
The Withheld Taxes Division has handled since July, 194-3, the fiscal
agency vrark assigned to the bank in connection with the collection at the source of
Federal income taxes on salaries. The division's functions are two-fold:
1. It receives remittances from qualified depositary banks of funds
representing withheld taxes paid to them by employers and others,
it credits such funds to the General Account of the Treasurer of
the United States, and it maintains accounting records for each
authorized depositary bank.
2. It receives from the Collectors of Internal Revenue the original
depositary receipts which the employers received from-the authorized depositaries and reconciles these with the accounts it maintains for the authorized depositaries.




AP - 10

PERSONNEL DEFARTMEMT
Personnel Division; Employees Activities; Correspondence files
Division; Stenographic Division; Medical Division
The Personnel Division makes studies of policies affecting personnel,
selects new employees, controls assignments, prepares payrolls, administers certain
bank rules, controls insurance bonds and trains messengers.
This division cooperates with The Federal Reserve Club, which conducts
the social life of the bank, sponsors athletic activities, maintains the Club Store
and Club Library, and publishes the "federalist," a weekly publication of events
of Interest within the bank. The department also handles educational loans and
advises on educational and other matters.
The Correspondence Files Division maintains control of the bank's general
files, and keeps certain documents in bound form. The Stenographic Division performs
duplicating and photostating work for the bank, maintains mailing list addressograph
plates, and furnishes stenographic and typing service where needed.
The functions of the Medical Division under the Medical Director include
(l) physical examination of all applicants before employment, (2) physical reexamination of all employees yearly when possible, (3) medical advice concerning
health of employees* (4) minor surgical operations and dressings, (5) issuing
excuses from work because of illness or accident, (6) issuing and renewing leaves
of absence, and (7) supervising the sanitation of the building.
?ERYTCp_

DEPARTMENT
"r
Supply Division; Post Office Division; Protection
i i vision; Telephone Section; Vault Division
5

The Food Supply Division selects food and prepares and serves luncheon for
the officers and employees of the bank, at prices substantially below cost. In
addition, the employees' cafeteria also serves the night force from 3 to 6 a.m.;
and special dinners are occasionally prepared.
bank.

The Post Office Division operates a postal station which serves only this
It affords both ordinary and registered mail facilities.

The armed guards in the Protection Division provide protection for the
main building, the building at 95 Maiden Lane and the space leased by the bank at
51 and 70 Pine Street. Protection is'also provided for all messengers or clerks
making deliveries of valuables through .the streets and for the registered mail
trucks that operate between the bank and the General Post Office. The guards
operate the bank's automobiles and the employees' check room, and perform various
other supervisory duties within the bank. In the event of an air raid alarm, the
division is in complete charge of the bank building. It also operates emergency
equipment in case of fire. The panel board controlling the alarms on the vaults
is under the jurisdiction of the division.
The Telephone Section handles inter-office and outside telephone calls
for the bank. It maintains two direct lines to the offices of the Board of Governors
in "Vashington, and two direct lines to the Treasury Department, V^ashington. Twentyfour hour service is provided and arrangements have been made to insure emergency
wervice if necessary.




AP - 10

The Vault Division sees that only authorized persons are admitted to the
vault space and holds partial control on access to the bank's currency and securities .
BUILDING OPERATING
This unit operates and maintains the main bank building and the annex
buildings at 95 Maiden Lane and 10 Gold Street. Substantially all maintenance and
repair work is done without the assistance of outside concerns, including that
incident to the air conditioning system and the power plant which generates all
electricity for light and power for the bank building.

BANK SUPERVISION AND REIATI0NS FUNCTION
BANK EXAMINATIONS DEPARTMENT
Examining Division; Analysis Division;
Application & Records Division
The Examining Division handles the examination of State member banks,
banks applying for membership, and affiliates and holding company affiliates. The
trust examiner handles the examinations of trust departments of State member banks
and of banks applying for membership.
The Analysis Division handles the analysis of examination reports ci mem—
ber banks and of banks applying for membership, the preparation of correspondence,
memoranda, and studies relating to member banks, the relations of the bank with the
Federal Deposit Insurance Corporation, the Reconstruction Finance Corporation and
State banking departments with respect to bank supervisory matters, applications of
member banks for permission to reduce their capital, reports of possible violations
of certain criminal statutes, administration of the Board of Governors' Regulations
L, 0 and R, and recommendations on War Loan Depositaries,
The Application & Records Division maintains the departmental files and
reports of condition and earnings of member banks, administers the Board of Governors'
Regulations F, H, I, K, M, P and Q, maintains files of the corporate documents of
member banks, and reviews examination reports prior to typing.
BANK RELATIONS DEPARTMENT
The function of this department is to visit the banks of the Second
Federal Reserve District, to assist in keeping them informed of the operations of
the Federal Reserve Bank and of the Federal Reserve System, to give helpful suggestions to the officers of the banks in matters tending to raise the standard of bank
management and, generally, to promote harmonious and satisfactory relations between
the Reserve Bank and its members. It is also the function of the department to
promote better understanding with the nonmember banks, to give them assistance with
their current problems where this is possible and to assist them in becoming members
of the Federal Reserve System when they so desire.




AP - 10

SECURITY LOANS DEPARTMENT
This department administers the Board's RegulationsT and U governing,
respectively, the extension and maintenance of credit by brokers, dealers, and members of national securities exchanges, and loans by banks for the purpose of purchasing or carrying stocks registered on a national securities exchange. During
the year only a few minor inquiries were received, and a small amount of routine
work handled.

CASH AND COLLECTION FUNCTION
CASH DEPARTMENT
Receiving Division; Sorting and Counting Division;
Paying Division; Coin and Bullion Division
The principal operations of this department relate to the receipt and
distribution of coin and currency.
The Receiving. Division receives shipments of new paper currency from the
Treasury and deposits of used currency from member banks and other depositors. This
division also receives deposits of Government checks from officers of the Government
for immediate credit to the Treasurer's General Account, and a large volume of
Government checks and checks dravm on this bank which are presented by banks over
the counter for deposit, and immediate credit, in their accounts.
The Sorting and Counting Division verifies used paper currency deposited
by member banks, and sorts out: (l) Federal Reserve notes issued through other
Fsderal Reserve Banks (these are returned to those banks, except that notes issued
through the Boston and Philadelphia Reserve Banks are shipped direct to their member
banks) and (2) currency which is unfit for further circulation (which is sent to the
Treasury for destruction)•
The Paying Division handles all currency shipments and counter payments,
including those 'Government checks and coupons which are cashed over the counter,
and arranges for the shipment of accumulations of fit Federal Reserve notes issued
through the Federal Reserve Banks of Boston and Philadelphia to member banks in
their respective districts. Fbderal Reserve notes are requisitioned from, and
retired with the Federal Reserve agent in accordance with instructions given by
this division to the Cash Custody Department. All currency handled by this division
is obtained from either the Cash Custody Department or the Sorting and Counting
Division•
Since May, 1942, the receipt and delivery of United States currency and
coin seized by the United States Customs and delivered to the bank under General
Ruling No. 5, issued under Executive Order No. 3389 (Foreign Funds Control) have
been handled in the Cash Department. The Sorting and Counting Division receives
such currency and coin and holds it for three months or until it is released, whichever is shorter. If such currency has not been released within three months it is
lodged with the Cash Custody Department, The Paying Division makes all releases in
accordance with instructions from the Foreign Funds Control Department.
The Coin and Bullion Division receives, handles and disburses all coin
received by the bank.




AP - 10

CASH CUSTODY DEPARTMENT
Cash Custody Division
This department maintains the custody in the vaults of all currency, coin
and bullion held by the bank, and receptacles containing other valuables, making
delivery thereof to various departments of the bank on requisition. In accordance
with the Vault Rules and Regulations of the bank, unissued Federal Reserve notes
are held under joint control with the Assistant and alternate Assistant Federal
Reserve Agents; and the bank's coin and currency, and bullion earmarked for foreign
central banks and governments, are held under joint control with the Vault Division
of the Service Department,

CHECK DEPARTMENT
Clearings Division; Transit Division;
City Collection and Return Items Division
This department handles all checks and other cash items Cither than
Government checks) received for collection from member and nonmember clearing banks
in this district, from other Federal Reserve Banks and direct sending member banks
of other districts, and from or for the account of other depositors, such as the
Treasurer of the United States, various other Government agencies and foreign central
banks and governments.
The Clearings Division handles all items drawn on banks in The New York
Clearing House Association, the Northern New Jersey Clearing House Association and
those banks in Greater New York which participate in the Manhattan, Bronx and Brooklyn
collection arrangement.
The Transit Division handles the checks drawn on the other banks in the
Second Federal Reserve District and on banks located in other Federal Reserve districts, processing, checks drawn on banks located in the Second Federal Reserve
District on I.B.M. punch card equipment.
The City Collection and Return Items Division handles all cash items which
are returned unpaid for any reason, makes hand presentation of noncash items payable
at street addresses in New York City, below 59th Street, and provides messenger
service for other departments of the bank,
COLLECTION DEPARTMENT
Coupon Collection Division; Country Collection Division;
Wire Transfer Division
This department handles all noncash items (such as maturing bonds and
coupons, municipal warrants, maturing notes and acceptances, drafts with or without
documents attached, and all other evidences of indebtedness and orders to pay except
bank checks handled as cash items) which are received by the bank for collection;
except those requiring hand presentation in New York City. In addition the Coupon
Collection Division handles the work incident to the payment by the bank;, as fiscal
agent of the United States, of coupons detached from securities issued or guaranteed
by the United States Government.
The Wire Transfer Division handles telegraphic transfers of funds between
the Federal Reserve Bank of New York and other Federal Reserve Banks made for account
of the Treasurer of the United States or at the request of, or for credit to, member
banks and nonmember clearing banks located in the Second Federal Reserve District.



AP - 10

GOVERNMENT CHECK DEPARTMENT (Organized June 21, 1943)
Card Check Division; Treasury Check Division
The Treasury Check Division handles all paper and punch-card checks drawn
on the Treasurer of the United States paj^able in Washington which are received by
the bank for collection from member and nonmember clearing banks or other sources in
this district.
The Card Check Division handles the punch-card checks, most of which are
drawn on the Treasurer of the United States, "through" a designated Federal Reserve
Bank. Whereas all traditional style (so-called "paper") checks drawn on the
Treasurer are sent to Washington for examination and payment, most of the punchcard checks are examined and paid in the Federal Reserve Bank through which made
payable.
Immediate credit (subject to final payment) is given for all Government
checks received on deposit, punch-card checks drawn "through" other Federal Reserve
Banks being forwarded to such banks for examination and payment.

FOREIGN FUNCTION

FOREIGN DEPARTMENT
Foreign Operations Division; Reports and Analysis Division; Cable Division
The Foreign Accounts Section of the Foreign Operations Division handles
the dollar, earmarked gold, and securities custody accounts maintained by this bank
for foreign central banks and governments under authority of section 14(e) of the
Federal Reserve Act, and also operates the Federal Reserve System accounts maintained
abroad. Transactions in such accounts on the books of the bank include payments and
receipts, collections, gold earmarks and releases, and purchases and sales of-securities. All other Federal Reserve Banks participate in all such accounts and are
kept currently informed concerning operations therein.
The Foreign Exchange Section of the Foreign Operations Division handles
certain fiscal agency transactions and foreign exchange transactions for foreign
correspondents and out-of-town member banks. The fiscal agency transactions consist
of: purchases and. sales of gold and foreign exchange for the Stabilization Fund,
operation of stabilization agreements entered into between the Treasury and various
foreign governments and central banks, maintenance of certain dollar and earmarked
gold accounts (some of which relate to such stabilization and other similar agreements), purchases of silver under the Silver Purchase Act, purchases and sales of
foreign drafts, and cable transfers and remittances of funds abroad for use of our
armed forces and various governmental agencies.
The Reports and Analysis Division certifies daily rates of foreign exchange
to the Treasury, pursuant to section 522 of the Tariff Act of 1930. Reports on
international movements of capital and foreign exchange are collected by this division from banks, brokers, and others pursuant to Executive Order of January 15, 1934,
and Treasury regulations, and such reports are tabulated and analyzed. The division
also makes studies of the effect of other foreign operations on this market, and of
developments in the United States' balance of payments, Lend-Lease, and similar
fields of international finance.



AP - 10

The Cable Division handles all incoming and outgoing cablegrams and
radiograms, most of which are transmitted in our private code, and prepares code
books and secret telegraphic test keys for use between outselves and our foreign
correspondents.
FOREIGN FUNDS CONTROL DEPARTMENT
Compliance Division; Licensing Division; Applications and Records Division
This department performs the duties delegated to this bank, as fiscal
agent of the United States, by the Treasury Department in connection with the administration of Foreign Funds Control. Chief among such duties are1 the following:
Discussing with the Treasury the formulation of freezing control
policy and assisting in the preparation of public documents in
connection therewith.
\

Carrying on public relations to acquaint banks and other persons
with Treasury policy and to assist them with specific problems.
Receiving applications for licenses relating to transactions
affected by the freezing control and issuing the licenses or
making other disposition of the applications.
With the cooperation of the principal New York banks, assembling
information relating to payments from free foreign accounts in
order to detect the possible subversive use of such funds.
Receiving and checking reports covering transactions under licenses.
Receiving and forwarding to the Treasury census reports of property
in the United States owned by foreigners and of American-owned
property abroad.

GOVERNMENT BOND AND SAFEKEEPING FUNCTION
GOVERNMENT BOND DEPARTMENT
Savings Bond Issue Division; Treasury Bond Division
The Government Bond Department conducts the operations of the bank, as
fiscal agent of the United States, in connection with the issuance, distribution,
exchange and redemption of securities of the United States Government and certain
of its agencies, except for redemptions and reissues of United States Savings Bonds
which are handled by the Savings Bond Redemption Department. The department maintains detailed records with respect to public debt operations in the Second Federal
Reserve District and submits periodic reports to the Treasury Department concerning
such operations. The department also maintains records of the balances held in war
loan deposit accounts by banking institutions qualified as special depositaries of
public funds and controls the securities pledged as collateral for such balances.




All organizations, acting as issuing agents for sale of Series E War
Savings bonds in the Second Federal Reserve District, except post offices, are
qualified by the Government Bond Department which supplies them with bond stock to
be issued, receives their remittances of the proceeds of bonds sold and credits
such amounts to the account of the Treasurer of the United States.

SAVINGS BOND REDEMPTION DEPARTMENT
Redemption Division
This department handles the work of the bank, as fiscal agent of the
United States, in the following operations:
1. The reissuance of United States War Savings Bonds for:
(a)
(b)
(c)
(d.)
2*

Correction
Addition of coowner
Addition of beneficiary
Exchange of beneficiary for coowner.

Redemption of United States Savings Bonds of all series,
except Fand G which are received and transmitted to the
Division of Loans and Currency of the Treasury Department in Chicago.

3. Maintenance of files for the department and for all
general correspondence pertaining to United States Savings
Bonds, including applications for issuance.
SAFEKEEPING DEPARTMENT
Safekeeping Division
This department handles the records and maintains control of securities
held by the bank in safekeeping for account of member banks, the Treasury Department
and various Government -agencies, and foreign banks ana governments, as well as the
safekeeping of securities received as collateral in certain other departments and
savings bonds held in safekeeping by- the bank, as fiscal agent of the United States,
for account of the registered owners thereof. The Security Custody Department
maintains the actual custody in the vaults of all such securities.
This department also renders many services to the owners of securities
held in safekeeping, including the acceptance and delivery of securities against
purchases or sales, the presentation of bonds or coupons for collection at maturity,
and notification to owners that their bonds have been called for redemption or that
other events have occurred affecting their portfolios.
This department delivers new issues of Government securities to banks,
brokers or individuals on allotment subscriptions, either over our counter, by
registered mail, or by wire transfer to other sections of the country; and also
handles the delivery of incoming allotments or wire transfers of Government securities sent to us for New York delivery by the other Federal Reserve Banks and.
branches.




AP - 10

SECURITY CUSTODY DEPARTMENT
Security Custody Division
This department handles the actual custody in the vaults of all securities
held by the bank. These securities fall into the following classifications:
(1) securities held for'the System Open Market Account and securities held in safekeeping* including (a) Treasury bills held by this bank in "Option Account," (b) securities of member banks held for safekeeping, pledged as collateral in War Loan
Deposit Account, or pledged to secure loans to member banks, (c) securities held in
various accounts of the Secretary of the Treasury, and (d) securities held for
foreign correspondents and others, including savings bonds owned by individuals,
(2) securities held for account of the Reconstruction Finance Corporation, (3) unissued stock of United States Government securities, and {u) coupons clipped (a) from
unissued stock and held for destruction^ and (b) from securities owned by member
banks or by the System Open Market Account and to be delivered out for collection at
maturity.
Securities other than unissued stock are received with vault receipt
attached from the department of the bank having control thereof. The Security
Custody Department validates each receipt, files the securities, maintains control
of each account for which securities are held, cuts coupons as they mature in
accordance with appropriate instructions, and releases the securities to the appropriate department of the bank upon receipt of a withdrawal requisition and return
of the vault receipt.
Stocks of unissued Government obligations are requisitioned by the department as needed by the bank for purpose of sale or exchange; and the department dates,
and otherwise completes, stocks of Treasury bills for the weekly issues thereof and
stocks of Federal Intermediate Credit Bank and Federal Home Loan Bank obligations
for the monthly issues thereof.

LOANS, CREDITS AND R. F. C. CUSTODY
CREDIT DEPARTMENT
Credit Division; Consumer Credit Division
The function of the Credit Division rel rtes primarily to the activities
of the bank under the following regulations of the Board of Governors of the Federal
Reserve System: (l) Regulation A pertaining to discounts for and advances to member
banks by Federal Reserve Banks, (2) Regulation 3 with respect to the so-called
"industrial loan" activity pursuant to Section 13b of the Act, and (3) Regulation V
with respect to "war financing," i.e., the issuance of guarantee agreements on behalf of the War and Navy Departments and the United States Maritime Commission to
financing institutions with respect to commercial credits arranged for the fulfillment of war production contracts.
During the past year there has been little activity under Regulations A
and S with the exception of advances to member banks secured by obligations of the
Government, Consequently, the activity of the Credit Division has been almost
wholly devoted to war financing under Regulation V which entails (l) receipt of




AP - 10

applications, (2) development and summary of credit data with respect to such
applications, (3) issuance, of guarantee agreements after authorization by the armed
service of the Government and (4) servicing of loans made under such guarantee
agreements.
The Consumer Credit Division is solely devoted to the administration of
Regulation W issued by the Board of Governors with respect to consumer credit. At
this time such activity is in great part limited to the enforcement of the regulation which entails the spot checking throughout the district of records of credit
merchants.
DISCOUNT DEPARTMENT
Discount Division
The Discount Division receives and checks applications with respect to
discounts for and advances to member banks, and maintains books and records not
only with respect to such discounts for and. advances to member banks, but also in
connection with guarantee agreements issued by this bank on behalf of the War and
Navy Departments and the United States Maritime Commission under Regulation V.

R. F. C. CUSTODY DEPARTMENT
R. F. C. Custody Division
The operations of the bank as fiscal agent, custodian and depositary for
the Reconstruction Finance Corporation are effected by the R. F. C. Custody Department. The principal activities of the department are (1) the receipt and examination
of corporate resolutions and letters of authorization prescribing the conditions
precedent to the disbursement by, and the receipt of, funds by the department,
(2) the receipt, examination and safekeeping of promissory notes and the collateral
of borrowers in connection with loans, the receipt, examination and safekeeping of
invoices, bills of lading, warehouse receipts and other papers and documents evidencing title to strategic materials procured by subsidiaries of the Reconstruction
Finance Corporation, (3) the disbursements, by checks drawn on the Treasurer of the
United States, of the amounts of loans and participations therein, subsidy payments
and payments for strategic materials and other purposes made by the Reconstruction
Finance Corporation and its subsidiaries^ (4) the maintenance of complete records
of each transaction, including detailed inventory records and reports to the
Treasurer of the Reconstruction Finance Corporation, (5) the release of title documents necessary to effect sales of real property and strategic materials, and,
(6) the application of funds received in connection with payments of principal and
interest on loans, the sales of strategic materials and other purposes.




AP - 10

OPEN MARKET OPERATIONS AND TREASURY ISSUES FUNCTION
SECURITIES DEPARTMENT
Securities Division; Bill Division
The following operations of the bank are handled through the Securities
Division: (l) purchases and sales of Government securities for the System Open
Market Account and the allocation of such securities among the twelve Federal
Reserve Banks, in accordance with general directions of the Federal Open Market
Committee, (2) purchases and sales of securities (other than corporate stocks) in
the open market for account of member banks, the Treasury Department and foreign
correspondents, (3) purchases and sales of Treasury bills at the Federal Reserve
System's established buying rate of 3/8 per cent, (4) compilation of statistical
information in connection with new issue of Government securities, (5) making
studies, and keeping the Treasury and the Board of Governors currently informed
of market conditions in Government securities, and (6) preparation of reports
covering market conditions and operations. This division also handles the
operations of the bank, as fiscal agent of the United States, in receiving cash
subscriptions for new issues of Government securities issued subject to allotment,
making the allotments thereon, and in receiving tenders on both competitive and
fixed price bases for the weekly issues of Treasury bills and making allotments
thereon.
This department is also charged with responsibility for the registration, issuance and cancelation of the capital stock i f the bank and the payment
p
of dividends on outstanding stock held by member banks.
The Bill Division buys and sells bankers acceptances for account of the
System Open Market Account when directed by the Federal Open Market Committee, and
also for account of member banks and foreign correspondents.




AP - 10


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102