Full text of Federal Reserve Notes : July 1975

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Federal Reserve Notes
FEDERAL RESERVE BANK OF SAN FRANCISCO
•
JULY 1975
Serving Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah & Washington

MAYER REPRESENTS WEST
ON ADVISORY COUNCIL

BICENTENNIAL BONDS
ARE NOW ON SALE

James B. Mayer has been appointed

Newly designed Bicentennial Savings
Bonds arenowonsalethroughoutthe

as

the

Twelfth

Federal

Reserve

West to commemorate the nation's

District's representative on the Feder
al Advisory Council, President John J.
Balles announced. Mayer is Chair

According to Senior Vice President

man of the Board and Chief Executive

Gerald R. Kelly, only the appearance

200th birthday.

Officer of the Valley National Bank of

of

Arizona.

changed to celebrate the founding of
the Republic. The rates, terms and

The 12-member Advisory Council,
which consists of one representative

conditions

Reserve System's Board of Gover
nors. The Council confers with the

Board on economic and banking
matters

and

makes recommenda

tions regarding System operations
and policies.

Valley National is the largest bank in
Arizona with reported total resources
of more than $3 billion at year-end
1974. It is headquartered in Phoenix
and serves Arizona through more
than 150 offices.

A director of Valley National Bank
since 1956, Mayer was elected
chairman of the board in 1972, and
named chairman and chief executive

Series

of

E

the

bonds

bonds

has

been

are

not

affected.

from each of the Federal Reserve

Districts, meets four times a year in
Washington, D.C., with the Federal

the

J. B. Mayer

Savings bonds account for nearly
one-fourth of the publicly held portion

A nationally recognized cotton indus
try leader, he is a past director of the
National Cotton Council, Western
Cotton Shippers Association, Cotton
Council International, and the Nation
al Cottonseed Products Association,
of which he is past-president.

of the national debt, and are familiar to
hundreds of millions of Americans

dating back to the famed bond drives
of World War II. Series E bonds are

obligations of the Federal government
and are sold at 75 percent of maturity
value. A $25 bond, for example, costs

$18.75. The bonds pay 6 percent
He is a former director of the Califor
nia State Chamber of Commerce and

when held five years to maturity.

a past-president of the Fresno Junior

Savings bonds sales recently set a

Chamber

Fresno County and City Chamber of

postwar record paced by the best
fourth quarter sales since 1945. More

Commerce. He has served on the

than 131/2 million savings bonds were

advisory

of

Commerce

boards to

the

and

the

business

schools of both Fresno State Univer

sity and Arizona State University, as
well as the President's Advisory

issued in the Twelfth District alone in

1974, through the San Francisco Fed

as well as the West's 6,000 banking
offices and other agents. This repre

officer the following year. He as

Board at Fresno. In 1972 and 1973 he

sented an increase of $20 million—

sumed responsibilities of the chair

was on the Advisory Board of the

from $640 million in 1973 to $660
million last year. The San Francisco

man's office after completing a 25-

Federal National Mortgage Associa

year career with Producers Cotton Oil

tion. His numerous civic, educational

Company, which operates an exten
sive agri-business enterprise in Cali

and business-related activities in
California and Arizona include serv

fornia and Arizona.

ice currently as director of the Central

Arizona Project,

Phoenix's Valley

Mayer is a California native and

Forward Association, and the Roose

graduate of Fresno State University.
After earning an AB degree in Econ
omics in 1937 he served as Deputy
Mayor of the City of Fresno.

velt Council of the Boy Scouts of
America. Among other affiliations, he
is a member of the Association of

Reserve City Bankers. 1j§p

Fed also reissued and replaced about

$90 million in savings bonds. %
PEOPLE TO CONTACT
The completion of a major bank
reorganization creates a new
structure (as of August 1) as
shown in charts on pages 2 and
3. In coming months we will
provide further details.

E

FEDERAL RESERVE BANK OF SAN FRANCISCO

August 1, 1975

C

SENIOR VICE PRESIDENT
DISTRICT DEPARTMENTS

[

Kent O. Sims

VICE PRESIDENT

VICE PRESIDENT

VICE PRESIDENT

VICE PRESIDENT

VICE PRESIDENT

SUPER. REG. & CREDIT
Henry B Jamison

BANK & PUBLIC SERVICES

STATISTICAL & DATA SERV

RESEARCH & PUB. INFO

8, GENERAL COUNSEL

Robert C. Dietz

Wilhelmine von Turk

Michael W

Louis E Reilly

Keran

DIRECTOR

DIRECTOR, BHC

DIRECTOR OF

BANK EXAMINATIONS

REGULATION

PUBLIC INFORMATION

Eugene A. Thomas

Harry W Green

William M Burke

CREDITS CONSUMER

ASST. VICE PRES.

EXAMINING

TRUSTS

OFFICER

ASST VICE PRES
& ECONOMIST

ASST VICE PRES

AFFAIRS OFFICER

& ECONOMIST

COUNSEL

Martin S. Depper

Roy A Karlsson

Joseph R. Bisignano

Robert A. Johnston

William L Cooper

OFFICERS

RESEARCH OFFICER

RESEARCH OFFICER

Merle E. Borchert

Herbert R. Runyon

Verle B. Johnston

Oscar P

Celh

ASSOC GEN

EXAMINING
PUBLIC INFO
OFFICER

Ernest C

Commercial-L.A.

Olson

Rodney E. Reid
nternational-SF

Wayne L Rickards
Commercial-S F.

SENIOR VICE PRESIDENT

BRANCH OPERATIONS

BRANCH OPERATIONS

Gerald R Kelly

August 1, 1975
SENIOR VICE PRESIDENT

SENIOR VICE PRESIDENT
SAN FRANCISCO

LOS ANGELES

Wesley G DeVnes

Richard C. Dunn

VICE PRESIDENT

VICE PRESIDENT
ANALYSIS-CONTROL

VICE PRESIDENT
OPERATIONS

OPERATIONS

Warren H. Hutchins

Claude Woessner

James M. Davis

ASST. VICE PRES

ASST VICE PRES

ASST. VICE PRES

ASST. VICE PRES

ADMIN. SERVICES

CASH

ADMIN. SERVICES

ANALYSIS-CONTROL

George P. Galloway

William K Ginter

Kenneth L Petersen

Jdhn R. Cola

PERSONNEL
OFFICER

CHECK OFFICER

FISCAL OFFICER

CASH OFFICER

CHECK OFFICER

FISCAL OFFICER

Robert H. Coltelt

W. Gordon Smith

Richard L. Rasmussen

Ralph W. Grambusch

Patsy L. Haynes

Michael J Murray

VICE PRESIDENT

VICE PRESIDENT

VICE PRESIDENT

SEATTLE

PORTLAND

SALT LAKE CITY

James J. Curran

Angelo S. Carella

A Grant Holman

ASST VICE PRES
ADMIN SERVICES

ASST VICE PRES
OPERATIONS

ADMIN. SERVICES

ASST. VICE PRES
ANALYSIS-CONTROL

ASST. VICE PRES
ADMIN, SERVICES

Parker R Smith

E. Ronald Liggett

Maynard C Peterson

H. William Pennington

Donald W Sheets

ASST VICE PRES

PERSONNEL

ASST. VICE PRES
ANALYSIS-CONTROL
H

OPERATIONS

ANALYSIS AND

OPERATIONS

CONTROL OFFICER

OFFICER

OFFICER

A. Richard Tidwell

M. Timothy Carr

J.W Williams Jr.

Peter Franzel

OFFICER
Vacant

ASSISTANT

GENERAL AUDITOR

BOARD OF DIRECTORS

GENERAL AUDITOR

James F, Leyman

Beverly J Adams

PRESIDENT

OMBUDSMAN

John J. Balles

Warren H. Hutchins

AUDIT OFFICER
LOS ANGELES

FIRST VICE PRESIDENT
John B. Williams

Bruce H, Thompson

SENIOR VICE PRESIDENT

SENIOR VICE PRESIDENT

BRANCH OPERATIONS

CORPORATE STAFF

Gerald R. Kelly

John J. Carson

BRANCH

OPERATIONS

DIRECTOR, CORPORATE

VICE PRESIDENT

VICE PRESIDENT

SENIOR VICE PRESIDENT

COMPUTER INFO. SYSTEMS

BUDGET & CONTROL

SECRETARY'S OFFICE

PERSONNEL

James M Brundy

Thomas E Judge

Donald V. Masten

Walter G. Woodbury

1
VICE PRESIDENT

VICE PRESIDENT
DATA SYSTEMS

BUILDING

Gordon Hammond

Rix Maurer. Jr.

ASST VICE PRES

ASST. VICE PRES

ASST VICE PRES

ASST VICE PRES

ASST. SECRETARY

ASST VICE PRES

TECH SERVICES

DATA PROCESSING

PLANNING & ANAL.

TO BOARD OF DIR

SYSTEM COORD

COMPENSATION

Kenneth A Grant

LaMar E Pugh

Roy A. Remedios

Vera J. Tayloe

Elwood E. Bernstein

Jane W. Langhorne

PACIFIC BASIN CONFERENCE FOSTERS INTERNATIONAL COOPERATION
information regularly, together with
many diverse sources of information
and with proper allowance for expect
ed margins of error."

Economists and central bankers from

14 nations converged on San Fran
cisco in late May to attend a first-ofits-kind economic conference hosted

by the Federal Reserve Bank of San
Francisco.

Participants

According

discussed

to

Klein,

economists

topics of special interest to Pacific

should construct models on a wide

Basin nations and considered ways of
promoting future research coopera
tion. In particular, they reviewed the

range of topics. High on his list is
modeling for the demand and supply
of essential food products and basic
resources. Rubber, tin, rice, grains,
cotton, ores, dairy products, sugar,
tropical fruit, mineral fuel, and wool
are among the key commodities
produced in the Pacific Basin area.

current state of the art in macro-

econometric model-building as it
relates to the making of economic
policy.

Monetary authorities from Australia,
Canada, the Republic of China, Hong
Kong, Indonesia, Japan, Korea, Ma
laysia, New Zealand, the Philippines,
Singapore, Thailand and the United
States attended the conference.

In the keynote address to the dele
gates, Dr. Lawrence R. Klein, Benja
min Franklin Professor of Economics

at the University of Pennsylvania's
Wharton School, called for interna-

L. R. Klein

tional cooperation in developing and
linking econometric models.
"I

am

not

recommending

naive

enslavement of central bankers to

their econometric models for policy
Klein said. "But I am
recommending that they use such

formation,"

"These products are supplied in
massive amounts by Pacific Basin
countries," Klein said. "Commodity
modeling is important because these
products enjoy a world-wide market
and their prices are determined by a
balancing of world supply against
world demand. In order to have good
estimates of the export earnings of
primary producing countries, it is
(continued on page 4)

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(continued from page 3)
necessary to estimate the world price
and equations of the supply process.
This can be done by first building
world commodity models and then

selling and market forces. The con
sumer too will be affected. The price
of South American coffee or sugar
can have a very real effect on the
consumption decisions of Americans.

fitting them into a country-linked
system."

Klein said that sophisticated and
comprehensive model-building would
take on increasing importance to
political entities as more and more
nations

become

oriented

to

the

emerging reality of global marketing,

Klein called the model-building proc
ess an enormously challenging task
but not a hopeless one. "We have
already made a solid beginning. Now
it is up to economists from throughout

this great trading area and around the
world to press forward to what is still

uncharted economic territory." Ijjflp

BORROWING COSTS

DOWN IN WEST
Business borrowing costs at major
West

*
Six common weaknesses in bank

security were cited by the Fed:
Surveillance

cameras

are

not

always installed where needed or
properly maintained to provide
useful pictures;
"Bait money" frequently is not
provided for each teller and
identification such as denomina
tion

and

serial

number

is not

Appropriate security training is
not always provided for tellerssomething that could provide
valuable

assistance

to

law-

enforcement agencies in appre
hending and convicting crimi
nals.

According to the Federal Bureau of
Investigation, crimes against federal
ly insured and regulated financial
institutions have increased sharply.

adequate to be used as evidence
in a trial;
Alarm systems are not ade
quately tested and serviced and

There were a record 2,817 robberies,

often fail;

new high of 3,485 in 1974. fr

359 burglaries, and 309 larcenies in
fiscal year 1974. The total of such
offenses rose from 3,172 in 1973 to a

banks

continued

to

conducted by the San Francisco Fed.
The next (August) survey may show
different results, however, in view of

the early July rise in the prime rate.

During the May 1-15 survey period,
the average rate on regular shortterm

BANKS URGED TO TIGHTEN SECURITY
Teller cash is not always kept at a
In the face of mounting crimes
minimum, as a means of reducing
perpetrated against banks, the Feder
possible bank losses;
al Reserve System has urged finan
* Bank property is often exposed to
cial institutions to strengthen their
view and not sufficiently guarded;
security programs.

Coast

decline through May, according to the
latest quarterly interest-rate survey

business

loans

was

8.33

percent—166 basis points below last
February's figure and 382 basis
points below last summer's record
high 12.15 percent. This decline, like

the comparable decline on revolvingcredit loans to 7.84 percent, reflected
the generally lower level of moneymarket rates and the six reductions in

the prime business-loan rate which

occurred during the latest survey
period.
The decline

in

interest

rates was

nearly the same for both the largest
and smallest loan categories. On
regular short-term loans of $1 million
and over, the average rate fell 166
basis points to 8.18 percent in May,
while on loans under $10,000, the
average fell 151 basis points to 9.72

percent. Ijflp