1952 Directors Frb Minneapolis

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Annual Report

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to the Directors

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1952☆

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FEDERAL RESERVE BANK OF M IN N EA P O L IS

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I N D E X

Directors and Officers.............. ....... .. ... .......... ....1

Changes of Directors and Officers.............................. 6

Economic Developments... ........................ ........ —.. 8

Assets. .. ..... ... ...... 16

Liabilities ............... ... ..... ..18

Departmental and Other Comments •’

Check Collection ..................... ............. 22

Currency and Coir#..... .................................. 26Discount and Credit......................................30Duplicating... ............... .... . 31Examination ......... ..................................... 32Fiscal Agency............................................. 34-Noncash Collection ...................................... 4-2Personnel ................................................ 4-3Planning.... ........................................ .4-7Protection-................................................ 4-9Public Services' ..................................... 50Purchasing-............................................... 59Research..................................................60Reserves (Member Bank)................................... 62Safekeeping .... ....................................... 64-Wire Transfers-........................................... 65

Capital Accounts. .... 67

Dividends.. 70

Bank Premises ___ _________ ______ ... 71

Earnings .. 73

Expenses ..79


HEAD OFFICE DIRECTORS AND MEMBER OF FEDERAL ADVISORY COUNCIL

Directors

Roger B. Shepard, Chairman, and Federal Reserve Agent Paul E. Miller, Deputy Chairman

Class A

Term Expires December 31

H. N. Thomson, Vice President, The Farmers and Merchants 1953Bank, Presho, South Dakota

Charles W. Burges, Vice President and Cashier, Security 1954-National Bank of Edgeley, Edgeley, North Dakota

Edgar F. Zelle, Chairman of the Board, First National 1955Bank, Minneapolis, Minnesota

Class B

William A. Denecke, Livestock Rancher, 1953Bozeman, Montana

Ray C. Lange, President, Chippewa Canning Company, 1954-Chippewa Falls, Wisconsin

Homer P. Clark, Honorary Chairman of the Board, West 1955Publishing Company, St. Paul, Minnesota

Class C

Roger B. Shepard, 322 Endicott Building, 1953St. Paul, Minnesota

Paul E. Miller, Director, University of Minnesota 1954-Agricultural Extension Division, St. Paul,Minnesota

F. A. Flodin, President, Lake Shore Engineering Company, 1955Iron Mountain, Michigan

Member of Federal Advisory Council

Joseph F. Ringland, President, Northwestern National Bank, 1953Minneapolis, Minnesota

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OFFICERS

0. S. Powell, President

A. W. Mills, First Vice President

H. C. Core, Vice President in Charge of Personnel Personnel:

CafeteriaEducation & Welfare MedicalPersonnel Maintenance Retirement System Social Security

Office Boys & Pages

C. W. Groth, Vice PresidentH. A. Berglund, Assistant Cashier

Assigned to Helena Branch

E. B. Larson, Vice President*M. B. Holmgren, Assistant Cashier

Fiscal Agency Securities:

Purchase and Sale Federal TaxesCommodity Credit Corporation

H. G. McConnell, Vice President Bank Examination Securities Exchange Act

*J. Marvin Peterson, Vice President and Director of ResearchF. L. Parsons, Associate Director of Research

LibraryPublicationsResearchStatistics

'"Effective January 23, 1953


OFFICERS (Contd.)

Otis R. Preston, Vice President *Christian Ries, Assistant Vice President

Public and Bank Relations Announcements Circulars Correspondence Press Relations

M. H. Strothman, Jr., Vice President George M. Rockwell, Assistant Cashier

Industrial Loans Loans & Discounts Regulation V Loans

Sigurd Ueland, Vice President, Counsel, & Secretary Legal

*A. W. Johnson, Assistant Vice President *John Gillette, Assistant Cashier

Check Collection Equipment Repairs Ordinary Mail

A. R. Larson, Assistant Vice President Noncash Collection Registered Mail Routing Symbol Securities:

SafekeepingVault

0. W. Ohnstad, Assistant Vice President Accounting:

ExpendituresMonthly and Annual Directors1 Reports

Building Duplicating Protection Purchasing Security Files Telephone

* Effective January 23, 1953


OFFICERS (Contd.)

M. 0. Sather, Assistant Cashier Accounting:

General Books and Bank Accounts Transfer of Funds

Foreign Exchange Reports Files & Old Records

M. E. Lysen, Operating Research Officer Operating Letters Operating Manuals Planning:

Efficiency Studies Equipment Office Forms Suggestions

Kyle K. Fossum, Auditor

Clement Van Nice, Assistant Vice President Currency and Coin


HELENA BRANCH DIRECTORS

John E. Corette Chairman

Term Expires December 31

G. R. wilburn, Livestock Rancher, 1953Grass Range, Montana

A. W. Heidel, Vice President, Powder River County Bank, 1953Broadus, Montana

John E. Corette, President and General Manager, Montana 1954-Power Company, Butte, Montana

J. Willard Johnson, Financial Vice President, Western 1954-Life Insurance Company, Helena, Montana

George N. Lund, Vice President and Cashier, First 1954-National Bank, Reserve, Montana


CHANGES DIRECTORS AND OFFICERS

The regular November election resulted in the re-election of

Edgar F. Zelle, Chairman of the Board, First National Bank of Minneapolis,

as Class A director, and Homer P. Clark, Honorary Chairman of the Board,

West Publishing Company, St. Paul, as Class B director. F. A. Flodin,

President of the Lake Shore Engineering Company, Iron Mountain, Michigan,

was reappointed by the Board of Governors as Class C director. All terms

expire December 31, 1955.

The Board of Governors reappointed Roger B. Shepard as Chairman

and Federal Reserve Agent. Paul E. Miller was reassigned as Deputy Chair

man.

The Board of Governors redesignated John E. Corette, Butte,

Montana, as a director of our Helena Branch for a two-year term beginning

January 1, 1953.

Our Board of Directors appointed J. Willard Johnson, Financial

Vice President of the Western Life Insurance Company, Helena, Montana, and

George N. Lund, Vice President and Cashier of the First National Bank,

Reserve, Montana, to succeed former directors Theodore Jacobs, Missoula,

Montana, and E. D, MacHaffie, Helena, Montana. These terms expire Decem

ber 31, 1954-.

Wm. E. Peterson, Assistant Cashier, retired on April 30 after

3U years of service at the bank.


J. N. Peyton, after serving as Chairman of our Board for 3 years

and as President for 16 years, retired as of July 1. As of the same date,

Oliver S. Powell returned from the Board of Governors, where he served

approximately two years as a member, to assume the presidency of the

Minneapolis Federal Reserve Bank.

On November 25 our Board of Directors advanced Kyle K. Fossum

to Auditor and 0. W. Ohnstad to Assistant Vice President.

On January 23, 1953, our Board of Directors advanced J. Marvin

Peterson to Vice President and Director of Research, Christian Ries and

A. W. Johnson to Assistant Vice Presidents, and elected M. B. Holmgren

and John Gillette as Assistant Cashiers.


ECONOMIC DEVELOPMENTS AND U.S. DEBT OPERATIONS IN 1352

The ultimate measure of an economy's performance is its output.

By this standard, and others, the American economy performed admirably in

1952. Record levels of production and employment were achieved during the

year in spite of predictions by some that the restrictive monetary policy

adopted earlier would generate unemployment with its consequent lower level

of activity. Even the prolonged shutdown of the basic steel industry was

not sufficient (seriously) to disturb business operations.

The Federal government which had financed military operations in

World Wars I and II with large borrowings from both the banking system and

the public, managed from mid-1950 to mid-1952 to finance almost all its

total expenditures with tax receipts.

In the last half of 1952 the public debt rose by $3 billion.

The bulk of this increase represents higher investments by government

agencies and trust accounts and a net increase in the general fund balance.

On a cash basis, the government incurred a deficit of $1.6 bil

lion in calendar 1952 compared to cash surpluses of $.4 billion and $1.2

billion in 1950 and 1951, respectively.

This splendid budget record,together with the high production

and the better control of the monetary system, contributed importantly to

the large degree of price stability enjoyed throughout the year.

Wholesale prices continued the decline originated in the Spring

of 1951 while consumer prices edged slightly upward. In contrast to 1951

when it rose 8 points, the consumer's price index was up 2 points in 1952.


The relative stability in the purchasing power of the dollar

meant that the higher consumer expenditures which characterized 1952

represented additions to the physical amount of goods and services taken

by consumers rather than higher prices paid. This contrasts with the

previous year when a large part of the additional consumption expenditures

represented higher prices paid.

In spite of their higher expenditures in 1952, larger incomes

permitted Americans to save at approximately the same high rate as in the

latter part of 1951. These large savings were reflected in the statements

of all types of financial institutions. Assets of life insurance companies,

savings banks, and savings and loan associations increased at a higher rate

than in previous years. Commercial banks reported sharp additions to time

deposit accounts.

To the extent that savings satisfy the demand for funds from

borrowers, pressure on the banking system to expand credit is diminished.

Such pressure became increasingly strong during the year.

Despite funds supplied to borrowers from large savings and credit

expansion, the demand for credit remained sufficiently strong to induce

interest rates higher than at any time in nearly two decades. At the end

of 1952 three-month Treasury bills were yielding as much as long-term govern

ment bonds had yielded less than three years earlier.

The rate of return on the shortest government obligations, the

bill rate, has been climbing, except for brief intervals, since mid-194-9.

The yield on long-term governments has climbed too, although not so much

and not so soon.

Early in 1950 long-term government bond prices began a decline

which was accelerated in the Spring of 1951 when the Federal Reserve System


abandoned policies intended to support the prices of these securities.

Contrary to the expectations of some pessimists the withdrawal

of support from the government security market has not resulted in serious

declines or panics.

At no time since the Treasury—Federal Reserve "Accord" which

gave birth to the withdrawal of support purchases of government bonds

has any U.S. government issue traded at less than 95. In terms of histori

cal precedent this is an extremely favorable record.

The decline was orderly. At no stage was there a dumping of

government securities on the market by holders who feared a collapse;

instead the decline encouraged the retention of those securities, this

being a prime objective of the new open market policy.

Previously, banks, as well as some nonbank investors, had almost

continuously reduced their holdings since 194-5. During that time com

mercial banks liquidated government securities worth $32 billion. These

banks have added $6 billion to their government portfolios since the ac

cord. It would seem that the coincidence of the reversal of the liquidation

trend and the date of the accord were more than accidental. Obviously,

higher yields and lower prices for government securities induce their

purchase while the threat of capital loss deters their sale.

Even the greater attraction afforded the obligations of state

and local governments by the interplay between their tax exempt feature

and the higher income taxes levied after Korea was not strong enough to

overcome the repercussions of the decline in U.S. government securities.

The yield on a sample of municipal bonds was 1.98%, 2.00$, and

2.17$ in 1950, 1951, and 1952, respectively.


The changed situation in the market for U.S. government credit

was not without its effect on the market for private credit. This was

to be expected since the return on Federal government securities represents

the pure rate of interest—no risk premium—while the return on private

loans includes both pure interest and risk premium.

The average return on a sample of the best quality corporate

bonds was 2,62%, 2.86%, and 2.95% in the three years ended with 1952 respec

tively. Most commercial banks have announced more than once since early

1951 higher charges on loans of all kinds.

Of course, lenders have benefited frcm these higher charges.

The benefits can be measured partly by the change in gross earnings reported

for all member banks. In 1951 these banks reported gross earnings more

than 12 per cent higher than in the previous year. Expenses rose too, but

not by so much. The greater increase in earnings than in expenses is re

flected by the 15 per cent rise in net current earnings before taxes

between 1950 and 1951. Data for 1952 are not yet complete but such fragmen

tary data as have been made available indicate the continuation of these

trends after 1951.

Benefits have not been confined to commercial bank lenders. Life

insurance companies, for example, report that earnings on invested funds

amounted to 3*18% in 1951 compared with 3-09% in 1950 and 3.06% in 1949.

In part these improved earnings reflect a shift to higher yielding assets,

but in part they reflect higher yields on all types of earning assets. Life

insurance policy holders, savers, are the ultimate recipients of these

higher earnings.


Once again the forces of supply and demand have been permitted

to assert themselves in the market for funds. The resultant higher interest

rates have served a dual role of discouraging borrowers and encouraging

savers, thus equating the supply and demand for funds without undue genera

tion of more credit.

This is not to say that credit expansion did not occur in 1952—

it did. But our economy was growing and such an economy needs more credit.

The expansion would doubtless have been much greater if the Federal Reserve

System had not stopped feeding reserves to the banking system by engaging

in support purchases of government securities. Evidence that the expansion

which did occur was not excessive can be found in the record of stable

prices throughout the year.

The composition of the new credit which was extended last year,

with respect to the type of borrower, was not as favorable as it might

have been. The removal of consumer credit controls in May was accompanied

by a reversal of the decline which had been in progress in the amount of

consumer credit outstanding. Subsequently, consumers added $3 billion to

their indebtedness bringing such borrowings to an all time high.

In one sense consumers are out of the reach of general credit

controls which operate through changes in the interest rate. This is be

cause consumers as a group are less sensitive to changes in interest rates

than are business borrowers.

Under these circumstances a general tightening of credit might

easily cause an undesirable shift in the composition of credit—more for

consumers and less for business.

In ordinary times this shift might not be considered undesirable.

But with the defense program growing in an economy already fully employed,


it seems the interests of defense would best be served if more funds

were made available to the productive elements of the economy while less

funds were made available to finance consumption.

Also, in the event of any future possible economic decline,

the repayment of these debts by consumers can only serve to accelerate

the fall in demand for the economy's products. Such a fall is at the heart

of any recession.

Although the Board of Governors suspended Regulation W on May 7

"....after careful review of developments in the economy generally and in

the markets directly affected by the regulation", they recommended to the

Congress that authority for regulation of consumer credit be continued

after June 30, 1952, in order that it could be reinstated should subsequent

developments warrant such action. The authority was not extended.

Less than a week after suspension of Regulation W the Board of

Governors in effect ended the Voluntary Credit Restraint Program when they

withdrew requests for compliance with the provisions of the program.

Another important selective credit control, Regulation X, was

suspended on September 16. Under the 1952 amendments to the Defense Pro

duction Act no minimum down payment requirement in excess of 5 per cent

could be imposed on the purchase of residential properties if the season

ally adjusted annual rate of housing starts fell below 1.2 million units

for three successive months.

When the Bureau of Labor Statistics found that housing starts

had fallen below the 1.2 million annual rate, the Board of Governors sus

pended Regulation X which had provided for restriction of nonresidential

loans as well as residential.


Actually, many prospective borrowers who could not meet the terms

of the regulation found that, even after suspension, lenders were not willing

to accommodate them. This is particularly true of borrowers who had hoped

to obtain FHA or GI loans. Lenders had more attractive alternative in

vestments .

Thus, last year witnessed the suspension of three important sup

plements to indirect controls, namely, Regulations W and X, and voluntary

credit restraint.

These essentially qualitative controls are powerful tools that

should be employed by the Federal Reserve System in conjunction with the

essentially quantitative indirect controls at times when the threat of

inflation warrants their use. The absence of any alarming developments

after the removal of selective controls last year is a tribute to the ef

fectiveness of indirect controls.

Although the use of indirect controls has raised the cost of

borrowing to the U.S. Treasury, Treasury debt instruments have become more

attractive at the same time.

For the first time since the Victory Loan of 194-5 the Treasury

issued marketable bonds last year. The first issue was offered in exchange

for maturing securities; the other was an issue for new money.

More attractive provisions for owners of Savings bonds, announced

in May, failed to cause these obligations to become an important source of

new money for the Treasury. A slight increase in the amount outstanding

occurred during the year, however, in contrast to the previous year when a

slight decrease occurred.

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One curious aspect of the changing structure of interest rates

in recent months has been a flatening of the yield curve. That is, the

difference between the yield on short-term obligations and the yield on

long-term obligations has been diminished. Long-term securities have

declined in price proportionately less than short-term securities.

In the last few days of 1952, 90-day Treasury bills were yielding

more than the longer Treasury certificates. Although this was a temporary

condition associated with the great stringency in the money markets at the

time, it illustrates the nature of the fundamental changes which have re

sulted from the operation of free markets.

In contrast to the previous year when the Federal Reserve System

added, net, government securities worth $3.1 billion to its portfolio,

Reserve bank assistance to Treasury financing in 1952 was of a magnitude

which required a net addition of less than a billion dollars.

The reserves provided to the commercial banks by these purchases

were less than the amount necessary to replace the reserves lost during

the year because of higher currency circulation.

Thanks mostly to expanded borrowing from the Federal Reserve

banks and to a gold inflow, commercial banks obtained sufficient reserves

to support their higher deposit liabilities.

Required reserve balances would have risen more rapidly except that

a substantial part of last year's deposit increase was in the form of time

deposits which require less reserves than do demand deposits.


MILLION DOLLARS M ILLION DOLLARS

1600

1400

1200

1000

80 0

600

400

200 -

lMOt

1600

1400

1200

1000

800

600

400

200

1917 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53


COMPARATIVE STATEMENT OF ASSETS

MINNEAPOLIS AND HELENA BRANCH COMBINED (Thousands of Dollars)

Change from 12-31-52 12-31-51 12-31-51

Assets:Cash Reserves:

Interdistrict Settlement Fund 157,606 175,261 - 17,655Gold Certificates with F.R.Agent 170,000 150,000 20,000Redemption Fund - F.R.Notes 25,549 25,018 + 531

Total Gold Certificate Reserves 353,155 350,279 + 2,876

Total Other Cash 5,879 7,056 - 1,177

Bills Discounted 500 __ + 500Foreign Loans on Gold 767 - + 767Industrial Loans 135 134 + 1IT. S. Government Securities:

Bills 23,013 14,852 + 8,161Certificates of Indebtedness 159,018 403,955 244,937Notes 438,430 160,891 +;277,539Bonds 143,939 169,655 - 25,716

Total U. S. Government Securities 764,400 749,353 + 15,047

Due From Foreign Banks 1 1F.R. Notes of other F.R. Banks 10,298 7,727 + 2,571Uncollected Items:

Transit Items 99,119 85,754 + 13,365Exchanges for Clearinghouse 3,013 9,037 - 6,024Other Cash Items 1,004 1,998 - 994Due From Branches or Head Office - - -

Total Uncollected Items 103,136 96,789 + 6,347

Bank Premises 2,493 2,493Less Reserve 1,442 1,410 + 32

Bank Premises - Net 1,051 1,083 - 32

Miscellaneous Assets:Fiscal Agency expense, reimbursable 135 90 + 45Interest Accrued 4,414 3,392 + 1,022Premium on Securities 367 487 - 120Deferred Charges 47 54 - 7All Other Assets 15 13 + 2

Total Miscellaneous Assets 4,978 4,036 + 942

Total Assets 1,244,300 1,216,458 27,842


MILLION DOLLARS M ILLION DOLLARS


COMPARATIVE STATEMENT OF L I A B I L I T I E S

MINNEAPOLIS AND HELENA BRANCH COMBINED (Thousands of Dollars)

Change from12-31-52 12-31-51 12-31-51

Liabilities:Federal Reserve Notes in Circulation 650,889 632,029 + 18,860

Deposits:Member Bank - Reserve Accounts 437,867 464,389 - 26,522U.S. Treasurer - General Account 26,412 8,309 + 18,103Foreign 13,611 13,013 + 598Nonmember Bank - Clearing Accounts 819 1,561 742Officers' Checks 224 124 + 100Due to Other F.R.Banks - Collected Funds - - -Other Deposits 3 , U 7 2,749 + 398

Total Deposits 482,080 490,145 - 8,065

Deferred Availability Items:U.S.Treasurer - General Account 4,333 3,363 + 970All Other 80,429 65,754 + 14,675

Total Deferred Availability Items 84,762 69,117 + 15,645

Miscellaneous Liabilities:Discount on Securities 252 270 18Sundry Items Payable 124 125 1Suspended Credits 79 96 17

Total Miscellaneous Liabilities 455 491 36

Total Liabilities 1,218,186 1,191,782 + 26,404

Capital Accounts:Capital Stock Paid in 5,719 5,363 + 356Surplus Fund - Section 7 15,131 14,063 + 1,068Surplus Fund - Section 13B 1,073 1,073 -

Reserve for Contingencies 4,191 4,177 + 14Total Capital Accounts 26,114 24,676 + 1,438

Total Liabilities & Capital Accounts 1,244,300 1,216,458 + 27,842


Probably the most significant development in the banking com

munity last year was the growing importance of borrowing by member banks

from the Federal Reserve banks. This form of extending credit by the

Reserve banks is much less inflationary than is the purchase of government

securities by the Reserve banks.

This is true because prudence requires that banks in debt to

the Federal reduce that debt at the earliest opportunity, either by liquidat

ing assets or by utilizing the proceeds of a deposit increase for this

purpose.

Reserves provided by borrowing are, therefore, temporary in

character while reserves provided when government securities are purchased

by the Reserve banks are more likely to be regarded as permanent, and to be

used as the basis for extension of additional credit by the commercial

banks.

The growing importance of borrowing by the commercial banks has

been accompanied by a growth in the effectiveness of the discount rate as

an instrument of control.

FEDERAL RESERVE BANK OF MINNEAPOLIS STATEMENT CHANGES

Although earnings on loans to member banks are still a relatively

unimportant part of total earnings at the Federal Reserve Bank of Minneapolis,

it is still possible to obtain an idea of how the volume of borrowing has

changed by comparing such earnings for 1952 with 1951. The comparison shows

an increase of more than 50 per cent.


Most of the higher earnings which sent gross revenue at the

Minneapolis Federal Reserve Bank to the highest level in history came

from earnings on investments—U.S. government securities. This increase

of almost 15 per cent came partly from larger holdings and partly from

higher yields.

The comparative balance sheet shows that investment in govern

ment securities was up from $74-9.3 million at the end of 1951 to $764.4-

million at the end of 1952, an increase of $15.1 million.

Inspection of the other asset accounts shows that the larger

investment in governments accounted for the largest part of the increase

in total assets.

The national trend towards higher currency circulation is re

flected on the liability side of this bank's statement. Federal Reserve

notes outstanding at the end of 1952 amounted to $18.8 million more than a

year earlier. The Christmas increase in demand for currency brought money

in circulation to an all time high for the nation.

Member bank reserve accounts show a decline of $26.5 million

from the year ago level but this decline is within the range of random

fluctuation and does not indicate any basic changes in the condition of

Ninth District member banks.

The net worth of the bank was enlarged during the year by reason

of the sale of more stock, the retention of earnings and the provision of

reserves for contingency.

There was no change in this bank's reserve ratio as the pro

portionate addition to our gold certificate reserves was equal to the

proportionate addition to our note and deposit liabilities.


DEPARTMENTAL AND OTHER COMMENTS

CHECK COLLECTION

The volume and dollar amount of checks handled during 1952 in

the Check Collection Department surpassed all records as reflected in the

following tables:

City Checks Country Checks Govt. Checks

PaperCard-Other Feds Card-Our District

Returned Items Postal Money Orders

1952

12,72849,006

1,1712,9259,234

65710.09785,818

Volume (000 Gnitted)

No.1951

of Items Increase____

PercentIncrease

11,584 1,144 9.842,605 6,401 15.0

1,151 20 1.72,492 433 17.37,084 2,150 30.3

627 30 4.74.711* 5,386 114.3

70,254 15,564 22.1

Dollar Amount(000 Omitted)

Dollar Amount Percent1952. m i Increase Increa:

City Checks #12,967,251 $12,870,201 $ 97,050 .7Country Checks 8,226,278 7,908,974 317,304 4.0Govt. Checks

Paper 1,139,903 1,058,061 81,842 7.7Card-Other Feds 200,924 167,377 33,547 20.0Card-Our District 809,065 664,087 144,978 21.8

Returned Items 296,570 282,581 13,989 4.9Postal Money Orders 162,565 75,220* ...87.ai£ 116.0

$23,802,556 $23,026,511 ^776,045 3.4

*This bank became paying agent for postal money orders effective July 1, 1951.

The previous highest single day's record (August 9, 1951) of

347,947 checks handled was surpassed on 48 different occasions during 1952.


The new single day's volume record of 444,583 items processed was established

on December 8, 1952.

New single day's volume records were also set during 1952 in

processing country and city checks of 227,456 on December 17 and 103,294

on November 17, respectively.

Due to the availability of a larger volume of items the two late

shifts totaling approximately 50 clerks sort and list from 100 thousand to

150 thousand checks each night, Monday through Friday.

The majority of all items are completely handled on the 80 proof

machines or tabulating equipment maintained in the department.

The total staff in the Check Collection Department was approxi

mately the same at the close of 1952 as it was at the close of 1951.

Check Routing Symbol

During the year, we have continued to gain in our efforts toward

having the check routing symbol properly placed on cash items.

The officer and bank representatives assigned to promote the rout

ing symbol directed their efforts mainly to problem banks. Calls were made

at these banks and lists furnished them of their customers whose checks did

not carry the symbol. On their bank calls, our Public Services men con

tinued to call the matter to the attention of the par banks.

The State of South Dakota, Department of Public Instruction, was

considering revising its school accounting system and was approached with

recommendations to permit using a uniform and standard type of check with

the routing symbol.


As of December 1, 1952, a survey showed the average use of the

routing symbol in the Ninth District by states was as follows: Michigan 83%|

Minnesota 90$; Montana 91%? North Dakota 90%; South Dakota 91%’, and Wis

consin 86%. Our Ninth District average of 90% (an increase of 10% for the

year) now equals the System average of 90% (an increase of 5% for the year).

Because the use of the check routing symbol has now reached the

point where it is workable in check collection operations, our efforts the

latter part of the year were directed to calling the attention of the banks

in our district to its use.

Check Standardization Program

A program was inaugurated at the beginning of 1952 for the pro

motion of check uniformity and standardization. It was found in changing

over to machine operation in our check collection department that poorly

designed checks and drafts and noncash items being handled as cash items

were responsible for considerable time loss in departmental operations.

Two senior representatives were assigned to promote this program.

During the year, some 4-00 direct calls were made on business, industrial

firms, printers, and banks. When firms felt they could not properly redesign

their own checks, the work was done at our bank and the firm was sent photo

static copies of suggested changes. Talks were given and slides shown to

several organizations in the Twin Cities and Duluth. Letters were written

to all member and par banks where their noncash items were being handled

as cash items through the check collection department asking for their

assistance in eliminating this noncash form of customers' drafts. Our


Public Services men, on their bank calls, followed through on these letters

with further discussion as to the need in correcting this situation.

Checks of national corporations operating in this district were

scrutinized and if a poorly designed check was being used the Federal Reserve

Bank of the district in which the corporation was located was asked to con

sult with them with the idea of making a change in the form of their check.

Legislation was initiated through the Bankers Association of

Minnesota, North and South Dakota, for presentation to the 1953 legislature

for the substitution of checks for warrants in disbursing municipal sub

divisions funds in those states. Wisconsin passed similar legislation in

1951 and Michigan and Montana are on a pending basis at present.

CREDIT CONTROL

Regulation W

This regulation, which had been reinstituted in September 1950,

was suspended on May 7, 1952. During the life of the regulation, repre

sentatives from our Credit Control Department visited 12,362 concerns sub

ject to the regulation. Less than i& of those visited were found to have

violated the regulation in such a manner as to warrant revisits or compliance

conferences at our bank. At the suspension of the regulation nine men were

devoting their entire time to investigations of concerns operating within

the scope of the regulation.


Regulation X

This regulation, applicable to real estate credit, was instituted

in October 1950 and suspended effective September 16, 1952, under statu

tory provisions. During the life of the regulation our representatives

called on 387 concerns subject to the regulation and found substantial

compliance with its terms. Activity during 1952 to the end of the regula

tion covered visits to 208 real estate financing organizations, less than

5% of which had transactions in violation of its terms. Nearly all of

such "violations" related to technical rather than substantive matters. At

the time of the suspension of the regulation six full time investigators

were engaged in investigative duties. These men were either absorbed in

other departments or resigned to accept employment elsewhere.

CURRENCY AND COIN

The volume of work involved in the various operations of the

Currency and Coin Department in 1952 ranges from slightly above to sub

stantially greater, in some cases, than the record volume of 1951.

During 1952 wrapped coin showed an increase of almost 9% in

the number of pieces wrapped. Two new automatic coin counting and wrapping

machines have been ordered and are expected to be received early in 1953.

These machines will eliminate the hand wrapping operation and are expected

to give us a substantial increase in the potential production of wrapped

coin, particularly in nickels and cents.


Four new currency sorting machines were received in late 1952.

A rearrangement of the departmental space was made necessary by the acqui

sition of the new sorting machines and by the removal of the elevator which

formerly linked the Currency Department with the bank floor. The space

formerly occupied by the elevator is now being used for a new teller's

cage, and the partitions which formed another cage have been removed so

that there will be sufficient room for the new sorting machines.

Our currency sorters discovered 82 counterfeits ostensibly worth

§>1,055 during the year as compared with 126 picked up in 1951.


Outgoing Shipments for Account of Member Banks

1952 1951

Currency paid out Currency shipped to Helena and for other F.R. Banks

Coin paid out

Number20,926

Branch664

12*02236,662

Amount$359,931,000

48.764.00012.032.000

$420,727,000

Number21,831

50914.49636,836

Amount$356,332,500

49,583,50010.946.000

$416,862,000

Incoming Shipments for Account of Member Banks

1952 1951

CurrencyCoin

Number22,041-2*21225,954

Amount$397,286,000

9,399,000$406,685,000

Number22,816-4.i22027,106

Amount$383,495,000

9.009.000$392,504,000

Number and Amount of Fieces Handled

Currency

Bills received and countedBills rehandledHand verification of bills

.1252.Number

65,883,7036,367,024

21.493.36993,744,096

Amount$436,089,000

77,483,470251.707.250

5*765,279,720

1951Number

64,983,6635,620,427

24.041.99194,646,081

Amount$420,409,56067,751,600

287.758.790$775,919,950

Coins received and counted Coins rehandled Coins wrapped

Coin

1952 _Number

102,222,4223,011,385

160,849,537

Amount $ 8,887,532

471,775

___AJ£2*Z25$ 13,8a , 582

1251-Number

104,789,8803,610,12251.186.000

159,586,002

Amount8,823,987

523,3784.309.400

13,656,765


Amount of Coin Received from U. S. Mints

1952 1951$2,957,000 $2,310,200

Number of Unfit Bills Forwarded to Treasurer of the United States for Redemption

mz m i33,342,863 26,182,316

Return of Federal Reserve Notes to Bank of Issue

m i 1951Fit-for-use Federal Reserve Notes

returned to other F. R. banks $52,321,300 $37,907,000Our fit-for-use Federal Reserve

Notes received from other F. R.banks $42,474,000 ^40,485,750


DISCOUNT AND CREDIT

A total of 54 banks in Head Office territory borrowed an aggregate

of $1,949,055,000 during 1952, all of which was secured by United States

government obligations. All but $72,205,000 of this amount was borrowed by

Twin City banks. Advances on governments in 1951 aggregated $1,715,790,000

to 41 banks. Seven banks in Montana borrowed $65,275,000 through the Helena

Branch in 1952, $40,085,000 more than in 1951«

There were no borrowings made under Section 10b in 1952. One non

member bank borrowed $500,000 secured by United States government obligations.

Such loans are authorized under the last paragraph of Section 13 of the Fed

eral Reserve Act and carry a rate 1% above the discount rate.

Our bank's participation in foreign loans on gold during the year

totaled $1,976,000. At year's end there was $767,000.

Only five applications for industrial loans under Section 13b of

the Federal Reserve Act were received during the year. These applications

aggregated $507,000. Four of the applications were declined and one was

approved and disbursed. No applications were pending at the year's end.

An industrial loan disbursement for $56,250 was made. The total

amount of industrial advances outstanding on our bank's books on December 31,

1952, was $134>883.34* These funds were being utilized by (l) a wholesale

and retail grocery business, (2 ) a paint manufacturer, (3) a creamery,

(4) a builder's hardware and appliance dealer, (5) a soft water service

company, and (6) a feed manufacturer.


In 1952, advances amounting to $13,064.,741.27 were made by

financing institutions under Regulation V. $9,318,243.94 advanced was

guaranteed by the Department of the Army; $377,000.00 by the Department

of the Navy; and $3*369,497.33 by the Department of the Air Force.

As of December 31, 1952, the amount of loans outstanding

guaranteed by the Department of the Army was $13,527,073.41, portion

guaranteed $>11,070,403.79J the Department of the Air Force, $7,437,326.96,

portion guaranteed $6,693,594.31; and the Department of the Navy

$418,710.59, portion guaranteed $349,477.41.

Twenty applications for guaranteed loans totaling $12,393,450

were received during 1952 and one application for $125,000 was pending

at the beginning of the year. Ten applications were authorized, five

were disapproved, five were withdrawn and one is under consideration.

The total amount of guarantee agreements executed in 1952 was

$3 ,430,000.

The approvals of applications for guaranteed loans ranged from

$15,000 to $800,000, all of which are in the form of revolving credits.

DUPLICATING

During 1952, the department turned out 5.9 million pieces of

duplicated matter on 5,516 separate production runs. This volume repre

sents an approximate decrease of 8% compared with total production for 1951

and is largely due to the suspension of Credit Controls, Regulation W on


May 7 and Regulation X on September 15. The total is a combined output of

four different machines, namely: the uitto, the mimeograph, the multigraph

and the multilith. The addressograph section of the department addressed

a daily average of approximately 4>600 envelopes and 4,500 miscellaneous

forms.

Photostatic reproduction of various documents declined slightly

for the year. We v.*ere reimbursed for the cost of about 50% of our 1952

photostat work.

EXAMINATION

At the close of the year there were 4.76 state and national member

banks in the Ninth District. The number of national banks decreased one,

and the number of state member banks increased one. The banks are geographi

cally distributed as follows:

National StateBanks Banks Total

Michigan 26 14 40Minnesota 178 28 206Montana 38 45 83North Dakota 40 2 42South Dakota 35 28 63Wisconsin 27 JLi _A2

3 U 132 476

A regular examination of each of the state member banks was made

except that the Rapid City Trust Company, Rapid City, South Dakota, which

opened for business September 15, 1952, was not examined, and one Montana

state member bank was examined twice.


At the close of the year, eleven state member banks were exercising

trust powers. Ten other state member banks are not exercising their trust

powers. Sixty-five national banks held permits to exercise full or limited

trust powers.

Two applications for membership in the Federal Reserve System were

received from state banks during the year.

During the year we received 687 examination reports from the Chief

National Bank Examiner's office at a cost of $6,870. In addition, six sep

arate reports of examination of trust departments were received at a cost

of $30.

The number of reports of examination received from the various

state banking departments in this district of state member banks examined

independently by them was as follows:

Minnesota 27South Dakota 4 Wisconsin 3North Dakota 2

Four calls for a report of condition of each member bank were issued,

and, in addition, all member banks submitted semiannual reports of earnings

and dividends.


FISCAL AGENCY

During the year 1952s the Treasury Department each week made the

usual offering of Treasury Bills, and in addition two special offerings of

Treasury Bills labeled "Tax Anticipation Series". An additional issue of

the 2 3/4$ Treasury Bonds, Investment Series B-1975-80, was also offered

for cash and in exchange for any of the following four outstanding restricted

Treasury Bonds:

1. 2 \/2% Bonds of 1965-70, dated Feb. 1, 1944, due March 15, 1970.

2. 2 1/256 Bonds of 1966-71, dated Dec. 1, 1944, due March 15, 1971.

3. 2 1/2$ Bonds of 1967-72, dated June 1, 1945, due June 15, 1972.

4. 2 1/2% Bonds of 1967-72, dated Nor. 15, 1945, due Dec. 15, 1972.

Commercial banks could only subscribe to this offering to the extent that they

presented restricted bonds of the eligible issues acquired before December 31,

1945, in payment of 75 percent of their subscription and cash for the remain

ing 25 percent. We received and allotted 34 applications, totaling

$11,568,000 for this offering. Six of these applications were for the account

of banks and 28 for the account of others; 08,450,000 were exchange subscrip

tions and $3,118,000 were for cash, Nationwide, exchange subscriptions

totaling $1,307,359,500 and cash subscriptions totaling $450,399,500 were

received.

Also offered for cash were 2 3/8$ Treasury Bonds of 1958. Com

mercial banks could subscribe for this issue for their own account to an

amount not exceeding the combined capital, surplus and undivided profits,

or 5 percent of the total deposits as of December 31, 1951, whichever was

greater. We received 600 applications totaling $263,922,500 for this issue,

of which $107,547,000 was allotted. These appl ica.tions represented 726


subscribers - 531 being banks. Nationwide, subscriptions totaling $11,693,-

351,000 were received and $4,24.8,4.37,500 allotted.

There were six exchange offerings during the year, as follows:

1. 2 3/8$ Treasury Bonds of 1957-59 for 2 l/2$ Treasury Bonds of 1952-54.

2. 1 7/8$ Certificates of Indebtedness, Series A-1953, for 1 7/8$ Certificates of Indebtedness, Series A-1952.

3. 1 7/8$ Certificates of Indebtedness, Series B-1953, for 1 7/8$ Certificates of Indebtedness, Series B-1952.

4. 2$ Certificates of Indebtedness, Series C-1953 for 1 7/8$Certificates of Indebtedness, Series C-1952, and 1 7/8$Certificates of Indebtedness, Series D-1952.

5. 2 1/8$ Treasury Notes, Series A-1953, for 1 7/8$ Certificates of Indebtedness, Series E-1952.

6. An additional issue of 2$ Certificates of Indebtedness, Series C-1953, for 1 7/8$ Certificates of Indebtedness, Series F-1952.

We received 1,512 applications, totaling $445,629,000 for these exchange

offerings, which were allotted in full. These applications represented

3,904 subscriptions, of which 2,981 were for the account of banks.

During the year, we received 4,661 tenders for the weekly Treasury

Bills, totaling $706,036,000, and $635,938,000 were accepted. These tenders

represented 5,276 subscribers. In 1951, we received 2,665 tenders, totaling

$363,505,000, and $350,377,000 were accepted. The average equivalent rate of

discount on Treasury Bills increased from 1.883 percent for the Bills dated

January 3, 1952, to 2.228 percent for the Bills dated December 26, 1952.

On October 3, 1952, tenders were received for bids to an issue of

161-day Treasury Bills dated October 8, 1952, due March 18, 1953. These Bills

were labeled "Tax Anticipation Series". We received 126 tenders, totaling

$82,995,000, and $75,595,000 were accepted. These Bills may be used to pay

income and profits taxes due March 15, 1953.

On November 13, 1952, tenders were received for bids to an issue


of 210-day Treasury Bills, dated November 21, 1952, due June 19, 1953, also

labeled "Tax Anticipation Series". We received 111 tenders, totaling

$101,765,000, and $56,034,000 were accepted. These Bills may be used to pay

income and profits taxes due on June 15, 1953.

Banks that were qualified as "Special Depositaries for Public

Honeys" were permitted to make payment for accepted tenders for these Tax

Anticipation Treasury Bills by deposit in their Treasury Tax and Loan Account

On April 29, 1952, the Treasury Department announced a number of

changes in United States Savings Bonds. Briefly, the changes are as follows:

1. The issuance of a new design Series E bond, effective as of

May 1, 1952, which matures nine years and eight months after

the issue date. The new "E" bonds yield a higher rate of

return, if redeemed during the early years, than the old bonds.

They also increase in redemption value at the end of six months

after the issue date; whereas "E" bonds issued prior to May 1,

1952, do not increase in redemption value until one year after

the issue date. The over-all interest rate was also increased

from 2.9 percent to 3 percent compounded semi-annually, by

shortening the term of the bonds from ten years to nine years

and eight months.

2. The interest rate on the "E" bonds, during the extension period,

was also raised for all such bonds that mature after May 1, 1952,

so that the return will be 3 percent compounded semi-annually on

the issue price, if such bonds are retained for an additional ten

years after the original maturity date. The new rates during the

extension period do not apply to the "E" bonds which matured

before May 1, 1952.

3. The annual limitation on the purchase of Series E bonds was alsoDigitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

raised from $10,000 (maturity value) to $20,000 (maturity value).

Since the new design "E" bonds were not physically available on

May 1, 1952, the stock of the old design bonds was used until the

new design bonds were available. Such old style bonds bearing

issue dates of May 1, 1952, or thereafter, nevertheless, entitled

the owner to the benefits of the revised terms. The new design

Series E bonds became available early in August 1952. On August 8,

we began to ship the new bonds to the issuing agents in our

district with instructions to return the unissued stock of the

old style "E" bonds. By the end of October 1952, the agents in

our district had accounted for and returned all of the old design

Series E bonds, amounting to 175,569 pieces, totaling $34,990,275

(maturity value). It is interesting to note that only two issuing

agents in this district were unable to account for all bonds con

signed to them. One agent could not account for one bond at $25

and another could not account for two bonds at $25 and two bonds

at $50. Under Treasury Department provisions, these agents re

imbursed the Department for the issue price of these five un

accounted for bonds. The unissued "E" bond stock has been

audited by us and sorted in serial number order by denomina

tions. This stock will be retained by us and will be used for

reissue cases involving bonds bearing issue dates prior to May 1,

1952,

4. The Treasury Department discontinued the sale of Series F and G

United States Savings Bonds as of the close of business April 30,

1952, and offered in their place Series J and K bonds. The Series J

bond, which replaces the "F" bond, will yield 2,76 percent interest

-37-


if held to maturity, which is twelve years after the issue date;

whereas the "F" bonds only yielded 2.53 percent if held twelve

years. The redemption values on the new bonds if redeemed prior

to maturity are also higher. The Series K bonds replaced the

Series G bonds. The "K" bond is a current income bond and it will

yield 2.76 percent if held to maturity, twelve years after the

issue date; whereas, the "G" bond only yields 2 1/2 percent if

held twelve years. This bond also has the same par payment pro

vision as the "G" bond. The amount of bonds of Series J or

Series K, or the combined aggregate amount of bonds of both series

originally issued during any one calendar year to any one owner

that may be held by that owner at any one time, including those

registered in the name of an individual and another person as co

owner, is limited to $200,000 (issue price). Bonds of Series K

issued in exchange for matured bonds of Series E are not included

in computing the owner's holdings for the purpose of applying the

limitation on holdings. Series J and K United States Savings Bonds

may be registered in the names of individuals as well as organiza

tions, However, up to the present time, commercial banks have not

been permitted to subscribe for either Series J or K United States

Savings Bonds.

5. As of June 1, 1952, a new current income bond, known as Series H,

also became available. This bond matures nine years and eight

months after the issue date, and will yield 3 percent if held to

maturity. They are sold at par and the interest is paid by check

semi-annually on a graduated scale of rates. The bond is redeem

able at par at any time six months after the issue date as of the


first day of the month on one full calendar month's notice. It

may only be registered in the names of individuals and the annual

purchase limitation is $20,000 (maturity value).

There were 1,4-09 qualified issuing agents for Series E savings bonds

in this district as of December 31, 1952, which is the same net number of

qualified issuing agents as of December 31, 1951. These agents, during 1952,

sent us 21,453 sales reports covering 991,908 pieces of Series E bonds, total

ing $95,457,355 (issue price) as compared with 931,016 pieces aggregating

$93,287,829 (issue price) issued during 1951. During the year 1952, we made

9,442 shipments of unissued stock of Series E bonds to issuing agents in our

district, involving 1,187,165 pieces as compared with 980,255 pieces shipped in

1951.

United States Savings Bonds of Series E, F, G, H, J and K amounting

to $48,684,487 (issue price), involving 214,956 applications and 244,987 pieces,

were issued by our bank during 1952. This compares with $41,285,375 (issue

price), involving 227,638 pieces of Series E, F and G issued in 1951.

On December 31, 1952, 1,251 banks with 110 branches and 38 other

organizations in our district were qualified to act as paying agents for Series

A through E savings bonds and Armed Forces Leave Bonds. The daily average of

all savings bonds paid by our bank and the paying agents in our district during

1952 was 8,101 pieces as compared with a daily average of 8,573 in 1951.

Paying agents in our district were reimbursed for paying savings

bonds and Armed Forces Leave Bonds during the first three quarters in 1952 in

the amount of $205,821 for 1,513,123 pieces as compared with $227,922.20 for

1,703,698 pieces during the first three quarters of 1951.

We received a monthly average of 1,597 pieces of savings bonds for

safekeeping during the year 1952 as compared with 1,166 pieces per month during


the year 1951. Savings bonds released from safekeeping during 1952 averaged

2,083 pieces monthly as compared with 2,342 per month during 1951. As of

December 31, 1952, we were holding in safekeeping for individuals, fiduciaries

and organizations other than banks 229,837 savings bonds as compared with 235,666

bonds held on December 31, 1951.

During the year 1952, we reissued for all purposes 133,162 savings

bonds with a maturity value of $27,407,550 as compared with 109,018 pieces,

totaling $22,008,895 (maturity value) reissued in 1951.

The total public debt as of December 31, 1952, was $267,445,125,000,

as compared with $259,445,000,000 on December 31, 1951.

In this district, 1,171 banks are now qualified as "Depositaries for

Public Moneys" and 988 of them had active Treasury Tax and Loan Accounts. As

of December 31, 1952, the total deposits in the Treasury Tax and Loan Accounts

were $107,475,150.28. The aggregate of all amounts deposited in the accounts

during 1952 were $982,323,888.49 as compared with $294,648,656.51 for 1951.

As it did last year, the Treasury Department permitted Special

Depositaries to accept for deposit in their Treasury Tax and Loan Accounts,

special drafts prepared by us representing checks of $10,000 or over drawn

on such depositaries in payment of quarterly installments of income and excess

profits taxes remitted to Directors of Internal Revenue. This provision was

made effective for the following periods:

March 1, 1952 through April 5, 1952

June 2, 1952 through July 3, 1952

Sept. 1, 1952 through Oct. 3, 1952

Dec. 1, 1952 through Jan. 5, 1953

For the tax payment period December 1, 1952, through January 5, 1953, only 50

percent of the amount of such checks could be deposited in the Treasury Tax


and Loan Account by a Special Depositary.

On December 31, 1952, 680 banks in this district were qualified to

act as Depositaries for Withheld Income Taxes, Federal Insurance Contribution

Act Taxes and Railroad Retirement Taxes, and as such could accept deposits of

those taxes from employers, and deposit the funds in their Treasury Tax and

Loan Accounts. During the year, we received from qualified Depositaries and

direct from employers 186,278 Depositary Receipts for withheld tax payments,

totaling '$360,352,296.35. In addition, we also received from qualified De

positaries and direct from employers 507 Depositary Receipts for $23,252,457.90,

representing Railroad Retirement Taxes. In 1951,634 banks were qualified as

Depositaries for Federal Taxes and we received a total of 155,710 Depositary

Receipts for such taxes, amounting to $295,978,315.96.

The Fiscal Agency now occupies space on the Bank Floor, the Green

Room in the Subbasement and the Annex. On December 31, 1952, there were 106

employees in the Fiscal Agency Division, as compared with 112 on December 31,

1951.

Commodity Credit Corporation

This year, in our district, new agreements with the Production

Marketing Administration were executed by 846 lending agencies. Two hundred

forty of these agencies also qualified as servicing agents. Ninety-one percent

of the servicing agencies are banks.

The number of items handled as cash items this year was approximately

57 thousand, as compared with 90 thousand last year. The dollar volume was

$116.5 million as compared with $147 million last year. We paid approximately

32 thousand sight drafts drawn on the Commodity Credit Corporation by the

Production Marketing Administration State Committees, of which there are 337

in this district, as compared with 41 thousand paid in 1951. These drafts


totaled $25.5 million as compared with $22.5 million in 1951.

Approximately 3,200 sight drafts, drawn on the Commodity Credit

Corporation and payable through the Federal Reserve bank, were paid by us in

1952. These drafts totaled $64. million. In 1951 we paid 2,100 such drafts,

totaling approximately $60 million.

On behalf of the Minneapolis Office of the Commodity Credit Corpo

ration, during the year we issued 15 thousand checks drawn on the Treasurer

of the United States, totaling approximately $221 million as compared with

20 thousand checks for $176 million in 1951.

There were two full-time employees in this division as of Decem

ber 31, 1952.

NONCASH COLLECTION

During 1952 this department handled 885,674. grain drafts totaling

$787,002,803.28. This was a decrease of 37,110 in the number of items handled

and a decrease in dollar value of $76 million under that of 1951.

There was an increase of 3,338 items in city collections and a de

crease of 584. items in country collections compared with 1951. The dollar

value of city collections increased $10,188,000 and the dollar value of

country items increased $1,4-99,000.

Coupon and country security collections showed a decrease of 61,599

items and a dollar value decrease of $967 thousand.

Our member banks forwarded 2,832 direct-sent collections to other

Federal Reserve banks as compared to 2,539 in 1951. The dollar value of these

collections totaled $23 million for 1952 as compared to $25 million for 1951.

Exclusive of direct-sent collections, this department handled during

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1952 a total of 1,169,4-86 items with a dollar value of $914 million. This is

a decrease of 95,955 in number of items handled and in dollar value, a decrease

of $66 million.

During the year we redeemed 307,123 Government coupons aggregating

$17 million, which is a decrease of 30,000 items and $12 million as compared

with 1951. We also redeemed 12,092 Governmental agency coupons amounting to

$588,000 during 1952, as compared to 11,810 coupons totaling $436,000 in 1951.

PERSONNEL

During the early part of 1952, after discussions with our Placement

Director friends and a survey of current literature concerning employment, it

appeared that there would be an extremely tight labor market during the year.

Several reasons were in evidence.

Census figures show that while demand for employment of young women

between the ages of 18 and 35 has been increasing, the supply has dropped off

since 1940. The latter was caused by the low birth rate during the depression

years, sharp increases in early marriage, and a rising birth rate in the post

war years. Census figures also show a gradual increase in the number of girls

attaining the age of 18 after 1952, but not before I960 will the number of 18

and 19 year-olds exceed the 1940 level.

Firms employing clerical women have experienced increased difficulty

because of the higher rates paid by production type industries. Many young

women who in the past would have taken clerical positions have preferred a

higher paying factory job since they plan to be a part of the labor force

only for a relatively short period of time.


Armed with this information and anticipating difficulty in filling

orders for new employees, we discussed with department managers the need for

longer term planning concerning operating personnel and the importance of

ordering new employees well in advance. By so doing, we finished the year

almost 100$ staffed, but it is already evident that we are starting the new

year in an extremely tight labor market.

During the past year we found it most difficult to fill jobs re

quiring special skills, such as stenographers. We have continued our

practice of placing older women on jobs where pressure deadlines are not re

quired. The number of night shift employees was also increased to tap a

source of labor that is not available for day work. On December 31, 1952, we

had 24 women IBM operators working on the night shift.

On December 31, 1952, the head office staff consisted of 638 em

ployees, 4-06 women and 232 men. Accessions for the year totaled 308 and

separations totaled 328. One hundred and five employees were hired during

June for the largest June placement since 194-3. This large number, consist

ing mostly of junior clerical employees, was necessary because the staff had

decreased during the last two months of 1951 and the first five months of 1952.

The staff fluctuated from a low of 624- on May 21 to a high of 694-

on June 26. Since 194-7 it has also been necessary to build up the staff for

vacation relief because the local high schools now have only one graduating

class each year and that during the spring.

At the end of the year, 213 employees were members of the local

chapter of the American Institute of Banking. Of this number, 98 were men

and 115 women. Sixty employees enrolled in 13 classes in order to further

their education and better prepare themselves for their work. An employee of

the bank is president of the AIB, and many others were appointed to work on


various committees.

The contract with the Minda Anderson Lunchroom was terminated in

February, and a new agreement was made with Nationwide Food Service, Inc.,

which assumed management of the cafeteria.

During the year, 116 suggestions were submitted and 32 suggestions

were approved with awards totaling 0192.

During January, the Welfare Division, in conjunction with the Federal

Reserve Club, made arrangements for the Red Cross Mobile Blood Unit to visit

the bank. One hundred and sixty employees volunteered to give, and 105 were

accepted and gave donations of blood to be used for Armed Forces personnel.

The Welfare Division also made arrangements to have the Mobile X-ray Unit of

the Hennepin County Tuberculosis Association come to the bank to give free

X-rays to employees and their dependents or relatives. Over 15% of the em

ployees were X-rayed. Sixty-eight relatives or dependents also were X-rayed

and were taken on tours of the bank and served refreshments in the employees'

cafeteria if they so wished.

Eleven employees completed a 24-week instructors' course in first

aid which was taught by a representative from the local Red Cross office. A

number of women employees attended a class in swimming which was taught by a

local Red Cross instructor.

We have continued the policy of offering polio insurance to

interested employees through the Connecticut Casualty Company. A total of

38 single and 59 family applications were made. Our policy carried with the

Connecticut General Life Insurance Company covering hospitalization and surgi

cal benefits has continued to give assistance to employees in case of illness.

The following tabulation shows the costs incurred by employees for surgery


and hospitalization and the portions thereof paid by the insurance company:

Services Claims Total Cost Amount Recovered % of Recovery

Surgical 138 $17,232.30 $14,406.28 84Hospital 128 8.802.20 6.295.00 71

2^6 $26,034.50 $20,701.28 77.5

In September the position of Job Analyst was created in the depart

ment. An employee who has worked in several of the large departments of the

bank over a period of many years was selected to conduct a review of all

active jobs in order to determine whether the description of the duties on

file in the Personnel Department adequately describes the tasks performed by

the individual assigned to each job. Information for the review is obtained

by interview with department heads and supervisors. Minor or inconsequential

job changes are made without re-evaluation, but if it is felt that major

changes have occurred, the Job Analyst presents the job to the Employee

Evaluation Committee, consisting of three members of the Personnel Department,

for preliminary evaluation. The job is then evaluated by a Junior Officer

Committee composed of three members, and final evaluation is made by the

Personnel Committee after giving consideration to evaluations by the Employee

and Junior Officer Committees. The Job Analyst is also responsible for the

writeup of descriptions of new jobs as they occur. It is believed a constant

review will help us insure a fair and just classification of jobs in all de

partments based on specific job requirements.

The Personnel Development Program continued its long-range plan aimed

at broadening the bank experience of our employees and developing manpower for

promotions within the bank. In the fall a Personnel Development Committee was

formed, consisting of two officers, two department managers from large de

partments, and a representative from the Personnel Department.

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PUNNING

As a result of the changes in postal rates and the size and weight

limitations which became effective January 1, 1952, a complete review of our

methods of forwarding checks, currency, coin, securities, etc., was made in

order to minimize the resulting increase in our postage expenses and to

assure that our shipments would comply with the new regulations. The regula

tions issued by the Post Office Department permit the Reserve banks to exceed

the reduced weight limitations under certain circumstances provided that such

shipments are "pouched" and we are using this authority extensively on ship

ments of coin, redeemed currency and United States Savings Bonds, etc.

As we assume the shipping charges on currency from member banks, we

advised all member banks of the new postal rates and regulations and requested

their cooperation in minimizing such expense by reducing the number of ship

ments forwarded by including deposits of fit and unfit currency in the same

shipments and by increasing the size of shipments where more than one ship

ment was being forwarded to us on the same day. Test checks of all shipments

received were made for a period of months to correct misunderstandings of the

new postal rates and regulations by member banks and postmasters and to obtain

the cooperation of the banks in effecting feasible savings in postage expense.

A survey of all phases of Check Collection Department operations

was completed early in the year and assistance given to the Check Collection

Department in the installation of the recommended changes which were adopted.

Arrangements were made with a number of member banks in this district to

forward checks to us by air mail or air express so as to permit receipt of the

items for handling by our night force. 1Te reimburse such banks for the addi


tional shipping charges incurred in excess of the cost of forwarding such de

posits by first class mail or railway express. As a result of the absorption

of the activities of the Chicago and Seattle offices of the Veterans Admini

stration by the Fort Snelling Veterans Administration office, there was a

substantial increase in the volume of items received from that office. The

Fort Snelling office previously deposited items at approximately 10:30 A.M.

daily. Arrangements were made to obtain a portion of these items for handling

by our night force after the consolidation and effective January 2, 1953,

checks deposited as late as 5:00 P.M. permit the handling of all such items

by our night force.

A Security Files Program, under the supervision of the Planning De

partment has been in continuous operation during the year. Current informa

tion is being maintained of our essential records in space in the basement of

the Wayzata State Bank, Wayzata, Minnesota.

Several surveys were made during the year of facilities for the

storage of emergency currency reserves. A plan for converting space in two

grilles in our main vault formerly used for the storage of coin, for the

storage of currency or coin on a basis which will permit joint audit and

officers control of individual compartments was adopted and the necessary steel

for this installation has been ordered and will be installed shortly.

An exhaustive study is being made of our previous, present and

estimated future space requirements with a view to determining the amount of

additional space which should be provided for in any ultimately adopted build

ing plans.

The Planning Department considers employees' suggestions and makes

recommendations to the Personnel Committee for the acceptance or rejection of

such suggestions and in certain instances alternate methods of accomplishing


the objectives of the suggester.

During the year several changes were made in the locations of de

partments in the bank and Syndicate building and the Planning Department

assisted in making such moves by furnishing suggested office layouts for

efficient space utilization, flow of work, etc.

The Planning Department made studies of various operations in a

number of departments and recommended changes ia forms, equipment used, in

formation recorded, etc., to improve operations.

Several operating letters and supplements were revised and dis

tributed to all member banks during the year.

A considerable amount of research for System committees was con

ducted during the year. Included in these surveys were several question

naires on check collection, currency and coin and leased wire activities.

Our first class mail and valuable registered mail schedules were

reviewed during the year and our records brought up to date. The coopera

tion of the Railway Mail Service was solicited in order to obtain improved

service to a number of points and information furnished on the necessity

for retaining the service in effect in several instances where reductions in

service were under consideration.

PROTECTION

Four guards left the employ of the bank during 1952, and one of

these guards was rehired. Three new guards were hired to fill these vacan

cies. As of December 31, 1952, the personnel of the protection department

was as follows:

-4-9-Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1 Superintendent U Sergeants 24 Guards (one acting as chauffeur)

Ammunition for all weapons was renewed, and old ammunition was

fired on the range by guards in their weekly practices.

All guards were given training on all arms, as well as their side

arms.

All alarms were tested monthly by the Superintendent of Protection.

All inside alarms were tested weekly by the sergeant in charge.

The information clerk issued 2,503 passes to outsiders who wished

to visit upper floors of the bank — 1,733 work cards were issued to outside

workmen, canteen employees, etc.

At the request of the Bond Department, 575 guard escorts (4-76

singles and 99 doubles) were furnished.

One hundred and five employees were admitted by memorandum and

after-hour passes turned in to the guard office after hours.

All applicants for employment were investigated at the Identifi

cation Bureau of the Minneapolis Police Department by the Superintendent

of Protection.

PUBLIC SERVICES

A summary of the Public Services activities of our bank for 1952 is

the best medium for comparison of our work with the objectives of a bank and

public relations program formulated by the subcommittee on bank and public

relations for the System. The objectives agreed on by that committee axe as

follows:


I. To bring about public understanding of the System's statutory purposes, responsibilities, and ooerations, and of their part in the economy of the United States.

II. To provide opportunity for mutual exchange of ideas among the Federal Reserve System, bankers, and the public at large, in order:

(a) To keep the System currently informed of economic and business developments;

(b) To keep bankers and the general public informed of developments, policies, regulations, and operations of the System and each Federal Reserve Bank;

(c) To keep the System aware of public attitudes toward the System's policies and regulations and toward individual Reserve Bank operations and practices.

III. To provide media for study of banking problems and techniques, and economic developments, with a view toward improvements that will contribute to the strength of the banking system as a whole.

The broad objectives are not expected to be achieved in any one

year, nor can a description of any one activity of an individual Reserve Bank

be expected to coincide exactly with any one of the objectives. For purposes

of comparison of our program with the broad objectives, we will take each

objective and list below it the activities of our bank which relate to it.

Relative to Objective No. I, TO BRING ABOUT PUBLIC UNDERSTANDING

OF THE SYSTEM'S STATUTORY PURPOSES, RESPONSIBILITIES, AND OPERATION, AND OF

THEIR PART IN THE ECONOMY OF THE UNITED STATES, our bank engaged in the

following:

I. In the fall of 1952, we introduced a new type of meeting to the

Ninth District. Now known as the Assembly, this meeting held

on November 24. and 25 included the directors as well as the

senior officers of our member banks. The announced program

theme, WHAT'S AHEAD FOR YOU AND YOUR BANK, sought to interest


particularly those directors of our member banks who play

an active part in the business life of their communities

rather than in the banks. The program included tours of

the Federal Reserve Bank, talks devoted largely to Federal

Reserve policy by Governor R. M. Evans, President Powell,

and Director of Research, J. M. Peterson. Credit problems

and other bank matters were discussed by qualified speakers.

The number of directors included in the audience total of

562 was very encouraging. Unsolicited comment received

indicates that future meetings of this type will attract

an even greater number of directors. The continuing effort

to better acquaint the directors' group with the Reserve

Bank and its direct connection with the local bank and the

economic welfare of the community should certainly qualify

this activity under Objective No. 1.

On May 3 our bank sponsored the fourth in a series of Money

and Banking Workshops. As in previous years, this meeting

was open to the instructors of economics and money and

banking from Ninth District colleges. Continuing the theme

originally announced in 1949, this meeting offered its

audience discussions on monetary and economic subjects

which could be used as supplementary material in teaching.

The 1952 major topic was inflation and the role of the Re

serve Bank was discussed in detail. Teachers play an im

portant part in the development of public understanding.

Our Workshop attempts to broaden the source of information

of the teachers.


III. The Federal Reserve Bank of Minneapolis' widest contact with

the general public continues to be our movie, THE FEDERAL

RESERVE BANK AND YOU, shown to school classes and other

interested groups. During 1952 it was shown to Ninth

District audiences totaling 4-2,267 persons bringing its

cumulative Ninth District audience total (since its intro

duction in 1950) to 195,470. In addition, our bank circulated

the movie, THE FEDERAL RESERVE SYSTEM, produced by the Encyclo

pedia Brittanica. This film was shown to audiences totaling

5,616 persons.

IV. Our publication, YOUR MONEY AND THE FEDERAL RESERVE SYSTEM,

continued to be very popular with teachers in the eighth grade

and junior high schools. During the year, we filled 779 re

quests for 8,135 copies. These requests came from all parts

of the country.

V. Another direct contact of our bank with the public was

through tours made of our bank. The total number to be

shown the work of the Federal Reserve Bank in 1952 did not

reach the record total of 2,920 achieved in 1951, but during

the year 101 groups totaling 2,773 people visited our bank.

As in previous years, the greatest number of people visited

our bank during the months of April and May, when an average

of one high school group a day was shown through.

VI. To encourage a favorable press, three avenues of approach

are used: The newspapers in the district, the financial

press outside of the district, and banking periodicals are

provided news releases and feature story material. Repre-


sentatives of the press are invited to attend meetings

sponsored by this bank. Personal calls are made on

editors by representatives of our bank.

VII. Not directly under the supervision of the Public Services

Department, but an essential part of the program, is the

work of the Research Department whose various publica

tions have a wide mailing list including bankers, business

and professional men, teachers, students, and others

interested throughout the district. In addition, our

economists delivered 115 addresses to audiences totaling

12,640.Objective No. II is stated: TO PROVIDE OPPORTUNITY FOR MUTUAL EX

CHANGE OF IDEAS AMONG THE FEDERAL RESERVE SYSTEM, BANKERS, AND THE PUBLIC

AT LARGE, IN ORDER, and our bank attempted to work along the following lines

I. The Assembly, held November 2U and 25} had as the bulk

of its audience the executive officers of our member

banks. In addition to the program offered the audience,

the meeting gave the bankers and directors assembled an

opportunity to exchange opinions and ideas among them

selves, the directors of other banks, and the representa

tives of our bank.

II. The Money and Banking Workshop described under Objective

No. 1 would qualify under Objective No. II since the

program content serves to keep the colleges and the

general public informed of developments, policies, and

so forth of the System.

III. Visits to banks in the District would probably be the


activity of our bank which would come closest to working

toward Objective No. II. During 1952, our officers and

senior staff members visited every bank in the District

at least once. Originally the plan of the Public Services

Department was to make calls on every bank twice during

the year. A review of the program (after the spring

visits in 1952) resulted in a decision to reduce the

number of calls made to one a year, thereby allowing more

time for each visit. To supplement the one visit, the de

partment now has a young man designated as a full-time

field representative. The specific purpose of his visits

is to become acquainted with the younger bankers in the

District. It is hoped that visits to banks in the Dis

trict will accomplish two things. First, that the

opportunity for our representatives to become personally

acquainted with commercial bankers will lead to friend

ships which in turn will lead to a more amicable approach

to common problems. Second, that a firsthand appraisal

of economic and social conditions of an area visited will

broaden the background of our men which in turn will lead

to a better understanding of the problems of commercial

bankers.

Our bank was represented at all the State bankers' con

ventions in the District and at as many group meetings

and other bankers' gatherings as could be scheduled

without undue expense. To give the directors of our

bank an opportunity to meet bankers in the District,


for several years the department has arranged for their

attendance at one of the State conventions. In 1952

conflicts in dates made it impossible to repeat this

program. Two of our directors, however, toured the

North Dakota oil fields enroute to the Montana con

vention. We also arranged for the directors to hold

their August meeting in Duluth, to meet Duluth and Iron

Range bankers, and to view the developments on the Range

for the processing of low-grade ore. While in Duluth,

the directors visited a refinery in Superior which at

present is processing oil delivered by pipeline from

Canada.

V. Our Research Department, previously mentioned, is most

active in the work under Objective No. II.

Objective No. Ill, TO PROVIDE MEDIA FOR STUDY OF BANKING PROBLEMS

AND TECHNIQUES, AND ECONOMIC DEVELOPMENTS. WITH A VIEW TOWARD IMPROVEMENTS

THAT WILL CONTRIBUTE TO THE STRENGTH OF THE BANKING SYSTEM AS A WHOLE, was

represented by:

I. The Assembly which also qualified under Objective No. 1

and II most certainly qualifies under No. Ill, since the

program provided a medium outlined in the objective.

II. The program of our Money and Banking Workshop in 1952

qualifies this meeting under Objective No. III.

III. In addition to the large group meetings previously

described, for nine years our bank has conducted a

meeting for the working members of the examining force

of the F.D.I.C., the national bank examiners, Federal


Reserve examiners, and the State banking departments

of the District. The program of the meeting (held this

year on November 29) again included current economic and

banking topics.

IV. Continuing the program which began in 194-8, the Federal

Reserve Bank of Minneapolis in 1952 offered to repre

sentatives of our member banks the opportunity to attend

our Short Course in Central Banking. The groups attend

ing (as in previous years) had an opportunity to study

at firsthand the work of the Federal Reserve Bank as

it applies to our member banks, to discuss current

economic and monetary developments with our economists,

and to discuss banking problems and techniques with

representatives of other banks from other parts of the

District. A recent canvass of our member banks indi

cates a continued interest in our Short Course. The

groups recently attending the Short Course have been

drawn mostly from the younger men and women in our

member banks.

V. In 1949, at the suggestion of one of our member bankers

whose bank had been represented at our Short Course,

our bank started and has continued a program of sending

our senior men for a week's study at a commercial bank.

Details of this program have been handled by our

personnel department, but the Public Services Depart

ment has solicited the banks which have taken our men

for training.


Some of the activities of our Public Services Department cannot

be readily catalogued, but in a sense supplement the efforts of other

functions.

I. Our bank has a display of currency which it offers to

member banks for exhibit in their lobbies during

anniversary celebrations or open houses marking the

completion of a remodeling project.

II. In 1950, in cooperation with the Secret Service, we

prepared a series of slides showing the features of

counterfeit currency. These slides have been used in

the conduct of so-called counterfeit clinics for bank

employees, school groups, and other interested

organizations. During 1952, we conducted three such

clinics.

III. The department stands ready and willing to extend

services requested by bankers. As an illustration,

we receive requests for information on plans for

anniversaries and other celebrations; to line up out

side speakers for bankers' programs (if none of our

men are available); to obtain tickets for entertain

ment events in the Twin Cities; and to assist in making

transportation reservations.

IV. For several years the department has maintained an in

formal clearinghouse for bankers requesting additional

personnel and bank employees seeking to change jobs.

V. In addition to circulating to our own employees changes

in the Ninth District Bank Directory, the department


sends these changes to 55 holders of the directory in

other banks and business firms.

VI. On the occasion of the celebration of a bank's or

banker's anniversary, the department prepares a

special citation.

Again, the broad objectives of a bank and public relations program

cannot be expected to be achieved in any one year. Indeed it would be

difficult at any time to determine whether any one objective had been

achieved.

Fortunately, the objectives outlined by the system committee

direct rather than limit the scope of the activities of the Public Services

Department. Functions which have been found acceptable are being repeated

and possibilities for new or improved methods are constantly being con

sidered.

PPBCHASING

In 1952 purchase orders were placed with various firms for 2,851

items, a decrease of 286 items from 1951. This reduction is largely due to

the increased use of our multilith duplicator for making bank forms which

were formerly purchased from outside suppliers.

During the year the departments of the bank requisitioned from the

stockroom a total of 10,309 items, listed on 4,151 requisitions. Although

our stockroom inventory is kept at a minimum consistent with good operating

efficiency, the total value of supplies on hand is usually above $40 thousand.

The market for office supplies was very competitive during 1952, the

more intense competition causing suppliers to absorb increases in operating


costs to a large extent.

RESEARCH

Near the end of 1952 the research department and the library were

moved from the ground floor of the bank building to new quarters in the

Syndicate building. This move provided the department with additional space

to accommodate an enlarged staff. Since 1941, the number of research employees

has increased from 9 to 23.

The work program of the department during 1952 was little changed

from that prevailing during 1951. Again, considerable effort was devoted to

special regional research projects. These supplemented the department's

regular research program which included many regular and special analyses of

economic conditions.

Four major regional projects were started during the year. These

dealt with the district's manganese supplies, the Missouri River Basin De

velopment, the processing of taconite, and Williston Basin oil developments.

Of these, two were completed and published during the year, and the other

two will be finished early in 1953. The published reports were distributed

to the regular Monthly Review mailing list — one, "Meeting the Supply Problem

of Manganese - Vital Ingredient in Steelmaking" was published as a supplement

to the May 1952 Monthly Review; the other, "Williston Basin Progress Suggests

District Will Have Major Oil Producing Area" was carried as an article in the

July Review.

Speaking engagements, attendance at meetings, committee assignments,

and requests for special statistical and analytical reports continued to occupy

much of the department's time during 1952. In addition to various bank com


mittees, representatives of the department served on 12 Federal Reserve

System committees during the year. Professional and educational organiza

tions, such as the Minneapolis Economic Roundtable and the Minnesota Economics

Club were served by employees of the department in capacities ranging from

officers to committee members. Speeches were delivered by the department's

economists at the Federal Reserve Assembly, the Examiners Conference, the

Money and Banking Workshop, and at other bank functions. They also delivered

speeches before bankers' conventions and group meetings, service clubs, meet

ings of farm groups, etc. Ninety-nine such talks were given outside the bank

before a combined audience of more than 12,000 people.

It is estimated that from 10 to 12 per cent of the time of senior

members of the department was spent in answering the wide variety of special

requests which were received from businessmen, students, and others through

out the district. Many of these requests also required a degree of clerical

work in compiling basic statistical data.

Numerous statistical series designed to provide adequate factual

information regarding current agricultural, business, and financial condi

tions were compiled throughout the year. Much of this information was dis

tributed to interested persons and to newspapers through the medium of

periodic statistical releases. Twelve different types of releases are pre

pared at the present time. These are mailed to approximately 3,500 users

throughout the country.

Publications issued by the department - the Farm News and the Monthly

Review - continued to increase in circulation. The Farm News, which is the

more widely distributed of the two, increased its circulation by 1,700 during

the year. About 11,700 copies of this pamphlet are now sent out each month to

individuals, either directly or through bankers and school teachers. At


year-end, the Monthly Review was being mailed to 8,927 people - this is an

increase of over 500 during the year.

In addition to special articles devoted to major regional research

projects, other Review articles featured during the year include "Arrested

Inflation Characterized 1951" in the January Review; "Recovery in the Hous

ing Market Has Continued" in the September Review; and "Drouth, Production

Costs, Cloud Farm Outlook" in the November Review.

During the year the facilities of the library were used by approxi

mately 6,600 people. Most of these were research department employees, the

remainder being made up of 1,900 service calls from other departments of the

bank, and 500 persons from outside the bank. This represents an overall in

crease of 1,000 patrons from 1951. As in previous years, most of the demand

for library material was for current publications such as newspapers,

periodicals, and statistical releases. These types of material accounted

for 35,000 out of a total of 39,000 pieces of library material used.

MEMBER BANK RESERVES

Reserve requirements for all member banks remained unchanged dur

ing the year 1952 as shown by the table below:

Bank Classification Net Demand Deposits Time Deposits

Country Banks 14$ 6$Reserve City Banks 20$ 6$Central Reserve City Banks 24$ 6$

The number and amount of penalties assessed during 1952 decreased

over the previous year; however, the dollar amount of penalties waived in

creased substantially although there was a slight decrease in the number

waived.Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Penalties assessed at the head office decreased 38.6% in number

and 38.9% in dollar amount, and at the Helena 3ranch 15.5% in number and

32.9% in amount. Penalties assessed for head office and Helena Branch com

bined decreased 31.5% in number and 36.7% in amount.

Penalties waived at the head office decreased 20% in number but

increased 13.5% in amount and at the Helena Branch, increased 8.8% in number

and 85.2% in amount.

This increase in the dollar amount of penalties waived is the re

sult of the Reserve City Banks in the Twin Cities and Helena, with their

large reserve requirements, taking advantage of the opportunity to use the

rule under which a deficiency in one period may be offset by excess reserves

in the following period, provided that such deficiency does not exceed 2%

of a bank's reserve. Out of 36% of the number and 77.7% of the dollar

amount of all penalties waived under this rule for all banks, 4-0,3% of the

number and 86.3% of the dollar amount were waived for deficiencies of Reserve

City Banks,

There was a decrease also in the number of penalties waived under

the rule which permits a penalty to be waived on a deficiency of not more

than 5% of the member bank's required reserve, provided that a penalty has

not been waived under this rule within a two year period. Fifteen per cent

of all penalties waived and 17.8% of the dollar amount were in this classifi

cation.

Forty-nine per cent of the number of all penalties waived with only

4.5% in dollar amount were waived under the rule which applies to penalties

not in excess of $5.00.

During 1952, 73 banks were penalized for a total of 124 times,


compared with 104 banks for 181 times in 1951. The following is a compara

tive report by states of penalties for deficiencies in reserves during 1952

and 1951:

Banks Affected

Michigan Minnesota North Dak. South Dak. Wisconsin

Head Off. Totals

HelenaBranch

Combined

Penalties Assessed Penalties Waived Assessed Waived

'52 '51 152 JjjlNo. Amount No. Amount No, Amount No. Amount No. No. No. No.

1952 1951 1952 1951

19 $ 879.64 47 1331.06 7 278.46

10 303.97 3 63.03

17 $ 604.28 24 $ 240.48 32 $ 204.04 6 8 14 2164 2637.23 139 6323.52 179 5371.15 28 35 66 90

21 154-28 25 398.07 5 11 13 1641 332.41 36 547.53 10 13 27 2528 116.96 46 185.96 3 12 15 22

20 601.11 18 469.05 17 363.08

86 $2856.16 136 $4674.75 253 $7167,65 318 $6706.75 52 79 135 174

38 1850,65___45 2758.06 74 2226.37 68 1202.27 21 25 36 31

124 $4706.81 181 $7432.81 327 $9394.02 386 $7909.02 73 104 171 205

SAFEKEEPING

Securities held for safekeeping and collateral purposes as of

December 31, 1952, were $1,484 million, an increase of $113 million compared

with the $1,371 million held a year ago, as reflected by the comparative

figures for 1952 and 1951 shown below:

12-31-52 12-31-51 Inc. or Dec(In thousands of dollars)

AccountsSecurities held in safekeeping 877,993 829,44-9 + 48,544

(Not pledged)Securities pledged to secure

public deposits 327,685 295,762 + 31,923^Securities pledged to secure

Government deposits 11,683 10,064 + 1,619**Securities pledged to secure

Treasury Tax and Loan Account 234,809 203,424 + 31,835■^Securities held as collateral

for Discounts and Advances 30,250 30,242 + 8


Accounts (continued)12-31-52 12-31-51 Inc. or Dec.

(in thousands of dollars)

Securities held as collateral to Consignment Account - U.S.SavingsBonds, Series E 4-5 4-5 0

Securities held for Public HousingAdministration ____ 1,704________ 1.712_______ -______ 8

$1,484,169 $1,370,698 +113,471

* Includes $2,815}000 held by commercial banks.** Includes $20,4305000 held by commercial banks and other Federal

Reserve banks„**# Includes $25,300,000 held by commercial banks.

The safekeeping department received 53,584 pieces of securities,

issued 7,336 receipts, and delivered 49,334 pieces in 8,752 transactions,

resulting in a net increase of 4,250 pieces of securities held during the

year.

This department also made 5,828 transfers of securities from one

account to another, and clipped 273 thousand coupons from securities held

during 1952.

The table below shows comparative volume figures for 1952 and 1951s

19.52 1951 Inc. or ]

Receipts issued 7,336 5,228 + 2,108Pieces received 53,584 44,^97 + 9,087Withdrawals handled 8,752 6,442 + 2,310Pieces delivered 49,334 47,359 + 1,975Transfers from one account to another 5,828 6,198 370Coupons clipped 273,629 263 < 662 + 4,967Custodian receipts issued 1,053 1,021 + 32

WIRE TRANSFERS

During 1952 the Wire Transfer Division handled a total of $13.1

billion in wire transfers. This figure is approximately $500 million lower


than 1951. Of this $13.1 billion, $4.5 billion (or 34$) were transfers to

other Federal Reserve districts, $6.1 billion (or 47$) were transfers re

ceived from other Federal Reserve districts, and the remaining $2.5 billion

(or 19$) were transfers within our own district.

The total number of transfers handled in 1952 was 43,319, which

is an increase of 663 over the 1951 figure.

The average dollar amount of transfers decreased to $303.6 thou

sand in 1952 from $319 thousand in 1951.

A total of 73,688 telegrams was handled - an increase of 5,524

over 1951. Of this number, 59,918 were transmitted over our leased private

wire system - an increase of 4,283 over 1951. The remaining 13,770 were

split between commercial wire and TWX. Commercial wire (Western Union)

totaled 7,005 and TWX 6,765. The combination of commercial and TWX (total

of 13,770) was 1,241 over commercial last year. Our TWX system was not

installed until November 1951; therefore, no comparative figures are avail

able ,


MILLION DOLLARS M ILLIO N DOLLARS

i0 <21


CAPITAL ACCOUNTS

CAPITAL STOCK paid in totaled §5,719 thousand on December 31,

1952, an increase of $356 thousand during the year.

SURPLUS ACCOUNTS. Surplus (Section 7) was increased $1,068 thou

sand on December 31, 1952, which brings the total to $15,131 thousand, Sur

plus (Section 13b) remained unchanged at $1,073 thousand.

RESERVES FOR CONTINGENCIES. No change was made in the reserve

of $1 million set aside for losses in excess of the blanket bond coverage;

the reserve of $500 thousand earmarked for losses not covered by the Loss

Sharing Agreement; or the special reserve for contingencies of $2,4-76

thousand.

The reserve for registered mail losses totaled $215 thousand as

of December 31, 1952. This is an increase of $14 thousand during the year.

A loss of $199.72 was charged against this reserve.

The table below reflects the changes made in this account during

1952.

Reserve for registered mail losses beginning of year 1952

Debit:Our pro rata share of loss sustained by the Federal Reserve Bank of Philadelphia

Credit:Annual addition based on 2^ per $1000 of total shipments of $713,358,440 for 12-month period Dec. 1, 1951 through Nov. 30, 1952

Net additions during year

Reserve for Registered Mail Losses, Dec. 31, 1952

-68-

$200,883.70

$ 199.72

14.267.17

14.067.45

$214,951.15


The following table shows currency and coin shipments made during

the fiscal year December 1, 1951 to November 30, 1952, which were the basis

for the addition to the registered mail loss reserve.

1952 1951(000 Omitted) (000 Omitted)

Registered MailNew F.R. currency from Washington $151,260 $176,520Fit F.R. notes to bank of issue 60,569 46,582Currency and coin between Minneapolis

and Helena 1,920* 8,290Other currency and coin outgoing -

Minneapolis and Helena 216,746 211,607Other currency and coin incoming -

Minneapolis and Helena 276,4P5 251,885

Railway Express and Truck Delivery All Other:

Other currency and coin outgoing 2,433 3,059Other currency and coin incoming 8.430 8.605

$717,763 $706,548

^Whenever notes are available in Washington, shipments are made direct to the Helena Branch from that source.

The disposition of 1952 net earnings and the changes made in the

surplus accounts are shown below:

Net Earnings $11,013,615.81Dividends Paid $ 327,905.73Paid U.S. Treasury (interest on

F.R. Notes) 9,617,021.12 9.944.926.35Transferred to Surplus (Section 7) $ 1,068,688.96

Surplus (Section 7) December 31, 1951 $L4,062,607.68Transferred from Earnings 1952 1.068.688.96Surplus (Section 7) December 31, 1952 $15,131,296.64


DIVIDENDS

As of December 31, 1952, capital stock held by member banks totaled

$5,719,300, on which accrued dividends totaling $327,906 were paid. This

year's dividend payment is the largest for any single year in the history

of the bank and when combined with previous years' payments, bring the ag

gregate total to $7,638,071.

Distribution of 1952 and 1951 Dividends

1252_________ ___________1251.Dividend Dividend

State No. of Banks Paid No. of Banks Paid Change

Michigan 40 $ 17,996.05 41 $ 17,122.73 $+ 873.32Minnesota 206 209,882.87 206 205,180.24 + 4,702.63Montana 83 35,091.94 84 32,040.71 + 3,051.23North Dakota 42 19,873.72 42 18,598.58 + 1,275.14South Dakota 63 27,052.68 62 24,934.37 + 2,118.31Wisconsin 42 18.008.47 41 17.057.60 + 950.87

476 $327,905.73 476 $314,934.23 $+12,971.50

TABLE OF DIVIDENDS PAID SINCE ORGANIZATION

1914 1934 $ 181,117.511915

$ 57,719.87 ft1935 185,448.45

1916 1936 179,052.041917 363,894.19 W 1937 174,057.311918 168,102.97 1938 174,231.271919 180,186.21 1939 174,905.391920 195,870.65 1940 177,400.581921 211,657.03 1941 179,789.681922 213,774.01 194-2 183,336.331923 212,732.68 1943 190,924.191924 202,827.98 1944 206,158.741925 193,559.46 1945 221,686.961926 187,609.25 1946 238,372.301927 180,726.51 1947 253,251.301928 181,202.86 1948 262,776.221929 184,029.92 1949 272,831.221930 184,4-4-5.39 , 1950 294,034.001931 180,454- 53 2J 1951 314,934.231932 175,4-94-. 80 1952 327,905.731933 171,568.89 $7,638,070.65

a/ For period November 1, 1914- through June 30, 1915. b/ For period July 1, 1915 through December 31, 1917. c/ $134,649.67 withdrawn from Surplus to pay dividend.


BANK PREMISES

Improvements made during 1952 to the Head Office building were

charged to Repairs and Alterations. A depreciation of 2% was taken on both

the Helena and Minneapolis buildings while no additions to the book value of

either building were made during the year. Inasmuch as a full reserve had

already been established, the reserve for depreciation on fixed machinery and

equipment of the Head Office was not increased. The Helena Branch took a

normal depreciation of 10% on fixed machinery and equipment.

Below are listed the principal repairs or alterations to the Head

Office building during 1952 and projects near completion at year's end.

1. Additional space was acquired in the Currency Department and

the bank floor by removal of number 7 elevator located in front

of the vault.

2. Projects near completion -

a. Installation of three windows in the front wall of the

reception room between the president's and chairman of the

board's offices. This space is to be occupied by the Public

Services Department.

b. Conversion from a single phase lighting service to a three

phase four-wire service to take care of any emergency.

c. Converting space in two grilles on the ground floor of the

main vault for storage of currency.


BANK PREMISES

BANK PREMISES:Gross Book Value:

Beginning of 1952 (no change duringyear) ...........

Total

. 01,384,281.50

HeadOffice

$1,283,281.50

HelenaBranch

#101,000.00

Allowance for Depreciation:Beginning of 1952 ..................Normal depreciation ............. . •

715,821.3627,685.56

$ 692,971.5625.665.60

$ 22,849.80 2,019.96

End of Year ......................... . $ 743,506.92 $ 718,637.16 $ 24,869.76

Net book value December 31, 1952 . . . . $ 640,774.58 e 564,644.34 $ 76,130.24

FIXED MACHINERY AND EQUIPMENT:Gross Book Value:

Beginning of 1952 (no change duringyear) ........... . e 698,171.34 $ 660,969.35 $ 37,201.99

Allowance for Depreciation:

Normal depreciation ...............694,336.46

3.720.24$ 660,969.35 $ 33,367.11

3,720.24

698,056.70 $ 660,969.35 $ 37,087.35

Net book value December 31, 1952 . . . . $ 114.64 $ - $ 114.64

LAND:. $ 410,520.66 $ 400,520.66 $ 10,000.00

TOTAL BANK PREMISES:Net book value December 31, 1952 . . . . $1,051,4-09.88 $ 965,165.00 $ 86,244-.88


NET EARNINGS & PROFITS

Net earnings and profits for the year 1952 totaled $11,014 thou

sand. This figure established a new all-time high and exceeds the 1951 total

by $1,754- thousand.

A statement of net earnings and profits is shown below:

Change1952 from 1951

Current Earnings $14-,300,838 $+1,835,939Current Expenses 3.291.556 + 153.511

Current Net Earnings $11,009,282 $+1,682,4-28

Additions to Current Net Earnings:Profit on U.S. Government

Securities sold, net $62,4-31 $+ 62,4-31All Other 79 +________f>7

Total Additions $62,510 $+ 62,488

Deductions from Current Net Earnings:Loss on U.S. Government Securities

sold, net - $- 51,867 Fees paid to architect for project

not carried out $4-2,517 + 4-2,517Reserve for Registered Mail Losses 14-,267 + 136All Other 1.392 +______ 171

Total Deductions $58,176 $- 9,04-3

Net Additions to Current Net Earnings $_____ 4- .334. $+ 71.531

Net Earnings and Profits $11,013,616* $+1,753,959

*For disposition of profits see page No. 69.


The table below gives a breakdown of Profit and Loss during 1952.

Head HelenaTotal Office Branch

Additions to Current Net Earnings;

Profit on U. S. Govt, securities sold, net $62,431.28 $62,431.28 -

Overage in uncurrent coin shipments to U. S. Mint, Denver, on 1-23-52 3.36 - $ 3.36

Extra dividend on our cash letter claim for $98.85 sent to F.R.B. Chicago on closed bank, First National Bank, Georgia, Iowa .68 .68

Total Additions $62,435.32 $62,431.96 $ 3.36

Deductions from Current Net Earnings:

Reserve for Registered Mail losses $14,267.17 $14,267.17 $

Discount on foreign currency and coin .62 .62 -

Loss on counterfeits 275.61 275.61 -

Difference account 275.52 303.51 -27.99

Loss on mutilated currency and coin 5.18 12.07 - 6.89

Difference between the estimated and actual expense for Fiscal Agency for December 1951 692.69 692.69 -

Silver certificate altered to $50.00. Bill found in Receiving Teller's cash 6-27-52. Source unknown. 49.00 49.00

Silver certificate altered to $20.00. Bill found in currency sorted by I. Iverson. Source unknown. 19.00 19.00

Fees paid to architect for project not carried out

i42.517.00 42.517.00

Total Deductions $58,101.79 $58,136.67 $ -•34.88

Net Additions to Current Net Earnings $ 4,333.53 $ 4,295.29 $ 38.24


IO''I


EARNINGS

An increase during the year of $20 million in our average daily

holdings of U.S. Government securities, together with a rise in the average

yield from 1.71$ to 1.91$, reflect the major increase in our earnings over

1951. The table below shows changes in the various earning accounts:


Discounts and Advances $ 277,228 $+ 87,094Foreign Loans on Gold 9,567 + 9,381Industrial Loans 5,515 2,269U.S. Govt. Securities-System Account 14 j,003,295 +1,744,925Deficient Reserve Penalties 4,694 2,752Commission Earned on Bankers' Acceptances

purchased for foreign correspondents 370 - 464Interest on Personal Loans to Employees 33 + 33Clearinghouse Fines 126

$14,300,838 $+1,835,939

The average daily holding of bills discounted for the year 1952

was $15,785 thousand and resulted in earnings of $277,228 as compared with

last year's average of $10,853 thousand and earnings of $190,134-. The average

return for the year was 1.75$. For ten months during 1952 our bank partici

pated in foreign loans on gold as compared with only two months in 1951.

This resulted in an increase of $533 thousand over 1951 in our daily average.

Earnings were $9,567 during 1952 as compared with $186 for the year 1951 at

the average yield of 1.76$. Our 1952 daily average holding of industrial

loans decreased to $110 thousand from $156 thousand in 1951, and, as a

result, earnings from that source were $2,269 less than for the previous year.

The average yield was 5.01$. For the year 1952, the average yield from loans

to Ninth District banks, foreign loans on gold, U.S. Government securities,

and industrial loans was 1.9126$. During 1951 the average yield on these


combined holdings was 1.7127$. Our average daily participation in Open

Market securities was $731 million, whereas one year ago the daily average

was $716 million. The average yield was 1.91$ for 1952 against 1.71$ for

1951. Earnings from these securities were $L4,003 thousand compared with

$12,258 thousand one year ago.

As of December 31, 1952, the bank's total participation in U.S.

Government securities held increased $15 million. The following table

indicates the bank's holdings as of December 31, 1952, and shows the dollar

increase or decrease in comparison with December 31, 1951.

Change 12-31-52 from 1951(In thousands of dollars)

Bonds $14-3,939 $- 25,716Notes 4-38,430 +277,539Bills 23,013 + 8,161Certificates 159.018 -24.4.937

$764,400 $+ 15,047


MILLION DOLLARS MILLION DOLLARS


COMPARATIVE STATEMENT OF NET CURRENT EXPENSES

Head HelenaOffice Branch Combined Combined1952 1952 1951

Salaries:Officers $ 199,384 $ 19,872 $ 219,256 $ 215,304Employees 1,458,276 144,719 1,602,995 1,484,718

Fees:Directors 5,775 3,820 9,595 8,375Federal Advisory Council 1,125 — 1,125 1,050Other 3,490 690 4,180 5,773

Retirement Contributions:F.R. Retirement System 110,334 10,804 121,138 123,124Supplemental Death Benefit 4,289 565 4,854 2,896Social Security 21,208 2,185 23,393 21,952

Traveling Expenses:Directors 4,561 2,352 6,913 6,698Federal Advisory Council 715 - 715 725Other 57,794 5,007 62,801 77,855

Postage and Expressage:Original Shipments of F.R. Currency 41,030 - 41,030 35,903Redemption of F.R. Currency 14,674 2,639 17,313 13,182Other 317,066 60,115 377,181 333,970

Telephone and Telegraph 19,582 9,485 29,067 27,438Printing, Stationery & Supplies 105,982 9,514 115,496 118,895Insurance 11,533 1,861 13,394 18,644Taxes on Real Estate 92,224 4,600 96,824 97,164Depreciation 25,666 5,740 31,406 31,406Light, Heat, Power & Water 29,484 2,455 31,939 27,125Repairs & Alterations 18,972 1,676 20,648 93,392Rent 48,218 23 48,241 48,618Furniture & Equipment:

Purchases 45,131 2,631 47,762 28,574Rentals 105,617 15,959 121,576 63,144

Assessment for expenses of Bd. of Gov. 105,000 - 105,000 103,700Federal Reserve Currency:

Original Cost 140,559 - 140,559 127,550Cost of Redemption 5,988 - 5,988 7,695

All Other 76.096 3,706 79,802 81.649Total Expense $3,069,773 $310,418 $3,380,191 $3,206,519

Miscellaneous Recoveries:Coin Wrapping 8,155 1,172 9,327 8,570Rental of Furniture & Equipment 2,887 - 2,887 3,030Rental of Space 33,434 504 33,938 37,703Postal Money Orders 36,658 2,963 39,621 15,374Other 2.862 2.862 3.797

Total Recoveries $ 83,996 $ 4,639 $ 88,635 $ 68,474

Total Net Current Expenses $2,985,777 $305,779 $3,291,556 $3,138,045


NONREIMBURSABLE EXPENSE

Change 1952 from 1951

Head Office $2,985,777 $+129,4-75Helena Branch 305.779 + 2L.036

$3,291,556 $+153,511

Head Office expense, after deduction of reimbursable expense,

increased $129 thousand compared with the year 1951. Principal increases

over last year were in salaries; postage and expressagej telephone and

telegraph; light, heat, power and water; furniture and equipment-purchases

and rentals; Federal Reserve currency-original cost and cost of redemption.

Principal decreases were in traveling expenses-other, insurance, and repairs

and alterations.

Helena Branch expense increased $24- thousand over last year.

The larger increases were in salaries, postage and expressage, and furni

ture and equipment-rentals.

SALARIES


Head Office $1,657,660 $+104,182Helena Branch 164..591 + 18.04.8

$1,822,251 $+122,230

Head Office salaries for 1952 totaled $1,657 thousand, an increase

of $104- thousand over last year. This increase is due to merit and salary

adjustments as the average number (623) of employees for the year was the

same as in 1951.


FEES _ DIRECTORS

Head Office $5,775 $+ 4-25Helena Branch 3.820 + 795

$9,595 $+1,220

Increased attendance in the eleven meetings held in 1952 account

for this increase.


FEES _ FEDERAL ADVISORY COUNCIL


Head Office $1,125 $+75

In 1952, our Council member attended seven local and four out-of-

town meetings; in 1951 he attended four local and four out-of-town meetings.

FEES _ OTHER


Head Office $3,490 $-1,728Helena Branch 690 +__13j5

$4,180 $-1,593

In 1951 this bank paid honorarium fees of approximately $1,100

to speakers in connection with the Member Bank Conference and Forum, whereas

in 1952 these two meetings were not held.


RETIREMENT CONTRIBUTIONS

F.R. RETIREMENT SYSTEM


Head Office $110,334- $-2,015Helena Branch 10.804 + 29

$121,138 $ -1,986

The retirement rate was reduced from 7.22 to 7.20 on July 1,

1952.

SUPPLEMENTAL DEATH BENEFIT


Head Office $4,289 $+1,623Helena Branch 565 + 335

$4,854 $+1,958

Contributions to Supplemental Death Benefit began on November 1,

1951. The $4,289 represents the first complete year's net expense to the

bank for this coverage.

SOCIAL SECURITY


Head Office $21,208 $+1,230Helena Branch 2.185 +__211

$23,393 $+1,441

Larger salary costs account for the increase in Social Security tax

payment during 1952.


TRAVEL _ DIRECTORS

Head Office $4-,561 $-608Helena Branch 2.352 +823

$6,913 $+215

Eleven meetings were held during the year as compared with twelve

in 1951.


TRAVEL _ FEDERAL ADVISORY COUNCIL


Head Office $715 $-9

In 1952 our council member attended four out-of-town meetings.

TRAVEL _ OTHER


Head Office $57,794 $-34-, 895Helena Branch 5.007 167

$62,801 $ -15,062

The decrease of $14,895 in Head Office travel is primarily due

to the termination of credit controls - Regulation W on May 7 and Regula

tion X on September 16.


POSTAGE & EXPRESSAGE Original Shipments

F. R. Currency

tion i

volume,


Head Office $4-1,030 $+5,127

Higher postal rates were the chief cause of this increase.

POSTAGE & EXPRESSAGE Redemption

F. R. Currency

Change1952. from 1951

Head Office $14,674- $+4-,694-Helena Branch 2.639 - 563

$17,313 $+4-, 131

The large increase in the number of bills forwarded for redemp-

3 the principal reason for this increase.

POSTAGE & EXPRESSAGE Other

Change from 1951

Head Office $317,066 $+31,952Helena Branch 60.115 +11.377

$377,181 $+43,329

Increased postage and expressage costs, together with greater

account for this increase.


TELEPHONE & TELEGRAPH

Head Office $19,582 $+1,062Helena Branch 9.485 + 567

$29,067 $+1,629


Increases were $600 in toll calls, $1,500 in telephone equipment

rental due to increased rates, and $250 in leased wire costs. There was a

decrease of $1,300 in commercial messages.

PRINTING, STATIONERY & SUPPLIES

Change m 2 from 1951

Head Office $105,982 $-3,845Helena Branch 9.514 + A4.6

$115,496 $-3,399

This decrease is largely due to the increased use of our multilith

duplicator for making bank forms which were formerly purchased from outside

suppliers,

INSURANCE


Head Office $11,533 $-5,408Helena Branch 1.861 + 158

$13,394 $-5,250

As of April 1, 1952, this bank terminated its group insurance

contracts with the Equitable Life Assurance Society. This accounts for


the decrease of $5,4-08.

TAXES ON REAL ESTATE


Head Office $92,224 $-592Helena Branch 4-.600 +252

$96,824- $-340

The tax rate was reduced from 14-5 mills to 14-4 mills.

DEPRECIATION ON BANK BUILDING & FIXED MACHINERY & EQUIPMENT


Head Office $25,666Helena Branch 5.740

$31,406

Depreciation on buildings, including vaults, is at the rate of

2% per annum, and on fixed machinery and equipment at 10$ per annum of the

gross book value.

LIGHT, HEAT, POWER & WATER


Head Office $29,484 $+4,835Helena Branch 2.455 21

$31,939 $+4,814

The Head Office total of $29,484 covers -


Light & Power $22,751Heat 4,520Water 1,4-12Sewage 589Gas 212

Higher light and power rates, together with much larger IBM

equipment operations, account for the increase of $4-,835 during 1952.

REPAIRS & ALTERATIONS


Head Office $18,972 $-62,580Helena Branch 1.676 -10.164-

$20,64.8 $-72,744-

The larger items of expense at Head Office during 1952 were:

1. Painting, plastering, and washing walls and ceilings for

general maintenance of building, $4,700.

2. Maintenance of elevators, $4,400.

3. Removal of elevator and shaft from Currency Department to

Bank floor, $2,300.

4. Sinking two test holes beside concrete caissons, $1,350.

5. Repair of water and gas main outside of building, $1,000,

RENT


Head Office $48,218 $-380

The 1952 figure includes rental of space in an adjacent building


totaling approximately $4-7,000 and space leased in the Wayzata State Bank

in connection with the Security Files program at an annual rental cost of

$1,200.

FURNITURE & EQUIPMENT Purchases


Head Office $45,131 $+19,908Helena Branch 2.631 - 720

$47,762 $+19,188

The larger purchases during 1952 were:

Bookkeeping machines $10,228Chairs 5,952Desks 3,398Carpeting of executive offices 2,900Plymouth Club coupe 2,240Chevrolet Sedan delivery truck 1,940Adding machines 1,877Typewriters 1,436Time Card machine 1,214Files 1,077

FURNITURE & EQUIPMENT Rentals


Head Office $105,617 $+53,832Helena Branch 15.959 + 4.600

$121,576 $+58,432

The 1952 figure reflects a full year's rental cost of IBM equip

ment in the Check Collection Department whereas the 1951 figure reflects


only a partial year's rental due to the installation of the major portion

of this equipment during that year.

BOARD ASSESSMENT

Head Office $105,000

1252Change

from 1951

$+1,300

The Board of Governors early in each semiannual period, levies

upon the Federal Reserve banks in proportion to the capital stock and surplus

of each, an assessment sufficient to pay the estimated expenses and salaries

of its members and employees for the period, plus any deficit carried for

ward from the preceding period.

The basis for our assessments for the years 1952 and 1951 are

shown below:

First Half 1952

Capital Stock Surplus (Section 7) Surplus (Section 13b)

$ 5,362,650 14,062,608

$ 5,073,700 13,168,052 1.072.621

$19,314,3731.072.621

$20,497,879

Assessment Rate .00265 .00291

Total Assessment for First Half $ 54,300 $ 56,200


Second Half 1952 1951

Capital Stock Surplus (Section 7) Surplus (Section 13b)

Assessment Rate

Total Assessment for Second Half

Total Assessment for Year

$ 5,466,400 $ 5,235,45014,062,608 13,168,0521.072.621 1.072.621

$20,601,629 $19,476,123

.00246 .00244

$ 50,700 $ 47,500

$ 105,000 $ 103,700

FEDERAL RESERVE CURRENCY


Original Cost $140,559 $+13,009Cost of Redemption 5.988 - 1.707

$146,547 $+11,302

Higher printing costs, together with greater volume, account for

this increase.

ALL OTHER

1951.


Head Office $76,096 $-1,438Helena Branch 3.706 - 409

$79,802 Cl, 847

All Other expense during 1952 reflects a slight increase over


MISCELLANEOUS r e c o v e r i e s

Head Office Helena Branch

Itemization is:

Coin Wrapping Rental of Furn. & Equip. Rental of Space Postal Money Orders Other

1952

$83,996 4. 639

$88,635

Head Office

$ 8,155 2,887

33,434- 36,658

2.862 $83,996

$+18,4-63 + 1.698

$+20,161

Changefrom 1951

Helena Branch

$1,172

504-2,963

$4,639

This bank became paying agent for postal money orders on July 1,

1951, and for the last half of that year was reimbursed $14,181 for its

services. For the full year 1952 we received $36,658, an increase of

$22,477.

Rent received from government agencies for space, furniture, and

equipment (deducted from total expense) totaled $36,321 during 1952 for the

Head Office, a decrease of $4,044 compared with the previous year. The

chief cause of this decrease was due to a reduction in space required for

Fiscal Agency operations.


REIMBURSABLE EXPENDITURES

ChangeAccount of 1952 from 1951

Public Debt $506,343 $-4,239Federal Taxes 23,347 -1,276Currency Reports 221 + 183Reconstruction Finance Corporation 87 - 941Federal Farm Mortgage Corporation 68 + 7Federal Land Banks 487 + 339Federal Intermediate Credit Banks 88 + 58Public Housing Administration 24 - 16Commodity Credit Corporation 11,571 +2,233War Department 5,682 -3,156Central Bank for Cooperatives 30 + 30Federal Home Loan Banks 51 - 79Home Owners' Loan Corporation 62 - 18

$548,066 $-6,875


1952 Directors Frb Minneapolis

Documents

Transcript of 1952 Directors Frb Minneapolis