Annual Report of the Federal Reserve Board, 1952

THIRTY-NINTH ANNUAL REPORT of the BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM COVERING OPERATIONS FOR THE YEAR Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LETTER OF TRANSMITTAL BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, Washington, May 8, 1953. THE SPEAKER OF THE HOUSE OF REPRESENTATIVES. Pursuant to the requirements of Section 10 of the Federal Reserve Act, as amended, I have the honor to submit the Thirty-ninth Annual Report, prepared by direction of the Board of Governors of the Federal Reserve System, covering operations during the calendar year 1952. Yours respectfully, WM. MCC. MARTIN, JR., Chairman. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

CONTENTS TEXT OF REPORT Page Introduction 1 Federal Reserve Credit Policy 2 Open market operations 3 Discounts and advances 5 Discount rate 5 Regulation of consumer instalment and real estate construction credit 5 Regulation of stock market credit 6 Suspension of voluntary credit restraint 7 Growth of Credit and Capital 7 Changes in Structure and Ownership of United States Government Debt 9 Bank Credit and Money 13 Bank credit 13 Deposits and currency 15 Bank reserves 16 Interest rates 18 Economic Conditions 19 Production 19 Employment 21 Prices 21 Income and personal saving 23 World Economic and Financial Developments 24 Loan Guarantees for Defense Production 28 Banking Operations and Structure 29 Bank earnings and profits 29 Bank earning assets 31 Capital accounts 31 Number of banking offices , 31 Changes in Federal Reserve membership 32 Par and nonpar banks. . . 33 Bank Supervision by the Federal Reserve System 34 Examination of Federal Reserve Banks 34 Examination of State member banks 34 Bank holding companies 34 Trust powers of national banks. . . 34 Acceptance powers of member banks 35 Foreign branches and banking corporations 35 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Page Changes in Regulations of the Board of Governors 36 Payment of interest on deposits 36 Membership of State banks 36 Consumer credit 37 Real estate credit 37 Litigation and Enforcement 38 Transamerica Corporation 38 Regulation W enforcement 38 Regulation X enforcement 38 Removal of bank officers 38 Legislation 39 Purchase of Government obligations by Federal Reserve Banks 39 Defense Production Act amendments of 1952 39 Capital requirements of member banks 39 Bank dealing in obligations of Central Bank for Cooperatives 40 Reserve Bank Operations 40 Volume of operations 40 Earnings and expenses 41 Holdings of loans and securities 42 Foreign and international accounts 43 Bank premises 44 Study of Check Collection System 44 Board of Governors—Income and Expenses 45 Federal Reserve Meetings 47 Ad Hoc Subcommittee of Federal Open Market Committee 48 TABLES 1. Statement of Condition of the Federal Reserve Banks (In detail), Dec. 31, 1952 50 2. Statement of Condition of Each Federal Reserve Bank at End of 1952 and 1951 52 3. Holdings of United States Government Securities by Federal Reserve Banks, End of December 1950, 1951, and 1952 56 4. Federal Reserve Bank Holdings of Special Short-Term Treasury Certificates Purchased Directly from the United States, 1949-52 57 5. Volume of Operations in Principal Departments of Federal Reserve Banks, 1948-52 57 6. Earnings and Expenses of Federal Reserve Banks during 1952 58 7. Earnings and Expenses of Federal Reserve Banks, 1914-52 60 8. Member Bank Reserves, Reserve Bank Credit, and Related Items— End of Year 1918-52 and End of Month 1952 62 iv Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Page 9. Bank Premises of Federal Reserve Banks and Branches, Dec. 31, 1952 64 10. Number and Salaries of Officers and Employees of Federal Reserve Banks, Dec. 31, 1952 65 11. Federal Reserve Bank Discount, Interest, and Commitment Rates, and Buying Rates on Acceptances (In eflect Dec. 31, 1952) 66 12. Member Bank Reserve Requirements 67 13. Maximum Interest Rates Payable on Time Deposits 67 14. Margin Requirements 68 15. Fees and Rates Established under Regulation V on Loans Guaranteed Pursuant to Defense Production Act of 1950 and Executive Order No. 10161 68 16. Minimum Down Payments and Maximum Maturities on Consumer Instalment Credit Subject to Regulation W 69 17. Maximum Loan Values and Maximum Maturities on Real Estate Construction Credit Subject to Regulation X 70 18. All Banks in the United States, by Classes, Dec. 31, 1952 and 1951, Principal Assets and Liabilities, and Number of Banks 72 19. Member Bank Earnings, by Class of Bank, 1952 and 1951 73 20. Analysis of Changes in Number of Banking Offices during 1952.... 74 21. Number of Banking Offices on Federal Reserve Par List and not on Par List, by Federal Reserve Districts and States, Dec. 31, 1952. . 75 APPENDIX Record of Policy Actions—Board of Governors 78 Record of Policy Actions—Federal Open Market Committee 90 Board of Governors of the Federal Reserve System 100 Federal Open Market Committee 101 Federal Advisory Council 102 Directors and Senior Officers of Federal Reserve Banks 103 Map of Federal Reserve Districts 118 Index 119 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

ANNUAL REPORT OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM In 1952 the national economy set new records in national output, employment of manpower and physical resources, and personal income and consumption. These records were achieved without further inflation despite the continued heavy requirements of the defense program and increases in private spending for consumption and capital investment. Wholesale and consumer prices were generally stable. Monetary policy, together with debt management policy, played a significant role in these economic developments. The objective was to encourage the use of an increased volume of current saving to meet demand for credit, and thus to restrict bank credit and monetary expansion to the growth needs of the economy. Too great an expansion of bank credit would have been conducive to resumption of inflationary pressures; too little would have handicapped business and the defense program. The Federal Reserve System followed a policy of restraining the pace of credit expansion by making it necessary for member banks to borrow in order to obtain reserves. This put them under pressure to restrict expansion of their loans and investments. Thus discount operations at the Reserve Banks again became an effective instrument of credit policy, a further realization of the purposes envisaged by the Treasury-Federal Reserve accord of March 1951, Demand for credit was vigorous but the supply of savings was large. Nonbank investors absorbed large amounts of mortgages and also of government and corporate securities issued to raise new money. The increase in bank credit resulted in a smaller expansion of demand deposits and currency—active elements in the money supply—than in either of the two preceding years. Many adjustments accompanied the high level of activity. Some prices and costs rose while others declined. Employment was at a record high, but the supply of labor was adequate to meet most needs. Inventories were reduced in some lines and increased in others, and for the economy as a whole accumulation was moderate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 ANNUAL REPORT OF BOARD OF GOVERNORS Beginning in May, consumer spending accelerated. Growth in private indebtedness, notably consumer and mortgage debt, was rapid. However, there was little tangible evidence of speculative developments in commodities or securities. Abroad as at home, the year marked further progress in building the military strength of the Western World as well as achievement of a better balanced economic situation. As in this country, improved economic balance was due in part to stronger fiscal and monetary measures. It also reflected attainment of easier supply conditions for primary commodities and many industrial materials and products. There are many similarities between developments in this country following abatement of inflationary pressures in the spring of 1951 and what occurred in the sterling area in 1952. In both cases inventory accumulation gave way to inventory liquidation in major consumer goods industries as expectations of further price pressures receded. In both cases the liquidation was accompanied by some slackening in the pace of industrial activity. Evidences of renewed expansion of activity became apparent in the United States in the late spring of 1952 and were paralleled abroad before the end of the year. One factor underlying the price stability that accompanied the very high level of activity in this country at the close of 1952 was the greater availability of goods in world markets. With imports remaining large and foreign purchases from the United States reduced, the stage was set for a strengthening of foreign holdings of monetary reserves. The period as a whole demonstrated the usefulness of freer markets in facilitating necessary economic adjustments. FEDERAL RESERVE CREDIT POLICY Federal Reserve credit policy in 1952 was designed to limit bank credit expansion to amounts consistent with the requirements of a growing economy operating at a high level without inflation. Under the conditions prevailing, this had the effect of permitting underlying forces of demand and supply to determine major trends in the money market. The selection of instruments for influencing credit, the timing of their use, and their application to temporary disturbances of the market were within this general framework. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 3 In the early months of the year, when demand for bank credit slackened somewhat, the System reduced its holdings of United States Government securities. In the last half of the year the substantial volume of new Federal financing, as well as the unusually large credit demand from businesses and consumers, pressed more heavily against the available supply of funds. Member bank borrowing increased substantially and continued at a high level after the year-end. At times in this period, the Federal Reserve purchased Government securities in the market. In order to assure that funds provided to aid the market during occasions of temporary strain would be automatically and quickly withdrawn, the Federal Reserve increased its use of repurchase agreements under which dealers who sold securities to the Federal Reserve undertook to buy them back within a short time. In this way temporary tightness was relieved without permanently enlarging the reserve base for credit expansion. Open market operations. The greater part of the System's open market purchases of United States Government securities in 1952 occurred during Treasury refunding operations in February, June, August, and September. The Treasury offered new securities in exchange for about 30 billion dollars of maturing or called securities, mostly certificates. In order to facilitate market adjustments during the offerings, the Federal Reserve made outright purchases of called and maturing securities and, on occasion, of other shortterm Government securities. Large outright purchases in February were offset by sales of other securities from the System's portfolio, while somewhat smaller purchases in June were only partly offset by concurrent sales of other issues. In August and September a large part of the funds supplied was left in the market in view of seasonal credit and currency needs. No purchases of maturing securities were made during the refunding of the December certificates. Other open market operations to moderate temporary excesses and stringencies of funds in the money market were carried out mostly at the beginning and the end of the year. The return of currency from circulation from Christmas of 1951 through January 1952 exceeded one billion dollars, and the reserve funds thus made available were about offset by a sharp reduction in Federal Reserve holdings of Government securities. Conversely, the Federal Reserve added one billion dollars of securities to its portfolio in the eight Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

4 ANNUAL REPORT OF BOARD OF GOVERNORS weeks preceding Christmas 1952, when an outflow of more than one billion dollars of currency was a major factor in money market stringency. More than half of this increase represented securities taken under repurchase contracts with security dealers. Federal Reserve holdings of Government securities under repurchase agreements reached a peak for the year of 900 million dollars on December 29, which compared with a peak of 300 million reached on December 27, 1951. Soon after the end of 1952 all of these holdings had been repurchased by the dealers, as is shown in the chart. Additional reserves were temporarily supplied to the market around quarterly tax-payment dates when large Treasury receipts and disbursements did not synchronize. Most of this supply of reserves represented direct purchases from the Treasury of special certificates. Purchases of marketable securities during these periods related more to assisting any refunding operations than to alleviating unusually stringent money conditions. Federal Reserve holdings of Government securities acquired by outright purchase increased about half a billion dollars in 1952. This increase provided the banking system with some of the funds needed to meet the public's demand for a larger volume of currency. FEDERAL RESERVE CREDIT Billions of Dollars,, Weekly Averages of Daily figures 1951 1952 1953 # Direct purchases of special certificates from Treasury. NOTE.—Excludes Federal Reserve float, industrial loans, and acceptances. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM J Discounts and advances. Under the Federal Reserve policy pursued in 1952, member banks greatly increased their discounting at the Reserve Banks. An increasing number of banks also replenished their reserves temporarily by borrowing reserves from other banks in the Federal funds market. Borrowing from the Reserve Banks fluctuated widely from week to week, especially at reserve city and central reserve city banks, but at both city and country banks the total rose fairly steadily. The general level of bank borrowing increased from less than half a billion dollars in the first half of 1952 to more than a billion during the last half of the year. Average borrowing in December, at 1.6 billion dollars, was the largest since 1921. The discount mechanism, while supplying reserve funds temporarily, tends to discourage undue expansion of bank credit. While banks are in debt, they are under pressure to repay and hence are likely to be conservative in expanding their own loans. Even when the total borrowing of all member banks is constant, a changing group of individual banks will be borrowing and will be feeling the need to restrict credit in order to adjust reserves. The restrictive influence of this pressure spreads beyond individual requests for bank credit and affects the attitudes of businesses and consumers throughout the community. Discount rate. The Federal Reserve discount rate remained at 1% per cent during 1952, the rate in effect since August 1950. It was raised to 2 per cent on January 16, 1953 at most Federal Reserve Banks and in the following week at the remaining Reserve Banks. The increase in the discount rate served to provide an additional deterrent to bank borrowing at the Reserve Banks. In its effect on bank attitudes toward lending, the raising of the discount rate was a further step in making the discount mechanism more effective as an instrument of restraint. Regulation of consumer instalment and real estate construction credit. Selective regulation of consumer instalment credit and real estate construction credit, authorized for temporary periods under the Defense Production Act, was suspended in 1952. In March and April of 1952, in the interest of simplifying the administration of Regulation W, the Board of Governors removed the down-payment requirement applying to home repair and moderni- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

6 ANNUAL REPORT OF BOARD OF GOVERNORS zation credits and exempted from the down-payment requirement all listed articles costing less than $100. Effective May 7 the Board suspended the regulation. Amendments to the Defense Production Act, approved June 30, 1952, repealed the Board's authority for regulation of consumer credit. At the end of April 1952, according to Federal Reserve revised estimates, outstanding instalment credit totaled 14.7 billion dollars, which was about 0.7 billion dollars more than a year earlier. Between April 30 and December 31, 1952 this type of credit increased 3.9 billion dollars or about one-fourth. With one minor exception in January, limitations on terms of real estate construction credit established under the Board's Regulation X and related FHA and VA regulations continued until June 1952 as modified in September 1951 in accordance with the statutory changes made by the Defense Housing and Community Facilities and Services Act of 1951. Effective June 11, 1952 the Board of Governors amended Regulation X, principally to ease the credit terms for conventionally financed one- to four-family houses and also the down-payment requirements for multi-family houses. The Housing and Home Finance Administrator authorized similar easing for FHA-insured and VA-guaranteed mortgages. Effective September 16, 1952 the Board suspended Regulation X. This action was taken in the light of the 1952 amendments to the Defense Production Act, which required the announcement of a period of real estate credit control relaxation when residential housing starts for three consecutive months, as certified by the Secretary of Labor, were below a seasonally adjusted annual rate of 1.2 million units. The Housing and Home Finance Administrator also acted to relax the terms for Government-aided real estate credit, but did not fully restore maximum statutory mortgage loan terms. Regulation of stock market credit. The 75 per cent margin requirement on stock market credit, put into effect in January 1951 to discourage possible speculative developments, remained in effect throughout 1952. This requirement was reduced to 50 per cent, effective February 20, 1953, as the need for extreme measures diminished. During most of 1952, common stock prices fluctuated around the level reached near the end of 1951 and outstanding stock market credit remained near 1.3 billion dollars, a level which had prevailed since the spring of 1951. In November and December stock Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM / prices rose to new postwar highs, but credit for purchasing or carrying stocks rose only slightly. Suspension of voluntary credit restraint. For about 14 months ending in May 1952, private financial organizations cooperated in a voluntary credit restraint program sponsored by the Federal Reserve System, under authority of the Defense Production Act, to help assure adequate financing for defense and defense-related activities and to curtail credit for nonessential or deferable purposes. During this period the program supplemented other measures to limit credit and monetary expansion. In April, at the request of the President, the financial actions of State and local governments were removed from the restrictions of the program. On May 12, 1952, operations under the program were discontinued and the voluntary credit restraint organization was placed on a standby basis. On June 30, authority for the program was terminated by amendments to the Defense Production Act. GROWTH OF CREDIT AND CAPITAL Expansion of credit and capital was greater in 1952 than in any other postwar year. Businesses, consumers, and governments all increased their borrowing, but the rising volume of individual saving flowing into financial channels permitted higher rates of economic activity without inflationary pressures. Business financing through corporate security issues reached a postwar high in 1952, as expenditures for new plant and equipment expanded further. Some corporations used the proceeds of security issues to refund short-term debt to commercial banks; the net increase in bank loans to business was substantially less than in either of the two preceding years. As the table on the following page shows, corporate security issues, less retirements, totaled 8.3 billion dollars or about 30 per cent more than the net amount in 1951. Bonds accounted for 64 per cent of the growth in outstanding corporate securities, a somewhat larger proportion than in the preceding year. Real estate mortgage credit outstanding increased considerably further in 1952, although somewhat less than in 1951 or 1950. Gross new mortgage lending on small nonfarm properties was at a new record level, but repayment of previously written debt also increased substantially. Mortgage debt on multi-family and commercial properties expanded slightly less than in either of the two preceding years; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

8 ANNUAL REPORT OF BOARD OF GOVERNORS the increase in farm mortgage debt was about the same as in 1951 and larger than in earlier postwar years. Short- and intermediate-term borrowing by consumers increased sharply beginning in May, after more than a year of little change. Most of the 4.2 billion dollar growth in consumer credit outstanding was in instalment credit associated with purchases of durable goods. GROWTH IN MAJOR TYPES OF CREDIT AND CAPITAL [Net increase in amounts outstanding, in billions of dollars] Distribution of growth by— 1952 p 1951 1950 Major types, total 31.6 22.9 25.3 Corporate security issues * S.3 6.4 3.7 Bank loans to business 2.0 4.0 4.9 Real estate mortgages 8.7 9.3 10.0 Consumer credit 4.2 .7 3.7 State and local government obligations... 3.6 3.2 3.0 Federal Government cash borrowing, net2 3.4 -1.2 -.9 Other bank credit3 1.4 .5 .9 Principal sources, total4 31.6 22.9 25.3 Commercial banking system 5 9.9 8.9 8.4 Mutual savings banks. 1.7 9 .9 k Savings and loan associations 3.1 2.0 2.1 Life insurance companies 4.4 3.5 3.6 Other institutional investors 6. . , . 2.4 3.0 2.5 Federal, State, and local governments... . 2.3 1.8 .8 Other lenders 7 7.8 2.8 7.0 P Preliminary. 1 Includes both bond and stock issues of all domestic corporations, net of retirements. 2 Net cash borrowing or repayment of borrowing (—) from the public. Excludes investments in public debt by Federal agencies, discount accruals on savings bonds, and other minor changes in the public debt, but includes all net borrowing through Federal agency security issues. 3 Includes agricultural loans, loans for purchasing and carrying securities, and miscellaneous bank loans. 4 Net amounts of major types of credit and capital supplied by specified lender groups. 6 Includes the following net additions to Federal Reserve holdings of Government securities: 1952, 0.9 billion dollars; 1951, 3.0 billion; and 1950, 1.9 billion. 6 Fire, casualty, and marine insurance companies, fraternal orders, nonprofit organizations, credit unions, and miscellaneous farm credit organizations. 7 Consumers, corporations, noncorporate businesses, and foreign investors. State and local governments borrowed a net amount of 3.6 billion dollars in 1952, most of it to help finance their large expenditures for construction of schools, highways, and other public facilities. The Federal Government was a substantial borrower after mid- 1952, principally to finance defense expenditures at a time of sea- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 9 sonally low tax receipts. Federal net cash borrowing from the public totaled 3.4 billion dollars for the year. About 1.8 billion of this borrowing was used to augment Treasury balances and the remainder to cover the deficit resulting from an excess of cash expenditures over cash income. The proportion of long-term credit demand financed through savings supplied directly or indirectly by individuals was larger in 1952 than in 1951. The growth in individuals' savings through deposits at mutual savings banks, shares in savings and loan associations, and life insurance company reserves provided these financial organizations with a large volume of funds to invest in 1952. These institutions were thus able to provide more funds for private borrowers with a smaller reduction in their holdings of Federal Government securities than in 1951. Individuals invested a substantial amount of their savings in 1952 directly in corporate and municipal securities, and also added considerably to their time deposits at commercial banks. The lending and investing activities of commercial banks are considered in a subsequent section. CHANGES IN STRUCTURE AND OWNERSHIP OF UNITED STATES GOVERNMENT DEBT The United States Government debt increased 8.0 billion dollars in 1952. The part of the debt held by the public (including Federal Reserve Banks) rose 4.4 billion, and the remaining 3.6 billion reflected net investments of Federal agencies and trust funds. About two-fifths of the net new borrowing from the public served to build up Treasury cash balances while the remainder was required to finance the Government's cash deficit for the calendar year and to cover discount accruals on savings bonds and other miscellaneous charges. Commercial banks and the Federal Reserve Banks combined took 2.7 billion, an amount corresponding to the increase in Treasury cash balances and to about half of the deficit, and nonbank investors took the remainder. A major part of new Treasury borrowing was effected through the first cash offering since 1945 of intermediate-term marketable securities. On July 1, in its largest borrowing operation of the year, the Treasury issued 4.2 billion dollars of 2% per cent marketable bonds maturing in June 1958. Debt management operations in the short-term market were substantial, but new issues were about offset by redemptions of maturing securities and of savings notes. In the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

10 ANNUAL REPORT OF BOARD OF GOVERNORS second quarter of the year there was an increase of 1.6 billion in regular 91-day bills and toward the end of the year there were two issues of tax anticipation bills maturing in March and June 1953 and totaling 4.5 billion dollars. These additions to the short-term marketable debt were partly offset by the maturity of 2.5 billion dollars of tax anticipation bills in the first half of 1952 and by cash redemptions of 1.8 billion dollars in the refunding of six maturing certificate issues. Only one small bond refunding took place during the year, and the call option was passed on five additional bond issues. In June 1952 the Treasury made an additional offering of the 2% per cent investment series bonds of 1975-80, which were first offered in April 1951. These bonds are convertible at the holder's option into five-year ll/ per cent marketable notes. Cash subscrip- 2 tions to the new offering could be supplemented by limited exchanges of the four longest term issues of restricted bonds. Subscriptions by the public amounted to 1.2 billion dollars, of which slightly more than 0.3 billion dollars represented cash subscriptions. The most striking change in the composition of the debt held by the public was an increase from 13.8 to 31.8 billion dollars of bank-eligible bonds maturing after five years. Most of the increase reflected the attainment of eligibility dates by four bond issues formerly restricted as to commercial bank ownership. Roughly one-fourth of the increase was due to the cash issuance of new bonds, and a small part to the offering of an intermediate-term bond in a refunding operation. Restricted bonds held by the public declined 14.0 billion dollars, largely owing to the change in eligibility status of some issues and in small part to exchanges for convertible bonds. Holdings of nonmarketable savings securities continued to decline during 1952. Outstanding savings notes declined 1.8 billion dollars as nonfinancial corporations shifted into short-term marketable securities with more attractive yields. The current redemption value of savings bonds increased almost 400 million dollars in contrast to last year's decline of similar magnitude. Purchases of savings bonds restricted to individuals increased; there was an improvement of terms on Series E bonds in May 1952 and an offering of a new current income bond, Series H, in June. Purchases of types of savings bonds open to institutions as well as individuals continued to decline, despite improvement in terms. The Federal Reserve Banks increased their holdings of Govern- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

.FEDERAL RESERVE SYSTEM 11 ment securities 900 million dollars in 1952 through net purchases of short-term securities. About half of the increase represented larger year-end holdings of securities acquired under contracts with dealers stipulating repurchase within short periods. Federal Reserve net market purchases consisted of bills and short-term bank-eligible bonds, while certificates were sold on balance. There were virtually no transactions in intermediate- and long-term securities. The System converted into marketable notes its remaining holdings of 2% per cent investment series bonds, amounting to 1.2 billion dollars. Commercial banks increased their holdings of Government securities 1.8 billion dollars. Starting in May they took advantage of the increasing supply of bank-eligible intermediate-term bonds to purchase more than 4 billion dollars of such issues. Bond purchases reached a peak in July, when banks acquired through the market substantial amounts of the newly issued Treasury bonds to supplement their original allotments. Total acquisitions of these newly issued bonds amounted to almost 3 billion dollars during the year. Other bonds purchased during the year consisted mainly of issues which attained eligibility status in May and June. As commercial bank reserve positions tightened, bond purchases were offset to a considerable extent by sales of shorter term securities including bonds, notes, and certificates. Bank holdings of bills declined during the first and third quarters and rose in the fourth quarter. On balance, there was some increase in holdings during the year. Changes in the first and last quarters largely reflected the role of commercial banks in the distribution of tax anticipation bills. Life insurance companies and mutual savings banks reduced their holdings of Government securities by 1.2 billion dollars, about onethird as much as in the preceding year. A greater inflow of individual savings and, in the case of life insurance companies, considerably less investment in real estate mortgages, reduced the pressure for selling Government securities. Fire, casualty, and marine insurance companies expanded their holdings of Government securities by 400 million dollars. Investors other than banks and insurance companies increased their holdings of Government securities about 2.5 billion dollars. In large part these purchases were attributable to foreign accounts and to State and local governments. Foreign countries increased Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

12 ANNUAL REPORT OF BOARD OF GOVERNORS both their dollar reserves and the proportion of these held in the form of Government securities. Continuing purchases of Government securities by State and local governments probably reflected OWNERSHIP OF UNITED STATES GOVERNMENT DEBT [Par value, in billions of dollars. Figures are partly estimated] Change: Dec. Item 31, 1952 Second First Year half half Total debt outstanding. 267.4 +8.0 +8.3 -.3 Debt held by Federal agencies and trust funds, total 45.9 +3.6 + 1.6 +2.1 Marketable 3.2 -.2 + .1 -.3 Convertible 3.4 + .5 + .5 Nonmarketable 39.3 +3.2 + 1.4 + 1.8 Debt held by public, total. 221.6 +4.4 +6.7 -2.4 Marketable 145.5 +6.1 +8.0 -2.0 Convertible 9.1 ^ -.6 + .5 Nonmarketable 67.0 -L6 •*— 7 -.9 Distribution of debt held by public: Federal Reserve Banks, total. 24.7 + .9 + 1.8 -.9 Marketable securities: Bills 1.3 + .7 + 1.0 -.2 Certificates and notes. . 18.8 + 1.0 + 1.4 -.5 Bank-eligible bonds. . . 3.3 + 1.6 + .9 + .7 Restricted bonds 1.2 -1.2 -.8 -.4 Convertible bonds -1.2 -.7 -.5 Commercial banks, total 63.4 + 1.8 +2.2 -.4 Marketable securities: Bills 7.9 + .5 + 1.5 -1.1 Certificates and notes. 17.5 -1.5 -1.6 Bank-eligible bonds. . . 34.8 +3.3 +2.5 + .3 Restricted bonds .5 -.5 -.3 -.2 Convertible bonds 2 0) (l) C) Nonmarketable securities. , 0 0) 0 Investors other than Federal Reserve and commercial banks, total 133.5 +2.7 -1.0 Marketable securities: Bills 12.4 +2.4 +2.0 + .4 Certificates and notes 10.6 + .1 -.3 + .3 Bank-eligible bonds 19.7 +6.7 +5.4 Restricted bonds 17.4 + 12.1 -5.1 -7.3 Convertible bonds 8.9 -12.4 + .1 + 1.0 Nonmarketable securities 64.5 -.9 + 1.1 -.7 -1.6 1 Less than 50 million dollars. NOTE.—Includes matured and noninterest-bearing debt as well as guaranteed securities. Details may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 13 temporary investment of the proceeds from some large security issues as well as long-term investment of retirement funds. Individuals and nonfinancial corporations appear to have changed their holdings relatively little over the year. Nonfinancial corporations reduced their holdings about 1.5 billion dollars in the first half of the year, when the major part of their income taxes was due, but purchased Government securities in the second half* BANK CREDIT AND MONEY Total loans and investments of commercial banks (excluding interbank loans) increased 9 billion dollars in 1952 to a total of 141 billion. A considerable part of the expansion represented investment of savings and time deposits. The active elements of the money supply—demand deposits and currency—increased less than in 1951, and there was little change in the rate of turnover of demand deposits. Bank credit. The expansion in bank loans and investments came in the last nine months of the year, following a moderate decline in the early months. Underlying the demand for credit was an expansion of economic activity that began with a pick-up of consumer buying in the spring and spread to various lines of business after settlement of the steel strike in August. Federal Government demand for credit reflected deficit operations beginning in July. A substantial part of the expansion of bank credit in 1952 reflected consumer borrowing beginning in May. "Other loans to individuals," which are mainly consumer loans, rose rapidly. The increase for the year was 2.2 billion dollars or more than 20 per cent, the largest for any type of bank loan. Banks also made funds available to consumers indirectly through loans to finance companies and distributors; the increase in such loans was particularly large in the closing months of the year. Bank loans to businesses increased 2 billion dollars in 1952, much less than in either of the two preceding years when expansion of inventories was especially large. Most of the growth came in the last quarter of the year, when loans expanded considerably more than usual in November and December. A seasonal rise in business loans in the latter part of the year is usually a major factor in the expansion of bank credit. For such business groups as food, liquor, and tobacco manufacturers, commodity dealers, and trade concerns, borrowing in the latter part of 1952 reflected seasonal needs. Sales Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

14 ANNUAL REPORT OF BOARD OF GOVERNORS finance, petroleum, and chemical companies also increased their borrowing during the period, and borrowing by such defense groups as manufacturers of metals and related products and public utilities increased only moderately. Banks also added about 2.0 billion dollars to their holdings of real estate mortgages and corporate and State and local government securities, thus providing funds to meet the demand for long-term credit. Commercial bank investment in United States Government securities increased 1.8 billion dollars in 1952 to a total of 63.3 billion. The increase in bank holdings of Government securities during the year was about the same as the increase in Treasury balances. At times of new Treasury financing, commercial banks bought securities directly from the Treasury and in the market, and also increased their loans to customers to finance purchases of Government securities. After the offerings, security loans were repaid and in addition banks sold some Government securities to nonbank LOANS AND INVESTMENTS OF ALL COMMERCIAL BANKS [In billions of dollars] Out- Increase,or decrease (—) stand- Type of loan or investment Dec.g31, 1st 2nd 3rd 4th 1952 Year qtr. qtr. qtr. qtr. Loans and investments, total.. . 141.5 9.0 -0.3 2.2 2.1 5.0 U. S. Govt. securities 63.3 1.8 -0.4 0.1 0.4 1.7 Other securities 1. 14.1 0.8 0.3 0.4 0.3 -0.2 Loans total. 64.0 6.4 -0.2 1.7 1.4 3.5 Business 27.9 2.0 -0.1 -0.5 0.8 1.8 Real estate 15.7 1.1 0.1 0.3 0.4 0.3 Agricultural 3.9 0.5 0.3 0.3 Securitv 3.2 0.6 -0.3 0.8 -0.6 0.7 Other loans to individuals. . 12.7 2.2 0.1 0.8 0.6 0.7 Other 1.6 -0.1 0.1 0.1 1 Mainly State and local government bonds. 2 Less than 50 million dollars. NOTE.—Table excludes interbank loans. Total loans are after, and types of loans are before, deductions for valuation reserves. Figures for security holdings are at book value and in this respect holdings of U. S. Government securities differ somewhat from the par value figures shown in the table on p. 12. Another point of difference is that banks in territories and possessions of the United States are excluded in this table and included in the table on p. 12. All figures are partly estimated for all dates except Dec. 31, 1951 and June 30 and Dec. 31, 1952. Details may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 15 investors. Security loans also increased in November and December as dealers borrowed in order to buy Government securities that banks were selling in order to meet heavy credit demands. Practically all the increase in commercial bank holdings of Government securities occurred in the last quarter of the year. In the first half holdings had declined somewhat. A substantial increase in late June and July, when banks subscribed to the new issue of intermediate-term Treasury bonds and purchased securities in the market, was followed by some decline in August and September as city banks sharply reduced their holdings of short-term Government securities. Treasury offerings of tax anticipation bills in early October and late November were originally taken up almost entirely by commercial banks, which later sold the major portion of their takings to nonbank investors. The distribution had not been completed by the year-end. Deposits and currency. Growth in total deposits and currency in 1952 was made up of further increases in savings and in the working balances of businesses, consumers, and Government. Time DEPOSITS AND CURRENCY Billions of Dollars 70 1951 1952 1951 1952 NOTE.—Figures are partly estimated. Deposits are for all banks in the United States. Demand and time deposits are adjusted to exclude U. S. Government and interbank deposits. Demand deposits are also adjusted to exclude items in process of collection. Time deposits include deposits in the Postal Savings System and in mutual savings banks. Figures are for last Wednesday of month except for June and December call dates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

16 ANNUAL REPORT OF BOARD OF GOVERNORS deposits at commercial and mutual savings banks, which are a principal form of individual saving, increased 4.5 billion dollars, or 8 per cent. This was the largest gain since 1946, when the high wartime rate of savings began to slacken. Privately held demand deposits and currency, which are particularly significant from the standpoint of spending in the economy, increased 4.5 billion or 4 per cent. This v/as a slower rate than in either 1950 or 1951. Demand deposits declined in the first quarter, in large part seasonally, and then increased, as is shown in the chart on the preceding page. Currency holdings rose fairly steadily throughout the year. The rate of use or turnover of demand deposits changed little in 1952. As measured by demand deposits at banks in leading cities outside New York, the rate fluctuated near 21^2 times a year, which was the average for 1951. Federal Government deposits increased almost 2 billion dollars or by more than one-third, reflecting the new financing after midyear. The ultimate effect of this financing on privately held deposits will be determined when the funds are disbursed by the Treasury and become available for private spending or saving. Bank reserves. During the first quarter of 1952 the contraction of deposits released some member bank reserves, and banks also obtained additional reserves from a gold inflow and the return of currency from circulation. The Federal Reserve absorbed a large part of these reserves by reducing its holdings of Government securities, as is shown in the chart. In the second quarter the gold inflow virtually ceased and currency in circulation increased again. These developments, together with a resumption of bank credit expansion in June and other factors, put pressure on reserve positions. Member banks obtained additional reserves largely through borrowing at the Reserve Banks. In June the Federal Reserve portfolio of Government securities was about the same as it had been at the end of January, when the year-end seasonal adjustments were completed, but member bank borrowing was 400 million dollars larger. During the last half of 1952 pressure on reserves increased steadily as currency in circulation increased further and bank lending expanded at a rapid rate. Need for additional reserves was accentuated in early July, October, and November by bank investment in new Treasury issues, and in December by the year-end shortage of funds in the market. Reserves were supplied through Federal Reserve Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

17 FEDERAL RESERVE SYSTEM MEMBER BANK RESERVES AND RELATED ITEMS Billions of Dollars, Wednesday Figures 22 20 18 16 30 CURRENCY IN CIRCULATION I 28 26 24 22 20 18 16 2 0 1950 1951 1952 1953 credit. From June to December average member bank borrowings at Federal Reserve Banks increased about a billion dollars and System holdings of Government securities increased 1.8 billion. Federal Reserve credit was reduced shortly after the end of the year, when repurchase agreements on securities were terminated and member banks repaid part of their borrowing. For 1952 as a whole, the amount of required reserves needed to support deposit growth increased 1 billion dollars, and an outflow of currency absorbed 1.4 billion of reserves. About half a billion dollars of the needed reserves were supplied by an inflow of gold and reduction in foreign deposits at the Reserve Banks. The remaining 2 billion were supplied by an increase in Federal Reserve credit that consisted of about half a billion dollars of outright purchases of Government securities, about half a billion of securities bought under repurchase agreements with dealers, and a billion dollar increase in member bank borrowings from the Reserve Banks. Additions to bank reserves from foreign operations resulted mainly from a gold inflow early in the year. The movement of gold into the United States which began in the third quarter of 1951 continued to be sizable through the first quarter of 1952, reflecting in part Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

18 ANNUAL REPORT OF BOARD OF GOVERNORS international payments due this country on current account and in part an increase in foreign funds held in this country. Thereafter the nation's gold stock was relatively stable until the last month of the year. Interest rates. Easier credit conditions brought about by seasonal and other temporary factors in early 1952 were accompanied by a downward drift in interest rates. Subsequently, as demand for credit pressed more heavily against the supply of funds, interest rates rose. The changing situation was reflected chiefly in the Treasury bill rate, the most sensitive money market rate. In the early part of the year the bill rate was generally below the Federal Reserve discount rate of 1% per cent, as is shown in the chart. After midyear, when member bank borrowing reached a higher level, the bill rate rose above the discount rate, and at one time near the year-end reached 2^ per cent. As in 1951, the Treasury bill rate fluctuated fairly widely in response to short-term changes in money market conditions. MONEY RATES Per Cent, Weekly Averages of Daily Figures CORPORATE Aaa MOODY'S ^TREASURY BILLS NEW ISSUES _J «• « • ' i 1 I I—I 1 1 1 1 «—I 1 '—' « ' 1 1- 1950 1951 1952 1953 •Callable in 12 years or more beginning Apr. 1, 1952. NOTE.—Rate for commercial paper is weekly prevailing rate in New York. Rate for Treasury bills is average discount on new issue during week. Federal Reserve discount rate is for the Federal Reserve Bank of New York. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 19 Other interest rates changed moderately. Open market rates on commercial paper were unchanged after a slight easing early in the year. Bank rates on short-term loans to businesses rose about a fourth of a percentage point early in the year. Upward pressure on long-term rates was moderated by the large volume of savings seeking investment. Average yields on highgrade corporate bonds remained just under 3 per cent during most of the year. New offerings of State and local government obligations were unusually heavy late in the year, and yields on highgrade municipal securities advanced about a third of a percentage point to 2.40 per cent. Long-term Treasury yields showed declining tendencies until July, then stiffened somewhat. At both the beginning and the end of the year they averaged 2.75 per cent. ECONOMIC CONDITIONS Economic activity continued to expand and output, employment, and income all reached new high levels toward the end of 1952. Prices remained relatively stable, easing moderately throughout the year in wholesale markets and slightly at the end of the year in consumer markets. Farm prices declined considerably in the last half of the year. Production. Total output in 1952 was valued at 346 billion dollars or 17 billion more than in 1951. The rise in output was made possible in part by increases in the labor force and employment and in the average number of hours worked per week. There was also a further rise in output per man-hour as new and more efficient plant capacity was brought into operation. Expansion in output for the year as a whole was stimulated largely by a higher level of outlays for national security purposes and by larger consumer expenditures for nondurable goods and services. Business investment in new plant and equipment increased slightly and State and local government outlays rose. Business inventory accumulation was substantially below the record rate of 1951 and consumer purchases of durable goods were moderately lower. Expenditures for new housing continued at a high level. These changes for the year as a whole reflect diverse movements during the year. National security outlays changed little after rising sharply through the second quarter. On the other hand, private expenditures changed little in the first three quarters and rose sharply Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

20 ANNUAL REPORT OF BOARD OF GOVERNORS in the fourth, as is shown in the chart. At that time inventories were being accumulated in large volume and consumer purchases of automobiles and other durable goods as well as of nondurable goods and services were expanding at a rapid rate. Total retail sales in the fourth quarter were 8 per cent larger than a year earlier, and most of the rise reflected larger physical volume. GROSS NATIONAL PRODUCT Billions of Dollars, 350 TOTAL 300 PRIVATE EXPENDITURES 250 200 100 GOVT PURCHASES OF GOODS AND SERVICE$ 50 1949 1950 1951 1952 NOTE.—Department of Commerce quarterly estimates at annual rates, adjusted for seasonal variation, Production expanded sharply following settlement of the steel strike at the end of July. By the year-end the Board's index of industrial production had risen to 235 per cent of the 1935-39 average as compared with about 220 in the spring and at the end of 1951. Production increases were general, but the major expansion was in consumer lines. Nondurable goods output began to rise in June, following a period of production curtailment initiated early in 1951. Consumer durable goods output, although limited in the spring by Federal restrictions on the use of some metals for civilian purposes and in the summer by the steel strike, picked up sharply as metal supplies became more readily available in the fall. By the year-end the rate of output of major consumer durable goods was about onethird higher than in the spring. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 21 Business inventories declined somewhat from early 1952 through the summer. Expansion on a substantial scale after August, despite rapidly rising sales, reflected to a large extent replenishment of depleted stocks of steel and steel products as well as efforts to bring inventory holdings into line with expanding sales, production needs, and prospective continued high levels of activity. At the year-end, business inventories were moderately larger than at the end of 1951. In the housing market, output and activity remained high throughout the year and costs and prices of real estate were relatively stable. For the year as a whole 1.1 million new housing units were started and nearly as many completed. This was about the same number as in 1951 and compares with a record of 1.4 million in 1950. At the end of 1952 the gross national product was at an annual rate of 360 billion dollars, or 23 billion larger than in the fourth quarter of 1951. Of this rise, about one-half was accounted for by larger consumer outlays and one-third by increased expenditures for national security purposes. The remainder represented larger outlays by State and local governments and increases in business inventory accumulation, residential construction, and fixed capital investment. Employment. Employment expanded along with production and sales. It rose to new high levels at nonfarm establishments and, in manufacturing at least, average hours of work increased. At the end of the year, total nonagricultural employment was 1.2 million larger than it had been a year earlier while unemployment, at 1.4 million, was smaller. Farm employment declined, continuing the general downward drift which has been evident for many years. Prices. In sharp contrast to the shortages and rapid price advances after the outbreak of war in Korea, supplies of most materials except certain metals were ample to meet current needs in 1952. Prices of such materials consequently eased and, with farm prices declining, the general level of wholesale prices gradually moved downward. Prices of finished goods changed little over the year, however, at either wholesale or retail. Wage rates rose at about the same rate as in 1951. Changes in capital values were moderate. Urban real property values and farm land values were generally maintained and common stock prices rose somewhat toward the end of the year. Consumer prices were about 1 per cent higher at the end of 1952 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

22 ANNUAL REPORT OF BOARD OF GOVERNORS than a year earlier. The change mainly reflected higher rents and prices for services; food prices were slightly lower. Wholesale prices were 3 per cent lower than a year earlier, with especially sharp SELECTED BUSINESS INDEXES Per Cent., 1947-49 » 100 140 — 120 — 100 — 100 1950 1951 1952 1950 1951 1952 NOTE.—Monthly series, seasonally adjusted except for prices. Indexes for inventories, retail sales, and disposable personal income based on Department of Commerce data. Price indexes based on Bureau of Labor Statistics data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 23 reductions in cotton, corn, and livestock. Many farm products were at support levels and Government expenditures for price support operations were large. Domestic demand for cotton improved somewhat but export demand declined sharply. The number of cattle on farms continued the rise of the preceding three years and reached a new high. Cattle marketings expanded rapidly after midyear and beef prices started to decline sharply late in the year. Prices of some industrial materials declined further during the year. A few materials increased in price but not sufficiently to prevent the index of basic commodity prices from declining considerably. Prices of most finished goods remained exceptionally stable throughout the year. Income and personal saving. Average wage and salary rates rose about 5 per cent over the year, compared with a rise of 1 per cent in consumer prices. For production workers in manufacturing, average hourly earnings increased 6 per cent, reflecting in part more premium pay for overtime work, and average weekly earnings advanced from $67 to $72. Incomes of unincorporated nonfarm proprietors and professional groups also increased during the year, but incomes of farm proprietors were generally lower than in the latter part of 1951. To a large extent, however, the effect on farm income of declines in prices of farm products was offset by expansion in the physical volume of marketings. The decline in farm prices and income was accompanied by a decline in farm purchases of machinery and equipment from the record levels reached in 1951. Total personal income was 17 billion dollars larger in December than a year earlier, but disposable income was only 13 billion dollars larger owing to larger personal tax payments in 1952. Notwithstanding higher taxes and slightly higher consumer prices, there was a modest increase in per capita real income after allowance for a 1.7 per cent increase in population. Personal saving continued in large volume in 1952. It averaged nearly 8 per cent of disposable income, which was about the same as in the last three quarters of 1951 but more than double the rate in the first quarter of 1951. A large part of personal saving took the form of additions to holdings of financial assets, such as time deposits and building and loan shares. Corporate profits were moderately lower in 1952 than in 1951. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

24 ANNUAL REPORT OF BOARD OF GOVERNORS They amounted to 40 billion dollars before taxes and 17 billion after taxes. The amount after taxes was about 1.5 billion less than in 1951 and 4.0 billion below the peak in 1950, when corporate tax rates were raised at midyear. With expenditures for new plant and equipment at record levels in 1952, corporations floated a record volume of new securities in the capital markets. At the year-end, there was an exceptionally high rate of utilization of both an expanding industrial capacity and a growing labor force, and corporate profits were again rising. At the same time, there was little evidence of a resumption of inflationary price trends; in some areas, such as farming, prices had declined from earlier advanced levels. Supplies were generally ample and Federal emergency restraints yyere being relaxed in many fields. WORLD ECONOMIC AND FINANCIAL DEVELOPMENTS For many countries the maintenance or restoration of balance in international payments continued to be a major concern of policy in 1952. With inflationary pressures checked, readjustments of supply and demand involved some decline in world trade. Progress toward equilibrium was reflected in a decline in the export surplus of the United States. Although considerable reliance for balancing international accounts was still placed on direct restrictions on imports and on substitutes for normal commercial exports, such as the receipt of international grants of aid, increasing emphasis was placed in many countries on steps toward a freer and more normal system of world trade. The general shrinkage of world commerce through the spring and summer of 1952 reflected two main forces. One was the slackening of inventory demand, which started in 1951 in the United States and occurred in other industrial countries with varying lags. The second was a sharp curtailment of import purchases by certain countries that produce raw materials and foodstuffs. In some industrial nations, the timing of events followed a pattern not greatly different from that in the United States. Industrial production at the beginning of 1952 was generally below the trend of recent years, but by the end of the year output was again making new records in some countries. Although their exports fell below earlier trends or actually declined during part of the year, several important nations maintained a surplus position in the balance of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 25 UNITED STATES BALANCE OF PAYMENTS SELECTED COMPONENTS Billions of Dollars U.S. GOVERNMENT V^ ^-'*«» ECONOMIC GRANTS and LOANS .-— ' OUTFLOW of PRIVATE CAPITAL NET TRANSFERS of GOLD and DOLLAR HOLDINGS »o FOREIGN COUNTRIES 1950 1951 1952 NOTE.—Quarterly data. Net transfers of gold and dollar holdings, compiled by Federal Reserve, include net foreign purchases of gold from United States plus net increase in foreign dollar holdings. Other data are derived from U. S. Department of Commerce statistics. Export surplus is the excess of exports of goods and services (minus military aid) over imports of goods and services (plus private gifts., Government pensions, etc.). U. S, Government loans and outflow of United States private capital are on a net basis and include short-term funds. international payments. These countries included Canada, Germany, the Netherlands, Belgium, Sweden, and Japan. Germany, Belgium, and the Netherlands found it possible to relax the tighter credit conditions that had been enforced by central bank action in 195L In Canada, interest rates continued to rise. In the United Kingdom and France, where great market pressures had been built up during 1951 by export sales, rearmament, and domestic consumption and investment, the peak in wholesale prices was not reached until early 1952. As expectations of further inflationary pressures gave way and demand for certain consumer goods declined, there was some slackening in the pace of industrial activity. In Britain, restriction of credit to private borrowers and a decline in exports of consumer goods to the overseas sterling area contributed to this development. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

26 ANNUAL REPORT OF BOARD OF GOVERNORS British exports to markets outside the sterling area were well maintained throughout the year. The decline in total export sales was more than matched by a reduction of import purchases, partly forced by official controls, partly the result of decreased demand in the United Kingdom. Prospects for balanced trade thus improved considerably over the course of the year. Import restrictions by certain countries such as Australia, South Africa, Argentina, and Brazil played a significant part in reducing demands on the industrial economies. In these countries internal inflation, aggravated by inflation due to export earnings in the 1950-51 boom, had spilled over into large purchases of imports at a time when export sales were falling. Serious drains on reserves of foreign exchange had resulted and severe restrictions were placed on import transactions in 1952. Inflationary credit expansion continued in 1952 in some South American countries. In the general readjustment of supply and demand last year, United States exports of agricultural and other products declined significantly. Exports of metals and machinery, however, continued to be large. Increased availability of imports facilitated the maintenance of activity in the United States at a high level and without upward pressure on prices. Imports of nonferrous metals increased, paving the way for termination of price controls on the major metals. While the price of rubber fell and purchases of some other materials declined in the first part of the year, the total value of United States imports throughout the year was not greatly below the record rate of early 1951. Toward the end of 1952 there was a general advance in the volume of imports, helping to stimulate production in other countries and to relieve balance-of-payment stresses. The United States assisted in rebuilding military strength elsewhere by exports of goods and services under military grant aid, amounting to 2.6 billion dollars for the year, as compared with 1.5 billion in 1951. Economic grant aid and Government loans totaling 2.4 billion dollars (net of repayments) were smaller than in 1951. The net outflow of private capital also declined; while the movement of permanent investment capital to Canada continued, the appreciation of the fluctuating Canadian dollar attracted some types of capital away from Canada to this country. The total supply of dollars to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 27 all countries, however, was almost as large as in 1951, and, with foreign buying in this country reduced, gold reserves and dollar holdings of other countries increased 1.2 billion dollars. This increase, which is shown in the upper part of the table, occurred mainly in the second half of the year. NET CHANGE IN FOREIGN GOLD RESERVES AND DOLLAR HOLDINGS, 1952 [In millions of dollars] 2nd 1st Item and area Year half half Net increase in total gold reserves and dollar holdings of foreign countries 1,202 957 245 United Kingdom and other sterling area countries. . . -494 145 -639 Continental Western Europe 255 719 536 Canada 305 66 239 Latin America -4 56 -60 Asia (nonsterling area) 187 6 181 Other countries -47 -12 Net foreign purchases of gold from United States (sales, —) -394 269 -663 United Kingdom and other sterling area countries. . . -451 80 -531 Continental Western Europe 115 148 -33 Canada y -7 Latin America -58 39 -97 Asia (nonsterling area) 7 2 5 United States payments on current transactions (including purchases of goods and services and also gifts other than Government aid) totaled 16.3 billion dollars as compared with 15.5 billion in 1951, while exports of goods and services (except those covered by military aid) were 18.1 billion, somewhat below the 18.8 billion total of the previous year. The export surplus based on these figures was less than 2 billion, as compared with 5 billion in 1948 and more than 3 billion in 1951. In the second half of the year the export surplus, on an annual rate basis, was only 400 million dollars. The additions to foreign gpld reserves and dollar holdings shown in the table include a small amount from new production of gold. Additions to dollar holdings in the latter half of the year largely took the form of investments in United States Government securities, Toward the end of the year and in the early part of 1953 foreign Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

28 ANNUAL REPORT OF BOARD OF GOVERNORS countries purchased gold from the United States with dollars recently or currently obtained. (Such purchases of gold in the second half of 1952 amounted to 269 million dollars, as shown in the lower part of the table.) This development involved a drain on member bank reserves which contributed to the tightening of bank credit in the United States. LOAN GUARANTEES FOR DEFENSE PRODUCTION The Defense Production Act of 1950 provided for the guarantee of loans made by private financing institutions to contractors, subcontractors, and others engaged in the performance of Government contracts for the purpose of expediting production and deliveries or services for the defense program. The Departments of the Army, Navy, Air Force, Commerce, Agriculture, and Interior, as well as the General Services Administration, the Atomic Energy Commission, and the Defense Materials Procurement Agency have, by Executive Orders, been designated as guaranteeing agencies. The Federal Reserve Banks act as fiscal agents of the guaranteeing agencies in these transactions, and the procedure is governed by Regulation V of the Board of Governors, as revised September 27, 1950. Pursuant to this regulation, and after consultation with the guaranteeing agencies, the Board announced a schedule of guarantee fees and the establishment of a maximum rate of interest of 5 per cent on guaranteed loans and a maximum commitment fee of l/ of 2 1 per cent per annum. This schedule of fees and rates was reviewed from time to time by the Board and the guaranteeing agencies. Regulation V loans outstanding on December 31, 1952 totaled 979 million dollars, of which 803 million, or 82 per cent on the average, was guaranteed. On the same date an additional 586 million was available to borrowers under guarantee agreements in force. From the beginning of the program in September 1950 through December 1952, 1,159 loans totaling 2,124 million dollars were authorized by the nine procurement agencies that may guarantee loans. The accompanying table gives the percentage distribution of authorizations classified by size of loan and number of employees of borrower. Nineteen per cent of the number and approximately one per cent of the amount of loans authorized consisted of loans of less than $100,000, while 57 per cent of the number and 6 per cent of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 29 the amount were less than $500,000. Approximately 74 per cent of the number and 20 per cent of the amount of loans authorized were to borrowers having less than 500 employees, including employees of any affiliated concerns under common ownership or control. V LOANS AUTHORIZED, SEPT. 27, 1950-DEC. 31, 1952 [Percentage distribution, by size of loan and number of employees of borrower*] Percentage of Cumulative perloans authorized centage distribution Size of loan Number Amount Number Amount Under $100,000 18.9 .6 18.9 .6 $100,000-$499,999 38.2 5.6 57.1 6.2 $500,000-$999,999 15.9 6.3 73.0 12.5 $l,000,000-$4,999,999 20.7 26.3 93.7 38.8 $5,000,000-49,999,999 3.1 12.7 96.8 51.5 $10,000,000 and over 3.2 48.5 100.0 100.0 Number of employees2 Under 50 . 18.9 1.5 18.9 1.5 50-99 . .. 16.3 2.4 35 2 3 9 100-499 38.6 - 16.0 73.8 19.9 500-2,499 16.9 24.5 90.7 44.4 2,500 and over 5.2 53.7 95.9 98.1 Not available 4.1 1.9 100.0 100.0 1 Distributions are of 1,159 loans authorized in an aggregate amount of 2,124 million dollars. 2 Includes employees of affiliated concerns under common ownership or control. BANKING OPERATIONS AND STRUCTURE Bank earnings and profits. Net current earnings of member banks, before income and excess profits taxes, increased during 1952. Net losses, charge-oflfs, and transfers to valuation reserves declined somewhat, but there was an increase in provision for taxes based on income. As a result, net profits after taxes and profit and loss adjustments amounted to 829 million dollars, about 10 per cent more than in 1951. The ratio of net profits to average capital accounts was 7.9 per cent as compared with 7.6 per cent in 1951. Net current earnings before income taxes amounted to 1,619 million dollars, an increase of 182 million. Accompanying larger average holdings and higher average rates of return, earnings on both United States Government securities and loans were larger Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

30 ANNUAL REPORT OF BOARD OF GOVERNORS than in 1951. Earnings on Government securities amounted to 929 million dollars, a 97 million increase, and earnings on loans aggregated 2,306 million, which was 303 million more than in the preceding year. Total current earnings increased by 451 million dollars, and total current expenses by 269 million. The accompanying table shows selected earnings data for all member banks in 1952 and 1951. EARNINGS, EXPENSES, PROFITS, AND DIVIDENDS OF ALL MEMBER BANKS, 1952 AND 1951 [In millions of dollars] Item 1951 Earnings 3,669 On U. S. Government securities 832 On loans 1 2,003 All other 834 Expenses 2,232 Net current earnings before income taxes 1,437 Net losses, charge-offs, and transfers to valuation reserves 2... 190 Profits before income taxes 1,247 Taxes on net income 491 Net profits 756 Cash dividends declared 3 371 1 Includes charges on loans other than interest. 2 Excludes losses charged and recoveries credited to valuation reserves. 3 Includes interest on capital notes and debentures. Net losses, charge-offs, and transfers to valuation reserves were 9 million dollars smaller than in 1951, but provisions for taxes were 117 million larger. The net increase in such charges was less than the growth in net current earnings, with the result that net profits after taxes and profit and loss adjustments increased 73 million dollars to 829 million. About 47 per cent of 1952 profits, or 390 million dollars, was distributed as dividends. This represented a return of 3.7 per cent on average total capital accounts; although the amount distributed was larger than in the previous two years the percentage was unchanged. Profits retained to strengthen capital accounts amounted to 439 million dollars as compared with 385 million in 1951. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 31 Bank earning assets. Earning assets of member banks amounted to 119.5 billion dollars at the end of 1952, an increase of 7.3 billion during the year. Of this increase, 5.5 billion dollars was in loans, 1.1 billion in holdings of United States Government obligations, and 0.7 billion in holdings of other securities. About a third of the loan increase was in commercial and industrial loans and another third in "other loans to individuals," which are largely consumer loans. According to sample data by industry groups, more than half the commercial and industrial loan expansion in 1952 was to manufacturers of metals and metal products (including machinery and transportation equipment). Net decreases in loans were reported for only three groups—manufacturers of food, liquor and tobacco; manufacturers of textiles, apparel, and leather; and the public utility industry (including transportation). Capital accounts. Capital accounts of member banks amounted to 10.8 billion dollars at the end of 1952, an increase of about half a billion during the year. Retention of profits accounted for most of the increase. Proceeds from sales of common stock amounting to 128 million dollars were offset to the extent of 25 million net by other changes in capital accounts, including the retirement of preferred stock and the effects of mergers and changes in Federal Reserve membership. The ratio of average total capital accounts to average total assets for all member banks was 6.9 per cent, the same as in 1951, and 0.1 point below 1949 and 1950. The ratio of average total capital accounts to total assets less cash assets and United States Government securities continued to decline, reaching 16.2 per cent as compared with 16.7 per cent in 1951 and 18.9 in 1950. The decline reflected the increasing proportion of earning assets held in the form of loans and investments other than United States Government securities. Number of banking offices. The number of banking offices in the United States increased to 20,095 during 1952 from 19,842 at the beginning of the year. This was the ninth consecutive year of growth. The number of banks declined by 43 to 14,575, but the number of branches increased by 296 to 5,520. All of these figures exclude banking facilities at military and other Government establishments, of which there were 191 at the end of 1952, an increase of 32 during the year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

32 ANNUAL REPORT OF BOARD OF GOVERNORS The number of banks (head offices) continued to decline, following the pattern of the four preceding years. There were 73 new banks opened for business during the year, but this increase in head offices was more than offset by a decrease of 116 resulting principally from the consolidation or absorption of 100 banks, 82 of which were converted into branches. Table 20 on page 74 shows increases and decreases in the number of banks by class of bank. The increase of 296 in the number of branches and additional offices, exclusive of banking facilities at military and other Government establishments, was the largest since the early twenties; the next largest annual increase was 290 during 1951. Most of the increase in 1952 was in de novo branches, of which there were 237. New York and Pennsylvania had the largest branch increases, with 38 each; smaller increases occurred in practically all other States that permit branch banking. More than half the increase in branches during 1952 was in places outside head-office cities; such branches now constitute about 55 per cent of the total of all branches as compared with 40 per cent in 1933. Ghanges in Federal Reserve membership. As a result principally of consolidations and absorptions, the number of member banks in the Federal Reserve System continued to decline during 1952. The total number of member bank offices continued to increase, however, owing to the establishment of de novo branches and to the conversion of most of the absorbed banks into branches. On December 31, 1952, there were 6,798 member banks. Of these, 4,909 were national banks and 1,889 were State member banks, which had declined in number by 30 and 12 respectively during the year. Nineteen newly organized banks became members, of which 15 were national banks and 4 were State chartered. Twelve insured nonmember banks, with deposits of about 113 million dollars, were admitted to membership. Four of these had previously withdrawn from the System in order to establish branches outside the city of the head office; they applied for membership and were readmitted under the terms of the legislation enacted in July 1952 (see page 39 of this Report). One national bank converted to a State member bank during the year. The 6,798 member banks in operation at the end of 1952 accounted for 48 per cent of the number and held 85 per cent of the deposits Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 33 of all commercial banks in the country. State member banks accounted for 21 per cent of the number and held 66 per cent of the deposits of all State commercial banks. These relationships have remained practically unchanged during recent years. Table 20 on page 74 summarizes the increases and decreases in the number of member banks and their branches. Par and nonpar banks.1 During 1952 a total of 73 banks were added to the Federal Reserve Par List, and 106 were deleted. Of the 73 additions, 13 were nonpar banks that chose to go on the Par List, 58 were newly organized banks, and 2 were banks that previously did not handle checking accounts. Of the 106 deletions, 2 were banks that withdrew from the Par List; nearly all of the remainder were absorbed by other par banks, and most of them were converted into branches. The number of par-remitting and nonpar banking offices at the end of 1952 is shown below: On Not on Par List Par List Banks (head offices) 12,122 1,820 Branches 4,962 303 Banking facilities at military and other Government establishments 190 1 Total 17,274 2,124 The par-remitting banks, representing 87 per cent of the banks on which checks are drawn, hold all but 2 per cent of the deposits of all commercial banks in the country. All banks in 29 States and the District of Columbia were on the Federal Reserve Par List at the end of the year; and in each of 5 other States the number of nonpar banks was less than 10. Practically all of the banks not on the Par List were in 14 States, as is indicated by the following distribution: Minnesota 410 Alabama 96 Georgia 284 North Dakota 92 Mississippi 160 Tennessee 84 Arkansas 118 South Carolina 81 North Carolina 107 Missouri 65 Louisiana 104 Florida 54 South Dakota 98 Texas 50 1This section refers only to banks on which checks are drawn and their branches and offices, including "banking facilities" at military and other Government establishments. The Federal Reserve Par List comprises all member banks, which are required under the law to remit at par for checks forwarded to them by the Federal Reserve Banks for payment, and also such nonmember banks as have agreed to do so. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

34 ANNUAL REPORT OF BOARD OF GOVERNORS Table 21 on page 75 shows these statistics by States and Federal Reserve districts. BANK SUPERVISION BY THE FEDERAL RESERVE SYSTEM Examination of Federal Reserve Banks. The Board's Division of Examinations examined each of the 12 Federal Reserve Banks and their 24 branches during the year as required by law. Examination of State member banks. State member banks are subject to examinations made by direction of the Board of Governors or of the Federal Reserve Banks by examiners selected or approved by the Board of Governors. The established policy is to conduct at least one regular examination of each State member bank, including its trust department, during each calendar year, by examiners for the Reserve Bank of the district in which the bank is situated, with additional examinations if considered desirable. In order to avoid duplication and to minimize inconvenience to the banks examined, wherever practicable joint examinations are made in cooperation with the State banking authorities or alternate examinations are made by agreement with State authorities. The 1952 program for the examination of State member banks was practically completed. Bank holding companies. During 1952 the Board authorized the issuance of one voting permit for general purposes and four permits for limited purposes to holding company affiliates of member banks. The regular annual reports were obtained from holding company affiliates to provide information with respect to the organizations to which voting permits have been granted. In accordance with established practice, a number of holding company affiliates were examined during the year by examiners for the Federal Reserve Banks in whose districts the principal offices of the holding companies are located. Section 301 of the Banking Act of 1935 provides that the term "holding company affiliate" shall not include, except for the purposes of Section 23A of the Federal Reserve Act, any organization which is determined by the Board not to be engaged, directly or indirectly, as a business in holding the stock of, or managing or controlling, banks, banking associations, savings banks, or trust companies. During the year the Board made such determinations with respect to seven organizations. Trust powers of national banks. During 1952, 14 national banks were granted authority by the Board to exercise one or more trust Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 35 powers under the provisions of Section ll(k) of the Federal Reserve Act. This number includes the grant of additional powers to 6 banks which previously had been granted certain trust powers. One additional national bank acquired trust powers as a result of consolidation. Trust powers of 23 national banks were terminated, 22 by voluntary liquidation, consolidation, merger, or conversion, and one by voluntary surrender. At the end of 1952, there were 1,758 national banks holding permits to exercise trust powers. Acceptance powers of member banks. During the year the Board approved the applications of three member banks, pursuant to the provisions of Section 13 of the Federal Reserve Act, for permission to accept drafts or bills of exchange drawn for the purpose of furnishing dollar exchange as required by the usages of trade in such countries, dependencies, or insular possessions of the United States as may have been designated by the Board of Governors. Foreign branches and banking corporations. Under the provisions of Section 25 of the Federal Reserve Act, the Board approved during 1952 four applications made by member banks for permission to establish branches in foreign countries or in dependencies or insular possessions of the United States. Member banks opened five such branches in 1952: one each in Brazil, Colombia, England, France, and Japan. One of the five branches so established had been authorized in 1950 and another in 1951. One branch in England was closed during the year. At the end of 1952, seven member banks had in active operation a total of 104 branches in 23 foreign countries and possessions of the United States. Of the 104 branches, four national banks were operating 98 and three State member banks were operating 6. The foreign branches in active operation were distributed geographically as follows: Latin America 54 Continental Europe 6 Argentina 10 Belgium 1 Brazil 10 France 2 Chile 2 Germany 3 Colombia 4 Cuba 19 England 10 Mexico 2 £anama 4 Far East 20 Peru 1 Uruguay 1 Hong Kong 1 Venezuela 1 India 2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

36 ANNUAL REPORT OF BOARD OF GOVERNORS Far East, cont. United States Possessions 14 Japan 10 Canal Zone 4 Philippines 5 Guam 1 Singapore 1 Puerto Rico 9 Thailand 1 Total 104 There was no change in 1952 in the list of corporations organized under State laws which operate under agreements entered into with the Board pursuant to Section 25 of the Federal Reserve Act relating to investment by member banks in the stock of corporations engaged principally in international or foreign banking. Of the four corporations in operation, one has no subsidiaries or foreign branches; one operates a branch in England (also an agency at the New York International Airport which was established during the year); one operates a branch in France; and one has an English fiduciary affiliate. One branch in France was closed in 1952 after the transfer of its business to the newly established branch of its parent member bank. At the end of 1952 there were in operation two banking corporations organized under the provisions of Section 25(a) of the Federal Reserve Act to engage in international or foreign banking. The head offices of these corporations are located in New York City and both were examined during the year by the Board's Division of Examinations. One such institution operates a branch in Germany and the other has a branch in France and a fiduciary affiliate in England. CHANGES IN REGULATIONS OF THE BOARD OF GOVERNORS Payment of interest on deposits. The Board's Regulation Q, relating to the payment of interest on deposits, was amended effective July 1, 1952, to liberalize the provisions of the regulation regarding allowance of grace periods in the computation by member banks of interest on savings deposits in order to accommodate these provisions to banking practices and State laws and regulations. Membership of State banks. The Board's Regulation H, relating to membership of State banking institutions in the Federal Reserve System, was amended effective September 1,1952. Such amendment brought the regulation into conformity with changes in the law relating to capital requirements for admission of State banks to membership and to capital requirements for the establishment of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 37 branches by State member banks. The changes in the law, approved July 15, 1952, are outlined on pages 39-40 of this Report. Consumer credit. Effective May 7, 1952, the Board suspended its Regulation W, relating to consumer credit, following a review of developments in the economy generally and in the markets directly affected by the regulation. The authority for the regulation contained in the Defense Production Act of 1950, as amended, was repealed effective June 30,1952. Previously, the regulation had been amended, effective January 2, 1952, to exempt therefrom prewar model automobiles; effective March 24, 1952, to remove the down payment and maximum loan value requirements in connection with home modernization and repairs; and, effective April 8, 1952, to extend to articles costing less than $100 the exemption from the down payment and maximum loan value provisions that previously had exempted articles costing less than $50. Real estate credit. The Board's Regulation X, relating to real estate credit, was amended effective January 9, 1952, to liberalize under specified conditions the requirements of the regulation in the case of veterans and other persons financing the purchase of homes through conventionally financed secondary loans which were to be combined with loans made, insured, or guaranteed by a department or agency of the United States Government. Effective June 11, 1952, Regulation X was amended to permit more liberal credit terms for conventionally financed one- to fourfamily housing and multi-unit housing. At the same time two technical amendments were announced. One of these provided special assistance for tenants and home owners whose homes had been destroyed or damaged in areas where major disasters had occurred, and the other provided for longer term sale agreements where properties being purchased would not be occupied or used by prospective owners until the financing terms complied with the regulation. The Board of Governors suspended Regulation X effective September 16, 1952. This action was taken following receipt by the Board from the Secretary of Labor of information that the seasonally adjusted annual rate of residential construction starts in each of the months of June, July, and August of 1952 had been less than 1,200,000 units. The 1952 amendments to the Defense Production Act provided that when housing starts had fallen below this specified rate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

38 ANNUAL REPORT OF BOARD OF GOVERNORS for three consecutive months a period of real estate credit relaxation should be announced during which the maximum down payment prescribed with respect to residential property could not exceed 5 per cent. Simultaneously with the suspension of Regulation X, the Housing and Home Finance Administrator acted to provide a relaxation of terms for Government-aided real estate credit. As required by executive order, the amendments to Regulation X affecting residential properties were made with the concurrence of the Housing and Home Finance Administrator. LITIGATION AND ENFORCEMENT Transamerica Corporation. The Board, on March 27, 1952, adopted its Findings as to the Facts, Conclusion, and Orders in the Transamerica Clayton Act proceeding. These were printed in the Federal Reserve Bulletin for April 1952, beginning at page 368. On May 27, 1952, Transamerica Corporation filed in the United States Court of Appeals for the Third Circuit its petition to review and set aside the orders of the Board, and an application for leave to adduce additional evidence. The case was argued before the Court of Appeals on March 16, 1953. Regulation W enforcement. The Board during 1952 obtained three injunctions in United States District Courts enjoining further violations of Regulation W, and suspended for temporary periods the licenses of five registrants to extend instalment credit subject to the regulation. Since the regulation was put into effect in September 1950, a total of 80 cases have been referred to the Department of Justice for such criminal proceedings as the Department might deem appropriate. As of April 10,1953, 70 of these cases had been referred to United States Attorneys for prosecution, of which 33 had been disposed of by convictions. Regulation X enforcement. During the year 1952, one injunction enjoining further violations of Regulation X was issued by a United States District Court, and the Board issued one Order for Investigation pursuant to which subpoenas were served. Removal of bank officers. Following the receipt of a certificate from the Comptroller of the Currency pursuant to the provisions of Section 30 of the Banking Act of 1933, the Board issued an order for a hearing to determine whether the president and certain other officers and directors of a national bank should be removed from office Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 39 because of violations of law and unsafe and unsound practices in the conduct of the affairs of the bank. However, before the date set for the hearing, a majority of the stock of the bank was sold and the president and certain other directors were replaced. As a consequence, the hearing was not held. LEGISLATION Purchase of Government obligations by Federal Reserve Banks. By Act of Congress approved June 23, 1952 the limited authority of the Federal Reserve Banks under Section 14(b) of the Federal Reserve Act to purchase and sell direct or fully guaranteed obligations of the United States directly from or to the United States was extended until June 30, 1954. This authority would otherwise have expired on June 30, 1952. Defense Production Act amendments of 1952. The Defense Production Act of 1950, which would have expired June 30, 1952, was amended and extended by Act of Congress approved June 30, 1952. The amendments repealed Section 601 of the Defense Production Act, which contained authority for control of consumer credit. It was also provided that no voluntary program or agreement for the control of credit should be approved or carried out under Section 708 of the Defense Production Act. While the new law continued the authority for regulation of real estate credit until June 30, 1953, it provided that, if estimated residential construction starts for three consecutive months should be below a seasonally adjusted annual rate of 1,200,000 units, no down-payment requirement in excess of 5 per cent should be imposed. Capital requirements of member banks. A law was approved on July 15, 1952 amending Section 9 of the Federal Reserve Act and Section 5155 of the Revised Statutes of the United States relating to requirements for admission of State banks to membership in the Federal Reserve System and to requirements for the establishment of branches by national and State member banks. The new law permits a State bank to become a member of the Federal Reserve System when it has capital stock and surplus adequate in the judgment of the Board of Governors in relation to its assets and to its deposit liabilities, except that if the bank does not have capital stock and surplus equal to that required for the establishment of a national Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

40 ANNUAL REPORT OF BOARD OF GOVERNORS bank it must be an insured bank or must first obtain approval for deposit insurance under the Federal Deposit Insurance Act. The new law also eliminated the requirement that in order for a national or State member bank to have an out-of-town branch it had to have a capital stock of at least $500,000. Such a bank, however, must still have capital equal to the total amount which would be required for the establishment of a national bank in each of the various places where its offices are located and must have the capital stock and surplus required by State law in like circumstances. In addition, under the new law, a State member bank may not reduce its capital stock without the consent of the Board of Governors. Also, the Board's approval is required for the establishment of any new branch of a State member bank in the head-office city, whereas formerly approval was required only for out-of-town branches. Bank dealing in obligations of Central Bank for Cooperatives. By Act of Congress approved April 9, 1952, the last sentence of Paragraph Seventh of Section 5136 of the Revised Statutes of the United States was amended so as to permit national banks to deal in and underwrite obligations issued by the Central Bank for Cooperatives. Such transactions remain subject to the limitation of 10 per cent of the national bank's capital and surplus. Subject, of course, to any applicable provision of State law, the provision also applies to all State member banks of the Federal Reserve System, since Section 9 of the Federal Reserve Act makes Section 5136 applicable to State member banks. RESERVE BANK OPERATIONS Volume of operations. Table 5 on page 57 discloses pronounced changes in some of the principal Reserve Bank operations during the year. Discounts and advances were more numerous in 1952 than in any other year since 1938. Federal Reserve discount facilities were used by 1,286 banks in 1952 as compared with 1,168 in the preceding year. The largest amount of discounts and advances outstanding during the year was 2,364 million dollars on December 27 as compared with the all-time peak of 2,860 million on November 1, 1920. Industrial loans were fewer in number than in 1951, but the amount of 31 million dollars disbursed was the largest since 1943. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 41 Commitments to make industrial loans declined and were less than one-half the commitments executed in 1951, Both the number and the amount of pieces of paper currency received and counted established new highs during 1952. On the other hand, the number of coins received and counted and their aggregate value continued the decline begun in the last half of 1951, reflecting a carryover of the acute coin scarcity that year. New peaks were established in the number and amount of checks handled and in the amount of issues, redemptions, and exchanges of Government securities. Postal money orders appear in the table for the first time. As noted in the Annual Report for 1951, the Reserve Banks began processing punch card postal money orders, using specially designed equipment, on July 1, 1951. The number of money orders handled during the last six months of that year was approximately 175 million and during the year 1952 it was approximately 371 million. The number of transfers of funds continued the upward trend begun in 1941, and the amount of such transfers set an all-time high, with a 17 per cent increase over 1951. Earnings and expenses. Current earnings, current expenses, and the distribution of net earnings of each Federal Reserve Bank during 1952 are shown in detail in Table 6 on page 58, and a condensed historical statement for all Reserve Banks is shown in Table 7 on page 60. The table on page 42 summarizes the earnings and expenses and the distribution of net earnings for 1952 and 1951. Current earnings amounted to 456 million dollars in 1952, 16 per cent more than in 1951, largely because of a higher average rate of interest received on holdings of United States Government securities. Earnings from discounts and advances were almost three times those of 1951. Current expenses were 10 per cent larger than in 1951, reflecting the effect of 1952 increases in wage structures, together with further growth of operations. As a result of these changes, current net earnings in 1952 were 351 million dollars, an increase of 17 per cent. After allowing for profit and loss additions and deductions from current net earnings, net earnings amounted to 353 million dollars, an increase of 19 per cent over 1951. Payments to the United States Treasury as interest on Federal Reserve notes amounted to 292 million dollars in 1952 and surpassed Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

42 ANNUAL REPORT OF BOARD OF GOVERNORS EARNINGS, EXPENSES, AND DISTRIBUTION OF NET EARNINGS OF FEDERAL RESERVE BANKS, 1952 AND 1951 [In thousands of dollars] Item 1952 1951 Current earnings 456,060 394,656 Current expenses 104,694 95,469 Current net earnings 351,366 299,187 Additions to current net earnings 1 2,195 388 Deductions from current net earnings 611 12,516 Net additions or net deductions (—) 1,584 -2,128 Net earnings before payments to U. S. Treasury 352,950 297,059 Paid U. S. Treasury (interest on F. R. notes) 291,934 254,874 Dividends 14,682 13,865 Transferred to surplus (Sec. 7) 46,334 28,320 1 Includes $1,992,000 net profits (1952) and $1,586,000 net losses (1951) on sales of U. S. Government securities. any previous year's distribution of earnings to the Treasury, either in this form or in the form of a franchise tax. A total of 1,178 million dollars has been paid to the Treasury as interest on Federal Reserve notes since the policy of making such payments was begun in 1947. Dividends to member banks at the statutory rate amounted to 15 million dollars in 1952, an increase of nearly one million over 1951, reflecting the increased paid-in capital of the Federal Reserve Banks because of increased capital and surplus of member banks. The remaining net earnings of 46 million dollars were added to surplus account. Holdings of loans and securities. Federal Reserve Bank holdings of United States Government securities averaged 23,127 million dollars in 1952, which was very near the peak of 23,250 million established in 1946. The average rate of interest received from holdings of United States Government securities rose to 1.91 per cent, the highest since 1930. Holdings of discounts and advances, and earnings thereon, were nearly three times those in 1951. The table on page 43 shows a comparison of average daily holdings, earnings, and average interest rates on loans and securities held by the Reserve Banks during each of the past three years. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 43 RESERVE BANK EARNINGS ON LOANS AND SECURITIES, 1950-52 [Dollar amounts in thousands] Dis- U.S. In- Item and year Total1 counts Govern- dusand ment trial advances securities loans Average daily holdings:2 1950 $18,536,551 $129,081 $18,405,083 $2,387 1951 23,045,707 292,770 22,748,210 4,646 1952 23,933,643 802,334 23,126,674 4,635 Earnings: 1950 275,066 2,034 272,916 116 1951 394,473 5,139 389,125 208 1952 455,898 14,083 441,629 186 Average rate of interest (per cent): 1950 1.48 1.58 1.48 4.85 1951 1.71 1.75 1.71 4.49 1952 1.90 1.75 1.91 4.01 1 Figures for 1951 include small amounts of acceptances purchased and earnings thereon. 2 Based on holdings at opening of business. Foreign and international accounts. During the year 1952 there was an increase of slightly more than one billion dollars in the total of earmarked gold, dollar deposits, United States Government securities, and miscellaneous holdings for foreign account by the Federal Reserve Banks. The total at year-end amounted to 7.1 billion dollars, a figure near the all-time high of 7.5 billion dollars reached in March 1951. The rise during the year was in contrast to the marked downtrend in the second half of 1951 which resulted in a net decrease of 1.2 billion dollars for that year as a whole. Holdings of United States Government securities, principally Treasury bills, rose by 773 million dollars, while earmarked gold increased by 213 million and dollar deposits by 24 million. There was little change during the year in the holdings for the International Bank for Reconstruction and Development and the International Monetary Fund. Activity in loans on gold to foreign central banks continued at a comparatively low level. As in the previous year, only one central bank was a borrower; its maximum indebtedness during the year was 45 million dollars, which by year-end had been reduced to 29.5 million dollars. Accounts were opened for two recently established central banks Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

44 ANNUAL REPORT OF BOARD OF GOVERNORS which took over the central banking functions formerly performed by essentially commercial banks, the accounts of which were subsequently closed. An account was also opened for a foreign government, while an account of a central bank nature was closed. The Federal Reserve Bank of New York continued to perform a number of operations for the International Bank for Reconstruction and Development and the International Monetary Fund and, pursuant to authorization and instructions of the Treasury Department, to operate the United States Stabilization Fund. Furthermore, as fiscal agent of the United States it administered for the Treasury Department the blocking regulations affecting assets and transactions in this country of Communist China and North Korea and their nationals. Bank premises. There was no change in the Board's policy, established in 1950 because of the enlarged defense program, of continuing to approve the preparation of plans for needed construction of Federal Reserve buildings, but of authorizing only construction of an emergency nature. The Federal Reserve Bank of Cleveland was authorized to aircondition the Cincinnati Branch building, and near the year-end the Federal Reserve Bank of San Francisco was authorized to obtain bids for an addition to its Los Angeles Branch. The new building of the Jacksonville Branch of the Federal Reserve Bank of Atlanta was occupied during 1952, as were additions to the Federal Reserve Banks of Boston and Richmond and the Detroit Branch of the Federal Reserve Bank of Chicago. The Detroit project had been authorized in 1949 and the other three in 1950. Extensive alterations to the existing buildings of the Federal Reserve Bank of Boston and the Detroit Branch of the Federal Reserve Bank of Chicago were undertaken in connection with the additions. During the year the Federal Reserve Bank of Atlanta acquired a building site adjoining its Birmingham Branch for an addition, and property in Nashville as a site for a new building to house the Nashville Branch. The Federal Reserve Bank of Dallas acquired a site for a new building for its San Antonio Branch. STUDY OF CHECK COLLECTION SYSTEM During the past 10 years there has been a tremendous increase in the volume of checks handled by the banking system. Tens of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 45 millions of checks flow through check collection channels daily. Although the volume is large, each check must be handled—listed and sorted—as an individual item. This frequently involves repeated listings and sortings of the same check. As a consequence of the increased volume, the check collection process has presented increasing problems to the banking system. Depositors are directly concerned with the efficient and rapid collection of checks and with delays in the collection process., In June 1952 a comprehensive study of the nation's check collection system was undertaken jointly by representatives of the American Bankers Association, the Association of Reserve City Bankers, and the Federal Reserve System. The objective of the study, which was still in progress at the end of the year, is to suggest ways in which the present difficulties may be overcome, the efficiency of bank operations increased, and service to depositors improved. The interest of the Federal Reserve Banks and the Board of Governors in the study is the improvement of the check collection service for the benefit of the entire national business and financial community. BOARD OF GOVERNORS—INCOME AND EXPENSES The accounts of the Board for the year 1952 were audited by the public accounting firm of Arthur Andersen & Co., whose certificate follows: To the Board of Governors of the Federal Reserve System: We have examined the statement of income and expenses of the Board of Governors of the Federal Reserve System for the year ended December 31, 1952, and cash balance as of December 31, 1952. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the accompanying statement presents fairly the income and expenses of the Board of Governors of the Federal Reserve System for the year ended December 31, 1952, and the cash balance as of that date. Arthur Andersen & Co. Washington, D. C, March 3, 1953. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

46 ANNUAL REPORT OF BOARD OF GOVERNORS [STATEMENT] INCOME: Assessments against Federal Reserve Banks $4,121,600.00 Bulletin sales 12,122.36 Other publications sales 15,341.37 Miscellaneous receipts 3,389.96 $4,152,453.69 EXPENSES: Salaries (Note 2) $2,866,266.11 Retirement contributions (Note 2) 230,712.07 Traveling expenses 188,171.01 Postage and expressage 12,044.67 Telephone and telegraph, including leased wire operations (net) 71,943.91 Printing and binding 175,192.18 Stationery and supplies 34,262.69 Furniture and equipment 57,130.88 Books and subscriptions 15,111.98 Heat, light, and power 36,855.31 Repairs, maintenance, and alterations 20,575.54 Insurance 7,086.86 Consumer Finances Survey 152,620.49 Corporate Financial Trends 5,000.00 Legal and consultant fees and expenses 11,520.82 Borrowed Federal Reserve Bank personnel 12,771.28 Audit expenses applicable to Board's accounts 6,165.45 Loss from operation of cafeteria (net) 41,646.59 Other 20,624.83 $3,965,702.67 EXCESS OF INCOME OVER EXPENSES $ 186,751.02 Other items not included above: Cash in bank, December 31, 1951 586,568.87 Receipts and disbursements (net) which do not affect income or expenses but which resulted in changes in assets and liabilities— Reimbursable accounts —1,096,469.24 Vouchers payable 1,115,635.46 Inventory 6,899.37 Unvouchered obligations —43,833.79 Employee payroll deductions —3,630.02 CASH IN BANK, December 31, 1952 $ 751,921.67 NOTES.—(1) The accounts of the Board have been maintained in part on a cash basis and in part on an accrual basis. Accordingly, at December 31, 1952, salaries of approximately $85,000 and other expenses of approximately $40,000 for services and goods received were unpaid at that date and are not included in the above Statement. However, it does include salaries of approximately $50,000 and other expenses of approximately $40,000 for services received in 1951 but not charged to expense until paid in 1952. It is anticipated that the accrual basis of accounting will be adopted in 1953. (2) Salaries and retirement contributions exclude approximately $95,000 and $10,000, Digitized forr eFsRpeAcStivEeRly , which were charged direct to cafeteria and leased wire operations. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 47 In the foregoing as submitted by Arthur Andersen & Co., "Other" expenses of $20,624.83 includes an expenditure of $449.65 contributed by the Board of Governors for a dinner at a meeting of Treasury Department Savings Bond Program workers. The Board received the following reimbursements in 1952 for expenditures handled through the reimbursable accounts referred to in the auditors' statement: Printing Federal Reserve notes $7,690,632.20 Leased wire service (telegraph) 128,316.25 Leased telephone lines 9,681.82 Federal Reserve Issue and Redemption Division (Comptroller of the Currency). . 141,965.91 Miscellaneous 30,951.08 FEDERAL RESERVE MEETINGS The Federal Open Market Committee met on February 29, March 1, June 19, September 25, and December 8, and the executive committee of the full Committee met from time to time during the year. Under the provisions of Section 12A of the Federal Reserve Act, the Federal Open Market Committee, which has responsibility for determining the policies under which the open market operations of the Federal Reserve Banks will be carried out, is required to meet in Washington at least four times each year. A record of the actions taken by the Committee on questions of policy will be found on pages 90-99 of this Report. Meetings of the Conference of Chairmen of the Federal Reserve Banks were held on May 5-6 and December 4-5 and were attended by members of the Board of Governors. The Conference of Presidents of the Federal Reserve Banks held meetings on February 27-28, June 18, September 23-24, and December 7-8, and the Board of Governors met with the Presidents on February 29, June 19, September 26, and December 9. Meetings of the Federal Advisory Council were held on February 17-19, May 18-20, October 5-7, and November 16-18. The Board of Governors met with the Council on February 19, May 20, October 7, and November 18. The Council is required by law to meet in Washington at least four times each year and is authorized by the Federal Reserve Act to consult with and advise the Board on all matters within the jurisdiction of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

48 ANNUAL REPORT OF BOARD OF GOVERNORS AD HOC SUBCOMMITTEE OF FEDERAL OPEN MARKET COMMITTEE During the year the Federal Open Market Committee undertook a study of the technical and operational phases of the market for U. S. Government securities through an ad hoc Subcommittee. The Subcommittee consisted of Wm. McC. Martin, Jr., Chairman, Abbot L. Mills, Jr., and Malcolm Bryan. Mr. Robert H. Craft, Vice President and Treasurer of the Guaranty Trust Company of New York, was appointed Technical Consultant to the Subcommittee and during the summer months was given leave of absence from his Company to devote his full time to the work. The Subcommittee was still engaged in its studies at the year end. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

50 ANNUAL REPORT OF BOARD OF GOVERNORS NO. 1—STATEMENT OF CONDITION OF THE FEDERAL RESERVE BANKS (IN DETAIL) DECEMBER 31, 1952 [Amounts in boldface type are those shown in the Board's weekly statement. In thousands of dollars.] ASSETS Gold certificates: Interdistrict settlement fund 7,770,547 Gold certificates on hand 1,015,555 Gold certificates with Federal Reserve Agents 12,399,000 21,185,102 Redemption fund for Federal Reserve notes 800,603 Total gold certificate reserves 21,985,705 Other cash: United States notes 29,358 Silver certificates 266,787 Standard silver dollars 3,294 National bank notes and Federal Reserve Bank notes 3,645 Subsidiary silver, nickels, and cents 18,936 Total other cash 322,020 Discounts and advances secured by U. S. Govt. securities: Discounted for member banks 126,680 Discounted for others 126,680 Other discounts and advances: Discounted for member banks 199 Foreign loans on gold 29,500 29,699 Total discounts and advances 156,379 Acceptances purchased Industrial loans 3,892 U. S. Govt. securities in System Open Market Account: Bills 741,950 Certificates 4,995,716 Notes 13,773,671 Bonds 4,521,975 Other U. S. Govt. securities (repurchase agreements) 663,700 Total U. S. Govt. securities 24,697,012 Total loans and securities 24,857,283 Due from foreign banks 23 Federal Reserve notes of other Federal Reserve Banks 239,458 Uncollected cash items: Transit items 3,873,968 Exchanges for clearing house 226,504 Other cash items 138,307 Total uncollected cash items 4,238,779 Bank premises: Land 14,314 Buildings (including vaults) 62,597 Fixed machinery and equipment 21,086 Total buildings 83,683 Less depreciation allowances 49,649 34,034 Total bank premises 48,348 Other assets: Industrial loans past due 28 Miscellaneous assets acquired account industrial loans.. 94 Miscellaneous assets acquired account closed banks Total 122 Less valuation allowances 53 Net 69 Fiscal Agency and other expenses, reimbursable 3,784 Interest accrued 138,829 Premium on securities 11,534 Deferred charges 1,698 Sundry items receivable 1,959 Real estate acquired for banking house purposes 1,786 Suspense account 754 All other 465 Total other assets 160,878 Total assets 51,852,494 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 51 NO. I—STATEMENT OF CONDITION OFTHE FEDERAL RESERVE BANKS (IN DETAIL) —Continued LIABILITIES Federal Reserve notes: Outstanding (issued to Federal Reserve Banks) 27,420,694 Less: Held by issuing Federal Reserve Banks 1,084,686 Forwarded for redemption 85,709 1,170,395 Federal Reserve notes, net (includes notes held by U. S. Treasury and by Federal Reserve Banks other than issuing Bank) 26,250,299 Deposits: Member bank—reserve accounts 19,950,372 U. S. Treasurer—general account 388,808 Foreign 549,959 Other deposits: Nonmember bank—clearing accounts 86,480 Officers' and certified checks 7,971 Federal Reserve exchange drafts 678 International organizations l 40,221 All other 319,565 Total other deposits 454,915 Total deposits 21,344,054 Deferred availability cash items 3,271,561 Other liabilities: Accrued dividends unpaid Unearned discount 36 Discount on securities 10,468 Sundry items payable 4,150 Suspense account 115 All other liabilities 154 Total other liabilities 14,923 Total liabilities 50,880,837 CAPITAL ACCOUNTS Capital paid in 252,634 Surplus (Sec. 7) 584,676 Surplus (Sec. 13b) 27,543 Other capital accounts: Reserves for contingencies: Reserve for registered mail losses 8,804 All other 98,000 Earnings and expenses: Current earnings (2) Current expenses (2) Current net earnings (2) Add—profit and loss (2) Deduct—dividends accrued since January 1 (2) interest on Federal Reserve notes (2) Unallocated net earnings (2) Total other capital accounts 106,804 Total liabilities and capital accounts 51,852,494 Contingent liability on acceptances purchased for foreign correspondents. Industrial loan commitments 1 Includes organizations such as the International Bank for Reconstruction and Development and the International Monetary Fund. 2 Amount in this account closed out at end of year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NO. 2—STATEMENT OF CONDITION OF EACH FEDERAL RESERVE BANK AT END OF 1952 AND 1951 [In thousands of dollars] Total Boston New York Philadelphia Cleveland Richmond Item 1952 1951 1952 1951 1952 1951 1952 1951 1952 1951 1952 1951 2 ASSETS > Gold certificates 21,185,10220,753,952 688,429 654,638 5,977,523 6,788,8661,271,0081,145,0471,446,6341,519,769 986,348 928,621 Redemption fund for Federal Reserve notes 800,603 714,115 64,891 62,778 135,378 78,065 57,278 56,306 85,475 75,408 76,732 66,214 Total gold certificate reserves 21,985,70521,468,067 753,320 717,416 6,112,901 6,866,9311,328,2861,201,3531,532,1091,595,1771,063,080 994,835 Other cash 322,020 323,175 22,031 20,638 64,362 69,693 18,317 17,513 21,491 19,113 27,616 23,885 Discounts and advances: Secured by U. S. Govt. securities. . 126,680 19,306 385 2,510 106,015 2,595 3,175 3,440 1,470 670 4,200 2,340 Other 29,699 41 1,829 8,909 2,301 2,714 1,504 Total discounts and advances. . . 156,379 19,347 2,214 2,510 114,924 2,595 5,476 3,440 4,184 670 5,704 2,340 Industrial loans 3,892 4,637 23 3,469 3,763 56 94 U. S. Government securities: Bills 1,340,750 596,360 40,466 770,126 265,677 46,633 29,438 74,064 43,703 50,148 31,110 Certificates 5,060,61612,792,798 354,451 902,366 1,218,487 2,914,088 313,991 800,631 498,6921,188,604 337,650 846,097 8 Notes 13,773,671 5,068,073 977,256 359,397 3,180,547 1,133,490 865,703 318,8831,374,943 473,409 930,935 336,991 Bonds 4,521,975 5,344,127 320,839 378,973 1,044,192 1,195,230 284,215 336,253 451,402 499,195 305,631 355,347 Total U. S. Govt. securities 24,697,01223,801,358 1,693,0121,640,736 6,213,352 5,508,4851,510,542 1,485,2052,399,1012,204,9111,624,3641,569,545 Total loans and securities 24,857,28323,825,342 1,695,2261,643,246 6,328,276 5,511,1031,519,4871,492,4082,403,2852,205,5811,630,124 1,571,979 Due from foreign banks 23 28 1 2 17 18 2 2 2 3 1 1 Federal Reserve notes of other Banks. . 239,458 201,141 5,996 4,136 32,307 22,622 16,086 11,682 12,312 11,121 50,711 48,796 Uncollected cash items 4,238,779 3,905,327 387,995 414,090 874,505 769,587 252,296 267,200 383,177 383,721 344,449 287,820 Bank premises 48,348 43,599 4,071 1,017 7,292 7,464 3,269 2,854 4,746 4,764 4,839 4,111 Other assets 160,878 133,157 11,396 10,981 36,642 28,934 9,761 8,298 15,733 12,769 10,887 8,841 Total assets... 51,852,494 49,899,836 2,880,036 2,811,526 13,456,292 13,276,3423,147,5043,001,3104,372,855 4,232,2493,131,7072,940,268 i After deducting $16,000 participations of other Federal Reserve Banks on Dec. 31, 1952, and $20,000 on Dec. 31, 1951. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LIABILITIES Federal Reserve notes 26,250,299 25,064,109 1,603,2081,525,817 5,796,489 5,588,434 1,857,3701,769,888 2,410,657 2,286,836 1,887,0631,785,153 Deposits: Member bank—reserve accounts.. 19,950,37220,055,716 835,721 873,756 6,184,727 6,368,672 929,318 912,1001,497,6991,471,670 849,025 848,054 U. S. Treasurer—general account. 388,808 246,687 44,086 3,864 44,922 202,462 33,092 4,285 15,316 3,733 28,743 539 Foreign 549,959 526,375 32,457 32,271 U84,537 i165,651 40,833 41,120 48,162 48,407 26,699 26,025 Other 454,915 362,798 10,013 9,070 334,153 220,194 7,092 7,4111 11,270 12,471 7,707 6,570 Total deposits 21,344,05421,191,576 922,277 918,961 6,748,339 6,956,979 1,010,335 964,9161,572,4471,536,281 912,174 881,188 Deferred availability cash items 3,271,561 2,721,490 293,075 307,828 628,042 461,363 205,923 195,198 299,246 323,938 280,791 225,184 Other liabilities and accrued dividends. 14,923 13,809 713 1,063 5,996 4,642 702 659 1,431 1,289 689 661 Total liabilities 50,880,837 48,990,984 2,819,2732,753,669 13,178,866 13,011,4183,074,330 2,930,6614,283,7814,148,344 3,080,717 2,892,186 CAPITAL ACCOUNTS Capital paid in 252,634 236,613 13,612 12,986 80,139 75,472 17,186 16,765 24,215 22,498 11,013 10,383 Surplus (Sec. 7) 584,676 538,342 36,462 34,192 167,503 159,743 43,578 41,493 54,064 50,648 29,248 27,025 Surplus (Sec. 13b) 27,543 27,543 3,011 3,011 7,319 7,319 4,489 4,489 1,006 1,006 3,349 3,349 Other capital accounts 106,804 106,354 7,678 7,668 22,465 22,390 7,921 7,902 9,789 9,753 7,380 7,325 Total liabilities and capital accounts 51,852,494 49,899,836 2,880,036 2,811,52613,456,292 13,276,342 3,147,504 3,001,310 4,372,855 4,232,249 3,131,707 2,940,268 Ratio of gold certificate reserves to deposit and F. R. note liabilities combined 46.2% 46.4% 29.8% 29.3% 48.7% 54.7% 46.3% 43.9% 38.5% 41.7% 38.0% 37.3% Contingent liability on acceptances purchased for foreign correspondents... 19,792 20,913 1,227 1,326 25,977 2 6,096 1,544 1,689 1,821 1,988 1,009 1,069 Industrial loan commitments 3,211 6,036 1,136 1,319 751 902 70 64 FEDERAL RESERVE NOTE STATEMENT Federal Reserve notes: Issued to Federal Reserve Bank by Federal Reserve Agent 27,420,694 26,130,543 1,660,2061,576,869 6,063,954 5,872,195 1,944,1301,835,565 2,506,864 2,374,740 1,966,2221,864,284 Held by Federal Reserve Bank and forwarded for redemption 1,170,395 1,066,434 56,998 51,052 267,465 283,761 86,760 65,677 96,207 87,904 79,159 79,131 Federal Reserve notes, net3.... 26,250,299 25,064,109 1,603,2081,525,817 5,796,489 5,588,434 1,857,3701,769,888 2,410,657 2,286,836 1,887,0631,785,153 Collateral held by Federal Reserve Agent for notes issued to Bank: Gold certificates 12,399,000 12,484,000 400,000 350,000 3,520,000 4,470,000 850,000 750,000 820,000 885,000 600,000 580,000 Eligible paper 120,554 17,936 385 2,510 105,765 2,595 3,175 3,440 4,200 2,240 U. S. Government securities 15,440,00014,050,000 1,300,0001,300,000 2,600,000 1,500,0001,100,0001,100,0001,700,0001,500,0001,400,0001,300,000 Total collateral 27,959,554 26,551,936 1,700,3851,652,510 6,225,765 5,972,595 1,953,1751,853,440 2,520,000 2,385,000 2,004,200 1,882,240 1 After deducting $365,403,000 participations of other Federal Reserve Banks on Dec. 31, 1952, and $360,707,000 on Dec. 31, 1951. 2 After deducting $13,815,000 participations of other Federal Reserve Banks on Dec. 31, 1952, and $14,817,000 on Dec. 31, 1951. 3 Includes Federal Reserve notes held by the U. S. Treasury and by Federal Reserve Banks other than the issuing Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NO. 2—STATEMENT OF CONDITION OF EACH FEDERAL RESERVE BANK AT END OF 1952 AND 1951—Continued Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco Item 1952 1951 1952 1951 1952 1951 1952 1951 1952 1951 1952 1951 1952 1951 ASSETS Gold certificates 881,901 923,550 4,430,854 4,221,264 636,609 554,750 327,606 325,261 896,784 737,998 715,296 553,765 2,926,110 2,400,423 Redemption fund for Federal Reserve notes 54,350 49,808 119,453 122,653 51,901 49,274 25,549 25,018 41,266 37,123 29,382 28,152 58,948 63,316 Total gold certificate reserves.. 936,251 973,358 4,550,307 4,343,917 688,510 604,024 353,155 350,279 938,050 775,121 744,678 581,9172,985,058 2,463,739 Other cash 27,229 26,579 54,784 53,922 19,662 18,944 5,879 7,056 12,294 13,128 12,311 19,218 36,044 33,486 Discounts and advances: s Secured by U. S. Govt. securities. 1,315 300 3,260 300 125 55 500 1,205 7,096 30 5,000 Other 1,269 4,100 41 1,121 767 1,320 1,121 2,744 Total discounts and advances. 2,584 300 7,360 341 1,246 55 1,267 2,525 7,096 1,151 7,744 Industrial loans 232 584 135 134 39 U. S. Government securities: Bills 42,944 25,245 106,107 70,434 40,213 25,507 23,013 14,852 32,479 22,029 34,008 22,388 80,549 45,977 o Certificates 289,147 686,607 714,4431,898,249 270,762 693,733 159,018 403,955 218,693 599,125 228,984 608,897 456,2981,250,446 Notes 797,206 273,4681,969,786 756,055 746,519 276,306 438,430 160,891 602,956 238,625 631,330 242,5181,258,060 498,040 Bonds 261,727 288,364 646,692 797,237 245,087 291,356 143,939 169,655 197,954 251,623 207,269 255,727 413,028 525,167 o Total U. S. Govt. securities... 1,391,0241,273,684 3,437,028 3,521,9751,302,5811,286,902 764,400 749,3531,052,0821,111,4021,101,5911,129,5302,207,9352,319,630 Total loans and securities 1,393,8401,274,568 3,444,388 3,522,3161,303,8271,286,957 765,802 749,4871,054,6071,118,4981,102,7421,129,5692,215,6792,319,630 1 Due from foreign banks 1 1 3 4 1 1 1 1 1 1 1 1 2 3 Federal Reserve notes of other Banks. 33,771 21,262 23,133 22,180 12,218 10,530 10,298 7,728 8,503 8,116 11,220 12,528 22,903 20,440 Uncollected cash items 279,348 234,021 704,040 652,609 174,822 136,889 103,136 96,789 197,170 202,755 179,733 168,648 358,108 291,198 Bank premises. 3,666 2,882 6,681 6,342 3,025 3,264 1,051 1,083 2,288 2,454 629 651 6,791 6,713 Other assets 9,959 7,312 22,952 19,333 8,489 6,982 4,978 4,036 7,314 6,533 7,874 6,259 14,893 12,879 Total assets.... 2,684,0652,539,9838,806,288 8,620,6232,210,5542,067,591 1,244,3001,216,4592,220,2272,126,6062,059,1881,918,7915,639,4785,148,088 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LIABILITIES Federal Reserve notes 1,445,0561,382,155 4,971,415 4,764,0811,230,998 1,167,160 650,889 632,0291,022,199 972,743 759,282 702,162 2,615,673 2,487,651 Deposits: Member bank—reserve accounts. 895,538 915,858 3,066,258 3,227,710 731,518 740,738 437,867 464,389 957,907 952,309 1,051,212 1,011,045 2,513,582 2,269,415 U. S. Treasurer—general account. 34,241 4,030 28,710 6,863 31,175 3,561 26,412 8,309 28,440 3,055 25,726 548 47,945 5,438 Foreign 22,511 21,861 72,767 71,829 19,893 19,259 13,611 13,013 19,893 19,259 19,893 19,259 48,703 48,421 Other 5,586 6,020 13,177 30,784 14,404 12,079 4,190 4,434 4,039 3,851 1,374 4,559 41,910 45,355 Total deposits 957,876 947,769 3,180,9123,337,186 796,990 775,637 482,080 490,145 1,010,279 978,474 1,098,205 1,035,4112,652,140 2,368,629 Deferred availability cash items 237,237 168,835 519,440 392,025 142,973 87,485 84,762 69,118 149,141 138,927 156,977 145,138 273,954 206,451 Other liabilities and accrued dividends 592 591 1,963 1,835 589 605 455 491 500 395 474 923 999 Total liabilities 2,640,7612,499,350 8,673,730 8,495,1272,171,5502,030,887 1,218,186 1,191*7832,182,094 2,090,6442,014,859 1,883,185 5,542,690 5,063,730 CAPITAL ACCOUNTS Capital paid in 10,408 9,711 32,342 30,375 8,800 8,366 5,719 5,363 9,477 8,886 12,238 10,712 27,485 25,096 Surplus (Sec. 7) 25,803 23,871 84,628 79,601 23,628 21,788 15,131 14,063 21,925 20,367 25,381 18,210 57,325 47,341 Surplus (Sec. 13b) 762 762 1,429 1,429 521 521 1,073 1,073 1,137 1,137 1,307 1,307 2,140 2,140 Other capital accounts. 6,331 6,289 14,159 14,091 6,055 6,029 4,191 4,177 5,594 5,572 5,403 5,377 9,838 9,781 Total liabilities and capital accounts 2,684,065 2,539,9838,806,288 8,620,6232,210,554 2,067,5911,244,300 1,216,459 2,220,2272,126,606 2,059,1881,918,7915,639,4785,148,088 Ratio of gold certificate reserves to deposits and F. R. note liabilities combined 39.0% 41.8% 55.8% 53.6% 34.0% 31.1% 31.2% 31.2% 46.2% 39.7% 40.1% 33.5% 56.7% 50.7% Contingent liability on acceptances purchased for foreign correspondents 851 898 2,751 2,951 752 791 515 535 752 791 752 791 1,841 1,988 Industrial loan commitments 125 2,473 769 835 360 443 FEDERAL RESERVE NOTE STATEMENT Federal Reserve notes: Issued to Federal Reserve Bank by Federal Reserve Agent 1,519,7111,445,6485,122,298 4,887,9381,293,600 1,220,180 665,643 646,8561,060,282 1,010,117 805,579 751,772 2,812,2052,644,379 Held by Federal Reserve Bank and forwarded for redemption. 74,655 63,493 150,883 123,857 62,602 53,020 14,754 14,827 38,083 37,374 46,297 49,610 196,532 156,728 Federal Reserves notes, net l.. 1,445,056 1,382,155 4,971,415 4,764,0811,230,998 1,167,160 650,889 632,029 1,022,199 972,743 759,282 702,1622,615,6732,487,651 Collateral held by Federal Reserve Agent for notes issued to Bank: Gold certificates 510,000 510,0002,800,0002,520,000 280,000 270,000 170,000 150,000 280,000 280,000 269,000 219,0001,900,000 1,500,000 Eligible paper 125 55 500 1,404 7,096 5,000 U. S. Government securities. . . . 1,050,000 950,0002,400,000 2,400,0001,025,000 1,000,000 505,000 505,000 800,000 750,000 560,000 545,000 1,000,0001,200,666 Total collateral. 1,560,000 1,460,000 ,200,000 4,920,0001,305,125 1,270,055 675,500 655,0001,081,404 1,037,096 829,000 764,0002,905,0002,700,000 includes Federal Reserve notes held by the U. S. Treasury and by Federal Reserve Banks other than the issuing Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

56 ANNUAL REPORT OF BOARD OF GOVERNORS NO. 3—HOLDINGS OF UNITED STATES GOVERNMENT SECURITIES BY FEDERAL RESERVE BANKS, END OF DECEMBER 1950, 1951, AND 1952 [In thousands of dollars] December 31 Changeduring Rate of Type of issue interest (Per cent) 1952 1951 1950 1952 1951 Treasury bonds: 1951-53* 2 855,825 755,825 508,825 +100,000 +247,000 1951-55* 2 8,200 8,200 7,200 + 1 000 1952-54*, Mar.. . 47,400 47,400 -47,400 1952-54*. June... 2 461,900 461,900 278,850 +183 050 1952-55*. June... 2H 96,700 96,700 96,700 1952-54*, Dec... 2 297,600 297,600 191,700 +105,900 1953 55 2 1954-56 2H 1955-60 214, 1956-58* 12,493 12,493 1,000 +11 493 1956-59* 2M 21,690 21,690 +21 690 1956-59 2% 1957-59* 339,096 +339,096 1958* 1 19 9 5 5 9 8 - - 6 6 2 3 *1, June.. 12% 319,849 319,849 292,600 +27 249 1959-62*1, Dec.. . 693,765 693,765 688,100 +5,665 1960-65 1962-67*1 2V& 56,610 56,610 51,400 +5 210 1963-68*1 214 122,585 122.585 109,000 + 13 585 1964-69*2, June. . 203,890 201,390 53,500 +2,500 +147,890 1964-69*2, Dec.. . 2>| 266,999 266,999 185,600 +81 399 1965-70*2 2}A 521,490 521,490 341,400 +180 090 1966-71*2 2X4, 132,707 132,707 37,200 +95 507 1967-72*2, June. . 2)/n 49,266 49,266 818,400 — 769 134 1967-72*, Sept.. . 2\fy 2,552 2,552 +2 552 1967-72*2, Dec. . 58,758 61,258 911,200 -2,500 -849,942 1975-80*3 2% 1,213,848 -1,213,848 + 1,213,848 Total Treasury bonds 4,521,975 5,344,127 4,620,075 -822,152 +724,052 Treasury notes:* July 1, 1951-B.. 1M 788,470 -788,470 July 1,1951-C. 82 250 82 250 July 1, 1951-D. 1 \i. 723,075 —723 07S Aug. 1,1951-E.. if 1 665 783 -1,665,783 Oct. 1, 1951-A.. 9,800 —9 800 Oct. 15, 1951-F.. 4,817,370 -4,817,370 Nov. 1, 1951-G.. 3,770,400 —3 770 400 Dec. 1,1953-A.. 2<A 7,491,750 +7,491,750 Mar. 15, 1954-A.. 244,650 244,650 205,750 +38 900 Mar. 15, 1955-A.. 89,800 89,800 44,500 +45,300 Dec 15, 1955-B.. 1% 3,233,623 3,233,623 419,828 +2,813,795 Apr 1 1956-EA 1 000,000 1,000 000 + 1 000 000 Oct. 1, 1956-EO 500,000 500,000 +500,000 Apr. 1, 1957-EA iH 500,000 +500,000 Oct. 1, 1957-EO iH 713,848 +713,848 Total Treasury notes . ... 13,773,671 5,068,073 12,527,226 +8,705,598 -7,459,153 Certificates* 1H 2,334,195 -2,334,195 4,857,816 12,792,798 -7,934,982 + 12,792,798 2 202,800 +202,800 Total certificates S,060,616 12,792,798 2,334,195 -7,732,182 + 10,458,603 Treasury bills* 1,340,750 596,360 1,296,071 + 744,390 -699,711 Total holdings. 24,697,012 23,801,358 20,777,567 +895,654 +3,023,791 * Taxable. 1 Became bank eligible during 1952. 2 Restricted as to commercial bank ownership. 3Nonmarketable issue convertible into 5-year \XA per cent marketable notes. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

57 FEDERAL RESERVE SYSTEM NO. 4—FEDERAL RESERVE BANK HOLDINGS OF SPECIAL SHORT-TERM TREASURY CERTIFICATES PURCHASED DIRECTLY FROM THE UNITED STATES, 1949-52 [In millions of dollars] Date Amount Date Amount Date Amount 1949—June 15 220 1952—Mar 20 338 1952—June 21 170 16 127 21 338 22* 170 1950—M?r 15 108 22 338 23 74 June 15 105 23* 338 24 47 1951—june \ 100 24 189 Sept. 15 103 2 100 25 170 16 257 3* 100 26 14 17 221 Dec 17 320 27 123 18 242 1952—Jan. 22 55 June 16 472 19 134 23 22 17 ... 536 20 134 Mar 17 811 18 413 21* 134 18 442 19 249 22 6 19 311 20 231 * Sunday or holiday. NOTE.—Interest rate % Per cent throughout. Data for prior years are given in the Board's Annual Report for 1951, p. 61. There were no holdings on dates not shown. NO. 5—VOLUME OF OPERATIONS IN PRINCIPAL DEPARTMENTS OF FEDERAL RESERVE BANKS, 1948-52 [Number in thousands; amounts in thousands of dollars] 1948 1949 1950 1951 1952 NUMBER OF PIECES HANDLED 1 Discounts and advances , 10 11 18 Industrial loans: Loans made .3 1.4 1 Commitments to make industrial loans (*) Currency received and counted. 3,754,584 3,809,865 3,846,397 4,066,619 4,183,063 Coin received and counted.. . . 6,531,128 7,294,363 7,190,498 5,889,223 5,716,379 Checks handled: U. S. Govt. checks 331,866 357,044 365,812 412,865 446,084 Postal money orders 371,318 All other 1,780,185 1,847,807 1,955,232 '2,122,147 3 2,293,061 Collection items handled: U. S. Govt. coupons paid. 17,417 16,334 15,323 14,510 13,599 All other 11,373 11,451 12,793 13,428 14,172 Issues, redemptions, and exchanges of U. S. Govt. securities 164,556 151,103 153,886 154,335 163,568 Transfers of funds 1,220 1,232 1,343 1,525 1,595 AMOUNTS HANDLED Discounts and advances 19,138,175 20,216,071 17,050,334 43,422,106 105,549,326 Industrial loans: Loans made 15,994 4,005 6,530 27,656 31,193 Commitments to make industrial loans 2,187 4,130 4,019 9,078 3,468 Currency received and counted 24,307,644 23,841,612 24,039,335 26,175,324 27,001,076 Coin received and counted.... 578,857 623,678 622,620 592,664 558,416 Checks handled: U. S. Govt. checks 69,605,341 64,379,607 64,569,739 89,648,061 119,423,270 Postal money orders 5,996,899 All other 7991771,839 758,342,771 856,952,849 799,891,846 3 840,094,629 Collection items handled: U. S. Govt. coupons paid. 379,155 2,303,038 2,173,589 2,020,560 1,923,079 All other ,965,273 4,175,169 4,758,483 5,121,274 5,103,262 Issues, redemptions, and exchanges of U. S. Govt. securities ,953,221 289,312,802 346,224,112 344,771,945 355,234,532 Transfers of funds ,459,807 415,887,444 509,167,912 656,771,175 767,974,539 1 Two or more checks, coupons, etc., handled as a single item are counted as one "piece." 2 Less than 50. 3 Excludes checks drawn on the Federal Reserve Banks, which were included in prior years. In 1950 there were 1,785,000 of these items amounting to $178,120,377,000. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NO. 6—EARNINGS AND EXPENSES OF FEDERAL RESERVE BANKS DURING 1952 Item Total Boston New York d P e h lp il h a i - a C l l a e n v d e- m Ri o c n h d - Atlanta Chicago St. Louis M ap in o n li e s - K C an it s y as Dallas Fra S n a c n isco CURRENT EARNINGS Discounts and advances $14,083,126 $271,446 $3,295,845 $571,357 $954,724 $705,515 $495,217 $2,855,247 $730,841 $286,795$1,285,700 $387,081$2,243,358 Industrial loans 186,248 153,721 4,255 22,479 5,515 278; Commitments to make industrial loans 30,307 2,488 6,200 596 12,772 6,233 2,018 U. S. Government securities.. 441,629,317 30,744,551100,889,402 27,4544,,770044 43,90088,,33667729,640,76725,599,774 64,661122,,117744 23,942,212 14,003,29519,890,78720,379,969 40,56633,,331155 All other 131,262 9,720 22,095 10,973 14,967 7,057 8,301 1122,,779955 6,808 5,233 17,043 6,769 9,501 Total current earnings... 456,060,260 31,025,717 104,207,34228,193,243 44,884,258 30,358,190 26,125,77167,492,988 24,679,86114,300,83821,199,763 20,774,09742,818,192 CURRENT EXPENSES Salaries: Officers 4,233,713 241,819 829,997 262,287 355,834 289,622 337,678 503,942 267,990 233,707 283,767 269,835 357,235 Employees 63,635,525 4,278,020 14,950,127 3,783,532 5,710,574 3,874,241 3,047,71110,031,871 3,580,645 1,979,754 3,329,161 2,868,790 6,201,099 Directors' and other fees.... 309,952 15,897 36,996 17,761 22,085 25,076 48,562 35,832 22,595 15,208 19,248 16,299 34,393 Retirement contributions. . . 6,059,708 404,953 1,362,356 349,460 547,200 378,049 316,422 953,443 338,040 183,652 332,896 292,464 600,773 Traveling expenses 1,228,468 90,485 154,643 46,295 103,243 112,792 100,050 155,334 90,772 70,803 87,363 87,423 129,265 Postage and expressage 15,176,606 1,208,141 2,389,373 932,852 1,260,212 1,369,681 1,302,166 2,176,510 808,943 463,674 769,193 763,636 1,732,225 Telephone and telegraph.... 796,315 43,309 186,725 43,787 55,228 49,922 75,239 60,502 54,561 33,242 51,457 49,947 92,396 Printing, stationery, and supplies 5,158,905 431,605 995,890 283,992 418,441 327,998 360,583 885,749 355,090 140,595 259,708 233,221 466,033 Insurance 868,781 63,676 195,363 40,750 78,115 76,692 53,693 107,121 47,332 15,438 57,072 38,530 94,999 Taxes on real estate 2,255,142 285,797 542,103 96,536 238,779 99,993 88,692 338,732 89,956 96,824 118,818 52,036 206,876 Depreciation (building) 2,592,706 55,832 706,041 66,352 343,680 190,535 93,535 326,663 249,543 31,406 195,270 60,329 273,520 Light, heat, power, and water 968,707 55,940 183,854 49,875 104,091 71,202 45,229 149,190 76,153 31,938 81,219 44,718 75,298 Repairs and alterations 776,754 30,601 44,589 36,749 139,973 103,957 88,008 64,514 24,183 20,648 46,654 128,716 48,162 Rent 471,225 37,593 3,720 42,284 33,181 7,469 71,794 113,750 23,291 49,561 15,589 19,931 53,062 Furniture and equipment: Purchases 2,293,160 238,142 259,365 125,814 200,864 398,109 394,299 319,772 122,705 48,680 58,494 48,262 78,654 Rentals 3,923,413 362,780 672,978 308,814 320,077 289,442 194,987 608,229 155,897 146,130 210,914 214,988 438,177 Assessment for expenses of Board of Governors 4,121,602 256,900 1,242,800 321,500 381,600 209,100 176,400 572,900 157,302 105,000 156,100 157,400 384,600 Federal Reserve currency. . . 8,521,426 592,808 1,742,928 625,421 758,894 780,662 650,365 1,301,285 457,668 146,547 318,293 294,080 852,475 All other 1,778,922 103,679 197,566 117,136 376,610 96,395 88,087 261,162 109,815 79,979 112,804 77,344 158,345 Total 125,171,030 8,797,977 26,697,414 7,551,19711,448,681 8,750,937 7,533,5001S,966,5O1 7,032,481 3,892,786 6,504,020 5,717,94912,277,587 Less reimbursement for certain fiscal agency and other expenses 20,476,939 1,141,699 4,330,054 1,126,338 1,956,567 1,190,423 1,171,116 3,411,226 1,178,047 601,230 1,367,908 908,237 2,094,094 Net expenses 104,694,091 7,656,278 22,367,360, 6,424,859 9,492.114 7,560,514 6,362,38415,555,275 5,854,434 3,291,556 5,136,112 4,809,71210,183,493 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

PROFIT AND LOSS Current net earnings 351,366,169 23,369,439 81,839,98221,768,38435,392,14422,797,67619,763,38751,937,71318,825,427 11,009,282 16,063,65115,964,385 32,634,699 Additions to current net earnings: Profits on sales of U. S, Government securities (net) 1,991,647 137,396 458,802 132,132 188,345 130,497 107,519 293,142 108,609 62,431 94,386 92,042 186,346 All other 203,225 59,958 882 1,109 27,210 1.693 97,129 6,171 7,490 4 1,191 67 321 Total additions 2,194,872 197,354 459,684 133,241 215,555 132,190 204,648 299,313 116,099 62,435 95,577 92,109 186,667 Deductions from current net earnings: Charge-offs and special depreciation on bank premises 27,586 27,586 w Re c s i e e r s ves for contingen- 493,367 40,516 75,609 28,995 36,768 55,181 42,953 68,387 24,873 14,267 22,223 25,531 58,064 I00 Allother 89,931 12,154 5,087 987 5,553 2,225 537 8,971 2,920 43,835 1,235 4,190 2,237 Total deductions 610,884 80,256 80,696 29,982 42,321 57,406 43,490 77,358 27,793 58,102 23,458 29,721 60,301 Net additions 1,583,988 117,098 378,988 103,259 173,234 74,784 161,158 221,955 88,306 4,333 72,119 62,388 126,366 Net earnings before payments to U. S. Treasury 352,950,157 23,486,537 82,218,970 21,871,643 35,565,378 22,872,46019,924,545 52,159,66818,913,73311,013,615 16,135,770 16,026,773 32,761,065 Paid U. S. Treasury (interest on F. R. notes) 291,934,634 20,426,366 69,832,43418,763,697 30,743,128 20,006,07017,385,550 45,238,68016,560,583 9,617,02114,022,539 8,146,70921,191,857 Dividends 14,681,788 790,381 4,627,264 1,023,039 1,406,069 643,141 607,064 1,894,010 513,060 327,905 555,050 709,449 1,585,356 Transferred to surplus (Sec. 7) 46,333,735 2,269,790 7,759,272 2,084,907 3,416,181 2,223,249 1,931,931 5,026,978 1,840,090 1,068,689 1,550,181 7,170,615 9,983,852 Surplus (Sec. 7), January 1... 538,343,146 34,191,802 159,743,584 492,930 50,648,469 27,024,68723,871,39779,601,20621,788,220 14,062,60820,366,554 18,210,14147,341,548 Surplus (Sec. 7), December 31. 584,676,881 36,461,592 167,502,856 43,577,83754,064,650 29,247,936 25,803,328 84,628,184 23,628,310 15,131,29721,924,73525,380,756 57,325,400 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NO. 7—EARNINGS AND EXPENSES OF FEDERAL RESERVE BANKS, 1914-52 Bank and period e C a u rn rr in en g t s e C x u p r e r n e s n e t s U N . b S e e m . t f o e T e r n e a r t e r s n a p i s t a n o u y g r - y s l Div p i a d i e d nds F p r a T a i r n d e c a t h o s i u s U r e y . t 2 a S x . Pa ( T S id e r e c t . a o s 1 u U 3 rv . b S ) . P F ( a I . T n id R r te e . t r a o e s n s u o U t r t y e . o s S n ) . T t ( r o S a e n c s s . u f r e 1 p r 3 l r u e b s d ) T t r o ( a S n s e s u c f . r e p r 7 l r u ) e s d All Federal Reserve Banks, by years: 1914-15 $ 2,173,252 $ 2,320,586 $ -141,459 $ 217,463 1916 5,217,998 2,273,999 2,750,998 1,742,774 1917 16,128,339 5,159,727 9,582,067 6,804,186 $ 1,134,234 $ 1,134,234 1018 67,584,417 10,959,533 52,716,310 5,540,684 48,334,341 1919 102,380,583 19,339,633 78,367,504 5,011,832 2,703,894 70,651,778 1920 181,296,711 28,258,030 149,294,774 5,654,018 60,724,742 82,916,014 1921 122,865,866 34,463,845 82,087,225 6,119,673 59,974,466 15,993,086 1922 50,498,699 29,559,049 16,497,736 6,307,035 10,850,605 -659,904 1923 . .. 50,708,566 29,764,173 12,711,286 6,552,717 3 613,056 2 545,513 1924 38,340,449 28,431,126 3,718,180 6,682,496 113,646 -3,077,962 1925 41,800,706 27,528,163 9,449,066 6,915,958 59,300 2,473,808 1926 47,599,595 27,350,182 16,611,745 7,329,169 818,150 8,464,426 1927 43,024,484 27,518,443 13,048,249 7,754,539 249,591 5,044,119 1928 64,052,860 26,904,810 32,122,021 8,458,463 2,584,659 21,078 899 1929 70,955,496 29,691,113 36,402,741 9,583,913 4,283,231 22,535,597 1930 36,424,044 28,342,726 7,988,182 10,268,598 17,308 -2,297,724 w 1931 29 701,279 27,040,664 2 972,066 10,029,760 — 7 057 694 o 1932 50,018,817 26,291,381 22,314,244 9,282,244 2,011,418 11,020,582 1933 49 487 318 29 222,837 7 957,407 8 874,262 —916 855 1934 48,902,813 29,241,396 15,231,409 8,781,661 $ —60 323 6,510 071 1935 42,751,959 31,577,443 9,437,758 8,504,974 $ 297 667 27 695 607 422 1936 37 900 639 29 874,023 8 512,433 7 829,581 227 448 102 880 352 524 1937. 41,233,135 28,800,614 10,801,247 7,940,966 176 625 67 304 2 616 352 1 1938 36 261 428 28 911,608 9 581,954 8 019,137 119 524 419 140 1 862 433 1939 38,500,665 28,646,855 12,243,365 8,110,462 24 579 —425 653 4 533 977 1940 43,537,805 29,165,477 25,860,025 8,214,971 82,152 — 54 456 17 617 358 1941 41 380 095 32 963,150 9 137,581 8 429,936 141 465 —4 333 570 513 o 1942 52,662,704 38,624,044 12,470,451 8,669,076 197 672 49 602 3 554 101 1943 69 305 715 43 545,564 49 528,433 8 911 342 244 726 135 003 40 237 362 1944 104,391,829 49,175,921 58,437,788 9,500,126 326 717 201 150 48 409 795 1945 142,209,546 48,717,271 92,662,268 10,182,851 247 659 262 133 81 969 625 1946 150,385,033 57,235,107 92,523,935 10,962,160 67,054 27 708 81 467 013 1947 158,655,566 65,392,975 95,235,592 11,523,047 35,605 $ 75,223,818 86,772 8,366,350 1948 304,160,818 72,710,188 197,132,683 11,919,809 166 690 356 18 522 518 1949 316,536,930 77,477,676 226,936,980 12,329,373 193,145,837 21,461,770 1950 275,838,994 80,571,771 231,561,340 13 082,992 196 628 858 21 849 490 1951 394,656,072 95,469,086 297,059,097 13,864,750 254 873 588 28 320 759 1952 456,060,260 104,694,091 352,950,157 14,681,788 291,934,634 46,333,735 Total—1914-52. .. 3,825,591,485 1,413,214,280 2,363,754,838 320,588,786 149,138,300 2,188,893 1,178,497,091 -3,658 2 713,345,426 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Aggregate for each Federal Reserve Bank, 1914-52: Boston 258,797,569 100,747,267 155,850,624 21,501,179 7,111,395 280,843 80,129,966 +135,412 46,691,829 New York 992,961,505 330,698,827 659,907,669 109,114,437 68,006,262 369,116 278,525,253 -433,413 204,326,014 Philadelphia 273,653,948 101,099,007 172,332,952 27,851,154 5,558,901 722,406 79,711,110 +290,661 58,198,720 Cleveland 355,316,694 130,838,243 218,197,680 31,958,876 4,842,447 82,930 114,034,797 -9,907 67,288,537 Richmond 222,816,895 87,415,436 132,098,034 13,600,611 6,200,189 172,493 77,140,029 -71,516 35,056,228 Atlanta 193,170,875 71,555,729 116,134,179 11,764,540 8,950,561 79,264 64,258,964 +5,491 31,075,359 Chicago 542,934,927 193,376,267 339,409,924 38,031,122 25,313,526 151,045 175,933,929 + 11,681 99,968,621 St. Louis 187,814,862 76,576,989 106,003,724 11,092,191 2,755,629 7,464 63,453,531 -26,514 28,721,423 Minneapolis 118,529,197 47,470,143 69,243,889 7,638,068 5,202,900 55,615 37,209,047 +64,875 19,073,384 Kansas City 182,343,629 79,395,509 99,737,181 10,940,997 6,939,100 64,213 55,745,532 -8,674 26,056,013 Dallas 156,272,584 63,393,675 89,576,005 11,101,957 560,049 102,083 48,043,010 +55,336 29,713,570 San Francisco 340,978,800 130,647,188 205,262,977 25,993,654 7,697,341 101,421 104,311,923 -17,090 67,175,728 Total 3,825,591,485 1,413,214,280 2,363,754,838 320,588,786 149,138,300 2,188,893 1,178,497,091 -3,658 713,345,426 I 1 Current earnings less current expenses, plus other additions and less other deductions. 2 On Dec. 31, 1952, surplus (Sec. 7)—accumulated pursuant to Section 7 of the Federal Reserve Act—amounted to $584,676,881 ($713,345,426 retained net earnings, shown here, minus $139,299,557, charge-off of cost of Federal Deposit Insurance Corporation stock—amount paid to U. S. Treasury by F. D. I. C. upon cancellation of stock—and $500,000, charge-off on bank premises, plus $11,131,012 transferred from reserves for contingencies). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NO. 8—MEMBER BANK RESERVES, RESERVE BANK CREDIT, AND RELATED ITEMS—END OF YEAR 1918-52 AND END OF MONTH 1952 [In millions of dollars] Reserve Bank credit outstanding Member ba U. S. Government T u re r a y s- Treas- u T ry re a d s e - - Other reserve balarices End m of o n y t e h ar or v co a D a a n u n d i c n s d - - e ts s Total se B cu o r n it d i s es c c B e a a r i n t t l e i d l f s s i , , - ot A he ll r l Total st G o o c l k d 2 s r t i c o e a n u n u n g r c t d - - 3 y - c M i u n l o a c n ti i e r o y - n i h c n u o a g r l s y d s h 4 - R F B p e e w o a d s i s n e e t i r h k r t v s a s e l d m e N p e o m o s n b i - t e s r 8 c R F o e e u a d s n c e e - t r r s v a e l 6 Total qu R i e re - d Excess 7 notes 1918 1,766 239 28 211 493 2,498 2 873 1,795 4,951 288 51 121 118 1,636 1,585 51 1919 2,215 300 27 273 777 3,292 2,707 1,707 5,091 385 31 101 208 1,890 1,822 68 1920... 2,687 287 26 261 380 3,355 2,639 1,709 5,325 218 57 23 298 1,781 1921 1,144 234 32 202 185 1,563 3,373 1,842 4,403 214 96 27 285 1,753 1,654 99 1922 618 436 29 407 351 1,405 3,642 1,958 4,530 225 11 29 276 1,934 1923 723 134 30 104 382 1,238 3 957 2,009 4,757 213 38 23 275 1,898 1,884 14 1924 320 540 75 465 441 1,302 4,212 2,025 4,760 211 51 39 258 2,220 2,161 59 1925 643 375 61 314 441 1,459 4,112 1,977 4,817 203 16 29 272 2,212 2,256 -44 8 1926... 637 315 48 267 430 1,381 4,205 1,991 4,808 201 17 65 293 2,194 2,250 -56 1927 582 617 291 326 456 1,655 4,092 2,006 4,716 208 18 26 301 2,487 2,424 63 1928... 1,056 228 54 174 524 1,809 3,854 2,012 4,686 202 23 27 348 2,389 2,430 -41 8 1929 632 511 77 434 440 1,583 3,997 2,022 4,578 216 29 30 393 2,355 2,428 -73 1930 251 729 164 565 393 1,373 4,306 2,027 4,603 211 19 28 375 2,471 2,375 96 I 1931... 638 817 360 457 398 1,853 4,173 2,035 5,360 222 54 110 354 1,961 1,994 -33 1932 235 1,855 422 1,433 55 2,145 4,226 2,204 5,388 272 8 43 355 2,509 1,933 576 1933.. 98 2,437 443 1,994 153 2,688 4,036 2,303 5,519 284 3 132 360 2,729 1,870 859 1934 7 2,430 396 2,034 26 2,463 8,238 2,511 5,536 3,029 121 189 241 4,096 2,282 1,814 1935 5 2,431 216 2,215 50 2,486 10,125 2,476 5,882 2,566 544 255 253 5,587 2,743 2,844 1936 3 2,430 491 1,939 67 2,500 11,258 2,532 6,543 2,376 244 259 261 6,606 4,622 1,984 1937 10 2,564 752 1,812 39 2 612 12 760 2,637 6,550 3,619 142 407 263 7,027 5,815 1,212 1938 4 2,564 841 1,723 33 2,601 14,512 2,798 6,856 2,706 923 441 260 8,724 5,519 3,205 1939 7 2,484 1,351 1,133 102 2,593 17,644 2,963 7,598 2,409 634 653 251 11,653 6,444 5,209 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1940 3 2,184 1,285 899 87 2,274 21,995 3,087 8,732 2,213 368 1,732 284 14,026 7,411 6,615 1941 3 2,254 1,467 787 104 2,361 22,737 3,247 11,160 2,215 867 1,360 291 12,450 9,365 3,085 1942 6 6,189 2,793 3,396 484 6,679 22,726 ,648 15,410 2,193 799 1,278 256 13,117 11,129 1,988 1943 5 11,543 1,630 9,913 691 12,239 21,938 ,094 20,449 2,303 579 1,716 339 12,886 11,650 1,236 1944 80 18,846 1,243 17,603 819 19,745 20,619 4,131 25,307 2,375 440 1,598 402 14,373 12,748 1,625 1945 249 24,262 947 23,315 580 25,091 20,065 4,339 28,515 2,287 977 1,308 495 15,915 14,457 1,458 1946 163 23,350 753 22,597 581 24,093 20,529 4,562 28,952 2,272 393 822 607 16,139 15,577 562 1947 85 22,559 2,853 19,706 536 23,181 22,754 4,562 28,868 ,336 870 961 563 17,899 16,400 1,499 1948 223 23,333 10,977 12,356 542 24,097 24,244 4,589 28,224 ,325 1,123 1,189 590 20,479 19,277 1,202 1949 78 18,885 7,218 11,667 536 19,499 24,427 4,598 27,600 ,312 821 1,517 706 16,56S 15,550 1,018 1950 67 20,778 4,620 16,158 1,371 22,216 22,706 4,636 27,741 ,293 668 1,460 714 17,681 16,509 1,172 1951 19 23,801 5,344 18,457 1,189 25,009 22,695 4,709 29,206 ,270 247 889 746 20,056 19,667 389 1952— January 328 22,729 5,344 17,385 726 23,783 22,951 4,717 28,386 ,319 162 766 741 20,077 19,443 634 February 598 22,528 5,636 16,892 778 23,904 23,191 4,727 28,465 ,287 558 796 733 19,982 19,254 728 March 133 22,514 5,636 16,878 623 23,270 23,291 4,736 28,473 ,277 169 845 801 19,733 19,241 492 April 676 22,363 5,136 17,227 593 23,632 23,298 4,739 28,464 ,281 450 784 749 19,940 19,143 797 May 952 22,273 5,136 17,137 927 24,152 23,296 4,748 28,767 ,274 541 1,094 743 19,778 19,187 591 June 59 22,906 5,136 17,770 586 23,551 23,346 4,754 29,026 ,283 333 846 783 19,381 19,573 -192 July 1,270 22,853 5,136 17,717 699 24,821 23,350 4,762 28,978 ,281 638 991 723 20,323 19,828 495 August 1,318 23,146 5,236 17,910 751 25,216 23,344 4,776 29,293 ,269 488 1,157 718 20,411 19,576 835 September 477 23,694 5,236 18,458 577 24,747 23,342 4,786 29,419 ,278 508 881 723 20,066 19,747 319 October 1,591 23,575 4.522 19,053 689 25,855 23,339 4,795 29,644 ,268 770 887 805 20,616 19,996 620 November 1,895 23,821 4,527 19,294 1,024 26,740 23,338 4,802 30,236 ,261 378 1,056 801 21,149 20,354 795 December 156 24,697 4,522 20,175 971 25,825 23,187 4,812 30,433 ,270 389 1,005 777 19,950 20,520 -570 1 Includes Government overdrafts in 1918, 1919, and 1920. 2 Prior to Jan. 30, 1934, included gold held by Federal Reserve Banks and in circulation. 3 The stock of money, other than gold, for which the Treasury is primarily responsible—silver bullion at monetary value and standard silver dollars, subsidiary silver and minor coin, and United States notes; also, Federal Reserve bank notes and National bank notes for the retirement of which lawful money has been deposited with the Treasurer of the United States. Includes money of these kinds held in the Treasury and the Federal Reserve Banks as well as that in circulation. * Gold other than that held against gold certificates and gold certificate credits and as the reserve against United States notes and Treasury notes of 1890, monetary silver other than that held against silver certificates and Treasury notes of 1890, and the following coin and paper money held in the Treasury: subsidiary silver and minor coin, United States notes, Federal Reserve notes, Federal Reserve bank notes, and National bank notes. 6 Includes all deposits in Federal Reserve Banks except member bank reserve accounts and the U. S. Treasurer's general account. 6 The total of Federal Reserve Bank capital paid in, surplus, other capital accounts, and other liabilities and accrued dividends, less the sum of bank premises and other assets. 7 Figures available only on call dates prior to 1929. NOTE.—For description of figures and discussion of their significance, see Banking and Monetary Statistics, Sec. 10, pp. 360-66. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

64 ANNUAL REPORT OF BOARD OF GOVERNORS NO. 9—BANK PREMISES OF FEDERAL RESERVE BANKS AND BRANCHES DECEMBER 31, 1952 Cost Federal Reserve Bank or Net branch Building Fixed ma- book value Land (Including chinery and Total vaults) equipment Boston $ 1,628,132 $16,531,533 $ 652,666 $ 8,812,331 $ 4,071,254 New York 5,215,656 12,183,528 4,837,234 22,236,418 6,144,445 Annex 592,679 1,451,570 215,418 2,259,667 772,977 Buffalo 255,000 465,707 720,707 374,146 Philadelphia 1,884,357 14,944,814 920,743 7,749,914 3,268,976 Cleveland 1,295,490 6,534,594 ,685,765 9,515,849 2,163,416 Cincinnati 380,744 1,083,985 200,131 1,664,860 1,126,252 Pittsburgh 1,189,941 1,107,918 379,694 2,677,553 1,456,169 Richmond. . 387,411 14,493,309 663,667 5,544,387 3,445,630 Annex. . . 80,333 482,482 109,132 671,947 123,255 Baltimore. . 250,487 1,247,262 480,555 1,978,304 903,052 Charlotte... 105,701 308,749 154,449 568,899 367,169 Atlanta 283,000 1,461,474 308,082 2,052,556 649,551 Birmingham.. 124,137 330,680 70,510 525,327 140,884 Jacksonville. . 159,331 2 2,155,630 2,314,961 2,275,961 Nashville 48,000 211,616 35,091 294,707 87,640 New Orleans.. 277,078 762,456 250,450 1,289,984 512,509 Chicago.. 2,963,548 6,507,641 2,695,679 12,166,868 2,243,921 Detroit... 1,022,064 14,611,769 160,241 5,794,074 4,436,715 St. Louis. . . 1,496,060 2,136,438 1,321,042 4,953,540 1,331,266 Annex. . . 179,720 1,035,281 522,129 1,737,130 1,090,117 Little Rock. 85,007 264,604 158,320 507,931 196,198 Louisville . . 131,177 231,702 72,464 435,343 162,096 Memphis... 128,542 287,468 105,662 521,672 246,196 Minneapolis. 600,521 2,316,746 660,969 3,578,236 965,165 Helena 15,710 126,401 44,142 186,253 86,245 Kansas City 495,300 3,391,101 1,222,530 5,108,931 1,490,562 Denver 101,512 461,823 86,910 650,245 263,947 Oklahoma City 65,021 415,571 95,480 576,072 201,627 Omaha 176,427 406,867 94,549 677,843 332,154 Dallas 189,831 1,362,220 466,692 2,018,743 356,339 El Paso 39,004 119,739 32,134 190,877 48,845 Houston 78,812 317,336 112,111 508,259 133,446 San Antonio. 75,002 163,360 55,859 294,221 90,743 San Francisco.. 412,996 3,704,986 784,102 4,902,084 1,295,418 Los Angeles 443,488 988,109 323,195 1,754,792 407,327 Portland 161,239 1,667,626 630,920 2,459,785 2,299,044 Salt Lake City. 114,075 341,449 84,814 540,338 196,723 Seattle 274,772 1,879,446 642,240 2,796,458 2,592,832 Total 23,407,305 78,494,990 21,335,771 123,238,066 48,350,212 OTHER REAL ESTATE ACQUIRED FOR BANKING HOUSE PURPOSES New York 45,000 125,864 170,864 59,300 Richmond 146,550 146,550 146,550 Charlotte 10,868 10,868 10,868 Atlanta 348,500 348,500 348,500 Birmingham 173,173 173,173 173,173 Nashville 289,636 289,636 289,636 Omaha 258,007 258,007 258,007 San Antonio 402,345 402,345 402,345 San Francisco 63,000 63,000 63,000 Los Angeles 35,000 35,000 35,000 Total 1,772,079 125,864 1,897,943 1,786,379 1 Includes cost of addition or building under construction. 2 Cost of building under construction. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NO. 10—NUMBER AND SALARIES OF OFFICERS AND EMPLOYEES OF FEDERAL RESERVE BANKS [December 31, 1952] President Other officers Employees : Total Federal Reserve Bank (Including branches) Annual salary Number Annual salaries Number Annual salaries Number Annual salaries Boston $25,000 19 $224,900 1,385 $4,063,238 1,405 $4,313,138 New York. . . . . . .. 50 000 56 796,750 3,956 14,757,199 4,013 15,603,949 Philadelphia 25,000 22 245,800 1,206 3,638,845 1,229 3,909,645 Cleveland. . . 25 000 30 337,750 1,762 5,436,829 1,793 5,799,579 Richmond 25,000 26 285,000 1,331 3,714,631 1,358 4,024,631 Atlanta . . 25,000 35 331,950 1,136 3,186,504 1,172 3,543,454 Chicago 35,000 39 496,500 3,048 9,860,514 3,088 10,392,014 St. Louis 25,000 28 259,000 1,227 3,525,998 1,256 3,809,998 ^Minneapolis 25,000 20 213,000 679 1,931,256 700 2,169,256 Kansas City 25,000 26 253,600 1,079 3,181,672 1,106 3,460,272 Dallas 25,000 26 263,300 906 2,810,795 933 3,099,095 San Francisco 25,000 33 343,000 1,924 6,213,463 1,958 6,581,463 Total $335,000 360 $4,050,550 19,639 $62,320,944 20,011 $66,706,494 1 Includes 813 part-time employees. NOTE.—During the year 1952, the Banks were reimbursed $10,711,518 on account of salaries of officers and employees. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NO. 11—FEDERAL RESERVE BANK DISCOUNT, INTEREST, AND COMMITMENT RATES, AND BUYING RATES ON ACCEPTANCES [Per cent per annum] In effect December 31, 1952 Type of transaction Boston Y N o e r w k d P e h lp il h a i - a C la le n v d e- m Ri o c n h d - Atlanta Chicago L S ou t. is M ap in o n li e s - K C an it s y as Dallas F c S r is a a c n n o - Discounts for and advances to member banks under Sees. 13 and 13a of the Federal Reserve Act 1H IX IX IX IX IX IX IX Advances to member banks under Sec. 10(b) of the Federal Reserve Act 2X 2H 2X 2X 2X 2X 2X 2H 2H Advances to individuals, partnerships, or corporations other than member banks secured by direct obligations of the United States (last paragraph of Sec. 13 of the Federal Reserve Act) 2H 2% 2H 2% 2Y2 2Y2 Loans to industrial or commercial businesses under Sec. 13b of the Federal Reserve Act, direct or in participation with financing institutions 2Y2-S 2^-5 3-5 2H-5 Discounts for and purchases from financing institutions under Sec. 13b of the Federal Reserve Act: o On portion for which institution is obligated 0) 0) 0) C1) 23^-5 \-X-tX (? C1) C1) 0) On remaining portion (3) (3) (3) () (3) (8) (3) (3) > Commitments to make loans under Sec. 13b of the Federal Reserve Act: To industrial or commercial businesses X-1X 4-iX £H x-n 4-iX -iX To financing institutions XiX iiX 4-iX 2-IH Effeecctti ve minimum buyinygg rates on prime bankers' acceptances payabblle iin ddoollllaars (*) 1-90 days 1 91-120 days 2 121-180 days 2H 1 Rate charged borrower by financing institution less commitment rate. 2 Rate charged borrower but not to exceed 1 per cent above the discount rate. 3 Rate charged borrower. * Financing institution is charged X Per cent per annum on undisbursed portion of loan. 5 The rates shown for the Federal Reserve Bank of New York also apply to any purchases made by the other Federal Reserve Banks. NOTE.—Maximum maturities. Discounts for and advances to member banks: 90 days for discounts and advances under Sections 13 and 13a of the Federal Reserve Act except that discounts of certain bankers' acceptances and of agricultural paper may have maturities not exceeding 6 months and 9 months, respectively, and advances secured by obligations of Federal intermediate credit banks maturing within 6 months are limited to maximum maturities of 15 days; 4 months for advances under Section 10(b). Advances to individuals, partnerships, or corporations under the last paragraph of Section 13: 90 days. Industrial loans and commitments under Section 13b: 5 years. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

67 FEDERAL RESERVE SYSTEM NO. 12—MEMBER BANK RESERVE REQUIREMENTS IPer cent of deposits] Net demand deposits l Time deposits Effective date of change ci C r ty e e s n e b t r a r v n a e l ks ci R ty e s b e a rv n e ks C b o a u n n k t s ry r r e e s s C e e e r r v v n e e tr a c a l i n ty d C b o a u n n k t s ry banks 1917—June 21. . 13 10 1936—Aug. 16. . 15 1937—Mar. 1. . 22M 17 12M May 1. 26 20 14 1938—Apr. 16. . 22?* 17 12 1 19 9 4 4 2 1 — — A N u o g v . . 2 1 0 2 2 6 4 20 14 Sept. 14 22 Oct. 3 20 1948—Feb. 27. 22 June 11. 24 Sept. 16. 16 Sept. 24. 26 1949—May 1. . . 15 May 5 . . . 24 21 June 30. . . 20 July 1. . . 14 Aug. 1. . . 13 Aug. 11. .. 23 H Aug. 16. .. 12 Aug. 18. .. 23 19 Aug. 25 . . . 2234 18 Sept. 1. . . 22 18 1951—Jan. 11 23 19 Jan. 16 13 Jan. 25 24 20 Feb. 1 ii In effect Jan. 1, 1953 2. 24 20 14 1 Demand deposits subject to reserve requirements, which beginning Aug. 23, 1935, have been total demand deposits minus cash items in process of collection and demand balances due from domestic banks (also minus war loan and Series E bond accounts during the period Apr. 13, 1943-June 30, 1947). 3 Present legal minimum and maximum requirements on net demand deposits—central reserve cities, 13 and 26 per cent; reserve cities, 10 and 20 per cent; country, 7 and 14 per cent, respectively; on time deposits at all member banks, 3 and 6 per cent, respectively. NO. 13—MAXIMUM INTEREST RATES PAYABLE ON TIME DEPOSITS1 [Per cent per annum] Nov. 1, 1933 Feb. 1, 1935 In effect Type of deposit to to beginning Jan. 31, 1935 Dec. 31, 1935 Jan. 1, 1936 Savings deposits 3 2H 2% Postal Savings deposits 3 2}4 2H Other time deposits payable: I I n n 6 9 0 m d o a n y t s h s t o o r 6 m m o o r n e ths 3 3 2 2 l H A 2V2 In less than 90 days 3 2Y2 1 1 Maximum rates that may be paid by member banks as established by the Board of Governors under provisions of Regulation Q. Under this regulation the rate payable by a member bank may not in any event exceed the maximum rate payable by State banks or trust companies on like deposits under the laws of the State in which the member bank is located. Maximum rates that may be paid by insured nonmember banks as established by the Federal Deposit Insurance Corporation, effective Feb. 1, 1936, are the same as those in effect for member banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

68 ANNUAL REPORT OF BOARD OF GOVERNORS NO. 14—MARGIN REQUIREMENTS 1 Prescribed by Board of Governors of the Federal Reserve System in accordance with Securities Exchange Act of 1934 [Per cent of market value] Feb. 5, July 5, Jan. 21, Feb. 1, Mar. 30, Jan. 17, Effec- 1945- 1945- 1946- 1947- 1949- 1951- tive July 4, Jan. 20, Jan. 31, Mar. 29, Jan. 16, Feb. 19, Feb. 20, 1945 1946 1947 1949 1951 1953 1953 Regulation T: For extensions of credit by brokers and dealers on listed securities 50 75 100 75 50 75 50 For short sales 50 75 100 75 50 75 50 Regulation U: For loans by banks on stocks 50 75 100 75 50 75 50 1 Regulations T and U limit the amount of credit that may be extended on a security by prescribing a maximum loan value, which is a specified percentage of its market value at the time of the extension; the "margin requirements" shown in this table are the difference between the market value (100 per cent) and the maximum loan value. NO. 15—FEES AND RATES ESTABLISHED UNDER REGULATION V ON LOANS GUARANTEED PURSUANT TO DEFENSE PRODUCTION ACT OF 1950 AND EXECUTIVE ORDER NO. 10161 [In effect December 31, 1952] Fees Payable to Guaranteeing Agency by Financing Institution on Guaranteed Portion of Loan Guarantee fee Percentage of Percentage of loan guaranteed in (P te e r r e c s e t n t p a a g y e a b o l f e any f e c e o c m h m ar i g t e m d ent by borrower) borrower 70 or less . . . . .. 10 10 75 15 15 80 20 20 85 25 25 90 30 30 95 35 35 Over 95 40-50 40-50 Maximum Rates Financing Institutions May Charge Borrowers [Per cent per annum] Interest rate Commitment rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 69 NO. 16—MINIMUM DOWN PAYMENTS AND MAXIMUM MATURITIES ON CONSUMER INSTALMENT CREDIT SUBJECT TO REGULATION W Prescribed by Board of Governors of the Federal Reserve System under authority of the Defense Production Act as amended. Effective beginning September 18, 1950; amended October 16, 1950, and July 31, 1951; and suspended May 7, 1952. September 18, 1950 to October 16, 1950 to July 31, 1951 to October 16, 1950 July 31, 1951 May 7, 1952 Type of credit p ( M P a e i d y n r o m i w m c e e n u n n m t t * ) M ( m M a a x o t i u n m r th i u t s y m ) p ( M P a e i d y n r o m i w m c e e n u n n m t t * ) M ( m M a a x o t i u n m r th i u t s y m ) p ( M P a e i d y n r o m i w m c e e n u n n m t t * ) M ( m M a a x o t i u n m r th i u t s y m ) Instalment sales: Group A 33 H 21 15 33 X 18 Automobiles 2 Group B , 15 18 25 15 15 18 Major appliances 3 Group C 10 18 15 15 15 18 Furniture and floor coverings (soft-surface) Group D 10 30 10 30 36 Home improvement materials, articles, and services * Instalment loans: To purchase listed articles () () () Other (unclassified) , 18 15 18 1 For automobiles, payable in cash, trade-in, or both; for other listed articles, payable in cash from Sept. 18, 1950, to July 31, 1951, and in cash, trade-in, or both beginning July 31, 1951. Exempted from down payment requirements: Sept. 18 to Oct. 16, 1950, listed articles costing less than $100; Oct. 16, 1950 to Apr. 8, 1952, those costing less than $50; beginning Apr. 8, 1952, those costing less than $100. 2 Effective Jan. 2, 1952, only automobiles of model years later than 1942. 3 Major appliances consisted of cooking stoves and ranges, dishwashers, ironers, mechanical refrigerators and food freezers, washing machines, or clothes drying machines, combination units incorporating any of the foregoing, room-unit air conditioners, dehumidifiers, radio or television sets and phonographs, sewing machines, and vacuum cleaners. 4 Effective Mar. 24, 1952, no down payment required. • Included heating, plumbing, and other household fixtures. 6 Where credit was to purchase listed articles, requirements were same as on instalment sales of the respective articles. NOTE.—The regulation, amendments, and supplements thereto contained additional provisions and various exceptions to limitations not shown in this table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

70 ANNUAL REPORT OF BOARD OF GOVERNORS NO. 17—MAXIMUM LOAN VALUES AND MAXIMUM MATURITIES ON REAL ESTATE CONSTRUCTION CREDIT SUBJECT TO REGULATION X Prescribed by Board of Governors of the Federal Reserve System under authority of the Defense Production Act of 1950 as enacted September 8, 1950, and as amended. Effective beginning October 12, 1950 for one- to two-family residences, January 12, 1951 for three- to four-family and multi-unit residences, and February 15, 1951 for nonresidential properties; suspended September 16, 1952. Value per family unit Maximum loan value * Maximum maturity One- to four-family unit residential properties and farm residences October 12, 1950 to September 1, 1951 [3- to 4-family units not included until January 12, 1951] Not more than $5,000 90 per cent of value per family 25 years for properties valued unit at $7,000 or less 2 More than $5,000 but not more $4,500 plus 65 per cent of exthan $9,000 cess of value per family unit over $5,000 More than $9,000 but not more $7,100 plus 60 per cent of ex- 20 years for properties valued than $15,000 cess of value per family unit at more than $7,000 3 over $9,000 More than $15,000 but not $10,700 plus 20 per cent of exmore than $20,000 cess of value per family unit over $15,000 More than $20,000 but not $11,700 plus 10 per cent of exmore than $24,250 cess of value per family unit over $20,000 Over $24,250 50 per cent of value per family unit September 1, 1951 to June 11, 1952 Not more than $7,000 90 per cent of value per family unit More than $7,000 but not more 85 per cent of value per family than $10,000 unit More than $10,000 but not 80 per cent of value per family 25 vears for properties valued more than $12,000 unit at $12,000 or less 2 More than $12,000 but not $9,600 plus 40 per cent of ex- 20 years for properties valued more than $15,000 cess of value per family unit at more than $12,000 * over $12,000 More than $15,000 but not $10,800 plus 20 per cent of exmore than $20,000 cess of value per family unit over $15,000 More than $20,000 but not $11,800 plus 10 per cent of exmore than $24,500 cess of value per family unit over $20,000 Over $24,500 50 per cent of value per family unit June 11, 1952 to September 16, 1952 Not more than $7,000 95 per cent of value per family unit More than $7,000 but not more $6,300 plus 75 per cent of exthan $10,000 cess of value per family unit over $7,000 More than $10,000 but not $8,550 plus 55 per cent of ex- 25 years for properties valued at more than $15,000 cess of value per family unit $12,000 or less 2 over $10,000 More than $15,000 but not $11,300 plus 45 per cent of ex- 20 years for properties valued at more than $21,000 cess of value per family unit more than $12,000 3 over $15,000 More than $21,000 but not $14,000 plus 25 per cent of exmore than $25,000 cess of value per family unit over $21,000 Digitized for OFvRerA $S2E5,R00 0 60 per cent of value per family unit http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 71 NO. 17—MAXIMUM LOAN VALUES AND MAXIMUM MATURITIES ON REAL ESTATE CONSTRUCTION CREDIT SUBJECT TO REGULATION X—Continued Value per family unit Maximum loan value l Maximum maturity Multi-unit residential properties January 12, 1951 to June 11, 1952 Not more than $7,000 83 per cent of value per family None unit More than $7,000 but not more $5,810 plus 53 per cent of ex- None than $15,000 cess of value per family unit over $7,000 More than $15,000 but not $10,050 plus 20 per cent of ex- None more than $23,500 cess of value per family unit over $15,000 Over $23,500 50 per cent of value per family None unit June 11, 1952 to September 16, 1952 Not more than $7,000 90 per cent of value per family None unit More than $7,000 but not more $6,300 plus 55 per cent of ex- None than $10,000 cess of value per family unit over $7,000 More than $10,000 but not $7,950 plus 54 per cent of ex- None more than $15,000 cess of value per family unit over $10,000 More than $15,000 but not $10,650 plus 50 per cent of ex- None more than $20,000 cess of value per family unit over $15,000 More than $20,000 but not $13,150 plus 37 per cent of ex- None more than $25,000 cess of value per family unit over $20,000 Over $25,000 60 per cent of value per family None unit Value of property 4 Nonresidential properties February 15, 1951 to September 16, 1952 All values 50 per cent of value of prop- 25 years 2 erty 1 If the total amount of credit extended does not exceed $2,500, the loan is not subject to Regulation X. 8 If amortized through substantially equal monthly, quarterly, semiannual, or annual payments which fully liquidate the original principal amount in the prescribed period. 3 An alternative to the method of amortization described in footnote 2 is allowed which annually reduces the original principal amount by not less than 5 per cent until the outstanding balance has been reduced to 50 per cent or less of the value of the property. Not applicable to nonresidential properties. * In the case of credit extended with respect to nonresidential property involving more than one nonresidential structure, the maximum loan value may be applied separately with respect to each such structure, or with respect to the entire property, at the election of the registrant Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NO. 18—ALL BANKS IN THE UNITED STATES, BY CLASSES, DECEMBER 31, 1952 AND 1951 PRINCIPAL ASSETS AND LIABILITIES, AND NUMBER OF BANKS [In millions of dollars] Commercial banks Mutual savings banks All Member banks Item banks Total no I n n m su e r m ed ber in N su o r n e - d Total i Insured x in N su o r n e - d Total i National State * December 31, 1952 Loans and investments, total 165,626 141,624 119,547 80,180 39,367 20,242 1,854 24,003 17,621 6,382 8 Loans 75,512 64,163 55,034 36,004 19,030 8,605 531 11,349 8 691 2 6S8 Investments 90,114 77,461 64,514 44,176 20,337 11,638 1,322 12,654 8,930 3,724 U S Govt obligations 72,740 63,318 52,763 35,835 16,928 9,556 1,010 9 422 6 593 2 829 Other securities 17,374 14,143 11,751 8,341 3,409 2,081 312 3,231 2,337 895 Cash assets 45,584 44,666 39,255 26,333 12,922 4,970 444 918 732 187 DeDosits total 195,552 172,931 147,527 98,974 48,553 23,464 1,960 22,621 16,785 5,836 O O In t t t h h e e e r r r b a d ti n e m k m e an . d . ... 1 6 1 1 3 5 6 , , , 5 3 6 9 2 3 8 1 3 1 4 1 1 1 5 6 , , , 0 3 6 1 1 0 2 9 0 1 3 1 0 2 4 0 , , , 8 6 0 1 9 2 7 0 0 6 2 9 6 2 , , , 9 3 6 6 1 9 2 8 4 3 1 4 3 0 , , , 6 6 1 9 5 9 9 8 6 1 7 5 , , 7 3 3 4 5 7 1 0 3 1,2 4 3 2 0 2 9 2 9 22,58 3 6 2 3 16 7 3 5 2 0 3 5,833 3 o w Total capital accounts 15,367 12,888 10,761 7,042 3,719 1,804 326 2,479 1,730 749 Number of banks 14,575 14,046 6,798 4,909 1,889 6,627 624 529 206 323 o December 31, 1951 Loans and investments, total 154,869 132,610 112,247 75,255 36,992 18,591 1,789 22,259 16,190 6,069 67,608 57,746 49,561 32,317 17,243 7,701 490 9,862 7 523 2 339 1 Investments 87,261 74,863 62,687 42,938 19,748 10,890 1,299 12,398 8,668 3,730 U S Govt obligations 71,343 61,524 51,621 35,063 16,558 8,923 991 9,819 6 921 2 897 Other securities 15,918 13,339 11,065 7,875 3,191 1,967 308 2,579 1,746 833 45,531 44,645 39,252 25,951 13,301 4,926 469 886 695 191 Deposits total 185,756 164,840 141,015 94,173 46,843 21,912 1,932 20,915 15 368 5 547 Interbank 15,087 15,086 14,425 9,788 4,637 353 308 2 2 Other demand 111,644 111,618 95,968 63,477 32,491 14,415 1,235 26 23 3 Other time 59,025 38,137 30,623 20,908 9,715 7,144 388 20,888 15,343 5,544 Total capital accounts 14,623 12,216 10,218 6,653 3,565 1,686 314 2,407 1,678 729 Number of banks 14,618 14,089 6,840 4,939 1,901 6,602 650 529 202 327 * Member bank figures and insured mutual savings bank figures both include three member mutual savings banks. These banks are not included in the total for "commercial banks;" and are included only once in the total for "all banks." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

73 FEDERAL RESERVE SYSTEM NO. 19—MEMBER BANK EARNINGS, BY CLASS OF BANK, 1952 AND 1951 [Dollar amounts in millions] Central reserve city Danks Reserve Country city banks banks Item New York Chicago 1952 1951 1952 1951 1952 1951 1952 1951 1952 1951 Earnings $4,120$3,669 $691 $608 $169 $151$1,594$1,413$1,665$1,497 On U. S. Government securities 929 832 134 127 49 45 344 298 403 362 On other securities 235 211 43 37 12 12 87 77 93 84 On loans 2,306 2,003 378 308 83 69 915 804 930 822 All other 650 623 137 136 26 25 248 235 240 228 Expenses 2,501 2,232 371 334 93 83 974 861 1,063 954 Salaries and wages 1,244 1,125 213 196 44 41 478 429 509 460 Interest on deposits.... 365 306 18 12 14 12 160 134 173 147 All other 893 801 140 126 34 30 337 298 381 347 Net current earnings before income taxes. 1,619 1,437 321 274 76 68 620 552 602 543 Recoveries and profits l... 111 139 24 33 11 7 38 59 38 40 Losses and charge-offs 2... 224 202 23 17 9 11 92 92 101 81 Net addition to valuation reserves 68 128 8 33 4 10 29 48 27 37 Profits before income taxes 1,437 1,247 313 256 74 55 537 471 513 464 Taxes on net income. .. 608 491 139 114 29 17 241 196 199 163 Net profits 829 756 175 142 45 38 295 275 314 301 Cash dividends declared 3 390 371 95 93 18 16 156 147 122 115 Ratios (per cent): Net current earnings before income taxes Average total capital accounts 15.4 14.4 13.1 11.5 14.5 13.7 17.1 16.2 15.6 14.9 Average total assets.... 1.06 1.00 1.08 0.97 0.97 0.91 1.06 1.01 1.07 1.03 Net profits to— Average total capital accounts 7 9 7 6 7.1 5.9 8 6 7.7 8 1 8 1 8.1 8.2 ' Average total assets.... 0.55 0.53 0.59 0.50 0.58 0.51 0.51 0.50 0.56 0.57 1 Includes recoveries credited to valuation reserves. 2 Includes losses charged to valuation reserves. 3 Includes interest on capital notes and debentures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

74 ANNUAL REPORT OF BOARD OF GOVERNORS NO. 20—ANALYSIS OF CHANGES IN NUMBER OF BANKING OFFICES DURING 1952 Commercial and stock savings banks and nondeposit trust companies Mutual savings All Member Nonmember banks banks banks banks Total ti N on a- al m S b t e e a r m t e i - su In re - d s N u i o n re n - d - su I r n e - d l s N u i o n re n - d - Number of banks, Dec. 31,1951 14,618 14,089 4,939 1,901 6,602 650 202 327 Changes during 1952 New banks * .... +73 +73 + 15 +4 +45 +9 Suspensions -3 -3 -2 Consolidations and absorptions: Banks converted into branches -82 -82 -32 -17 -31 -2 Other -18 -18 -6 -3 -6 -3 Voluntary liquidations * -13 -1 -6 -6 Interclass bank changes: Conversions— National into State -6 + 1 +5 Federal Reserve membership:4 Admissions of State banks + 12 -12 Withdrawals of State banks -9 +9 Federal deposit insurance: * Admissions of State banks... +24 -24 +4 -4 ^Vithdrawals of State banks +1 Net increase or decrease -43 -43 -30 -12 +25 +4 -4 -26 Number of banks, Dec. 31,1952 14,575 14,046 4,909 1,889 6,627 206 323 624 Number of branches and additional offices, Dec. 31, 19516. 5,224 4,994 2,244 1,449 1,260 41 165 65 Changes during 1952 De novo branches +237 +217 +101 +59 +56 + 1 +14 +6 Banks converted into branches... +81 +81 +48 +23 +9 +1 Discontinued —22 — 18 —6 -2 -2 Interclass branch changes: National to State member... -1 + 1 State member to national +6 -6 State member to nonmember. -3 +3 Nonmember to national + 10 — 10 Nonmember to State member + 13 -13 Noninsured to insured +2 -2 Net increase or decrease +296 +280 +159 +81 + 12 +4 +40 Number of branches and additional offices, Dec. 31, 1952«. 5,520 5,274 2,403 1,530 41 177 69 1,300 Number of banking facilities, Dec. 31, 19517 159 159 126 18 15 Changes during 1952 Established +32 +32 +27 +2 +3 Number of banking facilities, Dec. 31, 19527 191 191 153 20 18 1 The State member bank figures and the insured mutual savings bank figures both include three member mutual savings banks. These banks are not included in the total for "commercial banks" and are included only once in "all banks." 2 Exclusive of new banks organized to succeed operating banks. 8 Exclusive of liquidations incident to the succession, conversion, and absorption of banks. * Exclusive of conversions, if any, of national banks into State member banks, or vice versa. Such changes do not affect Federal Reserve membership; they are included under "conversions." 6 Exclusive of insured nonmember banks converted into national banks or admitted to Federal Reserve membership, or vice versa. Such changes do not affect Federal Deposit Insurance Corporation membership; they are included in the appropriate other groups under "interclass bank changes." 8 Covers all branches and other additional offices at which deposits are received, checks paid, or money lent, except banking facilities which are shown separately. 7 Banking facilities are provided at military and other Government establishments through arrangements made by the Treasury Department with banks designated as depositaries and financial agents of the Government. These figures do not include branches that have also been designated by the Treasury Department as banking facilities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 75 NO. 21—NUMBER OF BANKING OFFICES ON FEDERAL RESERVE PAR LIST AND NOT ON PAR LIST/BY FEDERAL RESERVE DISTRICTS AND STATES, DECEMBER 31, 1952 i Total banks on which checks are On par list Not on par list drawn, and their (Nonmember) Federal branches and Reserve dis- offices Total Member Nonmember trict or State Branches Branches Branches Branches Branches Banks and Banks and Banks and Banks and Banks and offices offices offices offices offices DISTRICT Boston 469 390 469 390 321 310 148 80 New York... . 837 1,043 837 1,043 720 958 117 85 Philadelphia. . 215 820 215 621 166 199 49 Cleveland.... 1,090 380 1,090 380 673 330 417 50 Richmond.... 1,005 639 812 490 477 303 335 187 193 149 Atlanta :1,224 256 630 216 360 187 270 29 594 40 Chicago 1,476 672 2,476 672 1,005 316 1,471 356 St. Louis 1,463 176 1 140 112 493 69 647 43 323 64 Minneapolis. . 1,276 115 676 74 476 29 200 45 600 41 Kansas City.. 1,754 26 1,745 26 752 15 993 11 9 Dallas 040 73 939 63 634 44 305 19 101 10 Sari^Francisco. 488 1,471 488 1,471 260 1,379 228 92 Total 13,942 5,456 12,122 5,152 6,792 4,106 5,330 1,046 1,829 304 STATE Alabama .... 229 30 133 30 95 30 38 96 Arizona 13 70 13 70 5 53 8 17 Arkansas 230 22 112 5 69 2 43 3 118 17 California.... 190 1,035 190 1,035 118 982 72 53 Colorado 150 5 150 5 94 4 56 1 Connecticut. . 104 68 104 68 63 57 41 11 Delaware 35 31 35 31 14 14 21 17 Dist. of Col... 19 48 19 48 15 38 4 10 Florida 205 9 151 9 75 8 76 1 54 Georgia 403 52 119 49 66 45 53 4 284 3 Idaho . . 40 62 40 62 21 57 19 5 Illinois 891 3 889 3 511 3 378 2 Indiana . . 480 126 480 126 236 69 244 57 Iowa 664 163 664 163 161 503 163 Kansas 609 2 607 2 215 2 392 2 Kentucky.... 378 57 378 57 111 37 267 20 Louisiana 167 89 63 65 49 57 14 8 104 24 Maine . . 63 79 63 79 38 42 25 37 Maryland.... 156 142 156 142 73 81 83 61 Massachusetts 175 200 175 200 138 179 37 21 Michigan 425 285 425 285 227 229 198 56 Minnesota.... 677 6 267 6 206 6 61 410 Mississippi. . . 202 73 42 16 31 8 11 8 160 57 IMissouri 593 1 528 1 176 1 352 65 IVIontana . 109 109 83 26 Nebraska 411 2 411 2 140 2 271 Nevada 8 22 8 22 6 20 2 2 New Hamp... 74 2 74 2 52 1 22 1 New Jersey... 309 189 309 189 267 166 42 23 New Mexico.. 51 23 51 23 34 6 17 17 New York.... 603 858 603 858 525 797 78 61 North Carolina 209 257 102 113 55 64 47 49 io7 144 O N h o i r o th Dakota. 6 1 5 5 1 3 27 2 1 2 65 6 1 1 271 6 41 4 7 2 237 23 1 4 9 34 6 92 16 Oklahoma... . 383 2 375 2 223 2 152 8 Oregon 67 111 67 111 29 101 38 10 Pennsylvania. 934 256 934 256 706 222 228 34 Rhode Island. 13 54 13 54 8 43 5 11 South Carolina 149 64 68 59 33 48 35 11 81 5 South Dakota. 170 52 72 27 63 23 9 4 98 25 Tennessee.... 295 113 211 100 84 77 127 23 84 13 Texas 916 14 866 14 581 14 285 50 Utah 55 34 55 34 31 31 24 3 Vermont 66 11 66 11 38 4 28 7 Virginia .... 315 128 311 128 204 72 107 56 4 Washington... 117 162 117 162 51 151 66 11 West Virginia. 182 181 109 72 1 Wisconsin.... 552 151 552 151 165 21 387 130 Wyoming. . . . 52 52 39 13 1 Does not include mutual savings banks, on a few of which some checks are drawn, but does in- Digitized for cFluRdeA S19E1 Rba nking facilities (see footnote 7, Table 20). The difference between the number of member banks on Dec. 31, 1952 shown in this table and in Table 20 is due to the fact that this table excludes http://fraser.3s tmloeumisbfeerd n.oonrgd/e posit trust companies and 3 member mutual savings banks on which no checks are drawn. The corresponding difference for the number of nonmember commercial banks is due to Federal Reserve Bank of St. Louis

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RECORD OF POLICY ACTIONS BOARD OF GOVERNORS JANUARY 8, 1952 Amendment to Regulation X, Real Estate Credit. Regulation X was amended, effective January 9, 1952, with the concurrence of the Housing and Home Finance Administrator, by adding to section 5 a new subsection (p) which provided that the prohibitions of subsections (a) and (b) of section 4 of the regulation would not apply to a secondary loan to a borrower when the primary loan was made, insured, or guaranteed, in whole or in part, by any department or agency of the United States, if (1) the total amount of the primary and secondary loans did not exceed the maximum loan which legally could have been made, insured, or guaranteed by the department or agency for the borrower, and (2) the department or agency approved the making of the secondary loan. Votes for this action: Messrs. Martin, Szymczak, Evans, Vardaman, Norton, and Powell. Votes against this action: none. This amendment was adopted by the Board in order to clarify the position of veterans and other persons financing the purchase of a home in cases where secondary loans were combined with loans made, insured, or guaranteed by a department or agency of the United States Government. In some cases the amount which a first mortgagee would lend was less than the full amount of the commitment of the Veterans Administration, and extensions of secondary financing in most such cases were prohibited by Regulation X because they were not guaranteed by the Veterans Administration and exceeded the applicable maximum loan value permissible under the regulation. The Board therefore adopted the above amendment, following discussions with representatives of the Housing and Home Finance Agency and the Veterans Administration, in order to make it possible for veterans or others to take full advantage of applicable commitments where the total of primary and secondary financing did not exceed the maximum loan which legally could have been made, insured, or guaranteed by any department or agency of the Federal Government and the department or agency approved the making of the secondary loan. Digitized for FRASER 78 http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 79 MARCH 21, 1952 Amendment to Regulation W, Consumer Credit. Regulation W was amended, effective March 24, 1952, by eliminating the down payment requirement in connection with credit extensions for residential repairs, alterations, and improvements. Votes for this action: Messrs. Martin, Szymczak, Evans, Vardaman, Powell, Mills, and Robertson. Votes against this action: none. When the provision requiring a down payment in connection with credit extensions for residential repairs, alterations, or improvements was included in Regulation W in September 1950, the Board recognized that there would be difficulty in obtaining general compliance with such a requirement when applied to all home improvement credits, as distinguished from Federal Housing Administration requirements that there be a down payment if the credit grantor wished to have a home improvement loan insured under Title I of the Federal Housing Act. In adopting this provision, therefore, the Board was aware that it might not prove to be either sufficiendy equitable or effective as a credit restraint measure to warrant its indefinite retention in Regulation W. In an effort to make the requirement administratively feasible, the Board provided that the down payment must be obtained before beginning work. However, the 1951 Amendments to the Defense Production Act forbade, for an important segment of such credits, the requirement of a down payment before completion of the work, and amendment of Regulation W to conform to that provision further increased the difficulty of enforcing the requirement. Because of this administrative difficulty and because available evidence indicated that elimination of the down payment requirement probably would have no significant effect upon the outstanding amount of home repair and modernization credit, the Board adopted the above amendment. In view of the activity of the Federal Housing Administration in insuring home improvement loans, the Board consulted with that agency before taking this action and was assured that there would be no objection to the amendment. The maximum permissible maturity for this type of instalment credit remained unchanged at 36 months. APRIL 7, 1952 Amendment to Regulation W, Consumer Credit. Regulation W was amended, effective April 8, 1952, to exempt from the prescribed minimum down payment and maximum loan value requirements of the regulation listed articles having a cash price of less than $100, exclusive of any applicable sales tax, this exemption having previously been applicable to listed articles having a cash price of less than $50. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

80 ANNUAL REPORT OF BOARD OF GOVERNORS Votes for this action: Messrs. Martin, Szymczak, Evans, Vardaman, Mills, and Robertson. Votes against this action: none. This amendment was adopted by the Board in the interest of simplifying the administration of Regulation W. It was not expected that the action would have any substantial effect on the volume of consumer instalment credit outstanding. APRIL 17, 1952 Amendment to Program for Voluntary Credit Restraint. The Program for Voluntary Credit Restraint was amended, effective April 17, 1952, to provide that it would not seek to restrict, and would not apply to, the financing of or loans to States or local governments, including counties, municipalities, districts, or other political subdivisions. Votes for this action: Messrs. Martin, Szymczak, Evans, Vardaman, Powell, Mills, and Robertson. Votes against this action: none. This action resulted from a request from the President of the United States to the Director of Defense Mobilization that the necessary steps be taken to remove from the restrictions of the Program for Voluntary Credit Restraint the financial actions of State and local governments. The Voluntary Credit Restraint Committee having recommended to the Board that the Program be amended in compliance with the President's request, the Board consulted with the Attorney General and with the Chairman of the Federal Trade Commission, as provided by the Defense Production Act of 1950, and upon receipt of advice from the Acting Attorney General that he approved a Request to financing institutions to act and to refrain from acting pursuant to the amended Program, the Board issued such a Request and a Finding that the amended Program was in the public interest as contributing to the national defense. MAY 2, 1952 Suspension of Program for Voluntary Credit Restraint. The Board withdrew, effective May 12, 1952, its outstanding Request to financing institutions to act and to refrain from acting pursuant to and in accordance with the provisions of the Program for Voluntary Credit Restraint, as amended. Votes for this action: Messrs. Martin, Szymczak, Evans, Vardaman, Powell, Mills, and Robertson. Votes against this action: none. The sequence of events leading up to the above action, the reason why the Board took the action, and the effect thereof were indicated in the Withdrawal by the Board of its Request to financing institutions to act and to refrain from Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 81 acting pursuant to the provisions of the Program for Voluntary Credit Restraint. The text of the Withdrawal of Request was as follows: Pursuant to the provisions of section 708 of the Defense Production Act of 1950 and Executive Order No. 10161, the Board of Governors of the Federal Reserve System, on March 9, 1951, requested every financing institution in the United States to act, and to refrain from acting, pursuant to and in accordance with the provisions of a "Program for Voluntary Credit Restraint" which had been prepared and approved in accordance with the procedures and requirements prescribed by the said section 708 and by the said Executive Order. The Voluntary Credit Restraint Committee created pursuant to the Program, every subcommittee created pursuant to the Program, and every individual member of the said Committee and of said subcommittees were also requested by the said Board, on March 9, 1951, to act and to refrain from acting pursuant to and in accordance with the provisions of the Program. Subsequently, on April 20, 1951, and on April 17, 1952, the said Board requested every financing institution in the United States, the said Committee, the said subcommittees, and the individual members thereof, to act and to refrain from acting pursuant to and in accordance with the provisions of an amended "Program for Voluntary Credit Restraint" which had been prepared, amended and approved in accordance with the procedures and requirements prescribed by the said section 708 and by Executive Order No. 10161. On May 2, 1952, the Voluntary Credit Restraint Committee recommended to the Board of Governors of the Federal Reserve System that the screening of applications for financing, in accordance with the principles established by the Voluntary Credit Restraint Program, be suspended in the light of current circumstances. The Board of Governors of the Federal Reserve System is unanimously in agreement with this recommendation of the Voluntary Credit Restraint Committee. Accordingly, effective May 12, 1952, the Board of Governors of the Federal Reserve System hereby withdraws the requests which it addressed to all financing institutions, the Committee, the subcommittees, and members thereof, on March 9, 1951, April 20, 1951, and April 17, 1952, to act and to refrain from acting pursuant to and in accordance with the provisions of the Program. Under the provisions of section 708 of the Defense Production Act of 1950, acts or omissions to act pursuant to the requests above referred to and the Program for Voluntary Credit Restraint which occur while said section 708 is in effect and before the withdrawal of such requests are not construed to be within the prohibitions of the antitrust laws or of the Federal Trade Commission Act of the United States. As the result of this withdrawal by the Board of the requests previously made Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

82 ANNUAL REPORT OF BOARD OF GOVERNORS by it, the provisions of said section 708 will not apply to any act or omission to act by reason of such requests on or after May 12, 1952. MAY 6, 1952 Suspension of Regulation W, Consumer Credit. Regulation W was suspended, effective May 7, 1952. Votes for this action: Messrs. Martin, Szymczak, Evans, Vardaman, Powell, Mills, and Robertson. Votes against this action: none. After careful review of developments in the economy generally and in the markets directly affected by Regulation W, the Board concluded that suspension of the restrictions on consumer credit imposed by the regulation was justified. The inflationary pressures throughout the economy had abated considerably and the over-all demand for consumer durable goods was in a more balanced relation to the supply. The Board arrived at its decision after consultation with the Office of Defense Mobilization, and its review of the situation included consideration of the recommendations received from time to time in consultations with industry and trade representatives. MAY 21, 1952 Amendment to Regulation Q, Payment of Interest on Deposits. The Board amended subsection (d) of section 3 of Regulation Q, effective July 1, 1952, to permit member banks, in computing interest on savings deposits, to allow a grace period of ten business days at the beginning of any calendar month commencing a regular quarterly or semiannual interest period, a grace period of five business days at the beginning of any other calendar month, and a grace period of three business days at the end of any calendar month ending a regular quarterly or semiannual interest period. Votes for this action: Messrs. Martin, Szymczak, Evans, Powell, Mills, and Robertson. Votes against this action: none. Prior to the adoption of this amendment member banks were permitted to pay interest from the first of any calendar month on savings deposits received during the first five calendar days of the month, even though such payments, if made at the maximum rate prescribed by Regulation Q, would, because of the days of grace, result in an effective rate of interest slightly in excess of such maximum rate. However, the matter was of little more than academic interest until a tendency to increase rates of interest on savings deposits became apparent and some rates were raised to the prescribed maximum of 2l/ per cent. 2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 83 The allowance of periods of grace in computing interest on savings deposits antedates the Federal regulation of interest rates, and practices in respect thereto vary considerably in different parts of the country according to banking customs and State regulations. In the administration of its regulation with regard to the payment of interest on deposits, the Board has regarded grace periods as a matter of relatively minor significance, and the adoption of this amendment reflected the Board's policy of endeavoring to avoid or reduce to a minimum complications due to minor differences in unimportant matters between Regulation Q and State regulations and established practices. Concurrent with the effective date of this amendment, the Federal Deposit Insurance Corporation, in accordance with an understanding reached with the Board, adopted an identical amendment to its regulations relating to the payment of interest on deposits by insured nonmember banks. JUNE 6, 1952 Amendment to Regulation X, Real Estate Credit. The Board amended Regulation X, effective June 11, 1952, with the concurrence of the Housing and Home Finance Administrator, (a) by reducing the required minimum down payment per family unit for one- to four-unit residential properties and farm residences having a value per family unit of not more than $7,000 from 10 per cent to 5 per cent, by reducing the minimum down payment per family unit for such residences having a value per family unit of over $25,000 from 50 per cent to 40 per cent, and by smoothing out and relaxing somewhat the required down payment schedule for such residences having a value per family unit of more than $7,000 but not more than $25,000; (b) by relaxing the schedule of minimum down payments per family unit for multi-unit residential properties so as to establish a range of from 10 to 40 per cent rather than a range of from 17 to 50 per cent; (c) by providing special assistance for tenants and home owners whose homes were destroyed or damaged, in areas where major disasters occurred; and (d) by removing the six-month limitation on the period during which contracts to sell real property were exempt from the regulation if the purchaser did not receive title to or occupy or otherwise use the property. Votes for this action: Messrs. Martin, Szymczak, Evans, Vardaman, Powell, Mills, and Robertson. Votes against this action: none. On August 28, 1951, the Board amended Regulation X, effective September 1, 1951, for the purpose of bringing the terms of the regulation affecting oneto four-family housing into conformity with the provisions of the Defense Housing and Community Facilities and Services Act of 1951. The resulting Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

84 ANNUAL REPORT OF BOARD OF GOVERNORS schedule of required minimum down payments accorded preferential treatment to one- to four-family housing in the bracket between $7,000 and $12,000 as compared with other classes of housing. The revisions now approved by the Board served the purpose of relaxing further the down payment requirements for the purchase of one- to four-family residences in all price ranges and providing better balance in the down payment schedule as a whole. The relaxation of the schedule of required down payments applicable to multi-unit residences was authorized to provide terms approximately equivalent to the relaxations made in the one- to four-family housing schedule and particularly in view of evidence that the existing terms were exercising a substantial degree of restriction over the construction of three-bedroom apartments for which there was an increasing demand. The Board considered these actions to be appropriate because of tendencies toward greater stability in the economy generally and because, in contrast with the situation a few months earlier, most materials needed for real estate construction were in adequate supply and labor, both skilled and unskilled, was reported to be available through the country. The technical amendment providing special assistance for tenants and home owners whose homes were destroyed or substantially damaged by flood, fire, or other similar casualty was adopted by the Board in recognition of the view of the Housing and Home Finance Agency that the assistance theretofore provided by section 5(e) was not sufficient to provide relief in areas affected by major disasters and that, in order to stimulate the construction of housing for the use of disaster victims, it would be necessary to provide builders with a further exemption from the regulation. The terms of the exemption as amended permitted the Housing and Home Finance Agency to regulate such exempt housing under a specific program to be administered by that Agency in the disaster areas, the program to be limited to a specific number of dwellings to be built by builders certified by that Agency who would be required to offer the new structures for sale or rent at authorized prices to disaster victims for at least sixty days. The amendment extending indefinitely the period during which contracts to sell were exempt from the regulation if the purchaser did not receive title to or occupy or otherwise use the property was adopted by the Board because the previous limitation on this exemption, six months, had proved impossible of compliance in many practical situations. For example, when operative builders sold houses from blueprints on a volume basis, it was often impossible for the builder to deliver the completed structures within the six-month period previously allowed by the exemption. At the same time that the amendments to Regulation X became effective, the Federal Housing Administration and the Veterans Administration were authorized by the Housing and Home Finance Administrator to change their related regulations covering FHA-insured mortgages and VA-guaranteed loans to bring them into substantial conformity with the revised Regulation X. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 85 A similar revision was authorized by the Housing and Home Finance Administrator in the terms applicable to farm housing loans made by the Farmers Home Administration, and the schedule of down payments for VA-guaranteed mortgages was proportionately adjusted to maintain a preference for veterans as required by the Defense Production Act. AUGUST 15, 1952 Issuance of Capital Notes and Debentures by a State Member Bank. In connection with an inquiry by a State member bank which proposed to replace preferred stock with capital notes, the Board, in declining to consent to the reduction in capital involved in the method of financing submitted for its consideration, took the position that it did not look with favor on the increasing tendency of banks to turn to capital notes and debentures as against equity capital as a means of augmenting the protection afforded to depositors. Votes for this action: Messrs. Szymczak, Evans, Vardaman, Mills, and Robertson. Votes against this action: none. A State member bank submitted for the consideration of the Board a program under which it proposed to retire preferred stock held by local interests and simultaneously sell capital notes in a larger amount to an insurance company. Such notes do not come within the definition of the terms "capital" and "capital stock" in section 1 of the Board's Regulation H, Membership of State Banking Institutions in the Federal Reserve System, and cannot be considered capital for the purposes of membership in the Federal Reserve System under the provisions of section 9 of the Federal Reserve Act. Consequently, they would not have qualified as a replacement for the preferred stock which the bank proposed to retire simultaneously with their issuance, and the net result of the transaction would have been a reduction in the basic capital of the State member bank. The consent of the Board to the reduction in capital was required by the amendment of July 15, 1952, to section 9 of the Federal Reserve Act, and this was the first occasion since the date of the amendment that such a program had been submitted for the Board's consideration. (Previously it had been provided in some cases as a condition of membership that the consent of the Board to any reduction in the bank's capital would be required.) In stating that it would not be willing to consent to the proposed reduction in capital, the Board pointed out that there was no urgency in the situation which would warrant the substitution of a long-term loan for any part of the equity capital of the State member bank and that it did not look with favor on the increasing tendency of banks to turn to capital notes and debentures as a means of augmenting the protection afforded to depositors. While borrowed money seems more attractive than the sale of additional equity capital in times of high earnings and high taxes, it can involve a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

86 ANNUAL REPORT OF BOARD OF GOVERNORS dangerous drain on the earnings of a bank in times of adversity. Furthermore, once a bank embraces the device of borrowed money and affords it priority over existing preferred and common stock, the sale of additional stock becomes extremely difficult, if not impossible. AUGUST 27, 1952 Amendment to Regulation H, Membership of State Banking Institutions in the Federal Reserve System. Regulation H was amended, effective September 1, 1952, to bring it into conformity with changes in law made by the Act of July 15, 1952, relating to requirements for admission of State banks to membership in the Federal Reserve System and to the requirements for the establishment of branches by national and State member banks, and also to effect minor revisions of an administrative nature. Votes for this action: Messrs. Martin, Szymczak, Evans, Vardaman, Mills, and Robertson. Votes against this action: none. Public Law 543, 82d Congress, approved by the President on July 15, 1952, amended section 9 of the Federal Reserve Act and section 5155 of the Revised Statutes of the United States in several respects. It provided that a State bank might be admitted to membership in the Federal Reserve System when it had capital and surplus adequate, in the judgment of the Board of Governors, in relation to its assets and to its deposit liabilities, except that if the bank did not have capital and surplus equal to that required for the establishment of a national bank it must be approved for deposit insurance under the Federal Deposit Insurance Act. The new law also eliminated the requirement that a national or State member bank must have a capital stock of at least $500,000 in order to have an out-of-town branch, although such a bank must still have capital equal to the total amount which would be required for the establishment of a national bank in each of the various places where its offices were located and must have the capital stock and surplus required by State law in like circumstances. The new law further specified that a State member bank might not establish any new branch in the head office city without the consent of the Board of Governors, and, in addition, that a State member bank might not reduce its capital stock without the Board's consent. Except for certain minor changes in language of a clarifying nature, the amendments to Regulation H were adopted solely for the purpose of bringing its provisions into conformity with the provisions of the new law. SEPTEMBER 12, 1952 Announcement of a "Period of Residential Credit Control Relaxation" and Suspension of Regulation X, Real Estate Credit. Pursuant to the provisions of section 607 of the Defense Production Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 87 Act, as amended, and section 503 of Executive Order No. 10161, as amended, the Board, with the concurrence of the Housing and Home Finance Administrator, announced the beginning, on September 16, 1952, of a "period of residential credit control relaxation" and the suspension of the Board's Regulation X, effective September 16, 1952. Votes for this action: Messrs. Martin, Szymczak, Evans, Vardaman, Mills, and Robertson. Votes against this action: none. The 1952 Amendments to the Defense Production Act contained provisions: (1) requiring that a "period of residential credit control relaxation" be announced if the number of permanent nonfarm family dwelling starts were below a seasonally adjusted annual rate of 1,200,000 units for three consecutive months, and (2) prohibiting during such a period the imposition of a down payment requirement on residential properties in excess of 5 per cent of the transaction price. Information having been received by the Board from the Secretary of Labor that the seasonally adjusted annual rate of housing starts, as estimated for this purpose, was less than 1,200,000 units in each of the months of June, July, and August, 1952, the Board, with the concurrence of the Housing and Home Finance Administrator, announced the beginning of a "period of residential credit control relaxation" on September 16, 1952, and suspended Regulation X, effective the same date. As an alternative to suspending Regulation X, the Board could have continued the regulation, with the 5 per cent down payment requirement prescribed by the Defense Production Act Amendments on housing credit and also with restrictions on nonresidential (commercial) construction credit. A 5 per cent down payment, however, is much less than that normally required in extending noninsured and nonguaranteed residential real estate credit so that continuation of the regulation on non-Government-aided residential real estate financing would have had virtually no restrictive effect. As to credit for nonresidential construction of the types covered by Regulation X, this represented only a minor portion of total real estate credit. The retention of restrictions on such credit, therefore, would not have fulfilled the objectives of Regulation X as a credit control measure without concurrent restrictions on the much larger volume of housing credit. Moreover, a continuation of the regulation of this one small segment of real estate credit would have been administratively infeasible and would have placed unjustifiably burdensome administrative procedures upon lenders. Concurrently with the suspension of Regulation X, the Housing and Home Finance Administrator instructed the Federal Housing Administration, the Veterans Administration, and the Department of Agriculture to relax down payment requirements on home loans aided or made by the Federal Government. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

88 ANNUAL REPORT OF BOARD OF GOVERNORS SEPTEMBER 18, 1952 Prepayment Premiums under Regulation V, Loan Guarantees for Defense Production. With respect to long-term loans for the purpose of financing facilities expansion guaranteed pursuant to section 301 of the Defense Production Act of 1950 and the Board's Regulation V, the Board prescribed a general rule that provision for a prepayment premium might be made, provided: (1) the loan had a maturity of five years or more; (2) such prepayment premium was not in excess of the rate of interest to be paid by the borrower pursuant to the terms of the loan; (3) provision was made for a graduated decrease in such prepayment premium as the loan approached maturity; and (4) it was affirmatively provided that such prepayment premium should not be applicable in the event the loan was refinanced by or consolidated with any other loan which might be made or guaranteed by the Government or any of its agencies. Votes for this action: Messrs. Martin, Evans, Vardaman, and Robertson. Votes against this action: Mr. Mills. During both the World War II and the current V-loan programs, the Board adopted the position that no termination fee, premium or fee on account of prepayment, service fee, or other fee of a similar character, except charges covering out-of-pocket expenses, might be charged a borrower by a financing institution in connection with any V-loan made primarily for working capital purposes. Until this time, however, the Board had not had occasion to consider what policy should be followed with respect to prepayment premiums in connection with long-term V-loans made for the purpose of financing facilities expansion. It was the consensus of the Board, following consultation with the guaranteeing agencies, that financing institutions, particularly nonbanking institutions, could not be expected to make such long-term loans without some provision for a prepayment penalty. At the same time, it was felt that unlimited provision for such premiums might adversely affect the interests of the Government. Accordingly, the Board prescribed a general rule that in the case of V-loans for financing the expansion of facilities, provision for a prepayment premium might be made, but only subject to the conditions above stated. DECEMBER 30, 1952 Eligibility for Membership in the Federal Reserve System of a State Bank Operating a Real Estate Title Insurance Business. In response to an inquiry made by a trust company located in the State of Pennsylvania, the Board stated that it would not consider the real estate title insurance business of the trust company a bar to its Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 89 admission to membership in the Federal Reserve System, provided that that business was divorced from the banking business of the institution through organization of a separate corporation to handle the title insurance business, all or substantially all of the stock of which would be owned by the trust company. Votes for this action: Messrs. Martin, Szymczak, Evans, Vardaman, and Mills. Votes against this action: Mr. Robertson. In the State of Pennsylvania, the real estate title insurance business had been closely associated with the banking business for many years. The Pennsylvania Banking Code of May 15, 1933, provided that banking institutions could not thereafter acquire title insurance powers, while title insurance companies could not acquire banking or fiduciary powers. In addition, the Code provided that title powers would lapse if not exercised for a continuous period of one year. As a result, there were by 1952 only a relatively few banks in the State of Pennsylvania which were engaged in title insurance operations, either directly or through subsidiaries or affiliates. Since 1933 it had been the policy of the Board, which was adhered to with only minor exceptions, to prescribe a condition of membership prohibiting the further exercise of the power to guarantee or insure title to real estate; in some cases, there was an absolute prohibition and in other cases the exercise of the powers was prohibited except with the Board's approval. The inquiry now made was considered in the light of whether the special situation existing in the State of Pennsylvania with respect to the real estate title insurance business warranted making an exception to the general policy of the Board that State member banks should not engage in extraneous businesses either as a part of their own activities or through subsidiaries or affiliates. A majority of the Board took the position that a favorable reply should be given in this case because the soundness of the nonbanking operation was evident from the long record of experience in the State, the safety of the bank's depositors did not appear to be endangered by the operation of the title insurance business, the risk involved seemed not to be great, the State Banking Code permitted only a limited number of banks to conduct title operations, and the number of such banks would continue to diminish by reason of the provisions of the Code. In addition, it was understood that any application for membership would be subjected to the usual scrutiny to make sure that other factors were favorable. The stipulation that a separate corporation must be organized to handle the title insurance business reflected the Board's reluctance to deviate from its general position against the combination of banking and nonbanking functions, together with a desire to limit the extent of any possible liability arising out of the title insurance business to the amount of the stock ownership in the subsidiary company. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

RECORD OF POLICY ACTIONS FEDERAL OPEN MARKET COMMITTEE MARCH 1, 1952 (A meeting of the Federal Open Market Committee—the last before the members of the Committee took office who were elected as representatives of the Federal Reserve Banks for a term of one year beginning March 1,1952—was held on February 29, 1952 for the purpose of ratifying actions which had been taken under existing policies and of discussing developments in the monetary and credit situation since the last meeting of the Committee. No policy actions were taken at that meeting.) 1. Authority to Effect Transactions in System Account. The following direction to the executive committee, which was in the same form as the direction issued at the meeting on November 14, 1951, was approved: The executive committee is directed, until otherwise directed by the Federal Open Market Committee, to arrange for such transactions for the System open market account, either in the open market or directly with the Treasury (including purchases, sales, exchanges, replacement of maturing securities, and letting maturities run off without replacement), as may be necessary, in the light of current and prospective economic conditions and the general credit situation of the country, with a view to exercising restraint upon inflationary developments, to maintaining orderly conditions in the Government security market, to relating the supply of funds in the market to the needs of commerce and business, and to the practical administration of the account; provided that the aggregate amount of securities held in the account at the close of this date other than special short-term certificates of indebtedness purchased from time to time for the temporary accommodation of the Treasury shall not be increased or decreased by more than 2 billion dollars. The executive committee is further directed, until otherwise directed by the Federal Open Market Committee, to arrange for the purchase for the System open market account direct from the Treasury of such amounts of special short-term certificates of indebtedness as may be necessary from time to time for the temporary accommodation of the Treasury; provided that the total amount of such certificates held in the account at any one time shall not exceed 2 billion dollars. Digitized for FRASER 90 http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 91 Votes for this action: Messrs. Martin, Chairman, Sproul, Vice Chairman, Bryan, Earhart, Evans, Leach, Mills, Powell, Robertson, Szymczak, Vardaman, and Young. Votes against this action: none. Since its meeting on October 4, 1951, the Federal Open Market Committee had pursued a policy of so-called "neutrality" in making reserves available, with a view to permitting market forces of supply and demand to operate with a minimum of Federal Reserve intervention except to promote orderly market conditions. This policy implied restraint on further expansion of bank credit but it was not designed to bring about an actual contraction in the existing volume of such credit. Under the policy, the System contemplated that principal reliance for additional Federal Reserve credit, to support increased bank loans and investments, would be placed on member bank borrowings from the Federal Reserve Banks and that open market operations would be limited as much as possible to supplying such additional demands as might be necessary to avoid undue restraint. At the same time, this policy permitted greater initiative in the choice and timing of actions to absorb funds through security sales from the System account when reserves were redundant. The most significant developments in the Government security market since the last meeting of the Federal Open Market Committee had occurred in the short-term sector. The opening weeks of the period were featured by a strong and fairly-sustained net demand for short-term Treasury obligations, especially bills, on the part of nonbank investors and, at times, commercial banks. In response to that buying interest and in accordance with the policy stated above, sales of bills and certificates were made from the System account through November 21, 1951, so as to absorb reserves, and these sales were effective in exercising some restraint on the money market. The Treasury's offering of certificates of indebtedness in exchange for the 214 per cent bonds of December 15, 1951, for which the subscription books were opened on December 3, was easily accomplished and there was little need for System support of that financing. The convergence of peak seasonal credit demands around the middle of December 1951, the liquidation of short-term Government securities by corporations, the quarterly tax payments, and a demand for holiday currency created substantial pressure on reserve positions of banks in December. A further complication resulted from uncertainties as to interest rate prospects. In order to prevent these combined circumstances from building up excessive pressure in the market, purchases were made for the System account during December, but these additional reserve funds were withdrawn through sales from the account as soon after the turn of the year as that could be done without disturbing the market. At the time of this meeting on March 1, 1952, the economic picture was one of approximate balance at high levels of activity—a situation that had continued Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

92 ANNUAL REPORT OF BOARD OF GOVERNORS for approximately a year during which there had been an important measure of credit restraint. While there were some factors that suggested the possibility of downward adjustments in prices and decreases in some phases of business activity, there were also in prospect factors that would tend to generate inflationary pressures, particularly the expanding defense program and the continued high level of capital expenditures by business. Although it appeared that there would be a substantial Federal cash deficit for the entire calendar year 1952, it was clear that the impact in the market of most of the deficit would not be felt until the second half of the year. In the meantime, individual savings were continuing at a high rate and promised to provide funds to meet at least part of the credit demands from Government and private sources. The objective of credit policy was to maintain conditions that would be conducive to the meeting of credit demands as much as possible through the use of available savings with a minimum of new money creation through bank credit. The direction to the executive committee quoted above was adopted, therefore, with a view to continuing the policy which had been pursued for several months. This was in accord with the discussions of the Committee at its meeting on the previous day. Continuance of this policy was based on the Committee's judgment that no major disturbances in the market in either direction were to be expected in the near future, that while additional restrictions on credit seemed unnecessary at the time, relaxation of restraint was not called for, and that measures adopted should continue to be such that they would act to restrain any resumption of inflationary pressures. The limitation in the second paragraph of the direction was increased from 1 billion to 2 billion dollars in view of the prospect that the Treasury might wish to sell short-term securities direct to the Federal Reserve Banks in an amount approximating 1% billion in order to smooth the effects of income tax collections over the March tax payment period. JUNE 19, 1952 1. Authority to Effect Transactions in System Account. The direction to the executive committee set forth below, which was in the same form as the direction issued at the meeting on March 1, 1952, was approved with the understanding that, if the authority contained in Section 14(b) of the Federal Reserve Act to purchase securities directly from the Treasury were not extended by Congress beyond June 30, 1952, the authority given in the second paragraph of the direction would terminate on that date. On June 23, 1952, the President signed Public Law No. 405, continuing such authority until June 30, 1954. The executive committee is directed, until otherwise directed by the Federal Open Market Committee, to arrange for such transactions for the System open market account, either in the open market or directly with the Treasury (including purchases, sales, exchanges, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 93 replacement of maturing securities, and letting maturities run oil without replacement), as may be necessary in the light of current and prospective economic conditions and the general credit situation of the country, with a view to exercising restraint upon inflationary developments, to maintaining orderly conditions in the Government security market, to relating the supply of funds in the market to the needs of commerce and business, and to the practical administration of the account, provided that the aggregate amount of securities held in the account at the close of this date other than special short-term certificates of indebtedness purchased from time to time for the temporary accommodation of the Treasury shall not be increased or decreased by more than 2 billion dollars. The executive committee is further directed, until otherwise directed by the Federal Open Market Committee, to arrange for the purchase for the System open market account direct from the Treasury of such amounts of special short-term certificates of indebtedness as may be necessary from time to time for the temporary accommodation of the Treasury; provided that the total amount of such certificates held in the account at any one time shall not exceed 2 billion dollars. Votes for this action: Messrs. Martin, Chairman, Sproul, Vice Chairman, Bryan, Earhart, Evans, Leach, Mills, Powell, Robertson, Szymczak, Vardaman, and Young. Votes against this action: none. At the time of this meeting, economic activity was continuing at a high level notwithstanding the steel strike; the situation was one of approximate balance with inflationary pressures potential rather than active. Bank loans had shown less than the usual seasonal contraction in recent months and total credit had expanded more than had been anticipated, but wholesale prices had not changed much although retail prices had risen somewhat. The System's policy of "neutrality" had become increasingly one of restraint as credit demands had expanded. Some relief had been given by putting funds into the market during temporary periods of stringency through purchases of short-term securities and through purchases from dealers under repurchase agreements. However, a major part of the additional reserve funds needed by the market to meet the combined demands of a rise in currency in circulation and an increase in required reserves was obtained through borrowing by member banks from the Federal Reserve Banks, as was indicated by the fact that member bank borrowings at the Federal Reserve Banks during May and the first half of June averaged well above a half billion dollars. The degree of tightness in the money market, together with the continuing high rate of private capital expenditures, indicated that, to meet seasonal and other essential credit demands later in the year, the System might find it Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

94 ANNUAL REPORT OF BOARD OF GOVERNORS desirable to make additional reserves available despite further large individual savings and accumulations of liquid funds and the use of these funds to meet current credit demands. Because of the potential inflationary situation, however, particularly the growing Federal cash deficit, the Committee felt that there should continue to be a minimum of direct purchases by the System and that the increased reserves needed by the market should be supplied mainly through member bank borrowings and use of repurchase agreements with dealers. The tighter money market was being reflected in a rising level of interest rates and suggested that, if credit demands should become excessive, an increase in the discount rate might be appropriate. Under the circumstances, the Committee wished to be in a position to restrain excessive expansion in bank credit during the latter part of the year and at the same time to be free to moderate undue strain in the market. Thus, it was concluded that the general policy of limiting the availability of bank reserves that had been pursued by the System since October of 1951 was still appropriate and that that policy provided adequate flexibility for dealing with market influences in the absence of extremes of pressure in either direction. The above direction was therefore adopted in the same form and with the same limitations as the one adopted at the preceding meeting of the Committee, since it was felt that no change in existing objectives of credit policy was needed. 2. Amendment of Section 8 of Federal Open Market Regulation. The Committee approved at this meeting an amendment to Section 8 of the Regulation of the Federal Open Market Committee with regard to the establishment of rates governing the purchase in the open market by Federal Reserve Banks of bankers' acceptances and bills of exchange of the kinds made eligible for purchase under the provisions of Regulation B of the Board of Governors of the Federal Reserve System. Prior to this action, the regulation had provided that the "rates of discount" in connection with such transactions should be established in accordance with the provisions of Section 14 (d) of the Federal Reserve Act, which meant that the rates were established by the Federal Reserve Banks subject to review and determination by the Board of Governors. Under the amendment adopted at this meeting, the reference to Section 14 (d) of the Federal Reserve Act was omitted. As a result, rates on transactions in bankers' acceptances and bills of exchange were brought more specifically under the direction of the Committee. The action contemplated that the Federal Open Market Committee from time to time would fix a minimum buying rate for bankers' acceptances and that the effective buying rates would be specified by the manager of the System open market account in the light of market conditions and developments and in accordance with any directives or limitations prescribed by the Federal Open Market Committee or the executive committee for the purpose of carrying out the policies of the Federal Open Market Committee. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 95 Votes for this action: Messrs. Martin, Chairman, Sproul, Vice Chairman, Bryan, Earhart, Evans, Leach, Mills, Powell, Robertson, Szymczak, Vardaman, and Young. Votes against this action: none. It was the view of the Committee that since any transactions in acceptances affect the availability of reserves for banks without the necessity of showing borrowings, they should be administered as open market operations and not as advances to member banks (except when they were made specifically as a rediscount for or an advance to a member bank and were treated by the bank as borrowing). Also, there had recently been some indication that the importance of the acceptance market might be increasing and, with the resumption of periods of seasonal tightness in the money market and some reduction in the liquidity position of banks, it seemed probable that the banks might find it advantageous to sell acceptances in order to obtain reserve funds. Thus, the Federal Reserve might be called upon to operate somewhat more actively in this market. This would be especially true if convertibility in the foreign exchanges were re-established and the way opened for the use of dollar acceptances to aid in financing world trade. SEPTEMBER 25, 1952 1. Authority to Effect Transactions in System Account. The Committee adopted the following direction to the executive committee: The executive committee is directed, until otherwise directed by the Federal Open Market Committee, to arrange for such transactions for the System open market account, either in the open market or directly with the Treasury (including purchases, sales, exchanges, replacement of maturing securities, and letting maturities run off without replacement), as may be necessary, in the light of current and prospective economic conditions and the general credit situation of the country, with a view to exercising restraint upon inflationary developments, to maintaining orderly conditions in the Government security market, to relating the supply of funds in the market to the needs of commerce and business, and to the practical administration of the account; provided that the aggregate amount of securities held in the System account (including commitments for the purchase or sale of securities for the account) at the close of this date, other than special short-term certificates of indebtedness purchased from time to time for the temporary accommodation of the Treasury, shall not be increased or decreased by more than 2 billion dollars. The executive committee is further directed, until otherwise directed by the Federal Open Market Committee, to arrange for the purchase direct from the Treasury for the account of the Federal Reserve Bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

96 ANNUAL REPORT OF BOARD OF GOVERNORS of New York (which Bank shall have discretion, in cases where it seems desirable, to issue participations to one or more Federal Reserve Banks) of such amounts of special short-term certificates of indebtedness as may be necessary from time to time for the temporary accommodation of the Treasury; provided that the total amount of such certificates held at any one time by Federal Reserve Banks shall not exceed in the aggregate 2 billion dollars. Votes for this action: Messrs. Martin, Chairman, Sproul, Vice Chairman, Bryan, Earhart, Evans, Leach, Robertson, Vardaman, and Young. Votes against this action: none. The period between the meetings of the Federal Open Market Committee on June 19 and September 25, 1952 was marked by large Treasury financing operations in June, August, and September, a tight money market which became progressively tighter during the three months, a level of member bank borrowings at the Reserve Banks generally above a billion dollars, a rise in Federal Reserve holdings of securities, an increase in demand deposits and currency in circulation, and an upward tendency in short-term interest rates. The economy was operating at a high level, in a state of reasonable equilibrium. Reserve System purchases of securities during this period were made principally at times of Treasury financing. The timing of such purchases, therefore, was not always what credit policy would have suggested. In ultimate effect, however, such purchases were partly offset by subsequent sales and over a period did not meet all the demand for reserve funds. System holdings at the time of this meeting were above those in late June, but the total was below that at the beginning of 1952. Some of the increased demand for reserves had been satisfied through borrowings by member banks which averaged around one billion dollars during most of this period, a level which caused banks to exercise a considerable degree of restraint in expanding the total volume of credit. While bank loans to business and those on real estate and consumer goods increased, there were declines in loans on securities and bank holdings of securities from the high points reached early in July at the time of the Treasury's issue of a 2% per cent bond of 1958. At this meeting, consideration was given to what the reasonable, noninflationary, credit demands during the remainder of the year might be, and it was felt that some increase in demand deposits and currency—the more active elements of the money supply—would be appropriate in an expanding economy. It appeared that such a growth would entail a substantial expansion during the remainder of the year, and demand for additional Federal Reserve credit might be a billion dollars or more. Since member bank borrowings already totaled a billion dollars and bank credit expansion seemed to be keeping within usual seasonal limits, it was felt that some of the additional reserves should be supplied through open market purchases in order to avoid undue restraint. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 97 The Treasury had announced at the time of this meeting an issue of tax anticipation bills in the amount of 2/4 billion dollars and it was expected that, with the growing Federal cash deficit, a further issue of about the same amount would be needed during the next few weeks. The Committee considered that operations during the preceding three months had been reasonably successful in keeping an even flow of money through the economy without having had excessive reserve funds on the one hand, or undue contraction on the other, and that the policy of modest restraint with respect to the availability of reserves should be reaffirmed. The foregoing direction was therefore adopted, the first paragraph of which was in substance the same as that part of the direction issued at the preceding meeting. The second paragraph of the direction was amended at this meeting to provide that purchases of special certificates of indebtedness direct from the Treasury for the temporary accommodation of the Treasury, under the authority of Section 14(b) of the Federal Reserve Act, should be made for the account of the Federal Reserve Bank of New York, with the understanding that that Bank, in its discretion, in cases where it seemed desirable, could issue participations to one or more Federal Reserve Banks. Previously, such certificates, which are carried on only a few occasions during the year and for only a few days at a time, had been held in the System account with resulting participation by all Federal Reserve Banks. The change was adopted for the purpose of simplifying the procedure for handling such transactions, particularly on days when some Reserve Banks were closed and others open, as on Saturday or on certain holidays. Since the amount of earnings from such special certificates is relatively small, the change in the practice would not affect significantly the earnings position of any Reserve Bank. 2. Repurchase Agreements. At this meeting, the Federal Open Market Committee ratified an action taken by a canvass of the members of the Committee on July 22, 1952, with respect to the fixing of the rate on securities purchased under repurchase contracts, which, by the Committee's action of October 4, 1951, the Federal Reserve Banks were authorized to enter into with nonbank dealers in U. S. Government securities qualified to transact business with the System open market account. Such agreements could cover only short-term Treasury obligations and were required to be for periods of 15 days or less and for the purpose of aiding temporary money market adjustments. Before the action of July 22, such agreements had been made at rates close to the average issuing rate on the most recent issue of 3-month Treasury bills. The change ratified at this meeting provided that the rate on such agreements should be specified from time to time by the manager of the System open market account in the light of market conditions and developments and in accordance with any directives or limitations prescribed by the Federal Open Market Committee or the executive committee for the purpose of carrying out the current policies Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

98 ANNUAL REPORT OF BOARD OF GOVERNORS of the Federal Open Market Committee, but in no event should the effective rate be below whichever was the lower of (1) the discount rate of the purchasing Federal Reserve Bank on eligible commercial paper, or (2) the average issuing rate on the most recent issue of 3-month Treasury bills. Votes for this action: Messrs. Martin, Chairman, Sproul, Vice Chairman, Bryan, Earhart, Evans, Leach, Robertson, Vardaman, and Young. Votes against this action: none. The change in procedure for setting the rate was made principally because the issuing rate on Treasury bills had been higher than the discount rate during the past few weeks, and, under the previous condition, this situation would have required an increase in the rate on repurchase agreements. It was believed that this would not be an appropriate arrangement in certain types of credit situations such as that currently existing, particularly in view of the imminent Treasury refunding operation. It was therefore considered desirable to change the procedure so as to avoid the necessity of raising the repurchase rate above the discount rate whenever the issuing rate on Treasury bills moved higher than the discount rate. DECEMBER 8, 1952 1. Authority to Effect Transactions in System Account. The following direction to the executive committee, which was in the same form as the direction issued at the meeting on September 25, 1952, was approved: The executive committee is directed, until otherwise directed by the Federal Open Market Committee, to arrange for such transactions for the System open market account, either in the open market or directly with the Treasury (including purchases, sales, exchanges, replacement of maturing securities, and letting maturities run ofl without replacement), as may be necessary, in the light of current and prospective economic conditions and the general credit situation of the country, with a view to exercising restraint upon inflationary developments, to maintaining orderly conditions in the Government security market, to relating the supply of funds in the market to the needs of commerce and business, and to the practical administration of the account; provided that the aggregate amount of securities held in the System account (including commitments for the purchase or sale of securities for the account) at the close of this date, other than special short-term certificates of indebtedness purchased from time to time for the temporary accommodation of the Treasury shall not be increased or decreased by more than 2 billion dollars. The executive committee is further directed, until otherwise directed by the Federal Open Market Committee, to arrange for the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 99 purchase direct from the Treasury for the account of the Federal Reserve Bank of New York (which Bank shall have discretion, in cases where it seems desirable, to issue participations to one or more Federal Reserve Banks) of such amounts of special short-term certificates of indebtedness as may be necessary from time to time for the temporary accommodation of the Treasury; provided that the total amount of such certificates held at any one time by the Federal Reserve Banks shall not exceed in the aggregate 2 billion dollars. Votes for this action: Messrs. Martin, Chairman, Sproul, Vice Chairman, Bryan, Earhart, Evans, Leach, Robertson, Vardaman, and Young. Votes against this action: none. During the autumn months, economic activity and employment had advanced to higher levels than in the spring of 1952 but commodity prices had generally not advanced. Total credit demand had been at record peacetime levels reflecting in particular Federal deficit financing during the second half of 1952 and a more than seasonal increase in private credit demands. Reserve Bank credit other than "float" had risen about \lA billion dollars in the September-November period, considerably more than had been anticipated at the time of the September 25 meeting of the Committee. Only about a third of this increase had been supplied by Federal Reserve purchases of securities, and member bank borrowings had risen to over 1/4 billion dollars. The accelerated expansion of bank credit in excess of moderate seasonal demands during the autumn months was a matter of concern in view of the economy's intensive use of its physical resources and the large volume of credit already outstanding. At the same time, there was evidence that the peak of the defense program in terms of requirements for materials and manpower was close at hand and that the rise in public expenditures in the next six months would be much less than had been expected earlier. The economic outlook was by no means clear, however, and it appeared that credit and monetary policy would need to be kept alert to realignments in underlying forces that might affect long-term growth and stability so that such policies could be adjusted promptly and effectively to changing conditions as they developed. It was the view of the Committee that the general outlook was for a high level of income and production over the next few months with no immediate evidence of price inflation. That view suggested that the Committee should remain on the alert but did not call for action to change the existing policy of modest restraint in furnishing any additional reserves, a policy which had been consistent with a stable price level and a high level of economic activity. Thus, the Committee renewed the direction set forth above in the same form as the direction issued to the executive committee at the meeting on September 25, 1952. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM [December 31, 1952] Term Expires WM. MCC. MARTIN, JR., of New York, Chairman January 31, 1956 M. S. SZYMCZAK of Illinois January 31, 1962 R. M. EVANS of Virginia January 31, 1954 JAMES K. VARDAMAN, JR., of Missouri January 31, 1960 A. L. MILLS, JR., of Oregon January 31, 1958 J. L. ROBERTSON of Nebraska January 31, 1964 ELLIOTT THURSTON, Assistant to the Board WINFIELD W. RIEFLER, Assistant to the Chairman WOODLIEF THOMAS, Economic Adviser to the Board S. R. CARPENTER, Secretary MERRITT SHERMAN, Assistant Secretary KENNETH A. KENYON, Assistant Secretary GP:ORGE B. VEST, General Counsel FREDERIC SOLOMON, Assistant General Counsel HOWARD H. HACKLEY, Assistant General Counsel G. HOWLAND CHASE, Assistant Solicitor RALPH A. YOUNG, Director, Division of Research and Statistics FRANK R. GARFIELD, Adviser on Economic Research, Division of Research and Statistics KENNETH B. WILLIAMS, Assistant Director, Division of Research and Statistics SUSAN S. BURR, Assistant Director, Division of Research and Statistics GUY E. NOYES, Assistant Director, Division of Research and Statistics C. RICHARD YOUNGDAHL, Assistant Director, Division of Research and Statistics ARTHUR W. MARGET, Director, Division of International Finance LEWIS N. DEMBITZ, Assistant Director, Division of International Finance GEORGE S. SLOAN, Director, Division of Examinations C. C. HOSTRUP, Assistant Director, Division of Examinations FRED A. NELSON, Assistant Director, Division of Examinations ARTHUR H. LANG, Chief Federal Reserve Examiner, Division of Examinations ROBERT C. MASTERS, Assistant Director, Division of Examinations GLENN M. GOODMAN, Assistant Director, Division of Examinations HENRY BENNER, Assistant Director, Division of Examinations ROBERT F. LEONARD, Director, Division of Ban\ Operations J. E. HORBETT, Assistant Director, Division of Ban\ Operations LOWELL MYRICK, Assistant Director, Division of Ban\ Operations DWIGHT L. ALLEN, Director, Division of Personnel Administration H. FRANKLIN SPRECHER, JR., Assistant Director, Division of Personnel Administration LISTON P. BETHEA, Director, Division of Administrative Services JOSEPH E. KELLEHER, Assistant Director, Division of Administrative Services EDWIN J. JOHNSON, Assistant Director, Division of Administrative Services GARDNER L. BOOTHE, II, Administrator, Office of Defense Loans < 100 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL ADVISORY COUNCIL [December 31, 1952] MEMBERS District No. 1—WALTER S. BUCKLIN, Chairman, The National Shawmut Bank of Boston, Boston, Massachusetts. District No. 2—N. BAXTER JACKSON, Chairman, Chemical Bank & Trust Company, New York, New York. District No. 3—GEOFFREY S. SMITH, President, Girard Trust Corn Exchange Bank, Philadelphia, Pennsylvania. District No. 4—GEORGE GUND, President, The Cleveland Trust Company, Cleveland, Ohio. District No. 5—ROBERT V. FLEMING, President and Chairman, The Riggs National Bank, Washington, D. C. District No. 6—PAUL M. DAVIS, Chairman, First American National Bank, Nashville, Tennessee. District No. 7—EDWARD E. BROWN, Chairman, The First National Bank of Chicago, Chicago, Illinois. District No. 8—V. J. ALEXANDER, Chairman, Union Planters National Bank & Trust Company, Memphis, Tennessee. District No. 9—JOSEPH F. RINGLAND, President and Chairman, Northwestern National Bank of Minneapolis, Minneapolis, Minnesota. District No. 10—DAVID T. BEALS, President, The Inter-State National Bank, Kansas City, Missouri. District No. 11—DEWITT T. RAY, President, National City Bank of Dallas, Dallas, Texas. District No. 12—JAMES K. LOCHEAD, President, American Trust Company, San Francisco, California. EXECUTIVE COMMITTEE EDWARD E. BROWN, CX officio ROBERT V. FLEMING, ex officio N. BAXTER JACKSON GEOFFREY S. SMITH GEORGE GUND OFFICERS President, EDWARD E. BROWN Vice President, ROBERT V. FLEMING Secretary, HERBERT V. PROCHNOW 102 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL OPEN MARKET COMMITTEE [December 31, 1952] MEMBERS WM. MCC. MARTIN, JR., Chairman (Board of Governors) ALLAN SPROUL, Vice Chairman (Elected by Federal Reserve Bank of New York) MALCOLM BRYAN (Elected by Federal Reserve Banks of Atlanta, St. Louis, and Dallas) C. E. EARHART (Elected by Federal Reserve Banks of Minneapolis, Kansas City, and San Francisco) R. M. EVANS (Board of Governors) HUGH LEACH (Elected by Federal Reserve Banks of Boston, Philadelphia, and Richmond) A. L. MILLS, JR. (Board of Governors) J. L. ROBERTSON (Board of Governors) M. S. SZYMCZAK (Board of Governors) JAMES K. VARDAMAN, JR. (Board of Governors) C. S. YOUNG (Elected by Federal Reserve Banks of Cleveland and Chicago) EXECUTIVE COMMITTEE OFFICERS WM. MCC. MARTIN, JR., Chairman WINFIELD W. RIEFLER, Secretary ALLAN SPROUL, Vice Chairman ELLIOTT THURSTON, Assistant Secretary HUGH LEACH GEORGE B. VEST, General Counsel A. L. MILLS, JR. WOODLIEF THOMAS, Economist JAMES K. VARDAMAN, JR. GEORGE W. MITCHELL, Associate Economist EARLE L. RAUBER, Associate Economist AGENT H. V. ROELSE, Associate Economist FEDERAL RESERVE BANK OF NEW YORK O. P. WHEELER, Associate Economist ROBERT G. ROUSE, Manager of System CHAS. W. WILLIAMS, Associate Economist Open Market Account RALPH A. YOUNG, Associate Economist 101 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS [December 31, 1952] CHAIRMEN AND DEPUTY CHAIRMEN OF BOARDS OF DIRECTORS Chairman and Federal Reserve Bank of— Federal Reserve Agent Deputy Chairman Boston Harold D. Hodgkinson Ames Stevens New York Robert T. Stevens William I. Myers Philadelphia Warren F. Whittier C. Canby Balderston Cleveland George C. Brainard John C. Virden Richmond Charles P. McCormick John B. Woodward, Jr. Atlanta Frank H.Neely Rufus C. Harris Chicago Franklin J. Lunding John S. Coleman St. Louis Russell L. Dearmont Wm. H. Bryce Minneapolis Roger B. Shepard Paul E. Miller Kansas City Robert B. Caldwell Cecil Puckett Dallas J. R. Parten R. B. Anderson San Francisco Brayton Wilbur William R. Wallace, Jr. CONFERENCE OF CHAIRMEN The Chairmen of the Federal Reserve Banks are organized into a Conference of Chairmen which meets from time to time to consider matters of common interest and to consult with and advise the Board of Governors. Mr. Wilbur, Chairman of the Federal Reserve Bank of San Francisco, was elected Chairman of the Conference and of the Executive Committee in May 1951 and served as such through the meeting held in May 1952. Mr. Lunding, Chairman of the Federal Reserve Bank of Chicago, and Mr. Whittier, Chairman of the Federal Reserve Bank of Philadelphia, served with Mr. Wilbur as members of the Executive Committee. At the meeting held in May 1952, Mr. Lunding was elected Chairman of the Conference and of the Executive Committee. Mr. Charles P. McCormick, Chairman of the Federal Reserve Bank of Richmond, was elected Vice Chairman and a member of the Executive Committee, and Mr. Harold D. Hodgkinson, Chairman of the Federal Reserve Bank of Boston, was elected as the other member of the Executive Committee. Mr. Lunding resigned as a director and Chairman of the Federal Reserve Bank of Chicago effective December 31, 1952, and Mr. McCormick succeeded him as Chairman of the Conference and of the Executive Committee. Digitized for FRASER 103 http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

104 ANNUAL REPORT OF BOARD OF GOVERNORS DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1952—Cont. DIRECTORS Class A and Class B directors are elected by the member banks of the district. Class C directors are appointed by the Board of Governors of the Federal Reserve System. The Class A directors are chosen as representatives of member banks and, as a matter of practice, are active officers of member banks. The Class B directors may not, under the law, be officers, directors, or employees of banks. At the time of their election they must be actively engaged in their district in commerce, agriculture, or some other industrial pursuit. The Class C directors may not, under the law, be officers, directors, employees, or stockholders of banks. They are appointed by the Board of Governors as representatives not of any particular group or interest, but of the public interest as a whole. Federal Reserve Bank branches have either five or seven directors, of whom a majority are appointed by the Board of Directors of the parent Federal Reserve Bank and the others are appointed by the Board of Governors of the Federal Reserve System. District No. 1—Boston Term Expires DIRECTORS Dec. 31 Class A: Earle W. Stamm President, The National Bank of Commerce of New London, New London, Conn 1952 Lloyd D. Brace President, The First National Bank of Boston, Boston, Mass 1953 Harold I. Chandler Vice President and Cashier, The Keene National Bank, Keene, N. H 1954 Class B: Roy L. Patrick President, Rock of Ages Corporation, Burlington, Vt. 1952 Harvey P. Hood President, H. P. Hood & Sons, Inc., Boston, Mass 1953 Frederick S. Blackall, jr President and Treasurer, The Taft-Peirce Manufacturing Company, Woonsocket, R. 1 1954 Class C.- Harold D. Hodgkinson Vice President, General Manager and Chairman of Management Board, Wm. Filene's Sons Company, Boston, Mass 1952 Karl T. Compton Chairman of the Corporation, Massachusetts Institute of Technology, Cambridge, Mass 1953 Ames Stevens President, Ames Worsted Company, Lowell, Mass.. . 1954 District No. 2—New York Class A: John C. Traphagen Chairman of the Board, The Bank of New York, New York, N. Y 1952 Burr P. Cleveland President, First National Bank of Cortland, Cortland, N.Y 1953 F. Palmer Armstrong President, The Keyport Banking Company, Keyport, N. J 1954 Class B.- Clarence Francis Chairman of the Board, General Foods Corporation, New York, N. Y 1952 Marion B. Folsom Treasurer and Director, Eastman Kodak Company, Rochester, N. Y 1953 Jay E. Crane Vice President, Standard Oil Company (New Jersey), New York, N. Y 1954 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 105 DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1952—Cont. Term Expires Dec. 31 DIRECTORS Cont. Class C.- Philip Young Dean, Graduate School of Business, Columbia University, New York, N. Y 1952 Robert T. Stevens Chairman of the Board, J. P. Stevens & Company, Inc., New York, N. Y 1953 William I. Myers Dean, New York State College of Agriculture, Cornell University, Ithaca, N. Y 1954 Buffalo Branch Appointed by Federal Reserve Ban\: George F. Bates Vice President, The Marine Trust Company of Western New York, Buffalo, N. Y. (In charge of Power City Trust offices, Niagara Falls, N. Y.) 1952 Bernard E. Finucane President, Security Trust Company of Rochester, Rochester, N. Y 1952 C. Elmer Olson President, The First National Bank of Falconer, Falconer, N. Y 1953 Lewis G. Harriman President, Manufacturers and Traders Trust Company, Buffalo, N. Y 1954 Appointed by Board of Governors: Edgar F. Wendt President, Buffalo Forge Company, BufTalo, N. Y.. . 1952 Robert C. Tait President, Stromberg-Carlson Company, Pvochester, N. Y .' 1953 Clayton G. White Dairy Farmer, Stow, N. Y 1954 District No. 3—Philadelphia Class A: J. Nyce Patterson President, Watsontown National Bank, Watsontown, Pa 1952 Archie D. Swift Chairman of Board, Central-Penn National Bank, Philadelphia, Pa 1953 Wads worth Cresse Trust Officer and Executive Vice President, First National Bank and Trust Company, Woodbury, N. J 1954 Class B.- Charles E. Oakes President and Director, Pennsylvania Power and Light Company, Allentown, Pa 1952 Warren C. Newton President, O. A. Newton and Son Company, Bridgeville, Del 1953 Andrew Kaul, III President and Director, Speer Carbon Company, St. Marys, Pa 1954 Class C: Warren F. Whittier Agricultural Consultant, Chester Springs, Pa 1952 C. Canby Balderston Dean, Wharton School of Finance and Commerce, University of Pennsylvania, Philadelphia, Pa 1953 William J. Meinel President and Chairman of Board, Heintz Manufacturing Company, Philadelphia, Pa 1954 District No. 4—Cleveland Class A: John D. Bainer President, The Merchants National Bank and Trust Company of Meadville, Meadville, Pa 1952 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

106 ANNUAL REPORT OF BOARD OF GOVERNORS DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1952—Cont. Term Expires Dec. 31 DIRECTORS Cont. Lawrence N. Murray President, Mellon National Bank and Trust Company, Pittsburgh, Pa 1953 Edison Hobstctter President, Pomeroy National Bank, Pomeroy, Ohio. . . 1954 Class B.- Edward C. Doll President, Lovell Manufacturing Company, Erie, Pa. 1952 Charles J. Stilwell President, The Warner and Swasey Company, Cleveland, Ohio 1953 Joel M. Bowlby Chairman of the Board, The Eagle-Picher Company, Cincinnati, Ohio 1954 Class C.- George C. Brainard Chairman, Executive Committee, Addressograph- Multigraph Corporation, Cleveland, Ohio 1952 John C. Virden Chairman of the Board, John C. Virden Company, Cleveland, Ohio 1953 Leo L. Rummell Dean, College of Agriculture, The Ohio State University, Columbus, Ohio 1954 Cincinnati Branch Appointed by Federal Reserve Ban\: Sterling B. Cramer First Vice President, The Fifth Third Union Trust Company, Cincinnati, Ohio 1952 L. M. Campbell President, Second National Bank, Ashland, Ky 1953 E. S. Dabney President, Security Trust Company, Lexington, Ky.. . 1954 Joseph B. Hall President, Kroger Company, Cincinnati, Ohio 1954 Appointed by Board of Governors: H. C. Besuden Farmer, Winchester, Ky 1952 Granville R. Lohnes Treasurer, National Cash Register Company, Dayton, Ohio 1953 John C. Baker President, Ohio University, Athens, Ohio 1954 Pittsburgh Branch Appointed by Federal Reserve Bank,: John Barclay, Jr President, Barclay-Westmoreland Trust Company, Greensburg, Pa 1952 Hugo E. Laupp President, Wheeling Dollar Savings and Trust Company, Wheeling, W. Va 1953 Montfort Jones Professor of Finance, The University of Pittsburgh, Pittsburgh, Pa 1954 William B. McFall President, Commonwealth Trust Company of Pittsburgh, Pittsburgh, Pa 1954 Appointed by Board of Governors: Sidney A. Swensrud President, Gulf Oil Corporation, Pittsburgh, Pa 1952 Henry A. Roemer, Jr President, Sharon Steel Corporation, Sharon, Pa 1953 Clifford F. Hood Executive Vice President—Operations, United States Steel Company, Pittsburgh, Pa 1954 District No. 5—Richmond Class A: Warren S. Johnson Investment Counselor, Peoples Savings Bank & Trust Company, Wilmington, N. C 1952 John A. Sydenstricker Executive Vice President, First National Bank in Marlinton, Marlinton, W. Va 1953 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 107 DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1952—Cont. Term Expires Dec. 31 DIRECTORS Cont. James D. Harrison President, First National Bank of Baltimore, Baltimore, Md 1954 Class B: H. L. Rust, Jr President, H. L. Rust Company, Washington, D. C. . 1952 Cary L. Page President and Treasurer, Jackson Mills, Wellford, S. C. 1953 Edwin Hyde Executive Vice President, Miller & Rhoads, Inc., Richmond, Va 1954 Class C.- John B. Woodward, Jr President, Newport News Shipbuilding & Dry Dock Company, Newport News, Va 1952 Charles P. McCormick President and Chairman of Board, McCormick & Company, Inc., Baltimore, Md 1953 W. G. Wysor Management Counsel, Southern States Cooperative, Inc., Richmond, Va. 1954 Baltimore Branch Appointed by Federal Reserve Ban\: Eugene G. Grady President, The Western National Bank, Baltimore, Md. 1952 Lacy I. Rice President, The Old National Bank, Martinsburg, W. Va 1952 Charles W. Hoff President, Union Trust Company of Maryland, Baltimore, Md 1953 Charles A. Piper President, The Liberty Trust Company, Cumberland, Md 1954 Appointed by Board of Governors: L. Vinton Hershey President and General Manager, Hagerstown Shoe Company, Hagerstown, Md 1952 James M. Shriver President, The B. F. Shriver Company, Westminster, Md 1953 Alonzo G. Decker, Jr Vice President, Black and Decker Manufacturing Company, Towson, Md 1954 Charlotte Branch Appointed by Federal Reserve Ban\: George S. Crouch Chairman of the Board, Union National Bank, Charlotte, N. C 1952 Jonathan Woody , President, First National Bank, Waynesville, N. C 1952 A. K. Davis Senior Vice President, Wachovia Bank and Trust Company, Winston-Salem, N. C 1953 Thomas J. Robertson President, First National Bank of South Carolina, Columbia, S. C 1954 Appointed by Board of Governors: W. A. L. Sibley Vice President and Treasurer, Monarch Mills, Union, S. C 1952 R. E. Ebert President, Dixie Home Stores, Inc., Greenville, S. C. 1953 Paul T. Taylor President, Taylor Warehouse Company, Winston- Salem, N. C 1954 District No. 6—Atlanta Class A: Leslie R. Driver President, The First National Bank in Bristol, Bristol Tenn 1952 Roland L. Adams President, Bank of York, York, Ala 1953 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

108 ANNUAL REPORT OF BOARD OF GOVERNORS DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1952—Cont. Term Expires Dec. 31 DIRECTORS Cont. W. C. Bowman Chairman of Board, The First National Bank of Montgomery, Montgomery, Ala 1954 Class B: Donald Comer Chairman of the Board, Avondale Mills, Birmingham, Ala 1952 A. B. Freeman Chairman of the Board, Louisiana Coca-Cola Bottling Company, Ltd., New Orleans, La 1953 }. A. McCrary Vice President and Treasurer, J. B. McCrary Company, Inc., Atlanta, Ga 1954 Class C: Rufus C. Harris President, The Tulane University of Louisiana, New Orleans, La 1952 Frank H. Neely Chairman of the Board, Rich's, Incorporated, Atlanta, Ga 1953 Paul E. Reinhold President, Foremost Dairies, Inc., Jacksonville, Fla.. . . 1954 Birmingham Branch Appointed by Federal Reserve Ban\: John B. Barnett, Jr President, The Monroe County Bank, Monroeviile, Ala 1952 A. M. Shook President, Security Commercial Bank, Birmingham, Ala 1952 T. J. Cottingham President, State National Bank of Decatur, Decatur, Ala 1953 A. J. Goodwin, Jr Vice President, The Anniston National Bank, Anniston, Ala 1954 Appointed by Board of Governors: Thad Holt President, The Television Corporation, Birmingham, Ala 1952 John M. Gallalee President, University of Alabama, Tuscaloosa, Ala.. . . 1953 Edwin C. Bottcher Farming, Cullman, Ala 1954 Jacksonville Branch Appointed by Federal Reserve Ban\: N. Ray Carroll President, The First National Bank of Kissimmee, Kissimmee, Fla 1952 J. E. Bryan ,. .President, Union Trust Company, St. Petersburg, Fla. 1952 Clement B. Chinn Vice Chairman, The First National Bank of Miami, Miami, Fla 1953 G. W. Reese President, The Citizens and Peoples National Bank of Pensacola, Pensacola, Fla 1954 Appointed by Board of Governors: Howard Phillips Vice President and General Manager, Dr. P. Phillips Company, Orlando, Fla 1952 Marshall F. Howell Vice President, Bond-Howell Lumber Company, Jacksonville, Fla 1953 J. Hillis Miller President, University of Florida, Gainesville, Fla 1954 Nashville Branch Appointed by Federal Reserve Ban\: T. L. Cathey President, Peoples and Union Bank, Lewisburg, Tenn. 1952 Thos. D. Brabson President, The First National Bank of Greeneville, Greeneville, Tenn 1952 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 109 DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1952—Cont. Term Expires Dec. 31 DIRECTORS Cont. G. C. Graves President, The First National Bank of Athens, Athens, Tenn 1953 Sam M. Fleming President, Third National Bank in Nashville, Nashville, Tenn 1954 Appointed by Board of Governors: W. Bratten Evans President, Tennesssee Enamel Manufacturing Company, Nashville, Tenn 1952 C. E. Brehm President, University of Tennessee, Knoxville, Tenn.. . 1953 H. C. Meacham Agriculture and livestock, Franklin, Tenn 1954 New Orleans Branch Appointed by Federal Reserve Ban\: Elbert E. Moore President, Louisiana National Bank of Baton Rouge, Baton Rouge, La 1952 Percy H. Sitges President, Louisiana Bank & Trust Company, New Orleans, La 1952 Wm. C. Carter President, Gulf National Bank of Gulfport, Gulfport, Miss 1953 G. M. McWilliams President, Citizens Bank of Hattiesburg, Hattiesburg, Miss 1954 Appointed by Board of Governors: E. O. Batson President, Batson-McGehee Company, Inc., Millard, Miss 1952 H. G. Chalkley, Jr President, Sweet Lake Land & Oil Company, Inc., Lake Charles, La 1953 Joel L. Fletcher, Jr President, Southwestern Louisiana Institute, Lafayette, La 1954 District No. 7—Chicago Class A: Horace S. French President, The Manufacturers National Bank of Chicago, Chicago, 111 1952 Vivian W. Johnson President, First National Bank, Cedar Falls, Iowa. . . . 1953 Walter J. Cummings Chairman, Continental Illinois National Bank and Trust Company of Chicago, Chicago, 111 1954 Class B.- William J. Grede President, Grede Foundries, Inc., Milwaukee, Wis.. .. 1952 William R. Sinclair Chairman of the Board and Chief Executive Officer, Kingan & Company, Indianapolis, Ind 1953 Walter E. Hawkinson Vice President in Charge of Finance, and Secretary, Allis-Chalmers Manufacturing Company, Milwaukee, Wis 1954 Class C.- John S. Coleman President, Burroughs Adding Machine Company, Detroit, Mich. . 1952 Allan B. Kline President, American Farm Bureau Federation, Chicago, 111. 1953 Franklin J. Lunding Director and Chief Executive Officer, Jewel Tea Company, Inc., Chicago, 111 1954 Detroit Branch Appointed by Federal Reserve Ban\: John A. Stewart Vice President and Cashier, Second National Bank & Trust Company, Saginaw, Mich 1952 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

110 ANNUAL REPORT OF BOARD OF GOVERNORS DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1952—Cont. Term Expires Dec. 31 DIRECTORS Cont. Howard P. Parshall President, Commonwealth Bank, Detroit, Mich 1952 Joseph M. Dodge President, The Detroit Bank, Detroit, Mich 1953 Appointed by Board of Governors: John A. Hannah President, Michigan State College, East Lansing, Mich. 1952 William M. Day Vice President and General Manager, Michigan Bell Telephone Company, Detroit, Mich 1953 District No. 8—St. Louis Class A: J. E. Etherton President, Carbondale National Bank, Carbondale, 111. 1952 William A. McDonnell President, First National Bank in St. Louis, St. Louis, Mo 1953 Phil E. Chappell President, Planters Bank & Trust Company, Hopkinsville, Ky 1954 Class B: Ralph E. Plunkett President, Plunkett-Jarrell Grocer Company, Little Rock, Ark 1952 Louis Ruthenburg Chairman of Board, Servel, Inc., Evansville, Ind 1953 M. Moss Alexander President, Missouri-Portland Cement Company, St. Louis, Mo 1954 Class C.- Russell L. Dearmont Chief Counsel for Trustee, Missouri-Pacific Lines, St. Louis, Mo 1952 Wm. H. Brycc Vice President and Director, Dixie Wax Paper Company, Memphis, Tenn 1953 Joseph H. Moore Farming, Charleston, Mo 1954 Little Rock Branch Appointed by Federal Reserve Ban\: Harvey C. Couch, Jr President, Union National Bank, Little Rock, Ark 1952 Gaither C. Johnston Farming, Dermott, Ark 1953 Thos. W. Stone Executive Vice President, The Arkansas National Bank, Hot Springs, Ark 1954 H. C. McKinney, Jr President, First National Bank, El Dorado, Ark 1954 Appointed by Board of Governors: Stonewall J. Beauchamp President, Terminal Warehouse Company, Little Rock, Ark 1952 Sam B. Strauss President, Pfeifers of Arkansas, Little Rock, Ark 1953 Shuford R. Nichols Farmer, ginner and cotton broker, Des Arc, Ark 1954 Louisville Branch Appointed by Federal Reserve Ban\: A. C. Voris President, Citizens National Bank, Bedford, Ind 1952 Noel Rush President, Lincoln Bank and Trust Company, Louisville, Ky 1953 Ira F. Wilcox Vice President and Cashier, The Union National Bank, New Albany, Ind 1954 M. C. Minor President, Farmers National Bank, Danville, Ky 1954 Appointed by Board of Governors: Smith D. Broadbent, Jr Farmer, Cadiz, Ky 1952 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 111 DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1952—Cont. Term Expires Dec. 31 DIRECTORS Cont. Alvin A. Voit President, Mengel Company, Louisville, Ky 1953 Pierre B. McBride President, Porcelain Metals Corporation, Louisville, Ky 1954 Memphis Branch Appointed by Federal Reserve Ban\: Ben L. Ross Chairman of Board, Phillips National Bank, Helena, Ark 1952 C. Reeves President, Merchants and Farmers Bank, Columbus, Miss 1953 William B. Pollard President, National Bank of Commerce, Memphis, Tenn 1954 John A. McCall President, First National Bank, Lexington, Tenn.. ... 1954 Appointed by Board of Governors: Hugh M. Brinkley Farmer, Hughes, Ark 1952 M. P. Moore Owner, Circle M Ranch, Senatobia, Miss 1953 CafTey Robertson President, Caffey Robertson Company, Memphis, Tenn. 1954 District No. 9—Minneapolis Class A: Edgar F. Zelle Chairman of the Board, First National Bank of Minneapolis, Minneapolis, Minn 1952 H. N. Thomson Vice President, Farmers and Merchants Bank, Presho, S.D 1953 C. W. Burges Vice President and Cashier, Security National Bank, Edgeley, N. D 1954 Class B: Homer P. Clark Honorary Chairman of the Board, West Publishing Company, St. Paul, Minn 1952 W. A. Deneckc Livestock rancher, Bozcman, Mont 1953 Ray C. Lange President, Chippewa Canning Company, Chippewa Falls, Wis 1954 Class C: F. A. Flodin President, Lake Shore Engineering Company, Iron Mountain, Mich 1952 Roger B. Shepard St. Paul, Minn 1953 Paul E. Miller Director, Agricultural Extension Division, University of Minnesota, St. Paul, Minn 1954 Helena Branch Appointed by Federal Reserve Ban\: Theodore Jacobs President, First National Bank, Missoula, Mont 1952 E. D. MacHaffie Investments, Helena, Mont 1952 A. W. Heidel Vice President, Powder River County Bank, Broadus, Mont 1953 Appointed by Board of Governors: John E. Corette, Jr President and General Manager, Montana Power Company, Butte, Mont 1952 G. R. Milburn Livestock rancher, Grass Range, Mont 1953 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

112 ANNUAL REPORT OF BOARD OF GOVERNORS DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1952—Cont. Term Expires Dec. 31 DIRECTORS Cont. District No. 10—Kansas City Class A: W. S. Kennedy President and Chairman of the Board, The First National Bank of Junction City, Junction City, Kan.. . 1952 W. L. Bunten Executive Vice President, Goodland State Bank, Goodland, Kan 1953 T. A. Dines Chairman of the Board, The United States National Bank of Denver, Denver, Colo 1954 Class B: E. M. Dodds President, United States Cold Storage Corporation, Kansas City, Mo 1952 L. C. Hutson Director, Chickasha Cotton Oil Company, Chickasha, Okla 1953 Max A. Miller Ranching and farming, Omaha, Neb 1954 Class C.- Robert B. Caldwell Caldwell, Downing, Noble and Garrity, Kansas City, Mo 1952 Cecil Puckett Dean, College of Business Administration, University of Denver, Denver, Colo 1953 Lyle L. Hague Farmer and stockman, Cherokee, Okla 1954 Denver Branch Appointed by Federal Reserve Ban\: Ralph S. Newcomer Executive Vice President, First National Bank in Boulder, Boulder, Colo 1952 Albert K. Mitchell Rancher, Albert, N. M 1952 Merriam B. Berger Vice President, The Colorado National Bank of Denver, Denver, Colo 1953 Appointed by Board of Governors: G. Norman Winder Rancher, Craig, Colo 1952 Aksel Nielsen President, The Title Guaranty Company, Denver, Colo 1953 Oklahoma City Branch Appointed by Federal Reserve Ban\: F. M. Overstreet President, First National Bank at Ponca City, Ponca City, Okla 1952 Frank A. Sewell Chairman of the Board and President, The Liberty National Bank and Trust Company of Oklahoma City, Oklahoma City, Okla 1952 George R. Gear President, The City National Bank of Guymon, Guymon, Okla 1953 Appointed by Board of Governors: Rufus J. Green Rancher and farmer, Duncan, Okla 1952 Cecil W. Cotton President, C. W. Cotton Supply Company, Tulsa, Okla 1953 Omaha Branch Appointed by Federal Reserve Ban\: Fred W. Marble President, The Stock Growers National Bank of Cheyenne, Cheyenne, Wyo 1952 I. R. Alter President, The First National Bank of Grand Island, Grand Island, Neb 1953 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 113 DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1952—Cont. Term Expires Dec. 31 DIRECTORS Cont. Ellsworth Moser President, The United States National Bank of Omaha, Omaha, Neb 1953 Appointed by Board of Governors: Fred S. Wallace Farmer, Gibbon, Neb 1952 Joe W. Seacrest President, State Journal Company, Lincoln, Neb.. .. 1953 District No. 11—Dallas Class A: J. Edd McLaughlin President, Security State Bank and Trust Company, Rails, Tex 1952 W. L. Peterson President, The State National Bank, Denison, Tex 1953 P. P. Butler President, First National Bank in Houston, Houston, Tex 1954 Class B: George L. MacGregor Chairman of the Board, President and General Manager, Dallas Power and Light Company, Dallas, Tex 1952 W. F. Beall President and General Manager, 3 Beall Brothers 3, Department Stores, Jacksonville, Tex 1953 D. A. Hulcy Chairman of the Board and President, Lone Star Gas Company, Dallas, Tex 1954 Class C: J. R. Parten President, Woodley Petroleum Company, Houston, Tex 1952 Hal Bogle Livestock feeding, farming and ranching. Dexter, N. M 1953 R. B. Anderson General Manager, W. T. Waggoner Estate, Vernon, Tex 1954 El Paso Branch Appointed by Federal Reserve Ban\: George G. Matkin President, State National Bank, El Paso, Tex' 1952 W. H. Holcombe Executive Vice President, Security State Bank, Pecos, Tex 1953 John W. Cordts President, Southwest National Bank, El Paso, Tex.. . . 1954 J. M. Sakrison President, Southern Arizona Bank & Trust Company, Tucson, Ariz 1954 Appointed by Board of Governors: Hiram S. Corbett President, J. Knox Corbett Lumber Company, Tuscon, Ariz 1952 Vacancy 1953 Jas. A. Dick, Jr President, James A. Dick Investment Company, El Paso, Tex 1954 Houston Branch Appointed by Federal Reserve Ban\: Melvin Rouff. President, Houston National Bank, Houston, Tex.. .. 1952 R. Lee Kempner President, United States National Bank, Galveston, Tex 1953 O. R. Weyrich President, Houston Bank & Trust Company, Houston, Tex 1954 P. R. Hamill President, Bay City Bank & Trust Company, Bay City, Tex 1954 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

114 ANNUAL REPORT OF BOARD OF GOVERNORS DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1952—Cont. Term Expires Dec. 31 DIRECTORS Cont. Appointed by Board of Governors: Charles N. Shepardson Dean of Agriculture, A. & M. College of Texas, College Station, Tex 1952 Herbert G. Sutton T. O. Sutton and Sons, Colmesneil, Tex" 1953 Ross Stewart President, C. Jim Stewart & Stevenson, Inc., Houston, Tex 1954 San Antonio Branch Appointed by Federal Reserve Ban\: Riley Peters President, First State Bank, Kerrville, Tex.. .. 1952 E. R. L. Wroe President, American National Bank, Austin, Tex.. .. 1953 E. A. Baetz President, Bexar County National Bank, San Antonio, Tex 1954 V. S. Marett President, Gonzales State Bank, Gonzales, Tex 1954 Appointed by Board of Governors: D. Hayden Perry Livestock farming, Robstown, Tex 1952 Edward E. Hale Chairman of the Department and Professor of Economics, The University of Texas, Austin, Tex... 1953 Henry P. Drought Attorney at Law, San Antonio, Tex 1954 District No. 12—San Francisco Class A: William W. Crocker Chairman of the Board, Crocker First National Bank of San Francisco, San Francisco, Calif 1952 Chas. H. Stewart Chairman of the Board, Portland Trust Bank, Portland, Ore 1953 Carroll F. Byrd President, The First National Bank of Willows, Willows, Calif 1954 Class B.- Walter S. Johnson President, American Forest Products Corporation, San Francisco, Calif 1952 Alden G. Roach President, Columbia-Geneva Steel Division of United States Steel Company, San Francisco, Calif 1953 Reese H. Taylor President, Union Oil Company of California, Los Angeles, Calif 1954 Class C: Brayton Wilbur President, Wilbur-Ellis Company, San Francisco, Calif. 1952 William R. Wallace, Jr Member of the firm of Wallace, Garrison, Norton & Ray, Attorneys at Law, San Francisco, Calif 1953 Harry R. Wellman Director, Giannini Foundation of Agricultural Economics, University of California, Berkeley, Calif.. . 1954 Los Angeles Branch Appointed by Federal Reserve Ban\: M. Vilas Hubbard President, Citizens Commercial Trust and Savings Bank of Pasadena, Pasadena, Calif 1952 Frank L. King President, California Bank, Los Angeles, Calif 1952 W. R. Bimson President, The Valley National Bank of Phoenix, Phoenix, Ariz 1953 Appointed by Board of Governors: Fred G. Sherrill Vice President J. G. Boswell Company, Los Angeles, Calif 1952 Paul H. Helms President, Helms Bakeries, Los Angeles, Calif 1953 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 115 DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS, Dec. 31, 1952—Cont. Term Expires Dec. 31 DIRECTORS Cont. Portland Branch Appointed by Federal Reserve Ban\: W. W. Flint President, The First National Bank of Cottonwood, Cottonwood, Idaho 1952 Frank Wortman President, The First National Bank of McMinnviile, McMinnville, Ore 1952 E. C. Sammons President, The United States National Bank of Portland, Portland, Ore 1953 Appointed by Board of Governors: Robert B. Taylor Livestock and farming, Adams, Ore 1952 Aaron M. Frank President, Meier & Frank Company, Inc., Portland, Ore 1953 Salt Lake City Branch Appointed by Federal Reserve Ban\: Chas. L. Smith Chairman of the Board, First Security Bank of Utah, National Association, Salt Lake City, Utah 1952 John A. Schoonover President, The Idaho First National Bank, Boise, Idaho 1952 Harry Eaton Vice President, Twin Falls Bank and Trust Company, Twin Falls, Idaho 1953 Appointed by Board of Governors: Merle G. Hyer Livestock and farming, Lcwiston, Utah 1952 Vacancy 1953 Seattle Branch Appointed by Federal Reserve Ban\: Fred C. Forrest Chairman of the Board and President, The First National Bank of Pullman, Pullman, Wash 1952 Benj. N. Phillips Chairman of the Board, First National Bank in Port Angeles, Port Angeles, Wash 1952 Chas. F. Frankland President, The Pacific National Bank of Seattle, Seattle, Wash 1953 Appointed by Board of Governors: Ralph Sundquist Sundquist Fruit and Cold Storage, Yakima, Wash.. . . 1952 D. K. MacDonald President, D. K. MacDonald & Company, Inc., Seattle, Wash 1953 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

116 ANNUAL REPORT OF BOARD OF GOVERNORS DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS Dec. 31, 1952—Cont. SENIOR OFFICERS OF FEDERAL RESERVE BANKS [December 31, 1952] Federal Reserve President Bank of— First Vice President Vice Presidents Boston. J. A. Erickson John J. Fogg Carl B. Pitman Alfred C. Neal Robert B. Harvey2 O. A. Schlaikjer E. O. Latham R. F. Van Amringe New York. Allan Sproul H. A. Bilby H. V. Roelse William F. Treiber H. H. Kimball Robert G. Rouse L. W. Knoke V. Willis Walter S. Logan R. B. Wiltse A. Phelan J. H. Wurts Philadelphia Alfred H. Williams Karl R. Bopp P. M. Poorman W. J. Davis Robert N. Hilkert J. V. Vergari3 E. C. Hill Richard G. Wilgus1 Wm. G. McCreedy Cleveland Ray M. Gidney Wilbur T. Blair Martin Morrison Win. H. Fletcher Roger R. Clouse Paul C. Stetzelberger A. H. Laning2 Donald S. Thompson Richmond. Hugh Leach N. L. Armistead K. Brantley Watson J. S. Walden, Jr. R. W. Mercer2 Edw. A. Wayne C. B. Strathy Chas. W. Williams Atlanta. Malcolm Bryan V. K. Bowman E. C. Rainey1 L. M. Clark J. E. Denmark L. B. Raisty Harold T. Patterson Earle L. Rauber S. P. Schuessler Chicago. C. S. Young Allan M. Black L. G. Meyer E. C. Harris Neil B. Dawes George W. Mitchell W. R. Diercks A. L. Olson W. A. Hopkins Alfred T. Sihler L. H. Jones1 W. W. Turner St. Louis. Delos C. Johns Frederick L. Deming H. H. Weigel O. M. Attebery Dale M. Lewis J. C. Wotawa Wm. E. Peterson Minneapolis O. S. Powell H. C. Core Otis R. Preston A. W. Mills E. B. Larson M. H. Strothman, Jr. H. G. McConnell Sigurd Ueland Kansas City H. G. Leedy P. A. Debus1 Clarence W. Tow Henry O. Koppang M. W. E. Park D. W. Woolley Dallas R. R. Gilbert E. B. Austin L. G. Pondrom W. D. Gentry R. B. Coleman Harry A. Shuford J. L. Cook2 Mac C. Smyth Watrous H. Irons San Francisco.... C. E. Earhart E. R. Millard Ronald T. Symms2 H. N. Mangels H. F. Slade O. P. Wheeler 1 Cashier. 2 Also Cashier. 8 Counsel. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 117 DIRECTORS AND SENIOR OFFICERS OF FEDERAL RESERVE BANKS Dec. 31, 1952—Cont. VICE PRESIDENTS IN CHARGE OF BRANCHES OF FEDERAL RESERVE BANKS Federal Reserve Bank of— Branch Chief Officer New York... Buffalo I. B. Smith Cleveland. . . Cincinnati W. D. Fulton Pittsburgh J. W. Kossin Richmond Baltimore D. F. Hagner Charlotte R. L. Cherry Atlanta Birmingham John L. Liles, Jr* Jacksonville T. A. Lanford Nashville R. E. Moody, Jr. New Orleans E. P. Paris Chicago Detroit H. J. Chalfont St. Louis Little Rock C. M. Stewart Louisville C. A. Schacht Memphis Paul E. Schroeder Minneapolis. Helena C. W. Groth Kansas City. . Denver G. A. Gregory Oklahoma City R. L. Mathes Omaha L. H. Earhart Dallas El Paso C. M. Rowland Houston W. H. Holloway San Antonio W. E. Eagle San Francisco Los Angles W. F. Volberg Portland J. A. Randall Salt Lake City W. L. Partner Seattle J. M. Leisner CONFERENCE OF PRESIDENTS The Presidents of the Federal Reserve Banks are organized into a Conference of Presidents which meets from time to time to consider matters of common interest and to consult with and advise the Board of Governors. Mr. Peyton, President of the Federal Reserve Bank of Minneapolis, and Mr. Leach, President of the Federal Reserve Bank of Richmond, who were elected Chairman of the Conference and Vice Chairman, respectively, in February 1950, v/ere re-elected as such in March 1951 and continued to serve until the meeting held in February 1952 when Mr. Leach was elected Chairman of the Conference and Mr. Gilbert, President of the Federal Reserve Bank of Dallas, was elected Vice Chairman. Mr. Clement A. Van Nice, Assistant Vice President of the Federal Reserve Bank of Minneapolis, who was appointed Secretary of the Conference in June 1950, continued to serve as such through the meeting held in June 1952, at which meeting Mr. Aubrey N. Heflin, Counsel, Federal Reserve Bank of Richmond, was appointed as his successor. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM BOUNDARIES OF FEDERAL RESERVE DISTRICTS AND THEIR BRANCH TERRITORIES \ S w o O I BOUNDARIES OF FEDERAL RESERVE DISTRICTS BOUNDARIES OF FEDERAL RESERVE BRANCH TERRITORIES BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM FEDERAL RESERVE BANK CITIES FEDERAL RESERVE BRANCH CITIES NOTE: There has been no change in district or branch territory boundaries since the publication of the description in the Annual Report of the Board of Governors for 1942, pp. 138-45. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX Acceptances: Page Bankers, buying rates on 66 Drafts or bills of exchange for purpose of creating dollar exchange, applications granted 35 Annual reports, bank holding companies 34 Arthur Andersen and Company, accounts of Board audited by 45 Assets, earning, of member banks 31 Assets and liabilities: All banks in the United States, by classes 72 Federal Reserve Banks 50, 52 Audit of accounts of Board of Governors 45 Bank credit and money, loans and investments of commercial banks.... 14 Bank holding companies: Annual reports 34 Voting permits issued 34 Bank premises, Federal Reserve Banks and branches 44, 64 Bank supervision by Federal Reserve System 34 Banking offices: Analysis of changes 74 Number of 31 Board of Governors: Accounts audited 45 Income and expenses 45 Members 100 Officers 100 Reimbursable expenditures 47 Bonds, Government: {See Government securities) Borrowings from Federal Reserve Banks 5 Branch banks: Domestic: Number of 31 Number and analysis of changes 74 Federal Reserve System: Bank premises 44, 64 Birmingham, building site for addition acquired 44 Cincinnati, air conditioning of building authorized 44 Detroit, addition to building occupied 44 Directors, list of 105 Examination of 34 Jacksonville, new building occupied 44 Los Angeles, bids for addition to building authorized 44 Nashville, site for new building acquired 44 Vice Presidents in charge of 117 Foreign, number in operation 35 Buildings of Federal Reserve Banks and branches, construction and improvements 44 Buying rates on acceptances 66 Capital accounts: Federal Reserve Banks 51, 53 Member banks 31 119 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

120 INDEX Page Capital notes and debentures, issuance by a State member bank 85 Capital requirements of member banks, amendment to Section 9 of Federal Reserve Act 39 Central Bank for Cooperatives, authority to permit national banks to deal in obligations of 40 Central reserve city banks, earnings and expenses 73 Chairmen of Federal Reserve Banks: Executive committee 103 List of 103 Meetings of 47 Charts: Deposits and currency 15 Federal Reserve credit 4 Gross national product 20 Member bank reserves and related items 17 Money rates 18 Selected business indexes 22 United States balance of payments 25 Check collection system, study of 44 Clayton Antitrust Act, Transamerica Corporation, findings as to the facts, conclusion, and orders 38 Clearing and collection: Par list: Changes in par and nonpar banks during year 33 Number of banks on list and number not on list, by States 75 Commercial banks: Assets and liabilities 72 Holdings of Government securities 12, 14 Loans and investments 14 Commitment fees under Regulation V 68 Committees: Executive, of Chairmen's Conference 103 Executive, of Federal Advisory Council 102 Executive, of Federal Open Market Committees 101 Condition reports of Federal Reserve Banks: All banks combined 50 Each bank 52 Conferences: (See Meetings) Consumer credit, Regulation W: Amendments to 5, 79 Minimum down payments and maximum maturities under 69 Suspended 5, 82 Corporate security issues during year 8 Country banks, earnings and expenses 73 Court cases: Regulation W, violations of 38 Regulation X, violations of 38 Removal of bank officers, order for hearing 38 Transamerica Corporation, findings as to the facts, conclusion and orders 38 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX 121 Credit: Consumer: (See Consumer credit) Page Expansion during year 7 Federal Reserve policy 2 Voluntary credit restraint program 7, 80 Currency, growth during year 15 Defense Production Act: Amendments to 39 Voluntary credit restraint program terminated by amendment to.... 7, 80 Deposits: All banks in the United States, by classes 72 Growth during year 15 Time, maximum rates on 67 Deputy Chairmen of Federal Reserve Banks, list of 103 Directors, Federal Reserve Banks: Classes of 104 List of 104 Directors, Federal Reserve branch banks: List of 105 Directory: Board of Governors of the Federal Reserve System 100 Federal Advisory Council 102 Federal Open Market Committee 101 Federal Reserve Banks 103 Discounts and advances at Federal Reserve Banks 5 Discount rates of Federal Reserve Banks 5, 66 Dividends: Federal Reserve Banks 42 Member banks 30, 73 Dollar exchange, permission to accept drafts or bills drawn for the purpose of furnishing 35 Earning assets of member banks 31 Earnings and expenses: Federal Reserve Banks: 1952 41 1914-1952 60 Member banks 73 Earnings and profits of member banks 29 Economic and financial developments in all countries 24 Economic conditions, review for year 19 Employees, Federal Reserve Banks, number and salaries 65 Employment, increase during year 21 Examinations: Federal Reserve Banks 34 Federal Reserve branch banks 34 Foreign banking corporations 36 Holding company affiliates 34 State member banks 34 Expenses: Board of Governors 46 Federal Reserve Banks 58, 60 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

122 INDEX Page Exports, review for certain countries 24 Federal Advisory Council: Executive committee 102 Meetings 47 Members and officers 102 Federal Open Market Committee: Executive committee 101 Meetings 47 Members and officers 101 Policy actions 90 Study of technical and operational phases of market by ad hoc subcommittee 48 Federal Reserve Act: Section 9, amendment as to capital requirements of member banks... 39 Federal Reserve Bank of Boston: Addition to building occupied and alterations to building authorized. . 44 Federal Reserve Bank of Richmond: Addition to building occupied 44 Federal Reserve Banks: Assets and liabilities 50, 52 Bank premises 44, 64 Branches: (See Branch banks, Federal Reserve System) Chairmen: (See Chairmen, Federal Reserve Banks) Condition of 50, 52 Directors 104 Discount rates 5, 66 Dividends 42 Earnings and expenses 41, 58, 60 Earnings on loans and securities 43 Employees 65 Examination of 34 First Vice Presidents 116 Foreign accounts 43 Holdings of Government securities 4, 11, 42, 56 Holdings of short-term Treasury certificates 57 Officers 116 Officers and employees, number and salaries 65 Ownership of Government debt 12 Presidents 116 Profit and loss 59 Vice Presidents 116 Volume of operations 40, 57 Federal Reserve credit policy 2 Federal Reserve notes: Cost of printing 47 Issued to and held by Federal Reserve Banks 51, 53, 55 Payments to United States Treasury as interest 42 Federal Reserve System: Changes in membership 32 Map 118 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX 123 Page Fiduciary powers granted to national banks 34 First Vice Presidents of Federal Reserve Banks, list of 116 Foreign accounts 43 Foreign banking corporations 35 Gold reserves and dollar holdings of foreign countries 27 Government debt, changes in structure and ownership 9 Government securities: Holdings of commercial banks 11 Holdings of Federal Reserve Banks 4, 11, 42, 56 Open market operations 3 Ownership, changes in 9 Purchase of obligations by Federal Reserve Banks directly from or sale to United States, authority extended 39 Study of technical and operational phases of market by ad hoc subcommittee of Federal Open Market Committee 48 Guarantee fees under Regulation V 68 Holding company affiliates 34 Imports, situation in certain countries 26 Income and expenses of Board of Governors 45 Income and personal savings 23 Insurance companies, holdings of Government securities 11 Interest rates: Amendment to Regulation Q relating to payment on deposits 36, 82 Changes during year 18 Federal Reserve Banks 66 Legislation: Capital requirements of member banks, amendment to Section 9 of Federal Reserve Act 39 Central Bank for Cooperatives, authority to permit national banks to deal in obligations of 40 Defense Production Act, amendments to 39 Purchase of Government obligations by Federal Reserve Banks, authority extended 39 Loans: Commercial banks 14 Defense production, guarantee of 28 Federal Reserve Banks, earnings on 43 Regulation V, guarantee fees and commitment rates 68 Regulation X, maximum loan values and maximum maturities 70 V-loans authorized 29 Loans and investments: All banks in United States 72 Commercial banks 14 Map of Federal Reserve System 118 Margin requirements: Reduction from 75 to 50 per cent.. 6 Table 68 Meetings: Chairmen of Federal Reserve Banks 47 Federal Advisory Council 47 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

124 INDEX Page Federal Open Market Committee 47 Presidents of Federal Reserve Banks 47 Member banks: Analysis of changes 74 Capital accounts 31, 72 Earning assets 31 Earnings, expenses, profits and dividends 30 Earnings and expenses 73 Number of 32 Reserve requirements 67 Reserves, reserve bank credit and related items 62 Membership in Federal Reserve System:. Amendment to Regulation H 36, 86 Changes in 32 Eligibility of State bank operating real estate title insurance business. . 88 Mutual savings banks: Analysis of changes 74 Assets and liabilities 72 Holdings of Government securities 11 National banks: Analysis of changes 74 Assets and liabilities 72 Trust powers granted to 34 Nonmember banks: Analysis of changes 74 Assets and liabilities 72 Par list, number on list and number not on list 75 Number of banking offices in the United States 74 Open market operations 3 Operations of Federal Reserve Banks, volume of 40, 57 Ownership of Government debt, changes in 9 Par List: Number of banks on, changes during year 33 Number of banks on list and not on list by Federal Reserve districts and States 75 Policy actions, Board of Governors: Eligibility for membership in the Federal Reserve System of a State bank operating a real estate title insurance business 88 Issuance of capital notes and debentures of a State member bank.... 85 Regulation H, membership of State banking institutions in the Federal Reserve System, amendment to 86 Regulation Q, payment of interest on deposits, amendment to 82 Regulation V, loan guarantees for defense production, prepayment premiums under 88 Regulation W, consumer credit: Amendments to 79 Suspension of 82 Regulation X, real estate credit:. Amendment to 78, 83 Announcement of period of residential control relaxation 87 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX 125 Policy actions, Board of Governors—Continued Suspension 87 Voluntary credit restraint program: Amendment to 80 Suspension of 80 Policy actions, Federal Open Market Committee: Amendment of Section 8 of Federal Open Market regulation 94 Authority to effect transactions in System account: Meeting of March 1 90 Meeting of June 19 92 Meeting of September 25 95 Meeting of December 8 98 Repurchase agreements 97 Postal savings deposits, interest rate on 67 Presidents of Federal Reserve Banks: Conference of 117 List of 116 Meetings of 47 Prices, changes in 21 Production, review for year 19 Profits of member banks 30 Rates: Buying, on acceptances 66 Commitment to make loans under Section 13 (b) of Federal Reserve Act 66 Discount at Federal Reserve Banks 5, 66 Interest 18, 66 Loans guaranteed under Defense Production Act 68 Postal savings deposits 67 Savings deposits 67 Time deposits 67 Real estate credit: Maximum loan values and maximum maturities under Regulation X. . 70 Regulation X: Amendments to 6, 78, 83 Suspension of 6, 87 Real estate title insurance business, eligibility of State bank for membership 88 Regulations, Board of Governors: H, membership of State banking institutions in Federal Reserve System, amendment to 36, 86 Q, payment of interest on deposits, amendment to 36, 82 T, extension and maintenance of credit by brokers, dealers, and members of national securities exchanges, reduction in margin requirements 6 U, loans by banks for the purpose of purchasing or carrying stocks registered on a national securities exchange, reduction in margin requirements 6 V, loan guarantees for defense production loans: Extent of 28 Prepayment premiums under 88 W, consumer credit: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

126 INDEX Regulations, Board of Governors—Continued W, consumer credit— Page Amendments to 5, 79 Enforcement of 38 Suspension of 5, 37, 82 X, real estate credit: Amendment to 6, 78, 83 Announcement of period of residential credit control relaxation.... 87 Enforcement of 38 Suspension of 6, 37, 87 Regulations, Federal Open Market Committee: Amendment to Section 8 94 Removal of bank officers, order for hearing 38 Repurchase agreements authorized by Federal Open Market Committee. . 97 Reserve city banks, earnings and expenses 73 Reserve requirements of member banks 67 Reserves: Fluctuations during year 16 Member banks, 1918-1952 62 Revised statutes: Amendment to Section 5136 to permit national banks to deal in obligations issued by Central Bank for Cooperatives 40 Salaries: Board of Governors 46 Officers and employees of Federal Reserve Banks 65 State member banks: Analysis of changes 74 Assets and liabilities 72 Changes in membership 32 Examination of 34 Studies: Check collection system 44 Federal Open Market Committee of technical and operational phases of market by ad hoc subcommittee 48 System Open Market account, authority to effect transactions in. 90, 92, 96, 99 Transamerica Corporation, findings as to the facts, conclusion, and orders 38 Treasury certificates, holdings of short-term by Federal Reserve Banks.... 57 Trust powers of national banks 34 Vice Presidents of Federal Reserve Banks, list of 116 Volume of operations of Federal Reserve Banks 40, 57 Voluntary credit restraint program: Amendment to 80 Suspension of 7, 80 Voting permits issued to bank holding companies 34 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis