Annual Report 1956
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FEDERAL RESERVE BANK OF CHICAGO ANNUAL REPORT 1956 To the Member Banks of the Seventh Federal Reserve District: I am pleased to submit to you this Forty-second Annual Report of the Federal Reserve Bank of Chicago, covering the operations during the year 1956. In addi tion to the summary of Bank operations the Report includes a detailed review of the basic economic structures of two District cities— Indianapolis and Milwaukee. This is the third in a series of studies of the distinguishing characteristics of Seventh District “areas” to appear in the Annual Report. Clifford S. Young retired on February 28, after 35 years of devoted service to the Bank. He started here in 1921 as an Assistant Examiner, subsequently served as Assistant Federal Reserve Agent, as Secretary, as Vice President, and as President of the Bank from 1941 until his retirement. “Hap” Young’s knowledge of Midwest banks and bankers, together with his warm personal qualities, made countless friends and represented a most important asset for the Federal Reserve Bank of Chicago and the Federal Reserve System. December 31 saw the retirement of Assistant Vice President Mark A. Lies, a “charter employee” who had served the Bank since the day it opened for business in 1914 and in recent years was the capable manager of our bank building. Mr. Lies also left us with the respect and affection of a host of friends. Carl E. Allen, who had been a Class “C” Director and Deputy Chairman of the Board, succeeded Mr. Young as President of the Bank on October 1. J. Stuart Russell was then appointed Deputy Chairman of the Board, and Robert P. Briggs, Executive Vice President of Consumers Power Company, Jackson, Michigan, was appointed a Class “C” Director to succeed Mr. Allen in the latter capacity. J. Thomas Smith, President of the Detroit Harvester Company, was appointed Director of the Branch to fill a vacancy on the Board. C. V. Patterson, Executive Vice President of the Upjohn Company, Kalamazoo, Michigan, was appointed Director of the Detroit Branch to succeed William M. Day, President, Michigan Bell Telephone Company. The past year set many records in the economic life of our country. As a result the volume of business handled by many departments of the Bank was larger than ever before. On behalf of our Directors, Officers and Staff, I extend our deep appreciation to you our stockholders for your understanding cooperation and assistance. Very truly yours, (L President carl E. allen took office as President of the Federal Reserve Bank of Chicago on October 1, 1956. Prior to that time Mr. Allen had served as Director and Deputy Chairman of the Board of the Chi cago Bank and since 1950 had been President of Campbell, Wyant and Cannon Foundry Company of Muskegon, Michigan. A long career in commercial banking preceded his service as a Midwest industrialist. From 1926 to 1950, Mr. Allen was associated with the National City Bank of New York where he served as a Vice Presi dent from 1940 to 1950. When announcing selection of the new chief executive officer of the Bank, Bert R. Prall, Chairman of the Board, said, “In selecting Mr. Allen we have a man who can give the Federal Reserve Bank the kind of leadership this great area needs. The Chicago District is the largest in point of population, has more banks than any other District, and leads all others in many of the basic industries of our economy. He has a broad commercial banking experience, is an out standing industrialist, and being 51 years of age will give continuity to management.” Mr. Allen was born in Carbondale, Illinois, is a graduate of Phillips Academy, Andover, Massachusetts, and of Dartmouth Col lege. He is married and has four children. FEDERAL RESERVE BANK OF CHICAGO Chairman and Federal Reserve Agent Deputy Chairman Bert R. Prall J. Stuart Russell Chicago, Illinois Farm Editor Des Moines Register and Tribune Des Moines, Iowa Robert P. Briggs Walter J. Cummings W illiam J. Grede Executive Vice President Chairman of the Board President Consumers Power Company Continental Illinois National Bank G rede Foundries, Inc. Jackson, Michigan and Trust Company of Chicago Milwaukee, Wisconsin Chicago, Illinois William A. Hanley Walter E. Hawkinson Vivian W. Johnson Director Vice President in Charge of Finance President Eli Lilly and Company and Secretary First National Bank Indianapolis, Indiana Allis-Chalmers Mfg. Co. C edar Falls, Iowa Milwaukee, Wisconsin Nugent R. Oberwortmann President The North Shore National Bank of Chicago Chicago, Illinois MEMBER OF FEDERAL ADVISORY COUNCIL Homer J. Livingston President The First National Bank of Chicago Chicago, Illinois MEMBERS OF INDUSTRIAL ADVISORY COMMITTEE C. Harvey Bradley John W. Evers Walter Harnischfeger Chairman of the Advisory Board President President W. J. Holliday & Company Commonwealth Edison Company Harnischfeger Corporation Division of Jones and Laughlin Chicago, Illinois Milwaukee, Wisconsin Steel Corporation Indianapolis, Indiana Edward M. Kerwin James L. Palmer Senior Vice President President E. J. Brach and Sons Marshall Field & Company Chicago, Illinois Chicago, Illinois DETROIT BRANCH DIRECTORS Chairm an Ira A. Moore John A. Hannah Howard P. Parshall Chairman of the Board President President Peoples National Bank of Grand Rapids Michigan State University Bank of the Commonwealth Grand Rapids, Michigan - East Lansing, Michigan Detroit, Michigan C. V. Patterson Raymond T. Perring Ernest W. Potter Executive Vice President President President Upjohn Company The Detroit Bank and Trust Company Citizens Commercial & Savings Bank Kalamazoo, Michigan Detroit, Michigan Flint, M ichigan J. Thomas Smith President Detroit Harvester Company Detroit, Michigan FEDERAL RESERVE BANK OF CHICAGO OFFICERS CARL E. ALLEN ERNEST C. HARRIS President First Vice President NEIL B. DAW ES, Vice President and Secretary GEORGE W. MITCHELL, Vice President WILFORD R. DIERCKS, Vice President HAROLD J. NEWMAN, Vice President ARTHUR M. GUSTAVSON, Vice President ARTHUR L. OLSON, Vice President PAUL C. HODGE, Vice President, RUSSEL A. SWANEY, Vice President General Counsel and Assistant Secretary WILLIAM W. TURNER, Vice President CLARENCE T. LAIBLY, Vice President LAURENCE H. JONES, Cashier ERNEST T. BAUGHMAN, ROBERT C. HOLLAND, Assistant Vice President Assistant Vice President PHIL C. CARROLL, Assistant Vice President BRUCE L. SMYTH, Assistant Vice President EDWARD A. HEATH, Assistant Vice President C. PAUL VAN ZANTE, and Assistant Secretary Assistant Vice President HUGH J. HELMER, Assistant Vice President H. FRED W ILSO N , Assistant Vice President CARL E. BIERBAUER, Assistant Cashier WILLIAM O. HUME, Assistant Cashier E D W A R D D. BRISTOW , Assistant Cashier H ARRY S. SCHULTZ, Assistant Cashier LE ROY A. DAVIS, Assistant Cashier ELMER F. SHIREY, Assistant Cashier LE ROY W. DAWSON, Assistant Cashier ROBERT E. SORG, Assistant Cashier FRED H. G R IM M , Assistant Cashier JOSEPH J. SRP, JR., Assistant Cashier VICTOR A. HANSEN, Assistant Cashier GEORGE T. TUCKER, Assistant Cashier JOHN J. ENDRES, General Auditor CHARLES J. SCANLON, Chief Examiner FRED A. DONS, Assistant General Auditor LELAND M. ROSS, Assistant Chief Examiner WILLIAM C. GALLAGHER, Assistant Counsel DETROIT BRANCH RUSSEL A. SWANEY, Vice President PAUL F. CAREY, Assistant Cashier RICHARD W. BLOOMFIELD, ARTHUR J. WIEGANDT, Assistant Cashier Assistant Vice President GORDON W. LAMPHERE, HAROLD L. DIEHL, Cashier Assistant General Counsel FEDERAL RESERVE BANK OF CHICAGO ANNUAL REPORT m i W JH 1 M i A | y ■ j ! •, Indianapolis Milwaukee big town, boom town old firms and new investment page 7 page 22 Big, thriving economies page 6 Activities in 1956 Assets and liabilities 41 Earnings and expenses 46 Operations: volume, personnel, membership 48 Big, thriving economies ne way to better understand the workings try. A city’s well-being, therefore, depends mainly of the dynamic and complex American economy is to on the external markets for the products in which examine differing regional and local economic con it specializes and on the effectiveness with which its ditions and trends. For nonfarm activities, the basic producers compete for these markets. For example, molecules in the economic fabric are metropolitan payrolls, employment, retail sales and bank deposits areas— cities and their environs. Thus the way to in most eastern Michigan cities are closely related study differences in molecular structure in the Mid to the sales of their principal “export” products— west is to appraise the economic specialization which motor vehicles and parts. differs considerably from one city to another and An appraisal of a city’s economic structure re imparts to each a distinctive set of economic char quires not only an examination of the present and acteristics. prospective demand for its exports, but also an What makes for prosperity, stability and growth analysis of investment in the community and how it in a metropolitan area? To some extent, a city’s way is financed— whether from the savings of local citi of making its living is a circular process. People zens and businesses, through local financial institu “take in each other’s washing”—that is, a fair pro tions, or in the national capital markets. For portion of the workers in every community earn their economic activities on current account— “exporting” keep by producing goods and services for each other. and serving local needs— while the main, are not the This kind of local specialization has existed in cities only things indicative of a city’s resources and pros for centuries.