From left (standing): John F. Moore, First Vice President Nelson C. Rising, Deputy Chairman Robert T. Parry, President Seated: Gary G. Michael, Chairman

It was also the year in which the entire Federal Reserve System celebrated its 85th year of service. At the end of 1913, President Woodrow Wilson signed the Federal Reserve Act, creating the Federal Reserve Banks that opened throughout the country the following year.

The influence of the Federal Reserve is now felt far beyond what the early founders could have imagined. Two of our directors profiled in this Report are from states that did not exist 85 years ago -- Alaska and Hawaii. In addition, the Pacific Rim countries are now a significant focus of this Bank.

Just this last summer, I, as president of the Federal Reserve Bank of San Francisco, was part of a delegation that visited central bankers in Japan and China. We were interested in learning more about economic and financial developments in their countries and gaining a better understanding of banking conditions and financial sector reforms that are taking place there. Information such as this, along with the invaluable grassroots information on local economic conditions provided to us by our directors, is key to the formulation of a successful monetary policy.

We want to extend particular thanks and appreciation to those directors and advisory council members who retired from Federal Reserve service at 1999 year end: on the Portland Branch Board, Gary T. Duim (Vice Chairman - Retired, U.S. Bancorp, Portland, OR); on the Salt Lake City Branch Board, Nancy S. Mortensen (Vice President - Marketing Services, Zions Cooperative Mercantile Institution, Salt Lake City, UT); from the Seattle Branch Board, Tomio Moriguchi (Chairman and CEO, Uwajimaya, Inc., Seattle, WA); and from the Twelfth District Advisory Council, its Chairman, Bailey (Biff) S. Barnard (Senior Vice President, Allied Capital Corporation, San Francisco, CA).

Gary G. Michael Chairman		Robert T. Parry President