Federal Reserve Bulletin, 1974-08

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

A copy of the Federal Reserve B ulletin is sent to each member bank without charge; member banks desiring additional copies may secure them at a special $10.00 annual rate. The regular subscription price in the United States and its possessions, and in Bolivia, Canada, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, Guatemala, Haiti, Republic of Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, El Salvador, Uruguay, and Venezuela is $20.00 per annum or $2.00 per copy; elsewhere, $24.00 per annum or $2.50 per copy. Group subscriptions in the United States for 10 or more copies to one address, $1.75 per copy per month, or $18.00 for 12 months. The B ulletin may be obtained from the Division of Administrative Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551, and remittance should be made payable to the order of the Board of Governors of the Federal Reserve System in a form collectible at par in U.S. currency. (Stamps and coupons are not accepted.) COVER: Photograph of the Constitution Avenue entrance of the Federal Reserve Building in Washington, D.C. The building, completed in 1937, houses the Board of Governors of the Federal Reserve System and its staff. In the two-tone reproduction of the photograph, the gray color is printed as a combined “line conversion” with a light-value halftone and the orange is overprinted with a darker-value halftone. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE BULLETIN NUMBER 8 □ VOLUME 60 □ AUGUST 1974 CONTENTS 533 Financial Developments in the Second Quarter of 1974 543 Summary Description of Information System for Banking Agency Reports 551 Statements to Congress 580 Record of Policy Actions of the Federal Open Market Committee 588 Law Department 609 Announcements 611 Industrial Production A 1 Contents A 3 Guide to Tabular Presentation A 3 Statistical Releases: Reference A 4 U.S. Statistics A 60 International Statistics A 82 Board of Governors and Staff A 84 Open Market Committee and Staff; Federal Advisory Council A 85 Federal Reserve Banks and Branches A 86 Federal Reserve Board Publications A 89 Index to Statistical Tables Map of Federal Reserve System on Inside Back Cover EDITORIAL J. Charles Partee Joseph R. Coyne Robert Solomon COMMITTEE Ralph C. Bryant Kenneth B. Williams Lyle E. Gramley Elizabeth B. Sette The Federal Reserve BULLETIN is issued monthly under the direction of the staff editorial committee. This committee is responsible for opinions expressed except in official statements and signed articles. Direction for the art work is provided by Mack Rowe. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial D evelopm ents in th e S econd Q u a rte r o f 1 9 7 4 This report, which was sent to the Joint Economic Committee of the U.S. Congress, highlights the important developments in finan­ cial markets during the spring and early summer. Most interest rates rose sharply during the second quarter of 1974 amidst continuing rapid increases in the price level, strong over-all demands for credit, and Federal Reserve efforts to restrain the expansion of monetary and credit aggregates. Nominal gross na­ tional product increased more rapidly than in the first quarter, reflecting both the persistence of a high rate of inflation and a leveling off in real output following the energy-related decline of the previous quarter. Interest rates, extending the upturn that had occurred in March, reached new peaks in various markets, and yield spreads widened as a result of increasing selectivity on the part of investors. Yields on Treasury securities, in contrast, rose only slightly on balance because of the increased public demand for high-quality investments, large foreign official purchases, and the short supply of Treasury bills available in the market. Toward the end of the quarter, financial market tensions were exacerbated by the publicity given to the difficulties of a large New York bank and the failure of a sizable bank in Germany. In the second quarter growth of the narrowly defined money stock, Mu accelerated, measured on both a quarterly average and a last-month-of-quarter basis. However, recent revisions of data on the monetary aggregates indicate M1 grew at a significantly lower rate in the first quarter than previously reported. Part of the increase in M1 during the second quarter reflected higher U.S. money balances held by foreign official institutions and foreign commercial banks. The broader measures of money, M2 and M3, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

534 FEDERAL RESERVE BULLETIN □ AUGUST 1974 expanded at slower rates in the second quarter, as inflows of consumer-type time and savings deposits at commercial banks and nonbank thrift institutions slackened. With credit demands contin­ uing strong, banks relied heavily on the issuance of negotiable certificates of deposits (CD’s) to attract lendable funds. MONETARY Between March and June, total reserves of member banks grew AGGREGATES at an annual rate of about 20 per cent; virtually all of the growth was in borrowed reserves. The sharp increase in borrowings re­ flected not only tighter market conditions but also the extension of emergency credit through the discount window to a single large bank. This extension of credit reduced the need for the Federal Reserve to supply reserves through open market operations, and so nonborrowed reserves grew at only a 1 per cent annual rate, TABLE 1 CHANGES IN SELECTED MONETARY AGGREGATES1 In per cent, figures are seasonally adjusted annual rates 1973 1974 Item 1972 1973 Q3 Q4 Qi Q2 Member bank reserves: Total ...................................................... 10.6 7.8 10.6 6.1 1.7 ! 20.4 Nonborrowed ........................................ 7.7 7.2 11.3 13.4 1.5 1.1 Available to support private nonbank deposits2 ........................... 10.1 9.3 14.2 1.4 6.2 20.3 Concepts of money3 calculated from: End-month of quarter— M M i 2 . . . . . . .. . . . . . .. . . . . . .. . . . .. . . . . . .. . . . . . .. . . . .. . . . . . .. . . . . . .. . . . . . .. . . . .. . . . . . .. . . . .. . . . . . .. . . . . . .. . . . . . .. . . . .. . . . . . .. . . . . . .. . . . . 1 8 1. . 1 7 6 8 . . 1 9 5.3 1 8 1 . . 9 0 5 9 . . 6 0 6 7 . . 4 7 m3 ...................................................... 13.0 8.8 5.1 9.8 8.9 6.4 Quarterly average— M, .......................................................................... 7.7 6.3 5.6 4.5 5.8 7.3 M2 ...................................................... 10.9 8.9 7.9 8.9 9.4 7.9 M3 ...................................................... 12.9 8.9 7.5 7.9 9.1 7.2 Time and savings deposits at: Commercial banks (other than large CD’s)................................ 13.5 11.4 10.6 12.6 12.2 8.7 Nonbank thrift institutions................... 16.6 8.6 4.6 7.6 8.6 4.1 Bank credit proxy, adjusted4.................... 11.6 10.6 10.5 3.3 8.5 20.9 Memo (Change in billions of dollars, seasonally adjusted): Large CD’s............................................. 10.4 19.4 4.7 -3.9 4.9 15.6 U.S. Government demand deposits at member banks................ -1.2 -.3 -.1 -1.2 1 Incorporates revisions in money stock and related measures based on new benchmark data for nonmember banks. 2Total reserves less required reserves for U.S. Government and interbank deposits. 3Mj is currency plus private demand deposits adjusted. Af2 is Af, plus bank time and savings deposits adjusted other than large CD’s. Af3 is Mo plus deposits at mutual savings banks and savings and loan associations. 4Total member bank deposits plus funds provided by Euro-dollar borrowings and bankrelated commercial paper. Note— Changes are calculated from the average amounts outstanding in the last month of each quarter, except the quarterly average calculation of concepts of money, which are based on changes in the average amounts outstanding for a quarter. Annual rates of growth have been adjusted for changes in reserve requirements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FINANCIAL DEVELOPMENTS, Q2 1974 535 The Federal funds rate rose throughout the second quarter, as the Federal Reserve resisted an excessive expansion in bank re­ serves supporting growth in private deposits. By the end of June it had reached almost 12 per cent, and there was a further rise in the first half of July. With most other short-term rates also escalating, money markets remained extremely taut, despite the relatively large increase in total reserves. Measured on both a quarterly average and a last-month-of-quarter basis, the expansion in M1 was faster than revised data for the first quarter now indicate. In April the growth of foreign official CONCEPTS OF MONEY Seasonally adjusted monthly averages. Mt is currency plus private demand deposits adjusted. M2 is Af, plus commercial bank time and savings deposits adjusted other than large CD’s. Af3 is M2 plus deposits at mutual savings banks and savings and loan associations. and foreign commercial bank demand balances accounted for over one-third of the rise in M 1? but in the following month when foreign transactions were not so large, the growth of money balances decelerated appreciably. The movement of funds to oil-exporting countries in June caused a bulge in the money stock as the funds remained briefly in demand balances before passing to their foreign recipients. The change in the scale of foreign payments clearly has increased the sensitivity of monthly changes in M x to foreign financial transactions. Growth in time and savings deposits other than CD’s moderated at banks in the second quarter, and partially estimated data suggest that month-to-month variations in the growth of such deposits were attributable largely to movements of time and savings deposits in denominations of less than $100,000. Small time and savings deposits appear to have declined slightly in April and substantially Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

536 FEDERAL RESERVE BULLETIN □ AUGUST 1974 in May, and then to have risen in June to approximately the level of outstandings in March. Deposit inflows at nonbank thrift institu­ tions showed a similar path in the quarter—weakening in April and May and then recovering in June, partly as a result of interest credited to customers’ accounts. The attractive yields available on market securities caused individuals to divert funds from savings accounts at banks and nonbank thrift institutions. Large banks, especially in New York and Chicago, relied heavily on the issuance of money market CD’s to acquire funds to meet loan demands; the increase in CD’s amounted to $15.6 billion, the largest quarterly expansion on record. Of the total, $7.7 billion was issued in April, a month of particularly heavy loan demand. Banks also relied to a lesser extent on nondeposit sources of funds such as the borrowing of Euro-dollars through foreign branches and the sale of assets to bank holding companies, which acquired funds in the commercial paper market. BANK USES OF FUNDS Total loans and investments of commercial banks grew rapidly between March and June. The quarter began with business credit demands focused on banks, as the prime rate—though rising— lagged behind commercial paper rates. In May, growth of bank loans to businesses slowed when the prime rate reached levels that made commercial paper financing by corporate borrowers relatively more attractive. Business loans moderated further in June, but without an accompanying increase in commercial paper issuance, as unsettled conditions in the commercial paper market made it difficult for borrowers with less than prime credit ratings to obtain BANK CREDIT COMPONENTS funds in this market. Total short-term business borrowing in June dropped to its lowest monthly rate of growth for the year. But U.S. GOVT. SECURITIES 4 in late June and early July, business loan demands rose sharply— n particularly at banks in the money market centers—as borrowers withdrew from money and capital markets. U u 4 J There were several factors underlying the strong business credit OTHER SECURITIES expansion in the second quarter. Corporate profits, after inventory 4 valuation adjustment and taxes, declined in the first quarter. While n f j T l i i n J L _ data are not yet available for the second quarter, apparently a TOTAL LOANS 20 continued low rate of internal funds generation forced businesses to seek substantial external borrowing—particularly with a high 16 rate of real inventory accumulation and of increased general work­ ing capital needs accompanying continued inflation. As noted earlier, it became more and more difficult as the quarter progressed for other than prime borrowers to obtain funds in the 1 Q3 Q 4 | Q1 commercial paper market, an important source of short-term credit. A heightened awareness of the risks associated with nonprime paper Seasonally adjusted. Loans adjusted for transfers between banks and their led to wide yield spreads between differently rated issues and holding companies, affiliates, sub­ sidiaries, or foreign branches. ultimately to a limited availability of funds in the commercial paper Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FINANCIAL DEVELOPMENTS, Q2 1974 537 BANK LOANS market. The capital market, too, reflected growing investor caution. MAJOR COMPONENTS This, together with increases in rates to levels that many borrowers BUSINESS found unattractive, caused a number of borrowers to postpone, n r L cancel, or reduce pending issues; these postponements and cancel­ lations became particularly widespread at the end of the quarter j=ll and in early July. Business borrowers, therefore, found it necessary REAL ESTATE to satisfy a major part of their large external financing needs at banks. Among other bank loan categories, real estate loans maintained CONSUMER 4A the pace of the previous quarter, and loans to nonbank financial 1 1 1 1 n 1 1------1 institutions were quite large—reflecting the same conditions that SECURITY + had diverted borrowers to banks from the commercial paper and capital markets. Real estate investment trusts, in particular, had 4 Q2 great difficulty obtaining market financing. Consumer borrowing Seasonally adjusted. “Business” ad­ at banks, on the other hand, showed the smallest growth for any justed for transfers between banks and their holding companies, affili­ quarter since 1970. ates, subsidiaries, or foreign branches. TABLE 2 RATE SPREADS AND CHANGES IN BUSINESS LOANS AND COMMERCIAL PAPER Amounts1 Prime rate Annual less 30- to 59- rate of Period day commercial Business change in paper rate loans Dealer- total (per cent) at all placed Total (per cent) commercial commercial banks2 paper3 1974—Q1 .................. 8.8 1.3 10.1 23.7 Q2 ................... 9.6 .4 10.0 22.1 April ............. -.08 4.8 -.2 4.6 30.6 May ............... .39 3.0 .5 3.5 22.7 June ............... .38 1.8 .1 1.9 12.1 Seasonally adjusted changes, in billions of dollars. 2Based on last-Wednesday-of-month data; adjusted for outstanding amounts of loans sold to affiliates. 3Measured from end-of-month to end-of-month. NONBANK Deposit growth at nonbank thrift institutions slowed appreciably INTERMEDIARIES AND during the second quarter. The sharp upward movement of yields MORTGAGE MARKETS on market instruments, which had begun in late February and early March, continued throughout the second quarter, diverting deposit flows away from claims at thrift institutions—especially mutual savings banks—into alternative investments. Total deposits at sav­ ings and loan associations and mutual savings banks grew at a seasonally adjusted annual rate of 4.2 per cent over the April-June period. Responding to the pressures of disintermediation, savings and loan associations covered existing mortgage commitments by in­ creasing indebtedness at the Federal home loan banks, reducing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

538 FEDERAL RESERVE BULLETIN □ AUGUST 1974 NONBANK SAVINGS ACCOUNTS their holdings of liquid assets, and drawing on credit lines at commercial banks. At the same time, they sharply curtailed new 12 mortgage commitment activity. Mutual savings banks also cut back their participation in the mortgage market, for the fifth consecutive quarter, and financed heavy deposit outflows by liquidating Gov­ ernment securities and by drawing on internal flows of funds and Q2 Q3 Q4 j Q1 Q2 credit lines at banks. Net mortgage debt formation rose substantially on a seasonally Seasonally adjusted. adjusted basis during the second quarter, reflecting the stronger deposit flows and easier mortgage market conditions of the first quarter. Both direct and indirect financing by Federally sponsored credit agencies also contributed to the rise in net mortgage debt formation. TABLE 3 NET CHANGE IN MORTGAGE DEBT OUTSTANDING In billions of dollars, seasonally adjusted annual rates 1973 1974 Change— Q2 Q3 Q4 Q1 Q2e By type of debt: Total ............................................ 76 71 58 59 64 Residential .............................. 54 51 38 40 44 Other1 ..................................... 22 20 20 19 20 At selected institutions: Commercial banks .................... 22 21 18 13 16 Savings and loans ...................... 34 25 12 22 26 Mutual savings banks ............... 7 5 5 4 3 Insurance companies ................. 2 5 7 4 5 FNMA-GNMA ........................... 2 7 3 2 8 includes commercial and other nonresidential as well as farm properties. ^Partially estimated. FUNDS RAISED IN The volume of long-term debt issued by corporations and State SECURITIES MARKETS and local governments remained near the elevated levels of the past two quarters. As noted earlier, corporations turned increasingly to banks for funds as conditions in the securities markets deterio­ rated in the second half of the quarter. In addition to a lower-thananticipated corporate bond volume, new stock issues dropped to the lowest seasonally adjusted volume for any quarter since 1968, as stock prices reached the lowest point in 3 years. The volume of long-term debt sold by State and local govern­ ments remained large in the second quarter because of a record­ sized bond offering by New York City. However, the originally scheduled volume was cut back, when statutory interest rate ceilings forced some postponements and other postponements were initiated voluntarily. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FINANCIAL DEVELOPMENTS, Q2 1974 539 TABLE 4 OFFERINGS OF NEW SECURITY ISSUES In billions of dollars, seasonally adjusted annual rates 1973 1974 Type of issue Q2 Q3 Q4 Ql Q2e Corporate securities—Total ........ 32 30 38 38 35 Bonds ....................................... 23 23 26 30 30 Stocks ..................................... 9 8 12 8 5 State and local government bonds ............................................ 24 23 26 23 26 ^Estimated. Note—Details may not add to totals because of rounding. U.S. Treasury demands for funds dropped off in the second quarter as Treasury tax and loan accounts at commercial banks were augmented by an unusually large volume of tax receipts. However, the resulting net repayment of $6.4 billion of outstanding Treasury debt was largely offset by substantial net borrowings on the part of Federally sponsored credit agencies. Financing of the administration’s housing programs and of Federal Home Loan Bank advances to member savings and loan associations accounted for much of the expanded borrowing by such agencies. TABLE 5 FEDERAL GOVERNMENT BORROWING AND CASH BALANCE Quarterly totals, in billions of dollars, not seasonally adjusted 1973 1974 Item Q2 Q3 Q4 Ql Q2 Budget surplus, or deficit ............ 7.7 -1.1 -5.0 -7.1 9.7 Net cash borrowings, or repayments (—) ......................... -6.5 -.7 6.7 3.4 -6.4 Other means of financing1 ............ -1.5 -2.5 .4 1.7 -2.5 Change in cash balance ............... -.3 -4.3 2.1 -2.0 .8 M emo: Net borrowings by Feder­ ally sponsored credit agencies2 5.0 6.1 3.2 ... *5.9 'Checks issued less checks paid and other accrued items. 2Includes debt of the Federal Home Loan Mortgage Corporation, Federal home loan banks, Federal land banks, Federal intermediate credit banks, banks for cooperatives, and FNMA (including discount notes and securities guaranteed by GNMA). Estimated. INTEREST RATES Under the influence of strong credit demands and a progressively more restrictive monetary policy, interest rates on private securities advanced very sharply over the second quarter. In the corporate and municipal bond markets where new-issue volume remained Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

540 FEDERAL RESERVE BULLETIN □ AUGUST 1974 high, yields rose generally 70 to 90 basis points over the quarter and have advanced further in July. This strong uptrend raised the average yields on new issues of Aaa-rated utilities to nearly 10 per cent, well above their previous record level. The Bond Buyer municipal bond yield average, on the other hand, remained some­ what below its previous peak level. Private short-term rates showed even sharper advances over the quarter. The Federal funds rate rose 2V2 percentage points to an average of nearly 12 per cent in the last week of June, and increases in rates on other private market instruments essentially paralleled the advance in the Federal funds rate. Market reaction to the financial difficulties of two banks—one domestic and one foreign—and of a large public utility, together with rumored difficulties at other firms, set in motion a marked shift of investor preferences toward securities of the highest quality. Spreads between yields on highest-quality securities and those of lower grades widened substantially; in fact, many borrowers with less than prime credit ratings found it increasingly difficult to borrow at all in securities markets or to roll over existing debt. This development, in addition to postponements and cancellations of new issues by firms unable or unwilling to pay the market yields required, added further pressure on banks to provide funds to the business community. Faced with heavy credit demands, banks raised their lending rates to record levels. The prime rate moved from 9V* per cent at the end of March to 12 per cent in early July. A key factor contributing to this increase in the prime rate was the need for banks to raise offering rates on CD’s to obtain funds for covering their expanded loan demands. Conditions in the Government securities market over the second quarter differed substantially from those in the private securities markets. Yields on Treasury bills actually declined 7 basis points over the quarter after having peaked in April, and yields on Treasury coupon issues advanced only moderately. This divergence from the upward trend of credit markets reflected in part increased demand by investors for instruments of the highest quality at a time when the volume of such securities was declining seasonally. More important, particularly for developments in the Treasury bill market, was the investment activity of foreign official institutions. The weaker deposit performance of nonbank thrift institutions and the upward movement of most market rates during the second quarter exerted strong upward pressure on mortgage rates. The prevailing rate on conventional mortgages on new homes rose to a record high of 92/4 per cent in June, 30 basis points above the previous peak, according to the Department of Housing and Urban Development. Early in July, the average auction yield on commit- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FINANCIAL DEVELOPMENTS, Q2 1974 541 INTEREST RATES SHORT-TERM LONG-TERM FEDERAL FUNDS CONVENTIONAL MHUODR TGAGES a U.S. GOVT. COMMERCIAL P4A-6P MERONTH A STATE AND LOCAL GOVT. F.R. DISCOUNT RATE T3-RMEOANSTUHRY BILLS * Level of series was affected by issue of new 20-year U.S. Government bond in January. Monthly averages except for conventional mortgages (based on quotations for one day each month). Yields: U.S. Treasury bills, market yields on 3-month issues; Prime commer­ cial paper, dealer offering rates; Conventional mortgages, rates on first mortgages in primary markets, unweighted and rounded to nearest 5 basis points, from Dept, of Housing and Urban Development; Corporate bonds, weighted averages of new publicly offered bonds rated Aaa, Aa, and A by Moody’s Investors Service and adjusted to an Aaa utility basis; U.S. Govt, bonds, market yields adjusted to 20-year constant maturity by U.S. Treasury; State and local govt, bonds (20 issues, mixed quality), Bond Buyer. ments by the Federal National Mortgage Association to purchase Government-underwritten and conventional mortgages rose to 9.90 per cent—more than 1 percentage point above the level prevailing at the end of March. To bring rates on mortgages underwritten by the Federal Housing and Veterans Administrations more into line with the market, ceiling rates on such mortgages were raised in three steps from 8XA per cent in March to 9 per cent in early July. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

543 Summary Description of Information System for Banking Agency Reports The Federal Reserve System, the Office of continue with present procedures. Similarly, the Comptroller of the Currency, and the Fed­ the approach does not presuppose or require eral Deposit Insurance Corporation have long any particular design for banks’ internal ac­ been concerned about the problems and bur­ counting or recordkeeping systems. Moreover, dens of bank reporting. The three agencies, the system does not add to reporting burdens both separately and jointly, have instituted a since it remains within the confines of existing variety of programs directed toward these prob­ reporting requirements. lems. As one part of these programs, the agen­ A preliminary version of ISBAR has been cies have been engaged for several years in a prepared for banking industry comment. This joint project—the Bank Report Reform Project pamphlet, which is being mailed to all com­ —to develop and implement a more systematic mercial banks, contains a summary of the approach to their procedures for requesting approach and its major characteristics. A more information from banks, for defining what is complete description of all aspects of the sys­ wanted in the various reports, and for collect­ tem and copies of its operating materials are ing the information. The operating materials presented in another set of documents bearing and procedures developed in this project have the general title Information System for Bank­ been given the name “Information System for ing Agency Reports. These documents will be Banking Agency Reports” (ISBAR). available from the agencies on request in a The project was set in motion by an ad hoc few weeks. group of commercial banks—the Steering Com­ Members of the banking community and mittee on Banking Information—and it has others who are interested are invited to review progressed in close cooperation with this group. the approach and its procedures and materials The general approach and main characteristics and to communicate general comments or spe­ of the project were developed within this Steer­ cific suggestions to any of the agencies. Com­ ing Committee. ments received by February 1975 will be taken The ISBAR procedures are completely vol­ into account in the preparation of an opera­ untary and optional for reporting banks. These tional version of the material, which is sched­ procedures will be made available by each of uled for release in the second half of 1975. At the three agencies for any bank to use if it so that time the three agencies will make the wishes. Each bank will decide for itself ISBAR procedures operationally available to whether to use the ISBAR procedures or to interested banks. Note.—This article is a reprint of a pamphlet that were prepared by the staff of the Bank Report Reform has been mailed to all commercial banks. The letter Project, headed by its Staff Director, Stanley J. Sigel, of transmittal is reproduced at the end of this article. Adviser, Division of Research and Statistics, Board of The article and the other documents referred to in it Governors of the Federal Reserve System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

544 FEDERAL RESERVE BULLETIN □ AUGUST 1974 The summary discussion in this pamphlet report Instructions that specify the information focuses on the following questions that reflect requested in the reports in terms of the ele­ the system’s major characteristics: ments of the classification structure. For banks, ISBAR will have four separate (1) What is ISBAR, how will it be used in report uses: (a) in their determination of the defini­ procedures, and what types of banks can tion of agency information requests; (b) in use it to advantage? connection with their generation of information (2) What role have commercial banks had in the for agency reports on a coded or automated design and development of the system? basis; (c) as an input to their design of record­ (3) Will the use of the system be compulsory for keeping and information systems; and (d) in banks? connection with the physical form of reporting (4) Does ISBAR involve any changes in the sub­ to the agencies. stance of information that banks report? (a) The fundamental use of the system by (5) Does the use of ISBAR put any particular banks will be definitional. The operating docu­ requirements or restrictions on banks’ ments provide each bank with the basis for internal recordkeeping procedures? systematically determining the complete speci­ (6) What reports are covered in the system? fication of all agency requests for information (7) How will future changes in reporting require­ that are covered by the ISBAR structure. Simi­ ments be handled in the system? larly, a basis is provided for a systematic com­ (8) Will the ISBAR approach be extended to parison of what is wanted on different reports other types of reports? requesting somewhat similar information. (9) How does ISBAR fit into the general efforts For such definitional purposes any bank— of the banking agencies to deal with prob­ regardless of size, accounting procedures, or lems of reporting burden? extent of automation or coding of accounts— (10) What additional materials on the system are may find that it can use the system to advan­ available and how can they be obtained? tage. This definitional use is independent of the bank’s accounting methods or internal procedures. There is no requirement, or even (1) W hat is ISBAR, how will it be used in presumption, that a bank has coded its accounts report procedures, and what types of or automated any of its procedures, nor is there banks can use it to advantage? any implication that it ever intends to do so. ISBAR consists of a set of materials and While the Instructions for each report line are procedures that provide, as an alternative to stated in terms of code numbers, these codes— present procedures, a systematic basis for: insofar as definitional use is concerned—are (a) banking agency requests for information internal to the ISBAR documents. They serve from commercial banks; (b) the definition of simply to guide the user from the coded Instruc­ the information requested; (c) bank generation tions for the line to the elements of the classifi­ of this information; and (d) bank reporting of cation structure and to the Dictionary defining the information to the agencies. these elements. Once the definition of a line is In the ISBAR approach, each line of infor­ determined in this way, the ISBAR codes have mation requested in agency reports that deal no further significance for a bank using the with balance sheet and related items is com­ system for definitional purposes only. pletely defined in terms of an appropriate com­ (b) While the ISBAR operating documents bination of the elements of a standard classifi­ may be used solely for definitional purposes, cation structure. This single, comprehensive they may also be used in connection with bank structure embraces the definitional needs of generation of agency reports on a coded or all the reports covered in the system. The automated basis. The ISBAR classification system’s main operating documents are the structure provides the substantive basis of bank classification structure, a Dictionary defining coding of accounts that would be appropriate each element of that structure, and a set of for the agency reports. The ISBAR coded Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SUMMARY DESCRIPTION OF ISBAR 545 report Instructions state agency requests for Eventually, consideration may be given to information in terms of the elements of the extending the options in this area to include classification structure. With appropriate iden­ transmission of the data by magnetic tape or tification and adaptation of its own classifica­ terminals. A few Federal Reserve Banks may tion system to the ISBAR structure, a bank be interested in pursuing such transmission could—if it so chose—use the ISBAR coded methods on an experimental basis with a limited Instructions as the basis for compiling some or number of banks. all of the data needed for agency reports by retrieval procedures that would be stated in (2) W hat role have com m ercial banks had terms of the classifications used in its own in the design and developm ent of the records. system ? A bank that has already coded or automated Commercial banks have played a major role some of its accounts or files for internal pur­ in the design and development of ISBAR. The poses may, therefore, have some interest in project originated when the group of banks examining the details of the ISBAR materials making up the ad hoc Steering Committee on to determine the feasibility of using ISBAR to Banking Information suggested to the banking facilitate the coded or automated generation of agencies that the banks and the agencies work some of the information needed for agency together to develop an approach to reporting reports. Such an examination would be a that would permit banks to deal with reporting necessary part of the bank’s determination of requirements in a more effective manner. Under the reports for which it might be worthwhile to the chairmanship of M. H. Schwartz, then link, and adapt as appropriate, its present pro­ a vice president of the First National City cedures to the ISBAR materials. Bank of New York and now Director of the (c) Another potential use of the ISBAR Division of Management Information and Tele­ materials is as an input to systems planning for communications Systems of the Atomic Energy banks that are designing new or revised infor­ Commission, and later Robert K. Wilmouth, mation systems or automated recordkeeping Executive Vice President of the First National systems. Such a bank may be interested in a Bank of Chicago, the Steering Committee set detailed examination of the ISBAR materials the general direction of the project and estab­ if it has any thought of incorporating agency- lished the major scope and characteristics of report-generation features into its new systems the approach. The members of the Steering or if it has any concern about the relationship Committee stressed to the agencies that banks between reporting requirements and its systems had a pressing need in the area of reporting and design. that the project was directed toward that need. (d) ISBAR also provides banks with alter­ The Committee persuaded the agencies to native procedures with respect to the physical establish the project and to implement the form of reporting information to the three resulting system as an operating alternative for banking agencies. Banks are given two types banks. of options in this regard. In the first, the data Throughout the project, the Steering Com­ being reported may be identified either by mittee continued to give general guidance to ISBAR codes or by existing procedures. In the the project staff. In addition, consultations second, each bank will have the choice of trans­ with operating personnel at each of the Steering mitting the data either by use of the present Committee banks during various stages in the report forms or by means of computer printouts work contributed to significant improvements or punched cards in standard formats to be set in the project results. by the agencies. Any bank that can put its Commercial bank participation will continue report returns on computer file may find it con­ during the present review period. Comments venient to transmit reports by the new alterna­ by individual banks on this preliminary version tive methods—even if it does not use other will be taken into account in preparing the ISBAR procedures and materials. operational version to be issued in 1975. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

546 FEDERAL RESERVE BULLETIN □ AUGUST 1974 As a supplement to the reviews by individual it or for any subset of reports or even for partsbanks, The American Bankers Association of reports. It may use the approach in con­ (ABA) and the Bank Administration Institute nection with some of its files or some of its (BAI) have established a joint steering com­ departments and not others. The bank may mittee to provide a focal point for industry adopt the procedures as soon as ISBAR be­ reaction to the ISBAR approach. The mem­ comes operational or at any time thereafter. bers of the committee are Virgil Dissmeyer, Senior Vice President and Cashier of the North­ (4) D oes ISBAR involve any changes in the western National Bank of Minneapolis; Gra­ substance of inform ation that banks re­ ham P. Dozier, III, Comptroller of Wachovia port? Bank and Trust Company, N.A., of Winston- Salem; Gail M. Melick, Executive Vice Presi­ ISBAR does not add to, or otherwise change, dent of Continental Illinois National Bank and the substance of reporting requirements. The Trust Company of Chicago; Paul Laskoski, system focuses on procedural and format mat­ Senior Vice President (Finance) of The First ters and on improvement, codification, and Pennsylvania Banking and Trust Company of systematization of definitions within the context Philadelphia; James E. Lodge, Director of the of the existing substance of reports. Whether a Operations and Automation Division of The bank uses ISBAR or the current procedures, it American Bankers Association; and Thom Mc­ will report the same items of information at Cord, Principal Bank Counselor of the Bank the same levels of detail for the same reports. Administration Institute. Any future changes that occur in reporting The committee is recruiting a group of banks requirements as a result of changes in banking to experiment with procedures for linking agency information needs will be reflected in ISBAR into their own accounting and infor­ the ISBAR operating materials—just as they mation systems. Any bank interested in obtain­ will be in the current reporting forms—but the ing more information about the experiment ISBAR procedures do not in themselves initiate should contact the ABA or BAI staff representa­ such changes. tive on the committee. In addition, the ABA and BAI are prepared (5) D oes the use of ISBAR put any partic­ to organize appropriate forms of educational ular requirem ents or restrictions on sessions on ISBAR if a need becomes evident. banks’ internal recordkeeping proce­ dures? (3) Wifi the use of the system be com ­ ISBAR does not impose, or presuppose, any pulsory for banks? particular design for banks’ accounting, record­ Nothing in the ISBAR approach is compul­ keeping, or information systems. Each bank sory for any bank. Use of the system is com­ that uses the ISBAR materials will continue to pletely at the option of each commercial bank. determine its own procedures in accordance A major purpose of the approach is to provide with its individual needs. the flexibility of alternative procedures to those This is true in particular for the classification banks that can use such procedures to advan­ and coding systems used by a bank to identify tage, while also allowing each bank the option and differentiate its accounts. ISBAR does pro­ of continuing under existing procedures. vide the substantive basis for the classification Each reporting bank has the option to use structure that is needed for such identification the system or not. If a bank does choose to of accounts as is relevant to reporting require­ use the system, other options arise on how ments. But the particular format, organization, and to what extent. Thus, a bank may use the and level of detail of the ISBAR classification ISBAR materials for any one, or any com­ structure does not constitute a recommended bination, of the uses discussed under Question standard system of classification for bank use. (1). It may use them for all of the reports For its own purposes, each bank may have covered by the system that are applicable to need for additional classification detail and for Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SUMMARY DESCRIPTION OF ISBAR 547 a different organization of its classification sys­ the direction that a bank takes in designing or tem. Similarly with respect to the code num­ adapting its procedures, each bank will still be bers that represent the classification structure, free to design its systems to meet its own needs. ISBAR does not require or provide a particular coding system for use by banks in the coding of (6) W hat reports are covered in the system ? their accounts. The code numbering used in the ISBAR documents is for identification and When ISBAR becomes operational in 1975, reference within the ISBAR materials and for it will cover the definitional requirements of coded communication of information requests. reports that meet all of the following condi­ These ISBAR codes are not intended or de­ tions: (a) The reports are issued by one or signed for bank use in coding accounts. A bank more of the three Federal banking supervisory that makes any use of the ISBAR materials agencies (including the Treasury’s Foreign would use a code numbering system in the Exchange Reports collected through the Fed­ classification of its accounts that is appropriate eral Reserve Banks); (b) they are submitted for its own needs. by commercial banks; and (c) they request However, because ISBAR does not put any information on balance sheet and related items. particular requirements on banks’ recordkeep­ Certain reports meeting these criteria are ex­ ing procedures, each bank using the ISBAR cluded as unsuited for the ISBAR approach— materials in connection with coded or auto­ for example, reports that request judgmental mated generation of agency reports will have or qualitative information and some one-time to prepare and maintain a conversion table or infrequently collected reports that ask for linking the ISBAR classifications, codes, and highly detailed, specialized information. Within procedures to its own records, classifications, the indicated scope, the system covers all re­ codes, and procedures. This conversion table ports—whether regulatory, supervisory, or sta­ would be the operating link between the ISBAR tistical; whether mandatory or voluntary; report Instructions, which are stated in terms whether completed by all banks or by a sample of the ISBAR codes, and the information as it of banks. is organized and identified in a bank’s records. Reports that will not be explicitly covered As mentioned in connection with Question 2, in the 1975 version of the system include: some experimental exercises in performing the (a) banking agency reports that do not deal kind of substantive identification necessary to with balance sheet and related items, such as prepare such conversion tables will be orga­ the Report of Income; (b) reports collected nized by the joint ABA-BAI steering com­ from bank trust departments, Edge Act sub­ mittee. sidiaries, and bank holding companies and The absence of any requirements on banks’ other nonbank affiliates; (c) reports of other internal procedures, other than for a conversion Federal agencies, such as the Securities and table, does not mean that a bank’s decision to Exchange Commission and the Internal Reve­ use the ISBAR materials may not have some nue Service; and (d) reports of State banking effect on its recordkeeping procedures. It is un­ supervisory agencies. likely that there will be any significant impact in Similarly, information needs of commercial those cases where the bank is using the ISBAR banks for purposes other than compiling the materials solely for definitional purposes, al­ covered reports are not explicitly incorporated though even here clarification of reporting in the structure. While there is a considerable requirements may result in some change in in­ overlap between the information that banks ternal records. But there may be a significant need for reporting and what they need for their impact in those instances where a bank is using own purposes, banks presumably require classi­ the ISBAR materials as an input to its systems fication detail for internal purposes that is not design activities or where a bank is trying to provided in the ISBAR structure. Because the adapt its existing procedures to take advantage additional details needed vary from bank to of the ISBAR approach. However, even where bank, the commercial bank Steering Committee use of the ISBAR materials strongly influences on Banking Information recommended that the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

548 FEDERAL RESERVE BULLETIN □ AUGUST 1974 project not attempt to develop a comprehensive Once the system is operational, all ISBAR classification structure covering all of the infor­ documents will be maintained and updated as mation needs of commercial banks. needed. Whenever a change in reporting re­ The preliminary version of the operating quirements entails a change of any kind in the materials has not yet incorporated some of the structure, notice to this effect, along with the reports that will be covered in the 1975 opera­ necessary revisions and additions to all relevant tional version. The incorporation of the re­ ISBAR documents, will be sent immediately maining reports to be covered will undoubtedly to all banks that have the ISBAR materials. In result in some changes in the ISBAR classifica­ the 1975 version, these documents will be tion structure and other materials. These issued in a looseleaf form so that new and changes will be in addition to those resulting revised pages may be incorporated readily. from industry and agency review of the pre­ liminary version. The specific reports covered (8) Will the ISBAR approach be extended in this preliminary version and those to be in­ to other types of reports? cluded in the 1975 version of ISBAR are listed An extension of ISBAR to the balance sheet in the additional descriptive material that is reports requested by other agencies—for ex­ available on request. ample, the Internal Revenue Service, the Securities and Exchange Commission, the De­ (7) How will future changes in reporting re­ partment of Commerce, and the State bank supervisors—would probably require the addi­ quirem ents be handled in the system ? tion of considerable detail, but not necessarily When ISBAR becomes operational in 1975, a drastic redesign of the structure. From the the classification structure will reflect the defini­ beginning of the project, the intention has been tional requirements of those reports coming to cover these reports eventually, but the ad­ within the scope of the system that are being ministrative problems involved in doing so have collected at that time. Not all future requests not yet been faced. A feasibility study will by banking agencies for new or revised infor­ undoubtedly be conducted after the system has mation will come within the scope of ISBAR, been satisfactorily implemented in its present but those that do will require prompt prepara­ scope and is working smoothly. tion and distribution of additional ISBAR Extension of the approach to the Report of materials. If such requests for information can Income or to reports submitted by bank holding be completely defined in terms of the classifica­ companies would raise difficult problems of tion structure as it stands, the main changes substance. These reports might require quite required in the material will be the preparation different parallel structures rather than incor­ of coded Instructions for the new requests. poration into the present structure. It is un­ However, there can be no guarantee, or pre­ likely that the project will be able to turn to sumption, that future information needs of the those areas until there has been considerable agencies—even if within the general scope of operating experience with the present coverage the system—will be limited to those that can of reports. be defined in terms of the ISBAR classification structure as it stands at any time. When agen­ (9) How does ISBAR fit into the general cies do request such new information that is not so definable, appropriate changes will have to efforts of the banking agencies to deal be made in the ISBAR classification structure with problem s of reporting burden? as well as in the Instructions. However, agency The burden of banking agency reports on procedures will be established in order to pre­ banks arises both from the substance of the vent unnecessary changes in the structure and information to be reported and from the pro­ to keep to a minimum those changes that are cedures used in requesting, defining, and trans­ required. mitting the information. ISBAR as such deals Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SUMMARY DESCRIPTION OF ISBAR 549 only with matters of reporting procedure; it structure. Part 2 also includes a technical Guide to takes the substance of reports as given. How­ Operating Documents that describes in detail the ever, ISBAR was also intended and designed formats, contents, and use of these documents. to be used as a comprehensive framework for PART 3 contains the coded report Instructions approaching problems of substance and to give for all covered reports except the Report of Con­ technical support for those agency programs dition, which is in Part 2. Because all banks do dealing with such problems. The ISBAR mate­ not prepare the same reports, a bank requesting rials provide an effective mechanism for the Part 3 will receive only those coded report Instruc­ tions that are relevant to it. kind of detailed and comprehensive comparison of the contents of existing reports that would PART 4 comprises supplementary documents be needed in any program of evaluation and that are not needed for the definitional use of the restructuring of the substance of reports. More­ system but that may be of interest for design and over, the system will provide an efficient mecha­ evaluation purposes to those banks that desire to nism for communicating to reporting banks the use the system in connection with coded or auto­ mated retrieval of information for agency reports. results of revisions of individual reports or A description of these supplementary documents restructuring of groups of related reports. Also, is contained in the Guide to Operating Documents because it provides a sharp and immediate of Part 2. focus on definitional questions, the system— once it is operational—will have a significant Each part of the ISBAR presentation is avail­ role to play in the design and introduction of able separately upon request. Banks may re­ new requests for information. quest as much of the material as they wish; but because the entire presentation is of consider­ able size, banks with no previous exposure to (10) W hat additional m aterials on the sys­ the system may find it helpful to examine the tem are available $nd how can they be descriptive Part 1 before deciding to request obtained? the operating documents of Parts 2 and 3 or The full presentation of ISBAR is contained the supplementary documents of Part 4. in a set of documents that provides both a more The documents making up the presentation complete description of the system and copies may be obtained by writing to the Board of of the operating materials. The presentation Governors of the Federal Reserve System, the bears the general title Information System for Office of the Comptroller of the Currency, the Banking Agency Reports and is divided into Federal Deposit Insurance Corporation, or any four major parts: Federal Reserve Bank. The specific addresses to which requests should be sent are listed on PART 1 is a general description of the system the inside of the back cover of this pamphlet. —its origins, purposes, scope, characteristics, uses, Requests should specify which parts of the and operating materials and procedures. It also presentation are wanted. discusses the relationship of the system materials In addition to providing the documents, the and procedures to banks’ own recordkeeping and agencies will endeavor, within the limits of the information systems. availability of knowledgeable personnel, to PART 2 consists of the various operating docu­ discuss the use of the ISBAR materials with ments required to implement the procedures of interested banks. Banks or groups of banks the system. These include the classification struc­ that are interested in arranging discussions ture needed to specify the lines of the covered between their staffs and the project staff should reports, a Dictionary defining each element of the address inquiries concerning the possibility of structure, and a set of coded report Instructions that specify the Report of Condition and its sched­ such discussions to any of the agency offices ules in terms of the elements of the classification listed on the inside of the back cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

550 FEDERAL RESERVE BULLETIN □ AUGUST 1974 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM OFFICE OF THE COMPTROLLER OF THE CURRENCY FEDERAL DEPOSIT INSURANCE CORPORATION August 23, 1974 To the Chief Executive Officer, At the request of a group of commercial banks, the three Federal bank super­ visory agencies have been engaged in a joint project to develop a more systematic approach to the procedures of bank reporting to Federal regulatory agencies. This project is part of agency efforts to deal with the problems of reporting burden and of quality of data. A preliminary version of the results of the project is now ready for distribution to the banking industry for its comments. The attached pamphlet contains a sum­ mary description; for banks interested in more information, more detailed descrip­ tions are also available upon request. We would appreciate receiving any comments and suggestions you may have on this material by February 1975. An operational version of the project’s classifi­ cation system is scheduled to be issued in the second half of 1975, at which time the reporting procedures developed in the project will be available for use by interested banks. It should be emphasized that there is nothing compulsory in the new approach. Its procedures were developed as alternatives to the present reporting system and each bank can decide whether to use all or part of the new system or to continue with the present procedures. The new system does not change the substance of the data that are being reported by banks to the Federal agencies. We hope that the availability of these alternative procedures will prove of value to many banks throughout the country, and expect that the new approach will also play a constructive role in our efforts to reduce reporting burden to the extent practicable. We look forward to receiving your comments on this preliminary report. Sincerely yours, Arthur F. Burns Chairman Board of Governors of the Federal Reserve System Comptroller of the Currency Frank Wille Chairman Federal Deposit Insurance Corporation Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

551 Statements to Congress Statement by Robert C. Holland, Member, rapid inflation and its accompaniments. Needing Board of Governors of the Federal Reserve to offer higher rates on deposits in order to System before the Subcommittee on Financial attract and hold consumer savings, these insti­ Institutions of the Committee on Banking, tutions find themselves burdened with a portfo­ Housing and Urban Affairs, U.S. Senate, on lio of long-term, relatively low-rate invest­ S. 2591, July 24, 1974. ments. As the Federal Reserve sees it, for the thrift I am pleased to appear again before the sub­ institutions to respond to this situation effec­ committee to discuss S. 2591 and related pro­ tively, they must be given power to offer more posals for changes in the structure of the Na­ attractive savings rewards and related services tion’s financial system. Let me try to summarize to their customers. Governmental action to fa­ the Board’s views in rather general terms, and cilitate such added attractions could include then respond to any specific questions. higher interest rate ceilings and permission to When I appeared before the subcommittee on offer variable interest rate deposits. November 7, 1973, I expressed the Board’s To pay for such increased deposit costs, belief that there is a need for reform in the however, thrift institutions will need both more structure of financial intermediaries, along the flexible lending and investing powers and time general lines of the proposed Financial Institu­ to utilize those powers to expand their earnings tions Act. We believe that such reforms should inflows. The Board favors broadening the earn­ be designed to improve the flexibility of finan­ ing asset opportunities open to thrift institutions cial institutions to respond to the changing needs along the lines of S. 2591, as I mentioned last of individuals and business. At the same time, fall. Board members feel that an innovation such reforms must take full account of the need to as the variable-rate mortgage deserves consid­ maintain a base for effective monetary policy. eration in this connection. We recognize that They must also preserve a safe and sound fi­ variable-rate mortgages pose problems; how­ nancial system. ever, we believe that it might be possible to Developments since last November have work out arrangements for such instruments that served to underscore the need for such changes. would be fair to both the lender and the bor­ Mr. Chairman, it is clear that you and members rower and that would fully inform the borrower of your subcommittee recognize this need, and about his rights and liabilities. the Federal Reserve wishes to be as helpful as In expanding institutional powers, however, it can to you as you pursue your consideration certain cautions must be kept in mind. First, of these matters. as a simple matter of fairness, the powers of As we contemplate the future of our financial competing institutions should be equitably re­ institutions, it is important to recognize that the lated. Second, as a matter of good stabilization most substantial contribution that can be made policy, provision should be made for the appli­ to their long-run health and welfare is to bring cation of monetary controls to all relevant mon­ our present corrosive inflation under control. For etary claims. Both these concerns prompted the all financial intermediaries doing business in Board to send to the Congress earlier this year fixed-dollar claims, continued inflation raises its proposal for uniform reserve requirements very serious threats. But inflation is particularly applicable to all Federally insured institutions troublesome for the nonbank thrift institutions, handling money-type deposits. which already face increasing problems result­ There is a third caution that applies to all the ing from the rise in interest rates associated with changes I have suggested thus far. Changes can Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

552 FEDERAL RESERVE BULLETIN □ AUGUST 1974 trigger transitional difficulties, some foreseen deposit in banks and thrift institutions. The and some unforeseen. Care needs to be taken Board recognizes that the resulting disinterme­ that transitions unfold in such a manner as to diation from nonbank thrift institutions (and also safeguard the soundness and safety of our insti­ from commercial bank time deposits) could be tutions and to minimize disruptions in credit significant if the volume of offerings of this type flows, particularly in the mortgage market, were to become large. Net inflows to the thrifts which is already depressed. Such considerations have already fallen off substantially in recent point to the importance of making changes on months, and any significant additional diversion a step-by-step basis and to the wisdom of giving of funds is a matter for public concern. the regulatory agencies authority to slow down Nonetheless, it is not clear that the long-run developments, if necessary, to stem adverse public interest would be served by prohibiting results flowing from too-rapid changes. In this or severely limiting innovative financing efforts spirit, the Board of Governors favors the gradual of this type. Offerings like the Citicorp issue lifting of deposit-rate interest ceilings but be­ promise improved investment opportunities for lieves the retention of standby powers to reim- individual savers, reduced pressures on short­ pose such ceilings would be prudent. term money markets, and strengthened financial Fundamental reforms of the type referred to positions for the corporations issuing them. above will clearly take considerable time to be While this first such offering is by a bank adopted and bear fruit. In the interim the finan­ holding company, there are numerous nonbank cial system is being plagued with a number of firms that may well follow this lead and bring short-range problems, some of the most painful similar issues to market. Any legislative or of which are ironic manifestations of underlying administrative counteraction aimed at banks or deficiencies that proposed longer-run reforms bank holding companies would still leave sav­ will eventually ameliorate. For this reason, we ings institutions subject to disintermediating believe that it is especially important to respond pressures from a stream of Citicorp-type offer­ to these short-range problems in a manner that ings from other issuers. is consistent with our longer-range goals. It is impossible to judge at this point how One such short-term problem about which all rapidly developments in this area will unfold members of the subcommittee are well aware or how large the drains of funds from the thrift is the current attraction of savings funds away institutions might prove to be. For all these from depositary institutions by offerings of very reasons, the Federal Reserve believes it would high-yielding—and sometimes innovatively de­ be wise not to rush in with hasty legislation signed—market securities. Such securities are against Citicorp-type issues. At the same time, epitomized by the new variable-rate note issue we do advocate very close monitoring of the scheduled to be sold by Citicorp. situation and the prudent development of con­ The characteristics of the Citicorp issue have tingency plans—including possible legislative been developed with the individual saver-in- proposals—to deal with seriously adverse re­ vestor in mind.1 As it is presently structured, sults should they emerge. the offering would compete with a variety of In such planning the Board believes that first alternatives but particularly with Treasury bills and strongest emphasis should be placed on and with small and medium-size certificates of positive means of bolstering the flow of funds to savings institutions rather than on negative devices that try to dam up flows of funds through 1The Citicorp note as now modified would include an interest rate that varies over time with the yield on other channels. The Federal Home Loan Bank 90-day Treasury bills, would be sold in minimum de­ System already has a vigorous program of lend­ nomination of $1,000 with an initial subscription mini­ ing to its member associations, and the Federal mum of $5,000, and would—after June 1, 1976— provide the holder with the option of presenting the Reserve and the Home Loan Bank Board have notes for redemption semiannually on 30 days’ notice. plans for backstopping the home loan banks if The new security would be listed on the New York required in necessitous cases. Stock Exchange and would be marketed by brokers nationwide. A more enduring remedy, which has consid­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

STATEMENTS TO CONGRESS 553 erable merit in our mind, is to take steps to Another approach would be to expand the be certain that depositary institutions are au­ Board’s regulatory authority with respect to the thorized to compete with the Citicorp-type of­ issuance of “cease-and-desist” orders. This ferings by themselves offering some form of could enable the Board, on a case-by-case basis, variable-rate instruments. It is undoubtedly true to determine if a proposed note issue by a bank that such institutions could not afford to issue holding company or its nonbank affiliates would as many of these instruments now as they could have a sufficiently adverse impact on financial in future years after their asset portfolios have markets or depositary institutions to justify im­ had time to adjust; but surely now is a time position of appropriate restrictions by the Board. for them to press their interest-paying ability to Such authority would be more limited than the the utmost. preceding legislative proposal, but it would still The Congress might be able to help the suffer from the same disadvantages albeit in cost-earnings squeeze on savings institutions by reduced degree. standing ready to appropriate larger amounts to Another and direct legislative answer might subsidize lending to them at below-market rates be for the Congress to amend Sec. 19(a) of the from the home loan banks. Since mutual savings Federal Reserve Act to specifically give the banks may be especially vulnerable, such pro­ Board discretionary authority to subject note grams of assistance might be expanded to in­ issues of bank holding companies and their clude them. Other public officials here today are nonbank subsidiaries to deposit-type regula­ better positioned than I to comment on the tion—regardless of the intended use of the details of this and other possible measures by proceeds. To permit comparable interest rate the Congress to improve the fund-raising ability regulation of all holding companies with depos­ of the savings institutions. itary intermediaries, similar authority would Now let me turn to the other category of have to be given to the Federal Deposit Insur­ possible actions—those that would try to help ance Corporation and to the Federal Home Loan the thrift institutions by handicapping competing Bank Board. alternatives. As I have intimated earlier, the The same result might be accomplished by Board sees many drawbacks and very uncertain action which spells out the understanding of the chances for much success in this direction. As Congress that the Board now has such authority a legal matter the Board believes it has no under Sec. 19(a). This is the approach taken present authority to constrain bank holding by Senate Concurrent Resolution 103, intro­ companies from offering securities like the Citi­ duced by Senator Sparkman (for himself, Sena­ corp issue if the proceeds are not transferred tors Brooke, Cranston, Proxmire, and Wil­ to the subsidiary bank. liams) and referred to the Committee on Bank­ Nonetheless, if your committee and the ing, Housing and Urban Affairs. If the Con­ Congress feel that it is desirable to consider gress should pass this concurrent resolution, the restrictive legislation on this subject, I can offer Board would accept that statement of congres­ some Board comment on several suggested sional intent and be prepared to act accordingly. possibilities. If either Sec. 19(a) were amended or if the Legislation to require the Board (or some concurrent resolution were to pass, we would, other one or combination of Federal agencies) of course, have to give careful consideration to to give prior approval to all obligations issued the implementing actions that should be taken. by a bank holding company or any of its bank For example, this authority might be used to or nonbank subsidiaries would seem to us far apply appropriate interest rate ceilings and re­ too sweeping. Even if it were accompanied by serve requirements to parent bank holding com­ the power to grant exemptions by regulation, pany issues sold to the general public in de­ the Board’s administrative burden and the un­ nominations of less than money market size certainty and interference injected into bank (say, $100,000) if they also have maturities or holding company decision-making appear ex­ holder redemption options in the first few (say, cessive. 2 to 5) years after issuance. Such limited re­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

554 FEDERAL RESERVE BULLETIN □ AUGUST 1974 strictions might perhaps be justified on the qualifying note. If action of this type is to be grounds that issues for larger amounts or longer taken, the Board believes it should be viewed terms would not offer sufficient competitive as a temporary remedy—one that should be threat to savings deposits to warrant special reconsidered and probably phased out as the restrictions. reforms visualized in the proposed Financial Weighing all these considerations, the Board Institutions Act come into being. Stop-gap so­ is inclined to believe that the above described lutions have their place, but good public policy concurrent resolution may be the best interim requires that they be superseded by more en­ course to follow if and when the Congress during reforms if our system of depositary in­ decides that restrictive action is necessary. I stitutions is to keep up with the financial needs want to conclude, however, with one further of our evolving economy. □ Statement by Arthur F. Burns, Chairman, economy, later for the United States and other Board of Governors of the Federal Reserve economies—suggested that unemployment System, before the Committee on Banking and could be reduced if a nation were willing to Currency, U.S. House of Representatives, July put up with more inflation, and that advances 30, 1974. in the general price level could be slowed down if a higher rate of unemployment were tolerated. I am pleased to appear before this committee Further research and subsequent develop­ today to discuss the six questions posed by ments have indicated, however, that simple sta­ Chairman Patman’s letter of June 19, 1974. The tistical correlations of this kind are misleading. several areas addressed by these questions are The forces affecting economic activity and of great interest, particularly to professional prices in a modern economy are far too complex economists. My comments on them convey the to be described by a simple mathematical equa­ basic thinking of the Board of Governors, and tion. will—I believe—be responsive to the commit­ We found in 1970 and early 1971, for ex­ tee’s needs. ample, that increases in wage rates and prices I must, however, go beyond a narrow or may continue—and even accelerate—in the face technical interpretation of these questions. Rap­ of rising unemployment and declining real out­ idly rising prices, rapidly rising wages, rapidly put. The experience of the United States in this rising interest rates—these are the burning eco­ regard was not unique; similar developments nomic issues of our time. My testimony today occurred at about the same time in Canada and will seek to identify the sources of this menacing the United Kingdom. inflationary problem and to outline the course We have also come to recognize that public that public policy must take to restore price policies that create excess aggregate demand, stability. and thereby drive up wage rates and prices, will The first question raised by Chairman Patman not result in any lasting reduction in unemploy­ concerns the reliability of the trade-off between ment. On the contrary, such policies—if long inflation and unemployment—the so-called continued—lead ultimately to galloping infla­ Phillips curve—as a guide for monetary policy. tion, to loss of confidence in the future, and The discovery some years ago of a statistical to economic stagnation. correlation between the rate of inflation and the The central objective of monetary and fiscal rate of unemployment seemed to offer a policies should be to foster lasting prosperity—a straightforward choice to policy-makers. These prosperity in which men and women looking early studies—using data first for the British for work are able to find work; a prosperity in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

STATEMENTS TO CONGRESS 555 which incomes and savings are protected against accounted for by food and fuel; for wholesale inflation; a prosperity that can be enjoyed by prices, the proportion was even higher. To all. Of late, such a prosperity has eluded us, achieve stability in the average price level, it because we have not yet found a way to bring would therefore have been necessary to bring an end to inflation. down very sharply the prices of other goods and Let me turn to your second question, con­ services. cerning the benefits and risks involved in the Prices of many commodities—particularly Federal Reserve accommodating increases of farm products and industrial raw materials—are the general price level that originate in supply established in highly competitive markets and shortfalls and other special events. are therefore capable of declining as well as Prices in the United States have been affected rising. The prices of many other commodities heavily in the past several years by a variety and services that make up the gross national of special factors. Disappointing harvests in product, however, are nowadays rather inflexi­ 1972—both here and abroad—caused a sharp ble in a downward direction, in large part be­ run-up of food prices in 1973. Beginning in the cause of the persistent upward push of labor fall of last year, the manipulation of petroleum costs and imperfect business competition. For shipments and prices by oil-exporting countries these commodities, significant price declines led to huge increases in the price of gasoline, could be achieved only by drastically restrictive heating oil, and related products. policies—policies that would lead to widespread Furthermore, a worldwide boom in economic bankruptcies and mass unemployment. A mon­ activity during 1972 and 1973 led to a bidding etary policy that sought to offset completely the up of prices everywhere. In the United States, effects on the average price level of the rising larger foreign orders for industrial materials, cost of food, petroleum products, and other component parts, and capital equipment added commodities whose prices were so heavily in­ to growing domestic demands. Pressures be­ fluenced during the past 2 years by special came particularly intense in the major materials factors would clearly have been undesirable. industries—such as steel, aluminum, cement, Nevertheless, monetary policy must not per­ paper—in which expansion of capacity had been mit sufficient growth in money and credit sup­ limited in earlier years by low profits and envi­ plies to accommodate all of the price increases ronmental controls. that are directly or indirectly attributable to The impact of worldwide inflation was espe­ special factors. The rise in the price of petro­ cially severe in the United States because of the leum, for example, has increased the costs of decline in the exchange value of the dollar energy, plastics, petroleum-based chemicals, relative to other currencies. Besides stimulating and other materials. Business firms will en­ our export trade, and thereby reinforcing the deavor to pass these higher costs through to pressures of domestic demand on available re­ consumers. Workers, too, will bargain for larger sources, devaluation raised the dollar prices of wage increases, in order to compensate for imported products, and these effects spread declines in their real incomes. To the extent that through our markets. wage increases outrun gains in productivity, More recently, the removal of controls over business costs—and ultimately consumer wages and prices has led to sharp upward ad­ prices—are driven up. Thus,in addition to their justments in both our labor and commodity direct effects on prices, special factors may have markets. large and widespread secondary effects on the It has at times been suggested that monetary price level. policy could have prevented these special fac­ A monetary policy that accommodated all of tors from affecting significantly the average these price increases could result in an endless level of wholesale and consumer prices. That cost-price spiral and a serious worsening of an may well be true, but the cost of such a policy already grave inflationary problem. The appro­ should not be underestimated. Last year, about priate course for monetary policy is the middle 60 per cent of the rise in consumer prices was ground. The price rigidities characteristic of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

556 FEDERAL RESERVE BULLETIN □ AUGUST 1974 modern industrialized economies must be re­ maintaining even keel in the money market— cognized, but a full pass-through of all the price that is, we refrain from taking overt actions that effects stemming from special factors must not market participants might interpret as a change be permitted. in monetary policy. On some occasions, there­ The middle course of policy we have adopted fore, the maintenance of even keel has delayed has resulted in a growth rate of the narrowly the timing of changes in monetary policy. defined money stock—currency and demand Treasury financing operations thus pose prob­ deposits—of about 6 per cent during the past lems for monetary policy, particularly when 12 months. This rate of growth is still too high they are large and frequent. for stability of average prices over the longer Federal deficit financing becomes a major term. But moderation in the growth rate of source of economic and financial instability money and credit supplies must be achieved when it occurs during periods of high economic gradually to avoid upsetting effects on the real activity, as it has in recent years. The huge economy. This is particularly true now, when Federal deficits of the past decade have added cost-price relations are seriously distorted. enormously to aggregate demand for goods and I turn now to Chairman Patman’s third ques­ services, and have thus been directly responsible tion, which relates to the positive elements and for upward pressures on the price level. Heavy the risks involved in monetizing deficit spend­ borrowing by the Federal sector has also been ing. The simple fact is that financing Federal an important contributing factor to the persistent deficits by printing money involves risks, and rise in interest rates, and to the strains that have the risks are grave. at times developed in money and capital mar­ Fortunately, since 1951 monetary policy in kets. Worse still, continuation of budget deficits this country has not been conducted with an eye has tended to undermine the confidence of the to providing a ready market for Treasury se­ public in the capacity of our Government to deal curities, or for financing Federal deficits. Con­ with inflation. siderations of this kind were an objective of If the present inflationary problem is to be Federal Reserve policy during World War II, solved, and interest rates brought down to rea­ when Treasury borrowing proceeded on an un­ sonable levels, the Federal budget must be precedented scale in relation to the size of our brought into better balance. This is the most economy. I doubt that such a policy was war­ important single step that could be taken to ranted even under wartime circumstances, and restore the confidence of people in their own its continuation in the years immediately after and our Nation’s economic future. the war was a very serious mistake. It led to Let me turn, next, to the committee’s fourth excessive increases in borrowing by private question, dealing with the benefits and risks of firms, consumers, and State and local govern­ the Federal Reserve’s fighting money market ments, and thus fueled the subsequent inflation. fires. The dangers inherent in this situation became As this committee well knows, the cardinal acutely evident during the Korean war, when aim of monetary policy is maintenance of a Federal deficits once again threatened. With the financial environment in which our national ob­ aid of prodding by the Congress, particularly jectives of full employment and price stability by Senator Douglas, the Federal Reserve and can be realized. For the most part, this respon­ the Treasury resolved their disagreements, and sibility is best achieved by striving for appro­ monetary policy returned to its traditional role priate growth rates of the monetary aggregates, of regulating the supplies of money and credit and letting financial markets take care of them­ in the interest of economic stability. Since then, selves. the Treasury has financed its deficits at prevail­ The appropriate monetary growth rates will ing market interest rates in competition with vary with economic conditions. They are apt other borrowers. to be higher during periods of economic During periods of large Treasury financings, weakness, when aggregate spending is in need the Federal Reserve follows the practice of of stimulus, than when the economy is booming Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

STATEMENTS TO CONGRESS 557 and inflationary tendencies threaten economic the demand for cash balances. If the Federal stability. Special circumstances may, however, Reserve tried to maintain a rigid monetary call for monetary growth rates that deviate from growth rate in the face of such developments, this general rule. For example, as noted in my interest rates could fluctuate widely, and to no response to the second question, the special good end. The costs of financial intermediation factors giving rise to extraordinary price pres­ would be increased, and the course of monetary sures during the past year or two have required policy might be misinterpreted. To avoid these toleration of a monetary growth rate that has harmful effects, the Federal Reserve seeks to been relatively high by historical standards. achieve desired growth rates of money and There are times when responsibility for credit over relatively long periods. Experience maintaining financial and economic stability re­ over the past two decades suggests that even quires the Federal Reserve to focus attention an abnormally large or abnormally small rate primarily on factors other than growth in the of growth of the money stock over a period of money stock or bank credit. The oldest and most 6 months or so has a negligible effect on the traditional function of a central bank is to act course of the economy—provided it is subse­ as a lender of last resort—that is, to provide quently offset. liquidity when dislocation of financial markets We recognize, of course, that too much at­ threatens serious damage to the economy. Act­ tention to preventing short-run fluctuations in ing in this capacity, the Federal Reserve in the interest rates could inadvertently cause the summer of 1970 warded off a developing li­ growth rate of money or credit to drift away quidity crisis in the commercial paper market. from what is appropriate for the longer run. To This year difficulties encountered by a large guard against this possibility, the Federal Re­ commercial bank led to rumors of widespread serve in early 1972 introduced a new set of illiquidity of the commercial banking system. procedures for implementing monetary policy. These concerns were reduced by timely Federal These procedures focus more attention on pro­ Reserve action at the discount window. viding bank reserves through open market It so happens that in neither of these instances operations at a pace consistent with desired did the Federal Reserve’s intervention result in growth rates of monetary and banking aggre­ a significant deviation of the monetary aggre­ gates. gates from desired growth rates. But let there The new procedures have been helpful, but be no mistake about our determination to deal numerous problems of monetary control still with financial troubles. In the future, as in the remain. For example, a substantial part of the past, we will surely not stand aloof and permit money stock is in the form of deposits at non­ a crisis to develop out of devotion to this or member banks. As a consequence of this and that preconceived growth rate of the money other factors, there is considerable slippage be­ stock. tween the supply of bank reserves controlled by The responsibility of the Federal Reserve for the Federal Reserve and the Nation’s money conditions in the money and capital markets stock. Monetary control is therefore less precise goes beyond its historic function to act as lender than it could or should be. I would once again of last resort. Monetary policies need to be urge the Congress to correct this defect by implemented, I believe, in ways that avoid large extending the Federal Reserve’s power over and erratic fluctuations in interest rates and reserve requirements to all commercial banks. money market conditions. Let me turn next to Chairman Patman’s fifth From one month to the next, the public’s question, which deals with the relationship that demand for money is subject to variations that interest rates, the money stock, and the rate of are usually of a short-run nature. For example, inflation bear to one another. a large tax refund, a retroactive increase in Most interest rates in the United States are social security benefit payments, or a sizable now at the highest levels in our history. There disbursement by the Treasury of revenue-shar­ are some who believe that restrictive monetary ing funds may produce a temporary bulge in and credit policies are responsible for this state Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

558 FEDERAL RESERVE BULLETIN □ AUGUST 1974 of affairs. This view is erroneous. The basic money stock has been about 6 per cent—a reason why interest rates have risen to their higher rate than in the previous decade. Since present level is the accelerating pace of price 1964, however, the income velocity of money advances over the past decade, so that we now —that is the ratio of gross national product to find ourselves in the midst of a two-digit infla­ the money stock—has risen at an average annual tion. rate of about 2Vi per cent, thus contributing Historical evidence—from other countries as importantly to the inflationary problem. well as our own—indicates beyond any doubt The role of more rapid monetary turnover that inflation and high interest rates go together. rates in inflationary processes warns against The reasons are not hard to understand. In most assuming any simple causal relation between countries throughout the Western World, infla­ monetary expansion and the rate of inflation tionary expectations have become deeply im­ either during long or short periods. Excessive bedded in the calculations of lenders and bor­ increases in money and credit can be an initiat­ rowers. Lenders now reckon that loans will ing source of excess demand and a soaring price probably be repaid in dollars of lesser value, level. But the initiating force may primarily lie and they therefore hold out for nominal rates elsewhere, as has been the case in the inflation of interest high enough to assure them a reason­ from which this country is now suffering. able real rate of return. Borrowers, on their part, The current inflationary problem emerged in are less resistant to rising costs of credit when the middle 1960’s when our Government was they anticipate repayment in cheaper dollars. pursuing a dangerously expansive fiscal policy. Interest rates at anything like present levels Massive tax reductions occurred in 1964 and are deplorable. They cause hardships to indi­ the first half of 1965, and they were immediately viduals and pose a threat to the viability of some followed by an explosion of Federal spending. of our industries and financial institutions. But The propensity of Federal expenditures to out­ we cannot realistically expect any lasting de­ run the growth of revenues has continued into cline in the level of interest rates until inflation the 1970’s. In the last 5 fiscal years, total is brought under control. Federal debt—including the obligations of the History also indicates that high rates of infla­ Federal credit agencies—has risen by more than tion are typically accompanied by high growth $100 billion, a larger increase than in the pre­ rates in supplies of money and credit. But infla­ vious 24 fiscal years. tionary tendencies and monetary expansion are Our underlying inflationary problem, I be­ not as closely related as is sometimes imagined. lieve, stems in very large part from loose fiscal For example, the econometric model of the St. policies, but it has been greatly aggravated Louis Federal Reserve Bank, which assigns a during the past year or two by the special factors major role to growth of the money stock in mentioned earlier. From a purely theoretical movements of the general price level, has point of view, it would have been possible for seriously underestimated the rate of inflation monetary policy to offset the influence that lax since the beginning of 1973. Simulations of the fiscal policies and the special factors have ex­ model, using the actual growth rates of the erted on the general level of prices. One may money stock since the first quarter of 1972, therefore argue that relatively high rates of suggest that the rate of inflation during the past monetary expansion have been a permissive two quarters should have been a mere 3¥i per factor in the accelerated pace of inflation. I have cent. Apparently, special factors—such as I no quarrel with this view. But an effort to use mentioned previously—have been at work. harsh policies of monetary restraint to offset the Inflationary processes are characterized by exceptionally powerful inflationary forces of re­ rising turnover rates of the existing stock of cent years would have caused serious financial money as well as by relatively high rates of disorder and economic dislocation. That would monetary expansion. Recent experience in the not have been a sensible course for monetary United States illustrates this fact. Over the past policy. 10 years, the average annual increase in the The last question put to me deals with how Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

STATEMENTS TO CONGRESS 559 monetary policy should be used to check infla­ We must face squarely the magnitude of the tion and bring interest rates down to reasonable task that lies ahead. A return to price stability levels. will require a national commitment to fight The principal objective of monetary policy inflation this year and in the years to come. since late 1972 has been to combat the infla­ Monetary policy must play a key role in this tionary forces threatening our economy. To this endeavor, and we in the Federal Reserve recog­ end, supplies of money and credit have been nize that fact. We are determined to reduce over restricted at a time when credit demands were time the rate of monetary and credit expansion booming. Inevitably, therefore, interest rates to a pace consistent with a stable price level. have risen. This unhappy consequence has led Monetary policy, however, should not be some observers to conclude that restrictive relied upon exclusively in the fight against in­ monetary policies are counterproductive—be­ flation. Fiscal restraint is also urgently needed. cause rising interest rates are an added cost to Strenuous efforts should be made to pare Federal businesses and thus may result in still higher budget expenditures, thus eliminating the deficit prices. that seems likely in fiscal 1975. The Congress There is a grain of truth in this argument, should resist any temptation to stimulate eco­ but no more than that. For most businesses, nomic activity by a general tax cut or a new interest costs are only a small fraction of total public works program. There may be justifica­ operating expenses. The direct effects of a re­ tion for assistance to particular industries—such strictive monetary policy on costs and prices are as housing—that are especially hard hit by a therefore small. The indirect effects of a restric­ policy of monetary restraint. An expanded pubtive monetary policy on prices are far more lic-service employment program may also be important. When growth in supplies of money needed if unemployment rises further. But and credit is restrained, some business firms and Government should not try to compensate fully consumers are discouraged by the high cost of for all the inconvenience or actual hardship that credit from carrying through their plans to may ensue from its struggle against inflation. spend; others find it more difficult to obtain Public policy must not negate with one hand credit and therefore trim their spending; still what it is doing with the other. others, reckoning that monetary restraint will There are other actions that may be of some cool off aggregate demand, curtail their outlays help in speeding the return to general price for goods and services even though they do not stability. For example, limited intervention in depend on the credit markets for spendable wage and price developments in pacesetting funds. In all these ways, a restrictive monetary industries may result in considerable improve­ policy helps to moderate aggregate spending and ment of wage and price performance. I would thus to reduce inflationary pressures. urge the Congress to re-establish the Cost of In order to bring interest rates down to rea­ Living Council and to empower it, as the need sonable levels, we shall need to stay with a arises, to appoint ad hoc review boards that moderately restrictive monetary policy long could delay wage and price increases in key enough to let the fires of inflation burn them­ industries, hold hearings, make recommenda­ selves out. tions, monitor results, issue reports, and thus Progress can still be made this year in slowing bring the force of public opinion to bear on wage the rate of price increase, and it is urgent that and price changes that appear to involve an we do so. Inflation has been having debilitating abuse of economic power. effects on the purchasing power of consumers, Encouragement to capital investment by re­ on the efficiency of business enterprises, and on vising the structure of tax revenues may also the condition of financial markets. The patience be helpful, as would other efforts to enlarge our of the American people is wearing thin. Our supply potential. For example, minimum wage social and political institutions cannot indefi­ laws could be modified to increase job opportu­ nitely withstand a continuation of the current nities for teenagers, and reforms are still needed inflationary spiral. to eliminate restrictive policies in the private Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

560 FEDERAL RESERVE BULLETIN □ AUGUST 1974 sector—such as featherbedding and outdated the resolve of the Congress and the Executive building codes. to weigh carefully the inflationary implications A national effort to end inflation requires of all new programs and policies, including explicit recognition of general price stability as those that add to private costs as well as those a primary objective of public policy. This might that raise Federal expenditures. And they would best be done promptly through a concurrent signal to our people, and to nations around the resolution by the Congress, to be followed later world, that the United States firmly intends to by an appropriate amendment to the Employ­ restore the conditions essential to a stable and ment Act of 1946. Such actions would heighten lasting prosperity. □ Statement by Jeffrey M. Bucher, Member, kets. Large commercial banks have been paying Board of Governors of the Federal Reserve rates of 12 per cent or more on large certificates System, before the Subcommittee on Financial of deposit in recent weeks in order to obtain Institutions of the Committee on Banking, loanable funds. These rates exceed by as much Housing and Urban Affairs, U.S. Senate, July as 2 percentage points the maximum rates that 31, 1974. banks are allowed to charge on loans to busi­ nesses in several States—including Tennessee, I am pleased to have the opportunity to present Arkansas, and Montana. Since July, moreover, the view of the Board of Governors on proposals the prime rate charged by large money market to authorize national banks, and Federally in­ banks to their best corporate customers has been sured banks and savings and loan associations at 12 per cent—also above the usury ceiling on to charge their corporate borrowers interest rates business loans in the aforementioned States. It that reflect current market conditions. is reasonable to assume that many of the lending The Board has been concerned for some time institutions in these States are finding it unat­ with the impact that usury ceilings have on the tractive to lend at the relatively low usury rate, availability of funds in local credit markets. It and because they cannot afford to compete ef­ goes without saying that no one wants to pay fectively for money market funds, these institu­ higher rates of interest for borrowed money than tions will find it increasingly difficult to continue is absolutely necessary. But at the same time, to accommodate local credit needs if these con­ it is very important to insure the availability of ditions persist. credit and the flow of funds in all financial Our information—although limited—does in­ markets on an equitable basis. When interest dicate a noticeable slowdown in business lend­ rates in specific markets are limited to artificially ing at some of the larger banks in Tennessee low levels, the continued availability of credit and Arkansas in the last 2 months. In late April in these markets will be severely threatened. the national prime rate rose above the 10 per Under such circumstances, lenders are likely to cent usury ceiling that prevails in these two impose much stricter nonprice lending terms in States, and in May and June commercial and order to compensate for the relatively low nom­ industrial loans at 12 of the large Tennessee and inal rates that can be charged. And borrowers, Arkansas banks (the only regional banks for finding it increasingly difficult to obtain financ­ which we have current data) declined by ap­ ing in local markets, may be forced to seek proximately 5V2 per cent. This decline contrasts funds from out-of-State sources. with experience in the comparable months of There is no question but that the potential for previous years, when loans at these banks gen­ disruption of credit flows in States with rela­ erally increased; and it contrasts especially with tively low usury ceilings has increased greatly the continued substantial expansion this past in recent months due to the general increase of spring in business loans at other large banks interest rates in competitively determined mar­ around the country. It might also be noted that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

STATEMENTS TO CONGRESS 561 in the last few weeks Federal funds—which are purpose the rate paid on 90-day Treasury bills, overnight loans sold by one bank to another— and specifically the average rate paid over the have traded at rates above 12 per cent. Thus, preceding month or quarter on such bills. The there is some temptation for banks in States like bill rate is published weekly and is a familiar Tennessee, Arkansas, and Montana to sell Fed­ rate to lending institutions. If the loan rate were eral funds or to direct their money into other tied to such a market rate, then adjustments more attractive investments, rather than to lend would be made automatically to changing mar­ to local borrowers at the 10 per cent ceiling rate. ket conditions, whereas this might not neces­ Because of distortions such as these that result sarily be the case if the base rate used were from artificially low rate limitations, the Board the discount rate. strongly encourages efforts to reduce the re­ The second concern that the Board has with straints imposed on local credit markets by the proposed bill is that the legislation would usury ceilings. We would prefer that remedial apply only on loans to corporations and would action to correct these inequities be undertaken exclude all noncorporate borrowers. For equity at the State level, and in this regard we believe reasons the Board believes that the bill should that States should promptly re-evaluate their be expanded to cover all loans for business usury laws in the light of recent experience. We purposes. Indeed, if lending institutions are al­ understand, however, that in some States this lowed to charge higher rates on loans to cor­ is a constitutional problem that may require porations, we can foresee sharp diminution in considerable time to resolve. In view of this, the availability of credit for unincorporated and given the urgency of the problems develop­ businesses. Available funds will be channeled ing in some markets currently, the Board sup­ into higher-yielding corporate loans, and credit ports the emergency measure proposed by that is already scarce for other borrowers could S.3817 as a means of providing some relief to become virtually unavailable. And, as a side these markets. effect, we would probably see many partner­ The Board has reservations about two specific ships and proprietorships incorporating in order items in the pending bill. First, we strongly urge to obtain financing. This has reportedly occurred that the maximum loan rate that institutions will in Missouri, a State with a relatively low usury be allowed to charge not be tied to the Federal ceiling from which only corporate borrowers are Reserve discount rate. As you are aware, the exempted. discount rate is a policy rate, administered by With the inclusion of the above two modifi­ the Federal Reserve for monetary policy pur­ cations—that is, tying the loan ceiling to a poses. It is not a market-determined rate and market rate and not the discount rate, and ex­ at times may not move in parallel with market panding the coverage to all business loans, not rates. just corporate loans—the Board favors the Instead, the Board would advise that the loan proposed legislation as a productive and desira­ rate be tied to a market-determined interest rate, ble emergency measure that should help to ease one that more clearly responds to changes in disproportionate credit constraints in certain credit market conditions. We suggest for this local markets. □ Statement by Arthur F. Burns, Chairman, of Governors on the condition of the national Board of Governors of the Federal Reserve economy. System, before the Joint Economic Committee, Our country is now struggling with a very August 6, 1974. serious problem of inflation. In the past 12 months, the consumer price level has risen by I am pleased to appear before this Committee 11 per cent; wholesale prices have risen even once again to present the views of the Board faster. When prices rise with such speed, infla­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

562 FEDERAL RESERVE BULLETIN □ AUGUST 1974 tion comes to dominate nearly every aspect of As a result of the inflation, consumer pur­ economic life. chasing power is being eroded. During the past The current inflation is of worldwide scope year, the take-home pay of the typical worker and of virulent intensity. Among the principal declined nearly 5 per cent in real terms. industrial countries, consumer prices over the As a result of the inflation, the real value of past year have risen anywhere from 7 to over the savings deposits, pensions, and life insur­ 20 per cent, while wholesale prices have ad­ ance policies of the American public has dimin­ vanced from 15 to over 40 per cent. Inflation ished. is also raging among the less developed coun­ As a result of the inflation, financial markets tries, and apparently in socialist countries as are experiencing strains and stresses. Interest well as in those practicing free enterprise. rates have moved skyward. Some financial and A major cause of the stepped-up rate of industrial firms have found it more difficult to inflation around the world was the coincidence roll over their commercial paper or to raise of booming economic activity among major needed funds through other channels. Savings industrial nations during 1972 and 1973. With flows to thrift institutions have diminished, and production rising rapidly, prices of labor, mate­ stock prices have plummeted. rials, and finished products were bid up every­ As a result of the inflation, profits reported where. The pressures of demand were particu­ by corporations have risen sharply; but much larly acute for industrial materials; severe of the reported profit is illusory because it fails shortages developed and prices of these com­ to take into account the need to replace inven­ modities skyrocketed. tories, plant, and equipment at appreciably The impact of worldwide inflation on our own higher prices. price level was magnified by the decline since In short, as a result of the inflation, much 1971 in the value of the dollar in foreign ex­ of the planning that American business firms change markets. Higher prices of foreign cur­ and households customarily do has been upset rencies raised the dollar prices of imported and become confused. The state of confidence goods, and these price increases were transmit­ has deteriorated, and the driving force of eco­ ted to domestic substitutes as well as to finished nomic expansion has been blunted. products based on imported materials. More­ It should not be surprising, therefore, that the over, as the dollar became cheaper for foreign physical performance of the economy has re­ buyers, our export trade increased rapidly and mained sluggish in recent months, despite the thus reinforced the pressure of demand on do­ lifting of the oil embargo that depressed the mestic resources. economy last winter. Auto sales have recovered Other special factors have also contributed to somewhat since March, but total retail sales— the higher rate of inflation since the beginning allowing for price advances—have continued to of last year. Disappointing harvests in 1972— move sidewise. Residential building activity is both here and abroad—forced a sharp run-up in a slump. Although the volume of new hous­ in food prices during 1973. And the manipu­ ing starts rose a little in June, the average for lation of petroleum shipments and prices by the second quarter fell and the number of new oil-exporting countries has caused a spectacular building permits also declined. Actually, most advance since last fall in the prices of gasoline, major sectors of the economy recorded little or heating oil, and other petroleum products. no change of activity in the second quarter, and More recently, the removal of direct controls early estimates suggest a slight further reduction over wages and prices has been followed by of the real gross national product in that 3-month sharp upward adjustments in both labor and period. commodity markets. Recent economic movements do not have, The inflation that we have been experiencing however, the characteristics of a cumulative has already caused injury to millions of people, decline in business activity. In a typical business and its continuance threatens further and more recession, all—or nearly all—comprehensive serious damage to the national economy. indicators of economic activity move downward Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

STATEMENTS TO CONGRESS 563 simultaneously. That is not the case presently. our money and capital markets have been at­ For example, the demand for labor has remained tracting funds from oil-exporting nations, the strong. Employment has continued to rise, and high price of imported oil has not created a the unemployment rate appears to be at about serious balance of payments problem for the the same level now as it was in January. United States. Uncertainties surrounding the ef­ In the industrial sector, production has re­ fects of recent oil prices have given rise to large covered somewhat over recent months; factory and rather unsettling swings in the value of the shipments have continued their upward course; dollar relative to other currencies since last and new orders received by manufacturers of October, but on balance the dollar is stronger capital goods have risen further. Unfilled orders now than it was at that time. The value of the on the books of business firms, especially in dollar in exchange markets began to recover last the capital goods industries, are enormous and October, fell once again between February and are still advancing, as shortages of critical ma­ May, and since then has gathered some strength. terials and parts continue to hold back produc­ At present, the average price of the dollar in tion schedules. exchange markets, although below the high In addition to the business capital sector, our point reached in January, is still about 6 per export markets are a source of continuing cent higher than it was in October of last year strength to the economy. Also, some businesses before the oil crisis. Intervention in exchange are adding significantly to their inventories, in markets by the Federal Reserve and other central order to replenish depleted stocks and bring banks, while not extensive, has helped to pre­ them into better balance with sales. These vent exchange rate fluctuations from becoming sources of strength have kept up activity in the unduly large and upsetting to the calculations industrial sector and have prevented the down­ of firms operating in international markets. ward tendencies in our economy from cumulat­ Other oil-importing countries have fared less ing in the manner characteristic of economic well during this difficult period of high and recessions. rising oil prices. For many of the less developed We should, however, act decisively to bring nations around the world, the rising costs of fuel inflation under control before these remaining and fertilizer have shattered plans for economic sources of strength are undermined. If interest development. Industrialized nations also—nota­ rates continue to soar, if construction costs and bly Italy and to a lesser extent other countries equipment prices continue to rise at a feverish such as Japan—have experienced severe strains pace, if our export prices continue to mount, in their international payments accounts. And we may eventually find that incentives for busi­ all oil-importing countries have suffered a sig­ ness investment are being eaten away and that nificant loss of consumer purchasing power due our export markets are shrinking. to the massive increase in fuel costs. Let me turn now to the condition of interna­ Unless the price of oil declines materially, tional financial markets and recent trends in our the oil-importing nations as a group cannot international trade and payments accounts. avoid sizable deficits in their current interna­ Our foreign trade balance has moved into tional accounts. This situation is fraught with deficit this year, principally because of the huge danger for the stability of international financial increase in the bill for imported oil. The dollar markets. It is by no means clear that private value of our fuel imports rose from an annual financial institutions will be able to recycle the rate of $8 billion in the second quarter of 1973 huge surpluses of the oil-exporting nations to to a $28 billion rate in the second quarter of the many nations of the world that are ex­ this year. The deterioration in the over-all trade periencing current account deficits. A substan­ account was much less than this, however, since tial decline in the price of.oil is, in my judg­ our exports over the past year have risen much ment, essential and requires the closest attention more than imports outside the petroleum cate­ of the world’s statesmen. gory. Strains in the international financial system Partly for these reasons, partly also because will, of course, be reduced if the oil-exporting Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

564 FEDERAL RESERVE BULLETIN □ AUGUST 1974 nations use their surpluses to provide assistance deliveries; it reflects the inflated prices at which to countries with current-account deficits—if not inventories must now be replenished; and it directly, then indirectly through international reflects, to some degree, anticipatory borrowing financial institutions. Tension in international by those who fear that credit may later be financial markets will also be lessened if coun­ unavailable or be still more costly. tries throughout the industrialized world, be­ In any event, with the demand for credit sides practicing conservation in the use of oil, expanding much more rapidly than supply, assign high priority to gaining control over their credit markets have tightened, and interest rates internal inflationary problem. Most of them are have risen to levels such as we have not pre­ now relying on monetary or fiscal restraints for viously known in over a century of our Nation’s that purpose, and the worldwide boom in eco­ recorded experience. nomic activity is therefore abating. If this and For example, the rate of interest that com­ other nations around the world persist in this mercial banks charge on short-term loans to struggle, the raging fires of inflation will even­ their largest and best known business customers tually burn themselves out. has risen to 12 per cent. In recent weeks many In our own country, the battle against infla­ of these same business firms have been paying tion has relied heavily on monetary restraint. from 11% to 12V4 per cent in the commercial The Federal Reserve recognizes that a restrictive paper market. Long-term interest rates have also monetary policy is bound to cause some incon­ risen substantially. The highest-grade corporate venience and even hardships. While we have bonds are selling at yields around 10 per cent; tried to apply the monetary brakes firmly enough rates on tax-exempt securities have been to get results, we have also been mindful of averaging about 6V2 per cent. Home buyers now the need to avoid a credit crunch. face mortgage interest rates of 9 per cent or Thus, the supply of money and credit has more. continued to grow. During the past 12 months, These interest rate levels are disquieting. the narrowly defined money stock—that is, cur­ They cause difficulties for many individuals and rency plus demand deposits—has increased 5 % pose a threat to the viability of some of our per cent, while loans and investments by com­ industries and financial institutions. But we mercial banks have risen by 12 per cent. cannot realistically expect a lasting decline in Since the beginning of this year, the annual the level of interest rates until inflation is rate of growth of these two aggregates has been brought under control. When the rate of infla­ a little higher—6 lA per cent for the narrow tion is 11 or 12 per cent, an interest rate of money stock and 13% per cent for total bank even 10 per cent means that the rate of return loans and investments. For one category of to the lender, in real terms, is negative. credit—namely, business loans of commercial Evidence is accumulating that the restrictive banks—the annual rate of growth has been much policy pursued by the Federal Reserve is helping higher, in fact over 20 per cent during the first to moderate aggregate demand by reducing the half of this year. availability of credit to potential borrowers and Clearly, the American economy is not being disciplining inflationary psychology. In the first starved for funds. On the contrary, growth of half of last year, the credit extended to private money and credit is still proceeding at a faster domestic borrowers increased at an annual rate rate than is consistent with general price stability of $165 billion and amounted to about 14% per over the longer term. cent of the private component of the gross, Yet, the demand for money and credit has national product. Estimates for the first half of been rising at a very much faster pace than the this year suggest that the rate of aggregate supply. This huge and growing demand for private credit expansion has fallen to about $145 borrowed funds reflects the continuing strength billion, or 11% per cent of private GNP. of business capital investment; it reflects the Of late, many businesses attempting to bor­ efforts of many firms to rebuild inventories that row at commercial banks have found it more were depleted by earlier shortages and slow difficult to obtain loans. The public securities Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

STATEMENTS TO CONGRESS 565 markets have also been less receptive. Since the on the actual condition of our banks, and it beginning of June, cancellations or post­ reflects also the state of readiness of the Federal ponements of corporate bond and stock offer­ Reserve to deal with such temporary financial ings have amounted to almost $2 billion. State problems as may arise. and local governments have also been affected; The Federal Reserve stands ready, as the cancellations or postponements of municipal Nation’s lender of last resort, to come promptly security offerings since early June have to the assistance of any solvent bank experienc­ amounted to about $800 million. ing a serious liquidity problem. Besides, the Some sectors of our economy now face unu­ Federal Reserve has long had on hand well-laid sually difficult problems. The housing in­ contingency plans for assisting, if the necessity dustry—which had already been suffering from should arise, other types of enterprises ex­ the erosion of workers’ purchasing power, from periencing liquidity problems. rising construction and land costs, from fears The need to activate these plans appears re­ of a gasoline shortage, and from overbuilding mote. But the resources of the Federal Reserve in some areas—is now experiencing added are enormous, and there should be no uncer­ hardships because of soaring interest rates and tainty about our readiness to deal with financial reduced availability of mortgage credit at sav­ emergencies. ings institutions and commercial banks. Public Tensions in financial markets have lessened utilities have also been caught in a squeeze; the in recent weeks, but they may continue to trou­ rates charged to their customers have lagged ble us until more evidence appears that the rate behind the prices of fuel and other materials, of inflation shows promise of diminishing. while rising interest rates have been adding to There are a few hopeful signs that price in­ the costs of debt service. creases may abate during the second half of this During the recent boom, some carelessness year, but they are inconclusive. crept into our financial system, as usually hap­ The role of the special factors that served to pens in a time of inflation. Some commercial accelerate price increases during the past year banks permitted their liabilities to grow much or two is now waning. Food and fuel prices faster than their capital. They also allowed de­ have recently contributed less to the rise in the pendence on volatile funds—such as overnight consumer price level than they did in 1973 or loans from other banks, certificates of deposit, early 1974. The boom in our own economy and and Euro-dollars—to reduce their liquidity. The that of other nations has tapered off, and the great majority of our banks have been managed pressure of demand on available industrial ca­ prudently; but in some instances unhealthy pacity should therefore continue to diminish. practices have turned up—such as speculating The underlying problem of inflation, how­ in foreign exchange or acquiring large amounts ever, remains very grave. The Federal budget of long-dated securities. continues to be in deficit. Farm prices, which Striving for quick profits is a characteristic had a downward trend during the past 10 feature of an inflationary boom. In fact, our months, have again staged a spirited recovery entire business system has come to rely on credit in the past few weeks. Shortages of materials too heavily, as so often happens in a time of and component parts—for example, steel, alu­ exuberance. But financial adventuring on the minum, coal, bearings, electric motors, forg­ part of banking firms—whether in the United ings—continue to be troublesome. States or abroad—is especially deplorable, since Most serious of all, the rise of wage rates mistakes on the part of individual banks can has accelerated sharply this year, while indus­ have pervasive effects on the state of confi­ trial productivity has been stagnating. Hourly dence. earnings in the private nonfarm economy rose Taken as a whole, however, the commercial at an average annual rate of 10 per cent during banking system in the United States is entirely the second quarter, and labor costs per unit of sound, and it can be counted on to continue output rose faster still. to function efficiently. My judgment is based Progress can still be made this year in slowing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

566 FEDERAL RESERVE BULLETIN □ AUGUST 1974 the rate of advance in our price level, and it the stock and bond markets revive. Such devel­ is urgent that we do so. We must face squarely opments would be of enormous benefit to the the magnitude of the task that lies ahead. A working of financial markets and to industries return to general price stability will require a such as homebuilding that depend heavily on national commitment to fight inflation this year credit. and in the years to come. There may well be justification for govern­ For a time, we should be prepared to tolerate mental assistance to housing or other activities a slower rate of economic growth and a higher that are especially hard hit by a policy of mone­ rate of unemployment than any of us would like. tary restraint. An expanded public-service em­ A period of slow growth is needed to permit ployment program may also be needed if unem­ an unwinding of the inflationary processes that ployment rises further. But Government should have been built into our economy through years not try to compensate fully for all the inconve­ of neglect. I believe the American people un­ nience or actual hardship that may ensue from derstand this and are prepared to make the its struggle against inflation. Public policy must sacrifices necessary to stop inflation. not negate with one hand what it is doing with There are, of course, risks that a period of the other. slow economic expansion will lead to a gradual There are other actions that would be of help weakening of demand for goods and services, in speeding the return to general price stability. to a deterioration in the economic outlook, and Fresh efforts should be made to bring our Na­ to cumulative recessionary tendencies. Public tion’s business and labor leaders together to policy cannot ignore this possibility. But the discuss their common interest in checking the principal danger our country faces today is from wage-price spiral. A degree of governmental the corrosive effects of inflation. If long contin­ intervention in wage and price developments in ued, inflation at anything like the present rate pace-setting industries might also be helpful. In would threaten the foundations of our society. the construction industry, the pace of wage The proper course for public policy, there­ increases is once again accelerating, and the fore, is to fight inflation with all the energy we progress made earlier through the Construction can muster. Industry Stabilization Committee could easily Monetary policy must play a key role in this be lost. Re-establishment of that Committee endeavor, and we in the Federal Reserve recog­ would be in the public interest. The Board of nize that fact. Our actions this year have sig­ Governors would also urge the Congress to naled a firm resolve to stick to a course of re-establish the Cost of Living Council and to monetary restraint until the forces of inflation empower it, as the need arises, to appoint ad are under good control. We are determined to hoc review boards that could delay wage and reduce over time the rate of monetary and credit price increases in key industries, hold hearings, expansion to a pace consistent with a stable make recommendations, monitor results, issue price level. reports, and thus bring the force of public opin­ However, monetary policy should not be re­ ion to bear on wage and price changes that lied upon exclusively in the fight against infla­ appear to involve an abuse of economic power. tion. Fiscal restraint is also urgently needed. Encouragement to capital investment by re­ Strenuous efforts should be made to pare Federal vising the structure of tax revenues may also budget expenditures in fiscal 1975. The be helpful, as would other efforts to enlarge our Congress should resist any temptation to stimu­ supply potential. For example, minimum wage late economic activity by a general tax cut or laws could be modified to increase job opportu­ a new public works program. nities for teenagers, and reforms are still needed Greater assistance from fiscal policy in the to eliminate restrictive practices in the private fight against inflation could, I believe, have sector—such as featherbedding and outdated dramatic effects on our financial markets. Even building codes. We also need to enforce the if no change were made in the course of mone­ antitrust laws more firmly and stiffen penalties tary policy, interest rates would tend to fall and for their violation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

STATEMENTS TO CONGRESS 567 A concerted national effort to end inflation This illustrious Committee has on past occa­ requires explicit recognition of general price sions provided timely and courageous leadership stability as a primary objective of public policy. to the Congress and to the Nation. The oppor­ This might best be done promptly through a tunity has arisen once again for the Joint Eco­ concurrent resolution by the Congress, to be nomic Committee to help our country find its followed later by an appropriate amendment to way out of the great peril posed by raging the Employment Act of 1946. Such actions inflation. Our people are weary, and they are would heighten the resolve of the Congress and anxiously awaiting positive and persuasive steps the Executive to deal thoroughly with the infla­ by their Government to arrest inflation and to tionary implications of all new governmental restore general price stability. The Federal Re­ programs and policies, including those that add serve pledges to you its full cooperation in your to private costs as well as those that raise search for ways to restore a stable and lasting Federal expenditures. prosperity. □ Statement by Henry C. Wallich, Member, likelihood that the OPEC countries will have Board of Governors of the Federal Reserve huge surpluses for some time to come. System, before the Subcommittee on Interna­ In analyzing the consequences of this enor­ tional Finance of the Committee on Banking and mous new flow of funds in the world, it is Currency, U.S. House of Representatives, Au­ helpful to look first at the real impact on income gust 13, 1974. and investment in the consuming countries and then to consider the financial problems related to managing this flow of funds. These two Mr. Chairman and Members of the Subcommit­ aspects of the oil situation are interrelated, of tee, I welcome the opportunity to discuss with course, and if the financial mechanism does not you some of the problems created by the enor­ prove equal to the demands that will be placed mous increase in the price of oil in the past upon it, the consequences will enormously ag­ year. As a result of that increase, oil-consuming gravate the already severe problems of the real nations will be paying out over $100 billion per sector. year to the oil-exporting [OPEC] countries at The first—immediate and obvious—effect of current prices and volumes, an increase of some higher prices paid for OPEC oil is that funds $80 billion in the revenues of these countries are pulled out of the income stream in the in one year. Even after allowing for a steep rise consuming countries, and, since as a group the in their expenditures for imported goods and OPEC countries cannot for some time spend services, the OPEC countries will be left with more than a fraction of these funds on current a surplus of funds available for investment of output, there is a relative reduction in consumer some $60 billion. This surplus will almost cer­ demand. You will recall that last October we tainly diminish as time goes by, either because also confronted a reduction in supply when we the price of oil is reduced to levels more com­ were faced with a cut in oil imports, which patible with a stable world economy, or because would also have reduced production capabil­ the OPEC countries will use a greater share of ities. This situation set in motion an effort at their increases to buy capital and consumer planning in individual countries, and multigoods and services from other countries, and laterally through the follow-up on the energy to provide assistance to countries most severely conference held in Washington in February—to affected by rising costs of oil. Nevertheless, share research programs, to reduce dependence without trying to project into the more distant on imported petroleum, and to share oil in the future, we must address our attention to the event of further embargoes. In the United Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

568 FEDERAL RESERVE BULLETIN □ AUGUST 1974 States, Project Independence got under way. I aware of the fact that the rise in oil prices has would regard it as a serious mistake if we should consequences that depress activity, as well as allow the more relaxed supply situation to cause those observed initially that were inflationary. us to slow down these efforts. For the United One result of the contraction that the oil States, in particular, the most effective way to situation has caused in aggregate consumer de­ deal with the energy problem is to mount a mands and in investment demands of some strong national program for holding down en­ sectors depending on petroleum is that there is ergy use and moving as quickly as possible to some additional room for investment elsewhere develop substitutes for imported oil. Not only to take place. This substitution does not auto­ will this give us some leverage in dealing with matically take place—we need to take whatever the present price and supply problems—it will steps we can to shift more of our economic move us in the right direction for the long-run activity from consumption into investment. benefit of the country. Such a shift will redress the imbalance between In some ways the effect of the jump in pay­ demand and potential supply that underlies the ments for oil can be likened to an excise tax— problem of inflation. Stepping up investments cutting down consumption of oil itself as the in the energy sector is especially important. The price rises, and cutting consumption of other financial requirements of such ventures are huge goods to the extent more is spent for oil—di­ and we should give thought to the problems of rectly and indirectly. But there are important financing these investments, which we have the differences: the quasi-tax is levied by foreign economic capacity to make. governments rather than by a domestic govern­ I would now like to turn from questions of ment, and the use of the funds is not under our reordering our domestic priorities to the more control, although, as I shall point out later, we general problems of all oil-importing countries can nevertheless guide the shifts in demand and and shall focus first upon those countries that output that will result from the quasi-tax. As are hardest hit, many of them less developed, I shall point out, the desirable shift of produc­ but some also among the industrial countries. tion is in the direction of more investment. If the less developed countries (LDC’s) that are It is important to note that while these pay­ severely affected cannot afford to buy the oil ments to OPEC countries tend to dampen con­ they need, or the food and fertilizer they need, sumption demand in the oil-consuming coun­ their present already low standards of living will tries, and may cause severe sectoral dislocations fall further, and their hopes of making some in some countries, they do not in themselves gains by industrializing will in many cases have reduce our over-all productive capabilities. Re­ to be shelved. Unless adequate ways to help call that when the oil price change was occur­ these countries are found, an important part of ring, the United States and other industrial the real cost of adjusting standards of living to countries were approaching together the crest pay for oil will fall on those countries least able of a remarkable boom in world demand—ac­ to bear such a burden. Food prices are now companied, as you know, by an explosion of rising generally, and the added problems of world prices as our economies were being driv­ paying for fuel and fertilizer may well reach en at almost full practicable capacity. By the the point of depriving some countries of their fall of 1973 nearly all governments were trying minimal subsistence needs, posing very harsh to put a lid on this boiling over of demand, alternatives. It can cogently be argued that the and were adopting more restrictive fiscal and additional problems of these developing coun­ monetary policies. In that context there was no tries should be the responsibility of the oil-ex­ reason to be concerned about the demand-de­ porting countries. pressing effects of higher oil payments, so that We can see how the burden of high oil prices any advocacy of expansionary policies to com­ will impact if we look at the way in which the pensate for them was clearly misplaced. Now, balances of payments of different groups of as this and other countries are experiencing an countries are likely to be affected unless these abatement of the boom, we must be increasingly prices come down. The OPEC countries will Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

STATEMENTS TO CONGRESS 569 have a huge surplus in their current account—an able to cope with the relatively small loss of export surplus—amounting to perhaps $60 bil­ real incomes that might occur; and we find lion or more per year at current prices. They another group of countries—some counted as will dispose of this surplus in various ways; LDC’s and some counted in the ranks of indus­ some will go into bilateral aid programs, or into trial countries—who will face serious difficul­ the international institutions, and this can help ties. Their difficulties may, in turn, react ad­ take some of the strain off the poorer countries; versely upon the countries originally in a more but the bulk of the funds will be placed in the favorable position. capital markets of the wealthier industrial coun­ I remarked just now that some of the wealth­ tries. The industrial countries as a group will ier countries may be increasingly uncomfortable have a large current account deficit with the about a rising debt to OPEC countries. In fact, OPEC countries. In the aggregate, however, this some countries dislike the idea so strongly that will be automatically financed—if my presump­ they may resolve to avoid it by bringing their tion about capital investment plans of the OPEC current account into balance—that is, they may countries is correct—by a capital inflow from try really to pay for oil by either increasing OPEC countries. This is another way of saying exports or decreasing other imports well below that these wealthier countries as a group will the levels that would otherwise be observed. not have to, and will indeed not be able to, This sounds very virtuous—we all feel that pay for their full oil imports by exporting goods going into debt should be limited and should and services, until such time as the OPEC be for some productive purpose. But the rest countries can absorb imports equal to their ex­ of the world happens to be in a unique situation ports; and indeed they will not be able to repay vis-a-vis the OPEC countries—until those their debts, again as a group, until the OPEC countries as a group buy more than they sell, countries begin to run trade deficits, perhaps they can only pile up financial surpluses abroad. after the exhaustion of their oil or its replace­ Thus, if each consuming country—acting in ment by alternative energy sources that the high what appeared to be a rational fashion—tried oil price is likely to encourage. This is not to to avoid going into debt, there could only be say there will not be problems of adaptation in a greater debt accumulation by other consuming the industrial countries of the sort I mentioned countries. In real terms, the countries avoiding a moment ago. It does mean that, provided the debt would be paying for their oil currently, oil deficits can be financed, real incomes need while other countries would find that their trade not be much different from what they would balance was being driven into deficit more than have been without the rise in oil prices. But would otherwise be the case and that their debt that is not true for those industrial as well as was increasing. In effect, some countries would developing countries that will not—through the be unloading their deficits upon the rest. They workings of the market or through public policy might do this either by using direct controls to measures —be able to attract an inflow of capital affect their trade balance, or manipulating their that will take care of their new import require­ exchange rate to depreciate it, or taking some ments. These countries can in some cases run extra measure of restraint to hold down domestic down existing reserves. After that, they would demand. The holding down of demand may in face drastic adjustments unless they receive many cases be entirely desirable in order to curb support. Taking these three groups of countries inflation or eliminate any payments deficit aris­ as aggregates, we find one group—the OPEC ing independently of the oil situation. Such countries—very much better off both in terms deficits exist now, and the countries experienc­ of current incomes and in terms of their claims ing them should indeed eliminate them. But if on future world production; we find a second many countries try to eliminate those deficits group—the wealthier countries with attractive resulting from the rise in the price of oil, we capital markets or good capacity to borrow— would, I believe, be in serious danger not only that are very uncomfortable perhaps about a of a major setback in world economic activity rising debt to OPEC countries, but would be but also of a breakdown in the rules for fair Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

570 FEDERAL RESERVE BULLETIN □ AUGUST 1974 trade among nations that could take us back to achieving an over-all balance in our accounts, the practices of the 1930’s. including capital movements, that will underpin We have not come near to such a state of a stable dollar in exchange markets. The part turmoil in the world trading system. I believe of that underpinning that must come from an we can avoid it. But it is difficult to predict appropriate net inflow of capital from abroad the decisions of nations when they find them­ could be significantly less than the extra $20 selves confronted with major difficulties. Some billion in payments due to the higher price of countries may well consider the problems con­ oil, if it turns out that there are sufficient im­ fronting them insolvable at the present price of provements in the rest of our accounts. oil. In the absence of a substantial reduction There have been considerable gyrations in the in that price, unforeseeable conditions could exchange value of the dollar since the second develop that could make the situation difficult devaluation in February of last year. But since if not impossible to manage. about mid-May the dollar has held fairly stable I would like to turn now to the U.S. balance against a weighted average of the currencies of of payments and to the effects of the oil crisis the countries that are our major competitors in on our international position. Our trade balance world markets. As it stands now, the dollar has has already felt the weight of the sharply higher depreciated about 17 per cent against those cost of imported fuel—in the second quarter of currencies since May 1970, and has moved up this year we were paying $28 billion at an slightly in recent months. On a broader meas­ annual rate for fuel imports—about $20 billion ure, taking into account the movement of the more at an annual rate than we had been paying dollar against a weighted average of nearly all a year ago. This is almost entirely a price foreign currencies, the devaluation of the dollar effect—in volume terms, imports of fuels were has been appreciably less—amounting to per­ nearly unchanged. Mainly because of rising fuel haps 12 per cent since 1970. The smaller de­ imports, our trade balance for all goods has preciation measures the dollar’s so-called “ef­ worsened sharply from a surplus at an annual fective rate,” against the world as a whole. The rate of $4.2 billion (balance-of-payments basis) reason for the difference between the two meas­ in the fourth quarter of last year—when we ures is that while the currencies of most of the reached the high point of recovery from the deep major industrial countries have appreciated quite deficit in 1972—to a deficit at an annual rate sharply against the dollar, those of numerous of nearly $7 billion in the second quarter of this other countries, including most of the develop­ year. However, our underlying trade balance, ing world, have tended to stay with or near the that is, abstracting from the arbitrary increase dollar. It is the average rate relationship that in oil prices and also leaving out the extraor­ comes closer to representing the longer-run ef­ dinary jump in agricultural exports, has shown fects on our balance of payments, rather than considerable strength, moving steadily from a changes from time to time against particular deficit at an annual rate of about $12 billion foreign currencies. in the first quarter of last year to a deficit of Recent relative stability of the dollar has, of only about $1 billion in the second quarter of course, been gratifying. It has materialized this year. In volume terms we have done even within an environment of floating exchange better, with export volumes rising and import rates, in which very wide swings had occurred volumes no higher than they were early in 1972. during the 12 months following the breakdown So far as our merchandise trade is concerned, of the fixed rates system in February-March we seem to have made the kinds of gains in 1973. Rate flexibility has proved its usefulness competitive position that could be expected in times of severe disturbance. It has given rise, from the depreciation of the dollar since 1970, on the other hand, to new concerns. Among and this, together with the extraordinary rise in these has been the fear that flexibility might be the value of agricultural exports, has helped to abused to engage in competitive depreciation as offset the huge jump in oil imports. However, a means of stimulating exports. So far nothing like other countries we must be concerned with of the kind, and indeed perhaps the very oppo­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

STATEMENTS TO CONGRESS 571 site, has happened. Faced with strong demand Americans buying only a small volume of for exports and with domestic inflation, most foreign securities even though the Interest countries have had a motive to keep the value Equalization Tax on such purchases has been of their currencies high. That holds down the dropped, while foreign purchases of U.S. cor­ price of imports and helps restrain domestic porate stocks—an important type of inflow in inflation. Downward fluctuations of the dollar, the past few years—has also paused. Moreover, such as occurred in the middle of 1973 and in new issues of bonds in the international markets the early months of this year, must in the light outside the United States have been less this of this nexus be regarded as harmful to our year than in any recent year. efforts to curb inflation in the United States. Of By contrast, there has been an extraordinary course, one cannot anticipate that national pref­ surge so far this year in international capital erences as regards exchange rates will always flows through banks in both directions—we see be the same and will always favor a high rather it in our own data and also in terms of new than a low value for the local currency. If loans arranged in the Euro-dollar market. U.S. demand in international trade should slacken, banks, including the U.S. agencies and branches or if some countries should begin to make strong of foreign banks, increased their foreign assets efforts to eliminate their oil deficits, national by about $9 billion in the first 5 months of this preferences and the trend of foreign exchange year, spread over many countries but especially rates may change. directed toward Japan. A simultaneous massive It is of considerable interest, therefore, that rise in liabilities reduced the net outflow— as part of the effort to reform the international which measures the net impact on our interna­ monetary system, certain guidelines for floating tional balance and on our domestic credit mar­ rates have been proposed. The reform effort has kets—to only about $1% billion. met with only limited success, which was to I would associate part of the increased inter­ be expected once skyrocketing oil prices and national activity of U.S. banks with the removal universal inflation engulfed the world. No long- or reduction of barriers to such transactions that run reform has been agreed upon, although occurred both here and abroad early in the year. valuable preparatory work has been done. But At times, differences in relative interest rates among the immediate steps that were agreed have also been important, with U.S. rates mov­ upon by the Committee of Twenty of the Inter­ ing up relative to foreign rates after the early national Monetary Fund, the proposal establish­ part of the year. But I believe much of the ing guidelines for floating provides some hope heightened activity was a result of the new oil that extreme and inappropriate rate fluctuations situation, which generated a demand for loans can be contained. by some countries to help meet the higher costs, The recent stability of the dollar in the ex­ and at the same time resulted in an added supply change market within a context of floating rates of liquid loanable funds in international markets indicates that the net movement of capital to as OPEC countries placed their revenues with the United States has increased sufficiently to the Euro-banks. just about offset the deterioration in our balance In examining these manifold flows of capital, on goods and services. Unfortunately, we do it must, of course, be borne in mind that an not yet have actual data in detail to support this inflow or outflow of funds does not ordinarily inference, but certain patterns were showing up influence the amount of bank reserves in the earlier. In the first quarter, U.S. direct investors’ U.S. banking system or the American money net outflows were quite low, while there was supply. Foreign capital does not bring any new a very large inflow of capital from foreign dollars from abroad. Every dollar of foreign business concerns acquiring businesses in the capital “flowing” to the United States was in United States. This pattern of direct investment fact in the United States before. It simply shifted may well be continuing. Portfolio investments ownership. This shift could have taken the form involving international dealings in securities of an American selling dollars to the foreigner, seem to have dropped off sharply this year, with in which case the inflow was matched by an Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

572 FEDERAL RESERVE BULLETIN □ AUGUST 1974 outflow as the American acquired whatever specific aspects of the flows of funds derived foreign currency or assets the buyer paid him from OPEC revenues and their impact on finan­ with. Or it could have represented a shift among cial institutions and structures. I believe it is foreign holders, for instance if the foreigner worth emphasizing that there will be great acquired dollars from a foreign central bank, disparities among the OPEC countries in their which had held them previously as part of its ability to utilize this new wealth to improve their reserves. What changes as a result of changes own countries and in their plans for investment in capital flows under our present regime of of this huge cash flow in foreign capital markets. flexible exchange rates is the exchange rate, as We see already that Iran has made plans for a rise in the demand for dollars in the case of industrialization and is developing ties with capital inflows, or in the supply in the case of countries that can be helpful in that process. outflows, shifts the balance of the market in We know that Kuwait, for instance, has been favor of or against the dollar. Only in special thinking through the requirements of an accept­ cases is a different interpretation appropriate. able investment portfolio for some time and is One further conclusion that I would draw probably fairly well diversified. In the case of from the variety of offsetting capital flows that Saudi Arabia, the initial reaction, which was have occurred is that under today’s conditions simply to let funds accumulate in liquid forms capital is highly mobile. The world’s national in the Euro-dollar market, seems to be moving money and credit markets are more open to already in the direction of finding more perma­ shifts among countries—sometimes via the nent lodging in such investments, perhaps, as Euro-markets—than they have been since before special issues of U.S. Treasury obligations. the 1930’s. Hence the system of national and According to International Monetary Fund data, international capital markets constitutes, in ef­ the reported increase in monetary reserves of fect, something like a large and only moderately the OPEC countries in the first half of 1974 was compartmentalized pool, rather than many sep­ about $15 billion, but the gains were acceler­ arate watertight compartments. As a result, any ating and were $3 billion to $4 billion per month movement of capital in one direction is quite in May and June with larger increases still to likely to be offset by movements in the opposite come. direction. A large outflow from the United These funds should not be regarded as a States tends to drive down interest rates abroad, monolithic mass of maneuver, poised to shift which makes American capital markets rela­ this way or that for speculative or political tively more attractive and causes other funds to reasons. There are many individual OPEC gov­ come to the United States, and inversely. To ernments involved, and there is no evidence that pour capital, whether owned by OPEC countries they are taking any unnecessary risks with their or others, into any one part of this market does funds. Working with their financial advisers, not mean that the net supply in that market is these countries are likely to distribute their funds increased by the full amount. Capital already over a wide range of investments, always present there tends to be pushed elsewhere, thus mindful of the need for security and stability. tending to even up the supply. Of course, these In return for continued rising levels of oil output equalizing movements will take place only if in OPEC countries, those countries understand­ conditions are otherwise propitious. When there ably wish to be provided with suitable ways of are heavy risks of a credit, exchange, or political holding their accumulating assets. I doubt that sort, the movements will not occur or will occur there will be attempts to attain dominance over only in response to severe declines of exchange particular large companies or economic sectors rates or increases in interest rates or both. The in the industrial countries, since this would evidence that in today’s markets capital is highly expose them to considerable economic and po­ mobile should be kept in mind in examining litical risks. At the same time, the amounts the possible effects of placement of OPEC involved are formidable by any normal stand­ money in any one particular market. ards of international capital flows. Questions This leads me to some comments on the more naturally arise about the ability of capital mar­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

STATEMENTS TO CONGRESS 573 kets to absorb such flows without suffering se­ hand, the investment preferences of OPEC gov­ vere dislocations. I believe some of these con­ ernments may be quite different; I would expect cerns are justified, but that others are exagger­ them to be more interested in assets that are ated. relatively liquid, widely traded both nationally There are a number of ways in which an and internationally, and backed by the strongest annual flow of funds of, say, $50 billion can guarantees. That would imply some shifts in the be compared with over-all flows of funds in yields on different kinds of financial assets in financial markets. In the United States alone the national markets, reducing yields on more liquid total of funds raised by nonfinancial sectors in assets relative to yields on, say, mortgages. In U.S. credit markets is now close to $200 the case of the United States, if there should billion a year; for all industrial countries to­ be a large inflow to major U.S. banks and to gether the total is two to three times that Treasury obligations, as seems possible, some amount. By far the greater part of these flows downward pressure may result on yields in those of funds is between domestic sectors of the sectors. That does not mean necessarily that the economy, though at times the flow of funds rate of growth of the monetary aggregates will vis-a-vis other countries can have a significant be significantly affected, but it does mean that effect on capital markets in individual countries. yield relationships could be changed for some Also, in recent years the Euro-currency markets time to come. The Federal Reserve could estab­ have grown in importance as a mechanism lish and maintain any desired degree of over-all through which funds move to and from national restraint or ease in monetary policy. money and credit markets. The Euro-markets Another kind of irregularity in flows that have now taken on increased importance, since could be troublesome is that OPEC countries a large part of the receipts of the OPEC coun­ are likely to prefer assets based directly or tries is being deposited in their accounts in these indirectly on the countries with the strongest banks, and, in turn, will be loaned by this group economies and the broadest markets. So may of banks to borrowers in national markets. The the banks that receive OPEC deposits in the record shows that the Euro-currency market has Euro-dollar market and lend them out to gov­ been capable of very rapid growth in the past. ernments and private borrowers all over the For instance, the net size of the Euro-currency world. The problem of the weaker countries is market (that is, after eliminating claims of one obvious—they will sooner or later find it diffi­ bank on another within the eight countries cult to attract funds from the market as their usually considered as forming “the market”) debt burdens reach the limits which the market grew by $25 billion in 1972 and by $50 billion should and probably will place on their borrow­ in 1973. There is an estimate that a further net ing capacity. growth of $30 billion has occurred this year to However, if they do not succeed in attracting mid-May, bringing the net size of the market funds to cover their deficits, it must be that some to about $185 billion. of the stronger countries are attracting more than It seems to me that if we have problems in enough funds to cover their own deficits with handling the flows of funds associated with the OPEC countries. If a few countries with higher payments for oil, it will not be so much strong economies and broad capital markets because of the sheer size of the amounts in­ attract a disproportionate share of OPEC invest­ volved but because of several kinds of potential ments—and the United States could well be one dislocations. of them—a number of adjustments are possible. In the first place, the normal stream of in­ First, other countries needing to borrow to cover vestment into financial assets in a given country their deficits would be able to take advantage will reflect the existing asset preferences of of the additional liquidity available in these investors and institutions in that country—a surplus countries—that is, capital markets in mixture of corporate debt and equity, financing these countries could do a considerable part of of government at various levels, mortgages, and the recycling job. Also, countries receiving in­ deposits in financial institutions. On the other adequate financing could allow their currencies Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

574 FEDERAL RESERVE BULLETIN □ AUGUST 1974 to depreciate, so that part of the adjustment as very short-term liabilities for which banks could come through changes in the trade bal­ must quickly find outlets that are usually much ance. After a point, however, these accommo­ less liquid? It would be unwise to be complacent dations through the market mechanism would about this question—bad judgments may be not take care of the problems of countries whose made and things can go wrong for individual debt capacity was running out or who could not banks. We must be prepared to meet these risks, adjust their trade balance beyond some point of by obtaining and providing up-to-date informa­ necessity. tion, by careful regulation and supervision, and To deal with such situations the most logical in the last resort by action that would safeguard solution would clearly be for the responsible the liquidity of markets and the integrity of the parties—the OPEC countries—to relieve the payments mechanism by keeping possible prob­ burden. The total amount of aid required would lems of any one institution from creating prob­ not be large relative to the mounting OPEC lems for the entire system. But given proper reserves, and it might be a more fruitful invest­ caution on all sides, I believe that fears some­ ment in terms of the stability of the world times expressed of financial difficulties are economy than a continuing accumulation of greatly exaggerated. financial assets in the stronger countries. If the Banks and their OPEC customers have al­ OPEC countries do not meet this challenge, ready begun to rationalize the flow of funds: should we expect those countries that receive there are reports that on the deposit side the OPEC funds in excess of their needs to act as maturities are stretching out, or yields are drop­ financial intermediaries, borrowing from OPEC ping enough to cause OPEC governments to countries at market rates and with assurance that seek out other assets; banks are assisting these these assets of the OPEC countries are sound, countries to find more suitable outlets for their while extending aid to cover the cost of oil to funds; on the asset side, some of the problem countries who cannot borrow at market terms? of liquidity is alleviated by the practice of mak­ I raise this question not because I believe the ing term loans whose interest rate can be ad­ industrial countries should cease to contribute justed at intervals to reflect changing conditions to the economic progress of poorer countries— in the market. quite the contrary—but rather to emphasize that So far, it appears that the leading banks have there is now a new burden on these countries dealt with these flows efficiently and relatively that should call forth a new set of aid donors. smoothly. Countries in need of funds have been There has already been a considerable amount able to raise very large sums in the Euro-dollar of activity by the OPEC countries that may markets—anticipating their requirements for ultimately relieve the burden for some of the some time ahead. For instance, in the first half LDC’s, but though the list of proposals for new of this year, publicly announced medium- and funds or institutions is quite long, it is not clear long-term Euro-currency bank credits totaled how well the actual disbursement of funds will about $20 billion, which is almost as much as meet the needs of particular countries. Never­ in all of 1973 and far more than in any earlier theless, if the OPEC countries are willing to year. do their share and the industrial countries are Nevertheless, to express faith in our financial not left with an untenable intermediary position, institutions does not mean to say that they can we should be able to provide mechanisms for meet any and all demands on them. On the aiding countries when market sources are not contrary, if they are to act prudently, they will available. have to keep the scale and kind of their opera­ Finally, another aspect of the flow of petro­ tions within the limits of acceptable risks. Given dollars causing concern is the impact of these present oil prices, this may leave substantial flows on the institutions in world financial mar­ investment needs of the oil exporters and bor­ kets. In particular, will untenable strains de­ rowing needs of the importers to be met through velop from a flood of OPEC funds coming in other channels. There can be no assurance, at Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

STATEMENTS TO CONGRESS 575 this time, that the problems, particularly of the of inflation and generate more investment in the borrowing countries, can be met without a sub­ areas of greatest capacity shortages. If we can stantial cut in the price of oil. make progress on those fronts, we can be more Whether the problems I have discussed relat­ hopeful that special problems of adjustment to ing to petro-dollars become acute or not depends high oil prices, or to other unexpected strains, in good part also on our ability to get control will not degenerate into serious impasses. □ Statement by Henry C. Wallich, Member, more important to U.S. producers, since exports Board of Governors of the Federal Reserve of goods last year amounted to more than 10 System, before the Subcommittee on Interna­ per cent of our domestic goods production, tional Finance and Resources of the Committee compared with 8.2 per cent in 1964. These gains on Finance, U.S. Senate, August 14, 1974. in international trade reflect elements of strength in the international economy—the reductions in I am glad to have this opportunity of discussing tariffs that have been painstakingly negotiated international economic problems and their do­ in recent decades, the highly developed and mestic repercussions before this distinguished continuously improving system of transportation subcommittee. and communication, and the rapid growth in If a broad-brushed picture of the international world production. economic scene in recent years is drawn, several While the over-all level of international major features stand out. The international transactions has expanded rapidly, the trade economy has been upset by a number of severe balance of the United States has moved une­ disturbances. Foremost among the recent dis­ venly in recent years, sliding into deficit in 1971 turbances have been the oil embargo and the and 1972, and then temporarily recovering to jump in the international price of oil. More a small surplus in 1973 as agricultural exports broadly, the international prices of commodities boomed and as the devaluations of the dollar have moved dramatically, rising particularly began to have their effect. Elements of strength rapidly during late 1972 and early 1973. The continue to benefit U.S. export trade, but they rises in the price of oil and other commodities have been overwhelmed by increases in the have contributed to the worldwide inflation that price of oil, with the result that our trade balance is currently raging, but inflation can by no is now back in deficit. During the second means be exclusively attributed to the commod­ quarter, the deficit amounted to $6.8 billion at ity sector. In recent years aggregate demand in an annual rate, seasonally adjusted. During that many countries has become overheated; too quarter fuel imports were running at an annual many have tried to do too much too quickly. rate $20 billion above last year’s. But if disturbances and change have been It seems unlikely that the trade balance will major unsettling features of the international improve very much, if at all, over the next 12 economy in recent years, its resilience has of­ months. Much depends on the size of the har­ fered some reassurance. In spite of the disturb­ vests here and abroad and on the price of oil. ances, there have been solid gains in the volume In 1973, following poor crops abroad, our agri­ of trade and other transactions among countries. cultural exports rose to 25 per cent of our total For the United States, for example, exports of merchandise exports, compared with 19 per cent goods and services have increased more rapidly in 1972. In 1974 this percentage is likely to than total gross national product, rising from decrease. 5.9 per cent of GNP one decade ago to 7.8 per The degree of exchange rate flexibility that cent of GNP during the past year. Looking at has developed in recent years has contributed goods only, foreign markets have become even to the ability of the international economy to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

576 FEDERAL RESERVE BULLETIN □ AUGUST 1974 withstand shocks. Indeed, it is difficult to see reduction in their living standards. Insofar as how the disturbances of the past few years could the oil exporters take the second option—ac­ have been absorbed as smoothly as they in fact quiring assets, and in a broad sense, investing were, if exchange rates had been pegged and in the oil-importing countries—they are auto­ rigidly defended. As a result of the negotiations matically recycling the oil receipts to the oil recently conducted by the Committee of Twenty importers as a group. In general, money not of the International Monetary Fund (IMF), the used for imports must be deposited or invested evolving system of exchange rate flexibility can somewhere, and wherever it goes, it is available be put on a more systematic basis. A major to the oil-importing countries. feature of the reform effort has been a set of But the automatic recycling occurs only with guidelines for floating, which define what coun­ respect to the oil-importing countries as a group. tries should and should not do in the way of For individual countries and institutions serious intervening in foreign exchange markets. The problems may nevertheless arise. First, the oildevelopment of guidelines for intervention exporting countries may want to hold their funds should limit potential conflicts among nations in only a limited number of large banks. A great over exchange rates and limit swings in rates, increase in deposits, for instance, could strain and this tends to ease some of the concern that the capital positions of these banks. A desire we may feel with respect to the system of for high liquidity on the part of the oil-exporting floating rates. countries, causing them to hold their funds in But while exchange rate flexibility has in­ the form of short-term deposits, would strain creased the shock resistance of the international the banks’ liquidity positions. Second, some economy, it has produced problems of its own, countries may suffer severe financing difficulties such as the speculative losses that have affected if their ability to finance imports by drawing some financial institutions in recent months. on reserves or by borrowing them falls short Market swings have been unnecessarily wide of needs. and have, from time to time, permitted declines Both problems can be mitigated to the extent in the value of the dollar, which have contrib­ that the oil exporters are prepared to make uted to inflationary pressures. In any event, appropriate financial arrangements. To the ex­ exchange flexibility can at best make only a tent that the oil-exporting countries decide to marginal contribution to the very real longer-run hold some of their assets in forms other than difficulties engendered by the increase in the bank deposits, the problems of the financial price of oil. The difficulties with which I speci­ institutions will be lessened. If, further, oil fically want to deal in this testimony are balance exporters were willing to acquire assets in the of payments problems, financial strains, and importing countries in approximate proportion domestic repercussions. to the need of the importing countries to pay When the oil-exporting countries receive their for oil, the danger that some countries may not huge additional payments, they basically have get enough recycling would be obviated. We two ways of using their great windfall. They are beginning to see encouraging developments can import additional goods, or they can acquire along these two lines. As of this time, however, assets in the oil-importing countries. Insofar as one cannot expect that the problems of financial they do the former, a course of action that is institutions and of balances of payments will be limited by their absorptive capacity, the total fully met by such developments. current-account deficits of the oil-importing The normal workings of the market will ease countries are reduced. Of course, this partial some of the problems growing out of the vast solution of their balance of payments problem payments to the oil producers. If the oil-export­ cannot be considered a painless outcome for the ing countries, like other recipients of windfalls, oil-importing countries, since they will of ne­ initially hold most of their new wealth in liquid cessity then have to give up the resources bank balances, they will compel banks to tighten needed for the production of their additional up the conditions on which they will accept exports to the oil producers, with a consequent these funds. This would give the Organization Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

STATEMENTS TO CONGRESS 577 of Petroleum Exporting Countries (OPEC) an experiencing as a consequence of domestic po­ incentive to look for other investments, either licies and other factors. Where good policy calls of a debt or equity nature. If a country receives for elimination of these deficits, every effort less recycling than needed to meet its current- should now be made to eliminate them. But a account deficit, it may be able to borrow from country cannot eliminate its oil deficit without countries that receive more than they require. increasing the deficit of some other country, The market has a major role to play in redis­ since the surplus of the oil-exporting countries, tributing funds according to need. This applies for reasons already stated, cannot be eliminated both to the Euro-dollar market and to the na­ in the short run. Individual countries might, of tional capital markets of countries. The ability course, attempt to eliminate their oil deficits. of capital markets to fulfill their function as But such attempts, if pursued too vigorously, intermediaries between countries with plentiful could lead to general contraction—since the and relatively scarce supplies of capital has been standard ways to eliminate a deficit are to re­ enhanced by recent moves towards freer capital strain aggregate demand, restrict imports and markets. other payments, and possibly depress exchange Situations may develop that the market cannot rates. The danger, so to speak, is that the handle, however. Such situations will be more oil-importing countries may be lured into a frequent if the price of oil remains at anything game of musical chairs with their combined like the present level. For instance, where credit deficit. The deficit will remain, but the game risks are perceived by private financial interme­ itself can become mutually destructive. diaries as excessive, facilities in addition to But while mutually contradictory attempts to those that the market can supply may be re­ eliminate current-account deficits represent a quired. Some international steps are now being danger, there is no fully satisfactory basis for taken to make financing available to needy agreeing as to how the deficits should be dis­ countries, most notably through the IMF oil tributed. It is frequently suggested that countries facility. The financial facilities of the European should attempt to balance their current-account Economic Community have been drawn upon receipts and expenditures exclusive of the defi­ by Italy. As strains on the international financial cits attributable to the increase in the price of system are to a large degree attributable to the oil. Alternatively, it has been suggested that actions of the OPEC countries, it is urgently countries adjust their trade balances in such desirable that they contribute to the easing of manner that each oil-importing country accepts the situation by lowering the price of oil and a deficit proportionate to its GNP. Neither of by making funds increasingly available for offi­ these criteria provides an adequate guide, if only cial financing arrangements. because some countries may be unable to bor­ Potential strains on the international financial row enough in the market, and then would have system can be reduced if steps are taken to keep to cut down their deficit unless they receive aid. some fair balance among the current-account It is appropriate that countries that face both positions of the oil-importing countries. As a large current-account deficits and strongly infla­ group, the oil-importing countries will run large tionary domestic conditions should take firm current-account deficits into the foreseeable fu­ steps to control domestic demand. Each ture—unless the oil problems are reduced by country, of course, should frame its policy in a major price rollback. How these deficits full awareness of the fact that, collectively, should best be distributed has been a matter of large current-account deficits cannot be avoided concern, both within international organizations by the oil-importing countries. But the prospec­ such as the Organization for Economic Cooper­ tive oil deficits do not mean that countries ation and Development (OECD) and within na­ should ignore the prudent fiscal and monetary tional governments. policies needed to put their domestic house in It must be borne in mind that the oil deficits order. are occurring in addition to deficits and sur­ In summarizing this review of the financial pluses that particular countries were already repercussions of the high price of oil, I would Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

578 FEDERAL RESERVE BULLETIN □ AUGUST 1974 say this; we have good markets and institutions, growth of our capital stock and productive ca­ and public policymakers are not without guides pacity. as to what to do in the face of this situation. Fortunately, one of the effects of the higher But one cannot at this time be sure that the price of imported oil is to create an opportunity situation will in fact be manageable, unless there for increased investment in each oil-importing is a substantial reduction in the price of oil. country’s economy. As already mentioned, the I now turn to the second group of problems increase in the price of imported oil, like an set out earlier, relating to domestic repercus­ excise tax, removes purchasing power from the sions of international events. Among the oil- domestic economy. The resources thus released importing countries, by far the greatest prob­ can advantageously be channeled into invest­ lems are encountered by the less developed ment. Such an increase in investment could countries (LDC’s). Facing an uncertain future come about, for instance, if the oil-exporting at best, a number of them have been put in a countries recycle the funds to the importing grim position by the increases in the price of countries and acquire assets there. oil—upon which depend their transportation, Nevertheless, until the present inflation has their nascent industries, and their supplies of been brought under control, increases in invest­ fertilizer. Indeed, unless the price of oil is ment must be accompanied by determined re­ reduced, or unless the LDC’s receive large straint on aggregate demand. It is here that flows of capital or aid from the OPEC or OECD restraint in the Government budget has a crucial countries, the outlook for some of them is very role to play. Cutting of Government expendi­ difficult indeed. The adverse effects of high oil tures and a reduction in the volume of Govern­ prices on the supply and cost of fertilizers and ment financing will have desirable direct effects therefore on the price of food is particularly in restraining inflationary forces. Furthermore, troublesome. given the over-all monetary restraint applied by For the economically developed countries, the Federal Reserve, more fiscal discipline will increases in the price of oil also have important mean less Government borrowing and hence domestic implications. Representing a strong lower interest rates both here and abroad. The autonomous increase in costs, they have exa­ relaxation of pressures on institutions that fi­ cerbated the already grave inflationary problems nance the housing industry would be especially of the United States and other countries. The beneficial. Indeed, a strong case for budgetary increases in the price of oil have frequently been restraint can be made on the grounds that, in compared with a large excise tax paid to for­ present circumstances, Government expendi­ eigners, having an effect both of pushing up tures are directly competitive with home con­ prices, and also of tending to drain real dispos­ struction. able income from the economy, thereby in­ In our domestic fight against inflation, we creasing the dangers of weakness in economic must not expect quick success; perseverance has activity. This source of softness of demand has, become the keynote. If we are to be successful however, tended to be offset by new demands in our anti-inflationary fight—and it is impera­ for capital investment. tive that we achieve success—then we must be Several aspects of the changes in the interna­ determined to fight inflationary pressures over tional economy have contributed to the need for an extended period. And, just as the interna­ additional capital, of which the need to develop tional prevalence of excess demand in recent substitute sources of energy is only one. An­ years has meant that national inflationary prob­ other is the fact that, as the current accounts lems have tended to reinforce one another, so, of the United States and other oil-importing on the other side, the unwinding of inflation countries show large deficits, there will be an will be less difficult for each country if there accumulation of liabilities to the oil-exporting is an international determination to exercise nations. In order to ease the future problems restraint. of debt repayment, we should encourage the The problems of inflation as well as those of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

STATEMENTS TO CONGRESS 579 international finance and of balances of pay­ In many countries, the combination of a rapid ments would be greatly eased by a decline in rate of inflation accompanied by softness on the the price of oil. There are reasons for expecting real side of the economy have added to current such a decline, not only on the grounds of a difficulties. In the United Kingdom, real GNP current excess of supply over demand, but also in 1974 is not expected to be above that in 1973. on the grounds of the long-term economic self- In Japan, a 25 per cent rate of inflation during interest of the oil-exporting countries which the first quarter of this year was accompanied undoubtedly will want to protect their markets. by a fall of 5 per cent in real GNP—both But a decline to the prices of past years cannot of these developments being due in significant be expected. part to Japan’s heavy dependence on imported Efforts to cope with inflation are needed al­ oil. most everywhere. In the OECD countries, in­ Given these conditions and policies, the out­ flation currently rages at rates that range be­ look seems to be for a period of, at best, tween 7 per cent and 23 per cent. Inflation has moderate growth abroad, as it is at home. I do reached a stage in which fears are being ex­ not, however, see policies that are deliberately pressed openly about the survival of democratic designed to restrain inflation leading to a serious institutions. Germany, which took anti-infla­ decline in the world economy, as prophets of tionary action earlier in the cycle, has been gloom sometimes predict, anymore than I see rewarded by the lowest rate of inflation among a crisis of the world’s financial system ahead. the major industrial countries. German restric­ We must not deceive ourselves about the fact tive actions in the past year have kept domestic that we face severe difficulties. We shall be demand approximately flat in real terms, with sailing in uncharted waters part of the time. But the expansion of German economic activity our institutions are strong, the right policies are being completely accounted for by the buoyancy at hand, and given the will, I feel confident that of its exports. the way will be found. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

580 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON MAY 21, 1974 Domestic policy directive The information reviewed at this meeting suggested that real output of goods and services was changing little in the current quarter, after having declined at an annual rate of 6.3 per cent in the first quarter, and that the increase in the GNP implicit deflator, which had accelerated to an annual rate of 11.5 per cent in the first quarter, was continuing at a rapid pace. Staff projections suggested that real economic activity would rise somewhat in the second half of the year and that prices would increase at a less rapid rate than in the first half. In April industrial production expanded somewhat—after having receded over the preceding 4 months—mainly as a result of in­ creases in output of automobiles and business equipment. Employ­ ment in manufacturing establishments also rose, following four consecutive months of decline, and total nonfarm payroll employ­ ment advanced moderately. The civilian labor force, which had changed little since January, declined in April, and the unemploy­ ment rate edged down from 5.1 to 5.0 per cent. According to the advance report, retail sales expanded moderately further, re­ flecting in large part an increase in sales of domestic models of new automobiles. Wholesale prices of farm and food products declined substan­ tially in April, for the second consecutive month. However, wholesale prices of industrial commodities continued upward at a rapid pace; price increases, which were reported for most com­ modity groups, were particularly large for metals, wood pulp, paper products, chemicals, and some types of machinery. In March the consumer price index had risen almost as substantially as in the preceding month, although retail prices of meats had declined. The index of average hourly earnings of production workers on nonfarm payrolls, which had risen more in February and March Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

RECORD OF POLICY ACTIONS OF FOMC 581 than earlier data for those months had indicated, advanced at a faster pace in April. In the first quarter, when real output and productivity declined, unit labor costs in the private nonfarm economy increased sharply. The latest staff projections for the second half of 1974, like those of 5 weeks earlier, suggested that business fixed investment would increase further and that government purchases of goods and services would continue to grow at a fairly rapid rate. However, it was now expected that the expansion in real consumption expend­ itures would slow, reflecting mainly a slower rise in sales of new automobiles, and that the upturn in residential construction activity would be more moderate than had been anticipated 5 weeks earlier. In foreign exchange markets the dollar depreciated further against leading foreign currencies in April and the first half of May. In mid-May, however, the dollar was buoyed by a speculative flurry based on a news report that the United States, Germany, and Switzerland were contemplating concerted intervention in the mar­ kets. The U.S. balance of payments, which had been in deficit in February and March, remained in deficit in April and early May. The U.S. foreign trade balance had shifted into sizable deficit in March, mainly because of increased costs of imports of petroleum and other industrial materials which reflected earlier increases in prices; for the first quarter as a whole the trade balance was still in surplus, but the amount was small and represented a substantial deterioration from the preceding quarter. Growth in loans and investments at U.S. commercial banks remained strong in April, reflecting for the most part continuation of rapid expansion in business loans; loans to nonbank financial institutions and to foreign commercial banks also increased, and banks added to their holdings of both Treasury and other securities. As in March, effective rates on bank loans were favorable relative to rates in the commercial paper market, and businesses continued to concentrate their strong short-term credit demands at banks. Between mid-April and mid-May the prime rate applicable to large corporations was raised in six steps from 10 per cent to IIV2 per cent at most banks. Growth in the narrowly defined money stock (M^1 slowed someprivate demand deposits plus currency in circulation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

582 FEDERAL RESERVE BULLETIN □ AUGUST 1974 what in April from the rapid pace of the preceding 2 months, but at an annual rate of about 8 per cent, it was slightly faster than over the first quarter as a whole. Banks’ net inflows of time and savings deposits other than large-denomination CD’s picked up slightly, and growth in the more broadly defined money stock (M2)2 remained at about the moderate rate recorded in March. In order to help finance the growth in their loans, banks further stepped up the issuance of large-denomination CD’s—to a record amount in April—and continued to increase borrowings in the commercial paper and Euro-dollar markets. As a result, the bank credit proxy3 rose at an unprecedented rate. Net deposit inflows at nonbank thrift institutions slowed sharply in April, as yields on market securities became increasingly attrac­ tive to savers, and growth in the measure of the money stock that includes such deposits (M3)4 slackened somewhat. Contract interest rates on conventional mortgages and yields in the secondary market for Federally insured mortgages rose sharply in April and early May. On May 1 the Treasury announced that it would auction up to $4.05 billion of notes and bonds to refund the bulk of $5.6 billion of publicly held securities maturing on May 15; the remainder would be retired by drawing down cash balances. In an auction on May 7 the Treasury sold $1.75 billion of 4lA year, S3A per cent notes at an average price to yield 8.73 per cent; and in auctions on May 8 it sold $2 billion of 25^-month, 83A per cent notes at an average price to yield 8.73 per cent and $300 million of 25-year, 8V2 per cent bonds at a price to yield 8.23 per cent. System open market operations since the April 15-16 meeting had been guided by the Committee’s decision to seek bank reserve and money market conditions that would moderate growth in monetary aggregates over the months ahead, while taking account of the forthcoming Treasury financing and of international and 2Mt plus commercial bank time and savings deposits other than large-denomi­ nation CD’s. 3Daily-average member bank deposits, adjusted to include funds from nondeposit sources. 4M2 plus time and savings deposits at mutual savings banks and at savings and loan associations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

RECORD OF POLICY ACTIONS OF FOMC 583 domestic financial market developments. Soon after the meeting, available data suggested that in the April-May period the annual rates of growth in the monetary aggregates would be above the upper limits of the ranges of tolerance that had been specified by the Committee. Accordingly, System operations were directed toward tightening in bank reserve and money market conditions. Largely because of unexpectedly strong money market pressures, the Federal funds rate rose to around 11 per cent on April 22 and 23—from around IOVa per cent just before the April meeting—and in the statement week ending April 24 it seemed likely to average a little above the upper limit of 10% per cent set by the Committee. The System Account Manager reported that in order to bring the funds rate back within the range of tolerance he would have to expand reserve-supplying operations, thus stimulating further growth of the monetary aggregates. On April 24 the members of the Committee—with the exception of Mr. Bucher—concurred in the Chairman’s recommendation that, in view of those circum­ stances and against the background of the increase in Federal Reserve discount rates announced that day, the upper limit of the funds rate constraint be raised by lA of a percentage point to 11 per cent. In mid-May available data suggested that in the April-May period growth rates in Mx and M2 would be within their short-run ranges of tolerance while the growth rate in reserves available to support private nonbank deposits (RPD’s) would be well above its specified range. The Federal funds rate remained above its 11 per cent upper limit, averaging 11.46 per cent in the most recent statement week, despite System efforts to achieve a lower rate. Major member banks apparently were bidding in the Federal funds market in order to avoid borrowing at the discount window; in addition, efforts to provide reserves were hampered by a technical market shortage of collateral for repurchase agreements. In any event, it would have been difficult to reduce the funds rate to 11 per cent without providing reserves through open market operations on a scale that would have risked market misinterpretation of the System’s policy intent. On May 17 the members—with the excep­ tion of Mr. Holland—concurred in Chairman Burns’ recom­ mendation that the Committee take note of the difficulties faced by the System Account Manager in recent days and, in view of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

584 FEDERAL RESERVE BULLETIN □ AUGUST 1974 the likelihood that those conditions would persist over the next few days, that it change the ceiling guideline for the funds rate from 11 to 11 lA per cent. On the day before this meeting, the Federal funds rate was 1 llA per cent. In the four statement weeks ending May 15, member bank borrowings averaged about $1,920 million, compared with an average of about $1,555 million in the preceding 4 weeks. Private short-term market interest rates rose sharply further in the period between the Committee’s meeting on April 15-16 and this meeting—in response to persistent strong business demands for credit and further tightening in money market conditions. In addition, yield spreads between high- and lower-quality securities widened, in part because of the uneasiness that developed in financial markets as a result of press reports of the special problems being experienced by Franklin National Bank and of rumors that some other financial institutions might be encountering liquidity problems and other difficulties. Treasury bill rates also increased in late April and early May. Subsequently, however, they dropped in response to a number of influences, including substantial purchases of bills by foreign mon­ etary authorities, strong demands by small investors who continued to be attracted by the high yield relative to interest rates available on time deposits, System purchases for its own account, and the apparent shift in investor preference toward securities of higher quality. On the day before this meeting, the market rate on 3-month bills was 7.94 per cent, down nearly a percentage point from levels reached in late April and early May, and about the same as at the time of the April meeting. Federal Reserve discount rates were raised from IV2 to 8 per cent, effective at seven Reserve Banks on April 25; shortly thereafter, rates were raised at the remaining five Banks. Yields on long-term securities also increased in the inter-meeting period, but by much less than those on private short-term instru­ ments. Demands for the longer-term issues—especially from small investors—tended to increase as yields advanced. Moreover, the volume of public offerings of corporate bonds declined in April, in part because some scheduled offerings of new issues were postponed or canceled. A substantial increase in the volume was in prospect for May. Offerings of State and local government issues Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

RECORD OF POLICY ACTIONS OF FOMC 585 expanded in April, and a moderate decline was in prospect for May. A staff analysis suggested that maintenance of prevailing money market conditions at this time would be associated with a dampen­ ing in the rate of growth of the narrowly defined money stock over the months ahead, because the demand for money was likely to be restrained by the lagged effects of the sharp rise in short-term market rates of interest that had occurred over the past few months. According to the analysis, growth in consumer-type time and savings deposits at both banks and nonbank thrift institutions would continue to be curtailed—because of high market interest rates relative to rates available on time deposits—and growth in broader measures of the money stock would slow further. Banks would continue to rely heavily on issuance of large-denomination CD’s and borrowings in the Euro-dollar market to finance loan expansion, although it appeared likely that a tightening in banks’ lending terms would moderate loan growth. The Committee concluded that the economic situation continued to call for moderate growth in monetary aggregates over the months ahead. At the same time, the members decided that—in view of the sensitive state of financial markets and the considerable tight­ ening in money market conditions that had occurred over recent months—greater emphasis than usual should be placed on money market conditions during the period until the next meeting, and accordingly, that the range specified for the Federal funds rate should be narrower than usual. In particular, they agreed that operations in the coming period should be directed toward main­ taining about the prevailing restrictive money market conditions, provided that the monetary aggregates appeared to be growing over the May-June period at rates within specified ranges of tolerance. The members also agreed that the lower limits of the tolerance ranges specified for the monetary aggregates should be set at levels that would accommodate slower growth rates than expected at present in the event that such rates developed, given about the prevailing money market conditions. Taking account of the staff analysis, the Committee decided that in the period until the next meeting the weekly average Federal funds rate might be permitted to vary in an orderly fashion from as low as 11 per cent to as high as 11% per cent, if necessary, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

586 FEDERAL RESERVE BULLETIN □ AUGUST 1974 in the course of operations. For the May-June period the Committee adopted ranges of tolerance of 3 to 7 per cent and 4 Vi to IV2 per cent for the annual rates of growth in and M2, respectively. The members agreed that rates of growth within those ranges would be likely to involve RPD growth during the same period at an annual rate within a 13 to 20 per cent range. The members also agreed that, in the conduct of operations, account should be taken of developments in domestic and interna­ tional financial markets. It was understood that the Chairman might call upon the Committee to consider the need for supplementary instructions before the next scheduled meeting if significant incon­ sistencies appeared to be developing among the Committee’s various objectives and constraints. The following domestic policy directive was issued to the Federal Reserve Bank of New York: The information reviewed at this meeting suggests that real output of goods and services—which had declined appreciably in the first quarter—is likely to change little in the current quarter and that price increases are continuing exceptionally large. In April industrial production and manufacturing employment expanded somewhat, after having declined for 4 months. The unemployment rate edged down to 5 per cent, as the civilian labor force declined. Wholesale prices of farm and food products declined substantially further, but increases among industrial commodities again were widespread and extraordinarily large. The advance in wage rates has accelerated somewhat in recent months, and unit labor costs have been rising at a fast pace. In April and early May the dollar depreciated further against leading foreign currencies, and the balance of payments remained in deficit on the official settlements basis. Rising import costs for petroleum and other products contributed to a sizable deficit in U.S. foreign trade in March. Growth in the narrowly defined money stock slackened somewhat in April from the rapid pace in the preceding 2 months, and the more broadly defined money stock continued to expand moderately. Deposit experience at nonbank thrift institutions deteriorated sharply. Business short-term credit demands remained exceptionally strong. These demands were concentrated in banks, and to help finance loan growth, banks issued a record amount of large-denomi­ nation CD’s and continued to borrow in the commercial paper and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

RECORD OF POLICY ACTIONS OF FOMC 587 Euro-dollar markets. Private short-term market interest rates have risen sharply further in recent weeks and conditions in financial markets have been uneasy. Treasury bill rates also rose in late April and early May, but have declined markedly in recent days. Long­ term rates have continued upward. Effective April 25, Federal Reserve discount rates were raised one-half point to 8 per cent. In light of the foregoing developments, it is the policy of the Federal Open Market Committee to foster financial conditions con­ ducive to resisting inflationary pressures, supporting a resumption of real economic growth, and achieving equilibrium in the country’s balance of payments. To implement this policy, while taking account of developments in domestic and international financial markets, the Committee seeks to maintain about the prevailing restrictive money market conditions, provided that the monetary aggregates appear to be growing at rates within the specified ranges of tolerance. Votes for this action: Messrs. Burns, Hayes, Black, Brimmer, Bucher, Clay, Holland, Kimbrel, Mitchell, Sheehan, Wallich, and Winn. Votes against this action: None. In the first 3 days of the statement week beginning June 6 the Federal funds rate averaged about 11.40 per cent, close to the 1IV2 per cent upper limit established by the Committee. The System Account Manager advised that market psychology was delicately poised; expectations of declining interest rates had strengthened during the past week, partly in conjunction with publicity attendant on reductions in the prime rate by a number of banks. Although those expectations had been dampened by System operations, the Manager reported that it would be useful to have some additional leeway with respect to the funds rate if necessary to counteract a resurgence of such expectations. Against that background, Chair­ man Burns recommended on June 10 that the upper limit of the funds rate constraint be raised to 11% per cent, on the understanding that the Manager would use the additional leeway if market interest rates came under downward pressure or if the monetary aggregates for the May-June period appeared to be testing the upper limits of their tolerance ranges. The members concurred in the Chairman’s recommendation. * * * * * Records of policy actions taken by the Federal Open Market Committee at each meeting, in the form in which they will appear in the Board’s Annual Report, are released about 90 days after the meeting and are subsequently published in the Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

588 Law Department Statutes, regulations, interpretations, and decisions RULES REGARDING DELEGATION OF AUTHORITY ing company of an interest in a finance company1 or an industrial bank,2 whether by acquisition of The Reserve Banks presently have delegated shares or assets, provided that the following con­ authority to approve, under certain standards, ditions are met: one-bank holding company formations, bank (i) No member of the Board has indicated an holding company formations involving more than objection prior to the Reserve Bank’s action. one bank, bank acquisitions by existing bank (ii) Applicant does not hold shares of a subsidi­ holding companies, bank mergers and mergers of ary finance company or subsidiary industrial bank bank holding companies. The Board has expanded or directly engage in such activities itself pursuant this authority by delegating to the Reserve Banks to § 4(a)(2) of the Act which may not be retained the authority to approve, pursuant to § 4(c)(8) of or engaged in beyond December 31,1980 without the Bank Holding Company Act, the acquisition Board approval. by bank holding companies of existing finance (iii) All relevant departments of the Reserve companies, industrial banks, and certain insurance Bank recommend approval. companies engaged in activities which the Board (iv) No substantive objection to the proposal has has previously determined to be permissible for been made by a bank supervisory authority, the bank holding companies. The Board has set forth United States Department of Justice, or a member standards under which this authority may be exer­ of the public. cised. Applications falling outside these standards (v) No significant policy issue is raised by the will be forwarded to the Board for further consid­ proposal as to which the Board has not expressed eration. its view. (vi) Each office of applicant’s existing3 and AMENDMENT TO RULES REGARDING proposed4 subsidiary banks, subsidiary industrial DELEGATION OF AUTHORITY banks and subsidiary finance companies and of applicant (if applicant directly engages in such activities) is 25 miles or more distant (in a straight Effective July 31, 1974 §§ 265.2(f)(31) and (32) line) from each office of the finance company or are added, to read as follows: industrial bank to be acquired. (vii) (a) The maximum in assets of finance SECTION 265.2—SPECIFIC FUNCTIONS companies and industrial banks acquired under DELEGATED TO BOARD EMPLOYEES AND FEDERAL RESERVE BANKS 1A finance company is defined, for purposes of this regula­ tion, as a concern which engages in consumer finance, sales finance and/or second mortgage activities. The acquisition of more than one separately incorporated company when such (f) Each Federal Reserve Bank is authorized, companies are part of an identifiable unit should be processed as to member banks or other indicated organi­ under a single acquisition application. zations headquartered in its district, or under sub- 2 An industrial bank is a State-chartered institution which provides consumer credit and accepts limited types of deposits; paragraph (25) of this paragraph as to its officers: it does not both accept demand deposits and make commercial loans. The term “industrial bank” also encompasses Morris Plan banks for purposes of this regulation. 3The definition of an existing subsidiary also includes, for purposes of this regulation, a bank or company for which the (31) Under the provisions of § 4(c)(8) of the acquisition has been approved by the Federal Reserve System Bank Holding Company Act (12 U.S.C. but not yet consummated. 1843(c)(8)) and §§ 225.4(a)(1), (2), (3) and (9)(ii) 4A proposed subsidiary is defined, for purposes of this regulation, as a bank or company for which an application of Regulation Y (12 CFR 225.4(a)(1), (2), (3) and for acquisition has been submitted to the Federal Reserve (9)(ii)) to approve the acquisition by a bank hold­ System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LAW DEPARTMENT 589 delegated authority in any calendar year5 does not pected to result in benefits to the public, such as exceed $15 million; and greater convenience, increased competition, or (vii)(b) The maximum size in assets of the gains in efficiency, that outweigh possible adverse finance company or industrial bank to be acquired effects, such as undue concentration of resources, does not exceed $5 million. (Exception: The max­ decreased or unfair competition, conflicts of inter­ imum size in assets of the finance company or ests, or unsound banking practices. industrial bank to be acquired is $15 million if the aggregate assets of applicant’s existing subsid­ iary finance companies and industrial banks6 and of the finance company or industrial bank to be (32) Under the provisions of § 4(c)(8) of the acquired do not exceed $50 million.) Bank Holding Company Act (12 U.S.C. (viii) Total assets of the finance company or 1843(c)(8)) and § 225.4(a)(9)(iii)(a) of Regulation industrial bank to be acquired will not exceed 10 Y (12 CFR 225.4(a)(9)(iii)(a)) to approve the per cent of the total consolidated assets of appli­ acquisition or, as an incident to a bank holding cant after consummation. company formation pursuant to § 3(a)(1) of the (ix) The sale of credit-related insurance by the Act, the retention by a bank holding company of finance company or industrial bank to be acquired shares or assets of a company that acts as insurance is limited to the sale, under individual or group agent or broker in offices at which the holding policies, of credit life insurance,7 credit accident company or its subsidiaries are otherwise engaged and health instance, and property damage insur­ in business (or in an office adjacent thereto) with ance protecting collateral.8 respect to any insurance sold in a community that (x) The activities of the firm to be acquired are has a population not exceeding 5,000, provided clearly permissible under § 4(c)(8) of the Act and that the following conditions are met: §§ 225.4(a)(1), (2), (3) and (9)(ii) of Regulation (i) No member of the Board has indicated an Y. objection prior to the Reserve Bank’s action. (xi) Neither applicant, applicant’s subsidiaries, (ii) All relevant departments of the Reserve nor the finance company or industrial bank to be Bank recommend approval. acquired has entered into or proposes to enter into (iii) No substantive objection to the proposal has any agreement with any director, officer, employee been made by a bank supervisory authority, the or shareholder of the finance company or industrial United States Department of Justice, or a member bank that contains any condition limiting or re­ of the public. stricting in any manner the right of such person (iv) No significant policy issue is raised by the to compete with applicant or any of applicant’s proposal as to which the Board has not expressed existing or proposed subsidiaries. its view. (xii) The Reserve Bank determines that con­ (v) Neither applicant, applicant’s subsidiaries, summation of the proposal can reasonably be ex­ nor the company to be acquired has entered into or proposes to enter into any agreement with any director, officer, employee or shareholder of the 5For the year 1974, the maximum figure is $8 million. company that contains any condition that limits 6 If applicant itself directly engages in finance company or or restricts in any manner the right of such person industrial bank activities, the assets related to such activities to compete with applicant or any of applicant’s should be included in a determination of aggregate assets. 7 Applications involving level term credit life insurance may existing or proposed subsidiaries. not be acted upon by the Reserve Bank under delegated (vi) The Reserve Bank determines that consum­ authority. 8If a finance company or industrial bank otherwise falling mation of the proposal can reasonably be expected within these guidelines has a subsidiary engaged in the un­ to result in benefits to the public, such as greater derwriting, as reinsurer, of credit life and credit accident and convenience, increased competition, or gains in health insurance in connection with extensions of credit by the finance company or industrial bank or if a finance company efficiency, that outweigh possible adverse effects, or industrial bank acts as agent for the sale of types of such as undue concentration of resources, de­ credit-related insurance other than designated herein, the ap­ creased or unfair competition, conflicts of inter­ plication may not be acted upon by the Reserve Bank under delegated authority. ests, or unsound banking practices. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

590 FEDERAL RESERVE BULLETIN □ AUGUST 1974 BANK HOLDING COMPANY AND BANK MERGER ORDERS ISSUED BY THE BOARD OF GOVERNORS ORDERS UNDER SECTION 3 OF petitive considerations are consistent with approval BANK HOLDING COMPANY ACT of the application. The future prospects of Applicant are primarily FIRST DAKOTA BANCORPORATION, INC., dependent upon the financial resources of Bank. FARGO, NORTH DAKOTA Bank is presently in a sound financial condition Order Approving Formation of with a capital to assets ratio of 8 per cent. Appli­ Bank Holding Company cant proposes to service the debt it will assume incident to this proposal over a 10 year period First Dakota Bancorporation, Fargo, North Da­ through dividends from Bank averaging 48 per kota, has applied for the Board’s approval under cent of Bank’s earnings. In light of Bank’s past § 3(a)(1) of the Bank Holding Company Act (12 earnings and its anticipated growth, the projected U.S.C. 1842(a)(1)) of formation of a bank holding earnings of Bank provide Applicant with the nec­ company through acquisition of 100 per cent of essary financial flexibility to meet its annual debt the voting shares (less directors’ qualifying shares) servicing requirements while maintaining an ade­ of West Fargo State Bank, West Fargo, North quate capital position for Bank. Moreover, the Dakota (“Bank”). principals of Applicant appear to have the inde­ Notice of the application, affording opportunity pendent financial resources and have expressed the for interested persons to submit comments and willingness to maintain Bank’s capital at accept­ views, has been given in accordance with § 3(b) able levels throughout the debt retirement period. of the Act. The time for filing comments and views The managerial resources of Applicant and Bank has expired, and the Board has considered the are considered satisfactory and the future prospects application and all comments received in light of for each appear favorable. Thus, the consid­ the factors set forth in § 3(c) of the Act (12 U.S.C. erations relating to the banking factors are con­ 1842(c)). sistent with approval of the application. Applicant is a recently organized corporation Although consummation of the proposal would formed for the purpose of becoming a holding effect no changes in the services offered by Bank, company through the acquisition of Bank. The the considerations relating to the convenience and proposed transaction involves the transfer of con­ needs of the community to be served are consistent trol of Bank from individuals to a corporation with approval of the application. It is the Board’s ninety per cent of the shares of which are owned judgment that the proposed transaction would be by individuals residing in the Fargo area. Thus, in the public interest and that the application the proposal would result in a continuation of the should be approved. local ownership of Bank. Bank holds deposits of On the basis of the record, the application is $9 million, representing approximately 2.3 per approved for the reasons summarized above. The cent of total deposits in the relevant market (ap­ transaction shall not be made (a) before the thir­ proximated by the Fargo-Moorhead SMS A), and tieth calendar day following the effective date of thereby ranks as the eighth largest of 24 commer­ this Order or (b) later than three months after the cial banks operating therein.1 Upon acquisition of effective date of this Order, unless such period Bank, Applicant would control less than one-half is extended for good cause by the Board or by of one per cent of total deposits in commercial the Fedeal Reserve Bank of Minneapolis pursuant banks in North Dakota. Since Applicant presently to delegated authority. has no subsidiaries, consummation of the proposal By order of the Board of Governors, effective would not have an adverse effect on existing or July 1, 1974. potential competition, nor would it increase the concentration of banking resources or have an Voting for this action: Governors Sheehan, Bucher and adverse effect on other banks in the relevant mar­ Holland. Voting against this action: Governors Brimmer, and ket. Therefore, the Board concludes that the com­ Wallich. Absent and not voting: Chairman Burns and Governor Mitchell. (Signed) Chester B. Feldberg, [seal] Secretary of the Board. 'All banking data are as of June 30, 1973. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LAW DEPARTMENT 591 Dissenting Statement of rately estimated. These financial requirements of Governors Brimmer and Wallich Applicant could place an undue strain on Bank. Therefore, it is our judgment that such financial considerations warrant denial of the application. We would deny the application of First Dakota For these reasons, we believe the proposed Bancorporation to become a bank holding com­ transaction is not in the public interest and should pany through the acquisition of West Fargo State be denied. Bank. In our judgment, Applicant would not have the necessary financial flexibility to service the LANDMARK BANKING CORPORATION debt it would incur as part of this transaction OF FLORIDA, without adversely affecting the capital position of FORT LAUDERDALE, FLORIDA Bank. With respect to questions of acquisition debt and Order Approving Acquisition of Bank debt-equity ratios, the Board has been relatively liberal in the standards it has applied in cases Landmark Banking Corporation of Florida, Fort where a current or prospective owner-chief execu­ Lauderdale, Florida, a bank holding company tive is establishing, or has established, a one-bank within the meaning of the Bank Holding Company holding company to hold the direct equity interest Act, has applied for the Board’s approval under in his bank. Essentially, this type of transaction § 3(a)(3) of the Act (12 U.S.C. 1842(a)(3)) to involves the transfer of the ownership of a bank acquire 80 per cent or more of the voting shares to a corporation owned by the same individuals. of First National Bank of Seminole, Pinellas In effect, control of the subject bank and its County, Florida (“Bank”). operations remain unchanged. In the present ap­ Notice of the application, affording opportunity plication, the transaction does not involve an for interested persons to submit comments and owner-chief executive situtation. Upon consum­ views, has been given in accordance with § 3(b) mation of the proposed transaction, the present of the Act. The time for filing comments and views shareholders of Bank would not be the share­ has expired, and the application and all comments holders of Applicant. The proposal contemplates received have been considered by the Board in the purchase by Applicant of Bank’s shares from light of the factors set forth in § 3(c) of the Act the present owners and thereafter replacing five (12 U.S.C. 1842(c)). of Bank’s current directors with Applicant’s five Applicant is the eighth largest holding company shareholders. In fact, only one shareholder of in Florida, and controls 14 banks with aggregate Applicant would be an active officer of Bank. deposits of $616 million, representing 3 per cent Under such circumstances, we do not believe that of the total deposits in commercial banks in the the principals of Applicant (who are really inves­ State.1 Acquisition of Bank ($8.1 million in de­ tors) should be afforded the more liberal debt-eq­ posits) would not significantly increase Applicant’s uity treatment of a mere change from individual share of total deposits in commercial banks in to corporate ownership. Florida, and its rank among banking organizations Turning to the financial aspects of the proposal, in Florida would not change. we find that Applicant’s earning prospects are Bank is located in the South Pinellas County entirely dependent upon the earnings of Bank. In banking market, where it controls less than 1 per this regard, Applicant expects to service its acqui­ cent of the total deposits in commercial banks and sition debt over a 10-year period through Bank ranks twenty-third out of 29 banks. In the relevant dividends averaging 48 per cent of Bank’s pro­ market, Applicant controls two banks: Union Trust jected net income and through savings realized by National Bank (“Union Bank”) (deposits of the holding company from filing consolidated in­ $155.5 million) and American Bank2 (deposits of come tax returns. The projected earnings for Bank $4.6 million), both of St. Petersburg. Through do not, in our view, provide Applicant with the these two subsidiary banks, Applicant controls necessary financial flexibility to meet its annual about 14 per cent of the total deposits in commer­ debt servicing requirements as well as any unex­ pected problems that might arise at Bank. Fur­ 1 Banking data are as of June 30, 1973, and reflect holding thermore, Bank’s payment of the projected divi­ company acquisitions approved through June 30, 1974. dends necessary to retire Applicant’s substantial 2 Applicant received approval to indirectly acquire shares of American Bank by Board order of September 18, 1973 ap­ acquisition debt could inhibit growth in Bank’s proving Applicant’s acquisition of North American Mortgage capital, unless future earnings have been accu­ Corporation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

592 FEDERAL RESERVE BULLETIN □ AUGUST 1974 cial banks in the market and ranks as the third convenience and needs of the community to be largest banking organization therein. Upon acqui­ served lend some weight toward approval of the sition of Bank, Applicant would increase its share application. It is the Board’s judgment that the of market deposits by less than 1 percentage point, proposed acquisition would be in the public inter­ and would become the second largest banking est and that the application should be approved. organization in the market. On the basis of the record, the application is Bank is located approximately 12 miles from approved for the reasons summarized above. The Union Bank and 5.5 miles from American Bank. transaction shall not be made (a) before the thir­ It appears that Bank derives some deposits from tieth calendar day following the effective date of the areas served by Union Bank and by American this Order or (b) later than three months after the Bank, and that Union Bank and American Bank effective date of this Order, unless such period each derive some deposits from Bank’s service is extended for good cause by the Board, or by area. Although Applicant’s acquisition of Bank the Federal Reserve Bank of Atlanta pursuant to would eliminate some existing competition be­ delegated authority. tween Bank and Applicant’s existing subsidiary By order of the Board of Governors, effective banks, in the context of the banking structure in July 31, 1974. the relevant market the elimination of such com­ Voting for this action: Governors Bucher, Holland, and petition is not regarded as significant. The market Wallich. Voting against this action: Governors Brimmer and is not highly concentrated, and there are a large Sheehan. Absent and not voting: Chairman Burns and Gover­ number of alternative competing banking organi­ nor Mitchell. zations, including subsidiaries of the four largest (Signed) Chester B. Feldberg, Florida bank holding companies available in the [seal] Secretary of the Board. market. Moreover, it does not appear that Appli­ cant would gain a dominant position in the market Dissenting Statement of following consummation of this proposal. Appli­ Governors Brimmer and Sheehan cant’s nonbanking subsidiary, North American Mortgage Company, derives only a small amount We would deny Applicant’s proposal to acquire of business from the relevant market and Bank Bank. We believe that approval of the application and North American Mortgage Company com­ would have adverse effects on competition within bined are minor factors in mortgage banking in the relevant market. In the absence of consid­ the relevant market. Accordingly, the Board con­ erations relating to the convenience and needs of cludes that competitive considerations with respect the communities to be served which would out­ to existing competition are consistent with ap­ weigh such adverse effects, the proposal should proval of this application. be denied. While Applicant could expand in the relevant Through its subsidiaries (American Bank and market de novo, Bank is not a substantial compet­ Union Bank), Applicant already controls about 14 itor in the market and as noted above, Applicant’s per cent of the deposits in the South Pinellas competitive position in the market will not be County banking market and ranks as the third substantially affected through its acquisition of largest banking organization in the market. The Bank. Moreover, in view of the distances separat­ record indicates that Bank competes directly with ing Bank from Applicant’s existing subsidiary both American Bank and Union Bank. In our banks, the large number of banks in the market, view, consummation of the proposal would elimi­ and Florida’s restrictive branching laws, the Board nate substantial existing competition. concludes that consummation of the proposed ac­ We are also concerned about the effects of quisition would not significantly decrease the po­ Applicant’s proposal on competition in the rele­ tential for increased competition in the market. vant market in the future. The South Pinellas The financial and managerial resources and fu­ County banking market has grown substantially in ture prospects of Applicant, its present subsidiary the last several years, and it appears that the area banks, and Bank are generally satisfactory, and will continue to experience such growth in the consistent with approval of the application. Appli­ future. Six new banks have successfully entered cant proposes to expand the range of services the market in the last five years and, at present, presently offered by Bank to include trust services the population per banking office and per capita and a drive-in facility. In addition, affiliation with deposits in the market are higher than the State Applicant would enable Bank to expand its lending average. Bank, which opened for business in late services. Therefore, considerations relating to the 1972, has already become a meaningful competitor Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LAW DEPARTMENT 593 to the other banking institutions in the market. Notice of the application, affording opportunity Applicant’s subsidiary, American Bank, also for interested persons to submit comments and began operations in late 1972 and is located only views, has been given in accordance with § 3(b) 5Vi miles from Bank. In addition to removing a of the Act and all comments and views received direct competitor from the market, Applicant’s have been considered by the Board in light of the acquisition of Bank would foreclose the possibility factors set forth in § 3(c) of the Act (12 U.S.C. of competition developing between the institutions 1842(c)). in the future. Moreover, since Bank is one of only Applicant controls 10 banks with aggregate de­ two remaining institutions available for acquisi­ posits of $542 million, representing about 7 per tion, approval of the proposal would virtually cent of the total deposits of commercial banks in eliminate the possibility of entry into the market the State.1 It ranks as the sixth largest banking by other organizations. These adverse effects on organization in Maryland and controls, in addition competition are even more serious because Appli­ to its 10 banks, two nonbanking subsidiaries. One cant is already substantially represented in the of the subsidiaries is engaged in mortgage financ­ market as the third largest banking organization, ing and servicing and the other is engaged in and it possesses the resources and expertise to commercial, specialized consumer and second expand de novo in this market. In view of the mortgage lending, factoring, lease financing and above, we believe Bank should be preserved as loan servicing. Upon acquisition of Bank ($61 an independent competitor or as an entry vehicle million in deposits), Applicant would increase its for a banking organization not yet represented in share of State deposits by .8 of a percentage point the market. Accordingly, we believe that the and its rank among banking organizations would Board’s approval will have serious adverse effects not change. on competition within the relevant market. Bank’s head office and six of its seven branches The Bank Holding Company Act requires the are located in Prince George’s County, Maryland, Board to deny any acquisition “whose effect in and its seventh branch is located in the adjoining any sections of the country may be substantially Anne Arundel County. With deposits of $61 mil­ to lessen competition” unless the adverse compet­ lion, Bank controls 1 per cent of the total deposits itive effects are clearly outweighed in the public in commercial banks in the Washington, D. C. interest by considerations relating to the conven­ SMS A (the relevant banking market). In addition, ience and needs of the communities to be served. Bank ranks as the eighth largest of twenty-three We believe the asserted benefits to the public are competing banking organizations in the Prince not significant because numerous competing insti­ George’s-Montgomery County area, holding about tutions in the market already provide such services 4 per cent of the total deposits therein. Applicant to customers, and several other banking organi­ controls three subsidiary banks that are headquar­ zations that could acquire Bank would be able to tered within this two-county area, and they hold provide such benefits without adverse effects on about 3 per cent of the total deposits in that area. competition. Through its banking subsidiaries, Applicant also For these reasons, we would deny the applica­ controls approximately 1.3 per cent of the deposits tion. in the Washington, D. C. SMSA. Bank is located about 10 miles from Applicant’s closest existing MERCANTILE BANKSHARES subsidiary banking office, and there does not ap­ CORPORATION, pear to be any significant existing competition BALTIMORE, MARYLAND between Applicant’s subsidiaries and Bank. Upon consummation of this proposal Applicant would Order Approving Acquisition of Bank become the eleventh largest banking organization in the relevant market and the fourth largest bank­ Mercantile Bankshares Corporation, Baltimore, ing organization in the Prince George’s-Mont- Maryland, a bank holding company within the gomery County area. However, each of the ten meaning of the Bank Holding Company Act, has largest Maryland banking organizations have of­ applied for the Board’s approval under § 3(a)(3) fices in the two-county area, and Applicant would of the Act (12 U.S.C. 1842(a)(3)) to acquire up to 100 per cent, but not less than 80 per cent, of the voting shares of The First National Bank *A11 other banking data are as of December 31, 1973, and of Southern Maryland of Upper Marlboro, Upper reflect bank holding company formations and acquisitions ap­ Marlboro, Maryland (“Bank”). proved by the Board through April 30, 1974. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

594 FEDERAL RESERVE BULLETIN □ AUGUST 1974 control substantially less deposits than the larger convenience and needs of the communities to be banking organizations represented in the two- served. We are also concerned with the significant county area and in the market. In view of the large increase in the concentration of banking resources number of competing banks and the distance which would result from the proposal within separating banking offices, it appears that no sig­ Prince George’s County, a region within the nificant potential competition between Applicant Washington, D. C. SMSA banking market. and Bank would be eliminated upon consumma­ The main thrust of this proposed acquisition will tion of the proposal. The Board concludes that be felt in Prince George’s County where six of competitive considerations are consistent with ap­ Marlboro Bank’s seven offices are located and two proval of the application. of Applicant’s subsidiary banks are headquartered. The financial and managerial resources and Within the county area, Applicant is the fifth prospects of Applicant, its subsidiaries and Bank largest banking organization and holds 6.2 per cent are all regarded as satisfactory and consistent with of total deposits; Marlboro Bank holds 7.3 per cent approval of the application. Although there is of such deposits and is the fourth largest banking nothing in the record to indicate that the banking organization. Upon consummation, Applicant needs of the area are not presently being served, would become the third largest banking organi­ Bank’s affiliation with Applicant would give it zation in Prince Georges County with total depos­ access to Applicant’s resources and its managerial its of $138 million—representing 13.5 per cent of and financial expertise, thus enabling Bank to total deposits for the county. Furthermore, the become more aggressive and competitive for larger proposed acquisition would result in Applicant— loans in the area. Considerations relating to con­ along with the first and second largest of the 13 venience and needs of the community are consist­ banking organizations represented in the county— ent with approval of the application. It is the holding 74 per cent of total deposits for the Prince Board’s judgment that the proposed acquisition George’s area. In view of the market conditions, would be in the public interest and that the appli­ it appears important that Applicant’s expansion cation should be approved. through acquisition in the Washington, D. C. On the basis of the record, the application is banking market should not be permitted to be approved for the reasons summarized above. The concentrated in the Prince George’s County area. transaction shall not be made (a) before the thir­ It appears to us that some existing competition tieth calendar day following the effective date of between Applicant’s offices and those of Marlboro this Order, or (b) later than three months after the Bank would be eliminated by consummation of effective date of this Order, unless such period this proposal, and we believe that forceful compe­ is extended for good cause by the Board, or by tition between these banking offices would develop the Federal Reserve Bank of Richmond pursuant in the near future in this rapidly growing area. to delegated authority. The Board’s recent denial of an application to By order of the Board of Governors, effective acquire a bank in Frederick County, adjacent to July 15, 1974. the Washington D. C. SMSA, was based upon the foreclosure of potential competition within a Voting for this action: Chairman Burns and Governors county area.1 In our judgment the same issues Sheehan, Bucher, Holland, and Wallich. Voting against this action: Governors Mitchell and Brimmer. confront the Board in the present application. In (Signed) C hester B. Feldberg, our opinion, the prospect of Marlboro Bank de­ [seal] Secretary of the Board. veloping into a meaningful competitive force in the county is highly promising. The present ac­ quisition would seriously diminish this opportu­ Dissenting Statement of nity. Governors Mitchell and Brimmer The total deposits of Marlboro Bank have in­ creased by 50 per cent during the period from We would deny the application of Mercantile January 1, 1969, through December 31, 1973; its Bankshares Corporation to acquire The First Na­ resources have increased by 54 per cent and total tional Bank of Southern Maryland of Upper Marl­ capital accounts have increased by 70 per ceilt boro (“Marlboro Bank”). In our view, consum­ mation of the proposal would have serious adverse effects on future competition between Applicant Application by Suburban Bancorporation, Hyattsville, and Marlboro Bank that are not outweighed in the Maryland, to acquire Farmers and Mechanics National Bank, public interest by considerations relating to the Frederick, Maryland, 59 Federal Reserve Bulletin 825. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LAW DEPARTMENT 595 during this same period. As indicated by these banks1 with aggregate deposits of approximately data, Marlboro Bank has experienced rapid growth $1,787 million, representing 5.14 per cent of the over the last several years, which demonstrates total commercial bank deposists in Texas.2 Ap­ that it is effectively competing within the relevant proval of the present proposed acquisition would areas. It is apparent that, in the absence of this not result in a significant increase in the concen­ proposal, Marlboro Bank could develop into a tration of banking resources in Texas. more meaningful source of competition not only Bank is situated in Arlington, Texas, within the within the Prince George’s County area but also Dallas banking market area (approximated by the in the Washington, D. C. SMSA banking market. Dallas RMA). Bank has deposits of $84 million, In our opinion, the anticompetitive effects of this representing a 1.2 per cent share of market depos­ proposal are not outweighed by “the probable its, and is the eighth largest of 113 banks in the effect of the transaction in meeting the conven­ market. Approval of the application would have ience and needs of the community to be served.” no adverse effects on competition in the Dallas We do not believe that Applicant’s ability to banking market. Consummation of the proposed enhance Marlboro Bank’s capacity to become acquisition would increase Applicant’s share of more aggressive and competitive for larger loans total commercial bank deposits in the Dallas in the area is sufficient grounds for outweighing banking market from 0.8 to 2.0 per cent, an the significantly adverse effect this proposal would increase which would not represent a substantial have on area competition. Moreover, we feel degree of further concentration of Applicant’s de­ strongly that the proposed acquisition would in­ posits in the market. Applicant’s nearest subsidiary crease the regional concentration of banking re­ to Bank, which is also in the Dallas banking sources in Prince George’s County. Accordingly, market, is located some 22 miles to the northeast. we would deny the present application. There is no substantial existing competition be­ tween Bank and any of Applicant’s subsidiaries, nor is there a reasonable probability of substantial TEXAS COMMERCE BANCSHARES, INC., competition developing in the future, in view of HOUSTON, TEXAS the distances involved, the number of intervening banks, and Texas’ restrictive branching laws. Re­ moval of Bank as an independent bank and a Order Approving Acquisition of Bank potential vehicle for entry into the market would Texas Commerce Bancshares, Inc., Houston, not have a significantly adverse effect on potential Texas, a bank holding company within the mean­ competition since three remaining banks in the ing of the Bank Holding Company Act, has ap­ immediate area and many small remaining banks plied for the Board’s approval under § 3(a)(3) of in the market could serve as a means of entry into the Act (12 U.S.C. 1842(a)(3)) to acquire 100 per the market by other organizations. Bank’s rela­ cent (less directors’ qualifying shares) of the vot­ tively small share of market deposits also contrib­ ing shares of the successor by merger to Arlington utes to the conclusion that the proposal would not Bank and Trust, Arlington, Texas (“Bank”). The have any adverse effect on potential competition. bank into which Bank is to be merged has no significance except as a means to facilitate the acquisition of Bank. Accordingly, the proposed 'The Board’s Orders of August 31, 1972, and November acquisition of the successor organization is treated 28, 1972, approving the acquisition of certain banks by Appli­ cant require, respectively, Applicant to divest all interest in herein as the proposed acquisition of the shares Beaumont State Bank, Beaumont, Texas, by October 12, 1974, of Bank. and all interest in Permian Bank and Trust, Odessa, Texas, by January 8, 1975. Notice of the application, affording opportunity 2A11 deposit figures are as of June 30, 1973, and bank holding for interested persons to submit comments and company statistics reflect holding company formations and views, has been given in accordance with § 3(b) acquisitions approved by the Board of Governors to the date of May 1, 1974. Subsequent to the latter date, the Board has of the Act. The time for filing coihments and views approved Applicant’s proposed acquisition of Southeast Bank, has expired, and the Board has considered the Houston, Texas; and the Federal Reserve Bank of Dallas, application and all comments received in light of acting pursuant to delegated authority for the Board, has approved Applicant’s proposed acquisitions of three de novo the factors set forth in § 3(c) of the Act (12 U.S.C. banks in Houston, Texas, Plaza Commerce Bank, Commerce 1842(c)). Medical Bank, and Westwood Commerce Bank; Guaranty National Bank and Trust Company of Corpus Christi, Corpus Applicant, the fourth largest multi-bank holding Christi, Texas; Union Bank of Fort Worth, Fort Worth, Texas; company in Texas, presently controls fifteen and First National Bank of Hurst, Hurst, Texas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

596 FEDERAL RESERVE BULLETIN □ AUGUST 1974 Accordingly, the Board concludes that competitive would result in increasing the already substantial considerations are consistent with approval of the size disparity between the State’s largest banking application. organizations and the smaller holding companies The financial and managerial resources and fu­ developing in the State. The net result of this trend ture prospects of Applicant, its subsidiaries, and would be a banking structure in which a few large Bank are regarded as generally satisfactory and organizations would control the largest banks in consistent with approval. The affiliation of Appli­ almost every important city in the State. This type cant with Bank would enhance Bank’s ability to of banking structure, in my view, tends to stifle meet the expanding banking needs resulting from banking competition throughout the State. the accelerating growth of both the residential and The present acquisition would not have the commercial segments of Arlington, as well as substantially adverse effect on competition noted enable Bank to strengthen its trust and investment in those previous cases. Although the fourth larg­ services and to provide effective real estate, mort­ est banking organization in Texas, Applicant is gage warehouse and construction financing. Ac­ not the largest banking organization in the Dallas cordingly, considerations related to the conven­ banking market, a market dominated by two larger ience and needs of the community to be served organizations holding collectively over 50 per cent lend some weight toward approval. It is the of total market deposits. In absolute terms the bank Board’s judgment that the proposed acquisition is to be acquired in the present case is a relatively in the public interest and that the application large bank; however, it holds only 1.2 per cent should be approved. of total market deposits and ranks as the market’s On the basis of the record, the application is eighth largest bank. Furthermore, in the context approved for the reasons summarized above. The of the Dallas banking market, the removal of Bank transaction shall not be made (a) before the thir­ as an independent organization would not inhibit tieth calendar day following the effective date of entry by other holding companies since there re­ this Order or (b) later than three months after the main many independent banks which are available effective date of this Order, unless such period for acquisition. Thus, the effects of the proposal is extended for good cause by the Board or by on potential competition in the Dallas market do the Federal Reserve Bank of Dallas pursuant to not appear to be significant. delegated authority. For the foregoing reasons and on the basis of By order of the Board of Governors, effective the record, I voted to approve the application. July 23, 1974. Voting for this action: Governors Brimmer, Sheehan, ORDERS UNDER SECTION 4 OF Bucher, Holland, and Wallich. Absent and not voting: Chair­ BANK HOLDING COMPANY ACT man Burns and Governor Mitchell. (Signed) C hester B. Feldberg, THE ALABAMA FINANCIAL GROUP, INC., [seal] Secretary of the Board. BIRMINGHAM, ALABAMA Order Approving A pplication to Engage De Concurring Statement of Novo In C ertain Insurance A gency A ctivi­ Governor Brimmer ties While I voted to approve the application by The Alabama Financial Group, Inc.,1 Bir­ Texas Commerce Bancshares to acquire the Ar­ mingham, Alabama (“Applicant”), a bank hold­ lington Bank and Trust Company, Arlington, ing company within the meaning of the Bank Texas, it should be noted that the proposal can Holding Company Act, on February 24, 1972, be distinguished from several recent cases in Texas applied to the Federal Reserve Bank of Atlanta denied by the Board. In each of those cases, one for approval, under § 4(c)(8) of the Act, as of the largest holding companies in the State was amended, and § 225.4(a)(9) of the Board’s Regu­ attempting to acquire one of the largest banks in lation Y (12 CFR 225.4(a)(9)), to engage de novo an important banking market in the State.1 As in certain insurance agency activities at various indicated previously, such proposals, if approved, locations in Alabama at which Applicant or its 'See for example, Board Orders at 1974 Federal Reserve 'In April, 1974, Applicant’s corporate name was changed Bulletin 43, 290, and 450. to Southern Bancorporation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LAW DEPARTMENT 597 banking and bank-related subsidiaries are other­ delity and Guaranty Company (“USF&G”). On wise engaged in business, through an insurance March 29, 1972, the Federal Reserve Bank of agency subsidiary (“Agency”) to be formed by Atlanta stayed the proceeding and requested that Applicant. the Board act directly on the application. Applicant proposes through Agency to act as By order dated March 6, 1973, the Board insurance agent or broker with respect to: directed that a formal hearing be held on the 1. All insurance for Applicant and its subsidiaries. subject application, as well as 21 other pending 2. Any insurance to protect assets financed by applications by bank holding companies to engage Applicant and its subsidiaries and other insur­ in certain insurance agency activities (38 Federal ance calculated to protect the lender’s ability Register 6441), before a designated Administra­ to obtain repayment of loans including: tive Law Judge (“Law Judge”). In addition to a. fire and extended coverage insurance the parties designated above, other parties sought b. use and occupancy insurance and were granted permission to participate in the c. business interruption insurance proceeding, including the American Bankers As­ d. liability insurance sociation (“ABA”), National Association of Cas­ e. homeowners insurance ualty & Surety Agents (“NACSA”), and the f. performance bonds connected with con­ Committee to Preserve Consumer Options struction loans (“CPCO”), an association of 28 banking institu­ g. boiler and machinery insurance tions including most of the applicant bank holding h. fidelity insurance companies in other docketed insurance agency i. theft insurance applications then pending before the Board. j. collision and comprehensive insurance Following a prehearing conference in Washing­ k. surety bonds ton, D. C., on March 27, 1973, a public hearing 1. marine property insurance was held on this application in Atlanta, Georgia, 3. Any insurance the purpose of which is to pro­ on June 25-26, 1973.2 The hearings and related vide loan or repayment funds in the event of proceedings have been conducted in accordance loss of income or other inability to repay debt with the Board’s Rules of Practice for Formal including: Hearings (12 CFR 263). a. credit life and credit accident and health In a Recommended Decision of February 7, insurance 1974, the Administrative Law Judge concluded b. mortgage life or mortgage guaranty insur­ that the evidence supported a partial approval of ance the application and recommended: 4. Convenience insurance within the limitations (1) That the application of the Alabama Financial of Regulation Y. Group be granted with respect to proprietary 5. A full line of general insurance at offices lo­ and employee insurance and for credit life, cated in communities having less than 5,000 health and accident and mortgage redemption population. insurance but denied as to all other forms of Applicant proposes to sell such insurance only insurance in Birmingham, Dothan and Marion in connection with extensions of credit or the County, Alabama. provision of other financial services, or as a matter (2) That the application be granted as to creditof convenience to the purchaser within the limits related insurance agency sales except surety of Regulation Y, or in communities with less than bonding to customers of banking and non­ 5,000 population. The sale of certain types of banking affiliates located in Huntsville, Mobile insurance is an activity that has been determined and any other area in which a banking subsid­ by the Board to be closely related to banking (12 iary may be acquired in which said subsidiary CFR 225.4(a)(9)). controls less than 15 per cent of local deposits. Notice of the application was published in the (3) That, in those respects in which the application communities to be served in accordance with § is granted, the authorization be subject to 225.4(b)(1) of the Board’s Regulation Y. Objec­ appropriate anticoercion statements to be fur­ tions to the application, requesting a hearing and seeking permission to intervene, were filed by the National Association of Insurance Agents (“NAIA”), the Alabama Association of Insurance 2 Board counsel participated in the hearing in a nonadversary Agents (“AAIA”), the Independent Insurance capacity but took no position with respect to the merits of Agents of Birmingham (“IIAB”), and U.S. Fi­ the application (12 CFR 263.6(d)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

598 FEDERAL RESERVE BULLETIN □ AUGUST 1974 nished for execution by loan/insurance cus­ office adjacent thereto) with respect to the follow­ tomers as part of their applications. ing types of insurance: The Board, having considered the exceptions (i) Any insurance for the holding company and taken to the Recommended Decision by the its subsidiaries; various parties and the entire record, and having (ii) Any insurance that (a) is directly related to determined that the Administrative Law Judge’s an extension of credit by a bank or a bank-related findings of fact, conclusions, and order, as modi­ firm of the kind described in this regulation, or fied and supplemented herein, should be adopted (b) is directly related to the provision of other as the findings, conclusions, and order of the financial services by a bank or such a bank-related Board, now makes its findings as to the facts, its firm, or (c) is otherwise sold as a matter of con­ conclusions drawn therefrom, and its order. venience to the purchaser, so long as the premium Applicant controlled four banking subsidiaries income from sales within this subdivision (ii)(c) as of December 30, 1972, with aggregate deposits does not constitute a significant portion of the of $676.8 million. These subsidiaries were located aggregate insurance premium income of the hold­ in Jefferson, Houston, Madison and Mobile ing company from insurance sold pursuant to this Counties. Applicant predicts that its proposed subdivision (ii); agency will generate approximately $200,000 in (iii) Any insurance sold in a community that annual premiums from the requirements of the (a) has a population not exceeding 5,000 or (b) holding company and its subsidiaries, and approx­ the holding company demonstrates has inadequate imately $600,000 in annual premiums from the insurance agency facilities. sale of credit life and credit accident and health Upon reviewing the legislative history to the insurance. Applicant stated that it was unable to 1970 Amendments to the Bank Holding Company make reasonable projections of premium income Act, the Law Judge concluded that “the Congress from the sale of other types of insurance. clearly had credit-related insurance agency sales The principal issues before the Board that arise in mind as an enterprise closely related to banking from this application are: (1) whether the proposed subject, however, to surviving the gamut of a net insurance agency activities are permissible activi­ public benefits test. . . . ” page 17. The Board’s ties under § 225.4(a)(9) of Regulation Y and are own understanding of the legislative history to the therefore so closely related to the business of 1970 Amendments is consistent with that of the banking or managing or controlling banks as to Law Judge and formed the basis upon which the be a proper incident thereto; (2) whether perform­ above-described Insurance Regulation was pro­ ance of the proposed activities can reasonably be mulgated. Although no precise guidelines were expected to produce benefits to the public such given the Board for making its determination of as greater convenience, increased competition, or those activities which are closely related to bank­ gains in efficiency, and (3) whether such benefits ing, the legislative history of the 1970 Amend­ to the public outweigh possible adverse effects ments to the Bank Holding Company Act include, such as undue concentration of resources, de­ as the Law Judge noted, references to sales of creased or unfair competition, conflicts of interests credit-related insurance as examples of activities or unsound banking practices. The Board has closely related to banking. The Law Judge’s re­ previously determined by Regulation (12 CFR view of the legislative history was described fully 225.4(a)(9)) that the following activities are so in companion Recommended Decisions4 to which closely related to banking or managing or control­ he referred in his Recommended Decision in the ling banks as to be proper incident thereto.3 instant matter. Indeed, in a companion Recom­ (9) acting as insurance agent or broker in of­ mended Decision issued November 9, 1973, the fices at which the holding company or its subsidi­ aries are otherwise engaged in business (or in an Members of both houses of Congress referred to the Board’s 3The Board’s Insurance Regulation was adopted after notice prior decisions during the legislative debate to the 1970 of proposed rule-making and following receipt of comments amendments. A member of the Conference Committee, Senator on the substance of the proposed regulation. The insurance Bennett, stated: “The Federal Reserve Board under the existing activities authorized by the regulation are those that are orga­ language of § 4(c)(8) for the past 14 years has approved nizationally and physically integrated into the operations of insurance activities for bank holding companies and there was the bank holding company. The Board’s decisions in this area no intent on the part of the Conference Committee to overrule prior to the 1970 Amendments to the Act are generally to the these past decisions”. Congressional Record S20645, De­ same effect (see, for example, Otto Bremer Company 1959 cember 18, 1970. F.R. Bull. 892; First Bank Stock Corporation 1959; F.R. 4Recommended Decisions Docket Numbers IA-3, 6, 7, 12, Bull. 917; and United Virginia Bancshares, Inc., 1970 F.R. and 13 issued November 9, 1973, pp. 15-22; Docket Numbers Bull. 599.) IA-8, pp. 9-16 issued January 14, 1974. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LAW DEPARTMENT 599 Law Judge found that “the business of selling tial element of the credit evaluation. The evidence general insurance” was an activity so closely of record confirms, in the Board’s view, that the related to banking as to be a proper incident sale of insurance protecting the collateral securing thereto. However, the Applicant in this proceeding an extension of credit is directly related to such has not sought the Board’s prior approval to extension of credit. The Board notes further that operate a general insurance agency. Instead, Ap­ this finding is in accord with its previously pub­ plicant listed in its application those specific in­ lished Interpretation (12 CFR 225.128) pertaining surance coverages it contemplated selling and for to insurance that supports the lending transactions which prior Board approval is sought. of a bank or banking related firm in the holding The insurance Applicant seeks to sell under No. company system. (1) above (all insurance for' Applicant and its Applicant also seeks Board approval to sell subsidiaries) has been specifically permitted under liability insurance on both real and personal prop­ § 225.4(a)(9)(i) of the Board’s Insurance Regula­ erty, as described above, when a subsidiary has tion. By a published Interpretation to this Regula­ taken a security interest in such property as the tion, the Board has further indicated that it regards result of an extension of credit. It appears from the sale of group insurance for the protection of the evidence of record that liability insurance is employees of the holding company as insurance generally sold in conjunction with or as part of for the holding company and its subsidiaries within an insurance package with insurance that protects § 225.4(a)(9)(i). However, NAIA argued that the the collateral securing an extension of credit. sale of group insurance and fidelity insurance on Thus, a “packaged” insurance policy, combining employees would not be closely related to banking liability insurance with insurance relating to phys­ where the employees pay part of the premiums. ical damage on property purchased from loan Regardless of which party pays the premium, the proceeds, fulfills a legitimate need of the lender Board views the protection of a bank holding and borrower alike at the time a loan is made. company’s employees through group insurance as Moreover, in the case of homeowner’s insurance, a distinct benefit to the holding company itself. it appears that it would not be economical for a Thus, the provision of group insurance protecting borrower to procure separately the various cover­ a holding company’s employees is no less “for ages customarily packaged in such a policy. The the holding company” than would be insurance Board concludes from all the evidence of record on real property owned by the holding company. that the sale of liability insurance on both real and Accordingly, the Board finds that the sale of in­ personal property supports the lending transactions surance for the holding company and its subsidi­ of a bank or bank-related firm in the holding aries, including group insurance for the protection company system when it is sold to borrowers in of employees of Applicant, to be a permissible conjunction with or as part of an insurance package activity under § 225.4(a)(9)(i) of the Insurance with insurance protecting the collateral in which Regulation. the bank or bank-related firm has a security interest Applicant seeks to sell various forms of insur­ and is a permissible activity within § 225.4(a) ance under No. (2) above that protects the collat­ (9)(ii)(a) of the Insurance Regulation. eral in which a subsidiary has a security interest Applicant has also requested permission to sell as a result of an extension of credit. Included surety bonds. Such bonds would include bid bonds among these coverages are physcial damage in­ (guaranteeing that a successful bidder on a build­ surance on real estate and physical damage insur­ ing contract will enter into the contract), subdivi­ ance on personal property. Applicant contends, sion bonds (guaranteeing to a municipality that the and the Board so finds, that such coverages are builder will make all required improvements) and directly related to an extension of credit within completion or performance bonds (insuring against the meaning of § 225.4(a)(9)(ii)(a) of the Insur­ a maintenance contractor’s failure to maintain its ance Regulation. The extension of credit on a obligation under a maintenance agreement). The secured loan is founded upon the value of the procurement of the coverages involved through collateral securing the loan. Thus, insurance is surety bonds has traditionally been a part of a essential from the lender’s standpoint to assure that mortgage loan transaction. In the Board’s judg­ the value of the collateral will not be impaired ment, a direct relationship exists between the sale by physical damage. The financial nature of the of surety bonds and an extension of credit. Ac­ insurance transaction forms an integral function for cordingly, the sale of surety bonds is, in the the borrower as well, since the presence or lack Board’s view, an activity within § 225.4(a) of insurance protecting loan collateral is an essen­ (9)(ii)(a) of the Insurance Regulation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

600 FEDERAL RESERVE BULLETIN □ AUGUST 1974 The Board finds, with three exceptions, that the 225.4(a)(9)(ii)(c) of the Insurance Regulation. The several types of insurance listed under No. (2) Board does not regard this provision as being above are either property insurance or liability designed to permit entry into the general insurance insurance sold as part of a package with property agency business but only permits the limited sale insurance on assets financed by Applicant and of such insurance as a matter of convenience to therefore within § 225.4(a)(9)(ii)(a) of the Insur­ the purchaser. ance Regulation. The exceptions are (1) use and Finally, Applicant has applied to sell general occupancy insurance, (2) business interruption in­ insurance at offices located in communities with surance, and (3) fidelity insurance. Little or no a population not exceeding 5,000. This request is evidence was presented concerning these types of clearly within § 225.4(a)(9)(iii)(a) of the Insurance insurance. Accordingly, there is insufficient evi­ Regulation. One of the communities affected under dence in this record upon which the Board may this request is the community of Hoover, Ala­ conclude that any of the insurance noted in the bama. It is clear that the population of Hoover exceptions above fall within § 225.4(a)(9)(ii)(a) does not exceed 5,000. The fact that Hoover is or (b) of the Insurance Regulation. situated within the Birmingham Standard Metro­ Applicant has requested prior Board approval politan Statistical Area (“SMSA”) does not pre­ to engage in the sale of credit life, credit accident vent this community from qualifying under the and health, mortgage redemption and mortgage provisions of § 225.4(a)(9)(iii)(a) of the Insurance guaranty insurance. With the exception of mort­ Regulation. The provisions of 12 U.S.C.A. § 92, gage guaranty insurance, the Board has previously pertaining to the powers of a national banking determined by order5 that the sale of these forms association to engage in the insurance business in of insurance was so closely related to banking as a community the population of which does not to be a proper incident thereto within the meaning exceed 5,000 inhabitants, contain no such limita­ of § 225.4(a)(9) of the Insurance Regulation. The tion. Accordingly, the Board concludes that the previous findings of the Board concerning such sale of general insurance in communities with a coverages are reaffirmed herein since such insur­ population not exceeding 5,000, including the ance is often required to assure repayment of an community of Hoover, is a permissible activity extension of credit by the holding company system within the Insurance Regulation. in the event of death or disability of the borrower. In determining whether a particular activity is Under these conditions, the Board finds that the a proper incident to banking or managing or con­ sale of such insurance is directly related to an trolling banks, the 1970 Amendments to the Act extension of credit. Mortgage guaranty insurance require the Board to “consider whether its per­ is a form of credit risk insurance that serves to formance by an affiliate of a holding company can protect the lender against loss of a specified per­ reasonably be expected to produce benefits to the centage of a loan in the event of foreclosure and public, such as greater convenience, increased sale of collateral. In this respect, it may be likened competition, or gains in efficiency, that outweigh to mortgage redemption insurance. The Board possible adverse effects, such as undue concentra­ therefore concludes that the sale of mortgage tion of resources, decreased or unfair competition, guaranty insurance is also within § 225.4(a) conflicts of interests, or unsound banking prac­ (9)(ii)(a) of the Insurance Regulation. tices”. Each of these factors has been separately Applicant also requests permission, under No. considered by the Board in its determination (4) above, to sell insurance that is otherwise sold herein. as a matter of convenience to the purchaser, so In the Board’s view, it is reasonable to antici­ long as the premium income from sales within this pate that approval of the subject application will category does not constitute a significant portion result in a benefit to the public in terms of greater of the aggregate insurance premium income from convenience to the borrower. The ability of a insurance sold in connection with loans or other borrower to complete an entire credit-insurance financial services. The sale of such insurance has transaction at one location is likely to result in been expressly permitted by the Board under § a considerable savings in time as well as eliminate the duplication of certain informational require­ ments. Moreover, it appears from the record that 5See Board Order of January 28, 1974, granting approval borrowers have often requested insurance from to Worcester Bancorp, Inc., Worcester, Massachusetts, to Applicant’s banks in the past, and there is a present engage de novo in the sale of credit life, credit accident and demand for this added convenience. Although health, and mortgage redemption insurance (1974 F.R. Bull. 393). Applicant will initially have but one licensed agent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LAW DEPARTMENT 601 at the head office of its lead bank, there would accompanying H.R. 6778, this particular danger appear to be some convenience, although to a “is enhanced when concentrations of power are lesser degree, for borrowers at Applicant’s other centered about money, credit and other financial banking locations. Applicant intends to have its areas, the common denominators of the econ­ loan officer contact the licensed agent to permit omy.” The share of commercial bank deposits the latter to obtain the necessary information to Applicant’s banking subsidiaries hold in local complete the insurance transaction. The Board Alabama markets does not establish an undue therefore concludes that approval of the instant concentration of resources in those markets. It application would bring greater conveniences to appears from the record in this proceeding that the public, and that this factor supports approval there are numerous banking alternatives in Ala­ of the application. bama’s banking markets. Moreover, additional Approval of the subject application is also likely competition in individual markets has resulted to result in some gains in efficiency. Most of the from the expansion of the State’s bank holding policies sold must, by Board Regulation, be di­ companies. Thus, the Board concludes that the rectly related to an extension of credit or the danger of an undue concentration of resources provision of other financial services offered by which the Congress feared might arise from bank Applicant. Thus, some savings can be anticipated holding company entry into a particular nonbank­ through the reduction or even elimination of ad­ ing activity is not present in this proceeding. vertising and solicitation expenses as the agent’s Accordingly, Applicant’s de novo entry into the customers will normally be referred to him by loan sale of those insurance coverages the Board has officers. Efficiencies are also likely to result found to be closely related to banking will not through Applicant’s ability to combine its insur­ disturb the present competitive relationships in ance and loan billing operations. It is the Board’s Alabama’s local banking markets. judgment that such efficiencies will result in posi­ Another possible adverse effect which the tive public benefits in terms of the service Appli­ Congress directed the Board to consider in any cant will be able to offer its borrower-insureds. § 4(c)(8) application concerned the danger of de­ It is reasonable to anticipate some increased creased or unfair competition. Since the Law competition among insurance agents in Alabama. Judge found in his Recommended Decision that While it does not appear that Applicant can intro­ Applicant’s sale of the above-described insurance duce more than a minimum amount of price com­ coverages would encourage a practice of “volun­ petition in those insurance agency markets that tary tying,” he concluded that Applicant would Applicant enters, it would appear capable of in­ possess an unfair competitive advantage. Accord­ jecting strong competition in such markets on the ingly, the Law Judge recommended that Applicant basis of service. The added convenience of com­ not be permitted to sell insurance in markets where pleting a credit-insurance transaction at one loca­ its banking subsidiaries hold more than 15 per cent tion, discussed supra, is one of the competitive of the total deposits in commercial banks. How­ means whereby Applicant may improve its service ever, the evidence of record contains no specific to the public. The ready availability of the finan­ instances of a tying arrangement resulting from cial expertise which Applicant brings to its bor­ either coercion or through a form of market power rower-insured will offer a new dimension to the that could lead to “voluntary tying.” On the other competitive scene. In addition, certain technical hand, there was testimony by Applicant’s witness efficiencies in the data processing area give Appli­ that insurance was not discussed until after a loan cant the capability of competing effectively with had been closed with the possible exception of independent agents. Based on these and other facts commercial loans. This would lessen any pre­ of record, it is the Board’s judgment that approval sumed pressure on borrowers to tie their purchase of the subject application will produce public ben­ of insurance to their borrowing of funds. Also, efits through increased competition among insur­ penetration figures for a bank-related insurance ance agents in local Alabama markets. agency in North Carolina indicate that a very low One of the possible adverse effects which percentage of sales of insurance relative to total Congress directed the Board to consider in deter­ loans was obtained by that agency. The Board mining whether a particular activity is a proper notes that the concentration of deposits in com­ incident to banking or managing or controlling mercial banks in Alabama is not significantly dif­ banks is the danger of an undue concentration of ferent from that in North Carolina and that it is resources. As noted in the Conference Report therefore reasonable to anticipate a comparatively Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

602 FEDERAL RESERVE BULLETIN □ AUGUST 1974 low penetration of insurance sales relative to total ance application forms indicating that “similar loans for Applicant.6 insurance, not necessarily naming the lending in­ Additionally, lenders other than commercial stitution as beneficiary, may be obtained from banks operate in most of the local markets in independent agents or in lieu thereof, that existing Alabama in which Applicant wishes to sell insur­ insurance owned by the debtor may be assigned ance. For example, borrowers can obtain automo­ to the bank” (page 20). The Board has not re­ bile loans from sales finance companies, personal quired this specific condition before and the evi­ loans from consumer finance companies and credit dence in this record is insufficient to demonstrate unions, and mortgage loans from savings and loan a public need for such a requirement. associations and mortgage bankers. Considering In considering the possible adverse effect of these nonbank sources of credit together with the conflicts of interests that may arise through Appli­ several banking alternatives available in local cant’s entry into the proposed insurance agency markets in Alabama, the Board concludes that activities, the Law Judge found that a conflict Applicant’s entrance into the insurance business existed in the “business of surety bonding.” A will not create a possible danger of voluntary tying prerequisite that the bond purchaser secure a line by borrowers of their insurance needs to their of credit from a lender in order to establish his loans. economic solvency in the eyes of the underwriter It is clear from this evidence of record that would tempt the banking affiliate, so the Law Applicant does not possess that degree of market Judge found, “to extend the necessary letter of power sufficient to create the danger of voluntary credit even though sound banking practice would tying or that such a practice could become a not so dictate.” The Board does not find any realistic threat. In view of the evidence of record credible evidence of record to support this conclu­ concerning the fear of voluntary tying, discussed sion. Nor does the record support a conclusion supra, the Board does not believe it should adopt that lending affiliates of the Applicant would risk an arbitrary standard which would foreclose Ap­ making an undesirable loan for the purpose of plicant from selling insurance in areas where its selling the customer any other form of insurance. banking subsidiaries possess more than 15 per cent Regulatory supervision of loans made by banking of deposits in commercial banks. Such a standard affiliates of Applicant appears to provide a reason­ would prevent Applicant’s sale of insurance in able safeguard against this possibility. Accord­ many markets thereby negating the convenience ingly, the Board finds that the adverse effects that and benefits the Board has found exist. The public might arise from possible conflicts of interest are would not be served well in that case. Accord­ not present in this application. In addition, a ingly, it is the Board’s judgment that approval of review of the entire record indicates that no other the subject application will not result in decreased unsound banking practices would result from Ap­ or unfair competition. plicant’s entry into the sale of the specified insur­ The Law Judge recommended in his decision ance coverages. Therefore, it is the Board’s judg­ that “appropriate statements be included in all ment that consummation of the proposed transac­ insurance application forms furnished by affiliates tion would not result in unsound banking practices. of the Applicant, in bold type above the borrower’s The Board notes that NAIA has objected to the signature, to the effect that the customer under­ exclusion by the Law Judge of certain testimony stands the placement of such insurance is not of Mr. Harrison Houghton, a witness for NAIA. offered as a condition to the grant of credit, nor The Board, after examining the record, concludes is an inducement therefor. . . . ” The Board finds that the Law Judge correctly exercised his discre­ that the evidence in this record is not sufficient tion in refusing to admit this testimony since it to require such language. was cumulative to other testimony in the record The Law Judge also recommended as a condi­ and, moreover, irrelevant to many of the issues tion of approval that language be added to insur­ involved in this application. NAIA filed a motion to exclude Board personnel who were involved in this hearing from partici­ 6There is not a one-to-one relationship between an amount pating “in the making of the Board’s decision” of penetration and an amount of voluntary tying in a particular on this application. Since such personnel of the context. Rather, a given penetration figure determines the maximum amount of voluntary tying that can possibly exist. Board did not participate in the decisional process, If the penetration figure is low, as is the evidence presented the issue raised by the motion is moot. from North Carolina, then the voluntary tying figure will be Based on the foregoing and other considerations low. The converse is not true; a high penetration figure does not by itself indicate a high amount of voluntary tying. reflected in the record, the Board has determined Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LAW DEPARTMENT 603 that the balance of the public interest factors the public interest factors in § 4(c)(8) of the Act (12 Board is required to consider under § 4(c)(8) is U.S.C. 1843(c)(8)). favorable. Accordingly, the application is hereby Applicant is the one-bank holding company approved, subject to the conditions noted above. parent of The First National Bank of Atlanta, This determination is further subject to conditions Atlanta, Georgia, which holds deposits of $1 bil­ set forth in § 225.4(c) of Regulation Y and to lion, representing 9.5 per cent of the total deposits the Board’s authority to require such modification in commercial banks in Georgia.1 Applicant also or termination of the activities of the holding controls nonbanking subsidiaries which engage in company or any of its subsidiaries as the Board consumer financing, mortgage banking, advising finds necessary to assure compliance with the a real estate investment trust, computer services, provisions and purposes of the Act and the Board’s personal property leasing, and factoring. regulations and orders issued thereunder or to Merit, a subsidiary of Walter E. Heller Interna­ prevent evasion thereof. The transaction herein tional Corporation has total receivables of $23.2 approved shall be made not later than three months million (as of June 30, 1973). Headquartered in after the effective date of this Order unless such Mobile, Alabama, Merit has 56 offices located in period is extended for good cause by the Board seven States: Alabama, Oklahoma, Georgia, In­ or by the Federal Reserve Bank of Atlanta pursuant diana, Tennessee, Florida, and Louisiana. to delegated authority. By order of April 18, 1974, the Board denied By order of the Board of Governors, effective an application by Applicant to acquire shares of July 3, 1974. Merit. In that order, the Board expressed concern Voting for this action: Vice Chairman Mitchell and Gover­ as to the effect consummation of the proposed nors Brimmer, Sheehan, Bucher, Holland, and Wallich. Ab­ acquisition would have upon existing competition sent and not voting: Chairman Burns. for personal instalment loans in certain local mar­ (Signed) C hester B. Feldberg, kets in Georgia. In order to eliminate any possible [seal] Secretary of the Board. adverse effects upon competition in markets pres­ ently served both by operating offices of Applicant FIRST NATIONAL HOLDING CORP., and of Merit, Applicant has modified the proposal ATLANTA, GEORGIA by applying to acquire all of Merit’s offices except Order Approving Acquisition of six Georgia offices which have been sold by Merit Finance Corporation Merit’s parent, Walter E. Heller International First National Holding Corp., Atlanta, Georgia, Corporation. In view of the foregoing, it appears a bank holding company within the meaning of that consummation of the proposed transaction the Bank Holding Company Act, has applied for would not have an adverse effect on existing competition in any market in Georgia. Applicant the Board’s approval, under section 4(c)(8) of the does not presently compete in any geographic Act and § 225.4(b)(2) of the Board’s Regulation Y, to acquire, through its wholly-owned subsidi­ market in which Merit competes, therefore, con­ summation of the proposed transaction would not ary, Dixie Finance Co., Inc., Atlanta, Georgia, all of the voting shares of Merit Finance Corpora­ adversely affect existing competition in any rele­ tion, Mobile, Alabama (“Merit”). Merit engages vant market. in the activities of making, acquiring or servicing With respect to the question whether consum­ loans or other extensions of credit for personal, mation of the proposal would eliminate any sig­ family or household purposes, and acting as in­ nificant competition in the future, the Board finds surance agent or broker in selling credit life, credit that Applicant appears to possess both the re­ accident and health insurance and property damage sources and expertise to enter the markets that are presently served by Merit de novo. However, no insurance for collateral supporting loans that are made by Merit. Such activities have been deter­ significant market served by Merit appears con­ mined by the Board to be closely related to bank­ centrated and the recent closing of certain of its ing (12 CFR 225.4(a)(1), (3) and (9)(ii)). offices indicates that it is a weakening competitive Notice of the application, affording opportunity force. The Board therefore concludes that con­ for interested persons to submit comments and summation of the proposal would have at the most views on the public interest factors, has been duly only very slight adverse effects with respect to the published (39 Federal Register 17593). The time elimination of probable future competition. for filing comments and views has expired. The application and all comments and views received have been considered by the Board in light of the banking data are as of June 30, 1973. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

604 FEDERAL RESERVE BULLETIN □ AUGUST 1974 Upon approval of this application Applicant posal eliminates any adverse effect that consum­ proposes to inject equity capital into Merit in order mation of the proposal would have on existing to strengthen Merit’s capital position and make competition. available greater amounts of funds for lending in However, unlike the majority, I believe there the communities served. Applicant further pro­ are additional adverse factors weighing against poses to increase the efficiency of existing offices approval of the application. As I stated in my of Merit through centralized purchasing, advertis­ Concurring Statement of April 18, 1974, concern­ ing, and recordkeeping. Finally, Applicant pro­ ing Applicant’s earlier proposal to acquire Merit, poses to establish de novo offices of Merit in Applicant has demonstrated that it possesses the Indiana, Oklahoma, and Tennessee, in areas where expertise to enter new markets de novo. Moreover, offices of Merit already exist, in order to maximize I believe Applicant is one of the most likely the benefits of supervision. entrants into a number of markets now served by There is no evidence in the record indicating Merit. In the absence of the proposed acquisition, that consummation of the proposed transaction it seems probable that Applicant would expand de would result in any undue concentration of re­ novo into those markets where Applicant and Merit sources, unfair competition, conflicts of interests, do not presently compete. Accordingly, I would unsound banking practices, or other adverse ef­ deny this application because the proposed acqui­ fects on the public interest. sition would have adverse effects on probable Based upon the foregoing and other consid­ future competition. erations reflected in the record, the Board has Furthermore, as I previously stated, I believe determined, in accordance with the provisions of the trend by bank holding companies to trade § 4(c)(8), that consummation of this proposal can nonbanking subsidiaries among themselves should reasonably be expected to produce benefits to the be discouraged. Once a bank holding company is public that outweigh possible adverse effects. Ac­ serving a community through a nonbanking sub­ cordingly, the application is hereby approved. This sidiary, the acquisition of that subsidiary by an­ determination is subject to the conditions set forth other bank holding company would not generally in § 225.4(c) of Regulation Y and to the Board’s result in any net benefits to the public. I continue authority to require such modification or termina­ to believe that there are no public benefits to be tion of the activities of a holding company or any gained from approval of this application since of its subsidiaries as the Board finds necessary to Merit’s present parent corporation has the ability assure compliance with the provisions and pur­ itself to strengthen Merit. poses of the Act and the Board’s regulations and Finding no public benefits to outweigh the fore­ orders issued thereunder or to prevent evasion going adverse effects, I would deny the applica­ thereof. tion. The transaction shall be made not later than three months after the effective date of this Order FIRST RAILROAD AND BANKING unless such period is extended for good cause by COMPANY OF GEORGIA, the Board or by the Federal Reserve Bank of AUGUSTA, GEORGIA Atlanta. Order Approving Acquisition of By order of the Board of Governors, effective CMC Group, Inc. July 31, 1974. First Railroad and Banking Company of Geor­ Voting for this action: Governors Sheehan, Bucher, and gia, Augusta, Georgia, a bank holding company Wallich. Voting against this action: Governors Brimmer and within the meaning of the Bank Holding Company Holland. Absent and not voting: Chairman Burns and Governor Mitchell. Act, has applied for the Board’s approval, under (Signed) C hester B. Feldberg, § 4(c)(8) of the Act and § 225.4(b)(2) of the [seal] Secretary of the Board. Board’s Regulation Y, to acquire all of the voting shares of CMC Group, Inc. (“CMC”), Charlotte, Dissenting Statement of North Carolina, a company that engages, through Governor Brimmer wholly-owned subsidiaries, in the activities of making or acquiring loans or other extensions of I dissent from the majority’s action in approving credit through the operation of offices engaged in this application of First National Holding Corp. consumer finance, mortgage lending, sales fi­ to acquire Merit Finance Corporation. The major­ nance, and insurance premium financing; acting ity has approved the revised proposal on the basis as reinsurer of credit life and credit accident and that excluding six Georgia offices from the pro­ health insurance which is directly related to exten­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LAW DEPARTMENT 605 sions of credit by the bank holding company reinsuring credit life and credit accident and health system, and acting as insurance agent with respect insurance directly related to extensions of credit to credit life and credit accident and health insur­ by CMC’s finance subsidiaries. ance and credit property insurance directly related Both Bank and CMC engage in consumer fi­ to extensions of credit.1 Such activities have been nance, second mortgage, sales finance, and credit determined by the Board to be closely related to insurance activities. CMC has an office located 17 banking (12 CFR 225.4(a)(1), (9), and (10)). miles from Bank in Aiken, South Carolina, which Notice of the application, affording opportunity is the eleventh largest of 14 existing consumer for interested persons to submit comments and finance offices. However, all of CMC’s consumer views on the public interest factors, has been duly finance offices are located in markets other than published (39 Federal Register 13718). The time that of Bank; there is no existing competition for filing comments and views has expired, and between Bank and CMC. In view of the distance the Board has considered all comments received, involved and Bank’s inability to branch into South including those of the National Consumer Law Carolina, it does not appear likely that any signif­ Center, Inc., (“NCLC”), Boston, Massachusetts, icant competition would develop in the future in the light of the public interest factors set forth between these institutions. Accordingly, the Board in § 4(c)(8) of the Act (12 U.S.C. 1843(c)). is of the view that approval of the application, Applicant’s only banking subsidiary, Georgia with respect to the consumer finance, second Railroad Bank & Trust Company (“Bank”), Au­ mortgage, sales finance, and credit insurance ac­ gusta, Georgia, controls deposits of approximately tivities, would not have any significant adverse $223 million,2 representing about 2 per cent of effects on existing or future competition in any the total deposits in commercial banks in the State, relevant market. and is the fifth largest banking organization in Due to the limited scope of CMC’s insurance Georgia. Bank operates in the Augusta banking premium financing and reinsurance activities, it market,3 and included among the commercial does not appear that Applicant’s acquisition of banking services it offers to the public are making these activities would have any adverse effects on consumer finance loans and second mortgage real existing or future competition. estate loans, discounting instalment notes for re­ It is anticipated that following consummation tailers, and selling credit life and credit accident of the proposed acquisition, Applicant will provide and health insurance directly related to its exten­ CMC with increased financial resources which will sions of consumer instalment credit. enable CMC to make more funds available for CMC engages in making consumer loans, pur­ lending in the respective communities served by chasing retail instalment paper, originating second CMC’s offices. In addition, Applicant has com­ mortgage loans, and acting as insurance agent with mitted that immediately upon consummation of the respect to the sale of credit life insurance, credit acquisition, CMC will reduce the premiums cur­ accident and health insurance, and credit property rently being charged on the credit life and credit insurance directly related to extensions of credit, accident and health insurance policies that are sold through wholly-owned subsidiaries with 16 offices in connection with extensions of credit by CMC’s in North Carolina, 8 offices in South Carolina, and subsidiaries and that are reinsured by its reinsur­ 2 offices in Georgia. CMC also has a subsidiary ance subsidiary. For North Carolina and South engaged primarily in insurance premium financ­ Carolina, Applicant will reduce the premiums ing4 for insurance written by independent insur­ charged for credit life insurance by 15 per cent, ance agencies, and another subsidiary engaged in and in Georgia, Applicant will reduce such pre­ miums by 9.6 per cent. Premiums on credit life insurance policies sold in connection with retail sales contracts will be reduced by 15 per cent in 'CMC also has a subsidiary which is engaged in mobile home sales, but Applicant has committed that this subsidiary all three States. In North Carolina, South Carolina, will be divested prior to the date of consummation of the and Georgia, CMC will reduce premiums for acquisition. credit accident and health insurance by between 2 All banking data are as of December 31, 1973. 3On the basis of the facts of record, the Augusta, Georgia 4.6 and 5 per cent. banking market is approximated by the Augusta Ranally Metro There is no evidence in the record indicating Area, which includes portions of Columbia and Richmond Counties in Georgia and a portion of Aiken County, South that consummation of the proposed acquisition Carolina, excluding the city of Aiken. would result in any undue concentration of re­ 4Insurance premium financing involves making extensions sources, unfair competition, conflicts of interests, of credit to finance the payment of casualty, liability, and other insurance premiums. unsound banking practices, or other adverse ef- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

606 FEDERAL RESERVE BULLETIN □ AUGUST 1974 fects on the public interest. In its consideration Dissenting Statement of of this application, the Board has examined the Governor Brimmer covenant not to compete which was executed in connection with the proposal. The Board finds that I would deny the application by First Railroad the provisions of this covenant are reasonable in and Banking Company of Georgia to acquire CMC duration, scope, and geographic area and are con­ Group, Inc. My decision is based on the existence sistent with the public interest. of covenants not to compete which were executed Based upon the foregoing and other consid­ between Applicant and two principals of CMC erations reflected in the record, the Board has Group, Inc. As part of the proposed transaction, determined, in accordance with the provisions of CMC’s two principal executive officers will enter § 4(c)(8), that consummation of this proposal can into employment agreements with Applicant that reasonably be expected to result in benefits to the contain covenants not to compete. For a period public that outweigh possible adverse effects. Ac­ of two years from the date of termination of their cordingly, the application is hereby approved. This employment with CMC, the latter’s principal of­ determination is subject to the conditions set forth ficers would be prevented from providing their in § 225.4(c) of Regulation Y and to the Board’s expertise to either an existing or future competitor authority to require such modification of termina­ of CMC in any geographic area in which CMC tion of the activities of a holding company or any presently has an office. I believe that such agree­ of its subsidiaries as the Board finds necessary to ments are inherently anticompetitive, and the ma­ assure compliance with the provisions and pur­ jority has presented no evidence to demonstrate poses of the Act and the Board’s regulations and that the adverse effects of such covenants are orders issued thereunder or to prevent evasion outweighed by reasonably expected benefits to the thereof. public. For reasons stated more fully in my dis­ The transaction shall be made not later than sents to the application of Orbanco, Inc., to ac­ three months after the effective date of this Order quire Far West Security Company (59 Federal unless such period is extended for good cause by Reserve B u lletin 368-369 (1973)), and the ap­ the Board or by the Federal Reserve Bank of plication of CBT Corporation to acquire Gen­ Atlanta. eral Discount Corporation (59 Federal Reserve By order of the Board of Governors, effective B u lletin 471 (1973), I believe such covenants are July 29, 1974. not in the public interest and should not receive the sanction of the Board. I would deny this Voting for this action: Chairman Burns and Governors application. Sheehan, Bucher, Holland, and Wallich. Voting against this action: Governor Brimmer. Absent and not voting: Governor Mitchell. (Signed) C hester B. Feldberg, [seal] Secretary of the Board. ORDERS NOT PRINTED IN THIS ISSUE During July, 1974, the Board of Governors approved the applications listed below. The orders have been published in the Federal Register, and copies of the orders are available upon request to Publications Services, Division of Administrative Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. ORDER UNDER SECTION 3(a)(1) OF BANK HOLDING COMPANY ACT— APPLICATION FOR FORMATION OF BANK HOLDING COMPANY Federal Effective Register Applicant Bank date citation Business Administrative Needs of State Bank of Lancaster, 7/9/74 39 F.R. 26068 Kansas, Ltd., Wichita, Kansas Lancaster, Kansas 7/16/74 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LAW DEPARTMENT 607 ORDERS UNDER SECTION 3(a)(3) OF BANK HOLDING COMPANY ACT— APPLICATIONS FOR ACQUISITION OF BANK Board action Federal (effective Register Applicant Bank(s) date) citation Bank of Virginia Company, Bank of Virginia—Eastern Shore, 7/12/74 39 F.R. 26944 Richmond, Virginia Hailwood, Virginia 7/24/74 Ellis Banking Corporation, Ellis Bank of North Tampa, 7/1/74 39 F.R. 25360 Bradenton, Florida Tampa, Florida 7/10/74 First City Bancorporation of Citizens State Bank, 7/30/74 39 F.R. 28564 Texas, Inc., Houston, Texas Sealy, Texas 7/8/74 First Financial Corporation, Citizens Bank and Trust Company, 7/26/74 39 F.R. 28189 Tampa, Florida Quincy, Florida 8/5/74 First United Bancorporation, Farmers-First National Bank of 7/9/74 39 F.R. 26070 Inc., Fort Worth, Texas Stephenville, Stephenville, 7/16/74 Texas General Bancshares Corporation, Central Bank of Clayton, 7/12/74 39 F.R. 26787 St. Louis, Missouri Clayton, Missouri 7/23/74 Mercantile Bancorporation, Inc., Bank of Memphis, 7/15/74 39 F.R. 26944 St. Louis, Missouri Memphis, Missouri 7/24/74 Mercantile Bancorporation, Inc., The Farmers Bank of Bowling 7/22/74 39 F.R. 27757 St. Louis, Missouri Green, Bowling Green, Missouri 7/31/74 National Detroit Corporation, National Bank of Dearborn, 7/3/74 39 F.R. 25553 Detroit, Michigan Dearborn, Michigan 7/11/74 The Dunmire Agency, Inc., The State Bank of Spring Hill, 7/19/74 39 F.R. 27356 Spring Hill, Kansas Spring Hill, Kansas 7/26/74 ORDERS UNDER SECTION 4(a)(8) OF BANK HOLDING COMPANY ACT— APPLICATIONS TO ENGAGE IN NONBANKING ACTIVITIES Board action Federal Nonbanking company (effective Register Applicant (or activity) date) citation First Tennessee National Tower Loan Company, 7/10/74 39 F.R. 26318 Corporation, Memphis, Hannibal, Missouri 7/18/74 Tennessee Rimco, Inc., Rimco Insurance Agency, 7/3/74 39 F.R. 26070 Rangely, Colorado Rangely, Colorado 7/16/74 The Conifer Group, Inc., Conifer Personnel Resources Inc., 7/11/74 39 F.R. 26490 Worcester, Massachusetts Worcester, Massachusetts 7 /19/74 ORDERS ISSUED BY FEDERAL RESERVE BANKS During July 1974, applications were approved by the Federal Reserve Banks under delegated authority as listed below. The orders have been published in the Federal Register, and copies of the orders are available upon request to the Reserve Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

608 FEDERAL RESERVE BULLETIN □ AUGUST 1974 ORDERS UNDER SECTION 3(a)(3) OF BANK HOLDING COMPANY ACT— APPLICATIONS FOR ACQUISITION OF BANK Federal Reserve Effective Register Applicant Bank Bank date citation Bankers Trust New York Mohawk Valley State Bank, New York 7/11/74 39 F.R. 26947 Corporation, New York, Utica, New York 7/24/74 New York Southeast Banking Corpora­ Beach State Bank, Atlanta 7/24/74 39 F.R. 28675 tion, Miami, Florida Panama City Beach, Florida 8/9/74 S outhern B ancorporation, Farmers Bank, Atlanta 6/28/74 39 F.R. 25368 Birmingham, Alabama Anderson, Alabama 7/10/74 Peoples Banking Corporation, The Oscoda State Savings Chicago 7/24/74 39 F.R. 28674 Bay City, Michigan Bank, Oscoda, Michigan 8/19/74 Commerce Bancshares, Inc., Exchange Bank of Kahoka, Kansas City 7/23/74 39 F.R. 28673 Kansas City, Missouri Kahoka, Missouri 8/9/74 Independent Bankshares Bank of Lake.County, San Francisco 7/20/74 39 F.R. 28674 Corporation, San Rafael, Lakeport, California 8/9/74 California Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

609 Announcements CHANGES IN BOARD STAFF ances, as was the old limit when it was established 10 years ago. The Board of Governors has announced the ap­ At the same time, the Committee removed two pointment, effective September 1, 1974, of Theo­ technical restrictions on System operations in dore E. Allison as Secretary of the Board to Federal agency securities. The Trading Desk is succeed Chester B. Feldberg, who has returned now permitted to exchange with the issuing agency to the Federal Reserve Bank of New York. maturing securities for newly issued securities, The Board has also announced the retirement instead of redeeming them at maturity. The second of Samuel I. Katz, Adviser in the Division of change permits the purchase of new agency issues International Finance, effective June 30. as early as the issue date, rather than only after 2 weeks of market trading in the issue. REVISED RATES FOR THE FEDERAL RESERVE These changes bring System practices in opera­ CHART BOOK ON FINANCIAL AND BUSINESS tions in agency issues more closely in line with STATISTICS those for operations in Treasury securities. Due to increased costs of publishing and distrib­ The guidelines are as follows: uting the Federal Reserve Monthly Chart Book on 1. System open market operations in Federal agency financial and business statistics and the annual issues are an integral part of total System open market Historical Chart Book, the subscription and per- operations designed to influence bank reserves, money market conditions, and monetary aggregates. copy rates have been revised. Effective September 2. System open market operations in Federal agency 1, 1974, the rates shown below will apply. issues are not designed to support individual sectors of Annual subscriptions: the market or to channel funds into issues of particular Domestic........................................................... $12.00 agencies. Foreign .............................................................. 15.00 3. System holdings of agency issues shall be modest Single copies (rates apply to both the monthly Chart relative to holdings of U.S. Government securities, and Book and the annual Historical Chart Book) : the amount and timing of System transactions in agency Domestic........................................................... 1.25 issues shall be determined with due regard for the Foreign .............................................................. 1.50 10 or more copies of one issue desirability of avoiding undue market effects. sent to a single address................................. 1.00 4. Purchases will be limited to fully taxable issues for which there is an active secondary market. Purchases will also be limited to issues outstanding in amounts INCREASE IN FEDERAL RESERVE HOLDINGS OF of $300 million or over in cases where the obligations BANKERS ACCEPTANCES; CHANGE IN SYSTEM have a maturity of 5 years or less at the time of issuance, OPERATIONS IN FEDERAL AGENCY SECURITIES and to issues outstanding in amounts of $200 million or over in cases where the securities have a maturity The Federal Reserve has announced that, effective of more than 5 years at the time of issuance. July 18, 1974, the limit on outright holdings of 5. System holdings of any one issue at any one time bankers acceptances that may be held by the Fed­ will not exceed 20 per cent of the amount of the issue outstanding. Aggregate holdings of the issues of any eral Reserve has been increased from $125 million one agency will not exceed 10 per cent of the amount to $500 million. of outstanding issues of that agency. This action was taken by the Federal Open 6. All outright purchases, sales, and holdings of Market Committee at its meeting of July 16 in agency issues will be for the System Open Market light of the sharp growth of outstanding accept­ Account. ances over the past 10 years. The $125 million ADDED AUTHORITY FOR RESERVE BANKS limit was established by the FOMC in 1964 when outstanding acceptances totaled $3.25 billion. At The Board of Governors announced on July 31, present almost $12 billion in bankers acceptances 1974, that it had delegated to .the Federal Reserve are outstanding. Banks authority to approve, under Board guide­ The new limit on outright holdings by the Sys­ lines, acquisitions by bank holding companies of tem is less than 5 per cent of outstanding accept­ existing small finance companies and industrial Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

610 FEDERAL RESERVE BULLETIN □ AUGUST 1974 banks, and existing insurance agencies in small bring the holding company’s total of such holdings towns. to more than $50 million. The Reserve Banks already had authority to The total assets of all finance companies and approve, under Board guidelines, certain forma­ industrial banks approved under delegated author­ tions and mergers of bank holding companies, ity may not exceed $15 million for any given bank mergers, and acquisitions by bank holding holding company during any calendar year. Ac­ companies of banks and of certain de novo com­ quisitions approved directly by the Board do not panies. count in this $15 million. The new delegation expanded this authority to The new rules also permit Reserve Banks to permit the Reserve Banks also to approve acquisi­ approve the acquisition or retention by holding tions, meeting Board criteria, of existing concerns companies of existing insurance agencies in or in the finance company, industrial bank, and in­ adjacent to offices of the holding company or its surance agency fields only. Where a case does not subsidiaries in towns with a population of 5,000 meet the criteria for Reserve Bank action it must or less. be forwarded to the Board. Reserve Banks now have authority to approve Industrial banks and Morris Plan banks—which acquisition of such de novo insurance agencies. are also included in the new delegation—provide consumer credit and receive special types of de­ REVISED OTC STOCK LIST posits. The Board of Governors has published a revised Under the new rules, Reserve Banks may ap­ list of 709 over-the-counter (OTC) stocks that are prove applications, filed under standard proce­ subject to its margin regulations effective at the dures, for the acquisition of finance companies opening of business, Monday, July 29. It is avail­ with assets no greater than $5 million. An excep­ able in mimeographed form from Publications tion permits Reserve Bank approval of acquisitions Services, Division of Administrative Services, of finance companies or industrial banks with Board of Governors of the Federal Reserve Sys­ assets no greater than $15 million if this will not tem, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

611 Industrial Production Released for publication August 15 Industrial production was virtually unchanged in INDUSTRIAL PRODUCTION July and at an estimated 125.7 per cent of the Seasonally adjusted, ratio scale, 1967-100 1967 average was 0.8 per cent below a year earlier. A moderate rise in production of consumer goods was about offset by a drop in construction products. Production of both business equipment and industrial materials was maintained. Auto assemblies rose 2 per cent in July and were at an annual rate of 7.8 million units. Output of other durable consumer goods changed little, and production of nondurable consumer goods in­ 1970 1972 creased moderately. Output of business equipment reached a peak in May and has been maintained at that level in June and July. In July, production of steel and other major materials, such as textiles, paper, and chemicals, continued at near-capacity levels and output of other durable and nondurable materials was un­ changed. F.R. indexes, seasonally adjusted. Latest figures: July. Seasonally adjusted Per cent 1967 = 100 changes from— Per cent changes, annual rate Industrial production 1974 1973 1974 Month Year ago ago May r Junep July e Q4 Ql Q2 Total ......................................................... 125.7 125.6 125.7 .1 -.8 .9 -6.6 1.6 Products, total ................................................. 123.6 123.4 123.6 .2 -.5 1.3 -5.8 1.6 Final products ............................................. 122.5 121.8 122.3 .4 .2 3.3 -6.5 2.3 Consumer goods ................................... 130.3 129.4 130.0 .5 -2.2 1.2 -11.5 2.2 Durable goods ................................. 132.8 132.4 133.1 .5 -6.5 -4.0 -26.6 13.5 Nondurable goods ......................... 129.4 128.3 128.8 .4 -.2 3.1 -5.2 -2.2 Business equipment ........................... 129.8 129.7 129.7 0 5.4 8.0 .6 6.0 Intermediate products ............................. 128.0 129.1 128.2 -.7 -3.2 -4.8 -4.6 0 Construction products ........................ 130.6 130.8 129.5 -1.0 -3.8 -5.6 -5.1 -1.8 Materials ............................................................. 129.2 129.4 129.3 -.1 -1.2 .3 -6.7 .3 rRevised. "Preliminary. '’Estimated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 1 Financial and Business Statistics CONTENTS A 3 GUIDE TO TABULAR PRESENTATION A 3 STATISTICAL RELEASES: REFERENCE U.S. STATISTICS: A 4 Member bank reserves, Federal Reserve Bank credit, and related items A 7 Federal funds— Major reserve city banks A 8 Reserve Bank interest rates A 9 Reserve requirements A 10 Maximum interest rates; margin requirements A 11 Open market account A 12 Federal Reserve Banks A 13 Bank debits A 14 Money stock A 15 Bank reserves; bank credit A 16 Commercial banks, by classes A 20 Weekly reporting banks A 25 Business loans of banks A 26 Demand deposit ownership A 27 Loan sales by banks A 27 Open market paper A 28 Interest rates A 31 Security markets A 32 Stock market credit A 32 Savings institutions A 34 Federal finance A 36 U.S. Government securities A 39 Federally sponsored credit agencies A 40 Security issues A 43 Business finance A 44 Real estate credit A 47 Consumer credit Continued on next page Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE BULLETIN □ AUGUST 1974 U.S. STATISTICS— Continued A 50 Industrial production A 52 Business activity A 52 Construction A 54 Labor force, employment, and unemployment A 55 Consumer prices A 55 Wholesale prices A 56 National product and income A 58 Flow of funds INTERNATIONAL STATISTICS: A 60 U.S. balance of payments A 61 Foreign trade A 61 U.S. reserve assets A 62 U.S. gold transactions A 63 International capital transactions of the United States A 76 Open market rates A 77 Central bank rates A 77 Foreign exchange rates A 78 Gold reserves of central banks and governments TABLES PUBLISHED PERIODICALLY: Number of banking offices: A 79 Analysis of changes A 80 On, and not on, Federal Reserve Par List A 89 INDEX TO STATISTICAL TABLES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 3 Guide to Tabular Presentation SYMBOLS AND ABBREVIATIONS e Estimated N.S.A. Monthly (or quarterly) figures not adjusted for seasonal variation c Corrected IPC Individuals, partnerships, and corporations p Preliminary SMSA Standard metropolitan statistical area r Revised A Assets rp Revised preliminary L Liabilities I, II, S Sources of funds III, IV Quarters U Uses of funds * Amounts insignificant in terms of the par­ n.e.c. Not elsewhere classified ticular unit (e.g., less than 500,000 A.R. Annual rate when the unit is millions) S.A. Monthly (or quarterly) figures adjusted for (1) Zero, (2) no figure to be expected, or seasonal variation (3) figure delayed GENERAL INFORMATION Minus signs are used to indicate (1) a decrease, (2) also include not fully guaranteed issues) as well as a negative figure, or (3) an outflow. direct obligations of the Treasury. “State and local A heavy vertical rule is used in the following in­ govt.” also includes municipalities, special districts, stances: (1) to the right (to the left) of a total when and other political subdivisions. the components shown to the right (left) of it add to In some of the tables details do not add to totals be­ that total (totals separated by ordinary rules include cause of rounding. more components than those shown), (2) to the right The footnotes labeled Note (which always appear (to the left) of items that are not part of a balance sheet, last) provide (1) the source or sources of data that do (3) to the left of memorandum items. not originate in the System; (2) notice when figures “U.S. Govt, securities” may include guaranteed are estimates; and (3) information on other charac­ issues of U.S. Govt, agencies (the flow of funds figures teristics of the data. TABLES PUBLISHED SEMIANNUALLY OR ANNUALLY, WITH LATEST BULLETIN REFERENCE Quarterly Issue Page Annually—Continued Issue Page Sales, revenue, profits, and divi­ Banks and branches, number, dends of large manufacturing by class and State ................... Apr. 1974 A-88—A-89 corporations .............................. July 1974 A-79 Flow of funds: Semiannually Assets and liabilities: 1961-72 ............................... Sept. 1973 A-71.14—A-71.28 Banking offices: Analysis of changes in number Aug. 1974 A-79 On, and not on, Federal Reserve Flows: Par List, number ................. Aug. 1974 A-80 1961-72 ............................... Sept. 1973 A-70—A-71.13 Annually Income and expenses: Bank holding companies: Federal Reserve Banks ........... Feb. 1974 A-96—A-97 Banking offices and deposits of Insured commercial banks ...... June 1974 A-84—A-85 group banks, Dec. 31, 1973 June 1974 A-80--A-83 Member banks: July 1974 530 Calendar year ....................... June 1974 A-84—A-93 Income ratios ....................... June 1974 A-94—A-99 Operating ratios ................... June 1973 A-96—A-101 Banking and monetary statistics: 1973............................................ Mar. 1974 A-96—A-109 July 1974 A-80—A-82 Stock market credit ...................... Jan. 1974 A-96—A-97 Statistical Releases LIST PUBLISHED SEMIANNUALLY, WITH LATEST BULLETIN REFERENCE Issue Page Anticipated schedule of release dates for individual releases June 1974 A-106 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 4 BANK RESERVES AND RELATED ITEMS □ AUGUST 1974 MEMBER BANK RESERVES, FEDERAL RESERVE BANK CREDIT, AND RELATED ITEMS (In millions of dollars) Factors supplying reserve funds Reserve Bank credit outstanding Treas­ Period or date U.S. Govt, securities 1 Special ury Gold Drawing cur­ Held Other stock Rights rency under Loans Float 2 F.R. Total 4 certificate out­ Bought repur­ assets 3 account stand­ Total out­ chase ing right agree­ ment Averages of daily figures 1939—Dec............................... 2,510 2,510 8 83 2,612 17,518 2,956 1941—Dec............................... 2,219 2,219 5 170 2,404 22^759 3,239 1945—Dec............................... 23,708 23,708 381 652 24,744 20’047 4*322 1950—Dec............................... 20,345 20,336 9 142 1,117 21,606 22*879 4 ’, 629 1960—Dec............................... 27,248 27,170 78 94 1,665 29,060 17,954 5,’ 396 1968—Dec............................... 52,529 52,454 75 765 3,251 56,610 10,367 6,810 1969—Dec............................... 57,500 57,295 205 1,086 3,235 2,204 64,100 10^367 6,841 1970—Dec............................... 61,688 61,310 378 321 3,570 1,032 66,708 11,105 400 7,145 1971—Dec............................... 69,158 68,868 290 107 3,905 982 74,255 10,132 400 7,611 1972—Dec............................... 71,094 70,790 304 1,049 3,479 1,138 76,851 10,410 400 8,293 1973—July............................... 77,448 76,875 573 2,051 *•3,162 1,180 83,929 10,410 400 8,538 Aug............................... 76,653 76,475 178 2,144 ’•2,563 1,018 82,443 10,410 400 8,549 Sept............................... 76,073 75,712 361 1,861 r2,925 889 81,810 10,410 400 8,584 Oct................................ 78,042 77,500 542 1,465 r2,936 1,122 83,644 10,933 400 8,613 Nov.............................. 78,457 77,937 520 1.399 r2,764 1,078 83,756 11,567 400 8,642 Dec............................... 79,701 78,833 868 U298 3,414 1,079 85,642 11,567 400 8,668 1974—Jan................................ 80,793 80,608 185 1,044 3,385 1,258 86,568 11,567 400 8.705 Feb............................... 80,801 80,551 250 1,186 2,300 1,117 85,493 11,567 400 8,747 Mar.............................. 80,686 80,184 502 1,352 1,816 960 84,943 11,567 400 8,767 Apr............................... 81,567 80,873 694 1,714 2,295 1,160 86,907 11,567 400 8,807 May............................. 83,434 82,037 1.397 2,580 2,025 1,093 89,405 11,567 400 8,838 June............................. 82,812 81,859 953 3.000 2,114 1,106 89,254 11,567 400 8,877 July®............................. 84,313 83,496 817 3.309 2,277 1,343 91,565 11,567 400 8,905 Week ending— 1974—May 1....................... 82,731 81,637 1,094 2,157 1,919 1,292 88,365 11,567 400 8,822 8....................... 83,190 81,868 1,322 1,616 1,807 1,336 88,238 11,567 400 8,827 15....................... 83,626 81,951 1,675 1,977 1,908 1,248 89,065 11,567 400 8,830 22....................... 83,679 81,756 1,923 3,090 2,238 879 90,227 11,567 400 8,836 29....................... 83,162 82,418 744 3,606 1,905 900 89,737 11,567 400 8,856 June 5....................... 83,075 82,128 947 3,054 2,184 1,013 89,554 11,567 400 8,859 12....................... 81,267 80,814 453 2,729 2,007 1,036 87,184 11,567 400 8,862 19....................... 83,017 82,283 734 3,223 2,162 1,095 89,720 11,567 400 8,880 26....................... 83,815 82,049 1,766 2,788 2,055 1,160 90,068 11,567 400 8,891 July 3....................... 83.933 82,663 1,270 3,435 2,190 1,253 91,140 11,567 400 8,899 10....................... 83,990 83,007 983 2,640 2,951 1,259 91,157 11,567 400 8,898 17....................... 84,718 83,614 1.104 3,175 2,401 1,321 92,015 11,567 400 8,903 24p..................... 84,429 84,153 276 3,641 2,113 1,397 91,808 11,567 400 8,907 31p..................... 84,112 83,531 581 3,689 1,831 1,434 91,409 11,567 400 8,913 End of month May............................. 84,658 8 82,777 1,881 3,298 1,925 1,015 91,269 11,567 400 8,895 June............................. 83,612 8 82,646 966 3,210 2,297 1,264 90,687 11,567 400 8,924 July®............................. 81,688 9 81,688 3,588 2,539 1,684 89,717 11,567 400 8,916 Wednesday 1974—May 1....................... 82,425 8 81,649 776 1,869 2,955 1,395 88,848 11,567 400 8,826 8....................... 83,125 8 81,916 1,209 1,923 2,380 1,330 89,023 11,567 400 8,829 15....................... 83,670 8 82,088 1,582 3,500 2,714 831 91,055 11,567 400 8,832 22....................... 81,473 9 79,840 1,633 2,980 2,131 946 87,787 11,567 400 8,853 29....................... 85,253 8 82,471 2,782 4,711 2,165 923 93,402 11,567 400 8,856 June 5....................... 79,659 9 79,659 2,710 2,847 1,078 86,394 11,567 400 8 860 12....................... 82,989 9 80,764 2,225 3,157 2,271 1,090 89,903 11,567 400 8 *865 19....................... 82,283 8 82,283 2,486 3 044 1,134 89,042 11,567 400 8 886 26....................... 83,555 8 81,976 1,579 2,978 2,621 1,196 90,607 ll’567 400 8*892 July 3....................... 84,027 8 82,745 1,282 3,002 2,668 1,266 91,346 11,567 400 8,897 10....................... 84,510 8 83,086 1,424 2,271 3,544 1,343 92,057 11,567 400 8,898 17....................... 84,829 8 83,775 1,054 4,048 3,070 1,369 93,663 11,567 400 8,906 24 p..................... 85,229 8 84,294 935 5,638 2,144 1,419 94,895 11,567 400 8,911 31 p..................... 81,688 9 81,688 3,588 2,539 1,684 89,717 11,567 400 8,916 1 Includes Federal agency issues held under repurchase agreements as industrial loan program was discontinued. For holdings of acceptances of Dec. 1, 1966, and Federal agency issues bought outright as of Sept. 29, on Wed. and end-of-month dates, see table on F.R. Banks on p. A-12. 1971. See also note 2. 2 Beginning with 1960 reflects a minor change in concept; see Feb. 1961 5 Includes certain deposits of domestic nonmember banks and foreign- Bulletin, p. 164. owned banking institutions held with member banks and redeposited in 3 Beginning Apr. 16, 1969, “Other F.R. assets” and “Other F.R. full with Federal Reserve Banks in connection with voluntary participa­ liabilities and capital” are shown separately; formerly, they were tion by nonmember institutions in the Federal Reserve System’s program netted together and reported as “Other F.R. accounts.” of credit restraint. 4 Includes industrial loans and acceptances until Aug. 21, 1959, when Notes continued on opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ BANK RESERVES AND RELATED ITEMS A 5 MEMBER BANK RESERVES, FEDERAL RESERVE BANK CREDIT, AND RELATED ITEMS— Continued (In millions of dollars) Factors absorbing reserve funds Deposits, other than member bank Member bank r C en u c r y ­ Treas­ with r e F s . e R rv . e B s, a nks Other O F t . h R e . r reserves Period or date in c u a r s y h F.R. lia­ cir­ ac­ bilities c t u io la n ­ h i o ng ld s ­ T u re r a y s­ F ei o g r n ­ Other 2,5 counts3 ca a p n it d a l 3 B W F a . n R it k h . s c r C e a o n n u in c d r y ­ 6 Total 7 Averages of daily figures 7,609 2,402 616 739 248 11,473 11,473 .1939—Dec. 10,985 2,189 592 1,531 292 12,812 12,812 .1941—Dec. 28,452 2,269 625 1,247 493 16,027 16,027 . 1945—Dec. 27,806 1,290 615 920 353 739 17,391 17,391 .1950—Dec. 33,019 408 522 250 495 1,029 16,688 2,595 19,283 .1960—Dec. 50,609 756 360 225 458 -1,105 22,484 4,737 27,221 .1968—Dec. 53.591 656 1,194 146 458 2,192 23,071 4,960 28,031 .1969—Dec. 57,013 427 849 145 735 2,265 23,925 5,340 29,265 .1970—Dec. 61,060 453 1.926 290 728 2,287 25,653 5,676 31,329 .1971—Dec. 66,060 350 1,449 272 631 2,362 24,830 6,095 31,353 .1972—Dec. 68,382 346 3,375 341 782 2,846 '27,205 r6,273 33,590 .1973—July 68,394 344 1,674 300 838 2,877 r27,375 6,296 33,783 ............Aug. 68.592 349 792 332. 781 2,848 *•27,510 6.402 34,020 ............Sept. 68,909 622 1,718 266 5 752 2,866 r28,458 6,371 34,913 ............Oct. 69,927 340 1,772 522 5 689 2,854 r28,259 r6,382 34,725 ............Nov. 71,646 323 1,892 406 5 717 2,942 28,352 6,635 35,068 ............Dec. 70,962 349 2,488 427 5 713 2,904 29,396 7,192 36,655 . 1974—Jan. 70,411 342 2,972 293 5 682 2,932 28,574 6,601 35,242 ............Feb. 71,081 334 1,803 311 5 699 2,998 28,450 6,450 34,966 ............Mar. 72,176 308 1,712 328 5 702 2,985 29,469 6.402 35,929 ............Apr. 72,876 286 3,000 320 5 699 3,168 29,861 6,600 36,519 ............May 73,749 293 2,015 491 691 3,187 29,672 6.668 36,390 ............June 74,556 275 2,795 296 773 3,216 30,525 6,824 37,349 ............Julyp Week ending— 72,048 301 2,460 343 5 672 3,132 30,198 6,589 36,845 . 1974—May 1 72,463 299 2,959 294 5 662 2,961 29,393 6,885 36,336 72,997 285 2,723 277 5 715 3,122 29,743 6,845 36,646 .15 72,959 278 3,028 343 5 728 3,218 30,477 6,081 36,616 .22 73,062 273 3,224 287 5 684 3,310 29,719 6,572 36,349 .29 73,344 302 2,804 399 5 694 3,275 29,562 6,659 36,279 . June 5 73,846 283 931 309 5 674 3,041 28,929 6,802 35,789 ...........12 73,938 292 1,511 992 674 3,140 30,019 6,631 36,708 ..........19 73,689 298 2,659 343 687 3,265 29,985 6,493 36,536 ...........26 74,112 287 2,781 350 777 3,240 30,459 6,815 37,274 . July 3 74,876 275 2,957 289 753 3,050 29,820 7.048 36,868 ..........10 74,849 266 2,366 303 786 3,193 31,122 6,702 37,824 ..........17 74,441 270 2,721 283 757 3,271 30,939 6,564 37,503 ..........24 p 74,081 283 3,214 293 785 3,390 30,241 6,986 37,227 ..........31* End of Month 73,199 296 3,133 429 5 667 3,395 31,012 6,661 37,731 .May 73,833 274 2,919 384 762 3,319 30,086 6.815 36,901 . June 74,309 283 3,822 330 1,169 3,403 27,283 6,986 34,269 . JulyP Wednesday 72,329 300 2,948 544 5 705 3,180 29,634 6,589 36,281 .1974—May 1 72,975 305 2,993 254 5 689 3,009 29,594 6,885 36,537 ..................... 8 73,204 296 2,569 358 5 749 3,131 31,547 6,845 38,450 .....................15 73,099 292 4.332 265 5 761 3,244 26,614 6,081 32,753 .....................22 73,488 269 2.333 315 5 642 3,644 33,534 6,572 40,164 .....................29 73,740 300 1,340 330 5 683 2,931 27,896 6,659 34,613 . June 5 74,166 296 906 359 5 650 3,101 31,257 6,802 38,117 ..........12 73,991 308 2,946 753 695 3,141 28,060 6,631 34,749 ..........19 73,932 303 2,693 282 699 3,286 30,270 6,493 36,763 ..........26 74,749 288 2,590 269 637 2,971 30,706 6,815 37,521 .July 3 75,154 277 2,447 241 764 3,144 30,894 7,048 37,942 10 74,848 285 2,714 257 797 3,170 32,465 6,702 39,167 17 74,411 268 3,001 254 732 3,350 33.756 6,564 40,320 24 p 74,309 283 3,822 330 1,169 3,403 27,283 6,986 34,269 31 p 6 Part allowed as reserves Dec. 1, 1959—Nov. 23, 1960; all allowed 1974 Ql, $67 million Q2, $58 million, transition period ended after second thereafter. Beginning with Jan. 1963, figures are estimated except for quarter, 1974. weekly averages. Beginning Sept. 12, 1968, amount is based on close- 8 Includes securities loaned—fully secured by U.S. Govt, securities of-business figures for reserve period 2 weeks previous to report date. pledged with F.R. Banks. 7 Beginning with week ending Nov. 15, 1972, includes $450 million of 9 Includes securities loaned—fully secured by U.S. Govt, securities reserve deficiencies on which F.R. Banks are allowed to waive penalties pledged with F.R. Banks. Also reflects securities sold, and scheduled to for a transition period in connection with bank adaptation to Regulation J be bought back, under matched sale/purchase transactions. as amended effective Nov. 9, 1972. Beginning 1973, allowable deficiencies included are (beginning with first statement week of quarter): Ql, $279 For other notes see opposite page. million; Q2, $172 million; Q3, $112 million; Q4, $84 million. Beginning Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 6 BANK RESERVES AND RELATED ITEMS □ AUGUST 1974 RESERVES AND BORROWINGS OF MEMBER BANKS (In millions of dollars) All member banks Large banks2 All other banks Period Reserves Borrowings New York City City of Chicago Other Total Re­ Excess i Total Sea­ Excess Borrow­ Excess Borrow­ Excess Borrow­ Excess Borrow­ held1 quired sonal ings ings ings ings 1939—Dec.................... 11,473 6,462 5,011 3 2,611 540 1,188 671 3 1941—Dec.................... 12,812 9,422 3,390 5 989 295 1,303 1 804 4 1945—Dec.................... 16,027 14,536 1,491 334 48 192 14 418 96 1,011 46 1950—Dec.................... 17,391 16,364 1,027 142 125 58 8 5 232 50 663 29 1960—Dec.................... 19,283 18,527 756 87 29 19 4 8 100 20 623 40 1965—Dec.................... 22,719 22,267 452 454 41 111 15 23 67 228 330 92 1967—Dec.................... 25,260 24,915 345 238 18 40 8 13 50 105 267 80 1968—Dec.................... 27,221 26,766 455 765 100 230 15 85 90 270 250 180 1969—Dec.................... 28,031 27,774 257 1,086 56 259 18 27 6 479 177 321 1970—Dec.................... 29,265 28,993 272 321 34 25 7 4 42 264 189 28 1971—Dec.................... 31,329 31,164 165 107 25 35 1 8 -35 22 174 42 1972—Dec.................... 31,353 31,134 219 1,049 -20 301 13 55 -42 429 -160 264 1973—July................... 33,590 33,199 391 2,050 124 156 135 30 67 -2 855 95 993 Aug................... 33,783 33,540 243 2,144 163 34 109 -8 53 8 755 97 1,227 34,020 33,775 245 1,861 147 -6 115 24 62 40 712 79 972 Oct.................... 34,913 34,690 223 1,465 126 11 74 1 54 17 589 110 748 34,725 34,543 182 1,399 84 27 180 -24 28 -20 593 115 598 Dec.................... 35,068 34,806 262 1,298 41 -23 74 43 28 28 761 133 435 1974—Jan..................... 36,655 36,419 236 1,044 18 65 135 -44 17 -8 549 156 343 Feb.................... 35,242 35,053 189 1,186 17 51 87 -19 18 -51 635 141 446 34,966 34,790 176 1,352 32 21 113 -61 65 43 689 107 485 Apr.................... 35,929 35,771 158 1,714 50 19 114 69 41 -58 987 70 572 Mav.................. 36,519 36,325 194 2,580 102 -20 772 29 20 -4 939 131 849 June 36,390 36,259 131 3,000 130 -26 1,303 -8 51 26 799 89 847 JulyP 37,349 37,167 182 3,309 149 6 1,457 16 70 -42 845 92 937 Week endinjI— 1973—July 4............ 33,327 32,695 632 2,400 111 191 454 58 195 101 916 170 835 11............ 32,519 32,524 -5 1,679 117 -130 115 -51 28 -42 759 106 777 18 33,721 33,264 457 1,722 117 232 -2 13 6 851 109 858 25........... 33,813 33,800 13 2,080 128 -149 50 56 24 -35 841 29 1,165 1974—Jan. 2............ 35,656 35,268 388 1,210 31 80 140 -6 141 24 599 223 330 9............ 36,296 36,210 86 776 19 2 271 -47 44 -96 174 160 287 16 37,702 37,374 328 988 20 59 45 16 27 681 159 262 23............ 36,610 36,693 -83 1,182 13 -114 183 -12 -110 655 86 344 30............ 36,139 35,880 259 1,220 17 104 20 -57 15 733 130 467 Feb. 6 35,475 35,351 124 998 18 -123 14 34 494 132 504 13............ 35,348 35,054 294 1,153 15 144 92 -23 56 -34 585 140 420 20............ 35,388 35,274 114 1,376 20 -37 257 -63 -42 711 189 408 27 34,851 34,645 206 1,251 16 70 -17 13 -24 780 110 458 Mar. 6............ 34,633 34,515 118 912 19 -81 123 13 11 1 364 118 414 13............ 34,748 34,632 116 983 19 41 11 -8 66 -82 507 98 399 20............ 35,209 35,129 80 1,483 35 -41 333 -3 15 -36 679 93 456 27............ 34,774 34,605 169 1,713 43 10 31 40 21 -16 1,061 68 600 Apr. 3............ 35,443 35,217 226 1,503 44 77 34 -9 189 -27 710 127 570 10............ 35,002 34,940 62 1,194 41 -73 108 4 53 6 663 67 370 17............ 36,256 35,927 329 1,816 46 78 107 -19 101 37 1,093 175 515 24............ 36,055 35,916 139 1,939 52 -12 69 70 4 -12 1,233 35 633 May 1............ 36,845 36,668 177 2,157 74 62 176 -47 17 -34 1,140 138 824 8............ 36,336 36,201 135 1,616 82 -57 134 41 14 10 822 83 646 15............ 36,646 36,470 176 1,977 94 83 506 -39 37 -63 731 137 703 22............ 36,616 36,487 129 3,090 112 -55 993 57 7 -9 1,131 78 959 29........... 36,349 26,170 179 3,606 114 32 1,449 -17 9 -10 1,081 116 1,067 June 5............ 36,279 36,054 225 3,054 131 -37 1,210 2 15 61 846 141 983 12............ 35,789 35,658 131 2,729 136 26 1,296 21 40 -67 629 93 764 19............ 36,708 36,461 247 3,223 140 31 1,385 -17 139 44 984 131 715 26............ 36,536 36,437 99 2,788 133 -8 1,221 41 17 -76 690 84 860 July 3........... 37,274 36,905 369 3,435 127 9 1,412 111 137 72 878 177 1,008 10............ 36,868 36,590 278 2,640 136 90 1,339 1 52 84 432 103 817 17........... 37,824 37,840 -16 3,175 150 -75 1,536 26 15 -74 786 107 838 24?.......... 37,503 37,314 189 3,641 155 -29 1,538 10 79 -141 1,108 44 916 31?.......... 37,227 37,035 192 3,689 163 36 1,431 -15 36 -86 1,080 79 1,142 1 Beginning with week ending Nov. 15, 1972, includes $450 million of for July 1972, p. 626. Categories shown here as “Large” and “All other” reserve deficiencies on which F.R. Banks are allowed to waive penalties parallel the previous “Reserve city” and “Country” categories, respectively for a transition period in connection with bank adaptation to Regulation J (hence the series are continuous over time). as amended effective Nov. 9, 1972. Beginning 1973, allowable deficiencies included are (beginning with first statement week of quarter): Ql, $279 Note.—Monthly and weekly data are averages of daily figures within million; Q2, $172 million; Q3, $112 million; Q4 million. Beginning 1974 the month or week, respectively. Beginning with Jan. 1964 reserves are Ql, $67 million, Q2, $58 million, transition period ended after second estimated except for weekly averages. quarter, 1974. Borrowings at F.R. Banks: Based on closing figures. 2 Beginning Nov. 9, 1972, designation of banks as reserve city banks Effective Apr. 19, 1963, the Board’s Regulation A, which governs lend­ for reserve-requirement purposes has been based on size of bank (net ing by Federal Reserve Banks, was revised to assist smaller member banks demand deposits of more than $400 million), as described in the Bulletin to meet the seasonal borrowing needs of their communities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 a MAJOR RESERVE CITY BANKS A 7 BASIC RESERVE POSITION, AND FEDERAL FUNDS AND RELATED TRANSACTIONS (In millions of dollars, except as noted) Basic reserve position Interbank Federal funds transactions Related transactions with U.S. Govt, securities dealers Less— Net- Gross transactions Net transactions Reporting banks week a e n n d ding— s E e x r r v c e e e ­ s s s 1 r a o t B w F o in . r R ­ g . s F i b e n N d a t n e e er r t k a ­ l S d u e r o f p i r c lu it s r P e e q a r u o v c i g f r e . e n d t c P ha u s r e ­ s Sales t a w c t T r o t a i o - o n t w n a s l s a ­ y 2 b c o P u h f y a u n s i r n e e ­ s g t s o b S e a f a l n l l n i e k n e s g s t d L ea o t l o a e n r s s3 de f r B i r a o n o o l w g e m r s r ­ ­ s4 lo N a e n t s Banks funds reserves banks trans. Total—46 banks 1974—june 5............ 50 423 12,509 -12,882 78.3 18,938 6,428 5,482 13,455 946 2,220 798 1,422 12............ 31 228 15,187 -15,384 94.6 20,960 5,773 5,168 15,792 606 3,271 948 2,322 19............ 59 827 13,981 -14,749 SI,7 20,238 6,258 5,790 14,448 468 2,088 751 1,337 26............ 66 343 13,465 -13,741 82,9 19,669 6,205 5,344 14,326 861 1,806 1,579 227 July 3............ 65 817 12,007 -12,759 75.3 19,030 7,023 6,098 12,933 925 1,806 1,051 756 10............ 222 267 14,249 -14,293 85.5 20,324 6,075 5,646 14,678 429 1,788 1,091 698 17........... 120 327 13,591 -13,798 77.5 19,453 5,862 5,373 14,080 489 1,655 1,154 501 24............ 63 284 7,330 -7.551 50.7 14,823 7.493 4,719 10,104 2,773 1,309 483 826 31............ 100 411 11,757 -12,068 70.6 17,690 5^933 4,872 12,818 1,060 2,483 985 1,498 8 in New York City 1974—June 5............ -8 3,513 -3,521 52.9 5,231 1,718 1,296 3,935 422 1,137 402 734 12............ 8 43 5,017 -5,052 77.8 6,416 1,399 1,105 5,311 295 1,463 458 1,005 19............ 35 238 4,600 -4,803 69,8 6,215 1,615 1,521 4,694 95 1,017 458 559 26............ 32 31 4,395 -4,394 65,9 6,257 1,862 1,551 4,706 312 702 499 203 July 3............ 23 159 3,658 -3,794 55.0 5,335 1.677 1.347 3,988 331 810 390 420 10............ 114 14 4,215 -4,116 61.3 5,933 1,718 i;518 4,414 199 846 558 287 17............ 11 127 3,856 -3.972 53.7 5,568 1,712 1,556 4,013 157 590 515 75 24............ -20 29 2,326 -2,374 39.2 4,669 2,343 1,253 3,416 1,090 636 264 373 31............ 47 21 3,137 -3.111 44.2 4,963 1,826 1.380 3.584 446 1,200 603 597 38 outside New York City 1974—June 5............ 59 423 8,997 -9,361 95.6 13,707 4,710 4,187 9,520 523 1,083 395 688 12............ 23 185 10,170 -10,333 105.8 14,544 4,374 4,063 10,481 311 1,807 490 1,317 19............ 24 589 9,381 -9,946 100.1 14,023 4,642 4,269 9,754 373 1,071 294 778 26............ 34 311 9,070 -9,347 94.3 13,412 4,342 3,793 9,619 549 1,105 1,081 24 July 3............ 41 657 8,349 -8,966 89.3 13,695 5,346 4,751 8.944 595 997 661 336 10............ 109 252 10,034 -10,178 101.7 14,391 4,357 4,127 10,264 230 943 532 410 17............ 108 200 9,735 -9,826 94.3 13,885 4,150 3,818 10,067 333 1,065 639 426 24............ 83 255 5,004 -5,176 58.5 10,154 5,150 3,466 6,688 1,683 672 219 453 31............ 53 390 8,620 -8,957 89.0 12,727 4,107 3,493 9,234 614 1,283 382 901 5 in City of Chicago 1974—June 5............ 3 3,861 -3,859 212.3 4,927 1.066 1,005 3,923 61 357 357 12............ 12 29 4,267 -4,284 242.3 5,131 864 864 4,267 465 465 19............ -14 129 3,934 -4,076 223.1 4,886 952 946 3,939 6 364 364 26 .......... 21 3,815 -3,793 206.9 4,810 996 996 3,815 402 402 July 3............ 11 107 3,165 -3.261 172.3 3,934 769 762 3,172 7 287 287 10............ 6 21 3,552 - 3,568 193.0 4,407 854 855 3,552 312 312 17............ 13 3,670 -3,657 185.0 4,510 840 840 3,670 318 318 24............ 51 1.885 -1,835 113.1 2,984 1,099 982 2,002 117 435 17 418 31............ 12 3; 070 -3.058 165.3 3,889 819 777 3, 112 42 366 366 33 others 1974—June 5............ 56 423 5,135 -5,502 69.0 8,779 3,644 3,182 5,597 462 727 395 331 12............ 11 157 5,904 -6,049 75.6 9,414 3,510 3,200 6,214 311 1,343 490 852 19............ 38 460 5,448 -5,869 72.3 9,138 3,690 3,323 5,815 368 707 294 413 26............ 13 311 5,255 -5,554 68.7 8,602 3,347 2,798 5,805 549 702 1,081 -378 July 3............ 30 550 5.184 -5,704 70.0 9,761 4,577 3,989 5,772 588 710 661 49 10............ 103 231 6.482 -6.610 81.0 9,985 3,503 3,273 6,712 230 631 532 98 17............ 95 200 6.064 — 6.169 73.1 9,375 3,310 2,978 6,397 333 747 639 108 24........... 32 255 3,119 -3.341 46.3 7,170 4,051 2,484 4,686 1,567 231 202 35 31............ 41 390 5,550 -5.899 71.8 8,838 3.288 2,716 6.122 572 917 382 535 1 Based upon reserve balances, including all adjustments applicable to banks, repurchase agreements (purchases of securities from dealers the reporting period. Prior to Sept. 25,1968, carryover reserve deficiencies, subject to resale), or other lending arrangements. if any, were deducted. Excess reserves for later periods are net of all carry­ 4 Federal funds borrowed, net funds acquired from each dealer by over reserves. clearing banks, reverse repurchase agreements (sales of securities to 2 Derived from averages for individual banks for entire week. Figure dealers subject to repurchase), resale agreements, and borrowings secured for each bank indicates extent to which the bank’s weekly average pur­ by Govt, or other issues. chases and sales are offsetting. Note.—Weekly averages of daily figures. For description of series 3 Federal funds loaned, net funds supplied to each dealer by clearing and back data, see Aug. 1964 Bulletin, pp. 944-74. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 8 F.R. BANK INTEREST RATES □ AUGUST 1974 CURRENT RATES (Per cent per annum) Loans to member banks— Loans to all others under Under Secs. 13 and 13a 1 Under Sec. 10(b) 2 last par. Sec. 13 3 Federal Reserve Bank R Ju a 1 l t 9 y e 7 4 3 o 1 n , Ef d fe a c t t e ive Pre r v at i e ous R Ju a 1 l t y 9 e 7 3 4 o 1 n , Ef d fe a c t t e ive Pre ra v t i e ous J R u a 1 l 9 y te 7 3 4 o 1 n , Eff d e a c t t e ive Pre r v a i t o e us Boston........... Apr. 30, 1974 IVi 8% Apr. 30, 1974 10 Apr. 30, 1974 9% New York.... Apr. 25, 1974 m 8% Apr. 25, 1974 10 Apr. 25, 1974 91/2 Philadelphia.. Apr. 25, 1974 m 8% Apr. 25, 1974 10 Apr. 25, 1974 91/2 Cleveland Apr. 25, 1974 m 81/2 Apr. 25, 1974 10 Apr. 25, 1974 91/2 Richmond___ Apr. 25, 1974 m 8V4 Apr. 25, 1974 10 Apr. 25, 1974 91/2 Atlanta.......... Apr. 29, 1974 m 8V4 Apr. 29, 1974 10 Apr. 29, 1974 91/2 Chicago......... Apr. 26, 1974 71/2 8% Apr. 26, 1974 10 Apr. 26, 1974 91/2 St. Louis........ Apr. 26, 1974 71/2 8% Apr. 26, 1974 10 Apr. 26, 1974 91/2 Minneapolis.. Apr. 26, 1974 m SV2 Apr. 26, 1974 10 Apr. 26, 1974 9% Kansas City.. Apr. 25, 1974 m 8V2 Apr. 25, 1974 10 Apr. 25, 1974 9 Vt Dallas............ Apr. 25, 1974 m m Apr. 25, 1974 10 Apr. 25, 1974 9% San Francisco Apr. 25, 1974 71/2 8% Apr. 25, 1974 10 Apr. 25, 1974 91/2 1 Discounts of eligible paper and advances secured by such paper or by guaranteed as to principal and interest by, the U.S. Govt, or any U.S. Govt, obligations or any other obligations eligible for F.R. Bank agency thereof. Maximum maturity: 90 days. purchase. Maximum maturity: 90 days except that discounts of certain 4 Also effective on the same dates as the other rates shown above for bankers’ acceptances and of agricultural paper may have maturities not the eight Reserve Banks so designated, a rate of 8 per cent was approved over 6 months and 9 months, respectively. on advances to nonmember banks, to be applicable in special circumstances 2 Advances secured to the satisfaction of the F.R. Bank. Maximum resulting from implementation of changes in Regulation J, which became maturity: 4 months. effective on Nov. 9, 1972. See “Announcements” on p. 942 of the Oct. 3 Advances to individuals, partnerships, or corporations other than 1972 Bulletin and p. 994 of the Nov. 1972 Bulletin. member banks secured by direct obligations of, or obligations fully SUMMARY OF EARLIER CHANGES (Per cent per annum) Range F.R. Range F.R. Range F.R. Effective (or level)— Bank Effective (or level)- Bank Effective (or level)— Bank date All F.R. of date All F.R. of date All F.R. of Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1954........ IVi IVi 1959—Mar. 6. 21/2-3 3 1970—Dec. 1.................... 51/2-534 534 16. 3 3 4.................... 51/2-534 51/2 1955—Apr. 14.................... ll/2-13/4 1V2 May 29. 3 -31/2 31/2 11.................... 51/2 51/2 M S N e o a p v y t . . 1 2 1 1 1 2 5 9 5 2 3 3 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2 2 1 I l V 1 3 i / 4 / 4 2 I 2 4 2 V - 1 - 1 - - - - 2 2 2 2 / 2 4 4 1 2 1 V 1 i 3 % / / 4 4 4 4 2 2 2 2 2 2 2 1 l l 1 1 1 % 3 3 3 / / / / / 4 4 4 4 2 2 1960— J S S J A u u e e u n n p p g e e t t . . . 1 1 1 1 1 1 9 8 0 2 1 4 3 2 . . . . . . . . 3 3 3 3 1 1 1 / / / 4 3 3 3 2 2 2 1 1 - - - - / / 4 4 4 2 2 3 1 /2 4 4 4 3 3 3 3 3 1 1 1 / / /2 2 2 1971—J F J a u e n l b y . . 2 2 1 1 1 2 1 1 8 9 2 5 9 9 3 6 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 5 5 14 5 4 4 4 5 5 - 3 - - i 3 3 5 5 V 4 5 4 4 a 1 1 1 - - / 4 / 5 5 2 4 5 5 5 5 5 5 5 5 4 1 1 3 % / / 4 4 4 1956— A A u p g r. . 2 2 3 1 0 4 1 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2 2 1 3 3 / 4 4 3 2 - - - 3 3 3 2 2 3 3 3 3 / / 4 4 1 1 9 9 6 64 3 — —J N u o ly v . 2 2 3 1 4 6 0 7 . . . . 3 3 4 1 31 - /2 / 3 2 - i 4 /2 4 4 3 3 1 1 / / 2 2 D N e o c v . . 1 1 1 1 7 3 9 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 4 4 4 3 1 i 3 / 4 / 2 4 2 - - - 4 5 4 3 3 4 4 4 4 4 5 1 3 3 / 4 4 2 1965—Dec. 6. 4 -41/2 41/2 24................... 4i/2 41/2 195 7—Aug. 9.................... 3 -31/2 3 13. 41/2 41/2 1973—Jan. 15................... 5 5 1958— N D Ja e o n c v . . . 2 2 1 2 3 2 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3 3 3 3 4 1 - - 3 / 3 2 1/2 3 3 3 3 1/2 1967— N A o p v r. . 2 2 1 0 7 7 4 . , . . 4 4 4 41 - - / 4 4 2 1 i/ /2 2 4 4 4 4 1 1 / / 2 2 M A F M e p a a b r y r . . . 2 2 1 4 2 6 3 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 5 5 1 3 / 5 5 4 2 1 - - 3 - / / 5 6 4 5 2 % 34 5 6 5 5 5 V 1 1 3 / / / 2 4 4 2 M A S M A e p u a a p g r r y t . . . . 2 2 2 1 1 1 1 7 9 4 1 3 5 8 3 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2 2 l l 1 % 1 1 3 3 3 / / / 2 4 4 2 1 4 4 4 1 - - - % - - - / 2 2 3 3 2 2 4 1 3 / 4 4 2 2 2 2 2 2 l l 1 1 V 3 3 3 / 4 / / 4 4 4 4 a 1968—M A D A p e u a c r g r . . . . 2 2 2 1 3 1 1 1 2 6 6 0 5 9 0 8 , , , , , 4 5 5 5 1 1 1 / / / 5 5 5 5 4 4 2 1 1 1 - - - - 5 / / / 5 5 5 2 4 2 1 1 1 / / / 2 2 2 4 5 5 5 5 5 5 5 1 1 1 1 1 1 % / / / / / / 2 2 2 4 2 2 1974— J J A A u u u p n ly g r e . . 1 2 1 1 2 3 1 2 1 8 5 5 3 4 0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 7 7 1 / 6 6 7 7 2 1 1 - - 8 - / / I 8 2 2 6 V 1/2 2 6 6 7 m 6 7 8 8 1 1 1 / / /2 2 2 Oct. 24.................... 2 -iy2 2 1969—Apr. 4 51/2-6 6 Nov. 7.................... 21/2 21/2 8 6 6 In effect July 31, 1974. .. . 8 8 1970—Nov. 11 53/4-6 6 13 53/4-6 534 16 534 53/4 Note.—Rates under Secs. 13 and 13a (as described in table and notes above). For data before 1955, see Banking and Monetary Statistics, 1943, pp. 439-42, and Supplement to Section 12, p. 31. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ RESERVE REQUIREMENTS A 9 RESERVE REQUIREMENTS ON DEPOSITS OF MEMBER BANKS (Deposit intervals are in millions of dollars. Requirements are in per cent of deposits.) Time 3 Net demand 2 (all classes of Net demand 2 ,4 Time 3 banks) Effective Effective date 1 Reserve city Other Other time date Other time Sav­ 0-2 2-10 10-100100-400 Over Sav­ Over Over ings Over 400 5 ings Over 0-5 5 0-5 5 0-5 5 0-5 5 6 In effect 1972—Nov. 9.. 10 12 7 16% 17% «3 »3 85 Jan. 1,1963. 16J/2 12 Nov. 16. 13 1966—July 14, 21. 1973—July 19.. IOI/2 12% 13% 18 Sept. 8, 15. 1967—Mar. 2.... 31/2 31/2 In effect Mar. 16.... 3 3 July 31, 1974 10% 121/z 13% 18 1968—Jan. 11, 18. 161/z 17 12 121/2 1969—Apr. 17.... 17 171/2 12% 13 1970—Oct. 1........ Present legal limits: Minimum Maximum Net demand deposits, reserve city banks. 10 22 Net demand deposits, other banks........ 7 14 Time deposits........................................... 3 10 1 When two dates are shown, the first applies to the change at reserve office of such a bank constitutes designation of that place as a reserve city banks and the second to the change at country banks. For changes city. Cities in which there are F.R. Banks or branches are also prior to 1963 see Board’s Annual Reports. reserve cities. Any banks having net demand deposits of $400 million or 2 (a) Demand deposits subject to reserve requirements are gross de­ less are considered to have the character of business of banks outside of mand deposits minus cash items in process of collection and demand reserve cities and are permitted to maintain reserves at ratios set for banks balances due from domestic banks. not in reserve cities. For details, see Regulation D and appropriate sup­ (b) Requirement schedules are graduated, and each deposit interval plements and amendments. applies to that part of the deposits of each bank. 5 Reserve city banks. (c) Since Oct. 16, 1969, member banks have been required under 6 Except as noted below, effective Dec. 27, 1973, member banks are Regulation M to maintain reserves against foreign branch deposits subject to an 8 per cent marginal reserve requirement against increases computed on the basis of net balances due from domestic offices to their in the aggregate of (a) outstanding time deposits of $100,000 or more, foreign branches and against foreign branch loans to U.S. residents. (b) outstanding funds obtained by the bank through issuance by a bank’s Since June 21, 1973, loans aggregating $100,000 or less to any U.S. resident affiliate of obligations subject to the existing reserve requirements on time have been excluded from computations, as have total loans of a bank to deposits, and (c) funds from sales of finance bills. The 8 per cent require­ U.S. residents if not exceeding $1 million. Regulation D imposes a similar ment applies to balances above a specified base, but is not applicable to reserve requirement on borrowings from foreign banks by domestic offices banks that have obligations of these types aggregating less than $10 million. of a member bank. The reserve percentage applicable to each of these For the period June 21 through Aug. 29, 1973, (a) included only single­ classifications is 8 per cent. The requirement was 10 per cent originally, maturity time deposits. Previous requirements have been: 8 per cent for was increased to 20 per cent on Jan. 7,1971, and was reduced to the current (a) and (b) from June 21 through Oct. 3, 1973, and for (c) from July 12 8 per cent effective June 21, 1973. Initially certain base amounts were through Oct. 3, 1973; and 11 per cent from Oct. 4 through Dec. 26, 1973. exempted in the computation of the requirements, but effective Mar. 14, For details, see Regulation D and appropriate supplements and amend­ 1974, the last of these reserve-free bases were eliminated. For details, see ments. Regulations D and M. 7 The 16% per cent requirement applied for one week, only to former 3 Effective Jan. 5, 1967, time deposits such as Christmas and vacation reserve city banks. For other banks, the 13 per cent requirement was club accounts became subject to same requirements as savings deposits. continued in this deposit interval. For other notes see 2(b) and 2(c) above. 8 See preceding columns for earliest effective date of this rate. 4 Effective Nov. 9, 1972, a new criterion was adopted to designate re­ serve cities, and on the same date requirements for reserves against net demand deposits of member banks were restructured to provide that each Note.—All required reserves were held on deposit with F.R. Banks member bank will maintain reserves related to the size of its net demand June 21, 1917, until Dec. 1959. From Dec. 1959 to Nov. 1960, member deposits. The new reserve city designations are as follows: A bank having banks were allowed to count part of their currency and coin as reserves; net demand deposits of more than $400 million is considered to have the effective Nov. 24, 1960, they were allowed to count all as reserves. For character of business of a reserve city bank, and the presence of the head further details, see Board’s Annual Reports. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 10 MAXIMUM INTEREST RATES; MARGIN REQUIREMENTS □ AUGUST 1974 MAXIMUM INTEREST RATES PAYABLE ON TIME AND SAVINGS DEPOSITS (Per cent per annum) Rates July 20, 1966—June 30, 1973 Rates beginning July 1, 1973 Effective date Effective date Type of deposit Type of deposit July 20, Sept. 26, Apr. 19, Jan. 21, July 1, Nov. 1, 1966 1966 1968 1970 1973 1973 Savings deposits............. Savings deposits............................................ Other time deposits: i Other time deposits (multiple- and single­ Multiple maturity:2 maturity) : 30-89 days.......... 4 4i/2 Less than $100,000: 90 days to 1 year. 5 30-89 days......................................... 5 5 1 year to 2 years. , 5 51/2 90 days to 1 year............................... 2 years or more.. 5V4 1 year to 2% years............................ 2* 2* Single-maturity: 2i/i years or more.............................. 61/2 6% Less than $100,000: 4 years or more in minimum denom­ 30 days to 1 year. 5 ination of $1,000....................... (4) m 1 year to 2 years. , 5% 5% $100,000 or more...................................... (3) (3) 2 years and over. . 5% $100,000 or more: 30-59 days.......... 5% (3) 60-89 days.......... sy4 (3) 90-179 days........ 5% 6 (3) 180 days to 1 year (3) 1 year or more... \Wa (3) 1 For exceptions with respect to certain foreign time deposits, see certificates with minimum denomination of $1,000. The amount of such Bulletin for Feb. 1968, p. 167. certificates that a bank could issue was limited to 5 per cent of its total 2 Multiple-maturity time deposits include deposits that are automati­ time and savings deposits. Sales in excess of that amount were subject to cally renewable at maturity without action by the depositor and deposits the 6% per cent ceiling that applies to time deposits maturing in 2% years that are payable after written notice of withdrawal. or more. 3 Maximum rates on all single-maturity time deposits in denominations Effective Nov. 1, 1973, a ceiling rate of ll/4 per cent was imposed on of $100,000 or more have been suspended. Rates that were effective certificates maturing in 4 years or more with minimum denomination Jan. 21, 1970, and the dates when they were suspended are: of $1,000. There is no limitation on the amount of these certificates that banks may issue. 30-59 days 6V4 per cent) June 24, 1970 60-89 days 6% per cent f Note.—Maximum rates that may be paid by member banks are estab­ 90-179 days 6Y4 per cent] lished by the Board of Governors under provisions of Regulation Q; 180 days to 1 year 7 per cent > May 16, 1973 however, a member bank may not pay a rate in excess of the maximum 1 year or more 7Vi per cent] rate payable by State banks or trust companies on like deposits under the laws of the State in which the member bank is located. Beginning Rates on multiple-maturity time deposits in demonination of $100,000 Feb. 1, 1936, maximum rates that may be paid by nonmember insured or more were suspended July 16, 1973. when the distinction between commercial banks, as established by the FDIC, have been the same as single- and multiple-maturity deposits was eliminated. those in effect for member banks. 4 Between July 1 and Oct. 31, 1973, there was no ceiling for 4-year For previous changes, see earlier issues of the Bulletin. MARGIN REQUIREMENTS (Per cent of market value) Period For credit extended under Regulations T (brokers and dealers), U (banks), and G (others than brokers, dealers, or banks) On margin stocks On convertible bonds Beginning Ending On short sales date date (T) 1937—Nov. 1 1945—Feb. 4, 40 50 1945—Feb. 5 July 4. 50 50 July 5 1946—Jan. 20. 75 75 1946—Jan. 21 1947—Jan. 31 . 100 100 1947—Feb. 1 1949—Mar. 29. 75 75 1949—Mar. 30 1951—Jan. 16. 50 50 1951—Jan. 17 1953—Feb. 19. 75 75 1953—Feb. 20 1955—Jan. 3. 50 50 1955—Jan. 4 Apr. 22 60 60 Apr. 23 1958—Jan. 15, 70 70 1958—Jan. 16 Aug. 4. 50 50 Aug. 5 Oct. 15. 70 70 Oct. 16 1960—July 27. 90 90 1960—July 28 1962—July 9. 70 70 1962—July 10 1963—Nov. 5. 50 50 1963—Nov. 6 1968—Mar. 10 70 70 1968—Mar. 11 June 7 70 50 70 June 8 1970—May 5 , 80 60 80 1970—May 6 1971—Dec. 65 50 65 1971—Dec. 6 1972—Nov. 22 55 50 55 1972—Nov. 24 1974—Jan. 65 50 65 Effective Jan. 3, 1974 50 50 50 Note.—Regulations G, T, and U, prescribed in accordance with the Securities Exchange Act of 1934, limit the amount of credit to purchase and carry margin stocks that may be extended on securities as collateral by prescribing a maximum loan value, which is a specified percentage of the market value of the collateral at the time the credit is extended; margin requirements are the difference between the market value (100 per cent) and the maximum loan value. The term margin stocks is defined in the corresponding regulation. Regulation G and special margin requirements for bonds convertible into stocks were adopted by the Board of Governors effective Mar. 11,1968. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ OPEN MARKET ACCOUNT A 11 TRANSACTIONS OF THE SYSTEM OPEN MARKET ACCOUNT (In millions of dollars) Outright transactions in U.S. Govt, securities, by maturity (excluding matched sale-purchase transactions) Treasury bills 1 Others within 1 year 2 1-5 years 5-10 years Over 10 years Period Exch., Gross Gross Redemp­ Gross Gross maturity Gross Gross Exch. or Gross Gross Exch. or Gross Gross Exch. or pur­ sales tions pur­ sales shifts, or pur­ sales maturity pur­ sales maturity pur­ sales maturity chases chases redemp­ chases shifts chases shifts chases shifts tions 1970, 11,074 5,214 2,160 99 -3,483 848 5,430 249 -1,845 93 -102 1971, 8,896 3,642 1,064 1,036 -6,462 1,338 4,672 933 685 311 150 1972, 8,522 6,467 2,545 125 2,933 789 -1,405 539 -2,094 167 250 1973 15,517 4,880 3,405 1,396 -140 579 -2,028 500 895 129 87 1973—June.. 1,047 218 163 17 123 37 78 51 -78 July.. 1,640 495 60 27 Aug.. 655 945 456 351 4,361 -4,812 ‘ioo Sept.. 480 401 564 836 -813 -23 Oct... 2,117 153 Nov.. 583 489 1,101 1,515 125 680 331 -2,220 35 25 Dec.. 1,919 70 10 34 116 -34 35 1974—Jan... 1,340 335 1,402 93 77 Feb.. 768 391 410 687 30 -922 200 35 Mar.. 664 566 165 109 56 25 Apr.. 1,237 49 407 172 May. 737 100 112 2,563 26 — 2 * 663 ioo June. 614 954 204 48 34 Matched Repurchase Federal agency obligations Bankers Total outright 1 sale-purchase agreements Net acceptances, transactions (U.S. Govt, change net (Treasury bills) securities) in U.S. Outright Repur­ Period Govt, chase Net securi­ agree­ change 3 Gross Gross Gross ties Gross Sales or ments, Repur­ pur­ Gross Redemp­ Gross pur­ pur­ Gross pur­ redemp­ net Out­ chase chases sales tions sales chases chases sales chases tions right agree­ ments 1970 12,362 5,214 2,160 12,177 12,177 33,859 33,859 4,988 -6 4,982 1971 12,515 3,642 2,019 16,205 16,205 44,741 43,519 8.076 485 101 22 181 8,866 1972 10,142 6,467 2,862 23,319 23,319 31,103 32,228 -312 1,197 370 -88 -9 -145 272 1973 18,121 4,880 4,592 45,780 45,780 74,755 74,795 8,610 865 239 29 -2 -36 9,227 1973--June. 1,274 218 163 4,630 4,630 5,621 5,621 893 229 19 -17 1,085 July.. 1,666 495 60 3,405 3,405 7,651 6,686 2.076 174 6 106 -12 2,416 Aug.. 1,006 945 807 9,632 9,632 2,234 2,492 -1,005 20 157 -7 -915 Sept.. 1,316 401 1,400 6,981 6,981 3,309 2,752 72 30 -95 -9 7 Oct.. 2,117 153 4,735 4,735 8,220 7,859 2,325 176 4 -20 8 2,440 Nov.. 1,116 489 1,101 2,089 2,089 6,637 7,525 -1,360 74 3 20 -2 -1,307 Dec.. 2,145 70 10 3,435 3,435 9,523 10,202 1.387 212 84 -126 23 1,386 1974—Jan.. 1,519 335 1,402 2,590 2,590 4,442 4,500 -276 29 39 -42 -328 Feb.., 798 391 410 2,393 2,393 4,265 4,265 -3 120 46 72 Mar.. 854 566 165 702 702 6,248 5,124 1,247 170 48 185 223 1,780 Apr.. 1,409 49 407 8,069 8,498 524 360 48 33 —89 789 May. 944 100 4,586 4,586 9,192 8,648 1.388 201 15 424 16 142 2,155 June. 790 954 204 4,580 4.580 6,124 6,667 -911 309 72 -372 -70 -1,115 1 Before Nov. 1973 Bulletin, included matched sale-purchase trans­ 3 Net change in U.S. Govt, securities, Federal agency obligations, and actions, which are now shown separately. bankers’ acceptances. 2 Includes special certificates acquired when the Treasury borrows Note.—Sales, redemptions, and negative figures reduce System hold­ directly from the Federal Reserve, as follows: June 1971, 955; Sept. 1972, ings; all other figures increase such holdings. 38; Aug. 1973, 351; Sept. 1973, 836. CONVERTIBLE FOREIGN CURRENCIES HELD BY FEDERAL RESERVE BANKS (In millions of U.S. dollar equivalent) E pe n r d i o o d f Total P st o e u rl n in d g s s A ch u i s l t l r i i n a g n s B fr e a lg n i c a s n C d a o n l a la d r i s an D kr a o n n is e h r F fr r a e n n c c s h G m e a rm rk a s n Ita li l r i e an Jap y a e n n ese g N u l e a il n t d h d e e s r r s ­ f S r w an is c s s 1970—Dec............. 257 154 * * 98 1 ♦ 4 1971—Dec............. 18 3 3 * 2 1 8 1972—Dec............. 192 * * * 164 1 20 6 I973—Apr............. 4 * * * * 1 3 May............ 4 * * * * 1 3 June............ 4 * * * * 1 3 July............. 4 * * * * 1 3 Aug............. 5 ♦ * * 1 3 Sept............. 4 * * * * 1 3 Oct.............. 4 * * * 1 3 Nov............. 4 * * * 1 3 Dec............. 4 * * * 1 3 1974—jan.............. 1 * * * 1 Feb.............. 32 * 20 * 10 1 Mar.. ... 6 * 5 * * 1 Apr............. 6 * 5 * * 1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 12 FEDERAL RESERVE BANKS a AUGUST 1974 CONSOLIDATED STATEMENT OF CONDITION OF ALL FEDERAL RESERVE BANKS (In millions of dollars) Wednesday End of month Item 1974 1974 1973 July 31 July 24 July 17 July 10 July 3 July 31 June 30 July 31 Assets Gold certificate account................................. 11.460 11,460 11,460 11,460 11,460 11,460 11,460 10,303 Special Drawing Rights certificate account. 400 400 400 400 400 400 400 400 Cash..................................................... 201 198 197 196 205 201 218 307 Loans: Member bank borrowings.............. 3,588 5,638 4,048 2,271 3,002 3,588 3,210 2,225 Other................................................ Acceptances: Bought outright............................... 218 200 128 114 99 218 97 54 Held under repurchase agreements. 265 219 275 284 207 78 Federal agency obligations: Bought outright................................ 3,585 3,587 3,442 3.151 2,853 3,585 2,858 1,617 Held under repurchase agreements. 328 432 678 633 270 106 U.S. Govt, securities: Bought outright: Bills........................... 35,464 38,068 37,694 37,421 37,378 35,464 37,274 35,331 Certificates—Special. Other.. Notes......................... 39,781 39.781 39,781 39,692 39 692 39,781 39.692 37,138 Bonds....................... 2,858 2,858 2,858 2,822 2,822 2,858 2,822 3,664 Total bought outright..................... 1,278,103 i 80,707 i 80,333 i 79,935 i 79,892 1,2 78,103 i 79,788 i 76,133 Held under repurchase agreements. 607 622 746 649 696 965 Total U.S. Govt, securities. 78,103 81,314 80,955 80,681 80,541 78,103 80,484 77,098 Total loans and securities................... 85,494 91.332 89,224 87,170 87,412 85,494 87,126 81,178 Cash items in process of collection... p 7.874 " 7,623 10.333 9,197 9,296 " 7,874 7,702 8,328 Bank premises..................................... 243 242 240 241 240 243 239 207 Other assets: Denominated in foreign currencies. 55 63 66 83 90 4 All other........................................... 1,433 1,122 1,066 1,036 943 1.433 935 1,096 Total assets. p 107,113 p 112,432 112,983 109,766 110,039 p 107,113 108,170 101,823 Liabilities F.R. notes........................................... 65.771 65,860 66,317 66,623 66,238 65.771 65,295 60,200 Deposits: Member bank reserves.................. p 27,283 33,756 32,465 30,894 30,706 p 27.283 30,086 28,495 U.S. Treasury—General account. 3,822 3,001 2,714 2,447 2,590 3.822 2,919 2,866 Foreign........................................... 330 254 257 241 269 330 384 280 Other: All other3................................... 1,169 732 764 637 1.169 762 820 Total deposits. 32,604 >> 37,743 p 32,604 34,151 32,461 Deferred availability cash items........... 5.335 5,479 7,263 5,653 6,628 5.335 5,405 6,157 Other liabilities and accrued dividends. 1.155 1,205 1,137 1,222 1,156 1,155 1,101 968 Total liabilities....................................... 104.865 p 110,287 110,950 107,844 108,224 p 104.865 105,952 99,786 Capital accounts Capital paid in.............................................................. 880 880 879 879 879 880 878 824 Surplus.......................................................................... 844 844 844 844 844 844 844 793 Other capital accounts................................................. 524 421 310 199 92 524 496 420 Total liabilities and capital accounts.......................... p 107,113 p 112,432 112,983 109,766 110,039 p 107,113 108,170 101,823 Contingent liability on acceptances purchased for foreign correspondents............................................. 1,023 975 918 866 835 1,023 795 496 Marketable U.S. Govt, securities held in custody for foreign and international accounts....................... 30,090 29,930 29,921 29,789 29,497 30.090 29,637 29,026 Federal Reserve Notes—Federal Reserve Agents’ Accounts 70,346 70,372 70,281 70,060 69,737 70.346 69,490 64,257 Collateral held against notes outstanding: 2,225 2,225 2,225 2,175 2,175 2.225 2,175 2,295 U.S. Govt, securities.................................................. 69,600 69,600 69,300 69,075 68,570 69,600 68,295 63,375 71,825 71,825 71,525 71,250 70,745 71,825 70,470 65,670 1 See note 8 on p. A-5. 2 See note 9 on p. A-5. 3 See note 5 on p. A-4. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ FEDERAL RESERVE BANKS; BANK DEBITS A 13 MATURITY DISTRIBUTION OF LOANS AND U.S. GOVERNMENT SECURITIES HELD BY FEDERAL RESERVE BANKS (In millions of dollars) Wednesday End of month Item 1974 1974 1973 July 31 July 24 July 17 July 10 July 3 July 31 June 30 July 31 3.588 5.638 4.050 2.270 3,001 3.588 3,209 2,224 3,476 5.571 3.959 2.174 2,919 3,476 3, 157 2,160 16 days to 90 days...................................................... 112 67 91 96 82 112 52 64 Acceptances—T otal........................................................ 218 465 347 389 383 218 304 132 Within 15 days............................................................ 31 288 239 300 308 31 225 94 16 days to 90 days...................................................... 187 177 108 89 75 187 79 38 U s Government securities—Total.............................. 78.103 81,314 80.955 80.681 80,541 78.103 80,484 77,098 Within 15 days1.......................................................... 9.127 6,482 6.100 5,SOI 5,602 9; 127 4,802 4,874 16 days to 90 days...................................................... 17,770 24,083 23,528 23.703 23,849 17,770 25,150 19,291 91 days to 1 year........................................................ 21.273 20.816 21,395 21,342 21,255 21.273 20,697 14,991 Over 1 year to 5 years................................................ 19,967 19.967 19.967 19.914 19,914 19.967 19,914 26,982 Over 5 years to 10 years............................................. 7,954 7.954 7*953 7.945 7.945 7.954 7,945 9.358 Over 10 years.............................................................. 2,012 2.012 2,012 1,976 1,976 2.012 1,976 1,602 Federal agency obligations—Total............................... 3.585 3.915 3.874 3,829 3,486 3.585 3.128 1,723 Within 15 days1.......................................................... 3 330 461 705 633 3 275 108 16 days to 90 days...................................................... 85 85 68 36 63 85 57 52 91 days to 1 year........................................................ 449 449 466 460 403 449 397 373 Over 1 year to 5 years................................................ 1 .719 1 .719 1.631 1.445 1,262 1.719 1,274 630 Over 5 years to 10 years............................................ 865 S65 835 789 754 865 754 308 Over 10 years.............................................................. 464 467 413 394 371 464 371 252 1 Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements. BANK DEBITS AND DEPOSIT TURNOVER (Seasonally adjusted annual rates) Debits to demand deposit accounts1 Turnover of demand deposits (billions of dollars) Period S T M 2 o 3 S t 3 a A l ’s N Le .Y ad . ing S 6 M o S t A he ’s rs2 T S o N M ( t e a . x S Y l c A l 2 . . ) 3 ’s 2 SM o 2 th 2 S 6 e A r ’s SM T 2 o 3 S t 3 a A l ’s L N e .Y ad . ing S 6 M o S t A he ’s rs2 T S o N M ( t e a . x S Y l c A l . 2 . ) 3 ’s 2 S o M 2 th 2 S 6 e A r ’s 1973—June............................. 16,638.8 7,224.6 4,050.2 9,414.3 5,364.1 99.9 245.0 107.6 68.7 54.0 July.............................. 17,224.5 7,381.4 4,282.4 9,843.1 5,560.8 102.6 247.5 111.7 71.3 55.8 Aug.............................. 17,888.9 7,744.6 4,318.2 10,144.3 5,826.0 106.2 252.5 113.6 73.6 58.4 Sept.............................. 17,918.7 8,025.3 4,195.7 9,893.3 5,697.6 107.4 266.4 111.6 72.4 57.5 Oct................................ 18,394.4 8,137.2 4,418.0 10,257.2 5,839.1 109.5 265.3 116.4 74.7 58.8 Nov.............................. 19,049.5 8,437.9 4,519.8 10,611.6 6,091.7 113.2 274.9 118.6 77.1 61.2 Dec............................... 18,641.3 8,097.7 4,462.8 10,543.6 6,080.8 110.2 269.8 115.0 75.8 60.6 1974—Jan................................ 18,815,7 8,081.0 4,517.1 10,734.8 6,217.6 111.5 270.3 116.2 77.3 62.2 Feb............................... 19,813.6 8,896.2 4,582.1 10,917.4 6,335.3 118.0 294.2 119.9 79.3 63.7 Mar.............................. 20,166.8 8,914.4 4,718.0 11,252.5 6,534.5 118.2 292.5 120.8 80.3 64.7 Apr............................... 20,062.1 8.637.9 4,747.6 11,424.2 6,676.6 115.4 274.6 119.7 80.2 65.0 May............................. r20,558.8 8,970.1 '4.820.8 Ml,588.7 r6,767.9 r117.0 275.3 '122.3 r81.0 65.3 June............................. 20,439.2 9,065.7 4.754.6 11,373.5 6,618.8 116.8 279.9 119.8 79.7 64.3 1 Excludes interbank and U.S. Govt, demand deposit accounts. Note.—Total SMSA’s includes some cities and counties not designated 2 Boston, Philadelphia, Chicago, Detroit, San Francisco-Oakland, and as SMSA’s. Los Angeles-Long Beach. For back data see pp. 634-35 of July 1972 Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 14 MONEY STOCK □ AUGUST 1974 MEASURES OF THE MONEY STOCK (In billions of dollars) Seasonally adjusted Not seasonally adjusted Month or week Mi A/o Mz Mi M^ Mi Composition of measures is described in the Note below. 1971—De c 235.2 473.0 727.9 241.9 477.9 730.9 1972—De c 255.7 525.5 822.8 263.0 530.6 826.2 1973—Jul y 266.4 552.1 867.1 265.7 551.1 867.6 Aug........ 266.3 555.1 870.7 263.0 551.3 866.6 Sept........ 265.5 556.8 873.5 264.0 554.4 870.0 Oct......... 266.6 561.9 880.3 266.1 560.1 877.2 Nov........ 269.2 567.3 887.7 270.9 565.7 884.0 Dec......... 271.4 572.1 894.8 279.1 577.2 898.4 1974—Ja............n 270.8 575.4 900.4 278.1 581.4 905.9 Feb......... 273.7 581.9 909.0 270.8 579.3 906.3 Mar........ 276.2 586.2 915.8 273.5 585.7 916.5 Apr......... 278.1 590.2 921.5 279.6 594.6 927.7 May....... 279.2 592.8 924.9 274.5 590.9 923.9 June.... 281.0 597.6 930.6 278.9 597.1 932.0 July®___ 281.2 600.2 934.0 280.4 599.1 934.8 Week ending— 1974—July 3. 282.1 599.2 281.7 599.8 10. 280.6 598.9 282.2 600.4 17. 282.2 600.5 282.7 600.5 24® 280.2 599.4 277.8 596.2 31® 280.5 601.4 277.6 597.9 Note.—Composition of the money stock measures is as follows: posits open account, and time certificates other than negotiable CD’s of $100,000 of large weekly reporting banks. Mi: Averages of daily figures for (1) demand deposits of commercial M3: M2 plus the average of the beginning- and end-of-month figures banks other than domestic interbank and U.S. Govt., less cash items in for deposits of mutual savings banks and for savings capital of savings process of collection and F.R. float; (2) foreign demand balances at F.R. and loan associations. Banks; and (3) currency outside the Treasury, F.R. Banks, and vaults of For description and back data, see “Revision of the Money Stock Meas­ commercial banks. ures and Member Bank Deposits” on pp. 81-95 of the Feb. 1974 Bulletin M2: Averages of daily figures for Mi plus savings deposits, time de­ and “Announcements” on p. 470 of the June 1974 Bulletin. COMPONENTS OF MONEY STOCK MEASURES AND RELATED ITEMS (In billions of dollars) Seasonally adjusted Not seasonally adjusted Commercial banks Commercial banks U.S. Time and savings Non­ Time and savings Non­ Govt. deposits bank Demand deposits deposits bank de­ Cur­ De­ thrift Cur­ thrift pos­ ren­ mand insti­ ren­ insti­ its3 cy de­ tu­ cy Do- tu­ pos­ tions2 mes- tions2 its CD’s1 Other Total Total Mem­ tic- CD's1 Other Total ber nonmember 1971—De c 52.6 182.6 33.0 237.9 270.9 254.8 53.5 188.4 142.6 44.1 33.8 236.0 269.8 253.0 6.9 1972—De c 56.9 198.7 43.4 269.9 313.3 297.2 57.9 205.1 152.4 51.4 44.3 267.6 311.8 295.6 7.4 1973—Jul y 59.5 206.9 63.9 285.7 349.6 315.0 60.0 205.7 149.7 53.2 62.3 285.4 347.8 316.5 6.5 Aug......... 59.8 206.4 66.3 288.8 355.1 315.6 60.0 202.9 147.8 52.7 68.4 288.3 356.7 315.3 4.1 Sept......... 60.2 205.3 66.7 291.4 358.0 316.7 60.1 203.8 148.2 53.3 68.8 290.5 359.3 315.6 5.3 Oct.......... 60.5 206.1 63.8 295.3 359.1 318.5 60.4 205.7 149.7 53.8 66.3 294.0 360.3 317.0 6.0 Nov......... 61.0 208.2 62.0 298.1 360.1 320.4 61.5 209.5 151.8 55.1 64.1 294.8 359.0 318.3 4.3 Dec.......... 61.7 209.7 62.8 300.6 363.5 322.7 62.7 216.4 157.0 56.6 64.1 298.1 362.2 321.2 6.3 1974—Ja.............n 61.9 208.9 65.5 304.6 370.1 325.0 61.6 216.5 156.4 57.1 66.1 303.4 369.4 324.5 8.0 Feb.......... 62.7 211.1 66.6 308.2 374.8 327.1 61.9 209.0 151.2 55.2 65.9 308.5 374.4 326.9 6.6 Mar......... 63.4 212.9 67.7 310.0 377.7 329.6 62.7 210.8 152.5 55.5 67.0 312.2 379.2 330.8 6.3 Apr.......... 64.0 214.1 75.4 312.1 387.4 331.4 63.6 216.1 156.0 57.3 72.4 314.9 387.3 333.2 6.0 May........ 64.5 214.8 81.2 313.6 394.7 332.1 64.2 210.2 151.5 56.0 77.8 316.4 394.2 333.0 7.5 June........ 64.8 216.1 83.3 316.6 400.0 333.0 64.9 214.0 153.7 57.4 79.7 318.2 397.9 334.9 6.0 July®.... 65.0 216.3 85.3 319.0 404.3 333.9 65.5 214.9 154.4 57.8 83.3 318.6 401.9 335.8 5.4 Week ending— 1974-July 3.. 64.9 217.2 85.0 317.1 402.2 65.3 216.4 155.8 57.8 80.8 318.1 399.0 8.6 10.. 65.1 215.4 84.7 318.3 403.0 66.2 215.9 154.6 58.6 81.1 318.3 399.4 6.8 17.. 64.9 217.3 85.4 318.3 403.7 65.7 217.0 155.6 58.6 83.0 317.8 400.8 4.2 24®. 64.9 215.3 85.9 319.2 405.1 65.2 212.6 152.8 57.0 84.8 318.4 403.2 4.8 31®. 64.8 215.7 85.4 320.9 406.3 64.8 212.8 153.4 56.6 85.3 320.3 405.6 4.3 1 Negotiable time certificates of deposit issued in denominations of 3 At all commercial banks. $100,000 or more by large weekly reporting commercial banks. 2 Average of the beginning and end-of-month figures for deposits of See also Note above, mutual savings banks and savings capital at savings and loan associations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ BANK RESERVES; BANK CREDIT A 15 AGGREGATE RESERVES AND MEMBER BANK DEPOSITS (In billions of dollars) Member bank reserves,S.A.1 Deposits subject to reserve requirements3 Total member bank deposits plus nondeposit S.A. N.S.A. items'* Period Non­ Total bor­ Re­ Avail- Demand Demand rowed quired able2 Time Time Total and U.S. Total and U.S. S.A. N.S.A. savings Private Govt. savings Private Govt. 1970—Dec.. .. 29.19 28.86 28.95 27.10 321.3 178.8 136.1 6.5 325.2 178.1 141.1 6.0 332.9 336.8 1971—Dec.. .. 31.30 31.17 31.12 28.96 360.3 210.4 143.8 6.1 364.6 209.7 149.2 5.7 364.3 368.7 1972—Dec.. .. 31.41 30.36 31.13 29.05 402.0 241.4 154.5 6.1 406.8 240.7 160.1 6.1 406.4 411.2 1973—July.... 33.58 31.62 33.29 31.36 431.1 270.1 157.1 3.9 429.9 268.5 156.2 5.1 437.6 436.4 Aug.. .. 33.91 31.74 33.73 32.04 436.7 275.0 157.0 4.8 433.7 276.6 154.0 3.1 443.8 440.8 Sept___ 34.17 32.32 33.95 32.39 438.6 277.5 156.2 5.0 437.7 279.0 154.7 4.1 445.9 445.0 Oct....... 34.94 33.47 34.72 32.84 439.7 277.3 156.4 6.0 439.7 278.8 156.1 4.8 446.5 446.5 Nov.... 34.86 33.46 34.62 32.71 440.4 277.1 157.5 5.8 438.2 276.6 158.3 3.2 447.5 445.3 Dec.. . . 35.10 33.81 34.80 32.91 442.2 279.0 158.3 4.9 447.5 278.5 164.0 5.0 449.6 454.9 1974—Jan....... 35.85 34.80 35.69 32.80 446.8 283.2 157.4 6.2 453.0 283.1 163.4 6.5 454.3 460.5 Feb....... 35.11 33.92 34.92 32.79 447.1 286.1 157.9 3.0 447.1 285.7 156.3 5.1 454.8 454.8 Mar___ 34.95 33.63 34.81 33.12 450.4 287.9 158.8 3.7 450.4 288.6 156.9 4.9 459.1 459.1 Apr.. .. 35.90 34.17 35.72 33.66 461.6 297.1 160.0 4.5 462.5 296.2 161.5 4.8 471.2 472.1 May. .. 36.52 33.93 36.35 34.27 467.0 304.2 159.1 3.8 464.7 303.0 155.6 6.1 477.8 475.4 June__ 36.73 33.73 36.53 34.80 472.9 308.6 160.6 3.7 470.0 306.4 158.9 4.7 483.1 480.3 July25... 37.45 34.15 37.26 35.07 475.7 312.2 160.9 2.6 474.3 310.1 160.0 4.2 486.9 485.5 1 Averages of daily figures. Member bank reserve series reflects actual except those due to the U.S. Govt., less cash items in process of collection reserve requirement percentages with no adjustment to eliminate the and demand balances due from domestic commercial banks. effect of changes in Regulations D and M. Required reserves were in­ 4 Total member bank deposits subject to reserve requirements, plus creased by $660 million effective Apr. 16, 1969, and $400 million effective Euro-dollar borrowings, bank-related commercial paper, and certain Oct. 16, 1969; were reduced by $500 million (net) effective Oct. 1, 1970. other nondeposit items. This series for deposits is referred to as “the ad­ Required reserves were reduced by approximately $2.5 billion, effective justed bank credit proxy.” Nov. 9, 1972; by $1.0 billion, effective Nov. 15; and increased by $300 million effective Nov. 22. Note.—For description of revised series and for back data, see article 2 Reserves available to support private nonbank deposits are defined “Revision of the Money Stock Measures and Member Bank Reserves and as (1) required reserves for (a) private demand deposits, (b) total time Deposits” on pp. 61-79 of the Feb. 1973 Bulletin. and savings deposits, and (c) nondeposit sources subject to reserve re­ Due to changes in Regulations M and D, member bank reserves include quirements, and (2) excess reserves. This series excludes required reserves reserves held against nondeposit funds beginning Oct. 16, 1969. Back data for net interbank and U.S. Govt, demand deposits. may be obtained from the Banking Section, Division of Research and 3 Averages of daily figures. Deposits subject to reserve requirements Statistics, Board of Governors of the Federal Reserve System, Washington, include total time and savings deposits and net demand deposits as defined D.C. 20551. by Regulation D. Private demand deposits include all demand deposits LOANS AND INVESTMENTS AT ALL COMMERCIAL BANKS (In billions of dollars) Seasonally adjusted Not seasonally adjusted Loans Securities Loans Securities Total Total Date loans Commercial loans Commercial and and industrial3 and and industrial3 invest­ Plus U.S. invest­ Plus U.S. ments1 Total 1 loans Plus Treas­ Other4 ments i Total i loans Plus Treas­ Other4 sold 2 Total loans ury sold 2 Total loans ury sold 2 sold 2 1970—Dec. 31___ 435.5 291.7 294.7 110.0 112.1 57.9 85.9 446.8 299.0 301.9 112.5 114.6 61.7 86.1 1971—Dec. 31___ 484.8 320.3 323.1 115.9 117.5 60.1 104.4 497.9 328.3 331.1 118.5 120.2 64.9 104.7 1972—Dec. 31___ 556.4 377.8 380.4 129.7 131.4 61.9 116.7 571.4 387.3 389.9 132.7 134.4 67.0 117.1 1973—July 25___ 608.8 427.5 431.5 151.2 153.7 59.8 121.5 607.4 429.3 433.3 151.6 154.1 56.5 121.7 Aug. 29___ 617.4 435.9 440.6 153.4 156.3 57.9 123.6 613.4 435.2 439.9 152.0 154.9 54.9 123.3 Sept. 26___ 620.2 439.1 443.7 153.7 156.6 56.4 124.7 619.9 440.1 444.7 153.8 156.7 55.1 124.8 Oct. 31___ 624.2 441.1 445.7 153.6 156.5 55.1 128.0 624.0 440.9 445.6 152.9 155.8 56.0 127.0 Nov. 28___ 628.4 445.5 449.8 155.0 157.7 55.0 127.9 628.2 443.9 448.3 154.1 156.8 57.8 126.5 Dec. 31___ 630.3 447.3 451.6 155.8 158.4 52.8 130.2 647.3 458.5 462.8 159.4 162.0 58.3 130.6 1974—Jan. 30p.. . 638.0 452.3 456.7 157.8 160.4 54.4 131.3 637.6 448.3 452.7 156.1 158.7 58.7 130.6 Feb. 27*. . . 645.7 457.1 462.1 158.9 161.6 56.2 132.4 640.4 451.5 456.4 157.3 160.0 57.5 131.5 Mar. 27*... 654.9 466.3 471.2 164.4 167.2 56.2 132.4 651.4 461.1 466.0 164.2 167.0 57.3 133.0 Apr. 24p... 663.2 473.7 479.1 168.9 172.0 56.7 132.8 660.5 470.4 475.8 169.6 172.7 56.1 134.0 May 29p... 668.6 478.0 483.7 171.9 175.0 56.7 133.9 665.1 476.9 482.5 171.3 174.4 53.6 134.6 June 30p__ 673.9 481.3 486.7 173.9 176.8 57.1 135.5 677.9 488.5 493.9 176.5 179.4 52.8 136.6 July 31*.... 681.3 490.4 495.8 176.8 179.7 55.4 135.5 680.1 492.8 498.2 177.2 180.1 51.7 135.7 1 Adjusted to exclude domestic commercial interbank loans. See also loans and investments were increased by about $600 million of which note 3. $500 million were in loans and $100 million in “other securities.” 2 Loans sold are those sold outright by commercial banks to own sub­ sidiaries, foreign branches, holding companies, and other affiliates. Note.—Total loans and investments: For monthly data, Jan. 1959- 3 Beginning June 30, 1972, commercial and industrial loans were re­ June 1973, see Nov. 1973 Bulletin, pp. A-96-A-97, and for 1948-58, duced by about $400 million as a result of loan reclassifications at one Aug. 1968 Bulletin, pp. A-94-A-97. For a description of the current large bank. seasonally adjusted series see the Nov. 1973 Bulletin, pp. 831-32, and 4 Beginning June 30, 1971, Farmers Home Administration insured notes the Dec. 1971 Bulletin, pp. 971-73. Commercial and industrial loans: totaling approximately $700 million are included in “Other securities” For monthly data, Jan. 1959-June 1973, see Nov. 1973 Bulletin, pp. rather than in “Loans.” A-96-A-98; for description see July 1972 Bulletin, p. 683. Data are for 5 Beginning June 30, 1974, data revised to include one large mutual last Wednesday of month except for June 30 and Dec. 31; data are partly savings bank that merged with a nonmember commercial bank. Total or wholly estimated except when June 30 and Dec. 31 are call dates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 16 COMMERCIAL BANKS □ AUGUST 1974 PRINCIPAL ASSETS AND LIABILITIES AND NUMBER, BY CLASS OF BANK (Amounts in millions of dollars) Loans and investments Deposits Total assets— Classification by Securities Total Interbank3 Other Total Num­ FRS membership Cash lia­ Bor­ capital ber and FDIC assets3 bilities row­ ac­ of insurance Total Loans and Total 3 Demand ings counts banks 1 U.S. capital De­ Treas­ Other ac­ mand Time Time5 ury 2 counts4 U.S. Govt. Other Last-Wednesday-of-month series 6 All commercial banks: 1941—Dec. 31.. 50,746 21,714 21,808 7,225 26.551 79,104 71,283 10,982 44,349 15,952 23 7,173 14,278 1947—Dec. 31 7. 116,284 38,057 69,221 9,006 37,502 155,377 144,103 12,792 240 1,343 94,367 35,360 65 10,059 14,181 1960—Dec. 31.. 199,509 117,642 61,003 20,864 52,150 257,552 229,843 17,079 1,799 5,945 133,379 71,641 163 20,986 13,472 1970—Dec. 31.. 461,194 313,334 61,742 86,118 93,643 576,242 480,940 30,608 1,975 7,938 209,335 231,084 19,375 42,958 13,686 1971—Dec. 31.. 516,564 346,930 64,930 104,704 99,832 640,255 537,946 32,205 2,908 10,169 220,375 272,289 25,912 47,211 13,783 1972—Dec. 31.. 598,808 414,696 67,028117,084113,128 739,033 616,037 33,854 4,194 10,875 252,223 314,891 38,083 52,658 13,927 1973—July 25.. 634,730 456,620 56,450121,660 95,880 762,410 619,200 28,710 5,830 6,750 228,470 349,440 52,610 54,920 14,069 Aug. 29.. 641,140 462,910 54,910123,320 92,010 766,300 619,520 26,500 6,620 3,460 224,770 358,170 53,220 55,350 14,083 Sept. 26.. 646,710 466,840 55,080124,790100,030 779,730 630,360 27.720 7,190 8,210 228,420 358,820 56,280 55,620 14,102 Oct. 31.. 654,390 471,340 56,010127.040 111,720 800,760 646,030 32,830 6,820 5,680 241,130 359,570 60,620 56,510 14,134 Nov. 28.. 659.280 475,010 57,770126,500 104,140 797,180 638,740 30,130 7,010 4,350 238,540 358,710 62,870 56,730 14,163 Dec. 31.. 683,799 494,947 58,277130,574118,276 835,224 681,847 36,839 6,773 9,865 263,367 365,002 58,994 58,128 14,171 1974—Jan. 30?. 673,520 484,240 58,730130,550103.070 810,500 651,410 31,510 6,620 9,500 233,310 370,470 65,770 58,270 14,180 Feb. 27?. 679,130 490,180 57,500131,450102,230 816,200 650.970 31,320 6,200 6,620 232,930 373,900 67,970 58,560 14,202 Mar. 27?. 687.670 497,430 57,260132,980104.070 827.600 658,490 31,590 6,490 6.070 235,360 378,980 69,740 59,050 14,236 Apr. 24?. 694,660 504,560 56,060134.040 101,770 833,340 665.970 30,870 7,290 5,850 235,460 386,500 67,320 59,590 14,261 May 29?. 697,970 509,780 53,630134,560114,585 850,625 678,265 34,070 8,200 5,880 237,265 392,850 69,560 59,870 14,290 June 26?, 707.670 519,290 52,340136.040 105,280 852.600 679,100 30,480 8,860 8.070 237,350 394,340 68,730 60,140 14.338 July 31?. 713.280 525,940 51,680135,660106,830 863,770 689,300 32.720 9,530 4,250 242,430 400,370 67,440 60,990 14.338 Members of F.R. System: 1941—Dec. 31.. 43,521 18,021 19,539 5,961 23,113 68,121 61,717 10,385 140 1,709 37,136 12,347 4 5,886 6,619 1947—Dec. 31.. 97,846 32,628 57,914 7,304 32,845 132,060 122,528 12,353 50 1,176 80,609 28,340 54 8,464 6,923 1960—Dec. 31.. 165.619 99,933 49,106 16,579 45,756 216.577 193,029 16,437 1,639 5,287 112,393 57,273 130 17,398 6,174 1970—Dec. 31.. 365,940 253,936 45,399 66,604 81,500 465,644 384,596 29.142 1,733 6,460 168,032 179,229 18,578 34,100 5,767 1971—Dec. 31.. 405,087 277,717 47,633 79,738 86,189 511,353 425,380 30,612 2; 549 8,427 174,385 209,406 25,046 37.279 5,727 1972—Dec. 31.. 465,788 329,548 48,715 87,524 96,566 585,125 482,124 31,958 3,561 9,024 197,817 239,763 36,357 41,228 5,704 1973—July 25.. 489,240 360,813 39,331 89,096 82,091 597,607 478,417 27,121 5,121 5,423 175,351 265,401 48,761 42,539 5,707 Aug. 29.. 494,200 365,951 38,233 90,016 78,475 600,202 478,273 24,972 5,911 2,701 172,082 272,607 49,283 42,807 5,713 Sept. 26.. 498,322 368,842 38,372 91,108 85,802 611,359 486,975 26,182 6,480 6,740 175,016 272,557 52,485 42,972 5,718 Oct. 31.. 504,120 371,866 39,375 92,879 96,251 628,710 499,110 31.142 6,112 4,601 185,324r271,931 56,772 43,618 5,723 Nov. 28.. 507,176 374,148 40,752 92,276 89,652 624,258 491,405 28,522 6,298 3,359 182,931 270,295 58.865 43,759 5,736 Dec. 31.. 528,124 391,032 41,494 95,598100,098 655,898 526.837 34,782 5,843 8,273 202,564 275,374 55,611 44,741 5,735 1974—Jan. 30.. 518,541 381,344 41,699 95,498 88,960 635,219 501,260 30,003 5,690 7,621 178,457 279,489 61,585 44,829 5,744 Feb. 27.. 522,816 385,879 40,922 96,015 87,753 639,172 500,113 29,753 5.273 5,084 178,731 281,272 63.865 45,054 5,747 Mar. 27.. 529,961 392,461 40,537 96,963 89,568 649,114 506,641 30,083 5,558 4,817 180,862 285,321 65,428 45,491 5,754 Apr. 24.. 535,917 399,092 39,273 97,552 87,005 653,285 512,7921 29,396 6,364 4,743 179,927 292,362 62,859 45,896 5.763 May 29.. 538,801 403,619 37,282 97,900 99,155 669,357 524.837 32,452 7.274 4,746 182,060 298,305 64,820 46,090 5.763 June 26.. 546,777 411,334 36,214 99,229 90,089 669.578 524,101 28,961 7,928 6,282 181,957 298,973 64,270 46.280 5.763 July 31?. 552.619 418,065 35,860 98,694 91,430 680,511 533,807 31,153 8,598 3,180 186,360 304,516 63,042 46,907 5.763 Call date series Insured banks: ! Total: i 1941_Dec. 31... 49,290 21,259 21,046 6,984 25,788 76,820 69,411 10,654 1,762 41,298 15,699 10 6,844 13,426 1947—Dec. 31... 114,274 37,583 67,941 8,750 36,926 152,733 141,851 12,615 54 1,325 92,975 34,882 61 9,734 13,398 1960—Dec. 31... 198,011 117,092 60,468 20,451 51,836 255,669 228,401 16,921 1,667 5,932 132,533 71,348 149 20,628 13,119 1970—Dec. 318.. 458,919 312,006 61,438 85,475 92,708 572,682 479,174 30,233 1,874 7,898 208,037 231,132 19,149 42,427 13,502 1971—Dec. 31... 514,097 345,386 64,691104,020 98,281 635,805 535,703 31,824 2,792 10,150 219,102 271,835 25,629 46,731 13,602 1972—Dec. 31... 594,502 411,525 66,679116,298111,333 732,519 612,822 33,366 4,113 10,820 250,693 313,830 37,556 52,166 13,721 1973—June 30... 630,379 452,587 57,532120,261101,716 762,250 625,316 30,559 5,446 10,408 235,174 343,729 48,413 55,240 13,842 Dec. 31... 678,113 490,527 57,961129,625116,266 827,081 677,358 36,248 6,429 9,856 261,530 363,294 57,531 57,603 13,964 1974—Apr. 24... 693,489 503,653 189,:837 98,997 826,736 664,070 30,539 6,634 5,913 234,435 386,550 66,160 59,757 14,043 National member: 1941—Dec. 31... 27,571 11,725 12,039 3,806 14,977 43,433 39,458 6,786 1,088 23,262 8,322 4 3,640 5,117 1947—Dec. 31... 65,280 21,428 38,674 5,178 22,024 88,182 82,023 8,375 35 795 53,541 19,278 45 5,409 5,005 1960—Dec. 31... 107,546 63,694 32,712 11,140 28,675 139,261 124,911 9,829 611 3,265 71,660 39,546 111 11,098 4,530 1970—Dec. 318.. 271,760 187,554 34,203 50,004 56,028 340,764 283,663 18,051 982 4,740 122,298 137,592 13,100 24,868 4,620 1971—Dec. 31... 302,756 206,758 36,386 59,612 59,191 376,318 314,085 17,511 1,828 6,014 128,441 160,291 18,169 27,065 4,599 1972—Dec. 31... 350,743 247,041 37,185 66,516 67,390 434,810 359,319 19,096 2,155 6,646 146,800 184,622 26,706 30,342 4,612 1973—June 30... 369,856 270,188 31,651 68,018 61,336 449,772 364,129 16,640 2,874 6,181 137,116 201,318 33,804 31,867 4,629 Dec. 31... 398,236 293,555 30,962 73,718 70,711 489,470 395,767 20,357 3,876 5,955 152,705 212,874 39,696 33,125 4,659 1974—Apr. 24... 404,972 299,182 105,'790 59,806 486,163 384,314 16,492 3,997 3,636 135,188 225,000 45,627 34,026 4,688 For notes see p. A-17. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ COMMERCIAL BANKS A 17 PRINCIPAL ASSETS AND LIABILITIES AND NUMBER, BY CLASS OF BANK— Continued (Amounts in millions of dollars) Loans and investments Deposits Total assets— F C R la S a s i n n s m d s if u e i F c r m a a D n t b i c I e o C e r n s h b i y p Total Loa l ns T U re . S S a e s . c ­ urit O ie t s her a C ss a e s t h s3 c b T a i a l a l p o i i n c a t i t d i ­ t a ­ e a l s l Total3 m D I a n e n t ­ d erba T n i k m 3 e Dema O nd ther Time r B i o n o w g r s ­ ­ c c T a o a o p u c i t n a ­ ta t l s l N ba b u o n e m f k r s ­ ury 2 counts 4 U.S. Other 5 Govt. Call date series Insured banks (cont.): State member: 1941—Dec. 31.... 15,950 6,295 7,500 2,155 8,145 24,688 22,259 3,'739 621 13,874 4,025 1 2,246 1,502 1947—Dec. 31.... 32,566 11,200 19,240 2,125 10,822 43,879 40,505 3,978 15 381 27,068 9,062 9 3,055 1,918 1960—Dec. 31.... 58,073 36,240 16,394 5,439 17,081 77,316 68,118 6,608 1,028 2,022 40.733 17,727 20 6,299 1,644 1970—Dec. 318... 94,760 66,963 11,196 16,600 25,472 125,460101,512 11,091 750 1,720 45.734 42,218 5,478 9,232 1,147 1971—Dec. 31.... 102,813 71,441 11,247 20,125 26,998 135,517111,777 13,102 721 2,412 45,945 49,597 6,878 10,214 1,128 1972—Dec. 31.... 115,426 82,889 11,530 21,008 29,176 150,697123,186 12,862 1,406 2,378 51,017 55,523 9,651 10,886 1,092 1973—June 30.... 121,052 91,095 9,429 20,527 26,891 155,017 123,016 12,671 2,005 1,986 45., 322 61,032 12,725 11,231 1.076 Dec. 31.... 130,240 97,828 10,532 21,880 29,387 166,780131,421 14,425 1,968 2,318 49,859 62,851 15,914 11,617 1.076 1974—Apr. 24... . 132,211 100,876 31,:335 27,008 166,929 127,944 12.918 2,084 1,114 44,173 67,655 18,210 12,145 1,071 Nonmember: 1941—Dec. 31.... 5,776 3,241 1,509 1,025 2,668 8,708 7,702 129 53 4,162 3,360 6 959 6,810 1947—Dec. 31.... 16,444 4,958 10.039 1,448 4,083 20,691 19,342 262 4 149 12,366 6,558 7 1,271 6,478 1960—Dec. 31.... 32,411 17,169 11,368 3,874 6,082 39,114 35,391 484 27 645 20,140 14,095 19 3,232 6,948 1970—Dec. 318... 92,399 57,489 16.039 18,871 11,208 106,457 93,998 1,091 141 1,438 40,005 51,322 571 8,326 7,735 1971—Dec. 31.... 108,527 67,188 17,058 24,282 12,092 123,970109,841 1,212 242 1,723 44,717 61,946 582 9,451 7,875 1972—Dec. 31.... 128,333 81,594 17,964 28,774 14,767 147,013 130,316 1,408 552 1,796 52,876 73,685 1,199 10,938 8,017 1973—June 30.... 139,471 91,304 16,452 31,716 13,490157,461 138,171 1,248 567 2,241 52,735 81,379 1,884 12,143 8,137 Dec. 31.... 149,638 99,143 16,467 34,027 16,167 170,831 150,170 1,467 586 1,582 58,966 87,569 1,920 12,862 8,229 1974—Apr. 24.... 156,305 103,594 52,'711 12,183 173,645 151,812 1,130 553 1,163 55,072 93.894 2,322 13,587 8,284 Noninsured nonmember: 1941—Dec. 31.... 1,457 455 761 241 763 2,283 1,872 529 1,2191 253 13 329 852 1947—Dec. 317... 2,009 474 1,280 255 576 2,643 2,251 177 185 18 1,392 478 4 325 783 1960—Dec. 31.... 1,498 550 535 413 314 1,883 1,443 159 132 13 846 293 14 358 352 1970—Dec. 318.. . 3,079 2,132 304 642 934 4,365 2,570 375 101 40 1,298 756 226 532 184 1971—Dec. 31.... 3,147 2,224 239 684 1,551 5,130 2,923 380 116 19 1,273 1,134 283 480 181 1972—Dec. 31.... 4,865 3,731 349 785 1,794 7,073 3,775 488 81 55 1,530 1,620 527 491 206 1973—June 30.... 5,915 4,732 345 838 1,892 8,196 4,438 488 145 26 1,779 2,000 885 500 204 Dec. 31.... 6,192 4,927 316 949 2,010 8,650 4,996 591 344 9 1,836 2,215 1,463 524 207 Total nonmember: 1941—Dec. 31.... 7,233 3,696 2,270 1,266 3,431 10,992 9,573 i157 5,5<04 3,613 18 1,288 7,662 1947—Dec. 31.... 18,454 5,432 11,318 1,703 4,659 23,334 21,591 439 190 167 13,758 7,036 12 1,596 7,261 1960—Dec. 31.... 33,910 17,719 11,904 4,287 6,396 40,997 36,834 643 160 657 20,986 14,388 33 3,590 7,300 1970—Dec. 318... 95,478 59,621 16,342 19,514 12,143 110,822 96,568 1,466 243 1,478 41,303 52,078 796 8,858 7,919 1971—Dec. 31.... 111,674 69,411 17,297 24,966 13,643 129,100112,764 1,592 359 1,742 45,990 63,081 866 9,932 8,056 1972—Dec. 31.... 133,198 85,325 18,313 29,559 16,562 154,085 134,091 1,895 633 1,850 54,406 75,305 1,726 11,429 8,223 1973—June 30.... 145,386 96,036 16,797 32,554 15,381 165,657 142,608 1,736 712 2,267 54,514 83,379 2,770 12,643 8,341 Dec. 31.... 155,830 104,070 16,783 34,976 18,177 179,480155,165 2,057 930 1,592 60,802 89,784 3,383 13,386 8,436 1 Loans to farmers directly guaranteed by CCC were reclassified as and for individual categories of securities on a gross basis—that is, before, securities and Export-Import Bank portfolio fund participations were deduction of valuation reserves—rather than net as previously reported. reclassified from loans to securities effective June 30, 1966. This reduced “Total loans” and increased “Other securities” by about $1 billion. Note.—Data are for all commercial banks in the United States (includ­ “Total loans” include Federal funds sold, and beginning with June 1967 ing Alaska and Hawaii, beginning with 1959). Commercial banks represent securities purchased under resale agreements, figures for which are in­ all commercial banks, both member and nonmember; stock savings cluded in “Federal funds sold, etc.,” on p. A-18. banks; and nondeposit trust companies. Effective June 30, 1971, Farmers Home Administration notes were Figures for member banks before 1970 include mutual savings banks classified as “Other securities” rather than “Loans.” As a result of this as follows: three before Jan. 1960 and two through Dec. 1960. Those change, approximately $300 million was transferred to “Other securities” banks are not included in insured commercial banks. for the period ending June 30, 1971, for all commercial banks. Effective June 30, 1969, commercial banks and member banks exclude See also table (and notes) at the bottom of p. A-26. a small national bank in the Virgin Islands; also, member banks exclude, 2 See first two paragraphs of note 1. and noninsured commercial banks include, through June 30,1970, a small 3 Reciprocal balances excluded beginning with 1942. member bank engaged exclusively in trust business; beginning 1973, 4 Includes items not shown separately. See also note 1. excludes one national bank in Puerto Rico. 5 See third paragraph of note 1 above. Beginning Dec. 31, 1973, member banks exclude and noninsured non­ 6 From the last-Wednesday-of-the-month series, figures for call dates member banks include a noninsured trust company which is a member of are shown for June and December as soon as they became available. the Federal Reserve System. 7 Beginning with Dec. 31, 1947, the series was revised; for description, Comparability of figures for classes of banks is affected somewhat by see note 4, p. 587, May 1964 Bulletin. changes in F.R. membership, deposit insurance status, and by mergers 8 Figure takes into account the following changes, which became etc. effective June 30, 1969: (1) inclusion of consolidated reports (including Figures are partly estimated except on call dates. figures for all bank-premises subsidiaries and other significant majority- For revisions in series before June 30, 1947, see July 1947 Bulletin, owned domestic subsidiaries) and (2) reporting of figures for total loans pp. 870-71. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 18 INSURED COMMERCIAL BANKS □ AUGUST 1974 ASSETS BY CLASS OF BANK, APRIL 24, 1974 (Amounts in millions of dollars) Member banks1 Insured Account commercial Large banks Nonbanks member Total All other banks i New York City of Other City Chicago large Cash bank balances, items in process.............................................. 98,997 86 814 23,527 3,984 31,456 27,847 12,183 Currency and coin....................................................................... 9,913 7,516 589 157 2,413 4,358 2,397 Reserves with Federal Reserve banks.......................................... 29,848 29,848 6,515 1,859 10,521 10,954 Demand balances with banks in United States........................... 23,711 15,647 5,741 297 3,023 6,586 8,064 Other balances with banks in United States......................... 2,056 1,323 57 5 738 524 733 Balances with banks in foreign countries.................................... 822 704 196 54 363 91 119 Cash items in process of collection.............................................. 32,646 31,776 10,429 1.613 14,400 5,334 870 Total securities held—Book value................................................... 189,837 137,126 15,221 5,322 45,992 70,592 52,711 Bank investment portfolios........................................................... 184,037 131,387 13,460 4,751 42,919 70,258 52,650 U.S. Treasury............................................................................. 54,236 37,728 4,221 1,153 12,088 20,265 16,508 Other U.S. Government agencies............................................. 28,568 18,297 1,333 621 5,063 11,280 10,271 States and political subdivisions............................................... 95,554 71,288 7,197 2,783 24,610 36,697 24,266 All other..................................................................................... 5,679 4,075 708 193 1,157 2,016 1,605 Trading-account securities............................................................ 5,799 5,738 1,761 571 3,073 334 61 Federal funds sold and securities resale agreements....................... 33,019 23,831 2,221 1,230 9,949 10,432 9,187 Other loans.......................................................................................... 470,634 376,227 71,145 21,841 143,675 139,566 94,406 Total loans and securities................................................................. 693,489 537,183 88,586 28,392 199,615 220,590 156,305 Fixed assets—Buildings, furniture, real estate................................ 13,715 10,549 1,051 417 4,303 4,778 3,167 Investments in subsidaries not consolidated.................................... 1.523 1,505 684 115 652 54 18 Customer acceptances outstanding.................................................. 5; 277 5,041 3,155 294 1,392 200 236 Other assets......................................................................................... 13,735 11,999 3,163 596 5,360 2,879 1,736 Total assets......................................................................................... 826,736 653,091 120,166 33,798 242,778 256,349 173,645 1 Member banks exclude a noninsured trust company that is a member Note.—Data include consolidated reports, including figures for all of the Federal Reserve System, and two national banks outside the bank-premises subsidiaries and other significant majority-owned domestic continental United States. subsidiaries. Figures for individual categories of securities are reported 2 See table (and notes), Deposits Accumulated for Payment of Personal on a gross basis—that is, before deduction of valuation reserves. Loans, p. 26. Back data in lesser detail were shown in previous Bulletins. 3 Demand deposits adjusted are demand deposits other than domestic Details may not add to totals because of rounding. commercial interbank and U.S. Govt., less cash items reported as in process of collection. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ INSURED COMMERCIAL BANKS A 19 LIABILITIES AND CAPITAL BY CLASS OF BANK, APRIL 24, 1974 (Amounts in millions of dollars) Member banks1 Insured Non­ Account commercial Large banks member banks banks1 Total All other New York City of Other City Chicago large Demand deposits............................................................................... 270,887 213,522 46,507 8,500 74,314 84,200 57,365 Mutual savings banks.................................................................... 1,036 963 343 1 172 447 74 Other individuals, partnerships, and corporations...................... 207,861 158,832 25,198 6,424 57,258 69,951 49,030 U.S. Government........................................................................... 5,913 4,750 661 164 2,131 1,794 1,163 States and political subdivisions................................................... 15,431 10,929 436 211 3,294 6,988 4,503 Foreign governments, central banks, etc...................................... 1,504 1,483 1,243 21 210 8 21 Commerical banks in United States............................................. 24,560 23,739 11,719 1,371 7,811 2,838 821 Banks in foreign countries............................................................ 4,943 4,708 3,421 128 1,048 111 236 Certified and officers* checks, etc.................................................. 9,637 8,118 3,485 180 2,390 2,063 1,519 Time and savings deposits................................................................. 393,184 298,736 40,788 14,810 108,725 134,414 94,447 Savings deposits............................................................................. 130,762 95,709 6,201 2,052 33,679 53,777 35,053 478 346 62 284 131 Mutual savings banks................................................................... 509 498 259 49 164 25 12 Other individuals, partnerships, and corporations...................... 197,527 151,586 24,183 9,668 55,180 62,555 45,941 U.S. Government........................................................................... 459 335 32 25 118 159 125 States and political subdivisions................................................... 49,011 36,515 2,168 1,623 15,484 17,241 12,496 Foreign governments, central banks, etc...................................... 8,311 8,163 4,437 865 2,819 42 148 Commercial banks in United States........................................... 5,806 5,304 3,371 496 1,137 300 502 Banks in foreign countries............................................................ 319 280 137 31 82 30 39 Total deposits.................................................................,.................. 664,070 512,258 87,295 23,310 183,039 218,614 151,812 Federal funds purchased and securities sold under agreements to repurchase.............................................................. 57,316 55,343 12,303 6,379 28,100 8,561 1,973 Other liabilities for borrowed money.............................................. 8,844 8,495 3,183 113 3,919 1,279 350 Mortgage indebtedness..................................................................... 868 686 80 5 439 163 181 Bank acceptances outstanding........................................................ 5,401 5,165 3,259 301 1,402 203 236 Other liabilities................................................................................... 22,541 18,465 3,574 1,232 7,366 6,292 4,075 Total liabilities.......... ..................................................................... 759,040 600,412 109,694 31,340 224,266 235,113 158,628 Minority interest in consolided subsidiaries.................................... 4 2 2 3 Total reserves on loans/securities..................................................... 7,934 6,507 i ,445 426 2,412 2,223 1,427 Reserves for bad debts (IRS)........................................................ 7,646 6,317 1,444 426 2,352 2,095 1,329 Other reserves on loans................................................................. 122 80 1 9 70 42 Reserves on securities.................................................................... 166 no 52 58 57 Total capital accounts....................................................................... 59,757 46,170 9,027 2,033 16,100 19,011 13,587 Capital notes and debentures... ................................................ 4,200 3,441 787 57 1,680 918 758 Equity capital................................................................................. 55,557 42,729 8,240 1,976 14,420 18,093 12,828 Preferred stock........................................................................... 61 43 18 11 14 18 Common stock........................................................................... 14,257 10,821 2,160 562 3,536 4,562 3,436 Surplus........................................................................................ 24,033 18.547 3,466 1,135 6,689 7,258 5,485 Undivided profits....................................................................... 16,376 12,703 2,592 236 3,932 5,944 3,674 831 615 4 42 252 316 216 Total liabilities, reserves, minority interest, capital account............................................................................................ 826,736 653,091 120,166 33,798 242,778 256,349 173,645 Demand deposits adjusted 3.............................................................. 207,767 153,256 23,697 5,353 49,972 74,234 54,511 Selected ratios: Percentage of total assets Cash and balances with other banks............................................ 12.0 13.3 19.6 11.8 13.0 10.9 7.0 23.0 21.0 12.7 15.7 18.9 27.5 30.3 U.S. treasury............................................................................... 6.6 5.8 3.5 3.4 5.0 7.9 9.5 States and political subdivisions................................................ 11.6 10.9 6.0 8.2 10.1 14.3 14.0 All other trading account securities.......................................... 4.1 3.4 1.7 2.4 2.6 5.2 6.8 0.7 0.9 1.5 1.7 1.3 0.1 0.0 60.9 61.3 61.1 68.3 63.3 58.5 59.6 4,1 4.5 6.7 4.2 4.8 3.1 3.0 83.9 82.3 73.7 84.0 82.2 86.1 90.0 Reserves for loans and securities.................................................. 1.0 1.0 1.2 1.3 1.0 0.9 0.8 6.7 6.5 6.9 5.8 5.9 7.1 7.4 Total capital accounts................................................................... 7.2 7.1 7.5 6.0 6.6 7.4 7.8 Number of banks............................................................................... 14,043 5,759 13 9 156 5,581 8,284 For notes see opposite page. 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A 20 WEEKLY REPORTING BANKS □ AUGUST 1974 ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKS (In millions of dollars) Loans Federal funds sold, etc.1 Other To brokers For purchasing and dealers or carrying securities Total involving— To nonbank loans financial Wednesday and Com­ To brokers To institutions invest­ To mer­ and dealers others ments com­ To cial Agri­ Total mer­ U.S. others Total and cul­ cial Treas­ Other indus­ tural Pers. banks ury trial U.S. U.S. and se­ cun- Treas­ Other Treas­ Other sales curi­ ties ury secs. ury secs. finan. Other ties secs. secs. COS., etc. Large banks— Total 1973 July 4............. 346,463 12,567 11,413 732 247 175 254,583 105.526 3.306 380 5,433 206 2,902 8,987 16,788 11............. 347,753 11,615 9,869 1,265 225 256 256,839 106,141 3,314 2,156 5,563 205 2,922 8,710 16,444 18.............. 347,604 13,922 12,731 867 150 174 255,103 106.527 3,301 522 5,186 205 2,963 8,707 16,458 2 5 346,915 12,412 10,997 953 119 343 255,738 106,755 3.307 766 5,296 201 2,956 8,802 16,421 1974 June 5.............. 390,957 18,823 15,441 2,014 686 682 287,662 120,731 3.759 1,544 4,937 125 2,701 9,457 20,447 12............. 390,049 16,960 13,901 1,985 512 562 287,457 121,488 3.760 602 5,006 129 2,699 9,319 20,355 19.............. 390,562 15,309 13.201 905 581 622 290,516 122,960 3,871 672 5,108 129 2,680 9,913 20,849 2 6 391,777 16,174 14,090 932 552 600 291,492 123,575 3,843 507 4,706 127 2,686 9,876 20,975 July 3 p............ 394,698 16,313 14,335 1,039 495 444 294,760 125,609 3,807 412 4,447 122 2,698 9,997 21,423 10 p............ 394,012 16,025 14.201 918 482 424 294,992 125,827 3,810 456 4,001 120 2,685 10,100 21,648 17p............ 393,421 14,924 13,040 1,071 402 411 295,943 126,553 3,845 487 3,889 108 2,682 10,232 21,636 24*>............ 389,989 12,800 10,971 935 406 488 294,573 126,132 3,821 415 4,011 111 2,674 9,845 21,460 31 p............ 397,276 16,020 13,537 1,437 437 609 297,955 126,267 3,857 1,720 4,694 113 2,687 10,107 21,616 New York City 1973 July 4............. 73,669 2,255 2,227 58,923 30,010 296 3,113 654 2,763 5,490 1 1 74,775 1,217 1,201 60,930 30,322 2,062 3,242 648 2,536 5,259 18............. 74,305 2,921 2,831 58,926 30,462 441 2,937 679 2,504 5,293 2 5 73,544 1,688 1,667 59,206 30,583 585 3,059 674 2,635 5,374 1974 June 5............. 85,219 1,798 1,720 32 38 69,326 34,735 138 1,445 2,989 558 3,241 7,303 12............. 85,784 1,707 1,677 21 68,931 35,156 146 538 2,970 565 3,185 7,316 19............. 86,289 1,257 1,144 104 70,145 35,875 145 535 3,064 562 3,538 7,605 2 6 87,299 2,233 2,163 64 70,641 36,426 138 423 2,768 562 3,487 7,624 July 3 p........... 89,065 2,269 2,232 29 72,342 37,587 136 326 2,586 560 3.507 7,933 10*............ 88,265 1,862 1,793 31 33 72,191 37,614 128 393 2,192 557 3,523 8,068 17 p............ 89,006 2,545 2,504 32 72,499 37,845 140 410 2,207 558 3,586 8,066 24*>............ 88,023 1,869 1,776 37 72,006 37,606 133 354 2,259 557 3,348 8,066 31®............ 92,098 2,807 2,716 36 74,683 37,525 135 1,611 2,949 557 3.507 8,140 Outside New York City 1973 July 4.............. 272,794 10,312 9,186 706 247 173 195,660 75,516 3,235 84 2.320 159 2,248 6,224 11,298 11.............. 272,978 10,398 8,668 1,249 225 256 195,909 75,819 3,241 94 2.321 159 2,274 6,174 11,185 1 8 273,299 11,001 9,900 778 150 173 196,177 76,065 3,228 81 2,249 161 2,284 6,203 11,165 2 5 273,371 10,724 9,330 937 119 338 196,532 76,172 3,234 181 2,237 158 2,282 6,167 11,047 1974 June 5.............. 305,738 17,025 13,721 2,006 654 644 218,336 85,996 3,621 99 1,948 97 2,143 6,216 13,144 12.............. 304,265 15,253 12,224 1,976 512 541 218,526 86,332 3,614 64 2,036 101 2,134 6,134 13,039 19.............. 304,273 14,052 12,057 896 581 518 220,371 87,085 3,726 137 2,044 101 2,118 6,375 13,244 2 6 304,478 13,941 11,927 926 552 536 220,851 87,149 3.705 84 1,938 101 2.124 6,389 13,351 July 3 p............ 305,633 14,044 12,103 1,031 495 415 222,418 88,022 3,671 86 1,861 99 2,138 6,490 13,490 10?............ 305,747 14,163 12,408 913 451 391 222,801 88,213 3,682 63 1,809 97 2,128 6,577 13,580 17*............ 304,415 12,379 10,536 1,062 402 379 223,444 88,708 3.705 77 1,682 85 2.124 6,646 13,570 24 p............ 301,966 10,931 9,195 879 406 451 222,567 88,526 3,688 61 1,752 83 2,117 6,497 13,394 31*>............ 305,178 13,213 10,821 1,382 437 573 223,272 88,742 3,722 109 1,745 83 2,130 6,600 13,476 For notes see p. A-24. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ WEEKLY REPORTING BANKS A 21 LIABILITIES OF LARGE COMMERCIAL BANKS— Continued (In millions of dollars) Investments U.S. Treasury securities Notes and bonds maturing— Wednesday For­ All Certif­ eign other Total Bills icates govts.2 Within 1 to After 1 yr. 5 yrs. 5 yrs. Large banks— Total 1973 1,260 20,225 23,823 4,152 4,151 12,753 2,767 .........................July 4 1,267 20,305 23,611 4,059 4,146 12,663 2,743 ....................................11 1,220 20,081 23,134 3,585 4,074 12,725 2,750 ...................................18 1,243 19,700 22,730 3,133 4,144 12,716 2,737 ...................................25 1974 57, 1,859 20,426 22,316 2,727 3,654 11,960 3,975 .........................June 5 57, 1,832 20,536 22,123 2.485 3,753 11,893 3,992 ...................................12 58 1,881 20,381 21,800 2,218 3,716 11,896 3,970 ...................................19 58; 1,966 20,734 20,982 1,736 3,551 11,753 3,942 ...................................26 58 2,040 21,131 20,872 1,749 3,578 11,734 3,811 .........................July 3® 58! 2,117 20,645 20,353 1.485 3,440 11,615 3,813 ...................................10® 58 2,022 20,709 20,186 1,469 3,411 11,551 3,755 ...................................17® 58; 1,837 20,365 19,944 1,306 3,436 11,437 3,765 ...................................24® 58 1,854 20,887 20,853 1,982 3,566 11,555 3,750 ...................................31® New York City 1973 5. 662 4,317 3,953 1,153 569 1,597 634 .......................July 4 5, 676 4,493 3,859 1,125 579 1,572 583 ...................................11 5; 621 4,301 3,774 1,088 548 1,560 578 ...................................18 5, 625 3,974 3,742 1,003 584 1,576 579 ...................................25 1974 6, 746 4,519 3,644 88 395 1,911 1,250 .......................June 5 6 771 4,639 3,907 263 451 1,932 1,261 ...................................12 6, 792 4,276 3,809 141 432 1,958 1,278 ...................................19 6, 789 4,620 3,355 81 216 1,786 1,272 ...................................26 6, 793 4,797 3,506 13 378 1,857 1,258 .......................July 3® 6, 788 4,605 3,288 75 227 1,726 1,260 ...................................10® 6, 823 4,564 3,204 58 250 1,690 1,206 ...................................17® 7, 810 4,627 3,096 84 205 1,591 1,216 ...................................24® 7, 811 4,996 3,770 369 426 1,767 1,208 ...................................31® Outside New York City 1973 44, 598 15,908 19,870 2,999 3,582 11,156 2,133 .......................July 4 44, 591 15,812 19,752 2,934 3,567 11,091 2,160 ..................................11 45, 599 15,780 19,360 2,497 3,526 11,165 2,172 ..................................18 45, 618 15,726 18,988 2,130 3,560 11,140 2,158 ..................................25 1974 50, 1,113 15,907 18,672 2,639 3,259 10,049 2,725 .......................June 5 51, 1,061 15,897 18,216 2,222 3,302 9,961 2,731 ..................................12 51, 1,089 16,105 17,991 2,077 3,284 9,938 2,692 ..................................19 51, 1,177 16,114 17,627 1,655 3,335 9,967 2,670 ..................................26 51, 1,247 16,334 17,366 1,736 3,200 9,877 2.553 .......................July 3® 51, 1,329 16,040 17,065 1.410 3,213 9,889 2.553 ..................................10® 51, 1,199 16,145 16,982 1.411 3,161 9,861 2.549 ..................................17® 51, 1,027 15,738 16,848 1,222 3,231 9,846 2.549 ..................................24® 51, 1,043 15,891 17,083 1,613 3,1401 9,788 2,542 ..................................31® Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 22 WEEKLY REPORTING BANKS □ AUGUST 1974 ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKS— Continued (In millions of dollars) Investments (cont.) Other securities Cash Invest­ Obligations Other bonds, items Re­ Bal­ ments Total of States corp. stocks, in serves Cur­ ances in sub­ assets/ Wednesday and and process with rency with sidiar­ Other total political securities of F.R. and do­ ies not assets liabil­ Total subdivisions collec­ Banks coin mestic consol­ ities tion banks idated Tax Certif. war­ All of All rants3 other partici­ others pation4 Large banks— Total 1973 July 4......................... 55,490 7,926 37,979 1,633 7,952 36,655 22,910 3,751 10,065 1,289 20,282 441,415 11.......................... 55,688 7,925 37,938 1,743 8,082 29,899 18,306 4,211 9,221 1.303 19,656 430,349 18.......................... 55,445 7,743 37,800 1,769 8,133 30,131 21,789 4,169 9,913 1.303 19,757 434,666 2 5 56,035 7,954 37,954 1,831 8,296 28,842 20,903 4,249 10,058 1,296 19,824 432,087 1974 June 5.......................... 62,156 7,505 40,931 2,397 11,323 32,299 21,271 4,052 12,134 1,588 24,898 487,199 12.......................... 63,509 8,007 41,406 2,508 11,588 32,446 24,666 4,494 10,526 1,571 25,022 488,774 19.......................... 62,937 7,511 41,333 2,519 11,574 32,243 21,214 4,566 11,076 1,583 24,362 485,606 2 6 63,129 7,384 41,312 2,525 11,908 31,909 22,880 4,684 10,994 1,675 25,105 489,024 July 3*......................... 62,753 7,255 41,206 2,512 11,780 36,811 23,874 3,911 10,045 1,609 26,452 497,400 10*........................ 62,642 7,048 41,436 2,386 11,772 31,247 23,899 4,558 10,050 1,607 26,504 491,877 17*........................ 62,368 6,968 41,355 2,378 11,667 33,181 25,660 4,516 11,157 1,602 26.104 495,641 24*........................ 62,672 7,060 41,421 2,420 11,771 31,874 26,683 4,592 10,257 1,573 26,875 491,843 31*........................ 62,448 6,960 41,202 2,496 11,790 35,101 20,911 4,502 11,425 1,575 28,415 499,205 New York City 1973 July 4......................... 8,538 2,013 4,673 368 1,484 11,702 6,652 468 4,206 621 6,325 103,643 11.......................... 8,769 2,090 4,722 434 1,523 9,698 5,098 491 4,025 623 5,941 100,651 18.......................... 8,684 2,108 4,607 443 1,526 9,364 7,171 478 4,554 623 6,429 102,924 2 5 8,908 2,304 4,627 464 1,513 10,788 6,389 478 4,817 616 6,321 102,953 1914 June 5......................... 10,451 2,240 5,582 554 2,075 10,812 6,423 494 6,207 744 7,754 117,653 12.......................... 11,239 2,692 5,770 607 2,170 11,424 8,486 508 4,985 725 7,953 119,865 19......................... 11,078 2,472 5,796 603 2,207 10,753 5,914 513 5,170 736 7,341 116,716 2 6 11,070 2,371 5,787 635 2,277 11,673 8,037 514 5,127 740 7,597 120,987 July 3*....................... 10,948 2,246 5.844 631 2,227 12,100 6,816 457 4,178 726 8,202 121,544 10*........................ 10,924 2,155 5,911 546 2,312 10,166 7,846 523 3,881 710 8,473 119,864 17*....................... 10,758 2,128 5.844 543 2,243 10,879 7,366 508 5,064 711 8,373 121,907 24*....................... 11,052 2,354 5,892 545 2,261 12,787 8,322 504 4,715 710 8,876 123,937 31*....................... 10,838 2,272 5.743 551 2,272 13,547 6,433 506 5,522 710 9,506 128,322 Outside New York City 1973 July 4.......................... 46,952 5,913 33,306 1,265 6,468 24,953 16,258 3,283 5,859 668 13,957 337,772 11.......................... 46,919 5,835 33,216 1,309 6,559 20,201 13,208 3,720 5,196 680 13,715 329,698 18.......................... 46,761 5,635 33,193 1,326 6,607 20,767 14,618 3,691 5,359 680 13,328 331,742 2 5 47,127 5,650 33,327 1,367 6,783 18,054 14,514 3,771 5,241 680 13,503 329,134 1974 June 5......................... 51,705 5,265 35,349 1,843 ,248 21,487 14,848 3,558 5,927 844 17,144 369,546 12......................... 52,270 5,315 35,636 1,901 ,418 21,022 16,180 3,986 5.541 846 17,069 368,909 19......................... 51,859 5,039 35,537 1,916 ,367 21,490 15,300 4,053 5,906 847 17,021 368,890 2 6 52,059 5,013 35.525 1,890 ,631 20,236 14,843 4,170 5.867 935 17,508 368,037 July 3*....................... 51,805 5,009 35,362 1,881 ,553 24,711 17,058 3,454 5.867 883 18,250 375,856 10*....................... 51,718 4,893 35.525 1,840 ,460 21,081 16,053 4,035 6,169 897 18,031 372,013 17*....................... 51.610 4,840 35,511 1,835 ,424 22,302 18,294 4,008 6,093 891 17,731 373,734 24*....................... 51,620 4,706 35,529 1,875 510 19,087 18,361 4,088 5.542 863 17,999 367,906 31*....................... 51.610 4,688 35,459 1,945 9,518 21,554 14,478 3,996 5,903 865 18,909 370,883 For notes see page A-24. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 a WEEKLY REPORTING BANKS A 23 ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKS— Continued (In millions of dollars) Deposits Demand Time and savings Domestic interbank Foreign IPC States States Wednesday and Certi­ and Do­ polit­ fied polit­ mes­ For­ Total IPC ical U.S. and Total6 ical tic eign sub­ Govt. Com­ Mutual Com­ offi­ sub­ inter­ gOVtS.2 divi­ mer­ sav­ Govts., mer­ cers* Sav­ Other divi­ bank sions cial ings etc. 2 cial checks ings sions banks Large banks— Total 1973 161,502 113,985 7,645 5,079 22,448 1,023 997 3,360 6,965 180,133 58,381 87,550 21,173 4,302 8,043 .............July 4 153,096 110,699 6,316 2,790 20,633 854 1,103 3,698 7,003 180,521 58,227 88,005 21,266 4,425 8,013 .......................11 153,341 111,523 6,089 3,215 21,083 783 902 3,458 6,288 181,811 57,999 89,445 21,325 4,487 7,967 .......................18 150,988 106,801 6,013 3,945 21,008 738 996 3,685 7,802 183,778 57,646 91,284 21,731 4,597 7,959 .......................25 1974 157,882 111,477 6,024 2,558 22,237 687 1,899 5,056 7,944 209,454 57,927 111,168 24,995 6,514 8,065 ..............June 5 156,244 113,717 5,790 1,711 21,529 671 1,431 4,729 6,666 209,896 57,853 111,597 24,635 6,630 8,345 .......................12 159,297 112,050 5,909 5,903 22,127 629 1,360 4,682 6,637 209,425 57,780 111,111 24,410 6,783 8,460 .......................19 158,474 112,201 6,733 4,289 21,748 651 1,220 4,759 6,873 210,561 57,885 111,865 24,364 6,974 8,542 .......................26 164,141 114,623 6,409 5,501 23,426 935 1,246 4,970 7,031 211,533 58,115 112,245 24,232 7,076 8,933 ..............July 3* 157,407 112,969 5,972 2,546 22,380 859 1,193 5,469 6,019 211,532 58,064 112,010 24,404 7,047 9,016 .......................10* 158,189 114,378 5,893 1,686 22,355 745 1,269 5,143 6,720 213,583 57,989 113,649 24,415 7,389 9,001 .......................17* 153,933 111,755 5,667 1,740 20,734 637 1,104 5,088 7,208 215,440 57,855 114,836 24,592 7,530 9,402 .......................24* 161,459 114,753 6,225 1,818 23,131 733 1,864 5,448 7,487 216,240 57,651 115,684 24,567 7,290 9,785 .......................31* New York City 1973 43,479 24,611 1,022 936 10,481 594 834 2,293 2,708 32,830 5,315 18,838 1,925 2,591 4,058 .July 4 40,650 23,070 297 415 9,606 430 934 2,682 3,216 32,924 5,279 18,867 1,932 2,697 4,056 ..........11 41,477 24,211 324 651 10,132 414 725 2,426 2,594 33,169 5,247 19,161 1,891 2,774 4,016 ..........18 42,337 22,615 303 737 10,510 391 726 2,709 4,346 33,629 5,196 19,452 2,046 2,912 3,957 ..........25 1974 45,392 23,668 368 613 10,639 359 1,652 3,800 4,293 40,521 5,073 24,561 1,808 4,216 4,553 .June 5 44,360 24,525 266 373 10,807 342 1,226 3,440 3,381 40,489 5.056 24,544 1,601 4,265 4,667 ..........12 44,980 23,997 330 1,354 11,004 319 1,145 3,435 3,396 40,468 5,037 24,310 1,620 4,339 4,757 ..........19 45,908 25,306 459 656 10,936 332 1,019 3,497 3,703 41,264 5.056 24,734 1,712 4,453 4,882 ..........26 45,638 24,872 410 923 11,098 558 1,042 3,695 3,040 42,581 5,067 25,314 1,906 4,663 5,151 .July 3* 43,744 24,223 349 470 10,773 492 971 4,081 2,385 42,687 5,062 25,078 1,970 4,705 5,345 ..........10* 44,487 24,449 297 176 11,318 399 1,048 3,864 2,936 43,413 5,056 25,420 2,106 4,926 5,317 ..........17* 45,433 25,370 347 229 10,563 343 908 3,802 3,871 44,401 5,039 25,945 2,087 4,947 5,715 ..........24* 48,889 26,215 461 369 11,816 399 1,645 4,149 3,835 44,686 5,006 26,091 2,069 4,667 6,155 ..........31* Outside New York City 1973 118,023 89,374 6,623 4,143 11,967 429 163 1,067 4,257 147,303 53,066 68,712 19,248 1,711 3,985 .July 4 112,446 87,629 6,019 2,375 11,027 424 169 1,016 3,787 147,597 52,948 69,138 19,334 1,728 3,957 ...........11 111,864 87,312 5,765 2,564 10,951 369 177 1,032 3,694 148,642 52,752 70,284 19,434 1,713 3,951 ..........18 108,651 84,186 5,710 3,208 10,498 347 270 976 3,456 150,149 52,450 71,832 19,685 1,685 4,002 ..........25 1974 112,490 87,809 5,656 1,945 11,598 328 247 1,256 3,651 168,933 52,854 86,607 23,187 2,298 3,512 .June 5 111,884 89,192 5,524 1,338 10,722 329 205 1,289 3,285 169,407 52,797 87,053 23,034 2,365 3,678 ..........12 114,317 88,053 5,579 4,549 11,123 310 215 1,247 3,241 168,957 52,743 86,801 22,790 2,444 3,703 ..........19 112,566 86,895 6,274 3,633 10,812 319 201 1,262 3,170 169,297 52,829 87,131 22,652 2,521 3,660 ..........26 118,503 89,751 5,999 4,578 12,328 377 204 1,275 3,991 168,952 53,048 86.931 22,326 2,413 3,782 . .July 3* 113,663 88,746 5,623 2,076 11,607 367 222 1,388 3,634 168,845 53,002 86.932 22,434 2,342 3,671 10* 113,702 89,929 5,596 1,510 11,037 346 221 1,279 3,784 170,170 52,933 88,229 22,309 2,463 3,684 17* 108,500 86,385 5,320 1,511 10,171 294 196 1,286 3,337 171,039 52,816 88,891 22,505 2,583 3,687 , 24* 112,570 88,538 5,764 1,449 11,315 334 219 1,299 3,652 171,554 52,645 89,593 22,498 2,623 3,630 For notes see p. A-24. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 24 WEEKLY REPORTING BANKS □ AUGUST 1974 ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKS— Continued (In millions of dollars) Borrowings Reserves Memoranda from— for— Large negotiable Fed­ Total time CD’s Gross eral Other Total loans included in time liabili­ Wednesday funds liabili­ capital Total and De­ and savings deposits 11 ties of pur­ F.R. ties, Secur­ ac­ loans invest­ mand banks chased, Banks Others etc. 8 Loans ities counts (gross) ments deposits to etc. 7 ad­ (gross) ad­ Issued Issued their justed^ ad­ justed 10 Total to to foreign justed9 lPC’s others bran­ ches Large banks— Total 1973 July 4...................... 41,216 2,423 3,723 17,094 4,469 96 30,759 252,143 331,456 97,320 59,513 39,596 19,917 1,766 11...................... 38,656 1,836 4,013 16,932 4,492 64 30,739 255,201 334,500 99,774 60,414 40,237 20,177 1,664 18...................... 41,746 1,100 4,264 17,219 4,492 64 30,629 252,998 331,577 98,912 61,618 41,505 20,113 2,146 2 5 38,743 1,299 4,512 17,558 4,495 64 30,650 253,759 332,524 97,193 63,507 43,005 20,502 2,092 1974 June 5......................... 51,998 2,092 6,319 21,264 5,052 66 33,072 286,963 371,435 100,788 79,160 55,658 23,502 2,813 12...................... 54,929 2,658 5,970 20,865 5,061 61 33,090 286,469 372,101 100,558 79,647 55,991 23,656 2,410 19...................... 49,474 1,988 6,267 21,028 5,060 61 33,006 288,693 373,430 99,024 79,154 55,375 23,779 2,503 2 6 51,325 2,341 6,358 21,861 5,065 61 32,978 289,542 373,653 100,528 80,176 56,015 24,161 3,388 July 3*....................... 53,465 2,361 6,100 21,447 5,040 62 33,251 292,695 376,320 98,403 80,848 56,267 24,581 3,177 10*.................... 55,108 1,745 6,086 21,669 5,033 62 33,235 292,727 375,722 101,234 81,129 56,229 24,900 2,804 17*.................... 52,608 3,417 6,119 23,522 5.035 62 33,106 293,653 376,207 100,967 82,973 57,613 25,360 4,583 24*.................... 49,449 4,780 6,137 23,909 5; 030 62 33,103 292,305 374,921 99,585 84,791 58,664 26,127 4,681 31*.................... 50,266 2,796 5,941 24,018 5,066 62 33.357 296,471 379,772 101,409 85,347 59,221 26,126 3,268 New York City 1973 July 4. 9,628 539 1,793 6,312 1,284 7,778 57,581 70,072 20,360 19,367 12,748 6,619 1,512 11 . 9,001 807 1,876 6,346 1,275 7,772 59,685 72,313 20,931 19,475 12,744 6,731 1,354 18. 10,517 2,131 6,610 1,279 7,741 57,787 70,245 21,330 19,725 13,072 6,653 1,669 25. 9,318 257 2,125 6,282 1,282 7,723 57,905 70,555 20,302 20,209 13,362 6,847 1,470 1974 June 5. 11,678 2,571 7,424 1,419 8,648 67,895 81,990 23,328 25,528 17,379 8,149 1,405 12. 14,966 300 7,270 1,423 8,633 67,341 82,487 21,756 25,437 17,352 8,085 1,192 19. 11,533 7,086 1,421 8,613 68,730 83,617 21,869 25,393 17,058 8,335 1,236 26. 13,253 '226 7,739 1,424 8,600 69,116 83,541 22,643 25.980 17,372 8,608 1,893 July 3*. 12,862 100 7,894 1,377 8,679 70,716 85,170 21,517 26.980 17,927 9,053 1,919 10*. 13,206 7,824 1,375 8,673 70,601 84,813 22,335 27,116 17,774 9,342 1,574 17*. 11,664 890 9,024 1,375 8,652 70,840 84,802 22,114 27,827 18,078 9,749 2,730 24*. 11,300 861 9,540 1,374 8,654 70,452 84,600 21,854 28,672 18,557 10,115 3,656 31*. 12,780 150 ' 9,560 1,391 8,736 73,148 87,756 23,157 28,723 18,520 10,203 2,422 Outside New York City 1973 July 31,588 1,884 l 10,782 3,185 96 22,981 194,562 261,384 76,960 40,146 26,848 13,298 254 29,655 1,029 F 10,586 3,217 64 22,967 195,516 262,187 78,843 40,939 27,493 13,446 310 31,229 1,100 10,609 3,213 64 22,! 195,211 261,332 77,582 41,893 28,433 13,460 477 29,425 1,042 r 11,276 3,213 64 22,927 195,854 261,969 76,891 43,298 29,643 13,655 622 1974 June 40,320 2,092 ! 13,840 3,633 66 24,424 219,068 289,445 77,460 53,632 38,279 15,353 1,408 39,963 2,358 i 13,595 3,638 61 24,457 219,128 289,614 78,802 54,210 38,639 15,571 1,218 37,941 1,988 1 13,942 3,639 61 24,393 219,963 289,813 77,155 53,761 38,317 15,444 1,267 38,072 2,121 ► 14,122 3,641 61 24,378 220,426 290,112 77.885 54,196 38,643 15,553 1,495 July 3*.................... 40,603 2,261 ' 13,553 3,663 62 24,572 221,979 291,150 76.886 53,868 38,340 15,528 1,258 10*.................... 41,902 1,745 13,845 3,658 62 24,562 222,126 290,909 78,899 54,013 38,455 15,558 1,230 17*.................... 40,944 2,527 ' 14,498 3,660 62 24,454 222’813 291,405 78,853 55,146 39,535 15,611 1,853 24*...........................I 38,149 3,919 t 14,369 3,656 62 24,449 221,853 290,321 77,731 56,119 40,107 16,012 1,025 31*........................... 37,486 2,646 14,458 3,675 62 24,621 223,323 292,016 78,252 56,624 40,701 15,923 846 1 Includes securities purchased under agreements to resell. 8 Includes minority interest in consolidated subsidiaries. 2 Includes official institutions and so forth. 9 Exclusive of loans and Federal funds transactions with domestic com­ 3 Includes short-term notes and bills. mercial banks. 4 Federal agencies only. 10 All demand deposits except U.S. Govt, and domestic commercial 5 Includes corporate stocks. banks, less cash items in process of collection. 6 Includes U.S. Govt, and foreign bank deposits, not shown separately. 11 Certificates of deposit issued in denominations of $100,000 or more. 7 Includes securities sold under agreements to repurchase. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ BUSINESS LOANS OF BANKS A 25 COMMERCIAL AND INDUSTRIAL LOANS OF LARGE COMMERCIAL BANKS (In millions of dollars) Outstanding Net change during- Industry 1974 1974 1974 1973 1973 July July July July July 1st 2nd 31 24 17 10 3 July June May II I IV half half Durable goods manufacturing: Primary metals................................. 1,867 1,874 1,882 1,853 1,829 2 -29 -15 -23 79 -247 56 -229 Machinery........................................ 8,492 8,668 8,656 8,581 8,489 -27 363 7 779 1,069 136 1,848 615 Transportation equipment.............. 3,199 3,189 3,159 3,213 3.183 92 110 -56 229 358 90 587 362 Other fabricated metal products... 2,943 2,975 2,991 2,923 2 ^ 896 108 59 71 235 267 15 502 71 Other durable goods........................ 4,792 4,759 4,785 4,812 4,732 180 160 126 560 349 -363 909 -73 Nondurable goods manufacturing: Food, liquor, and tobacco.............. 4,061 4,041 4,048 4,023 3,965 124 -122 -267 -344 124 340 -220 733 Textiles, apparel, and leather.......... 4,084 4,188 4,185 4,196 4,209 -43 215 I 338 570 -440 908 -205 Petroleum refining........................... 1,832 1,692 1,669 1,484 1,443 549 -212 287 68 -176 184 -108 203 Chemicals and rubber..................... 3,185 3,204 3,277 3,252 3,211 59 120 8 355 255 -198 610 -150 Other nondurable goods................. 2,507 2,535 2,532 2,519 2,510 24 120 6 222 116 -65 338 91 Mining, including crude petroleum and natural gas........................... 4,370 4,370 4,330 4,222 4,203 180 23 -94 74 312 -233 386 -156 Trade: Commodity dealers................. 1,491 1,445 1,434 1,457 1,514 -78 -88 -305 -630 357 630 -273 588 Other wholesale....................... 6,394 6,320 6,354 6,360 6,398 144 133 -7 364 471 151 835 194 Retail...................................... 7,212 7,199 7,242 7,071 7,151 43 123 118 556 540 -184 1,096 -19 Transportation..................................... 6,026 6,043 6,008 6,122 6,131 -77 -31 69 34 105 14 139 80 Communication................................... 2,408 2,397 2,563 2,584 2,637 -93 -29 102 326 149 -78 475 -91 Other public utilities........................... 7,640 7,577 7,635 7,379 7,395 719 548 397 1,335 -291 596 1,044 1,330 Construction......................................... 6,324 6,297 6,281 6,258 6,266 114 169 316 623 34 -200 657 11 11,734 11,759 11,726 11,651 11,682 86 107 I 404 188 565 592 927 All other domestic loans..................... 9,676 9,584 9,555 9,517 9,516 284 398 138 580 541 302 1,121 682 Bankers’ acceptances........................... 1,460 1,560 1,870 2,081 2,012 -257 301 124 381 62 199 443 -123 Foreign commercial and industrial loans.............................................. 4,953 4,949 4,887 4,804 4,839 273 202 132 502 105 23 607 -361 Total classified loans........................... 106,650106,625 107,069 106,362 106,211 2,406 2,640 1,159 6,968 5,584 1,237 12,552 4,480 Total commercial and industrial loans of large commercial banks.......... *126,267126,132 126,553 125,827 125,609 2,682 2,704 1,061 7,600 5,864 1,938 13,464 5,309 See Note to table below. “TERM” COMMERCIAL AND INDUSTRIAL LOANS OF LARGE COMMERCIAL BANKS (In millions of dollars) Outstanding Net change during— 19*74 1973 1974 1973 1974 Industry July June May Apr. Mar. Feb. Jan. Dec. Nov. 1st 31 26 29 24 27 27 30 26 28 U I IV III half Durable goods manufactur­ ing: Primary metals................... 1,116 1,105 1,111 1,083 1,064 1,046 1,092 1,104 1,240 41 -40 -203 -21 1 Machinery.................................. 3,574 r3,286 3,213 3,145 3,114 3,037 2,950 2,866 2,726 171 248 186 39 419 Transportation equipment. 1,371 1,410 1,424 1,423 1,365 1,367 1,324 1,284 1,257 45 81 18 77 126 Other fabricated metal products......................... 993 954 960 934 911 911 938 894 912 43 17 23 2 60 Other durable goods.......... 2,171 2,107 2,012 1,972 1,915 1,837 1,737 1,772 1,754 192 143 -16 98 335 Nondurable goods manufac­ turing: Food, liquor, and tobacco. 1,613 1,571 1,584 1,533 1,529 1,527 1,514 1,491 1,469 42 38 14 84 80 Textiles, apparel, and leather............................. 1,169 1,128 1,120 1,147 1,089 1,043 1,032 1,003 1,036 39 86 -25 59 125 Petroleum refining............. 995 963 954 934 945 901 920 933 839 18 12 13 44 30 Chemicals and rubber....... 1,759 1,737 1,686 1,690 1,603 1,569 1,570 1,561 1,509 134 42 9 71 176 Other nondurable goods.. 1,149 1,171 1,157 1,145 1,139 1,080 1,069 1,082 1,077 32 57 -18 37 89 Mining, including crude pe­ troleum and natural gas. 3,198 3,130 3,172 3,284 3,245 3,203 3,153 2,958 2,950 -115 287 -32 144 172 Trade: Commodity dealers.. 159 141 r144 144 140 129 137 127 135 1 13 11 -7 14 Other wholesale........ 1,454 rl,406 1,404 1,335 1,323 1,315 1,265 1,190 1,172 85 133 12 112 218 Retail......................... 2,515 '2,428 2,514 2,543 2,480 2,376 2,249 2,206 2,227 -60 274 59 141 214 Transportation....................... 4,349 r4,425 4,474 4,414 4,417 4,311 4,327 4,320 4,208 7 97 41 -26 104 Communication..................... 1,041 rl,030 1,033 978 966 940 947 860 828 66 106 2 73 172 Other public utilities............. 3,538 r3,443 3,356 3,196 3,154 3,245 3,298 3,252 3,121 289 -98 416 427 191 Construction.......................... 2,194 '2,130 1,984 1,908 1,898 1,940 1,943 1,905 1,936 233 -7 -87 96 226 Services................................... 5,246 r5,273 5,263 5,223 5,076 5,004 4,937 5,049 4,916 198 27 330 157 225 All other domestic loans .... 3,121 r3,021 2,945 2,935 2,808 2,384 2,692 2,602 2,617 214 206 17 384 420 Foreign commercial and in­ dustrial loans................. 2,593 r2,544 2,396 2,369 2,350 2,321 2,469 2,334 2,306 197 16 148 -399 213 Total loans............................. *45,318 44,403 43,906 43,335 42,531 41,486 41,563 40,793 40,235 1,872 1,738 918 1,592 3,610 Note.—About 160 weekly reporting banks are included in this series; Commercial and industrial “term” loans are all outstanding loans with these banks classify, by industry, commercial and industrial loans amount­ an original maturity of more than 1 year and all outstanding loans granted ing to about 90 per cent of such loans held by all weekly reporting banks under a formal agreement—revolving credit or standby—on which the and about 70 per cent of those held by all commercial banks. original maturity of the commitment was in excess of 1 year. For description of series see article “Revised Series on Commercial and Industrial Loans by Industry,” Feb. 1967 Bulletin, p. 209. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 26 DEMAND DEPOSIT OWNERSHIP □ AUGUST 1974 GROSS DEMAND DEPOSITS OF INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS1 (In billions of dollars) Iype of holder Total Class of bank, and quarter or month deposits, F b i u n s a i n n c e i s a s l No b n u f s i i n n a e n s c s ial Consumer Foreign o A th l e l r IPC All commercial banks: 1970—Sept................................................................................. 17.0 88.0 51.4 1.4 10.0 167.9 17.3 92.7 53.6 1.3 10.3 175.1 1971—Mar................................................................................ 18.3 86.3 54.4 1.4 10.5 170.9 June................................................................................ 18.1 89.6 56.2 1.3 10.5 175.8 Sept................................................................................. 17.9 91.5 57.5 1.2 9.7 177.9 18.5 98.4 58.6 1.3 10.7 187.5 1972—June................................................................................ 17.9 97.6 60.5 1.4 11.0 188.4 Sept................................................................................. 18.0 101.5 63.1 1.4 11.4 195.4 18.9 109.9 65.4 1.5 12.3 208.0 1973—Mar................................................................................. 18.6 102.8 65.1 1.7 11.8 200.0 June................................................................................ 18.6 106.6 67.3 2.0 11.8 206.3 Sept................................................................................. 18.8 108.3 69.1 2.1 11.9 210.3 Dec.................................................................................. 19.1 116.2 70.1 2.4 12.4 220.1 18.9 108.4 70.6 2.3 11.0 211.2 June*.............................................................................. 18.2 112.4 71.5 2.2 11.1 215.5 Weekly reporting banks: 1971—Dec................................................................................. 14.4 58.6 24.6 1.2 5.9 104.8 1972—Dec................................................................................. 14.7 64.4 27.1 1.4 6.6 114.3 1973—June................................................................................ 14.2 60.8 27.1 1.9 6.3 110.2 July................................................................................. 14.8 61.1 27.3 1.9 6.6 111.7 Aug................................................................................. 14.3 59.5 27.3 1.9 6.1 109.1 Sept................................................................................. 14.5 60.6 27.2 1.9 6.5 110.8 Oct.................................................................................. 15.0 61.7 27.3 2.0 6.6 112.5 14.8 62.9 27.5 2.1 6.7 113.9 Dec................................................................................. 14.9 66.2 28*. 0 2.2 6.8 118.1 1974—Jan.................................................................................. 15.2 63.8 28.4 2.3 6.7 116.5 Feb................................................................................. 14.1 62.1 26.9 2.3 6.2 111.5 Mar................................................................................. 14.7 61.5 27.6 2.1 6.3 112.1 14.7 62.2 29.6 2.1 6.2 114.7 May................................................................................ 14.2 62.3 28.0 2.1 6.1 112.7 14.1 63.4 28.1 2.0 6.3 113.9 1 Including cash items in process of collection. from reports supplied by a sample of commercial banks. For a detailed description of the type of depositor in each category, see June 1971 Note.—Daily-average balances maintained during month as estimated Bulletin, p. 466. DEPOSITS ACCUMULATED FOR PAYMENT OF PERSONAL LOANS (In millions of dollars) Class of Dec. 31, June 30, Dec. 31, Apr. 24, Class of Dec. 31, June 30, Dec. 31, Apr. 24, bank 1972 1973 1973 1974 bank 1972 1973 1973 1974 All commercial.... 559 538 507 All member—Cont. Insured................ 554 533 503 478 Other large banks 1........... 69 63 58 62 National member 311 304 288 282 All other member 1............ 313 312 294 284 State member.... 71 71 64 64 All nonmember...................... 177 163 155 All member............ 381 375 352 346 172 158 152 131 Noninsured......................... 5 5 3 1 Beginning Nov. 9,1972, designation of banks as reserve city banks for Note.—Hypothecated deposits, as shown in this table, are treated one reserve-requirement purposes has been based on size of bank (net demand way in monthly and weekly series for commercial banks and in another deposits of more than $400 million), as described in the Bulletin for way in call-date series. That is, they are excluded from “Time deposits” July 1972, p. 626. Categories shown here as “Other large” and “All other and “Loans” in the monthly (and year-end) series as shown on pp. A-16; member” parallel the previous “Reserve City” (other than in New York from the figures for weekly reporting banks as shown on pp. A-20-A-24 City and the City of Chicago) and “Country” categories, respectively (consumer instalment loans); and from the figures in the table at the (hence the series are continuous over time). bottom of p. A-15. But they are included in the figures for “Time de­ posits” and “Loans” for call dates as shown on pp. A-16-A-19. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ LOAN SALES BY BANKS; OPEN MARKET PAPER LOANS SOLD OUTRIGHT BY COMMERCIAL BANKS (Amounts outstanding; in millions of dollars) To own subsidiaries, foreign branches, holding companies, and other affiliates To all others except banks Date By type of loan By type of loan Total Total Commercial Commercial and All other and All other industrial industrial 1974—Apr. 3... 5,114 2,893 2,221 1,440 358 1,082 10... 5,063 2,911 2,152 1,443 356 1.087 17... 5,043 2,874 2,169 1,448 360 1.088 24. .. 5,386 3,080 2,306 1,482 393 1,089 May 1... 5,399 3,020 2^379 1,471 379 1,092 8... 5,536 3,069 2,467 1,475 375 1,100 15... 5,442 3,039 2,403 1,457 358 1,099 22... 5,567 3,084 2,483 1,455 357 1,098 29... 5,653 3,112 2.541 1,442 359 1,083 June 5... 5,648 2,986 2,662 1,469 384 1,085 12... 5,493 2,999 2,494 1,446 374 1,072 19... 5,380 2,888 2,492 1.450 391 1,059 26r.. 5,372 2,943 2,429 1,429 382 1,047 July 3 ... 5,460 2,947 2,513 1,479 439 1.040 10.. . 5,491 2,949 2.542 1,436 396 1.040 17... 5,501 2,973 2,528 1,420 381 1.039 24... 5,572 3,050 2,522 1,428 389 1.039 31... 5,411 2,905 2,506 1.450 413 1,037 Note.—Amounts sold under repurchase agreement are excluded. Figures include small amounts sold by banks other than large weekly reporting banks. COMMERCIAL AND FINANCE COMPANY PAPER AND BANKERS ACCEPTANCES OUTSTANDING (In millions of dollars) Commercial and finance Dollar acceptances company paper Held by- Based on— Placed through Placed End of period dealers directly Accepting banks F.R. Banks Total Total Im­ Ex­ Others ports ports All Bank Bank For­ into from other related Other1 related Other2 Total Own Bills Own eign United United bills bought acct. corr. States States 196 5 9,300 1,903 7,397 3,392 1,223 1,094 129 187 144 1,837 792 974 1,626 196 6 13,645 3,089 10,556 3,603 1,198 983 215 193 191 2,022 997 829 1,778 196 7 17,085 4,901 12,184 4,317 1,906 1,447 459 164 156 2,090 1,086 989 2,241 196 8 21,173 7,201 13,972 4,428 1,544 1,344 200 58 109 2,717 1,423 952 2,053 196 9 32,600 1,216 10,601 3,078 17,705 5,451 1,567 1.318 249 64 146 3,674 1,889 1,153 2,408 197 0 33,071 409 12,262 1,940 18,460 7,058 2,694 1,960 735 57 250 4,057 2,601 1,561 2,895 197 1 32,126 495 10,923 1,478 19,230 7,889 3,480 2,689 791 261 254 3,894 2,834 1,546 3,509 197 2 34,721 930 11,242 1,707 20,842 6,898 2.706 2,006 700 106 179 3,907 2,531 1,909 2,458 1973—June 35,786 1,173 8,316 3,110 23,187 7.237 2,185 1,746 439 66 395 4,591 2,053 2,755 2,428 July. 35,463 1,207 7,954 3,307 22,995 7,693 2,254 1,803 452 132 496 4,810 2,222 2,954 2,517 Aug. 37,149 1,350 7,676 3,758 24,365 7,734 1,968 1,598 370 84 522 5,159 2,268 2,945 2,520 Sept. 37,641 1,353 8,845 3,878 23,565 8,170 2,099 1,629 470 145 548 5,379 2,296 3,289 2,585 Oct.. 41,602 1,319 11,727 3,549 25,007 8.237 2,042 1,731 311 107 589 5,499 2,345 3,222 2,670 Nov. 42,945 1,317 12,824 3,655 25,149 8,493 2,566 2,129 437 71 604 5,252 2,320 3,340 2,833 Dec., 41,073 1,311 11,751 3,570 24,441 8,892 2,837 2.318 519 68 581 5,406 2,273 3,499 3,120 1974—Jan.. 45,491 1,429 13,990 4,072 26,000 9,101 2.706 2,251 454 68 589 5,738 2,334 3,492 3,275 Feb., 47,164 1,449 15,897 4,080 25,738 9,364 2,854 2,328 525 69 592 5,850 2,434 3,182 3,748 Mar. 44,690 1,508 13,520 4,537 25,125 10,166 2,986 2,413 573 296 684 6,200 2,827 2,979 4,361 Apr. 44,677 1,664 13,327 5,170 24,516 10,692 3,232 2,744 488 216 700 6,544 2,900 2,833 4,959 May 46,171 1,807 13,631 5,277 25,456 11,727 3,089 2,642 447 373 732 7,532 2,952 2,899 5,876 June 44,846 1,635 13,249 5,317 24,645 13,174 3,535 3,066 469 304 795 8,540 3,287 3,219 6,668 1 As reported by dealers; includes finance company paper as well as Note.—Back data available from Financial Statistics Division, Federal other commercial paper sold in the open market. Reserve Bank of New York. 2 As reported by finance companies that place their paper directly with investors. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 28 INTEREST RATES □ AUGUST 1974 PRIME RATE CHARGED BY BANKS (Per cent per annum) Effective date Rate Effective date Rate Effective date Rate Effective date Rate 1973—June 8........... 7 Vi" 1974—Jan. 7. 9Vt-9y4m- 1974—Apr. 11....... 934-98/10- 1974—June 3. lli/iB-lie/io- 19........... 7%b-7% 99/io 10b 11% 25........... 734 b 14. 9 Vi-9 34 b- 15....... IOb-IOVio- 1114-llViB- July 2........... 734 b-8 29. 9V 9 4 * - / 9 io K m- 19....... 10 I - O 1 I O /4 i/io- 10. 116/10 3............ 734-8 B 9*/io 1014b 21. ll$"ll%B 9............ 8-8 14 b 2 3 1014b-104/h> 24. IIIAb-1134 17............ 8^ b-8 ft Feb. 11. 9-9 ^■93/io 2 4 1014 b- 25. ll1A--ll%- 18............ 8iy4-8ViB 19. 9m-9V4 104/lO- 118/10 23............ 8Vi- 25. 8Vio-8%«-9 iovi 26. llvi-ll^B- 30............ 8 Vi-8 34 b 26. Wlio-8V4m 2 5 101 1 4 0 - 1/ 1 iB 04/10- 28. 11% 11 ^ 8 - /1 1 0 18/iu Aug. 6............ 834-9b Mar. 4. 8 Vi—87/io— 2 6 104/10- 7............ 9b 8%. lOViB- July 1134b-118/10. 13............ 9-9 14 b 5. 8%-8«/io- 1034-11 12 21............ 9V4B-91A 8%. 30___ lOViB- 5. 118/io-12b 22............ 9Vi" 19. 834 .-88/10 106/io- 9. 12b-1214 28............ 91^-934. 21. 8%«-88/io-9 1034-11 23. 10^12.- 29............ 934b 22. 8 8/10-9 b 26. 9b May 2.... loi/i-ioe/io- Sept. 14............ 934b-10 28. 9b-9^ 1034 B-ll 18............ 10a 29. 9-91/4B-914 3.... 10«/io-1034« 27............ 934-10b -11 Apr. 2, 9^b-9 4/10- 6.... lOe/io-1034- Oct. 22............ 91/£-934-10b 9% 11" 24............ 9^-934b-10 3, 914-94/10- 7.... 11 ■ 9ViB 10.... 11-1114" 4, 9Vio-9ViB- 13.... ll%*-ll*/io 9% 17........... Hi4_ll_4/10 5 94/10-9^- -11 Vi" 9%b 20.... 8, 9%b-98/10- 10 Note.—Beginning Nov. 1971, several banks adopted a floating prime Effective Apr. 16, 1973, with the adoption of a two tier or “dual prime rate keyed to money market variables, b denotes the predominate prime rate,” this table shows only the “large-business prime rate.” which is the rate quoted by commercial banks to large businesses. range of rates charged by commercial banks on short-term loans to large businesses with the highest credit standing. RATES ON BUSINESS LOANS OF BANKS Size of loan (in thousands of dollars) All sizes 1-9 10-99 100-499 500-999 1,000 and over Center May Feb. May Feb. May Feb. May Feb. May Feb. May Feb. 1974 1974 1974 1974 1974 1974 1974 1974 1974 1974 1974 1974 Short-term 35 centers..................................... 11.15 9.91 10.50 9.86 11.06 10.09 11.41 10.28 11.32 10.06 11.06 9.75 New York City........................ 11.08 9.68 10.70 9.93 11.25 10.12 11.54 9.95 11.24 9.78 11.00 9.62 7 Other Northeast................... 11.65 10.28 11.31 10.42 11.69 10.46 12.01 10.71 11.94 10.48 11.40 9.99 8 North Central....................... 11.09 9.98 9.59 9.18 10.80 9.98 11.36 10.42 11.37 10.14 11.00 9.82 7 Southeast............................... 10.88 9.80 10.43 9.69 10.69 9.81 10.92 10.02 10.93 9.90 10.94 9.60 8 Southwest.............................. 10.82 9.93 10.32 9.90 10.67 9.98 10.97 10.04 10.84 9.99 10.78 9.82 4 West Coast............................ 11.19 9.78 11.01 10.16 11.27 10.08 11.34 10.05 11.30 9.83 11.13 9.68 Revolving credit 35 centers..................................... 11.21 9.82 11.00 10.22 11.27 10.09 11.36 10.10 11.32 9.78 11.19 9.79 New York City........................ 11.47 9.91 10.76 9.32 11.16 9.60 11.27 9.99 11.31 9.72 11.49 9.92 7 Other Northeast................... 11.35 10.20 11.36 9.82 11.52 10.27 11.36 10.32 11.02 9.65 11.38 10.25 8 North Central....................... 11.06 10.00 11.63 11.14 11.37 10.27 11.35 10.17 11.19 10.03 11.00 9.97 7 Southeast............................... 10.58 9.96 10.00 9.75 10.17 9.88 10.51 10.09 11.00 9.35 10.52 10.14 8 Southwest.............................. 11.84 10.34 11.73 10.58 11.28 9.97 11.79 10.32 12.12 10.43 11.79 10.35 4 West Coast............................ 11.01 9.58 10.71 10.24 11.37 10.11 11.39 10.04 11.31 9.65 10.93 9.51 Long-term 35 centers..................................... 11.41 10.16 10.61 10.74 10.82 10.42 10.92 10.47 11.58 10.24 11.48 10.09 New York City........................ 12.64 10.03 10.67 11.50 10.93 11.90 10.06 12.06 9.95 12.74 10.02 7 Other Northeast................... 11.27 10.48 10.81 10.93 11.03 10.07 11.01 10.19 11.76 10.58 11.26 10.58 8 North Central....................... 11.14 10.48 9.49 10.51 10.13 9.69 11.10 10.45 11.66 10.10 11.13 10.57 7 Southeast............................... 11.03 10.93 10.19 10.49 9.96 13.59 11.49 12.48 9.96 14.20 11.50 8.90 8 Southwest.............................. 10.83 9.90 11.51 10.88 11.32 10.23 10.64 10.56 11.36 9.63 10.65 9.79 4 West Coast............................ 9.97 9.75 11.31 10.75 11.06 10.21 9.40 10.64 11.34 10.22 9.81 9.55 Note.—Beginning Feb. 1971 the Quarterly Survey of Interest Rates on Business Loans was revised. For description of revised series see pp. 468- 77 of the June 1971 Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 a INTEREST RATES A 29 MONEY MARKET RATES (Per cent per annum) U.S. Government securities4 Prime Finance commercial CO. Prime Fed­ paper1 paper bankers’ eral 3-month bills5 6-month bills5 9-to 12-month issues Period •placed accept­ funds 3- to 5directly, ances, rate3 year 90-119 4- to 6- 3- to 6- 90 days 1 Rate Market Rate Market 1-year issues 6 days months months2 on new yield on new yield bill (mar­ Other® issue issue ket yield)5 1967......................... 5.10 4.89 4.75 4.22 4.321 4.29 4.630 4.61 4.71 4.84 5.07 1968......................... 5.90 5.69 5.75 5.66 5.339 5.34 5.470 5.47 5.46 5.62 5.59 1969......................... 7.83 7.16 7.61 8.21 6.677 6.67 6.853 6.86 6.79 7.06 6.85 1970......................... 7.72 7.23 7.31 7.17 6.458 6.39 6.562 6.51 6.49 6.90 7.37 1971......................... 5.11 4.91 4.85 4.66 4.348 4.33 4.511 4.52 4.67 4.75 5.77 1972......................... 4.66 4.69 4.52 4.47 4.44 4.071 4.07 4.466 4.49 4.77 4.86 5.85 1973......................... 8.20 8.15 7.40 8.08 8.74 7.041 7.03 7.178 7.20 7.01 7.30 6.92 1973—July............... 9.26 9.18 8.09 9.19 10.40 8.015 8.01 8.081 8.12 7.97 8.37 7.49 Aug............... 10.26 10.21 8.90 10.18 10.50 8.672 8.67 8.700 8.65 8.32 8.82 7.75 Sept.............. 10.31 10.23 8.90 10.19 10.78 8.478 8.29 8.537 8.45 8.07 8.44 7.16 Oct................ 9.14 8.92 7.84 9.07 10.01 7.155 7.22 7.259 7.32 7.17 7.42 6.81 Nov............... 9.11 8.94 7.94 8.73 10.03 7.866 7.83 7.823 7.96 7.40 7.66 6.96 Dec............... 9.28 9.08 8.16 8.94 9.95 7.364 7.45 7.444 7.56 7.01 7.38 6.80 1974—Jan................ 8.86 8.66 7.92 8.72 9.65 7.755 7.77 7.627 7.65 7.01 7.46 6.94 Feb............... 8.00 7.82 7.40 7.83 8.97 7.060 7.12 6.874 6.96 6.51 6.93 6.77 Mar............... 8.64 8.42 7.76 8.43 9.35 7.986 7.96 7.829 7.83 7.34 7.86 7.33 Apr............... 9.92 9.79 8.43 9.61 10.51 8.229 8.33 8.171 8.32 8.08 8.66 7.99 May.............. 10.82 10.62 8.94 10.68 11.31 8.430 8.23 8.496 8.40 8.21 8.78 8.24 June............. 11.18 10.96 9.00 10.79 11.93 8.145 7.90 8.232 8.12 8.16 8.71 8.14 July............... 11.93 11.72 9.00 11.88 12.92 7.752 7.55 8.028 7.94 8.04 8.89 8.39 Week ending— 1974—Apr. 6........ 9.53 9.38 8.25 9.30 9.93 8.358 8.51 8.211 8.31 7.95 8.48 7.91 13....... 9.70 9.60 8.40 9.50 10.02 8.648 8.49 8.393 8.34 8.05 8.55 7.98 20 9.88 9.73 8.50 9.50 10.36 8.051 8.05 8.084 8. 18 8.05 8.61 7.94 27 . 10.23 10.13 8.50 9.85 10.78 7.857 8.10 7.995 8.27 8.14 8.82 8.04 May 4........ 10.85 10.73 8.70 10.35 11.17 8.909 8.81 8.796 8.73 8.45 9.10 8.29 11 11.00 10.83 8.90 10.70 11.29 9.036 8.60 9.006 8.71 8.46 9.21 8.51 18........ 11.00 10.80 9.00 10.75 11.46 8.023 8.00 8.031 8.12 8.11 8.79 8.20 25 10.63 10.38 9.00 10.75 10.95 8.197 7.90 8.440 8.28 7.99 8.39 8.09 June 1........ 10.56 10.31 9.00 10.75 11.54 7.983 8.04 8.205 8.26 8.06 8.46 8.07 8 10.78 10.53 9.00 10.75 11.45 8.300 8.05 8.426 8.16 8.15 8.61 8.06 15....... 10.98 10.75 9.00 10.75 11.60 8.260 8.23 8.324 8.32 8.14 8.68 8.06 22 , 11.33 11.10 9.00 10.75 11.85 8.177 7.88 8.175 8.04 8.10 8.66 8.09 29....... 11.65 11.48 9.00 10.90 11.97 7.841 7.45 8.003 7.96 8.24 8.88 8.33 July 6........ 12.00 11.81 9.00 11.31 13.55 7.808 7.53 8.055 8.15 8.38 9.09 8.47 13 12.18 11.95 9.00 12.00 13.34 7.892 7.45 8.480 8.05 8.13 9.09 8.60 20....... 12.15 11.95 9.00 12.00 13.04 7.702 7.72 7.876 7.83 7:80 8.67 8.35 27....... 11.73 11.50 9.00 12.00 12.60 7.604 7.43 7.700 7.64 7.81 8.62 8.08 Aug. 3........ 11.43 11.23 9.00 12.00 12.29 7.698 7.84 8.055 8.38 8.38 9.19 8.55 1 Averages of the most representative daily offering rate quoted by sentative of the day’s transactions, usually the one at which most trans­ dealers. actions occurred. 2 Averages of the most representative daily offering rate published by 4 Except for new bill issues, yields are averages computed from daily finance companies, for varying maturities in the 90-179 day range. closing bid prices. 3 Seven-day averages for week ending Wednesday. Beginning with 5 Bills quoted on bank-discount-rate basis. statement week ending July 25, 1973, weekly averages are based on the 6 Selected note and bond issues. daily average of the range of rates on a given day weighted by the volume of transactions at these rates. For earlier statement weeks, the averages Note.—Figures for Treasury bills are the revised series described on p. were based on the daily effective rate—the rate considered most repre­ A-35 of the Oct. 1972 Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 30 INTEREST RATES □ AUGUST 1974 BOND AND STOCK YIELDS (Per cent per annum) Government bonds Corporate bonds Stocks State and local Aaa utility By selected By Dividend/ Earnings/ rating group price ratio price ratio Period United Total i States ( t l e o r n m g ) ­ Baa New ce R n e t ­ ly Baa In tr d i u al s­ R ro a a i d l­ P u u ti b li l t i y c Pre­ Com­ Com­ issue offered ferred mon mon Seasoned issues 197 0 6.59 6.42 6.12 6.75 8.68 8.71 8.51 8.04 9.11 8.26 8.77 8.68 7.22 3.83 6.46 197 1 5.74 5.62 5.22 5.89 7.62 7.66 7.94 7.39 8.56 7.57 8.38 8.13 6.75 3.14 5.41 197 2 5.63 5.30 5.04 5.60 7.31 7.34 7.63 7.21 8.16 7.35 7.99 7.74 7.27 2.84 5.50 1973 6.30 5.22 4.99 5.49 7.74 7.75 7.80 7.44 8.24 7.60 8.12 7.83 7.23 3.06 7.12 1973—Jul y 6.53 5.44 5.21 5.71 8.01 7.97 7.80 7.45 8.24 7.59 8.17 7.81 7.35 3.04 Aug........ 6.81 5.51 5.26 5.80 8.36 8.22 8.04 7.68 8.53 7.91 3-32 8.06 7.43 3.16 Sept......... 6.42 5.13 4.90 5.41 7.88 7.99 8.06 7.63 8.63 7.89 8.37 8.09 7.38 3.13 7.09 Oct......... 6.26 5.03 4.76 5.31 7.90 7.94 7.96 7.60 8.41 7.76 8.24 8.04 7.18 3.05 Nov........ 6.31 5.21 5.03 5.46 7.90 7.94 8.02 7.67 8.42 7.81 8.28 8.11 7.40 3.36 Dec........ 6.35 5.14 4.90 5.43 8.00 8.04 8.05 7.68 8.48 7.84 8.28 8.17 7.76 3.70 8.37 1974—Ja............n 6.56 5.23 5.03 5.49 8.21 f8.21 8.15 7.83 8.58 7.97 8.34 8.27 7.60 3.64 Feb......... 6.54 5.25 5.05 5.49 8.12 8.23 8.17 7.85 8.59 8.01 8.27 8.33 7.47 3.81 Mar........ 6.81 5.44 5.20 5.71 8.46 8.44 8.27 8.01 8.65 8.12 8.35 8.44 7.56 3.65 8.95 Apr........ 7.04 5.76 5.45 6.06 r8.99 r8.95 8.50 8.25 8.88 8.39 8.51 8.68 7.83 3.86 May 7.07 6.09 5.89 6.30 9.24 9.13 8.68 8.37 9.10 8.55 8.73 8.86 8.11 4.00 June 7.03 6.17 5.95 6.41 9.38 9.40 8.85 8.47 9.34 8.69 8.89 9.08 8.25 4.02 July........ 7.18 6.70 6.34 7.10 10.20 10.04 9.10 8.72 9.55 8.95 9.08 9.35 8.40 4.42 Week ending— June 1. 7.06 6.09 5.95 6.30 9.09 9.15 8.75 8.39 9.23 8.60 8.81 8.95 8.20 4.13 8. 7.04 6.03 5.90 6.25 9.23 9.14 8.78 8.40 9.26 8.61 8.85 9.00 8.25 3.98 15, 6.99 6.11 5.95 6.30 9.28 9.18 8.81 8.40 9.29 8.64 8.88 9.02 8.19 3.91 22, 7.01 6.18 5.96 6.39 9.49 9.45 8.87 8.49 9.36 8.72 8.90 9.10 8.24 4.06 29, 7.07 6.35 6.00 6.70 9.50 r9.82 8.94 8.57 9.44 8.80 8.93 9.19 8.32 4.14 July 7.12 6.61 6.20 7.00 9.79 8.99 8.62 9.47 8.85 8.95 9.25 8.22 4.30 7.23 6.90 6.50 7.25 10.25 10. 16 9.04 8.66 9.49 8.90 9.01 9.30 8.29 4.54 7.24 6.80 6.50 7.15 10.10 10.02 9.10 8.71 9.55 8.95 9.09 9.36 8.43 4.35 7.12 6.48 6.15 7.00 10.09 9.16 8.77 9.61 9.02 9.16 9.40 8.52 4.29 Aug. 3 7.24 6.69 6.40 7.05 10.30 10.28 9.23 8.86 9.67 9.07 9.23 9.48 8.55 4.61 Number of issues2.. . 13 20 121 20 30 41 30 40 14 500 500 1 Includes bonds rated Aa and A, data for which are not shown sep­ govt.: General obligations only, based on Thurs. figures; from Moody’s arately. Because of a limited number of suitable issues, the number Investor Service. (3) Corporate: Rates for “New issue” and “Recently of corporate bonds in some groups has varied somewhat. As of Dec. offered” Aaa utility bonds are weekly averages compiled by the Board 23, 1967, there is no longer an Aaa-rated railroad bond series. of Governors of the Federal Reserve System. Rates for seasoned issues 2 Number of issues varies over time; figures shown reflect most recent are averages of daily figures from Moody’s Investors Service. count. Stocks: Standard and Poor’s corporate series. Dividend/price ratios are based on Wed. figures; earnings/price ratios are as of end of period. Note.—Annual yields are averages of monthly or quarterly data. Preferred stock ratio is based on eight median yields for a sample of non- Bonds: Monthly and weekly yields are computed as follows: (1) U.S. callable issues—12 industrial and 2 public utility; common stock ratios Govt.: Averages of daily figures for bonds maturing or callable in 10 years on the 500 stocks in the price index. Quarterly earnings are seasonally or more; from Federal Reserve Bank of New York. (2) State ami local adjusted at annual rates. NOTES TO TABLES ON OPPOSITE PAGE: Security Prices: Stock Market Customer Financing: Note.—Annual data are averages of monthly figures. Monthly and 1 Margin credit includes all credit extended to purchase or carry stocks weekly data are averages of daily figures unless otherwise noted and are or related equity instruments and secured at least in part by stock (see computed as follows: U.S. Govt, bonds, derived from average market Dec. 1970 Bulletin). Credit extended by brokers is end-of-month data yields in table on p. A-30 on basis of an assumed 3 per cent, 20-year for member firms of the New York Stock Exchange. June data for banks bond. Municipal and corporate bonds, derived from average yields as are universe totals; all other data for banks represent estimates for all computed by Standard and Poor’s Corp., on basis of a 4 per cent, 20- commercial banks based on reports by a reporting sample, which ac­ year bond; Wed. closing prices. Common stocks, derived from com­ counted for 60 per cent of security credit outstanding at banks on June 30, ponent common stock prices. Average daily volume of trading, normally 1971. conducted 5 days per week for 5lfi hours per day, or 27l/i hours per week. 2 In addition to assigning a current loan value to margin stock generally, In recent years shorter days and/or weeks have cut total weekly trading Regulations T and U permit special loan values for convertible bonds and to the following number of hours: stock acquired through exercise of subscription rights. 3 Nonmargin stocks are those not listed on a national securities exchange and not included on the Federal Reserve System’s list of Over the Counter margin stocks. At banks, loans to purchase or carry nonmargin stocks are unregulated; at brokers, such stocks have no loan value. 4 Free credit balances are in accounts with no unfulfilled commitments to the brokers and are subject to withdrawal by customers on demand. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ SECURITY MARKETS A 31 SECURITY PRICES Common stock prices Volume of Bond prices New York Stock Exchange Amer­ trading in foer cent of car) ican stocks Stock (thousands of Period Standard and Poor’s index New York Stock Exchange index Ex­ shares) (1941-43=10) (Dec. 31, 1965 = 50) change total index ( G t l U e o o r . n m v S g t . ) . ­ S l a o t n c a d a te l p A C o A r o a r A t ­ e Total In tr d ia u l s­ R ro a a i d l­ P u u ti b li l t i y c Total In tr d ia u l s­ T p t o r i a o r n t n a s ­ ­ Utility na F n i c ­ e 1 ( 9 A 1 3 7 0 u 1 3 0 g , ) = . NYSE AMEX 1970......................... 60.52 72.3 61.6 83.22 91.29 37.13 54.48 45.72 48.03 32.14 37.24 54.64 96.63 10,532 3,376 1971......................... 67.73 80.0 65.0 98.29 108.35 41.94 59.33 54.22 57.92 44.35 39.53 70.38 113.40 17,429 4,234 1972.......................... 68.71 84.4 65.9 109.20 121.79 44.11 56.90 60.29 65.73 50.17 38.48 78.35 129.10 16,487 4,447 1973......................... 62.80 85.4 63.7 107.43 120.44 38.05 53.47 57.42 63.08 37.74 37.69 70.12 103.80 16,374 3,004 1973—July............... 60.87 83.2 63.8 105.83 118.65 35.22 53.31 56.12 61.53 34.22 37.68 68.95 97.67 14,655 2,522 Aug............... 58.71 82.2 61.0 103.80 116.75 33.76 50.14 55.33 61.09 33.48 35.40 68.26 99.23 14,761 1,796 Sept.............. 61.81 86.2 61.3 105.61 118.52 35.49 52.31 56.71 62.25 35.82 36.79 72.23 101.88 17,320 2,055 Oct................ 63.13 86.9 62.1 109.84 123.42 38.24 53.22 59.26 65.29 39.03 37.47 74.98 107.97 18,387 3,388 Nov............... 62.71 85.6 62.1 102.03 114.64 39.74 48.30 54.59 60.15 36.31 34.73 67.85 99.91 19,044 3,693 Dec............... 62.37 86.1 62.9 94.78 106.16 41.48 45.73 50.39 55.12 34.69 33.47 62.49 88.39 19,227 3,553 1974—Jan................ 60.66 85.2 62.3 96.11 107.18 44.37 48.60 51.39 55.77 36.85 35.89 64.80 95.32 16,506 2,757 Feb................ 60.83 85.3 62.0 93.45 104.13 41.85 48.13 50.01 54.02 36.26 35.27 62.81 95.11 13,517 2,079 Mar............... 58.70 83.5 61.3 97.44 108.98 42.57 47.90 52.15 56.80 38.39 35.22 64.47 99.10 14,745 2,123 Apr............... 57.01 80.2 60.3 92.46 103.66 40.26 44.03 49.21 53.95 35.87 32.59 58.72 93.57 12,109 1,752 May.............. 56.81 77.3 59.7 89.67 101.17 37.04 39.35 47.35 52.53 33.62 30.25 52.85 84.71 12,512 1,725 June.............. 57.11 73.2 59.5 89.79 101.62 37.31 37.46 47.14 52.63 33.76 29.20 51.20 82.88 12,268 1,561 July............... 55.97 71.9 58.5 82.82 93.54 35.63 35.37 43.27 48.35 31.01 27.50 44.23 77.92 12,459 1,610 Week ending— 1974—July 6 56.42 73.3 59.1 84.56 95.62 35.49 35.68 44.06 49.36 31.24 27.90 44.24 77.65 11,141 1,262 13 , 55.66 69.7 58.6 81.12 90.93 34.29 34.65 42.26 47.29 29.87 26.94 42.28 75.36 15,398 2.259 20........ 55.57 71.0 58.2 83.52 94.43 35.65 35.19 43.65 48.81 31.29 27.48 45.16 78.16 11,971 M49 27........ 56.43 74.4 58.4 83.97 94.77 36.79 36. 12 43.99 49.08 31.91 27.92 45.93 80.19 11,760 1,352 Aug. 3........ 55.59 71.3 58.1 79.62 89.68 36.05 35. 10 41.71 46.41 30.56 27.13 42.79 77.79 11,092 1,291 For notes see opposite page. STOCK MARKET CUSTOMER FINANCING (In millions of dollars) Margin credit at brokers and banks 1 Regulated 2 Unregu­ lated 3 Free credit balances at brokers 4 End of period By source By type Margin stock Convertible Subscription Nonmargin bonds issues stock Total Brokers Banks credit at banks Brokers Banks Brokers Banks Brokers Banks Margin Cash accts. accts. 1973—June................................... 7,369 6,416 953 6,180 885 215 53 21 15 1,973 396 1,472 July.................................... 7,299 6,243 1,056 6,010 976 216 64 17 16 1,957 379 1,542 Aug.................................... 7,081 6,056 1,025 5,830 949 210 61 16 15 1,952 348 1,462 Sept.................................... 6,954 5,949 1,005 5,730 929 204 60 15 16 1,909 379 1,632 Oct..................................... 7,093 5,912 1,181 5,690 1,105 203 59 19 17 1,878 419 1,713 Nov.................................... 6,774 5,671 1,003 5,460 1,027 197 60 14 16 1,917 464 1,685 Dec..................................... 6,382 5,251 1,131 5,050 1,070 189 46 12 15 1,866 454 1,700 1974—Jan...................................... 6,343 5,323 1,020 5,130 961 182 45 11 14 1,845 445 1,666 Feb..................................... 6,462 5,423 1,039 5,230 977 183 46 10 16 1,843 420 1,604 Mar.................................... 6,566 r5,558 1,008 5,330 944 180 48 9 16 1,869 424 1,583 Apr.................................... 6,377 r5,368 1,009 5,370 952 179 44 9 13 1,868 415 1,440 May................................... 6,381 r5,361 1.020 5,180 963 172 44 9 13 1,858 395 1,420 June................................... 5,260 5,080 172 8 395 1,360 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 32 STOCK MARKET CREDIT; SAVINGS INSTITUTIONS □ AUGUST 1974 EQUITY STATUS OF MARGIN ACCOUNT DEBT SPECIAL MISCELLANEOUS ACCOUNT BALANCES AT BROKERS AT BROKERS, BY EQUITY STATUS OF ACCOUNTS (Per cent of total debt, except as noted) (Per cent of total, except as noted) Total Equity class (per cent) Equity class of accounts End of l ( d i m o e n b il s t ­ End of period c N re e d t it in debit status b T al o a t n a c l e period d o o f l­ 8 m 0 o o re r 70-79 60-69 50-59 40-49 Un 4 d 0 er status 60 o r p e m r o c r e e nt 6 L 0 e p ss e r t h c a e n n t o ( f m d i o ll l i l o a n r s s ) lars)! 35.8 43.5 20.7 5,750 1973—June. 6,180 4.9 7.1 13.2 17.5 22.1 35.3 July...................... 35.9 46.7 17.4 5,740 July.. 6,010 5.8 8.8 17.7 22.7 25.3 19.7 35.9 45.6 18.5 5,650 Aug.. 5,830 5.0 8.4 16.4 19.6 24.2 26.4 37.4 53.1 9.4 5,740 Sept.. 5,730 5.0 13.9 18.9 23.9 23.5 16.8 38.5 46.7 14.8 5,860 Oct. . 5,690 7.2 10.0 19.9 22.6 22.1 18.2 37.5 42.2 20.3 5,882 Nov.. 5,460 5.4 6.1 12.0 16.9 19.5 40.1 39.4 40.0 20.6 5,935 Dec.. 5,050 5.8 7.7 14.4 17.4 20.3 34.2 1974—Jan....................... 38.3 42.7 18.0 6,596 1974—Jan... 5,130 5.5 8.0 14.2 22.6 25.8 24.0 Feb....................... 39.4 43.3 24.9 6,740 Feb... 5,230 5.4 7.4 13.3 22.6 28.0 23.3 40.0 41.2 18.9 6,784 Mar.. 5,330 5.0 7.0 11.4 19.4 30.2 27.1 39.6 42.3 19.4 6,526 Apr.. 5,370 4.4 6.0 9.9 16.5 26.5 37.0 37.8 40.0 22.2 6,544 May. 5,180 4.2 5.1 8.5 13.7 23.3 45.3 40.3 37.4 22.4 6,538 June. 5,080 4.0 5.0 7.7 12.6 21.8 49.1 Note.—Special miscellaneous accounts contain credit balances that 1 Note 1 appears at the bottom of p. A-30. may be used by customers as the margin deposit required for additional purchases. Balances may arise as transfers based on loan values of other Note.—Each customer’s equity in his collateral (market value of col­ collateral in the customer’s margin account or deposits of cash (usually lateral less net debit balance) is expressed as a percentage of current col­ sales proceeds) occur. lateral values. MUTUAL SAVINGS BANKS (In millions of dollars) Loans Securities Total Mortgage loan assets— commitments Total Other General classified by maturity End of period M ga o g r e t­ Other G U o . v S t . . S l a o t n c a d a te l C r a o a n r t d p e o­ Cash O as t s h e e ts r g li e a a t n b i n e e i d s l r i a ­ l De it p s os­ lia ti b e i s li­ r c e o s a u e c n r ­ v ts e (in months) govt. other1 reserve accts. 3 or 3-6 6-9 Over Total less 9 1970................ 57,775 2,255 3,151 197 12,876 1,270 1,471 78,995 71,580 1,690 5,726 619 322 302 688 1,931 1971............... 62,069 2,808 3,334 385 17,674 1,389 1,711 89,369 81,440 1,810 6,118 1,047 627 463 1,310 3,447 19723............. 67,563 2,979 3,510 873 21,906 1,644 2,117 100,593 91,613 2,024 6,956 1,593 713 609 1,624 4,539 1973—May... 69,988 4,099 3,376 1,076 22,615 1,629 2,116 104,899 94,744 2,904 7,251 1,792 913 712 1,406 4,824 June... 70,637 3,959 3,346 1,125 22,562 1,775 2,273 105,677 95,706 2,650 7,321 1,711 1,020 573 1,378 4,683 July... 71,219 3,819 3,190 1,093 22,683 1,555 2,202 105,761 95,355 3,044 7,362 1,626 906 636 1,367 4,535 Aug---- 71,713 3,986 3,037 999 22,277 1,551 2,227 105,789 94,882 3,496 7,411 1,302 840 718 1,315 4,174 Sept.. . 72,034 4,200 2,945 957 21,799 1,491 2,345 105,771 95,183 3,134 7,453 1,411 762 589 1,197 3,959 Oct__ 72,367 4,181 3,007 939 21,276 1,501 2,285 105,557 94,944 3,139 7,474 1,318 771 510 1,096 3,695 Nov__ 72,760 4,424 2,948 925 21,150 1,519 2,264 105,991 95,259 3,201 7,530 1,272 685 479 1,079 3,515 Dec.... 73,231 3,871 2,957 926 21,383 1,968 2,314 106,651 96,496 2,566 7,589 1,250 598 405 1,008 3,261 1974—Jan.... 73,440 4,161 2,925 936 21,623 1,686 2,312 107,083 96,792 2,665 7,626 1,171 587 439 998 3,196 Feb.... 73,647 4,584 2,846 942 21,923 1,618 2,316 107,877 97,276 2,919 7,681 1,232 562 407 952 3,153 Mar... 73,957 4,825 2,851 934 22,302 1,634 2,373 108,876 98,557 2,595 7,724 1,302 525 413 929 3,168 Apr.... 74,181 4,425 2,852 951 22,366 1,601 2,347 108,722 98,035 2,943 7,744 1,214 584 401 994 3,193 May... 74,011 4,388 2,750 893 22,241 1,656 2,355 108,295 97,391 3,173 7,731 1,129 608 400 1,014 3,151 1 Also includes securities of foreign governments and international were net of valuation reserves. For most items, however, the differences organizations and nonguaranteed issues of U.S. Govt, agencies. are relatively small. 2 Commitments outstanding of banks in New York State as reported to the Savings Banks Assn. of the State of New York. Data include building Note.—NAMSB data; figures are estimates for all savings banks in loans beginning with Aug. 1967. the United States and differ somewhat from those shown elsewhere in 3 Balance sheet data beginning 1972 are reported on a gross-of-valua- the Bulletin; the latter are for call dates and are based on reports filed tion-reserves basis. The data differ somewhat from balance sheet data with U.S. Govt, and State bank supervisory agencies. previously reported by National Assn. of Mutual Savings Banks which Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ SAVINGS INSTITUTIONS A 33 LIFE INSURANCE COMPANIES (In millions of dollars) Government securities Business securities End of period a T s o s t e a ts l Total U St n a i t t e e s d Sta lo te c a a l nd Foreign 1 Total Bonds Stocks M gag o e rt s ­ e R st e a a t l e P lo o a li n c s y a O s t s h e e ts r 1970......................................... 207,254 11,068 4,574 3,306 3,188 88,518 73,098 15,420 74,375 6,320 16,064 10,909 1971......................................... 222,102 11,000 4,455 3,363 3,182 99,805 79,198 20,607 75,496 6,904 17,065 11,832 1972........................................ 239,730 11,372 4,562 3,367 3,443 112,985 86,140 26,845 76,948 7,295 18,003 13,127 1973—May'........................... 243,411 11,340 4.462 3,344 3,534 115,842 90,333 25,509 77,446 7,532 18,556 12,695 June............................. 244,531 11,359 4,468 3,373 3,518 116,153 90,484 25,669 77,914 7,548 18,673 12,884 July.............................. 247,082 11,427 4,480 3,427 3,520 118,061 91,144 26,917 78,243 7,577 18,841 12,933 Aug.............................. 247,655 11,416 4,462 3,433 3,521 117,842 91,342 26,500 78,657 7,632 19,181 12,927 Sept.............................. 250,203 11,404 4,424 3,439 3,541 119,200 91,480 27,720 79,040 7,677 19,511 13,371 Oct............................... 251,590 11,402 4,423 3,438 3,541 119,714 91,707 28,007 79,516 7,765 19,768 13,425 Nov.............................. 251,055 11,462 4,471 3,444 3,547 118,016 91,847 26,169 80,191 7,838 19,926 13,622 Dec.............................. 252,071 11,376 4,382 3,449 3,545 117,733 91,452 26,281 81,180 7,769 20,076 13,937 1974—Jan............................... 253,531 11,465 4.410 3.463 3,592 119,079 93,082 25,997 81,490 7,816 20,242 13,439 Feb............................... 254,739 11,535 4.429 3.518 3,588 119,715 93,672 26,043 81,745 7,825 20,382 13,537 Mar.............................. 255,847 11,766 4.595 3.511 3,660 119,936 94,037 25,899 81,971 7,831 20,538 13,805 Apr.............................. 256,583 11,594 4:317 3.526 3,751 120,466 95,010 25,456 82,469 7,795 20,830 13,429 May............................. 257,518 11,606 4.318 3.538 3,750 120,642 95,721 24,921 82,750 7,840 21,067 13,613 i Issues ol foreign governments and their subdivisions and bonds of Figures are annual statement asset values, with bonds carried on an the International Bank for Reconstruction and Development. amortized basis and stocks at year-end market value. Adjustments for interest due and accrued and for differences between market and book Note.—Institute of Life Insurance estimates for all life insurance values are not made on each item separately but are included, in total in companies in the United States. “Other assets.” SAVINGS AND LOAN ASSOCIATIONS (In millions of dollars) Assets Liabilities Mortgage Total loan com­ assets— mitments End of period M ga o g r e t s ­ I s n i m e t v i c e e e u s n s r t 1 t ­ ­ Cash Other lia T b o il t i a ti l e s S c a a v p i i n ta g l s wo N r e t t h2 m ro B o w n o e e r y ­ d 3 p L ro o i c a n e n s s s Other ou a p t t s e e t r a n i n o d d d o i 4 n f g 1970.................................. 150,331 13,020 3,506 9,326 176,183 146,404 12,401 10,911 3,078 3,389 4,452 1971.................................. 174,250 18,185 2,857 10,731 206,023 174,197 13,592 8,992 5,029 4,213 7,328 1972.................................. 206,182 21,574 2,781 12,590 243,127 206,764 15,240 9,782 6,209 5,132 11,515 19733................................ 232,104 21,027 19,227 272,358 227,254 17,108 17,100 4,676 6,220 9,532 1973—June....................... 222,580 23,220 17,920 263,720 221,624 16,225 12,698 6,754 6,419 14,705 July....................... 225,265 22,628 18,296 266,189 221,399 16,550 14,226 6,686 7,328 13,710 Aug....................... 227,778 21,001 18,704 267,483 220,243 16,896 15,634 6,449 8,261 12,249 Sept....................... 229,182 20,025 19,008 268,215 222,086 16,782 16,255 6,064 7,028 10,799 Oct......................... 230,195 20,618 19,295 270,108 223,033 17,041 16,435 5,535 8,064 9,909 Nov....................... 231,089 21,220 19,449 271,758 224,304 17,330 16,312 5,011 8,801 9,717 Dec........................ 232,104 21,027 19,227 272,358 227,254 17,108 17,100 4,676 6,220 9,532 1974—Jan......................... 232,980 22,378 19,502 274,860 229,435 17.333 16,663 4,380 7,049 9,788 Feb........................ 234,426 23,327 19,901 277,654 231,264 17,623 16,431 4,304 8,032 10,740 Mar....................... 236,514 23,970 20,429 280,913 235,436 17,488 16,652 4,492 6,845 12,018 Apr........................ 239,027 23,520 20,902 283,449 235,218 17,763 18,087 4,807 7,574 12,933 May...................... 241,650 23,680 21,538 286,868 235,731 18,074 19,282 5.050 8,731 12,493 June*..................... 243,825 22.963 21.740 288,528 238,452 17,892 20,285 5.046 6,853 11,708 1 Excludes stock of the Federal Home Loan Bank Board. Compensating included in other assets. The effect of this change was to reduce the mort­ changes have been made in “Other assets.” gage total by about $0.6 billion. 2 Includes net undistributed income, which is accrued by most, but not Also, GNMA-guaranteed, mortgage-backed securities of the pass­ all, associations. through type, previously included in cash and investment securities are 3 Advances from FHLBB and other borrowing. included in other assets. These amounted to about $2.4 billion at the end 4 Data comparable with those shown for mutual savings banks (on of 1972. preceding page) except that figures for loans in process are not included above but are included in the figures for mutual savings banks. Note.—FHLBB data; figures are estimates for all savings and loan 5 Beginning 1973, participation certificates guaranteed by the Federal assns. in the United States. Data are based on monthly reports of insured Home Loan Mortgage Corporation, loans and notes insured by the assns. and annual reports of noninsured assns. Data for current and Farmers Home Administration and certain other Government-insured preceding year are preliminary even when revised. morgtage-type investments, previously included in mortgage loans, are Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 34 FEDERAL FINANCE □ AUGUST 1974 FEDERAL FISCAL OPERATIONS: SUMMARY (In millions of dollars) U.S. budget Means of financing Borrowings from the public i Less: Cash and monetary assets Other means Period Surplus Less: Invest­ of Receipts Outlays or Public ments by Govt, Trea­ financ­ deficit debt Agency accounts Less: Equals: sury ing, (-) securi­ securi­ Special Total operat­ Other net3 ties ties notes 2 ing Special Other balance issues Fiscal year: 197 1 188,392 211,425 -23,033 27,211 -347 '6,461 '956 19,448 710 ' — 710 '3,587 197 2 208,649 231,876 -23,227 29,131 -1,269 6,813 1,607 19,442 1,362 1,108 '6,003 197 3 232,225 246,526 -14,301 30,881 216 '12,141 ' — 319 19.275 2,459 -1,613 -4,129 1974*................... 264,847 268,343 -3.495 16,918 912 13,703 1,110 3.017 -3,417 534 -2,405 Half year: 1972—July-Dee.., 106,062 118,579 -12,517 22,038 876 6,351 -823 17,386 956 -1,520 -5,434 1973—Jan.-June., 126,163 r127,947 -1,784 '8,843 -660 5,790 '504 1 ,889 1,503 '-93 '1,305 July-Dee.., 124,253 130,360 -6,107 11,756 477 5,396 824 6,013 -2,202 -191 -2,299 1974—Jan.-June?7 140,594 137,983 2,612 5.162 435 8,307 286 -2.996 -1,215 725 -106 Month: 1973— June '.......... '28,535 '21,069 '7,467 803 68 3,411 -171 -2,369 4,344 -4,741 -5,495 July........... 18,121 22,607 -4,486 862 9 1 ,258 325 -713 -5,398 -544 -743 Aug........... 21,291 22,139 -847 2,842 301 3,137 568 -563 -4,105 151 -2,544 Sept........... 25,007 20,736 4,271 -406 40 -756 -173 564 5,207 346 718 Oct............ 17,637 23,092 -5,455 1,037 29 -306 -22 1,395 -2,588 -43 1,431 Nov........... 20,208 22,099 -1,891 1,561 273 -3,510 3,141 2,202 -1,010 -48 -1,368 Dec........... 21,987 19,686 2,302 5,861 -174 5,574 -3,016 3,128 5,693 -54 209 1974—Ja n 23,476 23,671 -195 -1,714 12 -984 55 -773 168 544 1,681 Feb............ 20,226 21,030 -804 2,503 -17 2,478 169 -162 -2,877 -84 -1,995 Mar........... 16,818 22,905 -6,086 3,813 394 -164 61 4,309 690 191 2,657 Apr........... 29,657 22,273 7,384 -2,597 37 -115 57 -2,502 3,125 1,319 -438 May.......... 19,243 23,981 -4,739 2,773 -28 2,936 -200 8 -5,032 1,120 -1,423 June*....... 31,174 24,123 7,052 385 37 4,156 143 -3,877 2,711 -125 -588 Selected balances Treasury operating balance Borrowing from the public End Memo: of Less: Debt of period Investments of Govt.- B F a . n R k . s ac l c T a o o n a a u d x n nts d t O a e r p t i h o e e s s r i 4 ­ Total se P c d u u e b r b i l t i t i c es s A ec g u e r n it c ie y s S i p s G s e u c o e i v a s t l , acco O un th ts er S n L p o e e te c ss i s a : 2 l E T q o u t a a l l s: s c p p o r o N r i n v p o s a s w o . t — r e e s d Fiscal year: 1971......................... 1,274 7,372 109 8,755 398,130 12,163 '82,784 '22,356 825 304,328 '37,086 1972......................... 2,344 7,934 139 10,117 427,260 10,894 '89,598 '23,961 825 323,770 '41,814 1973........................ 4,038 8,433 106 12,576 458,142 11,109 101,738 24,093 825 343,045 51,325 1974*...................... 2,919 6,152 88 9. 159 475.060 12,021 115,442 24.752 825 346,062 Calendar year: 1972......................... 1,856 8,907 310 11,073 449,298 11,770 '95,948 '23,140 825 341,155 43,459 1973........................ 2,543 7,760 70 10,374 469,898 11,586 107,135 24,467 825 349,058 59,857 Month: 1973—June............. 4,038 8,433 106 12,576 458,142 11,109 101,738 24,093 825 343,045 51,325 July............. 2,867 4,203 108 7,178 459,003 11,118 102,996 23,968 825 342,332 52,780 Aug............. 847 2,217 8 3,072 461,845 11,419 106,133 24,536 825 341,769 54,409 Sept............. 1,626 6,582 71 8,279 461,439 11,459 105,378 24,362 825 342,333 56,691 Oct............... 1,839 3,781 71 5,691 462,476 11,488 105,071 24,241 825 343,727 59,330 Nov.............. 1,945 2,666 70 4,681 464,037 11,760 101,561 27,482 825 345,930 59,317 Dec.............. 2,543 7,760 70 10,374 469,898 11,586 107,135 24,467 825 349,058 59,857 1974—Jan............... 2,844 7,628 69 10,542 468,184 11,598 106,151 24,521 825 348,285 59,566 Feb.............. 2,017 5,579 69 7,665 470,687 11,581 108,629 24,691 825 348,123 59,282 Mar............. 1,372 6,915 69 8,356 474,500 11,975 108,465 24,752 825 352,433 59,897 Apr.............. 2,814 8,576 89 11,480 471,903 12,012 108,350 24,809 825 349,931 61,151 May............. 3,134 3,226 88 6,448 474,675 11,984 111,286 24,609 825 349,939 62,650 June*........... 2,919 6,152 88 9,159 475.060 12,021 115,442 24.752 825 346,062 1 The decrease in Federal securities resulting from conversion to private 3 Includes accrued interest payable on public debt securities, deposit ownership of Govt.-sponsored corporations (totaling $9,853 million) is funds, miscellaneous liability and asset accounts, and seigniorage. not included here. In the bottom panel, however, these conversions de­ 4 As of Jan. 3, 1972, the Treasury operating balance was redefined to crease the outstanding amounts of Federal securities held by the public exclude the gold balance and to include previously excluded “Other deposi­ mainly by reductions in agency securities. The Federal National Mortgage taries” (deposits in certain commercial depositaries that have been con­ Association (FNMA) was converted to private owership in Sept. 1968 and verted from a time to a demand basis to permit greater flexibility in the Federal intermediate credit banks (FICB) and banks for coopera­ Treasury cash management). tives in Dec. 1968. 5 Includes debt of Federal home loan banks, Federal land banks, R.F.K. 2 Represents non-interest-bearing public debt securities issued to the Stadium Fund, FNMA (beginning Sept. 1968), and FICB and banks International Monetary Fund and international lending organizations. for cooperatives (both beginning Dec. 1968). New obligations to these agencies are handled by letters of credit. Note.—Half years may not add to fiscal year totals due to revisions in series that are not yet available on a monthly basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ FEDERAL FINANCE A 35 FEDERAL FISCAL OPERATIONS: DETAIL (In millions of dollars) Budget receipts Individual income taxes i C nc o o rp m o e r a ta ti x o e n s So a c n ia d l c in o s n u t r r a ib n u c t e i o t n ax s es Period Employment Total W he i l t d h­ F C p P E t a u i a r l o i e e n m g n c s d n ­ . ­ 1 N w he i o t l h n d ­ ­ fu R n e d ­ s t N ot e a t l c G e r r i e o p ­ s ts s fu R n e d ­ s co P r n t o a a y t l x r l ­ i e b s u a t S i n o e d l n f - s2 e in U m s n u p - r l. . c O e n r i t e p h e ­ t t e s r 3 t N ot e a t l E ta x x c e is s e t C o u m s s ­ E a g s n i t f a d t te c M e r i i e p s ­ t c s . 4 taxes empl. Fiscal year: 197 1 188,39276,490 24,26214,52286,23030,320 3,53539,751 1,948 3,673 3,20648,578 16,614 2,591 3,735 3,858 197 2 208,64983,200 25,679 14,14394,73734,926 2,76044,088 2,032 4,357 3,43753,914 15,477 3,287 5,436 3,633 1973*•..................... 232,22598,093 27,01721,866 103,24639,045 2,89352,505 2,371 6,051 3,61464,542 16,260 3,188 4,917 3,921 1974*..................... 264,847111,857 2730,81923,957 118,75041,789 3,12562,886 3,008 6,907 4,049 76,849 16,885 3,334 5,009 5,355 Half year: 1972—July-Dee.. . 106,06246,056 5,784 68851,152 15,315 1,459 22,493 165 2,437 1,77326,867 8,244 1,551 2,333 2,059 1973—Jan.-June r. 126,16452,037 21,23321,17952,09423,730 1,434 30,013 2,206 3,616 1,841 37,657 8,016 1,637 2,584 1,861 July-Dee.. . 124,25352,961 6,207 99958,170 16,589 1,494 29,965 201 2,974 1,96735,109 8,966 1,633 2,514 2,768 1974—Jan.-June*. 140,49558,896 24,611 22,95460,58025.200 1.63032,919 2,808 2,932 2,08241,741 7,920 1,701 2,495 2,587 Month: 1973—June'.......... ••28,536 9,168 3,735 597 12,306 8,983 188 4,548 145 95 293 5,081 1,386 273 335 r359 July............ 18,121 8,487 681 354 8,814 1,552 202 4,608 382 346 5,336 1,538 276 398 409 Aug............ 21,291 9,085 451 257 9,279 904 209 7,087 1,357 333 8,778 1,434 303 494 308 Sept............ 25,007 7,940 3,903 13511,707 5,477 230 4,812 177 103 317 5,409 1,436 238 373 597 Oct............. 17,637 8,752 550 71 9,230 1,515 462 4,119 24 217 351 4,712 1,459 291 454 437 Nov............ 20,209 9,811 261 6610,006 939 287 5,578 825 321 6,724 1,563 301 462 501 Dec............. 21,987 8,887 362 115 9,134 6,201 105 3,760 89 299 4,149 1,536 224 333 515 1974—Jan................. 23,476 9,296 5,076 45 14,327 1,722 160 4,439 170 244 378 5,232 1,263 304 455 334 Feb................. 20,226 9,505 945 1,851 8,601 1,066 248 7,080 214 761 346 8,400 1,315 239 423 429 Mar................ 16,818 9,662 2,186 8,631 3,219 5,887 338 5,059 228 96 338 5,721 1,211 277 465 377 Apr................. 29,657 9,946 11,118 6,313 14,764 5,893 430 4,390 1,603 552 351 6,896 1,275 286 371 602 May............... 19,243 10,083 1,204 5,651 5,641 1,318 218 7,196 311 2,190 339 10,036 1,391 295 437 343 June*............. 31.174 10,404 4,084 462 14,029 9,313 236 4,757 281 88 329 5,455 1,464 301 344 503 Budget outlays Com. Gen­ Na­ Nat­ Com­ mun. Educa­ eral Intra- Period tional Intl. Space Agri­ ural merce deve­ tion Health Vet­ Inter­ Gen­ reve­ govt, Total de­ affairs re­ cul­ re­ and lop. and and erans est eral nue trans­ fense search ture sources transp. and man­ wel­ govt. shar­ ac­ hous­ power fare ing tions 5 ing Fiscal year: 1972...................... 231,876 78,336 3,786 3,422 7,061 3,759 11,197 4,216 10,198 *•81,538 10,747 20,584 4,889 -7,858 1973..................... 246,526 *•76,023 3,132 3,311 6,051 *•559*12,505 4,162 *•10,822 *-91,343 12,004 *-22,836 *-5,519 76,636 *--8,379 1974*................... 268,343 78,793 4,175 3,228 5,183 -990 12,549 5,129 10,575 105,577 13,370 28,101 6,485 6,106 -9,938 19756.................... 304,445 87,729 4,103 3,272 2,729 3,128 13,400 5,667 11,537 126,353 13,612 29,122 6,774 6,174 -10,717 Half year: 1972—J uly-Dec... 118,578 *-35,329 1,639 1,676 4,616 330 6,199 2,637 5,133 *-43,213 5.740 10,619 2,869 2,617 -4,039 1973—Jan.-June.. *•127,947M0,694 *■1,493 1,635 1,435 r 229 *6,306 1,525 r5,749 *-48,130 6,264 12,217 2,650 4,019 -4,340 July-Dee... 130,360 37,331 1,617 1,501 3,472 763 7,387 3,215 4,772 48,978 6,518 13,440 3,088 3,032 -4,753 1974—Jan.-June*. 137,983 41,462 2,558 1,727 1,711 - 1.753 5,162 1,914 5,803 56,599 6,852 14,661 3,397 3,074 -5,185 Month: 1973—June *•........ *•21,069 *•8,012 >•485 301 -126 118 '1,670 309 1,336 *-8,255 866 *-2,003 *-451 *--1 r —2,614 July........... 22,607 4,878 308 278 2,011 942 2,104 911 777 7,792 1,099 2,184 563 1,495 -850 Aug........... 22,139 6,772 327 262 440 573 1,090 779 954 7,935 1,054 2,159 466 -3 -670 Sept........... 20,736 6,095 205 246 -35 422 957 712 661 8,302 970 2,392 643 16 -849 Oct............. 23,092 6,607 282 248 503 416 1,260 561 955 8,040 1,058 2,135 479 1,494 -850 Nov........... 22,099 6,900 276 246 782 424 912 36 805 8,373 1,194 2,401 438 29 -717 Dec............ 19,686 6,079 219 221 -228 -130 1,064 316 619 8,534 1,143 2,169 498 -816 1974—Jan............. 23,671 6,793 351 251 756 -544 886 331 983 9,067 1,204 2,353 636 1,532 -929 Feb............ 21,030 6,509 224 231 138 58 363 198 932 8,979 1,088 2,466 520 1 -677 Mar........... 22,904 6,686 345 252 205 759 746 263 1,036 9,310 1,194 2,508 499 -898 Apr............ 22,273 6,751 336 293 89 -1,618 740 373 925 9,505 1,165 2,455 586 1,540 -867 May.......... 23,981 7,243 312 278 313 428 875 352 662 10,087 1,180 2,516 498 1 -763 June*........ 24,123 7,468 1,050 423 210 -836 1,562 397 1,263 9,655 1,020 2,314 648 -1,052 1 Collections of these receipts, totaling $2,427 million for fiscal year 6 Estimate presented in Budget of the U.S. Government, Fiscal Year 1973, were included as part of nonwithheld income taxes prior to Feb. 1975. Breakdown does not add to total because special allowances for 1974. contingencies, Federal pay increase (excluding Department of Defense), 2 Old-age, disability, and hospital insurance, and Railroad Retirement and acceleration of energy research and development, totaling $1,561 accounts. million, are not included. 3 Supplementary medical insurance premiums and Federal employee 7 Contains retroactive payments of $2,617 million for fiscal 1972. retirement contributions. 4 Deposits of earnings by Federal Reserve Banks and other miscellane­ Note.—Half years may not add to fiscal year totals due to revisions in ous receipts. series that are not yet available on a monthly basis. 5 Consists of Government contributions for employee retirement and of interest received by trust funds. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 36 U.S. GOVERNMENT SECURITIES □ AUGUST 1974 GROSS PUBLIC DEBT, BY TYPE OF SECURITY (In billions of dollars) Public issues End of period p T g u r o b o t l s a i s l c Marketable Con­ Nonmarketable i S ss p u e e c s ia 5 l debt 1 Total Total Bills C c e a r t t e if s i­ Notes Bonds 2 b v i o e b n r le d t­ s Total 3 F is o su re e i s g n 4 b S o in a n g v d s ­ s & notes 1967—Dec. 344.7 284.0 226.5 69.9 61.4 95.2 2.6 54.9 3.1 51.7 57.2 1968—Dec. 358.0 296.0 236.8 75.0 76.5 85.3 2.5 56.7 4.3 52.3 59.1 1969—Dec. 368.2 295.2 235.9 80.6 85.4 69.9 2.4 56.9 3.8 52.2 71.0 1970—Dec. 389.2 309.1 247.7 87.9 101.2 58.6 2.4 59.1 5.7 52.5 78.1 1971—Dec., 424.1 336.7 262.0 97.5 114.0 50.6 2.3 72.3 16.8 54.9 85.7 1972—Dec. 449.3 351.4 269.5 103.9 121.5 44.1 2.3 79.5 20.6 58.1 95.9 1973—July. 459.0 354.2 262.7 99.9 117.8 45.0 2.3 89.2 28.2 60.2 103.0 Aug. 461.8 353.8 262.4 101.8 118.7 42.0 2.3 89.1 27.9 60.3 106.1 Sept. 461.4 354.1 262.4 99.8 120.7 41.9 2.3 89.5 28.2 60.3 105.4 Oct., 462.5 355.5 264.0 101.6 120.7 41.8 2.3 89.2 27.8 60.5 105.1 Nov. 464.0 360.5 270.2 107.7 124.6 37.8 2.3 88.0 26.1 60.8 101.6 Dec. 469.9 360.7 270.2 107.8 124.6 37.8 2.3 88.2 26.0 60.8 107.1 1974—Jan.. 468.2 360.1 270.1 107.8 124.6 37.7 2.3 87.7 25.3 61.0 106.2 Feb. 470.7 360.0 269.7 107.9 126.1 35.7 2.3 88.1 25.4 61.3 108.6 Mar. 474.5 364.2 273.6 111.9 126.1 35.6 2.3 88.3 25.2 61.6 108.5 Apr. 471.9 361.7 270.5 107.3 127.6 35.5 2.3 89.0 25.7 61.9 108.4 May 474.7 361.5 269.6 107.9 128.4 33.2 2.3 89.6 26.0 62.1 111.3 June 475.1 357.8 266.6 105.0 128.4 33.1 2.3 89.0 r25.0 62.4 115.4 July. 475.3 358.8 268.8 107.3 128.4 33.0 2.3 86.8 24.4 62.7 115.5 1 Includes non-interest-bearing debt (of which $617 miilion on July 31, 4 Nonmarketable certificates of indebtedness, notes, and bonds in the 1974, was not subject to statutory debt limitation). Treasury foreign series and foreign-currency-series issues. 2 Includes Treasury bonds and minor amounts of Panama Canal and 5 Held only by U.S. Govt, agencies and trust funds and the Federal postal savings bonds. home loan banks. 3 Includes (not shown separately): depositary bonds, retirement plan bonds, and Rural Electrification Administration bonds. Note.—Based on Daily Statement of U.S. Treasury. See also second paragraph in Note to table below. OWNERSHIP OF PUBLIC DEBT (Par value, in billions of dollars) Held by- Held by private investors E pe n r d i o o d f p T g d u r o e b o t b l s a i t s l c ag G t U a e r o n u n . v S c s d t i . t . es B F a . n R k . s Total m C b e a o r n c m k ia ­ s l M s b a a v u n i t n u k g a s s l p I c a n a o n n s m c u ie e r ­ s ­ r c O a o t t r i h o p e n o r s ­ g S l a o o t n v c a d a t t s e l . Savi I n n g d s ividu O al t s her n F a i o t n a i r o n t e e n d i r g a ­ n l 1 t O i m o n r t v i s h s e c e s 2 . r ­ funds bonds securities 1967—Dec................ 344.7 73.1 49.1 222.4 63.8 4.2 9.0 12.2 24.1 51.2 22.3 15.8 19.9 1968—Dec................ 358.0 76.6 52.9 228.5 66.0 3.8 8.4 14.2 24.9 51.9 23.3 14.3 21.9 1969—Dec................ 368.2 89.0 57.2 222.0 56.8 3.1 7.6 10.4 27.2 51.8 29.0 11.2 25.0 1970—Dec................ 389.2 97.1 62.1 229.9 62.7 3.1 7.4 7.3 27.8 52.1 29.1 20.6 19.9 1971—Dec................ 424.1 106.0 70.2 247.9 65.3 3.1 7.0 11.4 25.4 54.4 18.8 46.9 15.6 1972—Dec................ 449.3 116.9 69.9 262.5 67.7 3.4 6.6 9.8 28.9 57.7 16.2 55.3 17.0 1973—June.............. 458.1 123.4 75.0 259.7 58.8 3.3 6.3 9.8 28.8 59.5 16.4 60.2 16.6 July............... 459.0 125.0 77.1 256.9 56.5 3.1 6.4 10.3 28.4 59.7 17.0 59.7 15.8 Aug............... 461.8 128.7 76.1 257.1 55.1 2.9 6.3 11.5 27.7 59.8 17.2 59.2 17.3 Sept............... 461.4 127.8 76.2 257.4 55.4 2.9 6.3 9.2 29.0 59.8 17.3 58.5 18.9 Oct................. 462.5 127.4 78.5 256.5 56.3 2.9 6.3 10.2 28.5 60.0 17.0 57.5 17.9 Nov............... 464.0 127.1 77.1 259.8 58.5 2.9 6.2 11.1 28.9 60.3 16.9 56.2 18.9 Dec................ 469.9 129.6 78.5 201.7 60.3 2.9 6.4 10.9 29.2 60.3 16.9 55.6 19.3 1974—Jan................. 468.2 128.7 78.2 261.2 60.2 2.8 6.3 10.7 29.9 60.5 16.9 52.8 21.1 Feb................ 470.7 131.3 78.2 261.1 58.2 2.8 6.0 10.9 30.7 60.8 17.0 53.6 21.2 Mar............... 474.5 131.2 79.5 263.8 59.5 2.8 6.1 11.7 30.4 61.1 17.3 54.9 20.0 Apr................ 471.9 131.1 80.0 260.7 56.8 2.7 5.£ 10.5 30.1 61.4 17.8 55.9 19.7 May.............. 474.7 113.9 81.4 259.4 54.8 2.6 5.8 11.2 29.2 61.7 18.3 57.3 18.5 June.............. 475.1 138.2 80.5 256.4 53.2 2.6 5.9 10.8 28.3 61.9 18.8 57.7 17.3 1 Consists of investments of foreign and international accounts in The debt and ownership concepts were altered beginning with the the United States. Mar. 1969 Bulletin. The new concepts (1) exclude guaranteed se­ 2 Consists of savings and loan assns., nonprofit institutions, cor­ curities and (2) remove from U.S. Govt, agencies and trust funds porate pension trust funds, and dealers and brokers. Also included and add to other miscellaneous investors the holdings of certain are certain Govt, deposit accounts and Govt.-sponsored agencies. Govt.-sponsored but privately owned agencies and certain Govt, deposit Note.—Reported data for F.R. Banks and U.S. Govt, agencies and accounts. trust funds; Treasury estimates for other groups. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ U.S. GOVERNMENT SECURITIES A 37 OWNERSHIP OF MARKETABLE SECURITIES, BY MATURITY (Par value, in millions of dollars) Within 1 year Type of holder and date Total y 1 e - a 5 rs y 5 e - a 1 r 0 s 1 y 0 ea -2 rs 0 20 O y v e e a r rs Total Bills Other AH holders: 1971—Dec. 31........................................................ 262,038 119,141 97,505 21,636 93,648 29,321 9,530 10,397 1972—Dec. 31........................................................ 269,509 130,422 103,870 26,552 88,564 29,143 15,301 6,079 1973—Dec. 31........................................................ 270,224 141,571 107,786 33,785 81,715 25,134 15,659 6,145 1974—May 31........................................................ 269,550 142,864 107,941 34,923 77,165 26,960 17,458 5,103 June 30........................................................ 266.575 139,942 105,019 34,923 77,199 26,957 17,403 5,074 U.S. Govt, agencies and trust funds: 1971—Dec. 31................................................ 18,444 1,380 605 775 7,614 4,676 2,319 2,456 1972—Dec. 31................................................ 19,360 1,609 674 935 6,418 5,487 4,317 1,530 1973—Dec. 31................................................ 20,962 2,220 631 1,589 7,714 4,389 5,019 1,620 1974—May 31................................................ 21,079 2,749 502 2,247 6,735 4,561 5,708 1,327 June 30................................................ 21,229 2,660 462 2,198 6,865 4,633 5,719 1,351 Federal Reserve Banks: 1971—Dec. 31................................................ 70,218 36,032 31,033 4,999 25,299 7,702 584 601 1972—Dec. 31................................................ 69,906 37,750 29,745 8,005 24,497 6,109 1,414 136 1973—Dec. 31................................................ 78,516 46,189 36,928 9,261 23,062 7,504 1,577 184 1974—May 31................................................ 81,395 50,865 37,988 12,877 20,502 8,032 1,747 248 June 30................................................ 80,485 50,132 37,321 12,811 20,231 8,127 1,753 241 Held by private investors: 1971—Dec. 31................................................ 173,376 81,729 65,867 15,862 60,735 16,943 6,627 7,340 1972—Dec. 31................................................ 180,243 91,063 73,451 17,612 57,649 17,547 9,570 4,413 1973—Dec. 31................................................ 170,746 93,162 70,227 22,935 50,939 13,241 9,063 4,341 1974—May 31................................................ 167,076 89.250 69,451 19,799 49,928 14,367 10,003 3,528 June 30................................................ 164,861 87.150 67,236 19,914 50,103 14,197 9,931 3,482 Commercial banks: 1971—Dec. 31......................................... 51,363 14,920 8,287 6,633 28,823 6,847 555 217 1972—Dec. 31......................................... 52,440 18,077 10,289 7,788 27,765 5,654 864 80 1973—Dec. 31......................................... 45,737 17.499 7,901 9,598 22,878 4,022 1,065 272 1974—May 31......................................... 41,349 12,206 4,093 8,113 22,779 5,077 1,025 262 June 30......................................... 40.181 11.334 3.309 8,025 22,741 4,845 1,010 250 Mutual savings banks: 1971—Dec. 31......................................... 2,742 416 235 181 1,221 499 281 326 1972—Dec. 31......................................... 2,609 590 309 281 1,152 469 274 124 1973—Dec. 31........................................ 1,955 562 222 340 750 211 300 131 1974—May 31........................................ 1,690 406 163 243 719 217 246 102 June 30......................................... 1.673 377 135 242 717 218 259 102 Insurance companies: 1971—Dec. 31......................................... 5,679 720 325 395 1,499 993 1,366 1,102 1972—Dec. 31......................................... 5,220 799 448 351 1,190 976 1,593 661 1973—Dec. 31........................................ 4,956 779 312 467 1,073 1,278 1,301 523 1974—May 31......................................... 4,686 636 241 395 992 1,319 1,341 399 June 30......................................... 4.571 569 194 375 1,009 1 ,276 1,329 389 Nonfinancial corporations: 1971—Dec. 31......................................... 6,021 4,191 3,280 911 1,492 301 16 20 1972—Dec. 31........................................ 4,948 3,604 1,198 2,406 1,198 121 25 1 1973—Dec 31......................................... 4,905 3,295 1,695 1,600 1,281 260 54 15 1974—May 31........................................ 4,777 2,810 1,610 1,200 1,582 320 53 12 June 30........................................ 4.400 2,327 1,219 1,108 1,476 528 56 13 Savings and loan associations: 1971—Dec. 31......................................... 3,002 629 343 286 1,449 587 162 175 1972—Dec. 31......................................... 2,873 820 498 322 1,140 605 226 81 1973—Dec. 31........................................ 2,103 576 121 455 1,011 320 151 45 1974 May 31........................................ 2,041 436 82 354 913 366 298 29 1.907 385 53 332 923 360 214 25 State and local governments: 1971—Dec. 31......................................... 9,823 4,592 3,832 760 2,268 783 918 1,263 1972—Dec. 31......................................... 10,904 6,159 5,203 956 2,033 816 1,298 598 1973—Dec. 31......................................... 9,829 5,845 4,483 1,362 1,870 778 1,003 332 1974—May 31......................................... 9,280 5,559 4,082 1,477 1,704 755 1,014 248 June 30......................................... 8.238 4.508 3,245 1,263 1.715 738 1,031 246 All others: 1971—Dec. 31......................................... 94,746 56,261 49,565 6,696 23,983 6,933 3,329 4,237 1972—Dec. 31......................................... 101,249 61,014 55,506 5,508 23,171 8,906 5,290 2,868 1973—Dec. 31........................................ 101,261 64,606 55,493 9,113 22,076 6,372 5,189 3,023 1974—May 31......................................... 103,253 67,197 59,180 8,017 21,239 6,313 6,026 2,476 June 30........................................ 103,891 67.650 59.081 8,569 21,522 6,232 6,032 2,457 Note.—Direct public issues only. Based on Treasury Survey of banks, and 734 insurance companies combined, each about 90 per cent; Ownership. (2) 467 nonfinancial corporations and 486 savings and loan assns., each Data complete for U.S. Govt, agencies and trust funds and F.R. Banks, about 50 per cent; and (3) 504 State and local govts., about 40 per cent. but data for other groups include only holdings of those institutions “All others,” a residual, includes holdings of all those not reporting that report. The following figures show, for each category, the number in the Treasury Survey, including investor groups not listed separately. and proportion reporting: (1) 5,589 commercial banks, 478 mutual savings Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 38 U.S. GOVERNMENT SECURITIES □ AUGUST 1974 DAILY-AVERAGE DEALER TRANSACTIONS (Par value, in millions of dollars) U.S. Government securities By maturity By type of customer U.S. Govt. Period agency Total securities Within 1-5 5-10 Over U.S. Govt, U.S. Govt, Com­ All 1 year years years 10 years securities securities mercial other1 dealers brokers banks 1973—June............................. 2,969 2,335 289 228 118 593 622 975 778 732 July.............................. 2,993 2,330 367 226 72 581 632 982 798 700 Aug.............................. 3,366 2,403 706 172 85 566 874 1,044 881 771 Sept.............................. 3,884 3,021 644 158 61 583 1,182 1,142 977 1,048 Oct................................ 3,384 2,798 374 163 48 568 954 1,073 789 810 Nov.............................. 4,022 3,001 485 447 89 655 1,188 1,173 1,007 810 Dec............................... 3,889 3,167 348 317 58 675 1,051 1,123 1,040 869 1974—Jan................................ 3,659 3,074 325 215 45 706 889 1,103 962 695 Feb............................... 4,229 3,192 402 561 74 795 1,058 1,299 1,077 1,019 Mar.............................. 3,697 2,814 450 369 64 744 892 1,071 991 733 Apr............................... 3,338 2,682 438 173 45 614 836 951 937 709 May............................. 3,542 2,645 693 133 72 711 905 991 936 861 June............................. 3,084 2,549 385 110 41 693 759 877 755 978 Week ending— 1974—June 5....................... 3,747 3,036 515 151 46 820 993 1,038 896 1,022 12....................... 3,566 2,917 482 124 43 805 941 1,003 818 1,158 19....................... 2,669 2,199 351 78 41 630 645 706 689 746 26....................... 2,706 2,322 252 93 39 624 610 803 669 1,097 July 3....................... 3,013 2,570 339 72 32 581 707 897 828 941 10....................... 2,568 2,139 344 58 27 545 617 646 760 1,054 17....................... 2,567 2,095 341 73 57 526 693 728 620 1,099 24....................... 2,194 1,759 328 66 41 388 635 555 616 1,252 31....................... 2,704 2,224 383 73 24 456 749 706 793 890 i Since Jan. 1972 has included transactions of dealers and brokers in They do not include allotments of, and exchanges for, new U.S. Govt, securities other than U.S. Govt. securities, redemptions of called or matured securities, or purchases or sales of securities under repurchase agreement, reverse repurchase (resale), Note.—The transactions data combine market purchases and sales of or similar contracts. Averages of daily figures based on the number of U.S. Govt, securities dealers reporting to the F.R. Bank of New York. trading days in the period. DAILY-AVERAGE DEALER POSITIONS DAILY-AVERAGE DEALER FINANCING (Par value, in millions of dollars) (In millions of dollars) U.S. Government securities, by maturity Commercial banks U.S. Period m t A a ie t l u s l ri­ W y i e 1 th ar in y 1 e - a 5 rs y 5 e - a 1 r 0 s y O e 1 v a 0 e rs r a s G e g t c e i o e u n v s r c t i y . ­ Period sou A r l c l es Y N C o e it r w y k w E h ls e e r ­ e C t o io rp ns o r 1 a­ o A th l e l r 1973—June............... 2,976 2,818 -165 91 232 744 1973—June........... 3,769 1,242 690 431 1,406 July............... 1,901 2,062 -250 -43 131 511 July............ 2,826 725 544 510 1,047 Aug................ 1,788 1,977 -94 -107 12 273 2,318 829 327 386 777 Sept................ 3,201 2,958 316 -111 38 799 4,244 1,620 877 441 1,306 Oct................. 3,073 2,858 93 56 67 904 3,721 1,253 918 328 1,223 Nov................ 3,618 3,034 95 350 139 1.185 Nov........... 4,469 1,809 900 570 1,190 Dec................ 4,441 3,697 223 396 124 1,400 5,468 2,322 1,147 671 1,329 1974—Jan................. 3,653 3,210 51 262 130 1,324 1974—Jan............. 4,802 1,747 1,253 658 1,143 Feb................. 4,081 2,707 537 647 190 1,435 Feb............. 4,837 1,545 1,501 533 1,257 Mar................ 2,587 2,149 50 287 102 1,045 3,817 1,196 952 485 1,185 Apr................. 1,536 1,577 -121 62 17 719 2,449 600 728 287 833 May............... 495 421 -33 66 41 786 May........... 1,637 26 486 213 913 June............... 594 447 52 78 16 1.185 June........... 2,477 241 884 268 1,083 Week ending— Week ending— 1974—May 1........ 794 921 -194 44 24 638 1974—May 1 . .. 1,763 201 579 248 736 8 602 743 -226 66 19 647 8. . . 1,572 -6 561 225 793 15........ 687 402 153 65 66 728 15. . . 1,790 -3 556 252 984 22 101 14 -36 73 50 687 22. . . 1,515 -88 379 221 1,003 29 354 241 -5 78 42 977 29. . . 1,552 129 391 169 864 June 5........ 1,049 925 47 63 14 1,232 June 5... 2,152 148 722 191 1,092 12 1,193 1,043 59 70 21 1,304 12... 3,527 587 1.244 334 1,363 19........ 807 657 57 84 9 1,219 19. .. 2,879 648 977 279 975 26. , -328 -485 51 89 17 1,214 26. .. 1,860 -82 651 299 993 Note.—The figures include all securities sold by dealers under repur­ i All business corporations, except commercial banks and insurance chase contracts regardless of the maturity date of the contract, unless the companies. contract is matched by a reverse repurchase (resale) agreement or delayed delivery sale with the same maturity and involving the same amount of Note.—Averages of daily figures based on the number of calendar days securities. Included in the repurchase contracts are some that more in the period. Both bank and nonbank dealers are included. See also clearly represent investments by the holders of the securities rather than Note to the table on the left. dealer trading positions. Average of daily figures based on number of trading days in the period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ FEDERALLY SPONSORED CREDIT AGENC A ; NG ISSUES OF FEDERALLY SPONSORED CREDIT AGENCIES, JUNE 30, : Cou­ Amount Cou­ Amount nour pon (millions Agency, and date of issue pon (millions Agency, and date of issue illior rate of dollars) and maturity rate of dollars) and maturity lollai Federal National Mortgage Banks for cooperatives Association—Cont. Bonds : 7.65 173 Debentures: 1/2/74 - 7/1/74................ 469 5% 400 9/10/69 - 9/10/74.......... 7.85 250 2/4/74 - 8/1/74................ 565 9 Vs 800 2/10/71 - 9/10/74............ 5.65 300 3/4/74 - 9/3/74................ 355 8.00 217 5/10/71 - 12/10/74.......... 6.10 250 4/1/74 - 10/1/74.............. 277 7.05 1,000 9/10/71 - 12/10/74.......... 6.45 450 5/1/74- 11/4/74.............. 232 6.10 250 11/10/70 - 3/10/75........ 7.55 300 6/3/74- 12/2/74.............. 351 5 Vs 400 10/12/71 - 3/10/75........ 6.35 600 10/1/73 -4/4/77.............. 200 8.20 500 4/12/71 -6/10/75............ 5.25 500 7.15 700 10/13/70 - 9/10/75........ 7.50 350 8.05 265 3/12/73 -9/10/75............ 6.80 650 Federal intermediate 6.80 300 3/10/72 - 12/10/75........ 5.70 500 credit banks 7.95 300 9/10/73 - 12/10/75.......... 8.25 300 Bonds: 7% 500 3/11/71 - 3/10/76............ 5.65 500 10/1/73 -7/1/74.............. 699 7.15 400 6/12/73 - 3/10/76............ 7.13 400 1/4/71 - 7/1/74.............. 224 6.50 350 6/10/71 - 6/10/76............ 6.70 250 11/1/73 - 8/1/74.............. 623 7.05 600 2/10/72 - 6/10/76............ 5.85 450 12/3/73 -9/3/74............. 593 9.10 700 11/10/71 - 9/10/76.......... 6.13 300 1/2/74 - 10/1/74.............. 661 8.70 400 6/12/72-9/10/76........... 5.85 500 2/4/74 - 11/4/74............. 754 7¥S 300 7/12/71 - 12/10/76.......... 7.45 300 3/4/74 - 12/2/74.............. 785 sy4 300 12/11/72- 12/10/76........ 6.25 500 5/1/72 - 1/2/75................ 240 7.20 600 6/10/74- 12/10/76.......... 8.45 500 4/1/74 - 1/2/75............... 608 7.45 300 2/13/62 - 2/10/77.......... 4 Vi 198 5/1/74 - 2/3/75................ 672 7.80 500 9/11/72 - 3/10/77........... 6.30 500 6/3/74 - 3/3/75................ 796 7.20 500 3/11/74 - 3/10/77............ 7.05 400 1/3/72 - 7/1/75................ 302 8.70 500 12/10/70 - 6/10/77........ 6.38 250 3/1/73 - 1/5/76................ 261 6.95 200 5/10/71 - 6/10/77............ 6.50 150 7/2/73 - 1/3/77............... 236 7.15 300 12/10/73 - 6/10/77.......... 7.20 500 1/2/74 - 1/3/78................ 406 8.80 600 9/10/71 -9/12/77............ 6.88 300 ey4 300 9/10/73 -9/12/77............ 7.85 400 7.45 300 7/10/73 - 12/12/77.......... 7.25 500 Federal land banks 7.60 500 10/1/73 - 12/12/77.......... 7.55 500 Bonds: 8.65 600 6/10/74-3/10/78............ 8.45 650 10/20/71 - 7/22/74 5.85 326 8% 400 6/12/73 - 6/12/78........... 7.15 600 4/20/71 - 10/21/74.......... 5.30 300 7.75 350 3/11/74 - 9/11/78............ 7.15 550 2/20/70 - 1/20/75.......... m 220 7.05 300 10/12/71 - 12/11/78___ 6.75 300 4/23/73 - 1/20/75............ 7.15 300 7.80 200 12/10/73 - 3/12/79.......... 7.25 500 4/20/65 - 4/21/75.......... 4% 200 6.60 200 9/10/73 - 6/11/79........... 7.85 300 7/20/73 -4/21/75............ 7.65 300 7.30 188 6/12/72- 9/10/79............ 6.40 300 2/15/72 - 7/21/75............ 5.70 425 834 300 12/10/71 - 12/10/79___ 6.55 350 4/22/74 - 7/21/75............ 8.30 300 73/8 400 2/10/72 - 3/10/80........... 6.88 250 7/20/71 - 10/20/75.......... 7.20 300 6/10/74-6/10/80............ 8.50 350 10/23/73 - 10/20/75 7.40 362 2/16/73 - 7/31/80........... 5.19 1 4/20/72- 1/20/76............ 6*4' 300 2/16/73 - 7/31/80............ 3.18 9 2/21/66 - 2/24/76.......... 5.00 123 6 8 7 5 . . . . 1 0 6 3 5 5 0 0 4 2 3 1 0 0 5 4 0 0 0 0 6 3 1 1 1 / / / 2 0 1 1 2 / / 2 6 1 1 9 / / 1 / / 7 7 7 / 7 3 3 3 7 2 2 - - - - 9 - 3 1 1 /1 / / 1 0 2 1 2 0 / 9 0 3 / / / 1 / 0 8 8 8 0 / 1 0 1 8 / 8 . . 0 . . . . 0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 6 7 6 7 . . . . . 1 4 0 6 5 5 5 6 0 0 4 3 3 1 0 0 5 5 0 6 0 0 5 4 4 7 1 1 / / / / / 2 2 2 2 2 3 0 2 1 2 / / / / 7 / 6 7 7 7 3 3 6 4 4 - - - - - 4 4 7 1 / 7 / / 2 0 2 2 / / 2 0 0 0 2 0 / / / 0 7 7 7 / / 7 6 6 6 7 6 . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 6 8 5 7 ^ % . % . 1 0 4 5 5 4 4 3 3 1 5 0 7 6 5 0 0 3 0 0 7 7 . . 7 1 5 5 1 1 5 5 0 0 4 3 / / 1 2 8 1 / / 7 7 3 3 - - 4 5 /1 /1 0 / / 8 8 1 1 .. . . . . . . . . . . . . . . . . . . . . . . . 4 6. . 5 5 9 0 2 1 6 8 4 7 / /2 2 0 2 / / 7 7 3 4 - -4 7 / / 2 2 0 0 / / 7 7 7 7 . . . . . . . . . . . . . . . . . . . . . . . . 8 7V % i 5 5 6 5 5 0 3/21/73 - 5/1/81............. 5.77 2 10/20/71 - 10/20/77........ 6.35 300 1/21/71 - 6/10/81 .......... 7.25 250 2/20/63 - 2/20/73-78.... 41/s 148 9/10/71 -9/10/81............ 7.25 250 5/2/66 - 4/20/78............ 5K 150 3/11/74 - 12/10/81.......... 7.30 250 7/20/72 - 7/20/78.......... 6.40 269 3,183 6/28/72 -5/1/82............. 5.84 58 10/23/73 - 10/19/78....... 7.35 550 2/10/71 - 6/10/82............ 6.65 250 2/20/67 - 1/22/79............ 5.00 285 8.00 200 9/11/72 - 9/10/82........... 6.80 200 1/21/74 - 1/22/79............ 7.10 300 4.38 248 12/10/73 - 12/10/82........ 7.35 300 9/15/72 -4/23/79............ 6.85 235 7.40 250 3/11/71 - 6/10/83............ 6.75 200 2/20/74 - 7/23/79............ 7.15 389 6/12/73 - 6/10/83............ 7.30 300 10/23/72 - 10/23/79........ 6.80 400 11/10/71 - 9/12/83.......... 6.75 250 1/22/73 - 1/21/80............ 6.70 300 8.38 250 4/12/71 - 6/11/84............ 6.25 200 7/20/73 - 7/21/80............ 71/2 250 3.58 53 12/10/71 - 12/10/84___ 6.90 250 2/23/71 - 4/20/81............ 6.70 224 5.48 5 3/10/72 - 3/10/92.......... 7.00 200 4/20/72 - 4/20/82............ 6.90 200 5.85 71 6/12/72-6/10/92........... 7.05 200 4/23/73 - 10/20/82......... 7.30 239 5.92 35 12/11/72 - 12/10/97........ 7.10 200 10/23/73 - 10/20/83........ 7.30 300 5.50 10 5.49 21 5.74 81 8.63 200 not guaranteed by the U.S. Govt.; see also note to table at top of p. A-40. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 40 FEDERALLY SPONSORED CREDIT AGENCIES □ AUGUST 1974 MAJOR BALANCE SHEET ITEMS OF SELECTED FEDERALLY SPONSORED CREDIT AGENCIES (In millions of dollars) Federal home loan banks Federal National Mortgage Assn. Banks Federal Federal (secondary market for intermediate land Assets Liabilities and capital operations) cooperatives credit banks banks End of period Ad­ Cash Mem­ Deben­ Loans Loans vances Invest­ and Bonds ber Capital Mort­ tures to Deben­ and Deben­ Mort­ to ments de­ and de­ stock gage and cooper­ tures dis­ tures gage Bonds mem­ posits notes posits loans notes atives counts loans bers (A) (L) (A) (L) (A) (L) (A) (L) 1970............. 10,614 3,864 105 10,183 2,332 1,607 15,502 15,206 2,030 1,755 4,974 4,799 7,186 6,395 1971............. 7,936 2,520 142 7,139 1,789 1,618 17,791 17,701 2,076 1,801 5,669 5,503 7,917 7,063 1972............. 7,979 2,225 129 6,971 1,548 1,756 19,791 19,238 2,298 1,944 6,094 5,804 9,107 8,012 1973—June.. 11,145 2,516 108 10,215 1,453 2,008 21,413 20,364 2,725 2,316 6,958 6,645 10,117 8,836 July. . 12,365 2,126 103 11,213 1,183 2,035 21,772 20,843 2,811 2,365 6,981 6,745 10,256 9,388 Aug. . 13,511 2,016 111 12,562 1,091 2,064 22,319 21,186 2,865 2,310 7,065 6,727 10,441 9,390 Sept. . 14,298 2,908 102 14,062 1,178 2,089 22,826 21,537 2,738 2,560 7,170 6,833 10,592 9,388 Oct.. . 14,799 3,498 106 15,362 1,270 2,107 23,348 22,243 2,711 2,728 7,130 6,901 10,781 9,838 Nov. . 14,866 3,649 77 15,362 1,545 2,112 23,912 22,404 2,662 2,704 7,029 6,890 10,926 9,838 Dec... 15,147 3,537 157 15,362 1,745 2,122 24,175 23,001 2,577 2,670 7,198 6,861 11,071 9,838 1974—Jan.. . 15,188 2,843 121 14,556 1,692 2,246 24,424 23,131 3,123 2,741 7,163 6,956 11,245 10,048 Feb... 14,904 2,680 116 13.906 1,936 2,294 24,541 23,092 3,211 2,828 7,277 7,029 11,402 10,282 Mar... 14,995 2,779 124 13,906 2,027 2,306 24,888 23,515 3,143 2,878 7,545 7,162 11,467 10,282 Apr... 16,020 1,615 82 13,902 2,067 2,337 25.264 23,668 r2,891 2,810 r7,850 7,403 Ml,878 10,843 May.. 17,103 1,956 96 14,893 r2,215 2,376 25,917 25,089 r2,694 2,674 '8,195 7,585 ’-12,142 10,843 June.. 17,642 2,564 115 16,393 2,158 2.413 26,559 25,878 2,733 2,449 8,479 7,858 12,400 10,843 Note.—Data from Federal Home Loan Bank Board, Federal National offered securities (excluding, for FHLB’s, bonds held within the FHLB Mortgage Assn., and Farm Credit Admin. Among omitted balance System) and are not guaranteed by the U.S. Govt.; for a listing of these sheet items are capital accounts of all agencies, except for stock of FHLB’s. securities, see table on preceding page. Loans are gross of valuation reserves Bonds, debentures, and notes are valued at par. They include only publicly and represent cost for FNMA and unpaid principal for other agencies. NEW ISSUES OF STATE AND LOCAL GOVERNMENT SECURITIES (In millions of dollars) All issues (new capital and refunding) Issues for new capital Type of issue Type of issuer Total Use of proceeds Period amount deliv­ Special ered3 G o e b a n l l e i­ r­ R n e u v e e­ HAA1 G l U o o a . v S n t . s . State di s a s t n t a r d t i . ct Other2 Total c E at d i u on ­ b R r a i o d n a g d d e s s i U ti t e i s l­ 4 H in o g u s s­ V a a e n i t d e s r ' ­ O p p o t u h s r e e ­ s r gations auth. 197 0 18,164 11,850 6,082 131 103 4,174 5,595 8,399 18,110 5,062 1,532 3,525 466 7,526 197 1 24,962 15,220 8,681 1,000 62 5,999 8,714 10,246 24,495 5,278 2,642 5,214 2,068 9,293 197 2 23,652 13,305 9,332 959 57 4,991 9,496 9,165 22,073 4,981 1,689 4,638 1,910 6,741 197 3 23,970 12,257 10,632 1,022 58 4,212 9,507 10,249 22,408 4,311 1,458 5,654 2,639 8,335 1973—Apr... 1,826 870 947 159 731 934 1,757 306 12 452 88 898 May.. 1,939 825 1,106 291 945 703 1,775 299 233 430 224 588 June.. 2,152 1,025 861 261 189 1,082 881 2,144 542 102 643 334 523 July.. 2,028 1,458 564 516 363 1,149 2,001 391 231 366 3 1,009 Aug... 1,657 1,067 588 529 498 630 1,602 311 30 352 290 618 Sept.. 1,750 721 741 285 236 838 675 1,653 327 66 579 384 298 Oct... 2,313 1,344 964 337 842 1,135 2,163 299 142 412 251 1,060 Nov.. 2,257 866 1,383 243 1,247 766 1,929 356 42 596 247 687 Dec... 2,089 919 995 173 450 1,022 616 1,954 372 165 487 344 582 1974—Jan.., 2,198 1,402 794 208 823 1,163 2,130 595 36 373 56 1,070 Feb.. 1,934 1,155 778 473 523 938 1,869 449 53 612 39 717 Mar. 1,979 1,160 590 227 346 776 856 1,868 359 258 349 241 660 Apr.. 2,362 1,694 660 360 849 1,155 2,325 505 9 595 178 1,038 1 Only bonds sold pursuant to 1949 Housing Act, which are secured 4 Water, sewer, and other utilities. by contract requiring the Housing Assistance Administration to make 5 Includes urban redevelopment loans. annual contributions to the local authority. 2 Municipalities, counties, townships, school districts. Note.—Security Industries Assn. data; par amounts of long-term issues 3 Excludes U.S. Govt, loans. Based on date of delivery to purchaser based on date of sale unless otherwise indicated. and payment to issuer, which occurs after date of sale. Components may not add to totals due to rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ SECURITY ISSUES A 41 TOTAL NEW ISSUES (In millions of dollars) Gross proceeds, all issues1 Noncorporate Corporate Period Bonds Stock Total G U o . v S t . .2 a G g U e o n . v S c t . y . 3 a ( n U S d t . a S lo t . e ) c 4 al Others Total Total P o u ff b e l r ic e l d y P p ri l v a a c t e e d ly Preferred Common 1970.................... 88,666 14,831 16,181 17,762 949 38,945 30,315 25,384 4,931 1,390 7,240 1971..................... 105,233 17,325 16,283 24,370 2,165 45,090 32,123 24,775 7,354 3,670 9,291 1972..................... 96,522 17,080 12,825 23,070 1,589 41,957 28,896 19,434 9,462 3,367 9,694 1973..................... 100,417 19,057 23,883 22,700 1,385 33,391 22,268 13,649 8,620 3,372 7,750 1973—Apr.......... 6,567 564 1,640 1,688 178 2,497 1,739 938 801 200 558 May......... 11,225 3,353 3,442 1,870 17 2,543 1,721 1,049 672 187 635 June......... 7,943 559 1,706 2,046 53 3,578 2,757 1,358 1,398 216 606 July.......... 7,643 490 2,471 1,992 60 2,631 1,870 857 1,013 226 536 Aug.......... 8,019 3,097 1,600 1,474 42 1,806 1,382 792 590 94 330 Sept.......... 8,091 2,432 2,100 1,630 15 1,915 1,366 684 682 119 430 Oct........... 8,924 485 2,612 2,232 196 3,398 2,358 1,805 553 355 685 Nov.......... 12,553 4,521 2,200 2,224 45 3,563 2,257 1,669 589 637 668 Dec........... 6,635 148 1,032 1,966 251 3,238 2,469 1,552 917 196 573 1974—Jan. <>........ 3,392 2,956 2,115 842 152 284 Feb.......... 2,687 2,101 1,684 418 268 318 Mar.......... 3,141 2,384 2,020 164 395 361 Apr........... 2,947 2,134 1,594 541 356 456 Gross proceeds, major groups of corporate issuers Period Manufacturing C m om is m ce e ll r a c n ia e l o u an s d Transportation Public utility Communication a R nd e a f l i n e a s n ta c t i e a l Bonds Stocks Bonds Stocks Bonds Stocks Bonds Stocks Bonds Stocks Bonds Stocks 1970............................................... 9,192 1,320 1,963 2,540 2,213 47 8,016 3,001 5,053 83 3,878 1,638 1971.............................................. 9,426 2,152 2,272 2,390 1,998 420 7,605 4,195 4,227 1,592 6,601 2,212 1972.............................................. 4,821 1,809 2,645 2,882 2,862 185 6,392 4,965 3,692 1,125 8,485 2,095 1973.............................................. 4,329 643 1,283 1,559 1,881 43 5,585 4,661 3,535 1,369 5,661 2,860 1973—Apr.................................... 260 22 237 139 91 1 150 369 258 743 228 387 12 30 143 236 8 361 410 355 19 351 231 June................................... 703 25 133 89 183 1,099 497 303 29 337 181 July.................................... 364 169 139 112 250 1 651 269 244 60 223 151 Aug.................................... 230 49 149 129 83 15 419 90 320 5 182 136 Sept.................................... 270 78 149 96 140 2 334 252 228 16 244 106 Oct..................................... 472 52 63 147 114 342 608 633 46 734 193 Nov.................................... 383 93 61 92 241 4 584 496 296 499 692 122 Dec.................................... 485 18 145 285 226 6 569 319 350 27 693 115 1974—Jan. 6................................. 866 29 135 125 127 1,192 249 142 4 493 30 Feb..................................... 353 36 51 143 5 1 536 293 372 25 784 87 Mar.................................... 419 161 40 71 76 850 446 310 21 690 58 Apr.................................... 1,109 9 209 56 6 446 685 279 5 85 57 1 Gross proceeds are derived by multiplying principal amounts or 6 Beginning Jan. 1974 noncorporate figures are no longer published by number of units by offering price. the SEC. 2 Includes guaranteed issues. 3 Issues not guaranteed. Note.—Securities and Exchange Commission estimates of new issues 4 See note to table at bottom of opposite page. maturing in more than 1 year sold for cash in the United States. 5 Foreign governments and their instrumentalities, International Bank for Reconstruction and Development, and domestic nonprofit organ­ izations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 42 SECURITY ISSUES □ AUGUST 1974 NET CHANGE IN OUTSTANDING CORPORATE SECURITIES (In millions of dollars) Derivation of change, all issuers1 Period All securities Bonds and notes Common and preferred stocks New issues Retirements Net change New issues Retirements Net change New issues Retirements Net change 1970....................... 38,707 9,079 29,628 |! 29,495 6,667 22,825 9,213 2,411 6,801 1971....................... 46,687 9,507 37,180 ! 31,917 8,190 23,728 14,769 1,318 13,452 1972....................... 42,306 10,224 32,082 27,065 8,003 19,062 15,242 2,222 13,018 1973®..................... 35,058 11,804 23,252 21,501 8,810 12,691 13,554 2,993 10,561 1972—IV........ 10,944 2,932 8,012 ' 6,998 2,207 4,790 3,946 725 3,220 1973—1................. 8,219 2,806 5,412 4,198 1,781 2,417 4,020 1,025 2,995 II................ 9,418 2,470 6,947 ! 5,769 1,664 4,106 3,648 806 2,842 Ill.............. 6,638 2,150 4,488 4,521 1,579 2,941 2,118 571 1,547 IV............... 10,783 4,378 6,405 7,013 3,786 3,227 3,768 591 3,177 Type of issues Manu­ Commercial Transpor­ Public Communi­ Real estate Period facturing and other 2 tation 3 utility cation and financial 1 & B n o o nd te s s Stocks & B o n n o d te s s Stocks & B n o o n t d e s s Stocks & B o n n o d te s s Stocks & B o n n o d te s s Stocks & B o n n o d te s s Stocks 1971....................... 6,585 2,534 827 2,290 900 800 6,486 4,206 3,925 1,600 5,005 2,017 1972....................... 1,995 2,094 1,409 2,471 711 254 5,137 4,844 3,343 1,260 7,045 2,096 1973....................... 801 658 -109 1,411 1,044 -93 4,265 4,509 3,165 1,389 3,522 3,141 1972—IV............... 116 290 575 479 179 47 1,056 1,735 944 89 1,920 580 1973—1.................. 135 63 -174 377 127 -43 844 1,170 520 185 965 1,244 II................ 632 -2 119 327 327 7 1,136 1,276 842 562 1,049 673 Ill.............. 165 450 108 247 414 -44 1,217 557 752 77 284 260 IV............... -131 147 -162 460 176 -13 1,068 1,506 1,051 575 1,224 964 1 Excludes investment companies. exclude foreign sales and include sales of securities held by affiliated com- 2 Extractive and commercial and miscellaneous companies. panies, special offerings to employees, and also new stock issues and cash 3 Railroad and other transportation companies. proceeds connected with conversions of bonds into stocks. Retirements are defined in the same way and also include securities retired with in- Note.—Securities and Exchange Commission estimates of cash trans- temal funds or with proceeds of issues for that purpose, actions only. As contrasted with data shown on opposite page, new issues OPEN-END INVESTMENT COMPANIES (In millions of dollars) Sales and redemption Assets (market value Sales and redemption Assets (market value of own shares at end of period) of own shares at end of period) Year Month Sales 1 Redemp­ Net Total 2 Cash Other Sales 1 Redemp­ Net Total 2 Cash Other tions sales position 3 tions sales position 3 1962.............. 2,699 1,123 1,576 21,271 1,315 19,956 1973—June.. 303 349 -46 48,127 4,164 43,963 1963.............. 2,460 1,504 952 25,214 1,341 23,873 July. . 364 357 -7 50,933 4,594 46,339 1964.............. 3,404 1,875 1,528 29,116 1,329 27,787 Aug.. 239 432 -193 49,553 4,567 44,986 Sept... 330 395 -65 52,322 4,641 47,681 1965.............. 4,359 1,962 2,395 35,220 1.803 33,417 Oct.. . 305 559 -254 51,952 4,168 47,784 1966.............. 4,671 2,005 2,665 34,829 2,971 31,858 Nov... 502 542 -40 45,814 4,126 41,688 1967.............. 4,670 2,745 1,927 44,701 2,566 42,135 Dec... 349 392 -43 46,518 4,002 42,516 1968.............. 6,820 3,841 2,979 52,677 3,187 49,490 1974—Jan.. . 334 325 9 47,094 4,226 42,863 1969.............. 6,717 3,661 3,056 48,291 3,846 44,445 Feb... 215 303 -88 45.958 4,447 41,511 1970.............. 4,624 2,987 1,637 47,618 3,649 43,969 Mar... 297 346 -49 44,423 4,406 40,017 Apr... 262 327 -65 42,679 4,426 38,253 1971.............. 5,145 4,751 774 56,694 3,163 53,531 May.. 323 320 3 41,015 4,389 36,626 1972.............. 4,892 6,563 -1,671 59,831 3,035 56,796 June.. 332 276 56 40.040 4,461 35,579 1973.............. 4,358 5,651 1,261 46,518 4,002 42,516 1 Includes contractual and regular single-purchase sales, voluntary and 3 Cash and deposits, receivables, all U.S. Govt, securities, and other contractual accumulation plan sales, and reinvestment of investment in- short-term debt securities, less current liabilities. come dividends; excludes reinvestment of realized capital gains dividends. 2 Market value at end of period less current liabilities. Note.—Investment Company Institute data based on reports of mem­ bers, which comprise substantially all open-end investment companies registered with the Securities and Exchange Commission. Data reflect newly formed companies after their initial offering of securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ BUSINESS FINANCE A 43 CORPORATE PROFITS, TAXES, AND DIVIDENDS (In billions of dollars) Corporate Corporate Year P b t e r a o f x o f e i r s t e s c ta o I x n m e ­ e s P t a r a f o x t f e e i r s ts d C d e i a n v s d i h ­ s t U r p i r b n o u d f t i i e t s s d ­ co c a n a l t l i s p o o u i w n t m a ­ l p­ Quarter P b t r e a o f x o f e i r s t e s c ta o I x n m e ­ e s P t a r a f o x t f e e i r s ts d C d e i a n v s d i h ­ s t U r p i r b n o u d f t i i t e s s d ­ co c a t n a l i l o s p o u n i w t m a ­ l p ­ ances1 ances 1 1968.............. 87.6 39.9 47.8 23.6 24.2 46.8 1972—11'... 96.0 40.3 55.7 27.1 28.6 66.4 1969.............. 84.9 40.1 44.8 24.3 20.5 51.9 III'.. 100.2 41.8 58.4 27.8 30.6 66.7 1970.............. 74.0 34.8 39.3 24.7 14.6 56.0 IV'.. 108.2 45.2 63.1 28.2 34.9 68.2 1971r............ 83.6 37.5 46.1 25.0 21.1 60.4 1972 '............ 99.2 41.5 57.7 27.3 30.3 66.3 1973—I'. .. 120.4 48.9 71.5 28.7 42.8 69.2 1973 ............ 122.7 49.8 72.9 29.6 43.3 71.2 II'... 124.9 50.9 74.0 29.1 44.9 70.8 III'.. 122.7 49.9 72.9 29.8 43.1 71.6 IV'.. 122.7 49.5 73.2 30.7 42.5 73.1 1974—I'. .. 138.7 53.6 85.1 31.6 53.5 75.6 i Includes depreciation, capital outlays charged to current accounts, and Note.—Dept, of Commerce estimates. Quarterly data are at seasonally accidental damages. adjusted annual rates. CURRENT ASSETS AND LIABILITIES OF NONFINANCIAL CORPORATIONS (In billions of dollars) Current assets Current liabilities Net Notes and accts. Notes and accts. End of period working U.S. receivable payable Accrued capital Total Cash s G ec o u v r t i . ­ I t n o v ri e e n s ­ Other Total F in e c d o e m ra e l Other ties U.S. Other U.S. Other taxes Govt.1 Govt.1 1970. 187.4 492.3 50.2 7.7 4.2 201.9 193.3 35.0 304.9 6.6 204.7 10.0 83.6 1971. 204.9 518.8 55.7 10.7 3.5 208.8 200.3 39.7 313.9 4.9 207.3 12.2 89.5 1972—1... 209.8 528.1 55.6 10.2 3.4 212.8 204.3 41.8 318.3 4.9 207.0 13.3 93.2 II.. 215.0 536.5 56.0 8.9 2.8 217.8 207.7 43.1 321.5 4.9 208.5 11.4 96.7 III. 219.2 547.5 57.7 7.8 2.9 224.1 212.2 42.8 328.3 4.7 212.1 12.7 98.8 IV. 224.3 563.1 60.5 9.9 3.4 230.5 215.1 43.6 338.8 4.0 221.6 14.1 99.1 1973—1... 231.8 579.2 61.2 10.8 3.2 235.7 222.8 45.5 347.4 4.1 222.8 15.7 104.7 II.. 237.7 596.8 62.3 9.6 2.9 245.6 230.3 46.0 359.1 4.5 232.5 13.9 108.1 III. 241.9 613.6 62.2 9.5 3.0 254.2 238.2 46.6 371.7 4.4 240.8 15.3 111.2 IV. 245.3 631.4 65.2 10.7 3.5 255.8 247.0 49.3 386.1 4.3 252.0 16.6 113.3 1974—1......................... 253.2 653.9 62.8 11.7 3.2 265.6 258.9 51.6 400.7 4.5 256.7 18.7 120.7 __________ 1 Receivables from, and payables to, the U.S. Govt, exclude amounts Note.—Based on Securities and Exchange Commission estimates, offset against each other on corporations’ books. BUSINESS EXPENDITURES ON NEW PLANT AND EQUIPMENT (In billions of dollars) Manufacturing Transportation Public utilities Period Total Durable du N r o a n bl ­ e Mining R ro a a i d l­ Air Other Electric and G a o s t her n C i o ca m ti m on u s ­ Other1 T A (S o . . R t A a . . ) l 1971....................... 81.21 14.15 15.84 2.16 1.67 1.88 1.38 12.86 2.44 10.77 18.05 1972....................... 88.44 15.64 15.72 2.45 1.80 2.46 1.46 14.48 2.52 11.89 20.07 1973....................... 99.74 19.25 18.76 2.74 1.96 2.41 1.66 15.91 2.76 12.85 21.40 1972—1.................. 19.38 3.29 3.32 .58 .48 .50 .32 3.19 .44 2.72 4.55 86.79 II............... 22.01 3.71 3.92 .61 .48 .73 .39 3.61 .62 2.95 4.98 87.12 Ill............... 21.86 3.86 3.87 .59 .38 .61 .35 3.67 .72 2.84 4.97 87.67 IV............... 25.20 4.77 4.61 .63 .47 .63 .40 4.01 .73 3.39 5.57 91.94 1973—1.................. 21.50 3.92 3.88 .63 .46 .52 .32 3.45 .50 2.87 4.94 96.19 11................. 24.73 4.65 4.51 .71 .46 .72 .43 3.91 .68 3.27 5.40 97.76 Ill............... 25.04 4.84 4.78 .69 .48 .57 .44 4.04 .77 3.19 5.24 100.90 IV............... 28.48 5.84 5.59 .71 .56 .60 .47 4.54 .82 3.53 5.83 103.74 1974—1.................. 24.10 4.74 4.75 .68 .50 .47 .34 3.85 .52 3.19 5.05 107.27 112............... 27.96 5.62 5.64 .76 .65 .63 .52 4.44 .81 8.90 110.53 1112............. 28.05 5.69 5.67 .75 .64 .50 .57 4.60 .97 8.65 113.16 1 Includes trade, service, construction, finance, and insurance. Note.—Dept, of Commerce and Securities and Exchange Commission 2 Anticipated by business. estimates for corporate and noncorporate business; excludes agriculture, real estate operators, medical, legal, educational, and cultural service, and nonprofit organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 44 REAL ESTATE CREDIT □ AUGUST 1974 MORTGAGE DEBT OUTSTANDING BY TYPE OF HOLDER (In millions of dollars) End of year End of quarter Type of holder, and type of property 1973 1974 1970 1971 1972 II III IV I Up ALL HOLDERS............................................ 451,726 499,758 565,196 600,197 619,996 635,137 646,280 OOJ,11 0(.n/ 280,175 307,200 345,500 366,202 378,382 386,489 392,053 402,064 58,023 67,367 76,585 81,130 83,521 85,394 86,760 88,382 Commercial.................................................. 82,292 92,333 107,673 115,150 119,504 123,855 127,228 131,191 31,236 32,858 35,438 37,715 38,589 39,399 40,239 41,530 PRIVATE FINANCIAL INSTITUTIONS.. 355,929 394,239 450,371 480,242 495,044 505,583 514,110 527,094 1- to 4-family................................................ 231,317 253,540 288,169 307,423 316,754 322,296 327,146 335,343 Multifamily1................................................ 45,796 52,498 59,293 62,429 63,566 64,723 65,555 66,707 Commercial.................................................. 68,697 78,345 92,387 99,364 103,429 107,018 109,891 113,254 Farm............................................................. 10,119 9,856 10,522 11,026 11,295 11,546 11,518 11,790 Commercial banks2...................................... 73,275 82,515 99,314 109,114 114,788 119,068 121,668 125,968 1- to 4-family............................................ 42,329 48,020 57,004 62,181 65,484 67,998 69,351 71,802 Multifamily1............................................ 3,311 3,984 5,778 6,469 6,745 6,932 7,178 7,432 Commercial.............................................. 23,284 26,306 31,751 35,224 37,181 38,696 39,664 41,066 Farm......................................................... 4,351 4,205 4,781 5,240 5,378 5,442 5,475 5,668 Mutual savings banks................................... 57,948 61,978 67,556 70,634 72,034 73,231 73,957 74,264 1- to 4-family............................................ 37,342 38,641 41,650 43,003 43,738 44,247 44,462 44,426 Multifamily1............................................ 12,594 14,386 15,490 16,394 16,567 16,843 17,011 17,081 Commercial.............................................. 7,893 8,901 10,354 11,178 11,670 12,084 12,425 12,698 Farm......................................................... 119 50 62 59 59 57 59 59 Savings and loan associations...................... 150,331 174,250 206,182 222,580 229,182 232,104 236,514 243,791 1- to 4-family............................................ 124,970 142,275 167,049 180,423 185,706 188,051 191,529 197,349 Multifamily1............................................ 13,830 17,355 20,783 21,880 22,391 22,561 22,800 23,379 Commercial.............................................. 11,531 14,620 18,350 20,277 21,085 21,492 22,185 23,063 Life insurance companies............................. 74,375 75,496 77,319 77,914 79,040 81,180 81,971 83,071 1- to 4-family............................................ 26,676 24,604 22,466 21,816 21,826 22,000 21,804 21,766 Multifamily1............................................ 16,061 16,773 17,242 17,686 17,863 18,387 18,566 18,815 Commercial.............................................. 25,989 28,518 31,932 32,685 33,493 34,746 35,617 36,427 Farm......................................................... 5,649 5,601 5,679 5,727 5,858 6,047 5,984 6,063 FEDERAL AND RELATED AGENCIES.. 32.992 39,357 45,790 48,991 53,008 55,664 58,430 62,533 1_ to 4-family................................................ 21.993 26,453 30,147 31,276 33,725 35,454 37,168 39,782 Multifamily1................................................ 3,359 4,555 6,086 7,128 8,171 8,489 8,923 9,643 Commercial.................................................. 16 11 Farm............................................................. 7,624 8,338 9,557 10,587 11,112 11,721 12,339 13,108 Government National Mortgage Association 5,222 5,323 5,113 3,908 4,429 4,029 3,604 3,618 1_ to 4-family............................................ 2,902 2,770 2,490 1,300 1,462 1,330 1,189 1,194 Multifamily1............................................ 2,304 2,542 2,623 2,608 2,967 2,699 2,415 2,424 Commercial.............................................. 16 11 Farmers Home Administration..................... 767 819 837 900 1,000 1,200 1,300 1,400 1- to 4-family............................................ 330 398 387 430 480 550 596 642 Farm......................................................... 437 421 450 470 520 650 704 758 Federal Housing and Veterans Administra­ tions ....................................................... 3,505 3,389 3,338 3,293 3,446 3,476 3,514 3,617 1- to 4-family............................................ 2,771 2,517 2,199 1,998 2,046 2,013 1,964 1,978 Multifamily1............................................ 734 872 1,139 1,295 1,400 1,463 1,550 1,639 Federal National Mortgage Association.... 15,502 17,791 19,791 21,413 22,831 24,175 24,875 26,559 1- to 4-family............................................ 15,181 16,681 17,697 18,521 19,479 20,370 20,516 21,691 Multifamily1............................................ 321 1,110 2,094 2,892 3,352 3,805 4,359 4,868 Federal land banks (farm only)................. 7,187 7,917 9,107 10,117 10,592 11,071 11,635 12,350 Federal Home Loan Mortgage Corporation. 357 964 1,789 2,029 2,423 2,604 2,637 3,191 1_ to 4-family............................................ 357 934 1,754 1,973 2,294 2,446 2,472 2,951 ............................................ 30 Multifam3i5ly1 56 129 158 165 240 GNMA Pools................................................ 452 3,154 5,815 7,331 8,287 9,109 10,865 11,798 1_ to 4-family............................................ 452 3,153 5,620 7,054 7,964 8,745 10,431 11,326 Multifamily1............................................ 1 195 277 323 364 434 All INDIVIDUALS AND OTHERS3................ 62,805 66,162 69,035 70,964 71,944 73,890 73,740 73,540 1- to 4-family................................................ 26,865 27,207 27,184 27,503 27,903 28,739 27,739 26,939 Multifamily1................................................ 8,868 10,314 11,206 11,573 11,784 12,182 12,282 12,032 Commercial.................................................. 13,579 13,977 15,286 15,786 16,075 16,837 17,337 17,937 Farm............................................................. 13,493 14,664 15,359 16,102 16,182 16,132 16,382 16,632 1 Structure of five or more units. sources, with some quarters estimated in part by Federal Reserve in 2 Includes loans held by nondeposit trust companies but not bank trust conjunction with the Federal Home Loan Bank Board and the Dept, of departments. Commerce. Separation of nonfarm mortgage debt by type of property, 3 Includes some U.S. agencies for which amounts are small or separate where not reported directly, and interpolations and extrapolations where data are not readily available. required, estimated mainly by Federal Reserve. Note.—Based on data from various institutional and Government Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ REAL ESTATE CREDIT A 45 FEDERAL NATIONAL MORTGAGE ASSOCIATION AND FEDERAL HOME LOAN MORTGAGE CORPORATION- SECONDARY MORTGAGE MARKET ACTIVITY (In millions of dollars) FNMA FHLMC Mortgage Mortgage Mortgage Mortgage Mortgage Mortgage End of holdings transactions commitments holdings transactions commitments period (during period) (during period) FHA- VA- Pur­ Made Out­ FHA Con­ Pur­ Made Out­ Total i m- guar­ chases Sales during stand­ Total VA ven­ chases during stand­ sured anteed period ing tional period ing 1970 15,492 11,063 4,429 5,079 20 8,047 5,203 325 325 325 1971 17,791 12,681 5,110 3,574 336 9,828 6,497 968 821 147 778 64 182 1972. 19,791 14,624 5,112 3,699 211 8,797 8,124 1,789 1,503 286 1,298 408 1,606 198 1973 24,175 16,852 6,352 6,127 71 8,914 7,889 2.604 1,743 861 1,334 409 1,629 186 1973--June.. 21,413 15,768 5,411 516 1 1,191 9,778 2,029 1,716 313 154 159 316 July. . 21,772 15,877 5,574 516 1,102 9,859 2,158 1,714 444 140 139 278 Aug... 22,319 16,085 5,761 699 1,019 9,809 2,307 1.728 579 161 208 291 Sept... 22,831 16,293 5,937 633 724 9,602 2,423 1.729 694 126 143 288 Oct... 23,348 16,510 6,101 659 264 8,918 2,527 1.742 785 113 63 218 Nov... 23,912 16,734 6,294 656 200 8,690 2,565 1,746 819 46 45 207 Dec... 24,175 16,852 6,352 410 40 158 7,889 2.604 1.743 861 50 43 186 1974—Jan.. . 24,424 17,008 6,348 350 110 6,715 2,621 1,736 885 34 26 161 Feb... 24,529 17,050 6,336 242 489 6,768 2,625 1.730 895 21 49 185 Mar... 24,875 17,315 6,340 462 1 1,646 7,913 2,638 1,724 914 29 595 748 Apr... 25,263 17,450 6,503 526 1 2,154 9,292 2,722 1,756 967 101 400 1,037 May.. 25,917 17,725 6,794 821 1.145 9.475 2,986 1,827 1,159 281 1,486 2,221 June.. 26.559 17,966 7,079 770 537 9.019 3,191 1 ,877 1,314 222 628 2,598 i Includes conventional loans not shown separately. For FHLMC: Data for 1970 begin with Nov. 26, when the FHLMC Note.—Data from FNMA and FHLMC, respectively. became operational. Holdings and transactions cover participations as For FNMA : Holdings include loans used to back bond issues guaranteed well as whole loans. Holdings include loans used to back bond issues by GNMA. Commitments include some multifamily and nonprofit guaranteed by GNMA. Commitments cover the conventional and Govt.hospital loan commitments in addition to 1- to 4-family loan commitments underwritten loan programs. accepted in FNMA’s free market auction system, and through the FNMA- GNMA Tandem Plan (Program 18). TERMS AND YIELDS ON NEW HOME MORTGAGES Conventional mortgages FHA- Terms1 Yields (per cent) in insured primary market loans—yield Period in private Contract Fees and Loan/price Purchase Loan secondary rate (per charges Maturity ratio price (thous. amount market5 cent) (per cent)2 (years) (per cent) of dollars) (thous. of FHLBB HUD dollars) series 3 series 4 1970........................... 8.27 1.03 25.1 71.7 35.5 25.2 8.44 8.52 9.03 1971........................... 7.60 .87 26.2 74.3 36.3 26.5 7.74 7.75 7.70 1972........................... 7.45 .88 27.2 76.8 37.3 28.1 7.60 7.64 7.52 1973 ....................... 7.78 1.11 26.3 77.3 37.1 28.1 7.95 1973—June............... 7.62 1.08 26.3 78.0 35.8 27.5 7.79 8.05 7.89 July................ 7.69 1.11 26.3 78.1 37.0 28.3 7.87 8.40 8.19 Aug............... 7.77 1.08 26.7 76.7 38.6 28.9 7.94 8.85 Sept................ 7.98 1.19 26.6 77.3 37.2 28.2 8.17 8.95 9.18 Oct................. 8.12 1.20 26.1 76.9 38.5 29.0 8.31 8.80 8.97 Nov................ 8.22 1.08 26.0 75.5 38.9 28.8 8.39 8.75 8.86 Dec................. 8.31 1.12 25.6 75.5 37.7 28.0 8.49 8.75 8.78 1974—Jan................. 8.33 1.16 26.4 76.3 38.8 28.9 8.52 8.65 Feb................. 8.40 1.33 25.9 76.5 37.8 28.5 8.62 8.55 8.54 Mar................ 8,43 1.35 26.4 77.3 39.1 29.5 8.64 8.60 8.66 Apr................. 8.47 1.21 26.1 77.3 38.5 29.2 8.67 8.90 9.17 May............... 8.55 1.20 25.8 76.8 37.9 28.8 8.74 9.15 9.46 June?’............. 8.63 1.28 26.7 76.8 40.1 30.4 8.84 9.25 9.46 1 Weighted averages based on probability sample survey of character­ (as shown in first column of this table) and an assumed prepayment at istics of mortgages originated by major institutional lender groups (in­ end of 10 years. cluding mortgage companies) for purchase of single-family homes, as 4 Rates on first mortgages, unweighted and rounded to the nearest compiled by Federal Home Loan Bank Board in cooperation with Federal 5 basis points. Deposit Insurance Corporation. Data are not strictly comparable with 5 Based on opinion reports submitted by field offices of prevailing earlier figures beginning Jan. 1973. local conditions as of the first of the succeeding month. Yields are derived 2 Fees and charges—related to principal mortgage amount—include from weighted averages of private secondary market prices for Sec. 203, loan commissions, fees, discounts, and other charges, but exclude closing 30-year mortgages with minimum downpayment and an assumed pre­ costs related solely to transfer of property ownership. payment at the end of 15 years. Any gaps in data are due to periods of 3 Effective rate, reflecting fees and charges as well as contract rates adjustment to changes in maximum permissible contract interest rates. NOTE TO TABLE AT BOTTOM OF PAGE A-46: amortization and prepayment terms. Data for the following are limited to cases where information was available or estimates could be made: American Life Insurance Association data for new commitments of capitalization rate (net stabilized property earnings divided by property $100,000 and over each on mortgages for multifamily and nonresidential value); debt coverage ratio (net stabilized earnings divided by debt service); nonfarm properties located largely in the United States. The 15 companies and per cent constant (annual level payment, including principal and account for a little more than one-half of both the total assets and the interest, per $100 of debt). All statistics exclude construction loans, nonfarm mortgages held by all U.S. life insurance companies. Averages, increases in existing loans in a company’s portfolio, reapprovals, and loans which are based on number of loans, vary in part with loan composition secured by land only. by type and location of property, type and purpose of loan, and loan Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 46 REAL ESTATE CREDIT □ AUGUST 1974 FEDERAL NATIONAL MORTGAGE ASSOCIATION AUCTIONS OF COMMITMENTS TO BUY HOME MORTGAGES Date of auction Item 1974 Feb. 25 Mar. 11 Mar. 25 Apr. 8 Apr. 22 May 6 May 20 June 3 June 17 July 1 July 15 July 29 Amounts (millions of dollars): Govt.-underwritten loans Offered1................................ 58.0 351.1 1,154.7 1,061.4 333.6 256.0 217.7 85.1 38.5 271.7 379.5 151.6 Accepted............................... 42.3 285.3 332.5 267.0 168.5 111.1 82.8 71.5 31.5 103.0 193.5 73.4 Conventional loans Offered1................................ 48.6 74.2 126.3 163.9 80.3 74.3 41.4 26.1 21.6 39.7 60.4 36.8 Accepted............................... 39.4 50.1 34.2 63.3 40.9 29.8 23.6 20.5 11.2 23.6 29.9 18.1 Average yield (per cent) on short­ term commitments 2 Govt.-underwritten loans........ 8.43 8.44 8.62 8.95 9.18 9.34 9.48 9.54 9.54 9.65 9.90 9.98 Conventional loans.................. 8.50 8.47 8.64 9.00 9.21 9.44 9.63 9.70 9.69 9.76 9.90 10.02 1 Mortgage amounts offered by bidders are total bids received. period of 12 years for 30-year loans, without special adjustment for 2 Average accepted bid yield (before deduction of 38 basis-point fee FNMA commitment fees and FNMA stock purchase and holding require­ paid for mortgage servicing) for home mortgages assuming a prepayment ments. Commitments mature in 4 months. MAJOR HOLDERS OF FHA-INSURED AND VA-GUARANTEED RESIDENTIAL MORTGAGE DEBT (End of period, in billions of dollars) Dec. 31, Dec. 31, Dec. 31, Mar. 31, June 30, Sept. 30, Dec. 31, Holder 1970 1971 1972 1973 1973 1973 1973 All holders................................................... 109.2 120.8 131.1 132.4 133.6 133.8 135.0 FHA......................................................... 91.7 81.3 86.4 86.6 86.4 85.6 85.0 VA............................................................ 37.3 39.5 44.7 45.8 47.2 48.2 50.0 Commercial banks...................................... 10.5 11.3 11.7 11.7 11.7 '•11.7 Ml.5 FHA......................................................... 7.9 8.3 8.5 8.5 8.5 '■8.4 '8.2 VA............................................................ 2.6 3.0 3.2 3.2 3.2 r3.3 3.3 Mutual savings banks................................. 28.1 28.2 28.6 28.7 28.7 28.6 28.4 FHA......................................................... 16.1 16.1 16.0 15.9 15.8 15.7 15.5 VA............................................................ 12.0 12.1 12.6 12.8 12.9 12.9 12.9 Savings and loan assns............................... 18.7 24.3 28.9 V FH A A .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 8 0 . . 5 2 1 1 3 0 . . 7 6 1 1 3 5 . . 5 4 } 29.5 } 29.8 ) 30.1 } 29.7 Life insurance cos....................................... 16.8 15.8 14.7 14.3 14.0 13.7 13.6 FHA........................................................ 11.4 10.8 10.0 9.7 9.5 9.3 9.2 VA............................................................ 5.4 5.0 4.7 4.6 4.5 4.4 4.4 Others.......................................................... 35.1 41.2 47.2 48.2 49.4 50.0 52.1 FHA......................................................... 26.3 32.4 36.5 VA. 10.7 Note.—VA-guaranteed residential mortgage debt is for 1- to 4-family Detail by type of holder partly estimated by Federal Reserve for first properties while FHA-insured includes some debt in multifamily structures. and third quarters, and for most recent quarter. COMMITMENTS OF LIFE INSURANCE COMPANIES FOR INCOME PROPERTY MORTGAGES Averages Total amount Period N of u l m oa b n e s r ( c m o ( m i d l o l m i l o la i n t r s t s e ) d o f ( o th a f m o L d u o o o s l a u l a n a n n r t d s ) s ( C p in o e r t r n a e t c t r r e e e a s n c t t t ) (y M rs a . t / u m r o it s y .) (p t L o e r r a - o v t c a i a e n o l n - u t e ) C ( a p t p e io i r t n a c l e r i n z a t a t ) e ­ co D r v a e e ti r b o a t ge P co er n s c t e a n n t t 1970........................... 912 2,341.1 2,567 9.93 22/8 74.7 10.8 1.32 11.1 1971........................... 1,664 3,982.5 2,393 9.07 22/10 74.9 10.0 1.29 10.4 1972........................... 2,132 4,986.5 2,339 8.57 23/3 75.2 9.6 1.29 9.8 1971—Nov................ 136 288.2 2,119 9.01 23/5 75.6 9.9 1.27 10.2 Dec................. 133 290.0 2,181 8.96 23/0 74.4 9.9 1.30 10.2 1972—Jan................. 107 198.6 1,856 8.78 22/1 73.3 10.0 1.31 10.2 Feb................. 122 423.5 3,471 8.62 22/6 73.3 9.7 1.31 10.0 Mar................ 220 530.4 2,411 8.50 24/2 76.3 9.5 1.29 9.7 Apr................. 200 381.1 1,906 8.44 24/6 76.3 9.5 1.29 9.6 May............... 246 399.6 1,624 8.48 23/4 76.0 9.5 1.26 9.8 June............... 268 683.2 2,549 8.55 23/0 75.4 9.5 1.29 9.8 July................ 170 421.2 2,478 8.56 23/0 74.5 9.5 1.31 9.8 Aug................ 178 515.7 2,897 8.54 23/0 74.9 9.5 1.27 9.9 Sept................ 152 354.1 2,329 8.58 23/4 75.7 9.5 1.28 9.8 Oct................. 159 343.5 2,161 8.65 23/0 75.8 9.6 1.29 9.9 Nov................ 180 371.7 2,065 8.63 23/2 74.7 9.6 1.28 9.9 Dec................. 130 363.9 2,799 8.64 22/8 74.4 9.8 1.37 9.9 See Note on p. A-45. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ CONSUMER CREDIT A 47 TOTAL CREDIT (In millions of dollars) Instalment Noninstalment End of period Total Other Home Charge accounts Auto­ consumer improve­ Personal Single­ Service Total mobile goods ment loans Total payment credit paper paper loans i loans Retail Credit outlets cards 2 196 5 89,883 70,893 28,437 18,483 3,736 20,237 18,990 7,671 5,724 706 4,889 196 6 96,239 76,245 30,010 20,732 3,841 21,662 19,994 7,972 5,812 874 5,336 196 7 100,783 79,428 29,796 22,389 4.008 23,235 21,355 8,558 6,041 1,029 5,727 196 8 110,770 87,745 32,948 24,626 4,239 25,932 23,025 9,532 5,966 1,227 6,300 196 9 121,146 97,105 35,527 28,313 4,613 28,652 24,041 9,747 5,936 1,437 6,921 197 0 127,163 102,064 35,184 31,465 5,070 30,345 25.099 9,675 6,163 1,805 7,456 197 1 138,394 111,295 38,664 34,353 5,413 32,865 27.099 10,585 6,397 1,953 8,164 197 2 157,564 127,332 44.129 40,080 6,201 36,922 30,232 12,256 7,055 1,947 8,974 197 3 180.486 147.437 51.130 47.530 7.352 41.425 33.049 13.241 7.783 2.046 9.979 1973—June. 167,083 136,018 48,549 41,853 6,688 38,928 31,065 12,990 6,544 2,011 9,520 July. 169,148 138,212 49,352 42,575 6,845 39,440 30,936 12,968 6,424 2,055 9,489 Aug. 171,978 140,810 50,232 43,505 7.009 40,064 31,168 13,111 6,475 2,130 9,452 Sept. 173,035 142,093 50,557 44,019 7,120 40,397 30,942 13,088 6,229 2,106 9,519 Oct.. 174,840 143,610 51,092 44,632 7,235 40,651 31,230 13,145 6,554 2,036 9,495 Nov* 176,969 145,400 51,371 45,592 7,321 41,116 31,569 13,161 6,761 2,024 9,623 Dec.. 180.486 147.437 51.130 47.530 7.352 41.425 33.049 13.241 7.783 2.046 9.979 1974—Jan.. 178,686 146,575 50,617 47,303 7,303 41,352 32,111 13,117 6,894 1,981 10,119 Feb.. 177,522 145,927 50,386 46,781 7,343 41,417 31,595 13,159 6,136 1,882 10,418 Mar. 177,572 145,768 50,310 46,536 7,430 41,492 31,804 13,188 6,097 1,842 10,677 Apr.. 179,495 147,047 50,606 47,017 7,573 41,851 32,448 13,315 6,556 1,878 10,699 May. 181,680 148,852 51,076 47,588 7,786 42,402 32,828 13,331 6,948 1,999 10,550 June. 183,425 150.615 51,641 48.099 7,930 42,945 32,810 13,311 7,002 2.104 10,393 1 Holdings of financial institutions; holdings of retail outlets are in­ Note.—Consumer credit estimates cover loans to individuals for cluded in “Other consumer goods paper.” household, family, and other personal expenditures, except real estate 2 Service station and miscellaneous credit-card accounts and home- mortgage loans* For back figures and description of the data, see “Con­ heating-oil accounts. sumer Credit,” Section 16 (New) of Supplement to Banking and Monetary Statistics, 1965 and Bulletins for Dec. 1968 and Oct. 1972. CONSUMER CREDIT HELD BY COMMERCIAL BANKS (In millions of dollars) Instalment Nonin­ stalment End of period Total Automobile paper Other consumer goods paper Home Personal loans improve­ Single­ Total ment payment Direct Mobile Credit Other loans Check Other loans homes cards credit 196 5 35,652 28,962 10,209 5,659 4,166 2,571 6,357 6,690 196 6 38,265 31,319 11,024 5,956 4,681 2,647 7,011 6,946 196 7 40,630 33,152 10,972 6,232 5,469 2,731 7,748 7,478 196 8 46,310 37,936 12,324 7,102 1,307 5,387 2,858 798 8,160 8,374 196 9 50,974 42,421 13,133 7,791 2,639 6,082 2,996 1,081 8,699 8,553 197 0 53,867 45,398 12,918 7,888 3.792 7,113 3,071 1,336 9,280 8,469 197 1 60.556 51,240 13,837 9,277 4,423 4,419 4,501 3,236 1,497 10,050 9,316 197 2 70,640 59,783 16,320 10,776 5,786 5,288 5,122 3,544 1,789 11,158 10,857 197 3 81.248 69.495 19.038 12,218 7.223 6.649 6.054 3.982 2.144 12.187 11.753 1973—June. 76,519 64,999 18,138 11,866 6,473 5,502 5,688 3,700 1,909 11,723 11,520 July. 77.556 66,065 18,439 12,023 6,629 5,603 5,815 3,774 1,934 11,848 11,491 Aug. 79,036 67,381 18,771 12,190 6,825 5.792 5,923 3,863 1,982 12,035 11,655 Sept. 79.526 67,918 18,886 12,160 6,956 5,909 5,978 3,903 2,027 12,099 11,608 Oct.. 80,281 68,627 19,123 12,262 7,106 5,991 6,012 3,950 2,060 12,123 11,654 Nov. 80,830 69,161 19,198 12,306 7,208 6,171 6,035 3,979 2,085 12,179 11,669 Dec.. 81.248 69.495 19.038 12,218 7.223 6.649 6.054 3.982 2.144 12.187 11.753 1974—Jan.. 81,081 69,429 18,885 12,113 7,237 6,826 6,041 3,944 2,167 12,216 11,652 Feb.. 80,909 69,246 18,770 12,028 7,285 6,770 6,063 3,937 2,173 12,220 11,663 Mar. 80,918 69,232 18,775 11,985 7,333 6,667 6,082 3,958 2,169 12,263 11,686 Apr., 81,750 69,944 18,896 12,039 7,399 6,761 6,208 4,028 2,180 12,433 11,806 May 82.527 70,721 19,037 12,100 7,491 6,887 6,323 4,135 2,199 12,549 11,806 June 83,417 71,615 19,220 12,169 7,564 7,076 6,420 4,224 2,230 12,712 11,802 See also Note to table at top of page* Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 48 CONSUMER CREDIT □ AUGUST 1974 INSTALMENT CREDIT HELD BY NONBANK LENDERS (In millions of dollars) Finance companies Other financial lenders Retail outlets Other consumer End of period Auto­ goods paper Home Per­ Mis­ Auto­ Other Total mobile improve­ sonal Total Credit cellaneous Total mobile retail paper ment loans unions lenders i dealers outlets Mobile Other loans homes 1965. 23,851 9,218 4,343 232 10,058 8,289 7,324 965 9,791 315 9,476 1966. 24,796 9,342 4,925 214 10,315 9,315 8,255 1,060 10,815 277 10,538 1967. 24,576 8,627 5,069 192 10,688 10,216 9,003 1,213 11,484 287 11,197 1968. 26,074 9,003 5,424 166 11,481 11,717 10,300 1,417 12,018 281 11,737 1969. 27,846 9,412 5,'115 174 12,485 13,722 12,028 1,694 13,116 250 12,866 1970. 27,678 9,044 2,464 3,237 199 12,734 15,088 12,986 2,102 13,900 218 13,682 1971 , 28,883 9,577 2,561 3,052 247 13,446 17,021 14,770 2,251 14,151 226 13,925 1972 32,088 10,174 2,916 3,589 497 14,912 19,511 16,913 2,598 15,950 261 15,689 1973. 37,243 11,927 3,378 4,434 917 16,587 22,567 19,609 2,958 18,132 299 17,833 1973--June............ 34,367 11,121 3,081 4,002 694 15,469 21,084 18,269 2,815 15,568 289 15,279 July............. 35,020 11,365 3,132 4,103 733 15,687 21,394 18,517 2,877 15,733 293 15,440 Aug............. 35,634 11,583 3,187 4,194 771 15,899 21,808 18,961 2,847 15,987 296 15,691 Sept............. 35,993 11,721 3,235 4,265 809 15,963 22,129 19,207 2,922 16,053 297 15,756 Oct.............. 36,365 11,859 3,269 4,316 847 16,074 22,315 19,339 2,976 16,303 300 16,003 Nov............. 36,887 11,949 3,310 4,371 886 16,371 22,505 19,517 2,988 16,847 302 16,545 Dec............. 37,243 11,927 3,378 4,434 917 16,587 22,567 19,609 2,958 18,132 299 17,833 1974--Jan.............. 37,140 11,754 3,392 4,460 940 16,594 22,301 19,429 2,872 17,705 296 17,409 Feb.............. 37,148 11,710 3,406 4,486 968 16,578 22,413 19,430 2,983 17,120 293 16,827 Mar............. 37,005 11,624 3,324 4,497 1,018 16,542 22,562 19,550 3,012 16,969 292 16,677 Apr............. 37,291 11,684 3,364 4,547 1,057 16,639 22,753 19,704 3,049 17,059 293 16,766 May............ 37,751 11,810 3,413 4,583 1 .097 16,848 23,203 20,053 3,150 17,177 294 16,883 June............ 38,159 11,957 3,449 4,626 1 .114 17.013 23,630 20.501 3,129 17,211 296 16,915 i Savings and loan associations and mutual savings banks. See also Note to table at top of preceding page. FINANCE RATES ON SELECTED TYPES OF INSTALMENT CREDIT (Per cent per annum) Commercial banks Finance companies Month New Mobile Other Personal Credit- Automobiles Other automo­ homes consumer loans card Mobile consumer Personal biles (84 mos.) goods (12 mos.) plans homes goods loans (36 mos.) (24 mos.) New Used 1972—June.......... 9.98 10.49 12.38 12.65 17.25 11.85 16.52 July........... 9.97 10.77 12.39 12.73 17.25 11.84 16.57 12.25 19.38 21.26 Aug........... 10.02 10.71 12.47 12.72 17.25 11.85 16.62 Sept........... 10.02 10.67 12.47 12.70 17.25 11.88 16.71 12.41 i9.i5 21.05 Oct............ 10.01 10.66 12.38 12.70 17.23 11.86 16.67 Nov........... 10.02 10.85 12.44 12.63 17.23 11.89 16.78 12.41 18.90 21.22 10.01 10.69 12.55 12.77 17.24 11.92 16.87 1973—Jan............. 10.01 10.54 12.46 12.65 17.13 11.89 16.08 12.51 19.04 21.00 Feb............ 10.05 10.76 12.51 12.76 17.16 11.86 16.20 Mar........... 10.04 10.67 12.48 12.71 17.19 11.85 16.32 12.54 18.92 20.79 Apr............ 10.04 10.64 12.50 12.74 17.19 11.88 16.44 May.......... 10.05 10.84 12.48 12.78 17.22 11.91 16.52 12.73 18.88 20.76 June.......... 10.08 10.57 12.57 12.78 17.24 11.94 16.61 July........... 10.10 10.84 12.51 12.75 17.21 12.02 16.75 12.77 18.93 20.55 Aug........... 10.25 10.95 12.66 12.84 17.22 12.13 16.86 Sept........... 10.44 11.06 12.67 12.96 17.23 12.28 16.98 12.90 18.69 20.52 Oct............ 10.53 10.98 12.80 13.02 17.23 12.34 17.11 Nov........... 10.49 11.19 12.75 12.94 17.23 12.40 17.21 13.12 18.77 20.65 Dec............ 10.49 11.07 12.86 13.12 17.24 \2A2 17.31 1974—Jan............. 10.55 11.09 12.78 12.96 17.25 12.39 16.56 13.24 18.90 20.68 Feb............ 10.53 11.25 12.82 13.02 17.24 12.33 16.62 Mar........... 10.50 10.92 12.82 13.04 17.23 12.29 16.69 13.15 »18.69 r20.57 Apr............ 10.51 11.07 12.81 13.00 17.25 12.28 16.76 May.......... 10.63 10.96 12.88 13.10 17.25 12.36 16.86 June.......... 10.80 11.18 12.99 13.18 17.25 12.50 17.07 13.07 18.90 20.57 Note.—Rates are reported on an annual percentage rate basis as specified maturities; finance company rates are weighted averages for specified in Regulation Z (Truth in Lending) of the Board of Governors. purchased contracts (except personal loans). For back figures and descrip- Commercial bank rates are “most common” rates for direct loans with tion of the data, see Bulletin for Sept. 1973. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ CONSUMER CREDIT A 49 INSTALMENT CREDIT EXTENDED AND REPAID (In millions of dollars) By type By holder Period Total Automobile Other Home Personal Commercial Finance Other Retail paper consumer improve­ loans banks companies financial outlets goods paper ment loans lenders Extensions 1966........................... 82,832 27,192 26,329 2,223 27,088 30,073 25,897 10,368 16,494 1967........................... 87,171 26,320 29,504 2,369 28,978 31,382 26,461 11,238 18,090 1968........................... 99,984 31,083 33,507 2,534 32,860 37,395 30,261 13,206 19,122 1969........................... 109,146 32,553 38,332 2,831 35,430 40,955 32,753 15,198 20,240 1970........................... 112,158 29,794 43,873 2,963 35,528 42,960 31,952 15,720 21,526 1971........................... 124,281 34,873 47,821 3,244 38,343 51,237 32,935 17,966 22,143 1972........................... 142,951 40,194 55,599 4,006 43,152 59,339 38,464 20,607 24,541 1973........................... 165,083 46,453 66,859 4,728 47,043 69,726 43,221 23,414 28,722 1973—June............... 13,646 3,762 5,505 400 3,979 5,684 3,584 1,978 2,400 July................ 14,542 3,930 5,943 433 4,236 5,976 3,824 2,110 2,632 Aug................ 14,294 3,968 5,961 408 3,957 6,195 3,685 1,943 2,471 Sept................ 13,691 3,939 5,537 410 3,805 5,809 3,602 2,019 2,261 Oct................. 14,149 3,912 5,911 415 3,911 6,060 3,623 1,951 2,515 Nov................ 14,275 3,819 5,978 402 4,076 6,222 3,564 2,029 2,460 Dec................. 12,677 3,315 5,254 429 3,679 5,124 3,279 1,897 2,377 1974—Jan................. 13,714 3,492 5,662 373 4,187 5,715 3,693 1,911 2,395 Feb............... 13,541 3,389 5,647 409 4,096 5,794 3,656 1,861 2,230 Mar................ 13,823 3,484 5,933 424 3,982 5,710 3,497 1,976 2,640 Apr................. 14,179 3,545 6,034 447 4,153 5,838 3,671 2,054 2,616 May............... 14,669 3,769 6,156 468 4,276 6,023 3,832 2,140 2,674 June............... 14,387 3,761 6,043 425 4,188 6,076 3,729 2,040 2,542 Repayments 196 6 77,480 25,619 24,080 2,118 25,663 27,716 24,952 9,342 15,470 196 7 83,988 26,534 27,847 2,202 27,405 29,549 26,681 10,337 17,421 196 8 91,667 27,931 31,270 2,303 30,163 32,611 28,763 11,705 18,588 196 9 99,786 29,974 34,645 2,457 32,710 36,470 30,981 13,193 19,142 197 0 107,199 30,137 40,721 2,506 33,835 40,398 31,705 14,354 20,742 197 1 115,050 31,393 44,933 2,901 35,823 45,395 31,730 16,033 21,892 197 2 126,914 34,729 49,872 3,218 39,095 50,796 35,259 18,117 22,742 197 3 144,978 39,452 59,409 3,577 42,540 60,014 38,066 20,358 26,540 1973—June. 12,034 3,253 4,955 300 3,526 4,890 3,241 1,694 2,209 July. 12,544 3,334 5,141 308 3,761 5,112 3,312 1,771 2,349 Aug. 12,399 3,293 5,168 298 3,640 5,146 3,241 1,738 2,274 Sept. 12,332 3,406 5,072 322 3,532 5,167 3,144 1,757 2,264 Oct.. 12,449 3,427 5,149 308 3,565 5,212 3,287 1,703 2,247 Nov. 12,549 3,471 5,154 301 3,623 5,345 3,143 1,814 2,247 Dec.. 12,267 3,338 5,001 332 3,596 5,088 3,151 1,766 2,262 1974—Jan.. 12,797 3,433 5,193 356 3,815 5,254 3,418 1,823 2,302 Feb.. 12,870 3,394 5,340 323 3,813 5,430 3,423 1,692 2,325 Mar. 13,206 3,544 5,596 308 3,758 5,479 3,452 1,827 2,448 Apr., 13,026 3,498 5,483 312 3,733 5,470 3,375 1,784 2,397 May 13,407 3,601 5,607 315 3,884 5,573 3,528 1,855 12,45 June 13,301 3,577 5.615 335 3,774 5,564 3.405 1,835 2,497 Net change 1966........................... 5,352 1,573 2,249 105 1,425 2,357 945 1,026 1,024 1967........................... 3,183 -214 1,657 167 1,573 1,833 -220 901 669 1968........................... 8,317 3,152 2,237 231 2,697 4,784 1,498 1,501 534 1969........................... 9,360 2,579 3,687 374 2,720 4,485 1,772 2,005 1,098 1970........................... 4,959 -343 3,152 457 1,693 2,977 -168 1,366 784 1971........................... 9,231 3,480 2,888 343 2,520 5,842 1,205 1,933 251 1972........................... 16,037 5,465 5,727 788 4,057 8,543 3,205 2,490 1,799 1973........................... 20,105 7,001 7,450 1,151 4,503 9,712 5,155 3,056 2,182 1973—June............... 1,612 509 550 100 453 794 343 284 191 July................ 1,998 596 802 125 475 864 512 339 283 Aug................ 1,895 675 793 110 317 1,049 444 205 197 Sept................ 1,359 533 465 88 273 642 458 262 -3 Oct................. 1,700 485 762 107 346 848 336 248 268 Nov................ 1,726 348 824 101 453 877 421 215 213 Dec................. 410 -23 253 97 83 36 128 131 115 1974—Jan................. 917 59 469 17 372 461 275 88 93 Feb................. 671 -5 307 86 283 364 233 169 -95 Mar................ 617 -60 337 116 224 231 45 149 192 Apr................. 1,153 47 551 135 420 368 296 270 219 May............... 1,262 168 549 153 392 450 304 285 223 June............... 1,086 154 428 90 414 512 324 205 45 Note.—Monthly estimates are seasonally adjusted and include adjust­ stalment paper, and certain other transactions may increase the amount ments for differences in trading days. Annual totals are based on data of extensions and repayments without affecting the amount outstanding. not seasonally adjusted. For back figures and description of the data, see “Consumer Credit,” Estimates are based on accounting records and often include finance Section 16 (New) of Supplement to Banking and Monetary Statistics, 1965, charges. Renewals and refinancing of loans, purchases and sales of in­ and Bulletins for Dec. 1968 and Oct. 1972. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 50 INDUSTRIAL PRODUCTION: S.A. □ AUGUST 1974 MARKET GROUPINGS (1967 = 100) 1967 1973 1973 1974 pro­ aver­ Grouping p ti o o r n ­ age July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr.r May June* July Total index.................................... 100.0 125.6 126.7 126.5 126.8 127.0 127.5 126.5 125.4 124.6 124.7 124.9 125.7 125.6 125.7 Products, total................................... 62.21 123.4 124.2 123.7 124.3 124.3 125.3 124.0 122.9 122.4 122.6 122.7 123.6 123.4 123.6 Final products................................ 48.95 121.3 122.1 121.4 122.4 122.7 123.7 122.6 121.2 120.6 121.0 120.8 122.5 121.8 122.3 Consumer goods........................ 28.53 131.7 132.8 131.2 132.3 132.6 133.5 131.3 129.2 128.3 128.5 128.5 130.3 129.4 130.0 Equipment.................................. 20.42 106.7 107.3 107.6 108.5 108.9 110.1 110.1 109.8 109.9 110.1 110.1 111.8 111.3 111.4 Intermediate products................... 13.26 131.1 132.5 132.1 131.0 130.6 131.1 129.1 129.2 129.1 128.2 129.4 128.0 129.1 128.2 Materials............................................ 37.79 129.3 130.9 130.9 131.3 131.1 131.5 130.7 129.7 128.3 128.8 128.7 129.2 129.4 129.3 Consumer goods Durable consumer goods................... 7.86 139.0 142.4 134.0 138.2 137.3 138.5 134.6 128.2 126.4 128.5 130.9 132. 132.4 133.1 Automotive products.................... 2.84 136. 141.7 121.1 129.8 131.4 133.7 120.6 108.0 106.6 108.0 113.8 116.2 114.7 116.6 Autos.......................................... 1.87 125.4 134.0 103.9 118.4 122.5 124.8 106.2 90.0 86.4 86.3 97.7 100.3 99.6 101.5 Auto parts and allied goods..., .97 158.9 156.7 154.2 151.8 148.4 150.9 147.8 142.6 145.5 149.8 144.7 146.7 143.6 145.5 Home goods...................................... 5.02 140.3 142.9 141.1 142.9 140.9 141.2 142.5 139.6 137.5 140.1 140.6 142.3 142.4 142.5 Appliances, TV, and radios........ 1.41 144. 147 146.3 149.4 143.4 140.4 147.9 138.4 131.9 135.8 135.2 137.8 136.9 Appliances and A/C............ .92 156.9 156.0 153.3 159.8 159.3 154.7 172.2 153.9 148.2 150.0 148.6 152.7 151.3 TV and home audio............. .49 Carpeting and furniture.............. 1. 150.0 155.4 154.2 153.3 153.9 152.7 150.1 153.5 153.3 154.5 158.2 157.4 158.9 Misc. home goods........................ 2.53 133.6 134.7 132.9 134.8 134.1 136.8 136.3 134.4 134.2 136.3 136.0 138.3 138.4 138.5 Nondurable consumer goods............ 20.67 129.0 129.1 130.2 130.1 130.8 131.5 130.2 129.5 129.1 128.7 127.6 129.4 128.3 128.8 Clothing........................................ 4.32 116.0 116.5 117.0 118.0 116.8 117.3 120.3 116.3 114.5 112.0 106.2 107.0 Consumer staples......................... 16.34 132.4 132.5 133.6 133.2 134.5 135.2 132.8 133.0 133.0 133.1 133.2 135.3 134.0 134.5 Consumer foods and tobacco.. 8.37 122.2 121.3 121.9 122.2 123.3 126.5 125.0 126.9 125.9 125.7 123.9 126.3 124.1 124.8 Nonfood staples....................... 7.98 143.1 144.1 145. 144. 146.2 144.3 141.1 139.4 140.4 140.8 143.1 144.5 144.3 144.7 Consumer chemical products 2.64 153.3 153.0 155.6 153.4 156.2 154.9 156.7 157 159.0 160.3 159.7 157.5 156.2 Consumer paper products... 1.91 121.3 122.5 124.1 124.4 122.5 123.6 120.5 119.4 119.9 119.1 119.4 124.7 123.5 Consumer fuel and lighting., 3.43 147.5 149.2 150.4 149.7 151.9 147.8 140.7 136.7 137.4 138.2 143.7 145.4 146.6 Residential utilities........... 2.25 156. 157. 160.0 160.9 161.9 158.0 149.8 145.6 148.6 149.0 151.6 153.2 Equipment Business equipment........................... 12.74 122.6 123.0 124.6 125.8 126.2 127. 126.9 126.8 127.3 127.6 127.9 129. 129.7 129.7 Industrial equipment.................... 6.77 120.1 120.5 122.5 124.1 124.5 125.6 124.9 125.3 126.6 126. 127.6 129.4 129.2 128.5 Building and mining equip.... 1.45 120.4 119.6 123.0 123.7 124.7 126.0 126.0 128.5 130.3 131.3 133.5 135.0 136.5 136.5 -Manufacturing equipment. 3.85 113.0 113.9 115.1 117.3 117.3 118.2 118.5 119.3 120.6 121.1 122.1 124.1 123.4 123.4 Power equipment..................... 1.47 138.5 138.5 141.0 142.3 143.0 144.6 140.3 138.0 138.7 137.3 136.6 137.8 137.1 133.6 Commercial, transit, farm eq.. .. 5.97 125.5 125. 127.0 127.7 128.1 130.3 129.2 128.5 128.2 128.7 128.2 130.2 130.4 130.9 Commercial equipment............ 3.30 135.0 135.9 137.0 138.2 140.1 141.3 139.3 139.8 139.8 140.8 140.4 141.3 142.4 141.5 Transit equipment.................... 2.00 109.8 109.0 108.4 109.6 109.8 111.4 111.1 109.5 109.3 109.4 106.7 110.2 108.0 110.7 Farm equipment....................... .67 125.1 126.4 132. 129.4 123.5 132.4 133.4 129.2 126.0 126.1 131.2 135.2 137.9 Defense and space equipment.......... 7.68 80.2 81.1 79.7 79.8 80.0 80.9 81.9 81.4 80.9 81.0 80.6 81.6 80.7 81.2 Military products......................... 5.15 80.3 81.1 79.0 79.1 79.3 80.0 81.3 80.6 80.2 80.5 79.9 80.3 78.2 78.8 Intermediate products Construction products..................... 5.93 134.2 134.5 135.3 134.9 134.3 133.7 131.1 133.0 131.3 129.6 130.8 130.6 130.8 129.5 Misc. intermediate products........... 7.34 128.6 132.7 129.6 128.1 127.5 129.0 127.4 126.3 127.4 127.5 128.2 126.0 127.7 Materials Durable goods materials................... 20.91 130.1 131.7 131.8 132.3 132.2 133.0 132.7 129. 127.3 127.2 127.3 128.8 128.5 128.6 Consumer durable parts.............. 4.75 127. 126.9 128.6 129.9 128.2 128.4 121.0 113.0 109.3 110.6 112.5 114.7 114.7 114.7 Equipment parts........................... 5.41 119.3 124.5 122.3 122.1 122.7 125.8 125.3 123.9 122.6 121.6 120.1 122.7 122.5 122.5 Durable materials nec................. 10.75 136.5 137.6 138.0 138.7 139.0 138.7 141.6 140.0 137.6 137.5 137.5 138.0 137.6 137.7 Nondurable goods materials............. 13.99 129.1 130. 130.6 130.3 130.1 130.7 129.2 131.1 131.1 131.9 131.9 130.8 131.4 131.0 Textile, paper, and chem. mat..., 8.58 139.8 142.2 142.4 141.9 141.4 142.4 140.1 143.4 141.7 143.1 143.9 142.9 143.1 143.0 Nondurable materials n.e.c.......... 5.41 112.2 112.1 111.7 112.0 112.3 112.1 111.9 111.7 114.3 114.7 112.7 111.9 112.9 111.9 Fuel and power, industrial.............. 2.89 123.9 126.9 126.3 128.3 126.9 124.9 123.1 121.5 122.5 122.6 123.2 124. 125.5 127.0 Supplementary groups Home goods and clothing............... 9.34 129.0 130.7 130.0 131.3 129.8 130.2 132.4 128.8 126.9 127.0 124.6 126.0 125.9 126.1 Containers........................................ 1.82 139.9 135.1 140.5 139.8 141.2 142.3 141.0 148.4 144.3 151.4 147.0 141.5 143.6 Gross value of products in market structure (In billions of 1963 dollars) Products, total............................. 286.3 449. 452.9 446.2 449.8 452.6 456.9 449.1 445.4 442.5 443.9 445.4 448. 448.1 447.9 Final products........................ 221.4 346.1 347.7 341.9 346.3 349.7 353.3 346.9 342.5 339.9 342.3 342.9 347.9 346.3 346.3 Consumer goods................ 156.3 239.7 241.0 235.4 239.0 241.7 243.6 237.8 233.6 230.6 232.7 233.8 237.5 235.7 236.0 Equipment........................... 65 106.4 106.6 106.6 107.3 108.0 109.5 109.0 108.9 109.1 109.4 109.0 110.6 110.6 110.3 Intermediate products............ 64.9 103.7 104.8 104.6 103.5 103.1 103.6 102.5 103.1 102.6 101.9 102.5 101.1 102.0 101.7 For Note see p. A-51. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ INDUSTRIAL PRODUCTION: S.A. A 51 INDUSTRY GROUPINGS (1967 = 100) 1967 1973 1973 1974 Grouping p p ti o r o o r n ­ ­ a a v g e e r­ July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr.r May June*' July Manufacturing..................................... 88.55 125.2 126.5 126.1 126.3 126.4 127.4 126.4 125.3 124.5 124.6 124. 125.6 125.3 125.5 Durable............................................. 52.33 122.1 123.8 122.6 123.3 123.5 124.3 123.1 121.1 119.4 120.4 120.7 122.2 121. 122.1 Nondurable...................................... 36.22 129.6 130.5 130.9 130.7 130.4 131.3 131.2 131.4 131.5 130.9 130.4 130.7 130.4 130.5 Mining and utilities............................. 11.45 128.9 130.4 130.7 131.3 131.5 130.6 126.9 125.4 126.9 127.3 127. 128.3 127.9 128.5 Mining.............................................. 6.37 110.2 111.0 111.5 111.8 111.9 111.3 110.4 109.9 111.7 112.2 111.3 111.6 110.8 111 .7 Utilities............................................. 5.08 152.3 154.8 154 155.8 156.2 154.6 147.6 144.9 146.1 146.5 148.7 149.2 149.5 149.9 Durable manufactures Primary and fabricated metals............ 12.55 128.8 130.6 129.5 129.5 130.6 131.0 130.5 130.4 127.6 128.2 127.5 129.2 129.6 130.0 Primary metals................................. 6.61 127.1 128.1 125.6 127.8 128.7 128.9 130.7 129.5 125.0 125.3 124.0 126. 127.5 128.2 Iron and steel, subtotal............... 4.23 121.6 120.9 118.5 122.7 123.6 124.2 127.7 125.5 119.4 119.6 116.4 118.0 120.0 120.0 Fabricated metal products.............. 5.94 130.7 133.5 133.8 131.5 132.4 133.1 130.0 131.4 130.6 131.6 131.3 131.9 132.1 132.0 Machinery and allied goods................. 32.44 117.3 119.3 117.7 118.9 118.9 119.9 118.6 115.2 113.8 114.8 115.5 117.2 116.5 116.9 Machinery......................................... 17.39 125.9 127.6 128.5 130.0 129.2 130.4 130.9 128.6 127.1 128.4 128.2 129.4 129.4 129.6 Nonelectrical machinery.............. 9.17 125.1 127.1 128.9 130.0 130.0 130.3 130.2 129.4 128.1 129.8 130.7 131.2 131.5 131.5 Electrical machinery.................... 8.22 126.8 128.0 128.2 129.8 128.5 130.5 131.6 127.7 126.2 126. 125.3 127.4 127.3 127.2 Transportation equipment.............. 9.29 109.2 112.1 105.7 107.3 108. 109.8 103.0 95.7 93.9 95.0 97.8 100.6 98.4 99.2 Motor vehicles and parts............ 4.56 138.1 144.1 131.0 133.9 136.4 137.8 124.6 112.7 109.2 110.2 116.4 119.6 116.9 118.1 Aerospace and misc. trans. eq... 4.73 81.4 81.3 81.3 81.7 82.3 82.9 82.2 79.3 79.3 80.3 80.0 82.4 80.7 81.0 Instruments....................................... 2.07 138.4 140.8 140.9 141.5 141.0 142.6 142.7 143.0 142. 142.8 143.8 146.3 147.4 147.4 Ordnance, private and Govt........... 3.69 85.4 86.7 83.8 83.7 83.8 84.3 86.1 85.2 84.2 84.9 84.3 84.9 84.6 84.3 Lumber, clay, and glass....................... 4.44 129.5 129 129.2 128.8 129.7 129.3 127.8 129.7 127.4 128.1 128.9 127.9 127.1 127.5 Lumber and products...................... 1.65 128.9 125.4 128.4 128.9 127.4 127.3 126.3 126.1 127. 1 126.1 126. 126 126.1 Clay, glass, and stone products___ 2.79 129.9 132.3 129.6 128. 131.2 130.4 128.7 131.8 127.6 129.3 130.3 128.6 127.5 Furniture and miscellaneous................. 2.90 135.2 135.9 137.5 138.2 136.1 136.4 135.3 133.4 135.2 136.8 136.8 138.9 138.4 138.7 Furniture and fixtures..................... 1.38 126.3 127.5 129.5 130.4 128.8 127.9 124.9 124.2 125.4 126.8 128.8 129.7 130.5 Miscellaneous manufactures........... 1.52 143.3 143.5 144.9 145.3 142.9 144.3 144.5 141 144.2 145.8 144.1 147.3 145.5 Nondurable manufactures Textiles, apparel, and leather.............. 6.90 114.7 114.5 115.4 117.5 116.8 116.7 118.8 116.2 115.3 112.4 109.3 109.5 108.0 108.4 Textile mill products....................... 2.69 127.1 128.9 129.0 130.2 130.2 129.4 130.9 128.4 127.6 125.0 123.4 123.5 123.0 Apparel products............................. 3.33 112.9 112.1 113.6 115.4 114.9 115.3 118.5 116.4 113.6 110.0 105.8 106.0 Leather and products...................... 83.6 79.2 81.0 86.4 83.1 82.9 82.9 77.6 83.7 83.0 79.5 80.1 Paper and printing............................... 7.92 122.1 123.8 124.5 122.1 121.3 121.9 121.2 121.7 122.2 122.5 121.2 121.3 122.6 122.3 Paper and products......................... 3.18 135.4 135.3 137.0 134.8 135.3 136.2 136.7 138.7 137.6 140.2 135.4 135.1 136.8 Printing and publishing................... 4.74 113.2 116.0 116.2 113.6 112.1 112.3 110.8 110.4 111.9 110.7 111.7 111 .9 113.0 113.5 Chemicals, petroleum, and rubber.... 11.92 149.3 151.8 151.0 150.9 151.1 151.6 151.6 151.5 151.2 151.3 153.5 152.9 153.1 153.2 Chemicals and products.................. 7.86 150.1 152.0 151.4 153.0 152.7 133.0 154.5 154.9 155.3 155.5 156.2 156.0 155.9 156.0 Petroleum products......................... 1.80 127.4 129.3 128.2 126.0 130.4 129.5 125.5 120.5 116.9 117.3 126.9 126.1 125.8 126.0 Rubber and plastics products......... 2.26 164.0 168.8 167.9 163.6 161.9 164.5 162.3 164.3 163.5 164.2 165.5 163.7 165.0 Foods and tobacco............................... 9.48 121.9 121.3 122.0 122.2 121.7 124.7 123.0 125.4 126.2 125.3 124.3 126.1 124.7 124.9 Foods................................................ 8.81 122.7 122.4 122.9 123.2 122.4 125.4 124.5 126.3 \21.2 126.5 125.9 127.3 125.8 126.1 Tobacco products............................ .67 111.6 105.3 110.1 109.1 113.7 115.8 104.2 113.3 112.1 110.4 104.6 109.4 Mining Metal, stone, and earth minerals......... 1.26 118.1 116.9 120.6 120.4 120.9 121.3 122.0 121. 119.9 119.7 117.5 117.9 112.0 117.5 Metal mining................................... .51 130.8 128.4 131.4 136.6 138.3 135.2 135.2 135.2 132.2 132.9 127.4 128.1 119.6 Stone and earth minerals................ .75 109.5 109.1 113.1 109.5 109.2 111.7 113.1 111.9 111.6 110.7 110.7 111.0 106.7 Coal, oil, and gas................................. 5.11 108.3 109.5 109.2 109.5 109.7 108.8 107.5 107.0 109.6 110.2 109.8 110.0 110.6 110.3 Coal.................................................. .69 103.6 109.0 104.0 109.8 103.0 104.1 110.4 108.7 112.7 114.7 U0.3 113.6 118.0 118.0 Oil and gas extraction..................... 4.42 109.0 109.5 110.0 109.7 110.8 109.6 107.0 106.8 109.1 109.5 109.7 109.5 109.5 109.0 Utilities Electric.................................................. 3.91 160.7 164.0 163 J 165.1 165.3 163.4 155.6 153.0 154.6 155.1 158.3 159.0 Gas........................................................ 1.17 124.2 Note.—Data for the complete year of 1972 are available in a pamphlet Published groupings include series and subtotals not shown sepa­ Industrial Production Indexes 1972 from Publications Services, Division rately. Figures for individual series and subtotals are published in the of Administrative Services, Board of Governors of the Federal Reserve monthly Business Indexes release. System, Washington, D.C. 20551. Indexes without seasonal adjustment are no longer being published in the Bulletin, but they are available in the Board’s monthly release Industrial Production (the G.12.3), which is available upon request to Publications Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 52 BUSINESS ACTIVITY; CONSTRUCTION □ AUGUST 1974 SELECTED BUSINESS INDEXES (1967= 100, except as noted) Industrial production Manu­ facturing 2 In­ Ca­ Market dustry pacity Con­ N ri o c n u a l- gutiliza­ Products tion struc­ tural Total Period Total Total C Fi o n n a ­ l m I e n d te ia r t ­ e M ri a a t ls e­ f M a i c a n t n g u u r­ ­ i o = n ( u 1 m 1 t 9 p 0 6 f u 0 g 7 ) t . tr c t a i o o c n n ts ­ T m p e o l e m o t n a y t ­ l — ­ i p m E lo m en y ­ t ­ P ro a l y ls ­ s r a e l t e ai s l 3 s C um on e ­ r m W c s o o a h d m l o e i l t ­ e y ­ Total sumerEquip­ goods ment 195 5 58.5 56.6 54.9 59.5 48.9 62.6 61.5 58.2 90.0 76.9 92.9 61.1 59 80.2 87.8 195 6 61.1 59.7 58.2 61.7 53.7 65.3 63.1 60.5 88.2 79.6 93.9 64.6 61 81.4 90.7 195 7 61.9 61.1 59.9 63.2 55.9 65.3 63.1 61.2 84.5 80.3 92.2 65.4 64 84.3 93.3 195 8 57.9 58.6 57.1 62.6 50.0 63.9 56.8 56.9 75.1 78.0 83.9 60.3 64 86.6 94.6 195 9 64.8 64.4 62.7 68.7 54.9 70.5 65.5 64.1 81.4 81.0 88.1 67.8 69 87.3 94.8 196 0 66.2 66.2 64.8 71.3 56.4 71.0 66.4 65.4 80.1 82.4 88.0 68.8 70 88.7 94.9 196 1 66.7 66.9 65.3 72.8 55.6 72.4 66.4 65.6 77.6 82.1 84.5 68.0 70 89.6 94.5 196 2 72.2 72.1 70.8 77.7 61.9 76.9 72.4 71.4 81.4 84.4 87.3 73.3 75 90.6 94.8 196 3 76.5 76.2 74.9 82.0 65.6 81.1 77.0 75.8 83.0 86.1 86.1 87.8 76.0 79 91.7 94.5 196 4 81.7 81.2 79.6 86.8 70.1 87.3 82.6 81.2 85.5 89.4 88.6 89.3 80.1 83 92.9 94.7 196 5 89.2 88.1 86.8 93.0 78.7 93.0 91.0 89.1 89.0 93.2 92.3 93.9 88.1 91 94.5 96.6 196 6 97.9 96.8 96.1 98.6 93.0 99.2 99.8 98.3 91.9 94.8 97.1 99.9 97.8 97 97.2 99.8 196 7 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 87.9 100.0 100.0 100.0 100.0 100 100.0 100.0 196 8 105.7 105.8 105.8 106.6 104.7 105.7 105.7 105.7 87.7 113.2 103.1 101.4 108.3 109 104.2 102.5 196 9 110.7 109.7 109.0 111.1 106.1 112.0 112.4 110.5 86.5 123.7 106.7 103.2 116.6 114 109.8 106.5 197 0 106.6 106.0 104.5 110.3 96.3 111.7 107.7 105.2 78.3 123.1 107.2 98.0 114.1 120 116.3 110.4 197 1 106.8 106.4 104.7 115.7 89.4 112.6 107.4 105.2 75.0 145.4 107.3 93 9 116.3 122 121.2 113.9 197 2 115.2 113.8 111.9 123.6 95.5 121.1 117.4 114.0 78.6 165.3 110.5 96.7 130.2 142 125.3 119.8 197 3 125.6 123.4 121.3 131.7 106.7 131.1 129.3 125.2 83.0 183.3 114.8 101.9 146.9 133.1 134.7 1973—June, 125.6 123.7 121.3 131.9 106.6 132.0 129.0 125.6 583.3 183.0 114.7 102.1 145.3 157 132.4 136.0 July. 126.7 124.2 122.1 132.8 107.3 132.5 130.9 126.5 175.0 114.6 101.8 146.3 163 132.7 134.3 Aug. 126.5 123.7 121.4 131.2 107.6 132.1 130.9 126.1 83.3 199.0 115.0 102.1 146.7 162 135.1 142.1 Sept. 126.8 124.3 122.4 132.3 108.5 131.0 131.3 126.3 j 182.0 115.3 102.1 149.8 163 135.5 139.7 Oct.. 127.0 124.3 122.7 132.6 108.9 130.6 131.1 126.4 j 191.0 116.0 102.9 151.7 164 136.6 138.7 Nov. 127.5 125.3 123.7 133.5 110.1 131.1 131.5 127.4 I 82.6 194.0 116.4 103.3 155.8 164 137.6 139.2 Dec. 126,5 124.0 122.6 131.3 110.1 129.1 130.7 126.4 J 161.0 116.4 103.2 153.7 161 138.5 141.8 1974—Jan.. 125,4 122.9 121.2 129.2 109.8 129.2 129.7 125.3 \ 155.0 116.2 102.6 151.6 164 139.7 146.6 Feb., 124.6 122.4 120.6 128.3 109.9 129.1 128.3 124.5 80.5 187.0 116.6 101.8 151.1 165 141.5 149.5 Mar. 124.7 122.6 121.0 128.5 110.1 128.2 128.8 124.6 ] 181.0 116.6 101.5 150.5 168 143.1 151.4 Apr. 124.9 '122.7 '120.8 '128.5 '110.1 '129.4 '128.7 ] 179.0 116.8 101.9 147.9 169 144.0 152.7 May '125.7 '123.6 '122.5 '130.3 '111.8 '128.0 '129.2 125.6 \ 80.6 188.0 '117.1 102.0 '154.4 172 145.6 155.0 June r125.6 '123.4 '121.8 '129.4 '111.3 '129.1 129.4 '125.3 J 166.0 '117.0 '102.0 '155.4 170 147.1 155.7 July. 125.7 123.6 122.3 130.0 111.4 128.2 129.3 125.5 116.8 101.4 156.4 177 161.7 ............ 1 Employees only: excludes personnel in the Armed Forces. Construction contracts; McGraw-Hill Informations Systems Company 2 Production workers only. F.W. Dodge Division, monthly index of dollar value of total construction 3 F.R. index based on Census Bureau figures. contracts, including residential, nonresidential, and heavy engineering; 4 Prices are not seasonally adjusted. Latest figure is final. does not include data for Alaska and Hawaii. 5 Figure is for second quarter 1973. Employment and payrolls: Based on Bureau of Labor Statistics data; Note.—All series: Data are seasonally adjusted unless otherwise noted. includes data for Alaska and Hawaii beginning with 1959. Capacity utilization: Based on data from Federal Reserve, McGraw- Prices: Bureau of Labor Statistics data. Hill Economics Department, and Dept, of Commerce. CONSTRUCTION CONTRACTS AND PRIVATE HOUSING PERMITS (In millions of dollars, except as noted) 1972 1973 1974 Type of ownership and 1972 1973 type of construction Dec. July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June rotal construction 1......................... 90,979101,071 6,423 9,228 10,303 8,151 8,983 7,905 6,133 5,954 6,610 7,911 8,92910,158 8,480 By type of ownership: Public........................................ 24,043 26,686 1,629 2,581 2,968 2,328 2,055 2,140 1,855 2,135 2,212 2,481 2,336 3,082 2,968 Private i.................................... 66,936 73,385 4,793 6,647 7,335 5,822 6,928 5,765 4,277 3,819 4,398 5,430 6,593 7,076 5,512 By type of construction: Residential building 1.............. 44,975 46,246 3,115 4,224 4,233 3,638 3,673 3,299 2,341 2,231 2,678 3,374 3,924 3,862 3,546 Nonresidential building........... 27,021 31,761 2,189 2,991 3,241 2,719 2,758 2,655 2,210 2,307 2,260 2,752 2,842 3,120 2,989 Nonbuilding............................. 18,983 22,064 1,119 2,013 2,828 1,794 2,552 1,951 1,581 1,415 1,672 1,785 2,163 3,176 1,945 Private housing units authorized... 2,219 1,796 2,399 1,780 1,750 1,596 1,316 1,314 1,237 1,301 1,333 1,461 1,300 1,116 1,116 (In thousands, S.A., A.R.) i Because of improved procedures for collecting data for 1 -family homes, McGraw-Hill Informations Systems Company, F.W. Dodge Division. some totals are not strictly comparable with those prior to 1968. To im­ Totals of monthly data exceed annual totals because adjustments— prove comparability, earlier levels may be raised by approximately 3 per negative—are made in accumulated monthly data after original figures cent for total and private construction, in each case, and by 8 per cent for have been published. residential building. Private housing units authorized are Census Bureau series for 14,000 reporting areas with local building permit systems; 1971 data are for Note.—Dollar value of construction contracts as reported by the 13,000 reporting areas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ CONSTRUCTION A 53 VALUE OF NEW CONSTRUCTION ACTIVITY (In millions of dollars) Private Public Nonresidential Period Total Total d R en e t s i i a ­ l 'Total Indus­ Bu C il o d m in ­ gs Other Other Total M ta i r l y i­ H w ig ay h­ d C v e m o a v a n t n e e i s n d l o e o t n r p ­ ­ Other 2 trial mercial build­ ings 1 1962 3 .......................... 59,965 42,096 25,150 16,946 2,842 5,144 3,631 5,329 17,869 1,266 6,365 1,523 8,715 1963 4 .......................... 64,563 45,206 27,874 17,332 2,906 4,995 3,745 5,686 19,357 1,179 7,084 1,694 9,400 1964 67,413 47,030 28,010 19,020 3,565 5,396 3,994 6,065 20,383 910 7,133 1,750 10,590 1965 73,412 51,350 27,934 23,416 5,118 6,739 4,735 6,824 22,062 830 7,550 2,019 11,663 1966 76,002 51,995 25,715 26,280 6,679 6,879 5,037 7,685 24,007 727 8,405 2,194 12,681 1967 77,503 51,967 25,568 26,399 6,131 6,982 4,993 8,293 2*5,536 695 8,591 2,124 14,126 1968 86,626 59,021 30,565 28,456 6,021 7,761 4,382 10,292 27,605 808 9,321 1,973 15,503 1969 93,368 65,404 33,200 32,204 6,783 9,401 4,971 11,049 £7,964 879 9,250 1,783 16,052 197 0 94,167 66,071 31,864 34,207 6,538 9,754 5,125 12,790 28,096 718 9,981 1,908 15,489 197 1 109,950 80,079 43,267 36,812 5,423 11,619 5,437 14,333 29,871 901 10,658 2,095 16,217 197 2 ............... 124,077 93,893 54,288 39,605 4,676 13,462 5,898 15,569 30,184 1,087 10,429 2,172 16,496 197 3 135,437 102,875 57,604 45,271 6,243 15,453 5,888 17,687 32,562 1,170 10,559 2,313 18,520 1973—Jun e 134,694 103,209 58,208 45,001 6,035 15,586 6,019 17,363 31,485 1,167 9,988 2,264 18,066 July................... 137,172 105,562 59,145 46,417 6,477 15,976 6,093 17,871 31,610 1,231 10,727 2,097 17,555 Aug................... 137,351 105,475 59,280 46,195 6,436 15,754 5,854 18,151 31,876 1,100 10,606 2,226 17,944 Sept................... 137,283 104,119 58,048 46,071 6,820 15,446 5,674 18,131 33,164 1,026 11,128 2,354 18,656 Oct..................... 136,363 130,197 56,233 46,964 6,748 15,762 5,860 18,594 33,166 1,079 10,566 2,300 19,221 Nov................... 135,594 102,172 54,450 47,722 7,080 16,054 5,727 18,861 33,422 1,060 10,952 2,362 19,048 Dec.................... 133,169 100,057 52,304 47,753 7,343 15,890 5,913 18,607 33,112 1,082 11,168 2,314 18,548 1974—Ja.......................n1 32,487 97,647 49,802 47,845 6,831 15,762 6,058 19,194 34,840 1,305 Feb.................... 136,274 98,762 49,071 49,691 7,869 16,650 6,143 19,029 37,512 1,361 Mar................... 135,483 99,045 49,209 49,836 7,500 16,652 6,336 19,348 36,438 1,401 Apr.r................ 137,786 98,832 49,558 49,274 6,920 16,296 6,264 19,794 38,954 1,507 May.................. 136,350 99,685 49,739 49,946 7,606 16,408 5,890 20,042 36,665 1,178 JuneP................ 136,028 99,303 49,468 49,835 7,668 16,107 6,015 20,047 36,725 1 Includes religious, educational, hospital, institutional, and other build­ 4 Beginning 1963, reflects inclusion of new series under “Public” (for ings. State and local govt, activity only). 2 Sewer and water, formerly shown separately, now included in “Other.” 3 Beginning July 1962, reflects inclusion of new series affecting most Note.—Census Bureau data; monthly series at seasonally adjusted private nonresidential groups. annual rates. NEW HOUSING UNITS (In thousands) Units started Private (S.A., A.R .) Government- Mobile Private and public underwritten home Period (N.S.A.) (N.S.A.) ship­ Region Type of structure ments (N.S.A.) Total North­ North 1- 2- to 4- 5- or east Central South West family family more- Total Private Public Total FHA VA family 1963.......................... 1,603 261 328 591 430 1,012 5!39 1,635 1,603 32 292 221 71 151 1964.......................... 1,529 254 340 578 357 970 108 450 1,561 1,529 32 264 205 59 191 1965.......................... 1,473 270 362 575 266 964 87 422 1,510 1,473 37 246 197 49 216 1966.......................... 1,165 206 288 472 198 778 61 325 1,196 1,165 31 195 158 37 217 1967.......................... 1,292 215 337 520 220 844 72 376 1,322 1,292 30 232 180 53 240 1968......................... 1,508 227 369 618 294 900 81 527 1,546 1,508 38 283 227 56 318 1969......................... 1,467 206 349 588 324 814 85 571 1,500 1,467 33 284 233 51 413 1970......................... 1,434 218 294 612 310 813 85 536 1,469 1,434 35 482 421 61 401 1971.......................... 2,052 264 434 869 486 1,151 120 781 2,084 2,052 32 621 528 93 497 1972......................... 2,357 330 443 1,057 527 1,309 141 906 2,379 2,357 22 475 371 104 576 1973......................... 2,045 277 440 897 428 1,132 118 795 2,057 2,045 12 247 161 86 567 1973—June.............. 2,152 345 485 873 449 1,140 127 886 203 203 1 25 17 8 56 July............... 2,152 245 475 1,020 412 1,232 144 776 203 203 1 20 12 8 49 Aug............... 2,030 255 466 844 465 1,108 107 814 200 197 3 23 14 9 53 Sept............... 1,844 281 431 748 384 990 97 757 149 148 1 15 10 6 44 Oct................ 1,674 242 383 715 334 957 81 637 149 147 2 15 9 6 45 Nov............... 1,675 241 322 750 362 938 84 653 135 133 1 17 12 5 39 Dec............... 1,403 192 278 654 279 767 73 563 91 90 11 7 4 28 1974—Jan................. 1,464 258 330 650 226 793 89 582 86 85 2 13 9 4 29 Feb............... 1,922 337 386 871 328 1,056 84 782 110 109 12 8 4 30 Mar............... 1,499 212 332 620 335 962 87 450 127 125 2 14 8 6 37 Apr.r............ 1,630 195 327 749 359 996 88 546 161 160 1 13 6 7 42 May.............. 1,476 177 319 634 346 933 95 448 150 150 1 17 10 8 41 Jun.p............. 1,595 262 382 616 335 1,015 76 504 149 148 2 15 8 7 Note.—Starts are Census Bureau series (including farm starts) except units under FHA, based on field office reports of first compliance inspec­ for Govt.-underwritten, which are from Federal Housing Admin, and tions. Data may not add to totals because of rounding. Veterans Admin, and represent units started, including rehabilitation Mobile home shipments are as reported by Mobile Homes Manufac­ turers Assn. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 54 EMPLOYMENT □ AUGUST 1974 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT (In thousands of persons, except as noted) Civilian labor force (S.A.) Period i p T n o ( s o N t p t i a t u .S u l l t a . n A i t o o i . o n ) n a n - l la ( b N N o . o r S t . f A i o n . r ) ce ( T l f S a o o b . r A t c o a e r . l ) Total Employed1 Unem­ U (p n e e m r r a m e t c e n p e 2 t l n o t y ; ­ Total In c n u o lt n u a ra g l r i- In ployed S.A.) agriculture industries 1968.......................... 135,562 53,291 82,272 78,737 75,920 72,103 3,817 2,817 3.6 1969........................... 137,841 53,602 84,240 80,734 77,902 74,296 3,606 2,832 3.5 1970........................... 140,182 54,280 85,903 82,715 78,627 75,165 3,462 4,088 4.9 1971........................... 142,596 55,666 86,929 84,113 79,120 75,732 3,387 4,993 5.9 1972........................... 145,775 56,785 88,991 86,542 81,702 78,230 3,472 4,840 5.6 1973........................... 148,263 57,222 91,040 88,714 84,409 80,957 3,452 4,304 4.9 1973—July............... 148,361 55,133 91,139 88,828 84,621 81,109 3,512 4,207 4.7 Aug................ 148,565 56,129 91,011 88,704 84,513 81,088 3,425 4,191 4.7 Sept................ 148,782 57,484 91,664 89,373 85,133 81,757 3,376 4,240 4.7 Oct................. 149,001 56,955 92,038 89,749 85,649 82,194 3,455 4,100 4.6 Nov................ 149,208 57,040 92,186 89,903 85,649 82,088 3,561 4,254 4.7 Dec................. 149,436 57,453 92,315 90,033 85,669 82,026 3,643 4,364 4.8 1974—Jan................. 149,656 58,303 92,801 90,543 85,811 82,017 3,794 4,732 5.2 Feb................. 149,857 58,165 92,814 90,556 85,803 81,951 3,852 4,753 5.2 Mar................ 150,066 58,183 92,747 90,496 85,863 82,164 3,699 4,633 5.1 Apr................. 150,283 58,547 92,556 90,313 85,775 82,264 3,511 4,538 5.0 May............... 150,507 58,349 92.909 90,679 85,971 82,514 3,457 4,708 5.2 June............... 150,710 55,953 93,130 90.919 86,165 82,872 3,293 4,754 5.2 July............... 150.922 55,426 93.387 91.167 86.312 82,907 3,405 4,855 5.3 1 Includes self-employed, unpaid family, and domestic service workers. to the calendar week that contains the 12th day; annual data are averages 2 Per cent of civilian labor force. of monthly figures. Description of changes in series beginning 1967 is Note.—Bureau of Labor Statistics. Information relating to persons 16 available from Bureau of Labor Statistics. years of age and over is obtained on a sample basis. Monthly data relate EMPLOYMENT IN NONAGRICULTURAL ESTABLISHMENTS, BY INDUSTRY DIVISION (In thousands of persons) Period Total M t a u n ri u n f g ac­ Mining c C o o n t n i s o t t r n r a u c c t ­ t T i l o i r c a n n u & s ti p l i o p ti r u e t b a s ­ ­ Trade Finance Service G m ov e e n r t n­ 1968......................................................... 67,915 19,781 606 3,285 4,310 14,084 3,382 10,623 11,845 70,284 20,167 619 3,435 4,429 14,639 3,564 11,229 12,202 1970.......................................................... 70,593 19,349 623 3,381 4,493 14,914 3,688 11,612 12,535 1971.......................................................... 70,645 18,529 602 3,411 4,442 15,142 3,796 11,869 12,856 1972.......................................................... 72,764 18,933 607 3,521 4,495 15,683 3,927 12,309 13,290 1973.......................................................... 75,567 19,820 625 3,648 4,611 16,288 4,053 12,866 13,657 SEASONALLY ADJUSTED 1973—June.............................................. 75,526 19,856 629 3,654 4,597 16,262 4,049 12,820 13,659 July.............................................. 75,493 19,804 631 3,680 4,598 16,294 4,048 12,828 13,610 Aug............................................... 75,747 19,861 634 3,676 4,617 16,352 4,064 12,906 13,637 Sept............................................... 75,961 19,882 633 3,700 4,629 16,388 4,078 12,995 13,656 Oct................................................ 76,363 20,016 639 3,694 4,671 16,465 4,088 13,044 13,746 Nov.............................................. 76,679 20,095 644 3,711 4,654 16,520 4,095 13,122 13,838 Dec............................................... 76,626 20,090 646 3,732 4,644 16,398 4,101 13,128 13,887 1974—Jan................................................ 76,526 20,006 654 3,636 4,684 16,417 4,109 13,136 13,884 Feb............................................... 76,813 19,904 656 3,757 4,691 16,472 4,124 13,215 13,994 Mar.............................................. 76,804 19,851 655 3,725 4,676 16,487 4,127 13,240 14,043 Apr............................................... 76,941 19,921 659 3,659 4,668 16,549 4,130 13,248 14,107 May.............................................. 77,136 19,942 664 3,662 4,664 16,594 4,145 13,329 14,136 JuneP............................................ 77,073 19,951 666 3,602 4,648 16,575 4,142 13,363 14,126 July®............................................ 76,951 19,867 674 3,500 4,637 16,612 4,133 13,397 14,131 NOT SEASONALLY ADJUSTED 1973—June.............................................. 76,308 20,002 642 3,827 4,661 16,335 4,089 12,999 13,743 July.............................................. 75,384 19,729 644 3,934 4,653 16,262 4,113 12,982 13,067 Aug............................................... 75,686 20,018 648 3,981 4,659 16,279 4,121 13,009 12,971 Sept.............................................. 76,238 20,132 641 3,944 4,671 16,367 4,082 12,982 13,419 Oct................................................ 76,914 20,168 640 3,923 4,680 16,515 4,076 13,057 13,855 Nov............................................... 77,322 20,202 643 3,822 4,659 16,780 4,079 13,096 14,041 Dec............................................... 77,391 20,110 642 3,639 4,644 17,113 4,080 13,062 14,101 1974—Jan................................................ 75,620 19,818 642 3,280 4,618 16,290 4,072 12,913 13,987 Feb............................................... 75,792 19,738 641 3,329 4,616 16,127 4,087 13,056 14,198 Mar.............................................. 76,117 19,726 642 3,405 4,634 16,187 4,102 13,147 14,274 Apr............................................... 76,706 19,777 653 3,527 4,635 16,429 4,118 13,274 14,293 May.............................................. 77,225 19,825 664 3,658 4,664 16,535 4,141 13,422 14,316 June®............................................ 77,871 20,099 680 3,782 4,713 16,650 4,183 13,550 14,214 July®............................................ 76,830 19,808 688 3,741 4,693 16,579 4,199 13,558 13,564 Note.—Bureau of Labor Statistics; data include all full- and part- persons, domestic servants, unpaid family workers, and members of time employees who worked during, or received pay for, the pay pe- Armed Forces are excluded. riod that includes the 12th of the month. Proprietors, self-employed Beginning with 1970, series has been adjusted to Mar. 1971 bench­ mark. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ PRICES A 55 CONSUMER PRICES (1967 = 100) Housing Health and recreation Fur­ Apparel Trans­ Period it A em ll s Total Rent H ow om ne e r - - F a o u n i e d l l e a G l n e a c d s ­ n i a n i n s g h d s ­ up a k n e d ep p t o io rt n a­ Total M ic e a d l ­ s P o e n r a ­ l R a i e n n a g d d­ g O a o t n o h d d er s ship coal tricity opera­ care care recrea­ serv­ tion tion ices 1929.......... 51.3 48.3 76.0 48.5 1933.......... 38.8 30.6 54.1 36.9 1941.......... 44.1 38.4 53.7 57.2 40.5 81.4 44.8 44.2 37.0 41.2 47.7 49.2 1945.......... 53.9 50.7 59.1 58.8 48.0 79.6 61.5 47.8 42.1 55.1 62.4 56.9 1960.......... 88.7 88.0 90.2 91.7 86.3 89.2 98.6 93.8 89.6 89.6 85.1 79.1 90.1 87.3 87.8 196 5 94.5 94.4 94.9 96.9 92.7 94.6 99.4 95.3 93.7 95.9 93.4 89.5 95.2 95.9 94.2 196 6 97.2 99.1 97.2 98.2 96.3 97.0 99.6 97.0 96.1 97.2 96.1 93.4 97.1 97.5 97.2 196 7 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 196 8 104.2 103.6 104.2 102.4 105.7 103.1 100.9 104.4 105.4 103.2 105.0 106.1 104.2 104.7 104.6 196 9 109.8 108.9 110.8 105.7 116.0 105.6 102.8 109.0 111.5 107.2 110.3 113.4 109.3 108.7 109.1 197 0 116.3 114.9 118.9 110.1 128.5 110.1 107.3 113.4 116.1 112.7 116.2 120.6 113.2 113.4 116.0 197 1 121.3 118.4 124.3 115.2 133.7 117.5 114.7 118.1 119.8 118.6 122.2 128.4 116.8 119.3 120.9 197 2 125.3 123.5 129.2 119.2 140.1 118.5 120.5 121.0 122.3 119.9 126.1 132.5 119.8 122.8 125.5 197 3 133.1 141.4 135.0 124.2 146.7 136.0 126.4 124.9 126.8 123.8 130.2 137.7 125.2 125.9 129.0 1973—June 132.4 139.8 133.9 123.9 145.0 131.6 125.4 124.7 126.8 124.6 130.0 137.0 124.9 125.9 129.0 July. 132.7 140.9 134.2 124.3 145.2 131.7 125.5 125.0 125.8 124.8 130.3 137.3 125.3 126.2 129.5 Aug. 135.1 149.4 135.2 125.0 147.0 132.8 125.8 125.3 126.5 124.5 130.5 137.6 125.7 126.1 129.4 Sept. 135.5 148.3 136.6 125.4 149.2 133.6 126.5 126.1 128.3 123.9 131.1 138.3 126.3 126.8 129.9 Oct.. 136.6 148.4 138.1 125.9 151.5 141.1 127.4 126.7 129.6 125.0 132.1 140.6 127.3 127.2 130.3 Nov. 137.6 150.0 139.4 126.3 152.6 155.6 129.8 127.5 130.5 125.8 132.6 140.9 128.1 127.5 130.8 Dec. 138.5 151.3 M40.6 126.9 153.6 172.8 131.0 128.0 130.5 126.7 133.0 141.4 129.2 127.6 131.3 1974—Jan.. 139.7 153.7 142.2 127.3 154.8 194.6 134.3 129.0 128.8 128.1 133.7 142.2 129.8 128.3 131.8 Feb. 141.5 157.6 143.4 128.0 155.8 202.0 137.3 130.1 130.4 129.3 134.5 143.4 130.8 128.9 132.3 Mar. 143.1 159.1 144.9 128.4 157.2 201.5 140.0 132.6 132.2 132.0 135.4 144.8 131.8 129.5 132.8 Apr. 144.0 158.6 146.0 128.8 158.2 206.5 141.9 134.0 133.6 134.4 136.3 145.6 133.1 130.4 133.6 May 145.6 159.7 147.6 129.3 159.4 211.0 143.9 137.0 135.0 137.6 137.7 147.2 134.9 132.0 134.4 June 147.1 160.3 149.2 129.8 161.2 214.2 144.5 139.2 135.7 140.7 139.4 149.4 136.5 133.5 135.8 Note.—Bureau of Labor Statistics index for city wage-earners and clerical workers. WHOLESALE PRICES: SUMMARY (1967 = 100, except as noted) Industrial commodities Pro­ Period m c t A o i o e m l d s l i ­ ­ p F u r a c o r t m d s ­ c f f e o a e s n o e s d d d e s d s Total t T e il e t e c x s . ­ , H e i t d c e . s, F e u tc e . l, C ic e h a t e c l m s . , ­ R b et u e c r b . , ­ L b e u t e c m r . , ­ P e a t p c e . r, M e a t l e c s, . t­ e c M a q e h n r u i y a d n ip ­ ­ ­ F t e u u t r r c e n . , i­ N t e m m a r l o a i l e n l i n ­ s c ­ ­ T e m p t q r o i a e o u r n n n i t p a s t1 ­ ­ ­ n c M e e o l i l u s a ­ s ­ ment I960............................. 94.9 97.2 89.5 95.3 99.5 90.8 96.1 101.8 103.1 95.3 98.1 92.4 92.0 99.0 97.2 93.0 1965............................. 96.6 98.7 95.5 96.4 99.8 94.3 95.5 99.0 95.9 95.9 96.2 96.4 93.9 96.9 97.5 95.9 1966............................. 99.8 105.9 101.2 98.5 100.1 103.4 97.8 99.4 97.8 100.2 98.8 98.8 96.8 98.0 98.4 97.7 1967............................. 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 1968............................. 102.5 102.5 102.2 102.5 103.7 103.2 98.9 99.8 103.4 113.3 101.1 102.6 103.2 102.8 103.7 102.2 1969............................. 106.5 109.1 107.3 106.0 106.0 108.9 100.9 99.9 105.3 125.3 104.0 108.5 106.5 104.9 107.7 100.8 105.2 1970............................. 110.4 111.0 112.0 110.0 107.2 110.1 105.9 102.2 108.6 113.7 108.2 116.7 111.4 107.5 113.3 104.5 109.9 1971............................. 113.9 112.9 114.3 114.0 108.6 114.0 114.2 104.2 109.2 127.0 110.1 119.0 115.5 109.9 122.4 110.3 112.8 1972............................. 119.1 125.0 120.8 117.9 113.6 131.3 118.6 104.2 109.3 144.3 113.4 123.5 117.9 111.4 126.1 113.8 114.6 1973............................. 134.7 176.3 148.1 125.9 123.8 143.1 134.3 110.0 112.4 177.2 122.1 132.8 121.7 115.2 130.2 115.1 119.7 1973—July.................. 134.3 173.3 146.5 126.1 124.2 141.4 134.7 110.8 112.9 177.8 122.3 132.8 122.0 115.2 130.0 115.0 120.9 Aug................... 142.1 213.3 166.2 126.7 125.2 143.0 135.2 111.0 113.1 178.8 123.3 133.7 122.3 115.9 130.0 115.1 121.0 Sept................... 139.7 200.4 156.3 127.4 126.8 143.8 137.4 111.5 112.8 181.9 124.4 134.4 122.6 116.0 129.9 114.5 121.1 Oct.................... 138.7 188.4 153.1 128.5 128.5 143.8 139.3 112.7 114.0 180.3 125.8 135.9 123.1 116.6 130.9 115.9 121.0 Nov................... 139.2 184.0 151.9 130.1 130.0 143.0 144.1 113.5 114.8 184.7 127.6 138.5 123.8 117.2 131.5 116.1 121.3 Dec................... 141.8 187.2 155.7 132.2 131.4 141.9 151.5 115.6 116.5 186.1 128.7 141.8 124.6 117.5 132.6 117.3 121.6 1974—Jan.................... 146.6 202.6 162.1 135.3 133.8 142.6 162.5 118.2 117.7 183.7 131.8 145.0 126.0 119.0 138.7 118.6 123.5 Feb................... 149.5 205.6 164.7 138.2 135.2 143.4 177.4 120.2 119.8 184. 1 132.9 148.0 127.0 120.2 142.1 118.9 124.6 Mar................... 151.4 197.0 163.0 142.4 136.1 143.4 189.0 127.3 123.8 191.3 137.2 154,7 129.0 121.3 144.2 119.1 125.8 Apr................... 152.7 186.2 159.1 146.6 137.5 145.4 197.9 132.3 129.4 200.2 114.4 161.2 130.8 122.9 146.7 119.4 128.2 May................. 155.0 180.8 158.9 150.5 139.1 146.3 204.3 137.0 133.7 198.0 146.6 168.7 134.1 124.5 150.7 121.4 133.2 June................ 155.7 168.6 157.4 153.6 141.7 146.0 210.5 142.8 135.6 192.2 147.5 174.0 137.2 126.1 152.3 122.8 134.3 July................... 161.7 180.8 167.6 157.8 142. 1 146.6 221.7 148.4 139.5 188.6 153.3 180.3 140.3 128.2 156.4 125.1 135.2 1 Dec. 1968=100. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 56 NATIONAL PRODUCT AND INCOME □ AUGUST 1974 GROSS NATIONAL PRODUCT (In billions of dollars) 1973 ' 1974 Item 1929 1933 1941 1950 1969 1970 19711 1972r 1973r II III IV Gross national product. 103.1 55.6 124.5 284.8 930.3 977.1 1,054.91,158.01,294.9 1,277.91,308.91.344.0 1.358.81,383.5 Final purchases............. 101.4 57.2 120.1 278.0 922.5 972.61,048.61,149.51,279.61,267.21,297.01.315.1 1.341.91,368.4 Personal consumption expenditures. 77.2 45.8 80.6 191.0 579.5 617.6 667.1 729.0 805.2 799.0 816.3 823.9 840.6 866.8 Durable goods............................. 9.2 3.5 9.6 30.5 90.8 91.3 103.9 118.4 130.3 132.1 132.4 124.3 123.9 130.2 Nondurable goods....................... 37.7 22.3 42.9 98.1 245.9 263.8 278.4 299.7 338.0 332.7 343.8 352.1 364.4 375.2 Services........................................ 30.3 20.1 28.1 62.4 242.7 262.6 284. 301.9 336.9 334.2 340.1 347.4 352.4 361.4 Gross private domestic investment. 16.2 1.4 17.9 54.1 139.0 136.3 153.7 179.3 209.4 205.1 209.0 224.5 210.5 213.0 Fixed investment............................... 14.5 3.0 13.4 47.3 131.1 131.7 147.4 170.8 194.0 194.4 197.1 195.5 193.6 197.9 Nonresidential.............................. 10.6 2.4 9.5 27.9 98.5 100.6 104.6 116.8 136.8 135.6 139.0 141.9 145.2 149.2 Structures.................................. 5.0 .9 2.9 9.2 34.2 36.1 37.9 41.1 47.0 46.2 47.9 49.3 51.3 52.5 Producers’ durable equipment. 5.6 1.5 6.6 18.7 64.3 64.4 66.6 75.7 89.8 89.4 91.1 92.6 93.9 96.7 Residential structures................. 4.0 .6 3.9 19.4 32.6 31.2 42.8 54.0 57.2 58.7 58.1 53.6 48.4 48.7 Nonfarm................................... 3.8 .5 3.7 18.6 32.0 30.7 42.3 53.4 56.7 58.4 57.6 53.0 47.8 48.0 Change in business inventories----- 1.7 -1.6 4.5 6.8 7 4.5 6.3 8.5 15.4 10.7 11.8 28.9 16.9 15.1 Nonfarm...................................... 1.8 -1.4 4.0 6.0 7.7 4.3 4.9 7.8 11.4 7.7 7.4 24.0 13.1 11.9 Net exports of goods and services. 1.1 .4 1.3 1.8 1.9 3.6 -.2 -6.0 3.9 .5 6.7 9.3 11.3 .2 Exports...................................... 7.0 2.4 5.9 13.8 55.5 62.9 65.4 72.4 100.4 95.4 103.7 113.6 131.2 138.6 Imports...................................... 5.9 2.0 4.6 12.0 53.6 59.3 65.6 78.4 96.4 94.9 96.9 104.3 119.9 138.4 Government purchases of goods and services. 8.5 8.0 24.8 37.9 210.0 219.5 234.2 255.7 276.4 273.3 276.9 286.4 296.3 303.5 Federal........................................................ 1.3 2.0 16.9 18.4 98.8 96.2 97.6 104.9 106.6 106.2 105.3 108.4 111.5 113 9 National defense.................................... 13.8 14.1 78.4 74.6 71.2 74.8 74.4 74.0 73.3 75.3 75.8 76.1 Other....................................................... 3.1 4.3 20.4 21.6 26.5 30.1 32.2 32.2 32.0 33.1 35.7 37.8 State and local...................................... 7.2 6.0 7.9 19.5 111.2 123.3 136.6 150.8 169.8 167.1 171.6 177.9 184.8 189.6 Gross national product in constant (1958) dollars........................................................... 203.6 141.5 263.7 355.3 725.6 722.5 746.3 792.5 839.2 837.4 840.8 845.7 830.5 828.0 Note.—Dept, of Commerce estimates. Quarterly data are seasonally see the Survey of Current Business, (generally the July issue) and the adjusted totals at annual rates. For back data and explanation of series, Aug. 1966 Supplement to the Survey. NATIONAL INCOME (In billions of dollars) 1973' 1974 Item 1929 1933 1941 1950 1969 1970 1971' 1972' 1973 r II III IV I' HP National income................................................ 86.8 40.3 104.2 241.1 766.0 800.5 857.7 946.51,065.61,051.21,077.31,106.31,118.8 Compensation of employees............................. 51.1 29.5 64.8 154.6 566.0 603.9 643.1 707.1 786.0 776.7 793.3 814.8 828.8 848.0 Wages and salaries....................................... 50.4 29.0 62.1 146.8 509.7 542.0 573.6 626.8 691.6 683.6 698.2 717.0 727.6 744.3 Private....................................................... 45.5 23.9 51.9 124.4 405.6 426.9 449.5 491.4 545.1 538.7 550.8 565.8 573.8 588.1 Military..................................................... .3 .3 1.9 5.0 19.0 19.6 19.4 20.5 20.6 20.3 20.2 21.0 21.0 20.9 Government civilian................................. 4.6 4.9 8.3 17.4 85.1 95.5 104.7 114.8 126.0 124.5 127.2 130.2 132.8 135.4 Supplements to wages and salaries................... .7 .5 2.7 7.8 56.3 61.9 69.5 80.3 94.4 93.1 95.1 97.7 101.2 103.7 Employer contributions for social in­ surance .................................................. .1 .1 2.0 4.0 27.8 29.1 33.1 38.6 48.4 47.8 48.8 50.1 52.3 53.2 Ot^er labor income.................................. .6 .4 .1 3.8 28.4 32.2 36.4 41.7 46.0 45.4 46.3 47.6 48.9 50.5 Proprietors’ income.......................................... 15.1 5.9 17.5 37.5 67.2 66.9 69.2 75.9 96.1 92.8 99.3 103.2 98.4 89.6 Business and professional........................... 9.0 3.3 11.1 24.0 50.5 50.0 52.0 54.9 57.6 57.1 57.7 58.4 59.3 60.5 Farm............................................................. 6.2 2.6 6.4 13.5 16.7 16.9 17.2 21.0 38.5 35.6 41.5 44.9 39.1 29.1 Rental income of persons................................. 5.4 2.0 3.5 9.4 22.6 23.9 25.2 25.9 26.1 25.7 26.2 26.4 26.4 26.1 Corporate profits and inventory valuation adjustment..................................................... 10.5 -1.2 15.2 37.7 79.8 69.2 78.7 92.2 105.1 105.0 105.2 106.4 107.7 Profits before tax.......................................... 10.0 1.0 17.7 42.6 84.9 74.0 83.6 99.2 122.7 124.9 122.7 122.7 138.7 Profits tax liability.................................... 1.4 .5 7.6 17.8 40.1 34.8 37.5 41.5 49.8 50.9 49.9 49. 5 53.6 Profits after tax........................................ 8.6 .4 10.1 24.9 44.8 39.3 46.1 57.7 72.9 74.0 72.9 73.2 85.1 Dividends.............................................. 5.8 2.0 4.4 8.8 24.3 24.7 25.0 27.3 29.6 29.1 29.8 30.7 31.6 32.5 Undistributed profits........................... 2.8 -1.6 5.7 16.0 20.5 14.6 21.1 30.3 43.3 44.9 43.1 42.5 53.5 Inventory valuation adjustment.................. .5 -2.1 -2.5 -5.0 -5.1 -4.8 -4.9 -7.0 -17.6 -20.0 -17.5 -16.3 -31.0 -37.3 Net interest....................................................... 4.7 4.1 3.2 2.0 30.5 36.5 41.6 45.6 52.3 51.1 53.2 55.5 57.5 59.8 Note.—Dept, of Commerce estimates. Quarterly data are seasonally adjusted totals at annual rates. See also Note to table above. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ NATIONAL PRODUCT AND INCOME A 57 RELATION OF GROSS NATIONAL PRODUCT, NATIONAL INCOME, AND PERSONAL INCOME AND SAVING (In billions of dollars) 1973 r 1974 Item 1929 1933 1941 1950 1969 1970 1971 ' 1972r 1973 r II III IV lr II p Gross national product. 103.1 55.6 124.5 284.8 930.3 977.1 1,054.91,158.01,294.91,277.91,308.91,344.01,358.81,383.5 Less: Capital consumption allowances........ 7.9 7.0 8.2 18.3 81.6 87.3 93.7 102.9 110.8 110.5 111.5 113.9 115.8 118.4 Indirect business tax and nontax lia­ bility.................................................... 7.0 7.1 11.3 23.3 85.9 93.5 102.7 110.0 119.2 118.6 120.4 121.3 122.6 125.7 Business transfer payments................... .6 .7 .5 .8 3.8 4.0 4.3 4.6 4.9 4.8 4.9 5.0 5.1 5.2 Statistical discrepancy........................... .7 .6 .4 1.5 -6.1 -6.4 -2.3 -3.8 -5.0 -1.5 -4.9 -2.6 -6.3 Plus: Subsidies less current surplus of gov­ ernment enterprises............................ -.1 .1 .2 1.0 1.7 1.1 2.3 .6 .1 .3 -. 1 -2.7 -3.7 Equals: National income. 86.8 40.3 104.2 241.1 766.0 800.5 857.7 946.51,065.61,051.21,077.31,106.31,118.8 Less: Corporate profits and inventory valu­ ation adjustment................................. 10.5 -1.2 15.2 37.7 79.8 69.2 78.7 92.2 105.1 105.0 105.2 106.4 107.7 Contributions for social insurance....... .2 .3 2.8 6.9 54.2 57.7 63.8 73.0 91.2 90.2 92.1 93.9 99.1 100.8 Excess of wage accruals over disburse­ ments ................................................... .0 . 1 .0 - . 1 - .3 .0 .0 .0 — • 6 Plus: Government transfer payments............ .9 1.5 2.6 14.3 61.9 75.1 89.0 98.6 113.0 111.3 114.1 117.1 123.1 130.7 Net interest paid by government and consumers........................................... 2.5 1.6 2.2 7.2 28.7 31.0 31.2 33.0 38.3 37.7 39.3 40.4 40.8 42.0 Dividends................................................ 5.8 2.0 4.4 8.8 24.3 24.7 25.0 27.3 29.6 29.1 29.8 30.7 31.6 32.5 Business transfer payments................... .6 .7 .5 .8 3.8 4.0 4.3 4.6 4.9 4.8 4.9 5.0 5.1 5.2 Equals: Personal income............................ 85.9 47.0 96.0 227.6 750.9 808.3 864.0 944.91,055.01,039.21,068.01,099.31,112.51,133.8 Less: Personal tax and nontax payments. 2.6 1.5 3.3 20.7 116.5 116.6 117.6 142.4 151.3 147.2 154.2 159.9 161.9 167.9 Equals: Disposable personal incomc.......... 83.3 45.5 92.7 206.9 634.4 691.7 746.4 802.5 903.7 892.1 913.9 939.4 950.6 965.9 Less: Personal outlays.................................... 79.1 46.5 81.7 193.9 596.2 635.5 685.9 749.9 829.4 822.5 840.7 850. 1 866.2 892.6 Personal consumption expenditures.. 77.2 45.8 80.6 191.0 579.5 617.6 667.1 729.0 805.2 799.0 816.3 823.9 840.6 866.8 Consumer interest payments............. 1.5 .5 .9 2.4 15.8 16.8 17.7 19.8 22.9 22.5 23.4 24.0 24.4 24.8 Personal transfer payments to for­ eigners.............................................. .3 ,2 .2 .5 .9 1.0 1.1 l.l 1.3 1.0 .9 2.2. 1.2 1.0 Equal: Personal saving. 4.2 -.9 11.0 13.1 38.2 56.2 60.5 52.6 74.4 69.6 73.2 89.3( 84.4 73.3 Disposable personal income in constant (1958) dollars........................................................... 150.6 112.2 190,3 249.6 513.6 534.8 555.4 580.5 619.6 618.2 621.8 622.9| 610.3 604.3 Note.—Dept, of Commerce estimates. Quarterly data are seasonally adjusted totals at annual rates. See also Note to table at top of opposite page. PERSONAL INCOME (In billions of dollars) 1973 r 1974 r Item June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June*’ Total personal income......................... 944.91.055.01,047.21,056.11.067.61,080.41,090. 1,100.01,107.11,107.01,113.41,117.11,125.21,134.41,141.8 Wage and salary disbursements.......... 626.8 691.7 689.2 692.9 697.2 704.5 711.0 717.9 722.2 722.5 728.3 .732.1 .737.1 .745.3 .752.5 Commodity-producing industries... 225.4 251.9 250.9 252.6 253.7 257.4 260.0 263 264.5 262.1 264. 265.3 267.4 270.0 271.8 Manufacturing only...................... 175.8 196.6 196.0 196. 197. 200. 202.9 205.2 205.8 204.1 204.9 205.5 207.8 210.1 211.8 Distributive industries..................... 151.0 165.1 164.9 165.1 166.2 168.2 169.1 171.1 170.9 172.0 172. 173.9 175.3 177.8 179.5 Service industries............................. 115.3 128.2 127.8 128.7 129.7 130.7 131.5 132.3 134.7 135.3 137.0 138.2 139.1 141.1 142.3 Government..................................... 135.0 146. 145.6 146.5 147.5 148.2 150.4 151.4 152.1 153.0 153.8 154.6 155.3 156.3 158.9 Other labor income............................. 41.7 46.0 45.6 45.9 46.3 46.7 47.1 47.6 48.0 48.5 48.9 49.4 49.9 50.5 51.1 Proprietors’ income............................ 75.9 96.1 93.1 96 99.1 102.1 103.2 103.4 103.3 100.8 98.5 96.0 92. 89.7 86.5 Business and professional............... 54.9 57.6 57.2 57.8 57.6 57. 58.3 58.5 58.4 58.7 59.4 59.9 60.2 60.6 60.9 Farm................................................. 21.0 38.5 35.9 38.8 41.5 44.3 44.9 44.9 44.9 42.1 39.1 36.1 32.6 29.1 25.6 Rental income...................................... 25.9 26.1 26.2 26.0 26.2 26.4 26.4 26.4 26.4 26.4 26.4 26.4 25.5 26.4 26.4 Dividends............................................. 27.3 29.6 29.2 29.4 30.0 30.0 30.2 30.4 31.6 31.4 31.6 31.9 32.1 32.5 33.0 Personal interest income..................... 78.6 90.6 89.9 91.2 92.5 93.7 94.8 96.0 97.0 97.5 98.3 99.0 100.4 101.8 103.3 Transfer payments............................... 103.2 117.8 116.6 117.2 119.4 120.4 121.7 122. 1 122.6 126.7 128.4 129.5 134.6 135. 137.1 Less: Personal contributions for social insurance.................................... 34.5 42.8 42.6 43.1 43.3 43.5 43.7 43.8 43. 46.7 46.8 47.0 47.2 47.6 48.0 Nonagricultural income........................ 916.51.008.0 1,002.91,008.81.017.61,027.61,037.01,046.11,052.91,055.51,064.91,071.61,083.11,095.81,106.7 Agricultural income............................. 28.4 47.1 44.3 47.4 50.0 52.9 53.8 53.9 54.2 51.6 48.5 45.5 42.0 38.6 35.1 Note.—Dept, of Commerce estimates. Monthly data are seasonally adjusted totals at annual rates. See also Note to table at top of opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 58 FLOW OF FUNDS □ AUGUST 1974 SUMMARY OF FUNDS RAISED AND ADVANCED IN U.S. CREDIT MARKETS (Seasonally adjusted annual rates; in billions of dollars) 1971 1972 1973 Transaction category, or sector 1968 1969 1970 1971 1972 1973 HI H2 HI H2 HI H2 Funds raised, by type and sector 1 Total funds raised by nonfinancial sectors................. 94.6 91.4 97.5 146.7 166.1 187.0 134.7 158.7 145.2 187.3 198.0 175.4 1 2 Excluding equities................................................. 95.9 88.0 92.6 135.0 156.1 181.3 123.8 146.1 134.7 177.8 192.3 169.6 2 3 U.S. Government....................................................... 13.4 -3.6 12.8 25.5 17.3 9.7 22.7 28.4 12.4 22.2 17.0 2.5 3 4 Public debt securities.............................................. 10.3 -1.3 12.9 26.0 13.9 7.7 24.2 27.8 10.5 17.2 15.8 -.3 4 5 Budget agency issues.............................................. 3.1 -2.4 -.1 -.5 3.4 2.0 -1.6 .5 1.9 4.9 1.2 2.8 5 6 81.2 95.0 84.7 121.2 148.8 177.3 112.0 130.4 132.8 165.1 181.0 172.9 6 7 Corporate equities.................................................. -1.4 3.4 4.9 11.7 10.0 5.7 10.9 12.6 10.4 9.5 5.7 5.8 7 8 Debt instruments.............................................. 82.6 91.6 79.8 109.5 138.8 171.6 101.1 117.8 122.3 155.6 175.3 167.1 8 9 Debt capital instruments....................................... 50.6 50.6 57.7 83.2 92.4 94.7 79.5 86.9 87.3 97.6 91.7 97.7 9 10 State and local government securities................ 9.5 9.9 11.3 16.6 11.9 10.1 17.9 15.4 12.0 11.9 6.5 13.6 10 11 Corporate and foreign bonds........................... 14.0 13.0 20.6 19.7 13.2 11.6 22.3 17.2 14.4 12.0 10.6 12.7 11 12 Mortgages............................................................ 27.1 27.7 25.7 46.8 67.3 73.0 39.3 54.3 60.9 73.7 74.6 71.4 12 13 15.1 15.7 12.8 26.0 39.7 42.6 20.6 31.5 35.6 43.7 43.5 41.8 13 14 Other residential.............................................. 3.4 4.7 5.8 8.8 10.3 9.5 8.5 9.1 9.1 11.5 10.8 8.2 14 15 Commercial...................................................... 6.4 5.3 5.3 10.0 14.8 16.5 8.5 11.5 13.5 16.0 16.1 16.9 15 16 Farm................................................................ 2.2 1.9 1.8 2.0 2.6 4.4 1.7 2.3 2.7 2.5 4.3 4.5 16 17 Other private credit................................................ 32.0 41.0 22.1 26.3 46.4 76.9 21.7 30.9 35.0 58.0 83.6 69.5 17 18 Bank loans n.e.c.................................................. 13.1 15.3 6.4 9.3 21.8 41.7 5.1 13.5 14.5 29.3 54.2 29.2 18 19 10.0 10.4 6.0 11.2 19.2 22.9 8.9 13.6 15.8 22.5 24.7 20.4 19 20 Open-market paper............................................ 1.6 3.3 3.8 -.9 -1.6 2.5 -1.0 -.8 -.3 -2.8 -3.4 8.4 20 21 Other.................................................................. 7.2 12.0 5.9 6.6 7.0 9.8 8.7 4.6 5.0 9.0 8.2 11.5 21 22 By borrowing sector................................................ 81.2 95.0 84.7 121.2 148.8 177.3 112.0 130.4 132.8 165.1 181.0 172.9 22 23 Debt instruments.............................................. 82.6 91.6 79.8 109.5 138.8 171.6 101.1 117.8 122.3 155.6 175.3 167.1 23 24 Foreign................................................................ 2.9 2.9 3.0 5.7 3.8 7.1 5.3 6.1 3.4 4.3 11.1 3.1 24 25 State and local governments.............................. 9.8 10.7 11.4 17.0 12.3 10.5 17.9 16.1 11.9 12.7 6.4 14.6 25 26 Households.......................................................... 29.6 32.2 22.9 38.3 63.2 74.1 30.0 46.6 56.2 70.5 73.5 74.0 26 27 Nonfinancial business......................................... 40.2 45.9 42.5 48.5 59.5 79.9 47.9 49.0 50.9 68.2 84.4 75.4 27 28 2.8 3.2 3.2 4.1 4.9 8.6 4.0 4.2 4.4 5.3 7.5 9.8 28 29 Nonfarm noncorporate..................................... 5.6 7.4 5.3 8.7 10.4 11.4 9.3 8.1 9.5 11.6 12.0 10.8 29 30 Corporate......................................................... 31.8 35.4 33.9 35.7 44.2 59.9 34.6 36.8 37.0 51.2 64.8 54.9 30 31 Corporate equities.............................................. -1.4 3.4 4.9 11.7 10.0 5.7 10.9 12.6 10.4 9.5 5.7 5.8 31 32 Foreign................................................................ .2 .5 .1 * -.4 -.2 .4 -.3 -.2 -.6 -.4 * 32 33 -1.5 2.9 4.8 11.7 10.4 5.9 10.5 12.9 10.7 10.1 6.1 5.7 33 Totals including equities 34 Foreign................................................................ 3.1 3.3 3.0 5.7 3.4 6.9 5.7 5.8 3.2 3.7 10.7 3.1 34 35 Nonfinancial business........................................ 38.7 48.8 47.3 60.2 69.9 85.8 58.4 61.9 61.6 78.3 90.5 81.2 35 36 Corporate........................................................ 30.3 38.3 38.8 47.4 54.6 65.8 45.1 49.7 47.7 61.3 70.9 60.6 36 37 Memo: U.S. Govt, cash balance......................... -1.1 .4 2.8 3.2 .5 -1.7 -.2 6.6 -3.0 4.0 3.6 -7.0 37 Totals net of changes in U.S. Govt, cash balances 38 Total funds raised...................................................... 95.7 91.0 94.7 143.5 165.6 188.7 134.9 152.1 148.1 183.3 194.3 182.3 38 39 By U.S. Government............................................ 14.5 -4.0 10.0 22.3 16.8 11.4 22.9 21.7 15.4 18.1 13.3 9.4 39 Private domestic net investment and borrowing in credit markets Total, households and business 1 Total capital outlays1...................................... 207.6 226.7 224.2 252.5 291.1 328.3 246.3 258.7 279.9 302.3 323.8 332.9 1 2 Capital consumption 2........................................... 140.4 154.3 166.0 179.0 193.4 209.9 175.8 182.2 190.3 196.6 205.6 214.3 2 3 Net physical investment......................................... 67.2 72.4 58.2 73.5 97.7 118.4 70.5 76.6 89.7 105.7 118.2 118.6 3 4 68.3 81.0 70.2 98.5 133.1 159.9 88.4 108.5 117.7 148.8 163.9 155.2 4 5 Excess net investment 3.......................................... -1.1 -8.6 -12.0 -25.0 -35.4 -41.5 -17.9 -32.0 -28.0 -43.1 -45.7 -36.6 5 Total business 6 Total capital outlays........................................ 97.9 108.9 108.0 116.6 133.3 151.3 115.8 117.3 127.4 139.3 145.6 157.0 6 7 Capital consumption.............................................. 63.2 69.5 74.6 80.3 87.6 94.5 78.8 81.7 86.2 88.9 92.7 96.3 7 8 Net physical investment......................................... 34.7 39.4 33.5 36.3 45.8 56.8 37.0 35.5 41.2 50.4 52.9 60.7 8 9 Net debt funds raised............................................. 40.2 45.9 42.5 48.5 59.5 79.9 47.9 49.0 50.9 68.2 84.4 75.4 9 10 Corporate equity issues.......................................... -1.5 2.9 4.8 11.7 10.4 5.9 10.5 12.9 10.7 10.1 6.1 5.7 10 11 Excess net investment 3......................................... -4.0 -9.4 -13.8 -23.9 -24.1 -29.0 -21.4 -26.4 -20.4 -27.9 -37.5 -20.5 11 Corporate business 12 Total capital outlays........................................ 75.0 83.7 84.0 86.7 100.7 114.8 86.5 87.0 96.0 105.4 109.8 120.0 12 13 Capital consumption.............................................. 45.1 49.8 53.6 57.7 62.8 67.9 56.7 58.7 61.8 63.8 66.5 69.4 13 14 Net physical investment......................................... 29.9 33.9 30.4 29.1 37.8 46.8 29.8 28.3 34.1 41.5 43.3 50.6 14 15 Net debt funds raised............................................. 31.8 35.4 33.9 35.7 44.2 59.9 34.6 36.8 37.0 51.2 64.8 54.9 15 16 Corporate equity issues.......................................... -1.5 2.9 4.8 11.7 10.4 5.9 10.5 12.9 10.7 10.1 6.1 5.7 16 17 Excess net investment 3.......................................... -.4 -4.4 -8.4 -18.3 -16.8 -18.9 -15.3 -21.4 -13.5 -19.8 -27.6 -10.0 17 Households 18 Total capital outlays........................................ 109.7 117.8 116.2 135.9 157.8 177.1 130.4 141.4 152.6 163.0 178.2 175.9 18 19 Capital consumption.............................................. 77.2 84.8 91.4 98.7 105.9 115.4 97.0 100.4 104.1 107.7 112.9 118.0 19 20 Net physical investment......................................... 32.5 33.0 24.7 37.2 51.9 61.6 33.5 41.0 48.5 55.3 65.3 58.0 20 21 Net funds raised..................................................... 29.6 32.2 22.9 38.3 63.2 74.1 30.0 46.6 56.2 70.5 73.5 74.0 21 22 Excess net investment 3.......................................... 2.9 .8 1.8 -1.1 -11.3 —12.5j 3.5 -5.6 -7.6 -15.2 -8.2 -16.1 22 1 Capital outlays are totals for residential and nonresidential fixed Funds raised by type and sector. Credit flows included here are the capital, net change in inventories, and consumer durables, except outlays net amounts raised by households, nonfinancial business, governments, by financial business. and foreigners. All funds raised by financial sectors are excluded. U.S. 2 Capital consumption includes amounts for consumer durables and Government budget issues (line 5) are loan participation certificates excludes financial business capital consumption. issued by CCC, Export-Import Bank, FNMA, and GNMA, together with security issues by FHA, Export-Import Bank, and TV A. Issues by Federally 3 Excess of net investment over net funds raised. sponsored credit agencies are excluded as borrowing by financial institu­ Note.—Full statements for sectors and transaction types are available tions. Such issues are on p. A-59, line 11. Corporate equity issues are net on a quarterly basis and annually for flows and for amounts outstanding. cash issues by nonfinancial and foreign corporations. Mortgages exclude Requests for these statements should be addressed to the Flow of Funds loans in process. Open market paper is commercial paper issued by Section, Division of Research and Statistics, Board of Governors of the nonfinancial corporations plus bankers’ acceptances. Federal Reserve System, Washington, D.C., 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ FLOW OF FUNDS A 59 DIRECT AND INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS (Seasonally adjusted annual rates; in billions of dollars) 1971 1972 1973 Transaction category, or sector 1968 1969 1970 1971 1972 1973 HI H2 H2 1 Total funds advanced in credit markets to nonfinancial sectors........................................... 95.9 88.0 92.6 135.0 156.1 181.3 123.8 146.1 134.7 177.8 192.3 169.6 1 By public agencies and foreign 2 Total net advances.................................................... 12.2 15.8 28.0 41.3 16.9 34.8 38.6 44.0 19.7 14.1 42.9 26.7 3 U.S. Government securities................................. 3.4 .9 15.7 33.4 7.3 11.0 32.9 34.0 12.7 2.0 21.2 .7 4 Residential mortgages.......................................... 2.8 4.6 5.7 5.7 5.2 7.7 4.2 7.1 6.2 4.3 4.9 10.5 5 FHLB advances to S&L’s.................................... .9 4.0 1.3 -2.7 * 7.2 -5.5 .2 -2.4 2.5 7. 6.6 6 Other loans and securities................................... 5.1 6.3 5.2 4.9 4.3 9.0 7.1 2.7 3.2 5.4 9. 1 8.9 By agency— 7 U.S. Government.................................................. 4.9 2.9 2.8 3.2 2.3 3.0 4.3 2.2 1.5 3.1 1.0 5.1 8 Sponsored credit agencies.................................... 3.2 9.0 9.9 2.8 6.0 20.3 -1.4 7.0 7.5 4.5 18.7 21.8 9 Monetary authorities............................................ 3.7 4.2 5.0 8.8 .2 9.2 8.4 9.3 4.5 -4.1 11.8 6.7 10 Foreign.................................................................. .3 -.3 10.3 26.4 8.4 2.3 27.3 25.5 6.2 10.6 11.5 -6.9 11 Agency borrowing not included in line 1............... 3.5 8.8 8.2 4.3 6.2 19.6 .9 7.7 7.4 5.0 17.6 21.6 Private domestic funds advanced 12 Total net advances.................................................... 87.2 80.9 72.8 98.0 145.4 166.1 86.1 109.9 122.4 168.6 167.0 164.5 13 U.S. Government securities................................. 13.3 4.6 5.4 -3.5 16.3 18.4 -9.2 2.1 7.1 25.3 13.5 23.4 14 State and local obligations................................... 9.5 9.9 11.3 16.6 11.9 10.1 17.9 15.4 12.0 11.9 6.5 13.6 15 Corporate and foreign bonds............................... 13.8 12.5 20.0 19.5 13.2 11.6 '>22.1 16.8 14.2 12.1 10.3 12.9 16 Residential mortgages.......................................... 15.5 15.7 12.8 29.1 44.6 44.3 24.8 33.4 38.4 50.8 49.2 39.4 17 Other mortgages and loans................................. 35.9 42.2 24.6 33.7 59.5 88.9 25.0 42.3 48.3 71.0 95.2 81.8 18 Less: FHLB advances.......................................... .9 4.0 1.3 -2.7 7.2 -5.5 .2 -2.4 2.5 7.8 6.6 Private financial intermediation 19 Credit market funds advanced by private financial institutions.......................................................... 75.3 54.9 74.9 111.4 150.2 161.4 112.2 110.6 130.5 170.1 184.8 138.0 20 Commercial banking............................................ 38.7 18.2 35.1 50.6 69.7 89.6 53.2 48.0 57.2 82.4 101.3 77.8 21 Savings institutions............................................... 15.6 14.5 16.9 41.5 48.7 35.2 45.4 37.5 48.4 48.9 49.8 20.6 22 Insurance and pension funds............................... 14.0 12.3 17.3 14.1 16.0 21.4 12.5 15.7 14.1 17.8 19.6 23.2 23 Other finance.......................................................... 7.0 9.9 5.7 5.3 15.8 15.2 1.2 9.4 10.6 21.0 14.1 16.4 24 Sources of funds.......................................................... 75.3 54.9 74.9 111.4 150.2 161.4 112.2 110.6 130.5 170.1 184.8 138.0 24 25 Private domestic deposits...................................... 45.9 2.6 63.2 90.8 97.8 87.9 107.7 73.9 97.9 97.9 103.1 72.7 25 26 Credit market borrowing...................................... 8.5 19.1 -.4 9.2 20.2 30.3 2.6 15.9 16.4 24.0 34.4 26.2 26 27 Other sources......................................................... 21.0 33.3 12.1 11.3 32.2 43.2 1.9 20.8 16.2 48.2 47.3 39.1 27 28 Foreign funds...................................................... 2.6 9.3 -8.5 -3.2 5.1 6.3 -7.2 .8 5.5 4.7 5.3 7.4 28 29 Treasury balances............................................... -.2 * 2.9 2.2 .7 -1.0 -.8 5.3 -3.6 5.1 -1.4 -.6 29 30 Insurance and pension reserves........................ 11.4 10.4 13.1 9.6 11.3 15.7 7.7 11.5 8.4 14.1 13.8 17.5 30 31 Other, net............................................................ 7.2 13.5 4.5 2.7 15.1 22.2 2.2 3.2 5.9 24.3 29.6 14.8 31 Private domestic nonfinancial investors 32 Direct lending in credit markets.............................. 20.3 45.0 -2.4 -4.2 15.4 35.1 -23.5 15.2 8.3 22.5 16.6 52.7 33 U.S. Government securities.................................. 8.0 16.8 -8.3 -13.0 4.1 19.4 -22.4 -3.5 -3.3 11.5 13.4 25.3 34 State and local obligations.................................... -.2 8.7 -1.1 -.1 2.1 1.4 -2.7 2.6 .9 3.4 .6 2.1 35 Corporate and foreign bonds................................ 4.7 7.4 10.1 ' 8.2 4.9 .8 8.6 7.7 4.5 5.2 1.3 .4 36 Commercial paper................................................. 5.8 10.2 -4.4 -.6 3.7 10.0 -7.3 6.0 6.7 .8 -.1 20.1 37 Other..................................................................... 2.1 2.0 1.4 1.3 .6 3.5 .3 2.3 -.4 1.7 1.4 4.8 38 Deposits and currency............................................... 48.3 5.4 66.6 94.2 102.2 91.8 110.6 77.9 103.3 101.3 109.2 74.5 39 Time and savings accounts.................................... 33.9 -2.3 56.1 81.2 85.7 79.9 92.6 69.8 88.8 82.6 98.8 60.9 40 Large negotiable CD’s...................................... 3.5 -13.7 15.0 7.7 8.7 18.6 3.4 12.0 2.1 15.3 34.2 3.0 41 Other at commercial banks............................... 17.5 3.4 24.2 32.9 31.0 32.9 44.0 21.9 38.9 23.2 26.8 39.0 42 At savings institutions........................................ 12.9 8.0 16.9 40.6 46.0 28.4 45.3 35.9 47.8 44.1 37.8 18.9 43 Money..................................................................... 14.5 7.7 10.5 13.0 16.5 12.0 17.9 8.1 14.5 18.7 10.3 13.6 43 44 Demand deposits............................................... 12.1 4.8 7.1 9.6 12.1 8.0 15.1 4.1 9.1 15.3 4.3 11.8 44 45 Currency............................................................ 2.4 2.8 3.5 3.4 4.4 3.9 2.8 3.9 5.5 3.4 6.0 1.8 45 46 Total of credit market instr., deposits, and currency, 68.7 50.5 64.2 90.0 117.7 126.9 87.1 93.0 111.7 123.8 125.7 127.2 46 47 Public support rate (in per cent)......................... 12.7 18.0 30.2 30.6 10.8 19.2 31.2 30.1 14.6 7.9 22.3 15.7 48 Private financial intermediation (in per cent)----- 86.4 67.9 102.8 113.7 103.3 97.2 130.3 100.7 106.6 100.9 110.7 83.9 49 Total foreign funds.............................................. 2.9 9.1 1.8 23.2 13.5 8.6 20.1 26.3 11.6 15.3 16.8 .5 Corporate equities not included above 1 Total net issues..................................... 5.1 9.5 9.5 14.7 12.0 5.7 13.0 16.3 12.4 11.5 5.4 6.0 2 Mutual fund shares......................... 5.8 4.8 2.6 1.2 -.6 -1.6 .3 2.1 -.8 -.4 -2.0 -1.1 3 Other equities.................................. -.7 4.7 6.9 13.5 12.6 7.3 12.7 14.2 13.3 12.0 7.4 7.1 4 Acquisitions by financial institutions 10.8 12.2 11.4 19.2 15.6 13.3 23.4 15.0 17.6 13.6 12.5 14.1 5 Other net purchases............................. -5.8 -2.7 -1.9 -4.6 -3.6 -7.6 -10.4 1.3 -5.1 -2.1 -7.0 -8.1 Notes 29. Demand deposits at commercial banks. Line 30. Excludes net investment of these reserves in corporate equities. 1. Line 2 of p. A-62. 31. Mainly retained earnings and net miscellaneous liabilities. 2. Sum of lines 3-6 or 7-10. 32. Line 12 less line 19 plus line 26. 6. Includes farm and commercial mortgages. 33—37. Lines 13-17 less amounts acquired by private finance. Line 37 11. Credit market funds raised by Federally sponsored credit agencies. includes mortgages. Included below in lines 13 and 33. Includes all GNMA-guaranteed 39+44. See line 25. security issues backed by mortgage pools. 45. Mainly an offset to line 9. 12. Line 1 less line 2 plus line 11. Also line 19 less line 26 plus line 32. 46. Lines 32 plus 38 or line 12 less line 27 plus line 45. Also sum of lines 27, 32, 39, and 44. 47. Line 2/line 1. 17. Includes farm and commercial mortgages. 48. Line 19/line 12. 25. Lines 39 + 44. 49. Lines 10 plus 28. 26. Excludes equity issues and investment company shares. Includes line 18. Corporate equities 28. Foreign deposits at commercial banks, bank borrowings from foreign Line 1 and 3. Includes issues by financial institutions. branches, and liabilities of foreign banking agencies to foreign af­ filiates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 60 U.S. BALANCE OF PAYMENTS □ AUGUST 1974 1. U.S. BALANCE OF PAYMENTS SUMMARY (In millions of dollars. Quarterly figures are seasonally adjusted unless shown in italics.) ] 1973 1974 Line Credits (+), debits (—) 1971 1972 1973 I II III IV Ip 1 Merchandise trade balance 1...................................................... -2,722 -6,986 623 -962 -360 602 1,343 101 2 Exports................................................................................. 42,754 48,768 70,252 15,228 16,670 18,143 20,211 22,299 3 Imports................................................................................. -45,476 -55,754 -69,629 -16,190 —17,030 -17,541 -18,868 -22,198 4 Military transactions, net........................................................... -2,908 -3,604 -2,201 -833 -763 -547 -58 -466 5 Travel and transportation, net.................................................. -2,341 -3,055 -2,710 -686 -781 -613 -630 -529 6 Investment income, net 2............................................................ 5,021 4,526 5,291 1,447 1,208 1,257 1,378 2,901 7 U.S. direct investments abroad 2...................................... 6,385 6,925 9.415 2,194 2,210 2,323 2,688 4,446 8 Other U.S. investments abroad.......................................... 3,444 3,494 4,569 1 ,000 1,098 1,179 1,292 1,495 9 Foreign investments in the United States 2..................... -4,809 -5,893 -8,693 - 1.747 -2,100 -2,245 -2,602 -3,040 10 Other services, net 2................................................................... 2,781 3,110 3,540 841 815 984 901 895 11; Balance on goods and services 3........................................................ -170 -6,009 4,543 / -193 119 1,683 2,934 2,902 1 487 233 -169 3,993 4,016 12 Remittances, pensions, and other transfers................................ -1,604 -1,624 -1,943 -404 -411 -412 -717 -396 13 -1,774 -7,634 2,600 J -597 -292 1,271 2,217 2,506 \ 109 -182 -597 3,270 3,646 14 U.S. Government grants (excluding military).......................... -2.043 -2,173 -1,933 -357 -645 -485 -447 42,534 15 Balance on current account................................................................. -3,817 -9,807 667 f -954 -937 786 1,770 4 -28 \ -266 -867 -1,045 2,845 1,094 16 U.S. Government capital flows excluding nonscheduled repayments, net 5.................................................................... -2.111 - 1,705 -2.938 -699 -565 -608 -1,066 4 1,296 17 Nonscheduled repayments of U.S. Government assets........... 227 137 289 111 174 4 * * 18 U.S. Government nonliquid liabilities to other than foreign official reserve agencies........................................................... -478 238 1,111 217 485 206 204 55 19 Long-term private capital flows, net......................................... -4,381 -98 127 319 -315 1,529 -1,406 742 20 U.S. direct investments abroad.......................................... -4,943 -3,517 -4,872 - 1,815 -973 -710 -1,374 -220 21 Foreign direct investments in the United States............... -115 383 2,537 351 588 886 712 1,127 22 Foreign securities................................................................ -966 -654 -807 51 -124 -209 -525 -647 23 U.S. securities other than Treasury issues......................... 2,289 4,507 4,051 1,718 489 1,173 670 696 24 Other, reported by U.S. banks.......................................... -862 -1,158 -581 -110 -239 227 -459 -52 25 Other, reported by U.S. nonbanking concerns................. 216 341 -200 124 -56 162 -430 -162 26 Balance on current account and long-term capital 5....................... -10,559 -11,235 -744 /-1,006 -1,158 1,917 -498 2,065 1-7,05/ -1,179 250 1,237 2,456 27 Nonliquid short-term private capital flows, net....................... -2,347 -1,541 -4,276 -1,663 -1,457 97 -1,253 -3,224 28 Claims reported by U.S. banks.......................................... -1,802 -1,457 -3,940 -1,644 -1,399 222 -1,119 -2,791 29 Claims reported by U.S. nonbanking concerns................ -530 -305 -1,240 -57 -59 -460 -664 -756 30 Liabilities reported by U.S. nonbanking concerns........... -15 221 904 38 1 335 530 323 31 Allocations of Special Drawing Rights (SDR’s)...................... 717 710 32 Errors and omissions, net.......................................................... -9,776 -1.790 -2,776 -4,085 904 -387 792 290 33 Net liquidity balance........................................................................... -21,965 -13,856 -7,796 / —6,754 -1,711 -1,627 -959 -869 \-6,l90 -2,038 611 -179 -48 34 Liquid private capital flows, net................................................ -7,788 3,502 2,492 -3,441 1,997 316 3,630 1,913 35 Liquid claims....................................................................... -1.097 -1,247 -1,944 - 1,853 923 -521 -493 -2,660 36 Reported by U.S. banks..............................................1 -566 -742 -1,103 -1,171 996 -456 -All -2,248 37 Reported by U.S. nonbanking concerns................... -531 -505 -841 -682 -73 -65 -21 -412 38 Liquid liabilities................................................................... -6.691 4,749 4,436 -1,588 1,074 837 4,113 4,573 39 To foreign commercial banks.................................... -6,908 3,716 2,978 - 1,673 723 699 3,229 4,589 40 To international and regional organizations............. 682 104 376 11 31 -50 384 -593 41 To other foreigners...................................................... -465 929 1,082 74 320 188 500 577 42 Official reserve transactions balance, financed by changes in:......... -29,753 -10,354 -5,304 /-10,195 286 1,943 2,661 1,044 1 -9,994 769 939 2,982 1,488 43 Liquid liabilities to foreign official agencies............................. 27,615 9,734 4,452 8,816 -729 -1,489 -2,145 -555 44 Other readily marketable liabilities to foreign official agen­ cies 6......................................................................................... -551 399 1,118 1,202 259 11 -354 -111 45 Nonliquid liabilities to foreign official reserve agencies re­ ported by U.S. Govt............................................................... 341 189 -475 -43 167 -452 -147 -2 46 U.S. official reserve assets, net.................................................. 2,348 32 209 220 17 -13 -15 -210 47 Gold..................................................................................... 866 547 48 SDR’s................................................................................... -249 -703 9 9 49 Convertible currencies........................................................ 381 35 233 233 -1 50 Gold tranche position in IMF........................................... 1,350 153 -33 -13 8 -13 -15 -209 Memoranda: 51 Transfers under military grant programs (excluded from lines 2, 4, and 14)................................................................... 3,204 4,189 2,772 693 833 758 487 391 52 Reinvested earnings of foreign incorporated affiliates of U.S. firms (excluded from lines 7 and 20)............................ 3.157 4,521 53 Reinvested earnings of U.S. incorporated affiliates of foreign firms (excluded from lines 9 and 21).................................... 498 548 Balances excluding allocations of SDR’s: 54 Net liquidity.........................................................................j —22,682 -14,566 -7,796 -6,190 -2,038 611 -179 -48 55 Official reserve transactions................................................ -30,470 -11,064 -5,304 -9,994 769 939 2,982 1,488 For notes see the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ FOREIGN TRADE; U.S. RESERVE ASSETS A 61 2. MERCHANDISE EXPORTS AND IMPORTS (Seasonally adjusted; in millions of dollars) Exports i Imports 2 Trade balance 1971 1972 1973 ' 1974 1971 1972 1973' 1974 1971 1972 1973' 1974 Month: Jan.... 3,601 4.074 4,955 7,111 3,599 4,436 5,244 6,467 2 -361 -289 644 Feb... 3,695 3,824 5,070 7,606 3,564 4,473 5,483 7,392 130 -649 -413 213 Mar... 3,790 3,869 5,311 7,674 3,628 4,515 5,414 7,845 160 -647 -103 -171 Apr... 3,631 3,820 5,494 8,234 3,774 4,417 5,360 8,141 -143 -596 + 133 93 May.. 3,746 3,882 5,561 7,630 3,908 4,486 5,703 8,407 -161 -604 -142 -777 June.. 3,672 3,971 5,728 8,357 4,037 4,468 5,775 8,613 -365 -497 -47 -256 July... 3,573 4.074 5,865 3,832 4,565 5,829 -259 -491 + 37 Aug... 3,667 4,197 6,042 3,913 4,726 6,011 -247 -530 + 32 Sept... 4,487 4,176 6.420 4,179 4,612 5,644 308 -436 + 776 Oct... 2,669 4,316 6^585 3,469 4,738 5,996 -800 -421 + 589 Nov... 3,196 4,473 6,879 3,456 5,148 6,684 -260 -675 + 195 Dec... 3,881 4,558 6,949 4,169 5,002 6,291 -288 -444 +658 Quarter: I 11,086 11,767 15,337 22,390 10,792 13,403 16,140 21,704 294 -1,657 -804 686 I I 11,049 11,673 16,783 24,220 11,719 13,370 16,838 25,161 -670 -1,697 -56 -940 III.... 11,727 12,447 18,327 11,924 13,903 17,483 -197 -1,456 + 845 IV.... 9,746 13,347 20,413 11,094 14,888 18,972 -1,348 -1,540 + 1,441 Year 3... 43,549 49,208 70,823 45,563 55,555 69,476 -2,014 -6,347 + 1.348 1 Exports of domestic and foreign merchandise; excludes Dept, of 3 Sum of unadjusted figures. Defense shipments of grant-aid military equipment and supplies under Mutual Security Program. Note.—Bureau of the Census data. Details may not add to totals be- 2 General imports including imports for immediate consumption plus cause of rounding, entries into bonded warehouses. 3. U.S. RESERVE ASSETS (In millions of dollars) E y n e d a r of Total To G ta o l2 ld st T o c re k a i sury v c fo e C u c r r r i o e t r e i i e n b s g n ­ l n e ­ p R o I e s M s i i n e ti F r o v n e SDR’s3 E m n o d n t o h f Total Tot G al o 2 ld s T to r c e k asury v c fo C e u c r r i r o e t e r i i e n s b g 4 n ­ l n e ­ p R o e I s M s i i e n ti r F o v n e SDR’s3 1960... 19,359 17,804 17,767 1,555 1973 1961... 18,753 16,947 16,889 116 1,690 July... 12,918 10,487 10,410 8 474 1,949 1962... 17,220 16,057 15,978 99 1,064 Aug---- 12,923 10,487 10,410 8 479 1,949 1963... 16,843 15,596 15,513 212 1,035 Sept---- 12,927 10,487 10,410 8 483 1,949 1964... 16,672 15,471 15,388 432 769 Oct.. . . 814,367 811,652 811,567 8 8 541 8 2,166 Nov.... 14,373 11,652 11,567 8 547 2,166 1965... 15,450 13,806 13,733 781 863 Dec.. . 14,378 11,652 11,567 8 552 2,166 1966... 14,882 13,235 13,159 1,321 326 1967... 14,830 12,065 11,982 2,345 420 1974 1968... 15,710 10,892 10,367 3,528 1 ,290 Jan.. . . 14,565 11,652 11,567 59 688 2,166 1969.. . 5 16,964 11,859 10,367 52,781 2,324 Feb.... 14,643 11,652 11,567 68 757 2,166 Mar__ 14,588 11,652 11,567 9 761 2,166 1970... 14,487 11,072 10,732 629 1,935 851 Apr.... 14,651 11,652 11,567 9 824 2,166 1971... 612,167 10,206 10,132 6 276 585 1,100 May... 14,870 11,652 11,567 66 989 2,163 19727. . 13,151 10,487 10,410 241 465 1,958 June. . . 14,946 11,652 11,567 94 1,005 2,195 19738 . . 14,378 11,652 11,567 8 552 2.166 July.... 9 14,912 11,652 11,567 12 9 1.021 9 2,227 1 Includes (a) gold sold to the United States by the IMF with the right total gold stock is $828 million (Treasury gold stock $822 million), reserve of repurchase, and (b) gold deposited by the IMF to mitigate the impact position in IMF $33 million, and SDR’s $155 million. on the U.S. gold stock of foreign purchases for the purpose of making 8 Total reserve assets include an increase of $1,436 million resulting gold subscriptions to the IMF under quota increases. For corresponding from change in par value of the U.S. dollar on Oct. 18, 1973; of which, liabilities, see Table 5. total gold stock is $1,165 million (Treas. gold stock $1,157 million) 2 Includes gold in Exchange Stabilization Fund. reserve position in IMF $54 million, and SDR’s $217 million. 3 Includes allocations by the IMF of Special Drawing Rights as follows: 9 Beginning July 1974, the IMF adopted a technique for valuing the $867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; and $710 SDR based on a weighted average of exchange rates for the currencies million on Jan. 1, 1972; plus net transactions in SDR’s. of 16 member countries. The U.S. SDR holdings and reserve position 4 For holdings of F.R. Banks only, see p. A-l 1. in the IMF are also valued on this basis beginning July 1974. At valua­ 5 Includes gain of $67 million resulting from revaluation of the German tion used prior to July 1974 (SDR 1 = $1.20635) SDR holdings at end mark in Oct. 1969, of which $13 million represents gain on mark holdings of July amounted to $2,233 million, reserve position in IMF $1,024 at time of revaluation. million, and total U.S. reserve assets $14,921 million. 6 Includes $28 million increase in dollar value of foreign currencies revalued to reflect market exchange rates as of Dec. 31, 1971. Note.—See Table 20 for gold held under earmark at F.R. Banks for 7 Total reserve assets include an increase of $1,016 million resulting foreign and international accounts. Gold under earmark is not included from change in par value of the U.S. dollar on May 8, 1972; of which, in the gold stock of the United States. NOTES TO TABLE 1 ON OPPOSITE PAGE: 1 Adjusted to balance of payments basis; excludes transfers under resenting the refinancing of economic assistance loans to India; a cor­ military grants, exports under U.S. military agency sales contracts, and responding reduction of credits is shown in line 16. imports of U.S. military agencies. 5 Includes some short-term U.S. Govt, assets. 2 Fees and royalities from U.S. direct investments abroad or from 6 Includes changes in long-term liabilities reported by banks in the foreign direct investments in the United States are excluded from invest­ United States and in investments by foreign official agencies in debt ment income and included in “Other services”. securities of U.S. Federally sponsored agencies and U.S. corporations. 3 Equal to net exports of goods and services in national income and Note.—Data are from U.S. Department of Commerce, Bureau of Eco­ product accounts of the United States. nomic Analysis. Details may not add to totals because of rounding. 4 Includes under U.S. Government grants $2 billion equivalent, rep­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 62 U.S. GOLD TRANSACTIONS □ AUGUST 1974 4. U.S. NET MONETARY GOLD TRANSACTIONS WITH FOREIGN COUNTRIES AND INTERNATIONAL ORGANIZATIONS (Net sales [—] or net acquisitions; in millions of dollars valued at $35 per fine ounce through Apr. 1972, at $38 from May 1972-Sept. 1973, and at $42.22 thereafter) 1973 1974 Area and country 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 II III IV I Western Europe: Austria............................... -82 -55 -100 -25 4 -40 -83 -58 -110 France................................. —518 -405 -884 -601 600 325 -129 -473 -225 500 Ireland................................ -1 -2 -2 -2 -52 41 2 200 -80 -60 -85 -209 -76 -60 -35 -19 -50 -25 -130 -32 -180 51 -81 -50 -2 -30 -50 -25 -50 -175 United Kingdom................ 329 618 150 80 -879 -835 200 1 -6 -35 -49 16 -47 11 -29 -13 Total........................... -399 -88 -1,299 -659 -980 -669 969 -204 -796 Canada ................................. 200 150 50 Latin American republics: Argentina ......................... -30 -39 -1 -25 -25 -28 Brazil.................................. 72 54 25 -3 -1 * -23 Colombia........................... 10 29 7 * -1 Venezuela........................... -25 Other................................... -11 -9 -13 -6 11 -40 -29 -80 -5 Total........................... 32 56 17 -41 9 -65 -54 -131 -5 Asia: Iraq..................................... -10 -4 -21 -42 Japan................................... -56 -119 Lebanon............................. -11 -11 -1 -95 -35 Malaysia............................. -34 -10 Philippines......................... 25 20 * -1 9 40 -4 -2 Saudi Arabia...................... -50 Singapore........................... -81 11 -30 Oth-e1r.3.............-..6..........-..1...4.... -14 -22 -75 -9 2-91 39 -3 Total........................... 12 3 -24 -86 -44 -366 42 -213 -38 -3 All other................................. -36 -7 -16 -22 3-166 3-68 -1 -81 -6 Total foreign countries.......... -392 -36 -1,322 -608 -1,031 -1,118 957 -631 -845 -3 Intl. Monetary Fund4........... 5-225 177 22 -3 10 -156 -22 -544 Grand total................ -392 -36 -1,547 -431 -1,009 -1,121 967 «-787 -867 -547 1 Includes purchase from Denmark of $25 million. repurchase; proceeds from these sales invested by IMF in U.S. Treasury 2 Includes purchase from Kuwait of $25 million. securities. IMF repurchased $400 million in Sept. 1970 and the remaining 3 Includes sales to Algeria of $150 million in 1967 and $50 million in $400 million in Feb. 1972. 1968. 5 Payment to the IMF of $259 million increase in U.S. gold subscription 4 Includes IMF gold sales to and purchases from the United States, less gold deposits by the IMF. U.S. payment of increases in its gold subscription to IMF, gold deposits 6 Includes the U.S. payment of $385 million increase in its gold sub­ by the IMF (see note 1 (b) to Table 3), and withdrawal of deposits. The scription to the IMF and gold sold by the IMF to the United States in first withdrawal ($17 million) was made in June 1968 and the last with­ mitigation of U.S. sales to other countries making gold payments to the drawal ($144 million) was made in Feb. 1972. IMF. The country data include U.S. gold sales to various countries in IMF sold to the United States a total of $800 million of gold ($200 connection with the IMF quota payments. Such U.S. sales to countries million in 1956, and $300 million in 1959 and in 1960) with the right of and resales to the United States by the IMF totaled $548 million each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ INTL. CAPITAL TRANSACTIONS OF THE U.S. A 63 5. U.S. LIQUID AND OTHER LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS, AND LIQUID LIABILITIES TO ALL OTHER FOREIGNERS (In millions of dollars) Liabilities to foreign countries Official institutions2 Liquid Liquid liabilities to Liquid liabili­ other foreigners liabili­ ties to Liquid ties to End IMF Nonmar­ Liquid non­ pe o ri f od Total a a c t f r r g t r i a i o s o o n i l m n d n s g ­ s 1 Total t l S i i t e a h e s b r o m i r r l e t i ­ ­ ­ M U a a b r .S k le . e t­ N v k o e e c n r t o t a m i n b b ­ l a l e e r­ n v k T o e e U r n r t e t a . c i S a b b o s . l l n . e e ­ m r O e a a a t b r d h k l i e e e l r y t ­ t m o l b i e a a t c i r b n e o c i k s i l m a i s ­ l ­ Total t l S i i t e a h e s b r o m i r r l t e i ­ ­ ­ M U a a b r .S l k e . e t­ a m g n t i o i a d o n n r n t y e r i a , e ­ l ­ po b rt y e d T bo re n a d s s . T U re .S as . . bo an n d ds li t a ie b s i l 5 i­ abroad 6 po b rt y e d T bo re n a d s s . z o a rg ti a o n n i s ­ 8 ba i n n k s no a t n e d s 3 bo an n d ds notes4 ba i n n k s no a te n s d 3 *7 U.S. notes U.S. 1962 24,268 800 12,914 11,963 751 200 5,346 3,013 2,565 448 2,195 1963 9........... \ f2 2 6 6 , , 4 3 3 9 3 4 8 8 0 0 0 0 1 1 4 4 , , 4 4 5 2 9 5 1 1 2 2 , , 4 4 6 6 7 7 1 1 , , 2 18 1 3 7 7 7 0 03 3 6 6 3 3 9 9 5 5 , , 8 8 1 17 7 3 3, ,3 39 8 7 7 3 3 , , 0 0 4 4 6 6 3 35 4 1 1 1 1 , , 9 96 6 5 0 1964 9........... / \ 2 2 9 9 , , 3 3 1 6 3 4 8 8 0 0 0 0 1 1 5 5 , , 7 7 8 9 6 0 1 1 3 3 , , 2 2 2 2 0 4 1 1 , , 1 1 2 2 5 5 1 1 , , 0 0 7 7 9 9 2 2 0 0 4 4 1 15 5 8 8 7 7 , , 2 3 7 0 1 3 3 3 , , 7 75 3 3 0 3 3, , 3 3 7 5 7 4 3 3 7 7 6 6 1 1. . 7 7 2 2 2 2 196 5 29,569 834 15,826 13,066 1,105 1,201 334 120 7,419 4,059 3,587 472 1,431 1966 9........... J \ 3 3 1 1, ,1 0 4 2 5 0 1 1 , , 0 0 1 1 1 1 1 1 4 4, , 8 8 4 9 1 6 1 1 2 2 , , 5 4 3 8 9 4 8 8 6 60 0 2 2 5 5 6 6 3 3 2 2 8 8 9 91 13 3 1 9 0 , , 9 1 3 1 6 6 4 4 , , 2 2 7 7 1 2 3 3 , , 7 7 4 4 3 4 5 5 2 2 8 8 9 90 0 5 6 /35,819 1.033 18,201 14,034 908 711 741 1,807 11,209 4,685 4,127 558 691 1967 9............ \35,667 1.033 18,194 14,027 908 711 741 1,807 11,085 4,678 4,120 558 677 1968 9............ J38,687 1.030 17,407 11,318 529 701 2,518 2,341 14,472 5,053 4,444 609 725 \38,473 1.030 17,340 11,318 462 701 2,518 2,341 14,472 4,909 4,444 465 722 1969 9........... o \ f 4 4 5 5 , , 9 7 1 55 4 1 1 . . 0 0 1 1 9 9 10 1 1 5 5 , , 9 9 9 7 8 5 1 1 1 1 , , 0 07 5 7 4 3 3 4 46 6 10 5 5 5 5 5 5 10 2 2 , , 5 5 1 1 5 5 1 1 , , 5 5 0 0 5 5 2 2 3 3 , , 6 6 3 4 8 5 4 4, , 5 4 8 6 9 4 4 3 , , 0 93 6 9 4 5 5 2 2 5 5 6 6 5 63 9 1970—Dec. 9. / \ 4 4 7 6 , , 0 9 0 6 9 0 5 5 6 66 6 2 2 3 3 , , 7 7 7 8 5 6 1 1 9 9 , , 3 3 3 3 3 3 2 3 9 0 5 6 4 4 2 29 9 3 3 , , 0 02 2 3 3 6 69 9 5 5 1 1 7 7 , , 1 1 6 3 9 7 4 4 , , 6 6 7 0 6 4 4 4, , 0 0 3 2 9 9 6 56 4 5 7 8 84 4 6 4 1971—Dec.11 \ / 6 6 7 7 , , 8 6 0 8 8 1 5 5 4 4 4 4 5 5 1 0 , ,6 2 5 0 1 9 3 3 9 9 , , 0 6 1 7 8 9 1 1 , ,9 9 5 5 5 5 6 6 , , 0 0 9 6 3 0 3 3 , , 3 4 7 4 1 1 1 1 4 4 4 4 1 1 0 0 , , 9 2 4 6 9 2 4 4, , 1 1 4 3 1 8 3 3, , 6 6 9 9 1 4 4 4 4 4 7 7 1 1 , , 5 5 2 2 8 3 1972—Dec.. . 82,888 61,526 40,000 5,236 12,108 3,639 543 14,665 5,070 4,645 425 1,627 1973—June. . 92,189 70,701 45,713 6,934 12,245 3,805 2,004 14,356 5,463 5,080 383 1,669 July... 93,218 71,028 46,138 6,934 12,245 3,705 2,006 15,310 5,362 4,988 374 1,518 Aug.. . 92.580 70,520 45,721 6,906 12,319 3,555 2,019 15,077 5,451 5,116 335 1,532 Sept.. . 92,073 69,777 45,174 6,914 12,319 3,355 2,015 15,026 5,651 5,304 347 1,619 Oct---- 93,175 69,702 45,212 6,929 12,319 3,233 2,009 15,953 5,699 5,325 374 1,821 Nov.. . 92.581 67,400 43,791 6,207 12,319 3,234 1,849 17,255 5,916 5,506 410 2,010 Dec.. . 92,608 66,810 43,919 5,701 12,319 3,210 1,661 17,643 6,152 5,722 430 2,003 1974—Ja___n 90,114 63,891 41,576 5,229 12,321 3,210 1,555 18,014 6,285 5,836 449 1,924 Feb__ 92,022 64,097 41,989 5,192 12,322 3,210 1,384 19,677 6,455 6,045 410 1,793 Mar... 95,718 65,527 43,412 5.192 12,329 3,210 1,384 22,022 6,751 6,351 400 1,418 Apr.. . 97,509 67,163 45.184 5,020 12.330 3,210 1,419 22,060 6,992 6,572 420 1,294 May^. 100,895 67,959 45,976 5.013 12.330 3,210 1,430 24,276 7,112 6,704 408 1,548 June.. 103.890 69.993 47,429 5,013 12,330 3,655 1.566 24,831 7,356 6,929 427 1,710 1 Includes (a) liability on gold deposited by the IMF to mitigate the shown for the preceding date; figures on second line are comparable with impact on the U.S. gold stock of foreign purchases for gold subscriptions those shown for the following date. to the IMF under quota increases, and (b) U.S. Treasury obligations at 10 Includes $101 million increase in dollar value of foreign currency cost value and funds awaiting investment obtained from proceeds of sales liabilities resulting from revaluation of the German mark in Oct. 1969 as of gold by the IMF to the United States to acquire income-earning assets. follows: liquid, $17 million, and other, $84 million. 2 Includes BIS and European Fund. 11 Data on the second line differ from those on first line because cer­ 3 Derived by applying reported transactions to benchmark data; tain accounts previously classified as “official institutions” are included breakdown of transactions by type of holder estimated 1962-63. with “banks”; a number of reporting banks are included in the series for 4 Excludes notes issued to foreign official nonreserve agencies. the first time; and U.S. Treasury securities payable in foreign currencies 5 Includes long-term liabilities reported by banks in the United States issued to official institutions of foreign countries have been increased in and debt securities of U.S. Federally-sponsored agencies and U.S. cor­ value to reflect market exchange rates as of Dec. 31, 1971. porations. 6 Includes short-term liabilities payable in dollars to commercial banks Note.—Based on Treasury Dept, data and on data reported to the abroad and short-term liabilities payable in foreign currencies to commer­ Treasury Dept, by banks and brokers in the United States. Data correspond cial banks abroad and to “other foreigners.” generally to statistics following in this section, except for the exclusion 7 Includes marketable U.S. Treasury bonds and notes held by commer­ of nonmarketable, nonconvertible U.S. Treasury notes issued to foreign cial banks abroad. official nonreserve agencies, the inclusion of investments by foreign 8 Principally the International Bank for Reconstruction and Develop­ official reserve agencies in debt securities of U.S. Federally-sponsored ment and the Inter-American and Asian Development Banks. agencies and U.S. corporations, and minor rounding differences. Table 9 Data on the two lines shown for this date differ because of changes excludes IMF “holdings of dollars,” and holdings of U.S. Treasury letters in reporting coverage. Figures on first line are comparable with those of credit and non-negotiable, non-interest-bearing special U.S. notes held by other international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 64 INTL. CAPITAL TRANSACTIONS OF THE U.S. o AUGUST 1974 6. U.S. LIQUID AND OTHER LIABILITIES TO OFFICIAL INSTITUTIONS OF FOREIGN COUNTRIES, BY AREA (Amounts outstanding; in millions of dollars) End of period c f o o T u r o n e t t i a r g i l n es E W u e ro st p e e r n t Canada A re m L pu a e b t r i i l n c ic a s n Asia Africa cou O n t t h r e ie r s 2 196 7 . 18,194 10,321 1,310 1,582 4,428 250 303 1968 3......... /17,407 8,070 1,867 1.865 5,043 259 303 \17,340 8,062 1,866 1.865 4,997 248 302 1969 3......... 4 15,975 4 7,074 1.624 1,888 4.552 546 291 4 15,998 4 7,074 1.624 1,911 4.552 546 291 1970 3........ /23,786 13,620 2.951 1,681 4,713 407 414 123,775 13,615 2.951 1,681 4,708 407 413 1971 5.......... /51,209 30,010 3.980 1,414 14,519 415 871 \50,651 30,134 3.980 1,429 13,823 415 870 197 2 61.526 34,197 4,279 1,733 17,577 777 2,963 1973—June. 70.701 46,967 4,111 1,999 13,734 992 2,898 July. . 71,028 47,140 4,043 2,075 13,692 928 3,150 Aug.. 70,520 47,260 3,836 2,015 13,637 738 3,034 Sept.. 69,777 47,099 3,759 1,861 13,289 769 3,000 Oct.. , 69.702 47,514 3,851 1,938 12,601 735 3,063 Nov.. 67,400 46,002 3,820 2,233 11,474 785 3,086 Dec.. 66,810 45,717 3,853 2,544 10,884 788 3,024 1974—Jan.. 63,891 43,290 3,945 2,446 10,479 838 2,893 Feb.. 64,097 42,389 4,262 2,743 10,878 1,000 2,825 Mar.. 65.527 42,771 4,195 2,887 11,631 1,249 2,794 Apr.. 67,163 42,648 4,309 3,532 12,360 1,402 2,912 MayP 67,959 42,761 4,302 3,384 12,988 1,620 2,904 JuneP 69,993 43,200 4,201 4,005 13,962 1,884 2,741 1 Includes Bank for International Settlements and European Fund. to official institutions of foreign countries have been increased in value by 2 Includes countries in Oceania and Eastern Europe, and Western Euro­ $110 million to reflect market exchange rates as of Dec. 31, 1971. pean dependencies in Latin America. 3 See note 9 to Table 5. Note.—Data represent short- and long-term liabilities to the official 4 Includes $101 million increase in dollar value of foreign currency institutions of foreign countries, as reported by banks in the United States; liabilities resulting from revaluation of the German mark in Oct. 1969. foreign official holdings of marketable and nonmarketable U.S. Treasury 5 Data on second line differ from those on the first line because certain securities with an original maturity of more than 1 year, except for non­ accounts previously classified as “Official institutions” are included in marketable notes issued to foreign official nonreserve agencies; and in­ “Banks”; a number of reporting banks are included in the series for vestments by foreign official reserve agencies in debt securities of U.S. the first time; and U.S. Treasury liabilities payable in foreign currencies Federally-sponsored agencies and U.S. corporations. SHORT-TERM LIABILITIES TO FOREIGNERS REPORTED BY BANKS IN THE UNITED STATES, BY TYPE (Amounts outstanding; in millions of dollars) To all foreigners To nonmonetary international and regional organizations6 Payable in dollars IMF Deposits Payable gold U.S. End of period Total l Total Dem D an e d pos T it i s me 2 b T i c r l U e l e s r a . t s S i a f u . i n r ­ d y s O l t i h e a t o r h b m r e . t 4 r ­ f r o e c n r i u e n c r i i g ­ e n s in m ve e s n t t ­ 5 Total Demand Time2 b T i c r l c e l e s a r a t t s i e a f u s i n r ­ d y O s l t i h e a t r o h b m r e . t r 4 ­ cates 3 1969............ 40,199 39,770 20,460 6,959 5,015 7,336 429 800 613 62 83 244 223 19707............ J41,719 41,351 15,785 5,924 14,123 5,519 368 400 820 69 159 211 381 141,761 41,393 15,795 5,961 14,123 5,514 368 400 820 69 159 211 381 /55,404 55,018 10,399 5,209 33,025 6,385 386 400 1,372 73 192 210 896 1971 ».......... 155,428 55,036 6,459 4,217 33,025 11,335 392 400 1,367 73 192 210 892 197 2 60,724 60,228 8,288 5,631 31,850 14,458 496 1,413 86 202 326 800 1973—June. 66,718 66,074 9,114 5,830 34,931 16,199 644 1,569 155 134 169 1,110 July.. 67,925 67,317 8,989 5,879 34,556 17,894 607 1,488 206 116 116 1,049 Aug.. 67,400 66,790 8,436 6,137 34,257 17,960 611 1,487 178 118 61 1,129 Sept.. 67,057 66,396 8,754 6,130 33,702 17,810 660 1,552 80 100 62 1,311 Oct... 68,258 67,681 9,108 6,772 32,869 18,932 577 1,768 70 93 173 1,431 Nov.. 68,514 67,892 9,849 6,884 31,977 19,182 622 1,962 73 97 373 1,420 Dec.. 69,239 68,642 11,399 6,995 31,886 18,363 597 1,955 101 86 296 1,471 1974—Jan... 67,281 66,641 10,822 7,030 29,543 12,246 640 1,855 95 94 286 1,380 Feb... 69,404 68,635 11,473 7,066 30,274 19,822 770 1,693 77 67 232 1,317 Mar.. 72,936 72,170 11,651 7,168 31,444 21,907 766 1,151 96 66 227 762 Apr.. 74,925 74,219 11,973 7,505 32,676 22,064 706 1,109 60 60 209 780 May^ 78,289 77,635 11,812 7,708 34,028 24,086 653 1,333 95 54 46 1,138 Junep 80,782 79,990 13,003 8,395 34,008 24,584 792 1,593 106 64 91 1,332 For notes see the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ INTL. CAPITAL TRANSACTIONS OF THE U.S. A 65 7. SHORTTERM LIABILITIES TO FOREIGNERS REPORTED BY BANKS IN THE UNITED STATES, BY TYPE— Continued (Amounts outstanding; in millions of dollars) Total to official, banks and other foreigners To official institutions9 Payable in dollars Payable in dollars Payable End of period Total Dema D nd eposi T ts ime2 T b c i r c l e U e l a r s a t . t s e S i a f u s . n i 3 r ­ d y s O l t h i e a t o r h b m r e . t 4 r ­ f r o e c n r i u e c n r i i g ­ e n s Total Dema D n e d posi T ts ime2 T bi c c r l U e e a ls a r t . t e s S i a s u f . n i r 3 ­ d y s O t l h e i t a o r h b m r e t . ­ 4 r c P u f r a o r y r e i a e n n b i c g l i e n es 1969....................... 38,786 20,397 6,876 3,971 7,113 429 11,077 1,930 2,942 3,844 2,159 202 J40,499 15,716 5,765 13,511 5,138 368 19,333 1,652 2,554 13,367 1,612 148 \40,541 15,726 5,802 13,511 5,133 368 19,333 1,652 2,554 13,367 1,612 148 /53,632 10,326 5,017 32,415 5,489 386 39,679 1,620 2,504 32,311 3,086 158 19718..................... 153,661 6,386 4,025 32,415 10,443 392 39,018 1,327 2,039 32,311 3,177 165 1972—Dec............. 59,310 8,203 5,429 31,523 13,659 496 40,000 1,591 2,880 31,453 3,905 171 1973—June............ 65,149 8,959 5,696 34,762 15,089 644 45,713 1,941 3,124 34,684 5,777 187 July............. 66,436 8,782 5,762 34,440 16,845 607 46,138 1,935 3,192 34,360 6,461 189 Aug............. 65,914 8,258 6,019 34,196 16,831 611 45,721 1,576 3,355 34,118 6,545 127 Sept............. 65,504 8,674 6,030 33,640 16,499 660 45,174 1,633 3,226 33,554 6,634 127 Oct.............. 66,490 9,038 6,678 32,696 17,501 577 45,212 1,811 3,846 32,613 6,814 127 Nov............. 66,552 9,776 6,787 31,604 17,763 622 43,791 2,035 3,802 31,529 6,298 127 Dec............. 67,284 11,297 6,909 31,590 16,892 597 43,919 2,125 3,911 31,511 6,245 127 1974—Jan.............. 65,426 10,728 6,936 29,257 17,865 640 41,576 2,379 3,705 29,152 6,212 127 Feb............. 67,711 11,396 6,999 30,042 18,505 770 41,989 2,407 3,703 29,917 5,834 127 Mar............. 71,785 11,554 7,103 31,217 21,145 766 43,412 2,631 3,800 31,064 5,790 127 Apr............. 73,816 11,913 7,445 32,467 21,284 706 45,184 2,920 3,949 32,312 5,877 127 MayP.......... 76,956 11,717 7,655 33,982 22,948 653 45,976 2,352 3,970 33,786 5,741 127 June?.......... 79,189 12,897 8,332 33,917 23.252 792 47,429 2,642 4,277 33,745 6,638 127 To banks10 To other foreigners To banks Payable in dollars and other foreigners: End of period Total Payable in Total Dema D nd eposi T ts ime2 T b c i r c l e e U l a s r a . t t s S e i a u f s . n i r ­ d y s O l t h i e a t o r h b m r e . t 4 r ­ Total Dema D nd eposi T ts ime2 T b c i r l c U e e l a s r a . t t s S i e a f u s . n i r ­ d y s O l t i h e a t o r h b m r e . t 4 r ­ f r o e c r n u e c r i i g ­ e n s 1969....................... 27,709 23,419 16,756 1,999 20 4,644 '4,064 1,711 1,935 107 312 226 n _ _ (21,166 16,917 12,376 1,326 14 3,202 4,029 1,688 1,886 131 325 220 \21,208 16,949 12,385 1,354 14 3,197 4,039 1,688 1,895 131 325 220 (13,953 10,034 7,047 850 8 2,130 3,691 1,660 1,663 96 274 228 19718..................... 114,643 10,721 3,399 320 8 6,995 3,694 1,660 1,666 96 271 228 1972—Dec............. 19,310 14,340 4,658 405 5 9,272 4,645 1,954 2,145 65 481 325 1973—June............ 19,437 13,899 5,053 258 8 8,579 5,081 1,965 2,314 70 732 457 July............. 20,299 14,892 4,957 321 8 9,607 4,989 1,890 2,250 72 776 418 Aug............. 20,192 14,594 4,806 353 10 9,425 5,115 1,876 2,311 68 861 483 Sept............. 20,330 14,493 5,070 430 8 8,984 5,305 1,972 2,374 77 881 533 Oct.............. 21,278 15,504 5,250 473 7 9,774 5,325 1,977 2,359 76 912 449 Nov............. 22,762 16,761 5,734 469 8 10,550 5,506 2,007 2,517 67 915 495 Dec............. 23,364 17,174 6,941 512 11 9,710 5,721 2,232 2,486 68 936 469 1974—Jan.............. 23,850 17,501 6,329 511 14 10,648 5,835 2,020 2,719 91 1,005 513 Feb.............. 25,722 19,035 6,857 521 32 11,625 6,044 2,131 2,775 93 1,045 642 Mar............. 28,373 21,384 6,572 506 54 14,251 6,350 2,351 2,797 98 1,104 639 Apr............. 28,632 21,481 6,601 683 63 14,133 6,572 2,392 2,813 92 1,274 579 May?.......... 30,980 23,750 7,054 774 73 15,849 6,704 2,312 2,911 124 1,358 526 JuneP.......... 31,760 24,166 7,839 1,002 66 15,259 6,929 2,415 3,052 106 1,355 665 1 Data exclude “holdings of dollars” of the IMF. 8 Data on second line differ from those on first line because (a) those 2 Excludes negotiable time certificates of deposit, which are included liabilities of U.S. banks to their foreign branches and those liabilities of in “Other.” U.S. agencies and branches of foreign banks to their head offices and 3 Includes nonmarketable certificates of indebtedness issued to official foreign branches, which were previously reported as deposits, are included institutions of foreign countries. in “Other short-term liabilities”; (b) certain accounts previously classified 4 Principally bankers’ acceptances, commercial paper, and negotiable as “Official institutions” are included in “Banks”; and (c) a number of time certificates of deposit. See also note 8(a). reporting banks are included in the series for the first time. 5 U.S. Treasury bills and certificates obtained from proceeds of sales of 9 Foreign central banks and foreign central govts, and their agencies, gold by the IMF to the United States to acquire income-earning assets. and Bank for International Settlements and European Fund. Upon termination of investment, the same quantity of gold was reac- io Excludes central banks, which are included in “Official institutions.” quired by the IMF. 6 Principally the International Bank for Reconstruction and Develop- Note.—“Short term” refers to obligations payable on demand or having ment and the Inter-American Development Bank. an original maturity of 1 year or less. For data on long-term liabilities Includes difference between cost value and face value of securities in reported by banks, see Table 9. Data exclude the “holdings of dollars” IMF gold investment account. of the International Monetary Fund; these obligations to the IMF consti- 7 Data on the two lines shown for this date differ because of changes in tute contingent liabilities, since they represent essentially the amount of reporting coverage. Figures on the first line are comparable in coverage dollars available for drawings from the IMF by other member countries, with those shown for the preceding date; figures on the second line are Data exclude also U.S. Treasury letters of credit and non-negotiable, non­ comparable with those shown for the following date. interest-bearing special U.S. notes held by the Inter-American Develop­ ment Bank and the International Development Association. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 66 INTL. CAPITAL TRANSACTIONS OF THE U.S. □ AUGUST 1974 8. SHORT-TERM LIABILITIES TO FOREIGNERS REPORTED BY BANKS IN THE UNITED STATES, BY COUNTRY (End of period. Amounts outstanding; in millions of dollars) 1972 1973 1974 Area and country Dec. Sept. Oct. Nov* Dec. Jan. Feb. Mar. Apr. Mayp JuneP Europe: Austria...................................................... 272 292 204 166 161 210 279 327 248 298 310 Belgium-Luxembourg.............................. 1,094 1.378 1,411 1,463 1,483 1,593 1,662 1,572 1,795 1,739 1,827 Denmark.................................................. 284 409 470 527 659 527 456 380 358 261 266 Finland...................................................... 163 145 135 136 165 178 160 169 140 143 174 France....................................................... 4,441 5,296 4,143 3,415 3,483 3,241 2,967 2,852 2,767 3,018 3,425 Germany................................................... 5,346 13,236 14,180 14,227 13,227 12,307 12,357 12,275 13,035 13,777 13,528 Greece....................................................... 238 215 280 236 389 262 238 343 285 239 232 Italy.......................................................... 1,338 1,140 1,095 1,224 1,404 1,195 1,119 2,243 1,386 1,435 1,281 Netherlands.............................................. 1,468 2,022 2,534 2,866 2,886 2,522 2,502 2,547 2,507 2,407 2,352 978 1,024 999 980 965 961 962 993 923 923 911 Portugal.................................................... 416 459 467 470 534 482 486 450 450 452 411 Spain......................................................... 256 259 284 319 305 264 304 267 289 499 471 Sweden...................................................... 1,184 1,835 1,787 1,807 1,885 1,975 1,973 1,733 1,475 1,350 1,211 2,857 3,309 3,316 3,091 3,377 3,281 3,513 3,792 4,228 5,138 6,354 Turkey...................................................... 97 72 83 75 98 221 146 96 92 95 125 United Kingdom..................................... 5,011 5,593 6,416 6,473 6,148 6,440 6,186 7,392 7,697 8,772 8,533 Yugoslavia................................................ 117 58 61 76 86 77 94 78 82 86 100 Other Western Europe1.......................... 1,483 3,099 3,426 2,926 3,352 3,125 3,007 2,946 3,003 2,444 2,701 U.S.S.R..................................................... 11 16 40 20 22 26 20 29 52 28 27 Other Eastern Europe............................. 81 114 96 101 110 92 96 122 95 104 125 Total.................................................. 27,136 39,971 41,426 40,598 40,742 38,982 38,525 40,605 40,905 43,210 44,364 3,467 3,721 3,812 3,967 3,862 4,158 4,432 3,841 4,553 4,164 3,701 Latin America: Argentina.................................................. 631 889 781 766 914 847 895 1,001 1,058 1,180 1,365 Bahamas 2................................................ 540 592 456 806 824 593 1,011 2,016 1,335 1,826 1,348 605 700 745 816 860 819 961 837 774 731 782 Chile.......................................................... 137 127 137 142 157 178 174 185 224 191 238 Colombia.................................................. 210 167 207 221 247 219 238 238 227 227 217 Cuba.......................................................... 6 7 7 6 7 7 8 7 6 6 6 Mexico...................................................... 831 1,044 1,029 1,132 1,284 1,323 1,343 1,369 1,374 1,416 1,410 Panama.................................................... 167 204 231 282 279 281 326 401 408 522 552 Peru........................................................... 225 178 152 124 135 144 154 159 160 162 166 Uruguay.................................................... 140 114 115 112 120 120 115 121 121 132 121 1,078 941 1,130 1,420 1,468 1,460 1,636 1,736 2,297 2,248 2,708 Other Latin American republics............. 860 791 742 769 880 947 1,026 1,100 1,144 1,053 1,073 Netherlands Antilles and Surinam......... 86 65 70 63 71 69 61 69 63 95 124 Other Latin America............................... 44 463 532 556 361 470 792 659 566 432 450 Total.................................................. 5,560 6,283 6,334 7,215 7,608 7,477 8,741 9,896 9,757 10,221 10,561 Asia: China, People’s Rep. of (China Mainland 39 40 37 40 38 38 39 38 39 39 33 China, Republic of (Taiwan)................... 675 802 779 764 757 735 715 641 573 620 688 Hong Kong............................................... 318 349 363 383 372 389 416 452 453 512 462 India.......................................................... 98 99 105 71 85 152 183 133 177 264 225 Indonesia.................................................. 108 254 169 160 133 186 175 240 305 220 257 Israel......................................................... 177 173 279 330 327 337 311 302 275 267 256 Japan........................................................ 15,843 7,680 7,061 6,726 6,954 6,417 7,440 8,307 8,668 9,060 9,419 Korea........................................................ 192 213 198 210 195 222 204 180 253 234 262 Philippines................................................ 438 482 479 497 515 570 604 595 642 731 772 Thailand.................................................... 171 143 163 180 247 336 471 607 536 517 524 Other........................................................ 1,071 1,165 1,139 1,138 1,202 1,306 1,196 1,445 1,942 1,883 2,542 Total.................................................. 19,131 11,401 10,771 10,500 10,826 10,690 11,752 12,940 13,861 14,347 15,440 Africa: Egypt......................................................... 24 34 34 63 35 72 72 52 68 71 84 Morocco................................................... 12 11 10 14 11 11 12 17 15 20 39 South Africa............................................. 115 132 103 109 114 97 119 148 83 122 102 Zaire.......................................................... 21 19 26 24 87 42 30 42 43 52 58 Other......................................................... 768 765 747 824 808 837 1,044 1,335 1,500 1,703 1,941 Total.................................................. 939 961 919 1,034 1,056 1,059 1,277 1,593 1,709 1,968 2,223 Other countries: Australia................................................... 3,027 3,106 3,169 3,183 3,131 2,986 2,917 2,849 2,979 2,980 2,831 All other.................................................... 51 62 59 55 59 74 66 60 52 68 69 Total.................................................. 3,077 3,168 3,228 3,238 3,190 3,059 2,984 2,909 3,031 3,047 2,900 Total foreign countries............................... 59,310 65,504 66,490 66,552 67,284 65,426 67,711 71,785 73,816 76,956 79,189 International and regional: International3........................................... 951 1,183 1,403 1,610 1,628 1,537 1,404 863 840 1,038 1,250 Latin American regional......................... 307 298 299 290 271 256 228 226 217 226 222 Other regional4........................................ 156 70 66 62 57 64 61 62 51 69 122 Total.................................................. 1,413 1,552 1,768 1,962 1,955 1,855 1,693 1,151 1,109 1,333 1,593 Grand total....................................... 60,724 67,057 68,258 68,514 69,239 67,281 69,404 72,936 74,925 78,289 80,782 For notes see the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ INTL. CAPITAL TRANSACTIONS OF THE U.S. A 67 8. SHORT TERM LIABILITIES TO FOREIGNERS REPORTED BY BANKS IN THE UNITED STATES, BY COUNTRY— Continued (End of period. Amounts outstanding; in millions of dollars) Supplementary data 5 1972 1973 1974 1972 1973 1974 Area and country Area and country Apr. Dec. Apr. Dec. Apr. Apr. Dec Apr. Dec. Apr. Other Western Europe: Other Asia—Cont.: Cyprus.......................................... 2 3 9 19 10 Kuwait.......................................... 16 39 36 28 Iceland.......................................... 9 9 12 II Laos.............................................. 3 2 3 3 Ireland, Rep. of.......................... 15 17 22 53 Lebanon....................................... 60 55 55 62 68 Malaysia....................................... 25 54 59 58 40 Other Latin American republics: Pakistan........................................ 58 59 93 105 108 Bolivia.......................................... 53 87 65 68 102 Ryukyu Islands (incl. Okinawa)« 53 Costa Rica................................... 70 92 75 86 88 Saudi Arabia................................ 80 344 236 334 303 Dominican Republic................ 91 114 104 118 137 Singapore..................................... 45 77 53 141 165 Ecuador...................................... 62 121 109 92 90 Sri Lanka (Ceylon)..................... 6 5 6 13 13 El Salvador................................. 83 76 86 90 129 Syria.............................................. 6 4 39 5 40 Guatemala.................................. 123 132 127 156 245 Vietnam........................................ 185 135 98 98 Haiti............................................. 23 27 25 21 28 Honduras..................................... 50 58 64 56 71 Jamaica........................................ 32 41 32 39 52 Other Africa: Nicaragua.................................... 66 61 79 99 119 Algeria.......................................... 31 32 51 111 110 Paraguay...................................... 17 22 26 29 40 Ethiopia (incl. Eritrea)................ 29 57 75 79 118 Trinidad & Tobago................... 15 20 17 17 21 Ghana.......................................... 11 10 28 20 22 Kenya........................................... 14 23 19 23 20 Other Latin America: Liberia.......................................... 25 30 31 42 29 Bermuda...................................... (2) (2) 127 242 201 Libya............................................ 296 393 312 331 British West Indies.................... 23 36 100 109 Nigeria......................................... 56 85 140 78 Southern Rhodesia...................... 2 2 1 2 1 Other Asia: Sudan............................................ 5 3 3 3 2 Afghanistan................................. 17 25 19 II Tanzania....................................... 6 11 16 12 12 Bahrain........................................ 18 24 23 24 II Tunisia.......................................... 7 10 11 7 17 Burma.......................................... 5 2 17 12 Uganda........................................ 10 7 19 6 11 Cambodia.................................... 2 3 3 4 Zambia......................................... 7 28 37 22 Iran............................................... 88 93 114 124 243 Iraq............................................... 9 10 26 101 All other: Jordan.......................................... 2 4 4 6 New Zealand............................... 27 30 34 39 33 1 Includes Bank for International Settlements and European Fund. 4 Asian, African, and European regional organizations, except BIS and 2 Bermuda included with Bahamas through Dec. 1972. European Fund, which are included in “Europe.” 3 Data exclude “holdings of dollars” of the International Monetary 5 Represent a partial breakdown of the amounts shown in the “other” Fund. categories (except “Other Eastern Europe”). 6 Included in Japan after Apr. 1972. 9. LONGTERM LIABILITIES TO FOREIGNERS REPORTED BY BANKS IN THE UNITED STATES (Amounts outstanding; in millions of dollars) To foreign countries Country or area To inti. End of period Total and Official Other Ger­ United Other Total Other All regional Total institu­ Banks1 foreign­ many King­ Europe Latin Japan Asia other tions ers dom America coun­ tries 1970.............................. 1,703 789 914 695 165 53 110 42 26 152 385 137 62 1971.............................. 902 446 457 144 257 56 164 52 30 111 3 87 9 1972—Dec. 2................ (1,000 562 439 93 259 87 165 63 32 136 1 32 10 \1,018 580 439 93 259 87 165 63 32 136 1 32 10 1973—June.................. 1,467 769 697 311 274 113 164 68 233 125 2 94 10 July................... 1,525 768 757 311 305 141 164 68 265 145 2 93 19 Aug.. ............... 1,530 775 755 322 305 127 165 68 265 143 2 95 17 Sept................... 1,502 758 744 318 302 123 165 68 263 145 2 84 18 Oct.................... 1,473 735 738 312 305 122 165 68 265 140 2 81 18 Nov................... 1,469 753 717 313 287 117 165 67 246 138 2 80 19 Dec.................... 1,487 761 726 310 296 121 165 66 245 151 5 78 18 1974—Jan..................... 1,497 801 696 310 275 111 165 65 236 139 2 78 11 Feb.................... 1,500 888 612 259 267 86 165 58 231 109 2 35 13 Mar................... 1,558 951 607 259 261 87 165 45 232 111 2 39 13 Apr.................... 1,671 1,025 646 294 263 89 165 56 227 133 2 50 13 Mayp................. 1,638 1,005 633 296 263 74 165 56 220 125 2 52 13 JuneP................ 1,675 974 700 321 307 73 165 78 220 146 2 77 12 1 Excludes central banks, which are included with “Official institutions.” 2 Data on the two lines shown for this date differ because of changes in reporting coverage. Figures on the first line are comparable in coverage with those shown for the preceding date; figures on the second line are comparable with those shown for the following date. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 68 INTL. CAPITAL TRANSACTIONS OF THE U.S. d AUGUST 1974 10. ESTIMATED FOREIGN HOLDINGS OF MARKETABLE U.S. TREASURY BONDS AND NOTES (End of period; in millions of dollars) 1973 1974 June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. MayP June* Europe: Belgium-Luxembourg..................... 6 6 6 7 7 7 7 7 7 7 7 7 7 Sweden............................................ 135 135 135 165 165 165 235 235 260 260 260 260 260 Switzerland...................................... 43 42 37 37 37 38 34 33 32 34 33 35 34 United Kingdom............................. 280 275 236 247 290 400 423 437 450 439 460 470 488 Other Western Europe................... 85 85 85 85 85 85 86 91 91 90 89 88 91 Eastern Europe............................... 5 5 5 5 5 5 5 5 5 5 5 5 5 Total........................................ 554 547 504 546 588 700 789 808 845 835 854 865 883 560 560 560 560 560 567 582 597 832 847 848 849 849 Latin America: Latin American republics............... 1 4 8 9 9 11 11 11 11 11 11 11 11 Other Latin America...................... 6 3 3 3 3 3 3 3 3 3 3 5 5 Total........................................ 7 7 11 12 12 14 14 14 14 14 14 16 16 Asia: Japan................................................ 5,977 5,977 5,949 5,950 5,950 5,143 4,552 4,066 3,718 3,703 3,531 3,499 3,498 Other Asia...................................... 10 9 9 11 11 11 11 11 11 11 11 12 12 Total........................................ 5,988 5,987 5,959 5,961 5,961 5,154 4,563 4,077 3,729 3,714 3,542 3,510 3,510 Africa.................................................. 183 183 183 158 158 158 158 158 157 157 157 157 157 25 25 25 25 25 25 25 25 25 25 25 25 25 Total foreign countries....................... 7,317 7,308 7,241 7,261 7,303 6,617 6,131 5,678 5,602 5,592 5,440 5,421 5,440 International and regional: International................................... 72 1 1 21 6 1 1 20 51 217 141 174 57 Latin American regional................ 27 28 45 45 47 47 48 49 49 49 44 41 60 Total........................................ 100 29 46 66 53 48 49 69 100 267 185 214 117 Grand total............................. 7,417 j 7,337 7,287 7,327 7,356 6,665 6,179 5,747 5,702 5,859 5,625 5,636 5,557 Note.—Data represent estimated official and private holdings of mar- year, and are based on benchmark surveys of holdings and regular monthly ketable U.S. Treasury securities with an original maturity of more than 1 reports of securities transactions (see Table 14). 11. SHORT-TERM CLAIMS ON FOREIGNERS REPORTED BY BANKS IN THE UNITED STATES, BY TYPE (Amounts outstanding; in millions of dollars) Payable in dollars Payable in foreign currencies End of period Total Total Total O in t f i s f o L t i i n c t o i s u a a ­ l ns t B o a — nks1 Others C s t t o o i i a o n l u n l n g e t d ­ s c ­ ­ f A e o o a m i c r f g n c a a n f c e d o c e e p e c r r s t s ­ t ­ . Other Total w D e i i e t g h p n o e f s r o i s t r s ­ g c F a o u n c p o n o v r a a r d i n m t e p t , i i c e e f g l s e i r . s e ­ n , ­ Other 1970............................. 10,802 10,192 3,051 119 1,720 1,212 2,389 3,985 766 610 352 92 166 1071 2 J 1 1 1 3 3 , , 1 2 7 7 0 2 1 1 2 2 , , 3 3 7 2 7 8 4 3 , , 5 9 0 6 3 9 2 23 2 1 3 2 2, ,0 61 8 3 0 1 1 , , 6 6 5 6 8 7 2 2 , , 4 4 7 7 5 5 4 4 , , 2 2 4 5 3 4 1 1 , , 6 1 7 0 9 7 8 8 9 4 5 2 5 5 4 4 8 9 1 1 7 1 3 9 1 1 7 7 4 4 1Q77 3 / \ 1 1 5 5 , , 4 6 7 7 1 6 1 1 4 4 , , 6 8 2 3 5 0 5 5 , , 6 6 7 7 1 4 1 16 6 3 3 2 2, ,9 97 7 5 0 2 2, ,5 53 3 5 8 3 3 , , 2 26 7 9 6 3 3 , , 2 2 2 0 6 4 2 2 , , 6 4 5 7 7 8 8 84 46 6 4 4 4 4 1 1 2 2 2 23 3 1 1 8 82 2 1973—June.................. 18,825 17,987 7,318 205 4,070 3,043 3,881 3,984 2,804 839 552 140 147 July................... 19,012 18,149 7,024 162 3,926 2,936 3,871 3,922 3,332 863 561 151 151 Aug................... 18,978 18,091 6,973 176 4,029 2,768 3,948 3,716 3,454 887 488 151 248 Sept................... 18,725 17,948 6,809 160 3,918 2,731 4,070 3,718 3,351 777 459 143 175 Oct.................... 19,298 18,438 6,983 216 3,989 2,778 4,099 3,774 3,582 861 510 187 163 Nov................... 19,588 18,797 7,070 252 4,084 2,733 4,287 3,788 3,652 790 512 131 148 Dec.................... 20,719 20,057 7,718 271 4,589 2,859 4,306 4,155 3,877 662 428 119 115 1974—Jan..................... 21,081 20,279 7,413 303 4,429 2,680 4,386 4,107 4,373 802 467 162 173 Feb.................... 22,968 22,124 7,949 303 4,992 2,654 4,426 4,554 5,195 844 594 121 129 Mar................... 25,654 24,805 9,080 421 5,807 2,852 4,641 5,125 5,958 849 545 160 144 Apr................... 26,564 25,707 9,578 346 6,152 3,079 4,805 5,810 5,515 857 589 99 169 May.................. 29,624 28,741 9,963 363 6,386 3,213 5,080 6,486 6,956 884 611 113 160 June.................. 32,049 31,092 11,509 386 7,771 3,352 5,049 7,491 7,044 957 687 130 141 1 Excludes central banks, which are included with “Official institutions.” “Other short-term claims”; and (b) a number of reporting banks are included 2 Data on second line differ from those on first line because (a) those in the series for the first time. claims of U.S. banks on their foreign branches and those claims of U.S. 3 Data on the two lines shown for this date differ because of changes agencies and branches of foreign banks on their head offices and foreign in reporting coverage. Figures on the first line are comparable in cover­ branches, which were previously reported as “Loans”, are included in age with those shown for the preceding date; figures on the second line are comparable with those shown for the following date. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ INTL. CAPITAL TRANSACTIONS OF THE U.S. A 69 12. SHORT-TERM CLAIMS ON FOREIGNERS REPORTED BY BANKS IN THE UNITED STATES, BY COUNTRY (End of period. Amounts outstanding; in millions of dollars) 1972 1973 1974 Area and country Dec. Sept. Oct. Jan. Feb. Mar. Apr. MayP June^ Europe: Austria....................................................... 14 15 14 11 14 36 20 40 32 104 Belgium-Luxembourg. ........................... 120 190 150 145 148 134 143 216 188 155 231 Denmark................................................... 59 52 50 53 48 50 60 76 57 67 63 Finland...................................................... 118 114 97 89 108 106 93 97 115 124 131 France....................................................... 330 413 461 525 621 649 682 743 721 624 727 Germany................................................... 321 313 366 392 311 342 382 395 355 441 421 Greece....................................................... 29 16 26 23 35 41 36 37 47 48 49 Italy........................................................... 255 242 282 363 316 313 330 482 507 512 572 Netherlands.............................................. 108 144 132 172 133 139 147 174 169 202 212 Norway..................................................... 69 67 74 82 72 85 91 76 91 96 90 Portugal.................................................... 19 18 23 22 23 25 25 37 29 33 32 Spain.......................................................... 207 183 183 189 222 208 180 284 318 322 404 Sweden...................................................... 164 166 155 177 153 135 106 121 132 95 117 Switzerland............................................... 125 234 242 203 176 240 338 270 327 417 663 Turkey....................................................... 6 6 8 16 10 11 9 16 18 8 10 United Kingdom..................................... 997 1,304 1,236 1,210 1,456 1,490 1.621 2,009 1,627 2,179 2,341 Yugoslavia......................................... 22 10 8 19 10 9 15 12 13 25 20 Other Western Europe............................. 20 26 34 26 27 19 20 22 28 55 26 U.S.S.R..................................................... 41 46 49 51 46 29 36 33 30 38 47 Other Eastern Europe............................. 49 97 87 72 59 64 65 70 65 95 84 Total.................................................. 3,067 3,654 3,678 3,843 3,985 4,104 4,416 5,190 4,875 5,568 6,343 Canada.......................................................... 1,914 1,909 2,210 1,979 1,960 1,880 2,037 2,243 2,191 2,363 2,195 Latin America: Argentina.................................................. 379 455 469 485 498 521 539 679 686 641 669 Bahamas 1............................................... 519 623 702 612 873 577 1,041 1,287 1,126 1,944 1,890 Brazil......................................................... 649 879 837 826 900 953 958 1,114 1,180 1,315 1,473 Chile.......................................................... 52 40 80 125 151 136 155 180 193 165 182 Colombia.......................................*......... 418 423 423 413 397 425 428 459 467 473 515 Cuba.......................................................... 13 13 15 13 12 11 11 13 13 13 13 Mexico...................................................... ,202 1,309 1,368 1.337 1,370 1,344 1,418 1,426 1,627 1,652 1,718 Panama..................................................... 244 252 273 263 266 294 297 345 390 406 386 Peru........................................................... 145 178 208 204 178 186 184 194 224 264 280 Uruguay.................................................... 40 39 45 47 55 58 51 44 38 38 40 Venezuela.................................................. 383 430 436 469 517 482 510 586 627 557 605 Other Latin American republics............. 388 409 431 465 490 542 546 600 617 618 663 Netherlands Antilles and Surinam......... 14 31 23 17 13 17 19 29 20 27 41 Other Latin America........................... 36 91 137 124 140 356 461 268 281 191 296 Total.................................................. 4,480 5,171 5,448 5,401 5,861 5,904 6,619 7,224 7,489 8,303 8,770 Asia: China, People’s Rep. of (China Mainland) 1 7 22 36 31 24 19 27 19 18 23 China, Republic of (Taiwan).................. 194 141 128 117 140 119 147 183 231 315 348 Hong Kong............................................... 93 130 121 124 147 169 189 170 179 166 207 India.......................................................... 14 19 14 16 16 16 15 19 18 25 18 Indonesia.................................................. 87 81 89 96 88 105 107 97 71 105 115 Israel.......................................................... 105 145 145 155 166 153 140 165 140 135 158 Japan........................................................ 4,152 5,801 5,746 6,034 6,400 6,466 6,960 7,857 8,607 9,715 10,798 Korea........................................................ 296 348 372 369 403 432 477 498 555 632 593 Philippines.........................»..................... 149 121 105 118 181 189 182 197 228 258 297 Thailand.................................................... 191 179 206 225 273 322 364 405 434 389 414 Other......................................................... 300 361 349 377 394 466 560 521 671 661 714 Total.................................................. 5,584 7,331 7,297 7,666 8,238 8,463 9,159 10,138 11,153 12,416 13,684 Africa: Egypt......................................................... 21 43 38 40 35 42 40 42 44 54 58 Morocco.................................................... 4 11 4 7 5 4 4 21 9 4 5 South Africa............................................. 143 157 150 147 129 133 134 131 153 206 202 Zaire.......................................................... 13 48 51 61 60 56 67 61 79 72 91 Other......................................................... 118 146 163 155 159 178 175 210 192 218 266 Total.................................................. 299 405 406 410 413 420 477 554 621 Other countries: Australia................................................... 291 218 223 251 243 279 268 328 318 353 378 All other.................................................... 40 36 36 36 43 37 49 64 59 66 57 Total.................................................. 330 254 259 287 286 316 317 392 377 420 435 Total foreign countries................................ 15,674 18.724 19.297 19.587 20.718 21,080 22.967 25.653 26.563 29.623 32.049 International and regional........................... 3 1 1 1 1 I 1 1 1 1 1 Grand total....................................... 15,676 18.725 19.298 19.588 20.719 21,081 22.968 25.654 26.564 29.624 32.050 1 Includes Bermuda through Dec. 1972. their own account or for account of their customers in the United States; Note.—Short-term claims are principally the following items payable and foreign currency balances held abroad by banks and bankers and on demand or with a contractual maturity of not more than 1 year: loans their customers in the United States. Excludes foreign currencies held made to, and acceptances made for, foreigners; drafts drawn against by U.S. monetary authorities. foreigners, where collection is being made by banks and bankers for Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 70 INTL. CAPITAL TRANSACTIONS OF THE U.S. □ AUGUST 1974 13. LONG-TERM CLAIMS ON FOREIGNERS REPORTED BY BANKS IN THE UNITED STATES (Amounts outstanding; in millions of dollars) Type Country or area Payable in dollars End of Payable period Total Loans to— O lo t n h g e ­ r c fo u r r i e r n i e g n n ­ U K d n i o n i m t g ed ­ E O u t r h o e p r e Canada A L m a e t r i i n ca Japan O A t s h i e a r co o u A t n h t l e r l i r es Official Other term cies Total institu­ Banks1 foreign­ claims tions ers 1970................. 3,075 2,698 504 236 1,958 352 25 71 411 312 1,325 115 548 292 1971................. 3,667 3,345 575 315 2,455 300 22 130 593 228 1,458 246 583 429 101*7 2 J4,954 4,539 833 430 3,276 375 40 145 704 406 1,996 319 881 503 \5,029 4,555 836 430 3,289 435 40 145 701 406 2,012 353 900 514 1973—June.... 5,609 5,100 978 550 3,572 464 45 131 980 523 2,002 316 1,096 561 July....... 5,628 5,119 957 554 3,609 455 54 128 1,029 517 1,982 315 1,122 535 Aug...... 5,524 5,012 1,002 514 3,496 466 46 137 1,007 404 1,963 309 1,157 548 Sept...... 5,410 4,885 1,010 508 3,367 456 70 131 976 418 1,941 256 1,186 501 Oct........ 5,593 5,037 1,041 538 3,458 476 80 130 1,012 491 1,980 262 1,203 514 Nov...... 5,788 5,248 1,127 555 3,566 463 78 138 1,059 484 2,088 255 1,246 516 Dec....... 5,862 5,310 1,129 571 3,610 480 72 140 1,099 489 2,072 247 1,282 533 1974—Jan ... 5,803 5,252 1,115 559 3,578 472 79 137 1,102 484 2,033 253 1,284 509 Feb ... 5,873 5,270 1,166 580 3,525 524 79 144 1,158 457 2,061 249 1,293 511 Mar...... 6,049 5,432 1,253 627 3,552 542 75 146 1,263 473 2,129 248 1,300 490 Apr....... 6,661 6,019 1,542 734 3.744 566 76 191 1,550 478 2,340 246 1,328 529 May"... 6,706 6,088 1,548 746 3,793 550 67 214 1,535 467 2,401 233 1,336 520 June"... 6,986 6,374 1,590 775 4,010 545 66 212 1,663 496 2,476 236 1,389 514 1 Excludes central banks, which are included with “Official institutions.” with those shown for the preceding date; figures on the second line are 2 Data on the two lines shown for this date differ because of changes in comparable with those shown for the following date. reporting coverage. Figures on the first line are comparable in coverage 14. PURCHASES AND SALES BY FOREIGNERS OF LONG-TERM SECURITIES, BY TYPE (In millions of dollars) U.S. corporate Marketable U.S. Treas. bonds and notes 1 securities 2 Foreign bonds Foreign stocks Net purchases or sales Period Total I a n n t d l. Foreign c P ha u s r e ­ s Sales c N h s a e a s t l e e p s s u o r r ­ c P ha u s r e ­ s Sales c N ha s e a s t l e e p s s u o r r ­ ch P a u s r e ­ s Sales c N h e a s t a s l e e p s s u o r r ­ regional Total Official Other 1971............................. 1,672 130 1,542 1,661 - 119 14,593 13,158 1,435 1,687 2,621 -935 1,385 1,439 -57 1972............................. 3,316 57 3,258 3,281 -23 19,073 15,015 4,058 1,901 2,961 -1,060 2,532 2,123 409 1973............................. 305 - 165 470 465 6 18,543 13,810 4,733 1,474 2,467 -993 1,729 1,554 176 1974—Jan.-June". .. . 622 68 -691 -688 3 7.596 6.672 924 540 1,648 -1,107 1,150 1,044 107 1973—june................. -71 -69 -1 - 1 1,087 899 188 125 103 22 123 111 12 July.................. -79 -71 -9 -9 1,320 898 422 101 207 -106 108 107 1 Aug.................. -51 17 -68 -28 -39 1,328 864 464 96 157 -61 117 125 -8 Sept.................. 40 20 20 8 12 1,174 963 212 67 101 -34 115 105 10 Oct................... 29 -13 42 15 27 1,807 1,722 86 97 336 -238 129 131 -2 Nov.................. -691 -5 -686 -722 36 1,948 1,692 256 104 317 -213 156 178 -22 Dec.................. -486 1 -487 -506 19 1.336 1,359 -23 144 209 -65 159 144 15 1974—Jan................... -432 20 -452 -472 19 1.715 1,453 262 71 364 -292 209 207 2 Feb................... -45 31 -76 -37 -39 1,200 1,188 12 100 145 -45 206 206 -1 Mar................ 157 166 -10 -10 1,672 1,474 198 102 398 -295 167 183 -16 Apr.................. -234 -82 -152 -171 20 1.060 844 216 103 323 -219 189 155 34 May"............... 11 29 -19 -7 - 12 853 845 8 89 153 -63 173 175 -2 June" ............. -79 -97 19 19 1,095 866 229 74 266 -192 207 117 90 1 Excludes nonmarketable U.S. Treasury bonds and notes issued to sold abroad by U.S. corporations organized to finance direct investments official institutions of foreign countries. abroad. 2 Includes State and local govt, securities, and securities of U.S. Govt, Note.—Statistics include transactions of international and regional agencies and corporations. Also includes issues of new debt securities organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ INTL. CAPITAL TRANSACTIONS OF THE U.S. A 71 15. NET PURCHASES OR SALES BY FOREIGNERS OF U.S. CORPORATE STOCKS, BY COUNTRY (In millions of dollars) Pur­ Net pur­ Ger­ Nether­ Switzer­ United Other Total Latin Period chases Sales chases or France many lands land King­ Europe Europe Canada America Asia Other i sales ( —) dom 1971..................... 11,626 10,894 731 87 131 219 168 -49 71 627 -93 37 108 52 1972..................... 14,361 12,173 2,188 372 -51 297 642 561 137 1,958 -78 -32 256 83 1973..................... 12,762 9,978 2,785 439 2 339 685 366 274 2,104 99 -1 577 5 1974—Jan.-June » 4,276 3,893 383 145 14 225 115 -31 34 507 -52 -53 -32 13 1973—June......... 766 632 134 2 -23 7 52 15 21 74 8 -2 55 -2 July.......... 880 564 316 67 -19 25 80 28 28 210 19 11 71 5 Aug........... 972 631 341 53 1 60 57 40 34 245 10 11 81 -6 Sept.......... 948 734 214 63 6 18 54 15 14 169 * 27 21 -3 Oct........... 1,369 1,272 96 6 -7 5 -34 68 25 62 -26 16 41 4 1,482 1,088 394 106 27 54 68 67 6 327 -18 -9 108 -14 Dec........... 873 878 -4 30 9 32 -64 -25 7 -12 -8 -4 34 -16 1974—Jan............ 974 801 173 68 4 37 43 27 23 201 -27 -42 33 9 Feb........... 741 585 156 39 5 52 40 -5 33 163 * 1 -9 1 Mar.......... 896 846 49 14 -26 40 24 14 25 91 -21 9 -29 -1 Apr........... 575 559 16 22 17 35 -5 -14 -35 19 -10 2 3 2 MayP........ 571 590 -19 18 7 29 2 -36 -5 16 -7 -16 -14 2 JuneP........ 520 512 8 -15 8 33 11 -18 -3 16 3 -7 -15 2 1 Includes international and regional organizations. 16. NET PURCHASES OR SALES BY FOREIGNERS OF U.S. CORPORATE BONDS, BY COUNTRY (In millions of dollars) Period Total France m G a e n r y ­ N la e n th d e s r­Sw la i n tz d er­ K U in n g i d te o d m E O u t r h o e p r e E T u o ro ta p l e Canada A L m a e t r i i n ca Asia Africa co O u t n h tr e i r es I r n e t g l. i o a n n a d l 1971..................... 703 15 35 -1 216 327 39 631 37 19 -2 * -21 39 1972..................... 1,871 336 77 74 135 357 315 1,293 82 22 323 2 * 148 1973..................... 1,948 201 -33 -19 307 275 473 1,204 49 44 588 * 10 52 1974—Jan.-June? 541 80 31 113 80 138 -30 412 19 9 -225 * * 325 1973—June......... 54 6 -3 * -3 -19 -2 -20 7 -1 * * 10 59 July.......... 106 * -57 * 13 -15 7 -52 3 4 1 * * 150 Aug.......... 123 31 1 1 -5 57 10 94 -1 4 2 * * 24 Sept.......... -2 2 * * -1 14 12 26 -1 1 11 * * -39 Oct........... -11 53 * 1 46 -14 1 86 4 1 1 * * -103 -138 4 11 -2 28 76 5 122 -21 3 -209 * * -33 Dec........... -19 9 10 4 37 60 32 152 <* 16 -183 * -3 1974—Jan........... r89 3 25 * 23 117 -9 159 14 1 -104 * * r18 Feb........... -144 1 * * * 44 -15 30 -2 -5 -119 * * -46 Mar.......... 149 1 * -2 6 -69 -6 -71 -1 6 -1 * * 215 Apr........... 200 60 3 * 8 23 17 111 4 -1 * * * 86 MayP........ 27 10 * * 28 -20 1 20 3 5 3 * * -3 JuneP........ 220 5 3 116 15 42 -17 163 1 4 -3 * * 56 Note.—Statistics include State and local govt, securities, and securities debt securities sold abroad by U.S. corporations organized to finance di­ of U.S. Govt, agencies and corporations. Also includes issues of new rect investments abroad. 17. NET PURCHASES OR SALES BY FOREIGNERS OF 18. FOREIGN CREDIT AND DEBIT LONG-TERM FOREIGN SECURITIES, BY AREA BALANCES IN BROKERAGE ACCOUNTS (In millions of dollars) (Amounts outstanding; in millions of dollars) 1 Intl. Total Latin Other Credit Debit Period Total and foreign Eu­ Canada Amer­ Asia Af­ coun­ End of balances balances re­ coun­ rope ica rica tries period (due to (due from gional tries foreigners) foreigners) 1971................ — 992 -310 -682 31 -275 -46 — 366 —57 32 1971—Mar............................ 511 314 1972................ -651 -90 -561 492 -651 -69 -296 -66 29 June........................... 419 300 1973................ -818 139 -957 -141 -569 -120 -168 3 37 333 320 311 314 1974— Jan.-June? -1,000 16 -1,016 -320 -810 -48 156 -4 10 325 379 June........................... 312 339 1973—June... 34 7 27 10 6 13 -13 1 9 286 336 July---- -105 3 -108 -13 -93 -13 9 * 2 372 405 Aug__ -69 5 -75 -21 -44 -4 -8 * 3 Sept__ -25 4 -28 -28 8 -8 -1 * 2 310 364 Oct....... -240 4 -243 -25 -148 -8 -64 1 1 June........................... 316 243 Nov... -236 9 -245 -47 -89 -6 -104 ♦ * 290 255 Dec.... -50 51 -101 -45 -11 -15 -34 2 3 333 231 1974—Jan -291 -4 -287 -81 -204 -2 -1 -1 2 1974—Mar.P........................ 384 227 Feb.... -46 6 -52 -62 -11 -9 32 -4 1 Mar.... -311 4 -315 -24 -288 -15 10 * 3 Apr.. .. -185 3 -188 -49 -157 6 12 * * Note.—Data represent the money credit balances and Mayp. . -65 5 -70 -26 -34 -22 9 * 3 money debit balances appearing on the books of reporting JuneP.. -101 3 -105 -78 -115 -6 94 1 * brokers and dealers in the United States, in accounts of foreigners with them, and in their accounts carried by Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 72 INTL. CAPITAL TRANSACTIONS OF THE U.S. □ AUGUST 1974 19a. ASSETS OF FOREIGN BRANCHES OF U.S. BANKS (In millions of dollars) Claims on U.S. Claims on foreigners Location and currency form Month-end Total Other Offi­ Non­ Other Total Parent Other Total branches Other cial bank bank of parent banks insti­ for­ bank tutions eigners IN ALL FOREIGN COUNTRIES Total, all currencies......................... 1971—Dec.r 59,939 4,755 2,302 2,454 53,423 11,223 23,599 1,164 17,436 1,760 1972—Dec.r 78,202 4,678 2,113 2,565 71,304 11,504 35,773 1,594 22,432 2,220 1973—May. 90,388 4,185 1.915 2,270 83,158 13,116 41,414 1,875 26,753 3,046 June. 96,107 4,925 2,325 2,601 87,786 13,149 44,953 1,805 27,879 3,395 July.. 100,987 5,350 2,502 2,848 92,071 14,934 46,155 1,934 29,048 3,567 Aug.. 102,392 5,109 2,286 2,823 93,470 15,289 46,012 2,012 30,156 3,813 Sept.. 108,080 4.806 1.916 2,890 98,681 16,778 48,084 2,147 31,672 4,593 Oct.. , 111,087 4,802 1,831 2,970 101,789 17,721 49,477 2,239 32,352 4,496 Nov.r 117,325 5,808 2,848 2,961 106,041 18,462 51,975 2,108 33,497 5,476 Dec.r 121,951 4,882 1,882 3,000 112,323 19.222 55,910 2,503 34,687 4,746 1974—Jan.r. 123,912 4,605 1.552 3,054 114,703 19,497 57,032 2,733 35,441 4,604 Feb.. 127,240 4,696 1,893 2,802711,481 20,341 57.163 2,957 37,020 5,064 Mar.. 136,983 7,986 5,383 2,603 123,823 22,268 60,435 3,030 38,090 5,174 Apr.r 139,532 6,257 3,682 2,575 128,187 22,854 62,334 3,629 39,370 5,087 May. 145,362 8,152 5,585 2.567 131,796 24,376 64,635 3,645 39,141 5,414 Payable in U.S. dollars. 1971— Dec. ' 39.149 4.502 2,295 2,207 34.093 6.659 17,341 861 9,233 553 1972—Dec.' 52.636 4,419 2,091 2,327 47,444 7,869 26,251 1,059 12,264 773 1973—May. 56,118 3,900 1,888 2,012 51,068 8,178 27,836 1,015 14,038 1,149 June. 59,984 4,575 2,276 2,298 54,117 8,118 30,457 1,037 14,505 1,292 July. , 62,239 4,775 2,467 2,308 56,058 8,852 30,964 1,123 15,118 1,407 Aug.. 63,553 4.502 2,227 2,275 57,670 9.660 30,545 1,193 16,272 1,380 Sept.. 66,361 4,386 1,865 2,521 60,362 10,315 31,767 1,186 17,093 1,613 Oct.. 68,400 4,356 1,789 2.567 62,461 11.223 32,595 1,223 17,419 1,583 Nov.. 73.637 5,336 2,787 2,549 66,595 11.874 34,992 1,302 18,427 1,705 Dec.. 79.502 4,428 1,844 2,583 73,308 12,844 39,052 1,587 19,824 1,767 1974—Jan.' 81,949 4,166 1,515 2,651 76,033 13,253 40,027 1,848 20,905 1,749 Feb.. 83,907 4,311 1,838 2,473 77,679 13,769 40,185 2,024 21,701 1,918 Mar.7 92,838 7,640 5,359 2,281 83,272 15,776 42,971 1,977 22,548 1,925 Apr.' 94,127 5,886 3,635 2,251 86.093 15,954 44,379 2,726 23,034 2,148 May. 100.155 7.806 5,537 2,269 89,876 16.874 47.330 2.840 22,831 2,473 IN UNITED KINGDOM Total, all currencies........ 1971—Dec.' 34,227 2,693 1,230 1,464 30,675 5,690 15,965 473 8,546 859 1972—Dec.' 43,467 2,234 1.138 1,096 40,214 5.659 23,842 606 10,106 1,018 1973—May. 48,860 1,743 909 834 45.783 5,725 28,254 610 11,194 1,334 June. 51,203 1,875 1,012 864 47,821 5,279 30,223 604 11,716 1,506 July. 53,996 2,500 1,492 1,008 49,923 6,274 30,652 646 12,350 1,574 Aug.. 52,880 1,877 935 942 49,423 6,849 29,525 677 12,372 1,580 Sept.. 55,842 1,473 604 870 52,489 8,022 30,774 659 13,035 1,879 Oct.. 57,306 1,833 879 954 53,518 7,970 31,617 685 13,247 1,954 Nov.. 61,897 2,230 1,181 1,049 56,808 8,552 33.813 700 13,743 2,859 Dec.. 61,732 1,789 738 1,051 57,761 8,773 34,442 735 13,811 2,183 1974—Jan... 63,757 1,484 521 964 60,185 9,123 35,796 907 14,359 2,087 Feb.. 63,585 1,477 616 861 59,792 9,209 34.813 916 14,853 2,317 Mar.. 68,076 3,070 2,319 751 63,020 MO,706 r36,192 887 15,235 1,986 Apr.r 68,914 2.713 1,876 837 64,104 10,695 36,765 1,073 15,572 2,097 May. 71,935 3,787 2,969 818 65,966 11,759 37,882 15,435 2,182 Payable in U.S. dollars. 1971—Dec.' 24.210 2,585 21,277 4,135 12,572 4,571 348 1972—Dec.' 30,257 2,146 27,664 4,326 17,874 5,464 446 1973—May. 30,809 1,654 28.569 3,943 18,776 5,851 586 June. 32,763 1,784 30,286 3,900 20,341 6,045 693 July. 33,381 2,193 30,464 4,042 20,137 6,286 723 Aug.. 32,807 1,538 30.569 4,887 19,134 6,549 699 Sept.. 34,251 1,348 32.062 5,399 19,759 6,904 840 Oct.. 35,511 1,681 33.062 5,769 20,336 6,956 768 Nov.. 39,096 2,042 36,218 6,273 22,650 7,296 835 Dec.. 40,323 1,642 37,816 6,509 23,899 7,409 865 1974—Jan.. 42,131 1,368 39,932 6,825 25,098 8,010 830 Feb.. 41,762 1.384 39,409 6,902 24,415 8,093 969 Mar.. 46,062 2,967 42,212 '8.240 '25,365 8,608 882 Apr.' 46,419 2,623 42,771 8,262 25,768 8,741 1,024 May. 49,608 3,688 44.784 9,285 26,957 8,542 1,135 IN BAHAMAS AND CAYMANSi Total, all currencies......................... 1971—Dec.' 8,234 1,274 496 777 6,871 3.620 3,251 90 1972—Dec.' 12,642 1,486 214 1,272 10,986 6,663 4,322 170 1973—May. 14,090 1,488 261 1,227 12,274 6,874 5,400 328 June. 15,614 1,909 402 1,507 13,448 7,915 5,533 256 July. 16,466 1,927 347 1,579 14,253 8,459 5.795 286 Aug.. 19,341 2,260 576 1,684 16,642 9,846 6.796 439 Sept.. 20,673 2,280 489 1,791 17,890 10,596 7,294 504 Oct.. 20,698 1,976 272 1,704 18,198 10,618 7,580 524 Nov., 21,503 2,525 824 1,702 18,412 10,367 8,045 566 Dec.. 23,771 2,001 313 1,688 21,307 12,302 9,005 463 1974—Jan... 24,071 2,011 228 1,783 21,581 12,232 9,349 479 Feb.. 25,657 1,882 170 1,713 23,262 13,293 9,969 513 Mar. ’ 28,444 3,299 1,787 1,512 24,534 14,600 9,934 611 Apr.r 28,776 2,280 802 1,478 25,873 15,496 10,376 623 May. 230,862 3,164 1,697 1,467 26,953 17,029 9,924 744 Digitized for FRASEFRo r notes see p. A-76 http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ INTL. CAPITAL TRANSACTIONS OF THE U.S. A 73 19b. LIABILITIES OF FOREIGN BRANCHES OF U.S. BANKS (In millions of dollars) To U.S. To foreigners Other Offi­ Non­ Other Month-end Location and currency form Total Parent Other Total branches Other cial bank bank of parent banks insti­ for­ bank tutions eigners IN ALL FOREIGN COUNTRIES 59 3,061 658 2,403 54.798 10,789 29,825 5,472 8,712 2,081 1971—D ec. 1 .. .Total all currencies, 78; 3,501 997 2,504 72,121 11,121 41,218 8,351 11,432 2,580 ...........1972—Dec. 90. 4,387 1,080 3,308 82,578 12,892 47,016 9,227 13,443 3,423 ...........1973—May 96. 4,456 1,005 3,451 87,999 12,918 51,863 9,483 13,735 3.651 .......................June 100, 4,368 1,200 3,169 92,702 14,634 54,072 9,575 14,421 3,917 .......................July 102, 4,607 1.083 3,524 93,645 15.627 54,493 8,494 15,031 4,140 .......................Aug. 108, 4,728 1,180 3,548 98,699 16,609 57,624 8,635 15,831 4.652 .......................Sept. 111, 4,680 1,298 3,382 101,719 17,253 59,304 9,073 16,089 4,688 .......................Oct. 117, 4,776 1.084 3,692 106,909 17,673 63,274 9,542 16,420 5,641 .......................Nov. 121, 5,070 1,158 3,912 111,754 18,233 65,650 10,094 17,777 5,128 .......................Dec. 123. 5,319 1,738 3,581 113,807 18,531 67,838 9,547 17,890 4,756 ...........1974—Jan. 127! 5,853 2,009 3,844 116,440 18.942 67,979 10,119 19,399 4,947 .......................Feb. 136; 6,656 2,127 4,530 125,002 21,043 71,936 10,474 21,550 5,324 .......................Mar.1 139; 6,875 2,368 4,507 127,280 22,469 71,600 11,196 22,015 5,377 .......................Apr. ! 145; 8,132 2,930 5.201 131,340 23,605 74,395 11,404 21,936 5,891 .......................May 40, 2,624 503 2,121 37,080 6,663 21,116 4,391 4,910 1,250 ...........1971—Dec. ! . Payable in U.S. dollars 54; 3,050 847 2.202 50,406 7,955 29,229 6,781 6,441 1,422 ...........1972-Dec. ' 59. 3,843 915 2,928 53,945 8,418 31,104 7,259 7,164 1,725 ...........1973—May 62, 3,911 866 3,045 57,139 8,376 34,403 7,247 7,114 1,783 .......................June 64, 3,775 1,036 2,739 58.799 9,219 35,153 7,005 7,421 1,882 .......................July 65. 4,057 943 3,114 59,347 10,237 35,458 6,165 7,487 2,092 .......................Aug. 68i 4,146 1,021 3,125 62,196 10.627 37,260 6,242 8,067 2,263 .......................Sept. 70, 4,135 1,139 2,996 63,693 11,312 r37,662 6,337 r8,382 2,230 .......................Oct. 75, 4,190 928 3,262 68,438 11,825 41,598 6,290 8,724 3,107 .......................Nov. 80, 4,488 993 3,495 73,284 12,571 43,702 7,327 9,684 2,611 ......................Dec. 82 4,820 1,609 3,211 74,920 12,754 44,990 7,172 10,003 2,473 ...........1974—Jan. 84 5,349 1,857 3,493 76,732 12.942 44,853 7,809 11,128 2,466 .......................Feb. 93 6,086 1,924 4,161 84,471 15,041 49,065 8,205 12,159 2,799 .......................Mar. 94 6,316 2,195 4,121 85,673 15,830 48,252 8,792 12,800 2,898 .......................Apr. 5 100 7,430 2,741 4,689 89,706 16.628 51,078 9,057 12,943 3,443 .......................May IN UNITED KINGDOM 34 1,653 109 1,544 31,814 3,401 18,833 4,454 5,126 760...........1971—Dec. .. .Total, all currencies 43 1,453 113 1,340 41,020 2,961 24,596 6,433 7,030 994...........1972—Dec. 48, 2,028 170 1,857 45,575 3,614 26,987 7,304 7,669 1,258 ...........1973—May 51, 1,957 122 1,835 47,936 3,321 29,151 7,565 7,899 1,310 .......................June 53, 1,875 163 1,711 50.707 3,883 30,797 7,793 8,234 1,414 .......................July 52, 2,080 171 1,909 49,293 3,731 30,266 6,730 8,565 1,508 .......................Aug. 55, 2,125 161 1,964 51,957 4,118 31,963 6,929 8,947 1,759 .......................Sept. 57, 2,026 129 1,897 53,475 4,036 33,341 7,118 *•8,980 1,805 .......................Oct. 61, 2,197 143 2,054 57,042 3,886 36,052 7,680 9,424 2,657 .......................Nov. 61, 2,431 136 2,295 57,311 3,944 35,063 8,056 10,248 1,990 .......................Dec. 63, 2,429 346 2,083 59,356 4,350 36,996 7,679 10,332 1,941 ...........1974—Jan. 63, 2,573 269 2,303 58,956 4,193 35,489 8,160 11,112 2,057 .......................Feb. 68, 3,167 353 2,814 63,096 4,587 37.836 8,456 12,217 1,813 .......................Mar. 68. 3,123 409 2,714 63,914 4,975 36,700 9,064 13,175 1,877 .......................Apr. 1 7i; 3,727 749 2,978 66,111 4,890 39,706 9,111 12,404 2,097 .......................M ay 24. 1,405 23 1,383 22,852 2,164 13,840 3,666 3,181 372...........1971—Dec. ' .Payable in U.S. dollars 30; 1,272 72 1,200 29,002 2,008 17,379 5,329 4,287 535...........1972—Dec. 1 32, 1,809 138 1,671 29,635 2,225 16,906 5,877 4,626 607 ...........1973—May 33, 1,731 102 1,629 31,185 2.234 18,318 5.971 4,663 575 .......................June 33, 1,661 148 1,513 31,549 2,316 18,639 5,855 4,738 593 .......................July 32, 1,846 148 1,698 30,433 2,213 18,566 4,995 4,660 681 .......................Aug. 34, 1,866 137 1,729 32,213 2,245 19.836 5,110 5,022 807 .......................Sept. 35, 1,831 103 1,727 32,781 2,515 r20,195 4,934 r5,137 730 .......................Oct. 39. 1,940 119 1,821 36,032 2,468 23,059 4.971 5,534 1,555 .......................Nov. 39; 2,173 113 2,060 36,646 2,519 22,135 5,839 6,152 839 .......................Dec. 40, 2,200 329 1,871 37,884 2,846 22,971 5,806 6,262 895 ...........1974—Jan. 40; 2,346 243 2,103 37.579 2,729 21,464 6,342 7,044 1,006 .......................Feb. 45: 2,927 329 2,598 41.708 3,063 24,300 6,694 7,650 945 .......................Mar. 46 2,878 384 2,494 42,453 3.234 23,382 7,225 8,612 992 .......................Apr. 1 49 3,480 724 2,756 44.580 3,083 26,128 7,306 8,064 1,194 .......................May IN BAHAMAS AND CAYMANS1 8 747 7,305 1,649 4,539 1,116 183...........1971—Dec. ’ .. .Total, all currencies 12 1,220 11,260 1,818 8,105 1,338 163...........1972—Dec. 1 14 1,320 12,440 1,944 8,980 1,516 330 ...........1973—May 15 1,458 13,829 2,272 10,170 1,387 326 ......................June 16 1,339 14.803 2,691 10,484 1,628 323 .......................July 19 1,521 17,410 3,917 11,691 1,803 409 .......................Aug. 20 1,608 18,464 4,321 12,255 1,887 601 ......................Sept. 20 1,663 18,463 4.591 11,902 1,969 572 ......................Oct. 21 1,559 19,363 4,744 12,857 1,762 582 ......................Nov. 23 1,517 21.803 5,526 14,453 1,824 451 .......................Dec. 1,848 21,782 5,293 14,569 1,920 441 ...........1974—Jan. 2,166 23,026 5,617 15,248 2,161 465 .......................Feb. 2.192 25,692 6.591 16,793 2,309 560......................Mar. 2.192 26,095 7,200 16,784 2,111 479 ......................Apr. 2,567 27,704 8,255 16,759 2,690 591 .......................May see p. A-76. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 74 INTL. CAPITAL TRANSACTIONS OF THE U.S. □ AUGUST 1974 20. DEPOSITS, U.S. TREAS. SECURITIES, 21. SHORT-TERM LIQUID CLAIMS ON FOREIGNERS AND GOLD HELD AT F.R. BANKS FOR REPORTED BY NONBANKING CONCERNS FOREIGN OFFICIAL ACCOUNT (Amounts outstanding; in millions of dollars) (In millions of dollars) Payable in Payable in dollars foreign currencies Assets in custody End of End of United period Deposits U se .S cu . r T it r i e e a s s 1 . Ear g m o a ld rked period Total Deposits i S n t h e v r o e m r s t t ­ ­ Deposits i S n t h e v r o e m r s t t ­ ­ K d i o n m g­ Canada ments 1 ments1 1971.............. 294 43,195 13,815 1972.............. 325 50,934 215,530 1969................... 1,491 1,062 161 183 86 663 534 1,141 697 150 173 121 372 443 1973—J A u u ly g. . . . . . 2 2 5 8 9 0 5 5 7 5, ,0 85 5 5 4 1 1 5 5 , , 4 4 6 55 4 1971_Dec.2 / \1 l , , 5 6 0 4 7 8 1 1 , , 0 0 7 9 8 2 2 1 0 2 3 7 2 2 3 34 4 1 6 2 8 0 5 5 7 8 7 0 4 5 4 8 3 7 Sept.. . 250 55,407 15,437 O N c o t v __ ... 4 4 2 2 0 6 5 5 2 4 , , 9 7 9 6 8 6 3 1 1 7 7 , , 1 1 0 2 4 2 1972_Dec.2. 1 / 2 l, ,3 9 7 6 5 5 1 1 , , 4 9 4 1 6 2 16 5 9 5 3 3 0 4 7 0 4 68 2 9 7 1 0 2 2 4 5 8 3 5 5 Dec.... 251 52,070 17,068 1973—May'.. . . 3,315 2,541 130 433 211 1,119 1,011 1974—Jan.... 392 49,582 17,044 June'.. . . 3,312 2,652 74 453 134 1,157 882 Feb... 542 50,255 17,039 July'. . .. 3,340 2,561 136 475 167 1,128 959 Mar... 366 51,342 17,037 Aug.'---- 3,424 2,643 82 490 209 1,117 940 Apr. .. 517 52,642 17,026 Sept.'---- 3,287 2,573 78 476 161 1,142 892 May. . 429 54,195 17,021 Oct.'. .. . 2,993 2,329 66 451 148 1,063 881 June... 384 54,442 17,014 Nov.'.... 3,241 2,604 64 437 136 1,121 922 July... 330 54,317 16,964 Dec.'.. .. 3,185 2,604 37 431 113 1,128 775 1974—Jan.'. ... 2,859 2,286 59 365 149 1,091 772 1 Marketable U.S. Treasury bills, certificates of in­ Feb 3,254 2,618 65 368 203 1,222 868 debtedness, notes, and bonds and nonmarketable U.S. Mar.'__ 3,692 3,018 99 358 218 1,366 1,029 Treasury securities payable in dollars and in foreign Apr.'.. .. 3,585 2,966 60 351 209 1,480 928 currencies. May........ 3,671 3,036 71 337 227 1,911 974 2 The value of earmarked gold increased because of the change in par value of the U.S. dollar in May 1972. 3 The value of earmarked gold increased because of the 1 Negotiable and other readily transferable foreign obligations payable on demand change in par value of the U.S. dollar in Oct. 1973. or having a contractual maturity of not more than 1 year from the date on which the obligation was incurred by the foreigner. Note.—Excludes deposits and U.S. Treasury securities 2 Data on the two lines for this date differ because of changes in reporting coverage. held for international and regional organizations. Ear­ Figures on the first line are comparable ip coverage with those shown for the preceding marked gold is gold held for foreign and international date; figures on the second line are comparable with those shown for the following date. accounts and is not included in the gold stock of the United States. Note.—Data represent the liquid assets abroad of large nonbanking concerns in the United States. They are a portion of the total claims on foreigners reported by nonbanking concerns in the United States and are included in the figures shown in Table 22. 22. SHORT-TERM LIABILITIES TO AND CLAIMS ON FOREIGNERS REPORTED BY NONBANKING CONCERNS, BY TYPE (Amount outstanding; in millions of dollars) Liabilities Claims Payable in 1f oreign currencies End of period Payable Payable Payable Total in in Total in dollars foreign dollars Deposits with currencies banks abroad Other in reporter’s name 1970—June..................... 2,387 1,843 543 4,457 3,868 234 355 Sept...................... 2,512 1,956 557 4,361 3,756 301 305 Dec...................... 2,677 2,281 496 4,160 3,579 234 348 1971—Mar...................... 2,437 1,975 462 4,515 3,909 232 374 June..................... 2,375 1,937 438 4,708 4,057 303 348 Sept...................... 2,564 2,109 454 4,894 4,186 383 326 JLIcC.1................... \ / 2 2 , , 7 7 6 0 3 4 2 2, , 3 2 0 2 1 9 4 4 6 7 3 5 5 5 , , 1 0 8 0 5 4 4 4 , , 5 4 3 6 5 7 2 31 9 8 0 2 3 4 33 7 1972—Mar...................... 2,844 2,407 437 5,177 4,557 318 302 June..................... 2,925 2,452 472 5,331 4,685 376 270 Sept...................... 2,933 2,435 498 5,495 4,833 432 230 J 3,119 2,635 484 5,723 5,074 411 238 1 3,533 3,022 511 6,373 5,695 396 282 1973—Mar.'................... 3,460 2,938 522 7,200 6,300 464 437 June'................... 3,435 2,856 579 7,437 6,574 503 360 Sept.'................... 3,757 3,034 723 7,809 6,855 535 418 Dec...................... 4,215 3,432 782 8,575 7,641 489 445 1974—Mar.?................... 4,691 3,789 902 10,628 9,671 411 546 1 Data on the two lines shown for this date differ preceding date; figures on the second line are compabecause of changes in reporting coverage. Figures on rable with those shown for the following date, the first line are comparable with those shown for the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ INTL. CAPITAL TRANSACTIONS OF THE U.S. A 75 23. SHORT-TERM LIABILITIES TO AND CLAIMS ON FOREIGNERS REPORTED BY NONBANKING CONCERNS (End of period. Amounts outstanding; in millions of dollars) Liabilities to foreigners Claims on foreigners Area and country 1972 1973 1974 1972 1973 1974 Dec.r Juner Sept.r Dec. Mar.p Dec.r Juner Sept.r Dec. Mar.*' Europe: Austria.................................................... 2 2 2 3 4 19 17 15 17 16 Belgium-Luxembourg........................... 83 81 129 131 221 73 109 112 106 153 Denmark................................................ 7 19 18 9 17 29 20 21 46 37 Finland................................................... 4 4 7 7 8 25 21 31 44 42 France.................................................... 167 165 165 168 161 231 325 283 310 413 Germany, Fed. Rep. of......................... 164 189 200 236 238 195 278 265 284 336 Greece.................................................... 15 24 33 40 21 35 40 52 51 87 Italy.......... .......................................... 121 103 108 116 136 202 201 201 237 327 Netherlands............................................ 109 113 115 134 123 84 96 119 118 111 14 13 10 9 9 16 19 21 18 22 Portugal.................................................. 4 4 12 13 24 19 25 24 50 112 Spain...................................................... 81 72 79 77 & 157 140 169 244 414 Sweden................................................... 13 25 32 48 43 57 49 53 71 74 Switzerland............................................ 105 81 142 103 94 82 90 67 101 90 Turkey.................................................... 4 3 11 18 26 48 14 17 34 41 United Kingdom................................... 1,104 775 855 938 1,129 1,223 1,495 1,544 1,559 1,857 Yugoslavia............................................. 7 17 22 28 31 12 18 21 49 30 Other Western Europe.......................... 2 3 3 3 3 12 9 12 15 19 Eastern Europe...................................... 3 22 24 31 26 42 92 73 104 79 2,010 1,716 1,966 2,113 2,383 2,561 3,059 3,100 3,457 4,259 Canada....................................................... 215 250 236 255 321 965 1,305 1.341 1,251 1,532 Latin America: Argentina................................................ 29 24 24 38 49 79 60 65 75 94 391 435 364 419 206 662 766 746 633 761 35 47 42 64 78 172 183 208 230 416 Chile....................................................... 18 13 13 20 6 34 29 34 42 78 7 7 8 9 18 39 36 43 40 44 1 * * * * 1 1 1 1 1 27 37 36 45 68 181 203 185 235 260 Panama.................................................. 18 18 17 13 14 85 83 102 120 178 Peru........................................................ 4 6 10 15 17 36 34 37 49 66 7 3 2 2 3 4 5 5 5 6 21 23 24 50 69 92 ioi 104 143 143 Other L.A. republics............................. 45 47 58 67 66 95 103 127 134 172 Neth. Antilles and Surinam................. 10 11 7 6 5 13 11 9 12 12 4 19 20 22 37 34 90 105 214 158 616 689 626 770 637 1,527 1.705 1,771 1,932 2,382 Asia : China, People’s Republic of (China 32 31 36 42 20 * 11 48 11 8 China, Rep. of (Taiwan)....................... 26 37 31 34 53 65 77 77 120 183 Hong Kong............................................ 12 13 18 41 24 33 40 44 47 65 India....................................................... 7 7 7 14 14 34 29 32 37 36 Indonesia................................................ 16 15 15 14 13 48 47 52 54 51 19 14 11 25 31 31 27 28 38 38 224 290 350 298 377 475 506 641 837 1,157 21 18 20 37 38 68 46 56 105 109 Philippines.............................................. 16 20 17 17 9 59 64 70 73 88 5 6 6 6 7 23 24 28 28 53 152 140 179 233 355 206 207 207 238 260 530 592 692 761 940 1.042 1.079 1,283 1,588 2,048 Africa: 32 20 11 25 48 16 23 28 18 15 8 6 6 14 22 52 51 60 62 69 1 12 19 19 21 8 15 19 19 20 63 67 97 128 134 93 97 95 127 162 104 105 134 187 224 170 187 202 225 266 Other countries: 45 72 94 118 134 83 75 90 97 111 14 11 9 12 22 23 26 22 25 30 59 83 103 130 156 107 101 111 123 141 International and regional....................... * * * * 29 1 1 * 1 1 Grand total.................................... 3,533 3,435 3,757 4,215 4,691 6,373 7,437 7,809 8,575 10,628 1 Includes Bermuda through Dec. 1972. Data exclude claims held through U.S. banks, and intercompany accounts Note.—Reported by exporters, importers, and industrial and com- between U.S. companies and their foreign affiliates, mercial concerns and other nonbanking institutions in the United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 76 INTL. CAPITAL TRANSACTIONS OF THE U.S. □ AUGUST 1974 24. LONG-TERM LIABILITIES TO AND CLAIMS ON FOREIGNERS REPORTED BY NONBANKING CONCERNS (Amounts outstanding; in millions of dollars) Claims End of period Total Country or area liabilities Total K U in n g i d te o d m E O u t r h o e p r e Canada Brazil Mexico A O L m a t e h t r i e n ic r a Japan O A t s h i e a r Africa o A th l e l r 1970—Mar.. 2,358 2,744 159 735 573 181 74 458 158 288 71 47 June.. 2,587 2,757 161 712 580 177 65 477 166 288 76 54 Sept.. 2,785 2,885 157 720 620 180 63 586 144 284 73 58 Dec... 3,102 2.950 146 708 669 183 60 618 140 292 71 64 1971—Mar... 3,177 2,983 154 688 670 182 63 615 161 302 77 72 June.. 3,172 2,982 151 687 677 180 63 625 138 312 75 74 Sept... 2,939 3,019 135 672 765 178 60 597 133 319 85 75 Dec.1 3 3 , , 1 1 5 3 9 8 3 3 . . 1 1 1 1 8 8 1 1 2 2 8 8 7 7 0 0 5 5 7 7 6 6 1 7 1 1 7 7 4 4 6 6 0 0 6 65 5 3 2 1 1 4 3 1 6 3 3 2 2 7 5 8 8 6 6 8 8 5 4 1972—Mar... 3,093 3,191 129 713 787 175 60 665 137 359 81 85 June.. 3,300 3,255 108 713 797 188 61 671 161 377 86 93 Sept.., 3,448 3,235 128 695 805 177 63 661 132 389 89 96 Dec.1. 3,540 3,370 163 715 833 184 60 659 156 406 87 109 3,688 3,493 187 758 868 187 64 703 134 399 82 111 1973—Mar.r 3,874 3,635 151 816 882 165 63 796 124 413 101 125 June r, 3,857 3,703 174 818 893 146 65 819 138 416 104 131 Sept.r, 4,086 3,877 211 840 911 147 73 827 152 475 104 137 Dec.r. 3,984 3.950 285 785 966 145 81 820 141 471 112 144 1974—Mar. p. 3,871 4,070 360 758 1.007 798 138 469 115 1 Data on the two lines shown for this date differ because of changes shown for the preceding date; figures on the second line are comparable i n reporting coverage. Figures on the first line are comparable with those with those shown for the following date. OPEN MARKET RATES (Per cent per annum) Germany, Switzer­ Canada United Kingdom France Fed. Rep. of Netherlands land Month Treasury Day-to- Prime Treasury Day-to- Clearing Day-to- Treasury Day-to- Treasury Day-to- Private bills, day bank bills, day banks’ day bills, day bills, day discount 3 months i money 2 bills, 3 months money deposit money 3 60-90 money 5 3 months money rate 3 months rates days4 1972....................... 3.55 3.65 6.06 5.02 4.83 3.84 4.95 3.04 4.30 2.15 1.97 4.81 1973....................... 5.43 5.27 10.45 9.40 8.27 7.96 8.92 6.40 10.18 4.07 4.94 5.09 1973—July............ 5.67 5.28 9.06 8.35 5.89 6.25 7.89 7.00 15.78 5.58 5.65 5.00 Aug............. 6.47 5.87 12.78 10.98 9.70 8.99 8.87 7.00 10.63 5.92 7.24 5.00 Sept............. 6.41 6.31 12.12 11.37 9.13 9.50 9.73 7.00 9.76 5.67 7.97 5.25 Oct.............. 6.56 6.54 11.37 10.75 10.53 9.50 10.99 7.00 10.57 5.25 7.93 5.25 Nov............. 6.48 6.56 13.38 11.76 8.80 9.50 10.96 7.00 11.30 5.29 7.88 5.25 Dec............. 6.39 6.58 13.74 12.41 9.57 9.46 11.14 7.00 11.89 6.41 8.75 5.40 1974—Jan.............. 6.31 6.50 13.67 12.09 10.36 9.25 13.63 7.00 10.40 6.50 9.36 6.00 Feb.............. 6.10 6.49 13.63 11.94 8.96 9.50 12.48 7.00 9.13 6.50 9.73 6.00 Mar............. 6.24 6.50 14.39 11.95 11.31 9.50 11.88 7.00 11.63 6.00 9.07 6.00 Apr............. 7.18 6.93 13.20 11.53 10.00 9.50 11.81 5.63 5.33 6.64 9.86 6.50 M ay............ 8.22 7.48 13.31 11.36 10.72 9.50 5.63 8.36 7.00 9.00 6.50 June............ 8.66 8.36 12.61 11.23 10.58 9.50 5.63 8.79 6.50 July............. 8.88 8.52 13.21 11.20 8.70 9.50 1 Based on average yield of weekly tenders during month. 5 Monthly averages based on daily quotations. 2 Based on weekly averages of daily closing rates. 3 Rate shown is on private securities. Note.—For description and back data, see “International Finance,” 4 Rate in effect at end of month. Section 15 of Supplement to Banking and Monetary Statistics, 1962. NOTES TO TABLES 19A AND 19B ON PAGES A-72 AND A73 RESPECTIVELY: 1 Cayman Islands included beginning Aug. 1973. For a given month, total assets may not equal total liabilities because 2 Total assets and total liabilities payable in U.S. dollars amounted to some branches do not adjust the parent’s equity in the branch to reflect $28,470 million and $28,686 million, respectively, on May 31, 1974. unrealized paper profits and paper losses caused by changes in exchange rates, which are used to convert foreign currency values into equivalent Note —Components may not add to totals due to rounding. dollar values. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ CENTRAL BANK AND EXCHANGE RATES A 77 CENTRAL BANK RATES FOR DISCOUNTS AND ADVANCES TO COMMERCIAL BANKS (Per cent per annum) Rate as of July 31, 1974 Rate as of July 31, 1974 Country Country Per Month Per Month cent effective cent effective Argentina. 18.0 Feb. 1972 Italy................... 9.0 Mar. 1974 Austria---- 6.50 May 1974 Japan................. 9.0 Dec. 1973 Belgium. .. 8.75 Feb. 1974 Mexico............... 4.5 June 1942 Brazil........ 18.0 Feb. 1972 Netherlands....... 8.0 Dec. 1973 Canada---- 9.25 July. 1974 Norway.............. 5.5 Mar. 1974 Denmark......................... 10.0 Jan. 1974 Sweden.............. 6.0 Apr. 1974 France............................. 13.0 June 1974 Switzerland........ 5.5 Jan. 1974 Germany, Fed. Rep. of. 7.0 June 1973 United Kingdom 11.75 May 1974 Israel................................ Venezuela.......... 5.0 Oct. 1970 Note.—Rates shown are mainly those at which the central bank either Japan—Penalty rates (exceeding the basic rate shown) for borrowings discounts or makes advances against eligible commercial paper and/or from the central bank in excess of an individual bank’s quota; govt, securities for commercial banks or brokers. For countries with t United Kingdom—The Bank’s minimum lending rate, which is the more than one rate applicable to such discounts or advances, the rate average rate of discount for Treasury bills established at the most recent shown is the one at which it is understood the central bank transacts tender plus one-half per cent rounded to the nearest one quarter per cent the largest proportion of its credit operations. Other rates for some of above. these countries follow: Venezuela—2 per cent for rediscounts of certain agricultural paper, 4Vi Argentina—3 and 5 per cent for certain rural and industrial paper, de­ per cent for advances against government bonds, and 5 l/i per cent for pending on type of transaction; rediscounts of certain industrial paper and on advances against promissory Brazil—8 per cent for secured paper and 4 per cent for certain agricultural notes or securities of first-class Venezuelan companies. paper; FOREIGN EXCHANGE RATES (In cents per unit of foreign currency) Australia Austria Belgium Canada Denmark France Germany India Ireland Italy Japan Period (dollar) (schilling) (franc) (dollar) (krone) (franc) (Deutsche (rupee) (pound) (lira) (yen) mark) 1970..................... 111.36 3.8659 2.0139 95.802 13.334 18.087 27.424 13.233 239.59 .15945 .27921 1971..................... 113.61 4.0009 2.0598 99.021 13.508 18.148 28.768 13.338 244.42 .16174 .28779 1972..................... 119.23 4.3228 2.2716 100.937 14.384 19.825 31.364 13.246 250.08 .17132 .32995 1973..................... 141.94 5.1649 2.5761 99.977 16.603 22.536 37.758 12.071 245.10 .17192 .36915 1973—July.......... 141.78 5.8124 2.8151 100.049 18.041 24.655 42.821 13.605 253.75 .17200 .37801 Aug.......... 141.48 5.5917 2.7035 99.605 17.521 23.527 41.219 13.220 247.57 .17423 .37704 Sept.......... 146.83 5.5695 2.7089 99.181 17.480 23.466 41.246 12.987 241.83 .17691 .37668 Oct........... 148.22 5.5871 2.7328 99.891 17.692 23.718 41.428 12.938 242.92 .17656 .37547 Nov.......... 148.22 5.2670 2.5882 100.092 16.744 22.687 38.764 12.767 238.70 .16904 .35941 Dec.......... 148.33 5.1150 2.4726 100.058 16.089 21.757 37.629 12.328 231.74 .16458 .35692 1974—Jan........... 148.23 4.8318 2.3329 100.859 14.981 19.905 35.529 11.854 222.40 .15433 .33559 Feb........... 148.50 5.0022 2.4358 102.398 15.570 20.187 36.844 12.131 227.49 .15275 .34367 Mar.......... 148.55 5.1605 2.5040 102.877 16.031 20.742 38.211 12.415 234.06 .15687 .35454 Apr........... 148.41 5.3345 2.5686 103.356 16.496 20.541 39.594 12.711 238.86 .15720 .36001 May......... 148.44 5.5655 2.6559 103.916 17.012 20.540 40.635 12.841 241.37 .15808 .35847 June......... 148.34 5.5085 2.6366 103.481 16.754 20.408 39.603 12.735 239.02 .15379 .35340 July.......... 147.99 5.4973 2.6378 102.424 16.858 20.984 39.174 12.759 238.96 .15522 .34372 Malaysia Mexico Nether­ New Norway Portugal South Spain Sweden Switzer­ United Period (dollar) (peso) lands Zealand (krone) (escudo) Africa (peseta) (krona) land Kingdom (guilder) (dollar) (rand) (franc) (pound) 1970..................... 32.396 8.0056 27.651 111.48 13.992 3.4978 139.24 1.4280 19.282 23.199 239.59 1971..................... 32.989 8.0056 28.650 113.71 14.205 3.5456 140.29 1.4383 19.592 24.325 244.42 1972..................... 35.610 8.0000 31.153 119.35 15.180 3.7023 129.43 1.5559 21.022 26.193 250.08 1973..................... 40.988 8.0000 35.977 136.04 17.406 4.1080 143.88 1.7178 22.970 31.700 245.10 1973—July.......... 43.121 8.0000 38.700 135.02 18.932 4.4624 148.63 1.7385 24.732 35.428 253.75 Aug.......... 43.859 8.0000 37.596 135.33 18.145 4.3243 148.52 1.7553 24.070 33.656 247.57 Sept.......... 43.361 8.0000 38.542 145.07 18.048 4.2784 148.50 1.7610 23.769 33.146 241.83 Oct........... 43.641 8.0000 40.011 148.64 18.285 4.3014 148.54 1.7576 23.942 33.019 242.92 Nov.......... 41.838 8.0000 37.267 147.74 17.872 4.1155 148.45 1.7479 23.019 31.604 238.70 Dec.......... 41.405 8.0000 35.615 144.34 17.651 3.9500 148.66 1.7571 22.026 31.252 231.74 1974—Jan........... 40.094 8.0000 34.009 139.08 16.739 3.7195 148.66 1.7205 20.781 29.727 222.40 Feb........... 40.489 8.0000 35.349 140.31 17.351 3.8567 148.76 1.6933 21.373 31.494 227.49 Mar.......... 41.152 8.0000 36.354 143.40 17.734 3.9519 148.88 1.6927 21.915 32.490 234.06 Apr.......... 41.959 8.0000 37.416 145.12 18.170 4.0232 148.85 1.7080 22.730 33.044 238.86 May......... 42.155 8.0000 38.509 146.07 18.771 4.1036 148.78 1.7409 23.388 34.288 241.37 June......... 41.586 8.0000 37.757 145.29 18.410 4.0160 148.86 1.7450 22.885 33.449 239.02 July......... 41.471 8.0000 38.043 145.15 18.519 3.9886 149.73 1.7525 22.861 33.739 238.96 Note.—Averages of certified noon buying rates in New York for cable transfers. For description of rates and back data, see “International Fi­ nance,” Section 15 of Supplement to Banking and Monetary Statistics, 1962. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 78 GOLD RESERVES □ AUGUST 1974 GOLD RESERVES OF CENTRAL BANKS AND GOVERNMENTS (In millions of dollars; valued at $35 per fine ounce through Apr. 1972, at $38 from May 1972-Sept. 1973, and at $42.22 thereafter) Esti­ Intl. Esti­ China, End of mated Mone­ United mated Algeria Argen­ Aus­ Aus­ Bel­ Canada Rep. of Den­ Egypt period total tary States rest of tina tralia tria gium (Taiwan) mark world1 Fund world 1970. 41,275 4,339 11,072 25,865 191 140 239 714 1,470 791 82 64 85 1971. 41,160 4,732 10,206 26,220 192 90 259 729 1,544 792 80 64 85 1972. 44,890 5.830 10.487 28,575 208 152 281 792 1,638 834 87 69 92 1973—June. 44,865 5.831 10.487 28,545 208 152 281 793 1,603 834 87 69 92 July.. 5.826 10.487 208 152 281 793 1,603 834 87 69 92 Aug.. 5.826 10.487 208 152 281 793 1,603 834 87 69 92 Sept.. 44,880 5.826 10.487 ’28 ,*565’ 208 152 282 793 1,603 834 87 69 92 Oct... 6,474 11.652 231 169 312 881 1,781 927 97 77 103 Nov.. 6.476 11.652 231 169 212 88i 1,781 927 97 77 103 Dec.., 49^850 6.478 11.652 31,720 231 169 311 881 1,781 927 97 77 103 1974—Jan.,.. 6.478 11.652 231 169 312 882 1,781 927 97 77 103 Feb.... 6.478 11.652 231 169 312 882 1,781 927 97 77 103 Mar... *>49,840 6.478 11.652 *>31,710 231 169 312 882 1,781 927 97 77 103 Apr.. . 6.478 11.652 231 169 313 882 1,781 927 97 77 May. . 6.477 11.652 231 169 312 882 1,781 927 97 77 JuneP. 6.477 11.652 231 882 1,781 927 77 Ger­ End of France many, Greece India Iran Iraq Italy Japan Kuwait Leb­ Libya Mexi­ Nether­ period Fed. anon co lands Rep. of 1970.......................... 3,532 3,980 117 243 131 144 2,887 532 86 288 85 176 1,787 1971.......................... 3,523 4,077 98 243 131 144 2,884 679 87 322 85 184 1,909 1972.......................... 3,826 4,459 133 264 142 156 3,130 801 94 350 93 188 2,059 1973—June.............. 3,841 4,462 133 264 142 156 3,134 802 102 350 93 186 2,063 July................ 3,835 4,469 133 264 142 156 3,134 802 102 350 93 184 2,063 Aug................ 3,835 4,469 133 264 142 156 3,134 802 102 350 93 182 2,065 Sept............... 3,835 4,469 133 264 142 156 3,134 802 94 350 93 179 2,065 Oct................. 4,261 4,966 148 293 159 173 3,483 891 115 388 103 198 2,294 Nov............... 4,261 4,966 148 293 159 173 3,483 891 105 388 103 198 2,294 Dec................ 4,261 4,966 148 293 159 173 3,483 891 120 388 103 196 2,294 1974—Jan................. 4,262 4,966 148 293 159 173 3,483 891 113 389 103 195 2,294 Feb................ 4,262 4,966 148 293 159 173 3,483 891 120 391 103 194 2,294 Mar............... 4.262 4.966 149 159 173 3.483 891 123 387 103 156 2.294 Apr................ 4.262 4.966 149 159 173 3.483 891 118 387 103 2.294 Mav.............. 4.262 4.966 149 159 173 3.483 891 142 386 103 2.294 June*>............ 4.262 4.966 150 159 173 3.483 891 130 389 103 2.294 United Bank End of i- Portu­ Saudi South Spain Sweden Switzer­ Thai­ Turkey King­ Uru­ Vene­ for Intl. period i gal Arabia Africa land land dom guay zuela Settle­ ments2 1970. 54 902 119 666 498 200 2,732 92 126 1,349 162 384 -282 1971. 55 921 108 410 398 200 2,909 82 130 775 148 391 310 1972. 60 1,021 117 681 541 217 3,158 89 136 800 133 425 218 1973—June. 60 1,022 117 724 542 220 3,162 89 136 810 133 425 205 July.. 60 1,022 117 734 542 220 3,162 89 136 810 133 425 204 Aug.. 60 1,035 117 740 542 220 3,162 89 136 797 133 425 205 Sept.. 60 1,036 116 738 542 220 3,162 89 136 797 133 425 213 Oct... 67 1,154 129 820 602 244 3,512 99 151 886 148 472 227 Nov.. 67 1,159 129 809 602 244 3,513 99 151 886 148 472 237 Dec.. 67 1,163 129 802 602 244 3,513 99 151 886 148 472 235 1974—Jan.... 67 1,167 129 793 602 244 3,513 99 151 886 148 472 271 Feb.... 67 1,171 129 783 602 244 3,513 99 151 886 148 472 277 Mar... 67 1,176 129 780 602 244 3,513 99 151 886 148 472 274 Apr.. . 67 1,180 129 780 602 244 3,513 99 151 148 472 271 May. . 67 1,180 129 777 602 244 3,513 99 151 472 247 June?. 129 781 244 3,513 472 259 i Includes reported or estimated gold holdings of international and The figures included for the Bank for International Settlements are regional organizations, central banks and govts, of countries listed in the Bank’s gold assets net of gold deposit liabilities. This procedure this table, and also of a number not shown separately here, and gold to be avoids the overstatement of total world gold reserves since most of the distributed by the Tripartite Commission for the Restitution of Monetary gold deposited with the BIS is included in the gold reserves of individual Gold; excludes holdings of the U.S.S.R., other Eastern European coun­ countries. tries, and China Mainland. 2 Net gold assets of BIS, i.e., gold in bars and coins and other gold assets minus gold deposit liabilities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

AUGUST 1974 □ BANKING OFFICES A 79 NUMBER OF BANKING OFFICES IN THE UNITED STATES Commercial banks Mutual savings banks All Member Nonmember Type of office and type of change banks Total Total Na­ State Total Insured Non­ Insured 2 Nontional 1 insured insured Banks (head office): Dec. 31, 1934............................................................ 16,063 15,484 6,442 5,462 980 9,042 7,699 1,343 68 511 Dec. 31, 1941............................................................ 14,826 14,278 6,619 5,117 1,502 7,662 6,810 852 52 496 Dec. 31, 1947 3.......................................................... 14,714 14,181 6,923 5,005 1,918 7,261 6,478 783 194 339 Dec. 31, 1951............................................................ 14,618 14,089 6,840 4,939 1,901 7,252 6,602 650 202 327 Dec. 31, 1962............................................................ 13,938 13,427 6,047 4,503 1,544 7,380 7,072 308 331 180 Dec. 31, 1963............................................................ 14,078 13,569 6,108 4,615 1,493 7,461 7,177 284 330 179 Dec. 31, 1964............................................................ 14,266 13,761 6,225 4,773 1,452 7,536 7,262 274 327 178 Dec. 31, 1965............................................................ 14,309 13,804 6,221 4,815 1,406 7,583 7,320 263 328 177 Dec. 31, 1966............................................................ 14,274 13,770 6,150 4,779 1,351 7,620 7,385 235 330 174 Dec. 31, 1967............................................................ 14,222 13,721 6,071 4,758 1,313 7,650 7,439 211 331 170 Dec. 31, 1968............................................................ 14,179 13,679 5,978 4,716 1,262 7,701 7,504 197 333 167 Dec. 31, 1969............................................................ 14,158 13,662 5,871 4,669 1,202 7,791 7,595 196 330 166 Dec. 31, 1970............................................................ 14,181 13,688 5,768 4,621 1,147 7,920 7,735 185 328 165 Dec. 31, 1971............................................................ 14,273 13,784 5,728 4,600 1,128 8,056 7,875 181 326 163 Dec. 31, 1972............................................................ 14,413 13,928 5,705 4,613 1,092 8,223 8,017 206 325 160 Dec. 31, 1973............................................................ 14,653 14,172 5,737 4,661 1,076 8,435 8,229 206 321 160 June 30, 1974............................................................ 14,817 14,338 5,763 4,695 1,068 8,575 8,347 228 319 160 Branches, additional offices, and facilities: Dec. 31, 1934............................................................ 3,133 3,007 2,224 1,243 981 783 783 126 Dec. 31, 1941............................................................ 3,699 3,564 2,580 1,565 1,015 984 932 52 32 103 Dec. 31, 1947 3.......................................................... 4,332 4,161 3,051 1.870 1,181 1,110 1,043 67 124 47 Dec. 31, 1951............................................................ 5,383 5,153 3,837 2,370 1,467 1,316 1,275 41 165 65 Dec. 31, 1962............................................................ 12,932 12,345 9,649 6,640 3,009 2,696 2,646 50 466 121 Dec. 31, 1963............................................................ 14,122 13,498 10,613 7,420 3,193 2,885 2,835 50 502 122 Dec. 31, 1964............................................................ 15,275 14,601 11,457 8,156 3,301 3,144 3,094 50 549 125 Dec. 31, 1965............................................................ 16,471 15,756 12,298 8,964 3,334 3,458 3,404 54 583 132 Dec. 31, 1966........................................................... 17,665 16,908 13,129 9,611 3,518 3,779 3,717 62 614 143 Dec. 31, 1967............................................................ 18,757 17,928 13,856 10,183 3,673 4,072 4,026 46 669 160 Dec. 31, 1968............................................................ 19,911 19,013 14,553 10,985 3,568 4,460 4,414 46 729 169 Dec. 31, 1969............................................................ 21,196 20,208 15,204 11,727 3,477 5,004 4,957 47 810 178 Dec. 31, 1970............................................................ 22,727 21,643 16,191 12,536 3,655 5,452 5,404 48 891 193 Dec. 31, 1971............................................................ 24,299 23,104 17,085 13,272 3,813 6,019 5,979 40 983 212 Dec. 31, 1972............................................................ 25,977 24,622 17,954 13,974 3,980 6,668 6,623 45 1,113 242 Dec. 31, 1973............................................................ 27,946 26,454 18,966 14,916 4,050 7,488 7,442 46 1,241 251 June 30, 1974............................................................ 28,869 27,336 19,436 15,387 4,049 7,900 7,853 47 1,282 251 Changes Jan.-June 30, 1974 Banks: New banks................................................................. 230 229 72 53 19 157 129 28 1 Ceased banking operations...................................... -2 -2 -2 -2 Suspensions................................................................ Reopening of suspended bank................................. 1 1 1 1 Consolidations and absorptions: Banks converted into branches........................... -51 -56 -27 -19 -8 — 29 -29 -1 Other...................................................................... -8 -6 -1 -1 — 5 — 4 -1 -2 Interclass changes: Nonmember to national....................................... 5 5 — 5 — 5 Nonmember to State member............................. 3 3 -3 — 3 State member to national..................................... 4 -4 State member to nonmember............................... -17 -17 17 17 National to nonmember....................................... -9 — 9 9 9 Noninsured to insured.......................................... 3 -3 Net change.................................................................. 164 166 26 34 — 8 140 118 22 —2 Number of banks, June 30, 1974............................. 14,817 14,338 5,763 4,695 1,068 8,575 8,347 228 319 160 Branches and additional offices: De novo..................................................................... 980 901 506 404 102 395 394 1 79 Banks converted........................................................ 56 56 39 29 10 17 17 Discontinued.............................................................. -106 -75 -61 — 42 —19 — 14 —14 -31 Sale of branch........................................................... -4 -4 — 5 -1 — 4 1 1 Interclass changes: Nonmember to national....................................... 19 19 —19 -19 Nonmember to State member............................. 3 3 — 3 -3 State member to national..................................... 106 -106 State member to nonmember............................... -14 -14 14 14 National to State member ................................. — 26 26 National to nonmember....................................... -16 -16 16 16 Insured mutual savings to national..................... 6 6 6 -6 Other.......................................................................... 1 -5 -8 3 6 6 -1 Facilities reclassified as branches............................. 2 2 1 1 1 1 Net change................................................................. 928 887 473 472 1 414 413 1 41 Number of branches and additional offices, June 30, 1974.................................................................. 28,671 27,138 19,271 15,232 4,039 7,867 7,820 47 1,282 251 Banking facilities:4 Facilities reclassified as branches ....................... -2 -2 -1 -1 - 1 -1 Discontinued............................................................. -3 -3 -2 -2 -1 -1 Interclass changes: State member to national.................................... +2 -2 Net change................................................................. -5 —5 -3 -1 — 2 —2 —2 Number of facilities, June 30, 1974 ....................... 198 198 165 155 10 33 33 1 National bank figures include one bank in Puerto Rico and one bank 4 Provided at military and other Govt, establishments through arrange­ in Virgin Islands. ments made by the Treasury Dept. 2 Insured mutual savings banks figures include one to three member mutual savings banks, 1941 to 1962 inclusive, not reflected in total com­ Note.—Beginning with 1959, figures include all banks in Alaska and mercial bank figures. Hawaii, but nonmember banks in territories and possesssions are excluded. 3 Series revised as of June 30, 1947. The revision resulted in an addition of 115 banks and nine branches. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 80 FEDERAL RESERVE PAR LIST □ AUGUST 1974 NUMBER OF PAR AND NONPAR BANKING OFFICES Par Total Nonpar (nonmember) F.R. district, Total Member Nonmember State, or other area Branches Branches Branches Branches Branches Banks and offices Banks and offices Banks and offices Banks and offices Banks and offices Total, including other areas: Dec. 31, 1973...................... 14,062 26,687 13,915 26,594 5,737 19,015 8,178 7,579 147 93 June 30, 1974..................... 14,213 27,583 14,084 27,488 5,763 19,493 8,321 7,995 129 95 F.R. districts, June 30, 1974 Boston................................. 379 1,917 379 1,917 208 1,245 171 672 New York1......................... 480 4,242 480 4,242 326 3,675 154 567 Philadelphia........................ 414 1,992 414 1,992 274 1,328 140 664 Cleveland........................... 771 2,385 771 2,385 462 1,922 309 463 Richmond........................... 772 3,964 766 3,963 388 2,477 378 1,486 6 1 Atlanta................................ 1,901 2,193 1,857 2,128 631 1,270 1,226 858 44 65 Chicago............................... 2,658 2,844 2,658 2,844 930 1,811 1,728 1,033 St. Louis............................. 1,414 1,274 1,377 1,260 429 644 948 616 37 14 Minneapolis........................ 1,392 351 1,392 351 505 182 887 169 Kansas City......................... 2,153 505 2,153 505 817 272 1,336 233 Dallas.................................. 1,445 402 1,403 387 650 200 753 187 42 15 San Francisco..................... 434 5,514 434 5,514 143 4,467 291 1,047 State or area, June 30, 1974: Alabama............................. 292 386 292 386 112 273 180 113 Alaska................................. 10 79 10 79 5 68 5 11 Arizona............................... 16 415 16 415 4 288 12 127 Arkansas............................. 257 258 220 244 83 151 137 93 37 14 California............................ 182 3,428 182 3,428 65 2.969 117 459 Colorado............................. 259 44 259 44 143 26 116 18 Connecticut......................... 71 532 71 532 26 324 45 208 Delaware............................. 17 123 17 123 5 4 12 119 District of Columbia.......... 16 122 16 122 14 112 2 10 Florida................................. 684 87 684 87 301 19 383 68 Georgia............................... 443 601 443 601 74 373 369 2?8 Hawaii................................. 8 148 8 148 2 10 6 138 Idaho................................... 23 186 23 186 10 159 13 27 Illinois................................. 1,182 187 1,182 187 490 109 692 78 Indiana................................ 408 809 408 809 173 482 235 327 Iowa.................................... 666 377 666 377 146 113 520 264 Kansas................................ 614 107 614 107 197 54 417 53 Kentucky............................. 342 440 342 440 91 257 251 183 Louisiana............................. 248 512 173 432 62 259 111 173 75 80 Maine.................................. 44 269 44 269 23 157 21 112 Maryland............................. 112 676 112 676 47 412 65 264 Massachusetts..................... 152 873 152 873 91 641 61 232 Michigan............................. 341 1,425 341 1,425 206 1,139 135 286 Minnesota........................... 742 27 742 27 229 15 513 12 Mississippi........................... 184 468 184 468 49 217 135 251 Missouri.............................. 687 235 687 235 172 79 515 156 Montana............................. 151 13 151 13 100 9 51 4 Nebraska............................. 446 69 446 69 131 39 315 30 Nevada................................ 8 99 8 99 5 84 3 15 New Hampshire................. 80 92 80 92 49 76 31 16 New Jersey......................... 223 1,286 223 1,286 151 1,095 72 191 New Mexico....................... 75 182 75 182 41 111 34 71 New York........................... 294 2,951 294 2,951 224 2,778 70 i 73 North Carolina................... 90 1,494 90 1,494 27 742 63 752 North Dakota..................... 169 78 169 78 47 18 122 60 Ohio.................................... 500 1,565 500 1,565 333 1,309 167 256 Oklahoma........................... 451 91 451 91 208 57 243 34 Oregon................................. 48 409 48 409 8 285 40 124 Pennsylvania....................... 412 2,111 412 2,111 274 1,487 138 624 Rhode Island...................... 16 208 16 208 5 114 11 94 South Carolina................... 91 569 85 568 23 375 62 193 South Dakota..................... 159 112 159 112 59 79 100 33 Tennessee............................ 329 682 329 682 85 381 244 301 Texas................................... 1,292 113 1,281 113 598 29 683 84 Utah.................................... 53 182 53 182 16 130 37 52 Vermont.............................. 36 120 36 120 21 47 15 73 Virginia............................... 278 1,085 278 1,085 165 824 113 261 Washington......................... 89 652 89 652 29 537 60 115 West Virginia..................... 212 25 212 25 127 15 85 10 Wisconsin........................... 617 319 617 319 160 102 457 217 Wyoming............................. 71 2 71 2 55 1 16 1 Other areas: American Samoa2 2 2 2 Guam2 .. . . 1 15 1 15 9 1 6 Puerto Rico3....................... 14 214 14 214 1 28 13 192 Virgin Islands3................... 8 29 8 29 1 22 7 1 1 Includes 19 New York City branches of three insured nonmember gin Islands) are included above in the table as nonmember banks; and Puerto Rican banks. nonmember branches in Puerto Rico include eight branches of Canadian 2 American Samoa and Guam assigned to the San Francisco District banks. for check clearing and collection purposes. All member branches in Guam are branches of California and New York Banks. Note.—Includes all commercial banking offices in the United States, 3 Puerto Rico and the Virgin Islands assigned to the New York District Puerto Rico, and the Virgin Islands on which checks are drawn, including for purposes of Regulation J, “Check Clearing and Collection.” Member 198 banking facilities. Number of banks and branches differs from that branches in Puerto Rico and all except seven in the Virgin Islands are in the table on page A-79 of the Aug. 1974 Bulletin, because this table branches of banks located in California, New York and Pennsylvania. includes banks in Puerto Rico and the Virgin Islands but excludes banks Certain branches of Canadian banks (two in Puerto Rico and five in Vir­ and trust companies on which no checks are drawn. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 81 B oard of G ov erno rs an d Staff sho w n on follow ing p a g e . Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Arthur F. Burns, Chairman George W. M itchell, Vice Chairman Andrew F. Brimmer John E. Sheehan Jeffrey M. Bucher Robert C. H olland Henry C. W allich OFFICE OF MANAGING DIRECTOR FOR OFFICE OF BOARD MEMBERS OFFICE OF MANAGING DIRECTOR FOR OPERATIONS RESEARCH AND ECONOMIC POLICY Thomas J. O’C onnell, Counsel to the Chairman D aniel M. D oyle, Managing Director Robert Solomon, Adviser to the Board J. Charles Partee, Managing Director John M. D enkler, Deputy Managing Joseph R. Coyne, Assistant to the Board Stephen H. Axilrod, Adviser to the Board Director John S. Rippey, Assistant to the Board Samuel B. Chase, Jr., Adviser to the Board Gordon B. Grimwood, Assistant Director John J. Hart, Special Assistant to the Board Arthur L. Broida, Assistant to the Board and Program Director for Frank O’Brien, Jr., Special Assistant to the M urray Altm ann, Special Assistant to the Contingency Planning Board Board W illiam W. Layton, Director of Equal Donald J. W inn, Special Assistant to the Board Employment DIVISION OF RESEARCH AND STATISTICS Brenton C. Leavitt, Program Director for Banking Structure LEGAL DIVISION Lyle E. Gramley, Director James L. Pierce, Associate Director Andrew F. Oehmann, Acting General Counsel Peter M. Keir, Adviser John N icoll, Deputy General Counsel Stanley J. Sigel, Adviser Robert S. Plotkin, Assistant General M urray S. W ernick, Adviser Counsel K enneth B. W illiam s, Adviser Baldwin B. T uttle, Assistant General James B. Eckert, Associate Adviser Counsel DIVISION OF FEDERAL RESERVE BANK Edward C. Ettin, Associate Adviser OPERATIONS Charles R. M cN eill, Assistant to the Robert J. Lawrence, Associate Adviser General Counsel Eleanor J. Stockw ell, Associate Adviser Ronald G. Burke, Director G riffith L. Garwood, Adviser Joseph S. Zeisel, Associate Adviser James R. Kudlinski, Associate Director James L. K ichline, Assistant Adviser OFFICE OF SAVER AND E. M aurice M cW hirter, Associate Stephen P. Taylor, Assistant Adviser CONSUMER AFFAIRS Director Thomas D. Thomson, Assistant Adviser W alter A. A lthausen, Assistant Director Frederic Solom on, Assistant to the Louis W einer, Assistant Adviser Harry A. G uinter, Assistant Director Board and Director Helm ut F. W endel, Assistant Adviser P. D. Ring, Assistant Director Janet O. H art, Deputy Director Levon H. Garabedian, Assistant Director A 82 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

DIVISION OF DATA PROCESSING OFFICE OF THE SECRETARY DIVISION OF INTERNATIONAL FINANCE C harles L. Ham pton, Director C hester B. Feldberg, Secretary Ralph C. B ryant, Director H enry W. M eetze, Associate Director Theodore E. A llison, Assistant Secretary John E. R eynolds, Associate Director G lenn L. Cummins, Assistant Director Normand R. V. Bernard, Assistant Paul W onnacott, Associate Director W arren N. M inami, Assistant Director Secretary R obert F. Gem m ill, Adviser R obert J. Zem el, Assistant Director E lizabeth L. C arm ichael, Assistant Reed J. Irvine, Adviser Secretary Bernard N orwood, Adviser DIVISION OF PERSONNEL Sam uel Pizer, Adviser DIVISION OF BANKING SUPERVISION G eorge B. H enry, Associate Adviser K eith D. Engstrom , Director AND REGULATION H elen B. Junz, Associate Adviser C harles W. W ood, Assistant Director fNoRMAN S. Fieleke, Assistant Adviser OFFICE OF THE CONTROLLER Brenton C. L eavitt, Director fOn loan from the Federal Reserve Bank of Boston. Frederick R. D ahl, Assistant Director John K akalec, Controller Jack M. Egertson, Assistant Director John N. Lyon, Assistant Director DIVISION OF ADMINISTRATIVE SERVICES John T. M cC lintock, Assistant Director Thomas A. Sidman, Assistant Director W alter W. Kreim ann, Director W illiam W. W iles, Assistant Director D onald E. A nderson, Assistant Director John D. Sm ith, Assistant Director A 83 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 84 FEDERAL OPEN MARKET COMMITTEE Arthur F. Burns, Chairman Alfred Hayes, Vice Chairman Robert P. Black George H. Clay John E. Sheehan Andrew F. Brimmer Robert C. Holland Henry C. Wallich Jeffrey M. Bucher Monroe Kimbrel Willis J. Winn George W. Mitchell Arthur L. Broida, Secretary Robert Solomon, Economist M urray Altm ann, Deputy Secretary (International Finance) Normand R. V. Bernard, Assistant Harry Brandt, Associate Economist Secretary Ralph C. Bryant, Associate Economist Thomas J. O’C onnell, General Counsel Richard G. Davis, Associate Economist Edward G. Guy, Deputy General Counsel Raymond J. D oll, Associate Economist John N icoll, Assistant General Counsel Lyle E. Gram ley, Associate Economist J. Charles Partee, Senior Economist W illiam J. H octer, Associate Economist Stephen H. Axilrod, Economist James Parthemos, Associate Economist (Domestic Finance) James L. Pierce, Associate Economist John E. Reynolds, Associate Economist Alan R. Holmes, Manager, System Open Market Account Charles A. Coombs, Special Manager, System Open Market Account Peter D. Sternlight, Deputy Manager, System Open Market Account FEDERAL ADVISORY COUNCIL Thomas I. Storrs, fifth federal reserve district, President James F. English, Jr., first federal reserve district, Vice President Gabriel Hauge, second federal Donald E. Lasater, eighth federal reserve district RESERVE DISTRICT James F. Bodine, third federal George H. Dixon, ninth federal RESERVE DISTRICT RESERVE DISTRICT Clair E. Fultz, fourth federal Eugene H. Adams, tenth federal RESERVE DISTRICT RESERVE DISTRICT Lawrence A. Merrigan, sixth federal Lewis H. Bond, eleventh federal RESERVE DISTRICT RESERVE DISTRICT Allen P. Stults, seventh federal Harold A. Rogers, twelfth federal RESERVE DISTRICT RESERVE DISTRICT Herbert V. Prochnow, Secretary W illiam J. Korsvik, Associate Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 85 FEDERAL RESERVE BANKS AND BRANCHES Federal Reserve Bank, branch, or facility Chairman President Vice President Zip code Deputy Chairman First Vice President in charge of branch Boston ...................... 02106 James S. Duesenberry Frank E. Morris Louis W. Cabot James A. McIntosh New York................ 10045 Roswell L. Gilpatric Alfred Hayes Frank R. Milliken Richard A. Debs Buffalo................. ....14240 Norman F. Beach A. A. Maclnnes, Jr. Philadelphia .......... 19101 John R. Coleman David P. Eastburn Edward J. Dwyer Mark H. Willes Cleveland ................ 44101 Horace A. Shepard Willis J. Winn Robert E. Kirby Walter H. MacDonald Cincinnati ............ 45201 Graham E. Marx Robert E. Showalter Pittsburgh ............ 15230 Richard Cyert Robert D. Duggan Richmond......................23261 Robert W. Lawson, Jr. Robert P. Black E. Craig Wall George C. Rankin Baltimore...................21203 James G. Harlow Jimmie R. Monhollon Charlotte..................28201 Charles W. DeBell Stuart P. Fishburne Culpeper Communications J. Gordon Dickerson, Jr. Center....................22701 Atlanta .................... 30303 H. G. Pattillo Monroe Kimbrel Clifford M. Kirtland, Jr. Kyle K. Fossum Birmingham ..... 35202 William C. Bauer Hiram J. Honea^ Jacksonville ......... 32203 Gert H. W. Schmidt Edward C. Rainey Nashville.............. 37203 Edward J. Boling Jeffrey J. Wells New Orleans 70161 Edwin J. Caplan George C. Guynn Miami Office......... 33152 W. M. Davis Chicago.................... 60690 William H. Franklin Robert P. Mayo Peter B. Clark Ernest T. Baughman Detroit................... 48231 W.M. Defoe William C. Conrad St. Louis................... 63166 Edward J. Schnuck Darryl R. Francis Sam Cooper Eugene A. Leonard Little Rock............ 72203 W.M. Pierce John F. Breen Louisville............. 40201 James C. Hendershot Donald L. Henry Memphis............... 38101 C. Whitney Brown L. Terry Britt Minneapolis ............ 55480 Bruce B. Dayton Bruce K. MacLaury James P. McFarland Clement A. Van Nice Helena................... 59601 William A. Cordingley Howard L. Knous Kansas City............. 64198 Robert W. Wagstaff George H. Clay Robert T. Person John T. Boy sen Denver ................. 80217 Maurice B. Mitchell J. David Hamilton Oklahoma City 73125 Joseph H. Williams William G. Evans Omaha ................. 68102 Durward B. Varner Robert D. Hamilton Dallas ....................... 75222 John Lawrence Philip E. Coldwell Charles T. Beaird T. W. Plant El Paso................. 79999 Gage Holland Frederic W. Reed Houston................ 77001 T.J. Barlow James L. Cauthen San Antonio......... 78295 Marshall Boykin, III Carl H. Moore San Francisco......... 94120 O. Meredith Wilson John J. Balles Joseph F. Alibrandi John B. Williams Los Angeles......... 90051 Joseph R. Vaughan Gerald R. Kelly Portland................ 97208 John R. Howard William M. Brown Salt Lake City...... 84110 Sam H. Bennion A. Grant Holman Seattle................... 98124 C. Henry Bacon, Jr. Paul W. Cavan Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 86 FEDERAL RESERVE BOARD PUBLICATIONS Available from Publications Services, Division of Administrative Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Where a charge is indicated, remittance should accompany request and be made payable to the order of the Board of Governors of the Federal Reserve System in a form collectible at par in U.S. currency. (Stamps and coupons are not accepted.) ANNUAL REPORT NIES. 1967. 29 pp. $.25 each; 10 or more to one address, $.20 each. FEDERAL RESERVE BULLETIN. Monthly. $20.00 per THE FEDERAL FUNDS MARKET. 1959. Ill pp. $1.00 year or $2.00 each in the United States and its each; 10 or more to one address, $.85 each. possessions, Bolivia, Canada, Chile, Colombia, TRADING IN FEDERAL FUNDS. 1965. 116 pp. $1.00 Costa Rica, Cuba, Dominican Republic, Ecuador, each; 10 or more to one address, $.85 each. Guatemala, Haiti, Republic of Honduras, Mexico, U.S. TREASURY ADVANCE REFUNDING, JUNE Nicaragua, Panama, Paraguay, Peru, El Salvador, 1960-JULY 1964. 1966. 65 pp. $.50 each; 10 or Uruguay, and Venezuela; 10 or more of same issue more to one address, $.40 each. to one address, $18.00 per year or $1.75 each. BANK CREDIT-CARD AND CHECK-CREDIT PLANS. Elsewhere, $24.00 per year or $2.50 each. 1968. 102 pp. $1.00 each; 10 or more to one FEDERAL RESERVE CHART BOOK ON FINANCIAL address, $.85 each. AND BUSINESS STATISTICS. Monthly. Subscrip­ INTEREST RATE EXPECTATIONS: TESTS ON YIELD tion includes one issue of Historical Chart Book. SPREADS AMONG SHORT-TERM GOVERNMENT $6.00 per year or $.60 each in the United States SECURITIES. 1968. 83 pp. $.50 each; 10 or more and the countries listed above; 10 or more of same to one address, $.40 each. issue to one address, $.50 each. Elsewhere, $7.00 SURVEY OF FINANCIAL CHARACTERISTICS OF per year or $.70 each. CONSUMERS. 1966. 166 pp. $1.00 each; 10 or HISTORICAL CHART BOOK. Issued annually in Sept. more to one address, $.85 each. Subscription to monthly chart book includes one SURVEY OF CHANGES IN FAMILY FINANCES. 1968. issue. $.60 each in the United States and countries 321 pp. $1.00 each; 10 or more to one address, listed above; 10 or more to one address, $.50 each. $.85 each. Elsewhere, $.70 each. REPORT OF THE JOINT TREASURY-FEDERAL RE­ THE FEDERAL RESERVE ACT, as amended through SERVE STUDY OF THE U.S. GOVERNMENT SE­ December 1971, with an appendix containing pro­ CURITIES MARKET. 1969. 48 pp. $.25 each; 10 visions of certain other statutes affecting the Federal or more to one address, $.20 each. Reserve System. 252 pp. $1.25. JOINT TREASURY-FEDERAL RESERVE STUDY OF REGULATIONS OF THE BOARD OF GOVERNORS OF THE GOVERNMENT SECURITIES MARKET: THE FEDERAL RESERVE SYSTEM. STAFF STUDIES—PART 1.1970. 86 pp. $.50 each; PUBLISHED INTERPRETATIONS OF THE BOARD OF 10 or more to one address, $.40 each. PART 2. GOVERNORS, as of December 31, 1973. $2.50. 1971. 153 pp. and PART 3. 1973. 131 pp. Each DEBITS AND CLEARING STATISTICS AND THEIR USE. volume $1.00; 10 or more to one address, $.85 1959. 144 pp. $1.00 each; 10 or more to one address, $.85 each. OPEN MARKET POLICIES AND OPERATING PROCE­ SUPPLEMENT TO BANKING AND MONETARY STA­ DURES—STAFF STUDIES. 1971. 218 pp. $2.00; TISTICS. Sec. 1. Banks and the Monetary System. 10 or more to one address, $1.75 each. 1962. 35 pp. $.35. Sec. 2. Member Banks. 1967. REAPPRAISAL OF THE FEDERAL RESERVE DIS­ 59 pp. $.50. Sec. 5. Bank Debits. 1966. 36 pp. COUNT MECHANISM, Vol. 1. 1971. 276 pp. Vol. $.35. Sec. 6. Bank Income. 1966. 29 pp. $.35. 2. 1971. 173 pp. Vol. 3. 1972. 220 pp. Each Sec. 9. Federal Reserve Banks. 1965. 36 pp. $.35. volume $3.00 each; 10 or more to one address, Sec. 10. Member Bank Reserves and Related Items. $2.50 each. 1962. 64 pp. $.50. Sec. 11. Currency. 1963. 11 THE ECONOMETRICS OF PRICE DETERMINATION pp. $.35. Sec. 12. Money Rates and Securities CONFERENCE, October 30-31, 1970, Washington, Markets. 1966. 182 pp. $.65. Sec. 14. Gold. 1962. D.C. Oct. 1972, 397 pp. Cloth ed. $5.00 each; 24 pp. $.35. Sec. 15. International Finance. 1962. 10 or more to one address, $4.50 each. Paper ed. 92 pp. $.65. Sec. 16 (New). Consumer Credit. $4.00 each; 10 or more to one address, $3.60 each. 1965. 103 pp. $.65. FEDERAL RESERVE STAFF STUDY: WAYS TO MOD­ INDUSTRIAL PRODUCTION—1971 edition. 383 pp. ERATE FLUCTUATIONS IN HOUSING CON­ $4.00 each; 10 or more to one address, $3.50 each. STRUCTION, Dec. 1972, 487 pp. $4.00 each; 10 BANK MERGERS & THE REGULATORY AGENCIES: or more to one address, $3.60 each. APPLICATION OF THE BANK MERGER ACT OF LENDING FUNCTIONS OF THE FEDERAL RESERVE 1960. 1964. 260 pp. $1.00 each; 10 or more to BANKS: A HISTORY, by Howard H. Hackley. 1973. one address, $.85 each. 271 pp. $3.50 each; 10 or more to one address, THE PERFORMANCE OF BANK HOLDING COMPA­ $3.00 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 87 STAFF ECONOMIC STUDIES BUSINESS FINANCING BY BUSINESS FINANCE COM­ PANIES. 10/68. Studies and papers on economic and financial subjects HOUSING PRODUCTION AND FINANCE. 3/69. that are of general interest in the field of economic research. REVISION OF WEEKLY SERIES FOR COMMERCIAL BANKS. 8/69. Summaries only printed in the BULLETIN EURO-DOLLARS: A CHANGING MARKET. 10/69. (Limited supply of mimeographed copies of full RECENT CHANGES IN STRUCTURE OF COMMER­ text available upon request for single copies) CIAL BANKING. 3/70. SDR’s IN FEDERAL RESERVE OPERATIONS AND THE DETERMINANTS OF A DIRECT INVESTMENT STATISTICS. 5/70. OUTFLOW WITH EMPHASIS ON THE SUPPLY OF FUNDS, by Frederic Brill Ruckdeschel. June 1973. MEASURES OF SECURITY CREDIT. 12/70. 171 pp. MONETARY AGGREGATES AND MONEY MARKET MORTGAGE COMMITMENTS ON INCOME PROPER­ CONDITIONS IN OPEN MARKET POLICY. 2/71. TIES: A NEW SERIES FOR 15 LIFE INSURANCE BANK FINANCING OF MOBILE HOMES. 3/71. COMPANIES, 1951-70, by Robert Moore Fisher and Barbara Negri Opper. Aug. 1973. 83 pp. INTEREST RATES, CREDIT FLOWS, AND MONETARY THE IMPACT OF HOLDING COMPANY ACQUISITIONS AGGREGATES SINCE 1964. 6/71. ON AGGREGATE CONCENTRATION IN BANKING, TWO KEY ISSUES OF MONETARY POLICY. 6/71. by Samuel H. Talley. Feb. 1974. 24 pp. SURVEY OF DEMAND DEPOSIT OWNERSHIP. 6/71. OPERATING POLICIES OF BANK HOLDING COMPA­ BANK RATES ON BUSINESS LOANS—REVISED NIES—PART II: NONBANKING SUBSIDIARIES, by SERIES. 6/71. Robert J. Lawrence. Mar. 1974. 59 pp. INDUSTRIAL PRODUCTION—REVISED AND NEW SHORT-RUN VARIATIONS IN THE MONEY STOCK- MEASURES. 7/71. SEASONAL OR CYCLICAL? by Herbert M. Kauf­ REVISED MEASURES OF MANUFACTURING CAPAC­ man and Raymond E. Lombra. June 1974. 27 pp. ITY UTILIZATION. 10/71. REVISION OF BANK CREDIT SERIES. 12/71. Printed in full in the BULLETIN PLANNED AND ACTUAL LONG-TERM BORROWING BY STATE & LOCAL GOVERNMENTS. 12/71. Staff Economic Studies shown in list below. (Except for Staff Papers, Staff Economic Studies, and ASSETS AND LIABILITIES OF FOREIGN BRANCHES some leading articles, most of the articles reprinted do OF U.S. BANKS. 2/72. not exceed 12 pages.) WAYS TO MODERATE FLUCTUATIONS IN THE CON­ STRUCTION OF HOUSING. 3/72. CONSTRUCTION LOANS AT COMMERCIAL BANKS. REPRINTS 6/72. SOME ESSENTIALS OF INTERNATIONAL MONETARY ADJUSTMENT FOR SEASONAL VARIATION. 6/41. REFORM. 6/72. SEASONAL FACTORS AFFECTING BANK RESERVES. BANK DEBITS, DEPOSITS, AND DEPOSIT TURN­ 2/58. OVER-REVISED SERIES. 7/72. LIQUIDITY AND PUBLIC POLICY, Staff Paper by Ste­ RECENT REGULATORY CHANGES IN RESERVE RE­ phen H. Axilrod. 10/61. QUIREMENTS AND CHECK COLLECTION. 7/72. SEASONALLY ADJUSTED SERIES FOR BANK CREDIT. YIELDS ON NEWLY ISSUED CORPORATE BONDS. 7/62. 9/72. INTEREST RATES AND MONETARY POLICY, Staff RECENT ACTIVITIES OF FOREIGN BRANCHES OF Paper by Stephen H. Axilrod. 9/62. U.S. BANKS. 10/72. REVISION OF CONSUMER CREDIT STATISTICS. MEASURES OF MEMBER BANK RESERVES. 7/63. 10/72. REVISION OF BANK DEBITS AND DEPOSIT TURN­ SURVEY OF FINANCE COMPANIES, 1970. 11/72. OVER SERIES. 3/65. RESEARCH ON BANKING STRUCTURE AND PER­ ONE-BANK HOLDING COMPANIES BEFORE THE 1970 FORMANCE, Staff Economic Study by Tynan AMENDMENTS. 12/72. Smith. 4/66. EVOLUTION OF THE PAYMENTS MECHANISM. 12/72. A REVISED INDEX OF MANUFACTURING CAPACITY, REVISION OF THE MONEY STOCK MEASURES AND Staff Economic Study by Frank de Leeuw with MEMBER BANK RESERVES AND DEPOSITS. 2/73. Frank E. Hopkins and Michael D. Sherman. 11/66. STATE AND LOCAL BORROWING ANTICIPATIONS REVISED SERIES ON COMMERCIAL AND INDUS­ AND REALIZATIONS. 4/73. TRIAL LOANS BY INDUSTRY. 2/67. YIELDS ON RECENTLY OFFERED CORPORATE INTEREST COST EFFECTS OF COMMERCIAL BANK BONDS. 5/73. UNDERWRITING OF MUNICIPAL REVENUE BONDS. 8/67. FEDERAL FISCAL POLICY, 1965-72. 6/73. U.S. INTERNATIONAL TRANSACTIONS: TRENDS IN SOME PROBLEMS OF CENTRAL BANKING. 6/73. 1960-67. 4/68. CAPACITY UTILIZATION IN MAJOR MATERIALS IN­ FEDERAL FISCAL POLICY IN THE 1960’s. 9/68. DUSTRIES. 8/73. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 88 FEDERAL RESERVE BULLETIN □ AUGUST 1974 CREDIT-CARD AND CHECK-CREDIT PLANS AT COM­ CHANGES IN TIME AND SAVINGS DEPOSITS AT MERCIAL BANKS. 9/73. COMMERCIAL BANKS, JULY-OCTOBER 1973. 4/74. RATES ON CONSUMER INSTALMENT LOANS. 9/73. CHANGES IN BANK LENDING PRACTICES, 1973.4/74. BALANCE OF PAYMENTS ADJUSTMENT SINCE 1971. CAPACITY UTILIZATION FOR MAJOR MATERIALS: 10/73. REVISED MEASURES. 4/74. NEW SERIES FOR LARGE MANUFACTURING COR­ OPEN MARKET OPERATIONS IN 1973. 5/74. PORATIONS. 10/73. NUMERICAL SPECIFICATIONS OF FINANCIAL VARI­ MONEY SUPPLY IN THE CONDUCT OF MONETARY ABLES AND THEIR ROLE IN MONETARY POLICY. POLICY. 11/73. 5/74. U.S. ENERGY SUPPLIES AND USES, Staff Economic Study by Clayton Gehman. 12/73. TREASURY AND FEDERAL RESERVE FOREIGN EX­ REVISION OF THE MONEY STOCK MEASURES AND CHANGE OPERATIONS, INTERIM REPORT. 6/74. MEMBER BANK DEPOSITS. 2/74. BANKING AND MONETARY STATISTICS, 1973. Se­ TREASURY AND FEDERAL RESERVE FOREIGN EX­ lected series of banking and monetary statistics for CHANGE OPERATIONS. 3/74. 1973 only. 3/74 and 7/74. RECENT DEVELOPMENTS IN THE U.S. BALANCE OF FINANCIAL DEVELOPMENTS IN THE SECOND PAYMENTS. 4/74. QUARTER OF 1974. 8/74. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 89 INDEX TO STATISTICAL TABLES (For list of tables published periodically, but not monthly, see page A-3) Acceptances, bankers, 11, 27, 29 Demand deposits: Agricultural loans of commercial banks, 18, 20 Adjusted, commercial banks, 13, 15, 19 Assets and liabilities (See also Foreigners): Banks, by classes, 16, 19, 23 Banks, by classes, 16, 18, 19, 20, 32 Ownership by individuals, partnerships, and Federal Reserve Banks, 12 corporations, 26 Nonfinancial corporations, current, 43 Subject to reserve requirements, 15 Automobiles: Turnover, 13 Consumer instalment credit, 47, 48, 49 Deposits (See also specific types of deposits): Production index, 50, 51 Accumulated at commercial banks for payment of personal loans, 26 Bank credit proxy, 15 Banks, by classes, 16, 19, 23, 32 Bankers balances, 18, 19, 22 Federal Reserve Banks, 12, 74 (See also Foreigners, claims on, and liabilities to) Subject to reserve requirements, 15 Banking offices: Discount rates (See Interest rates) Changes in number, 79 Discounts and advances by Reserve Banks (See Loans) Par and nonpar, number, 80 Dividends, corporate, 43 Banks for cooperatives, 40 Bonds (See also U.S. Govt, securities): Employment, 52, 54 New issues, 40, 41, 42 Yields and prices, 30, 31 Farm mortgage loans, 44 Branch banks: Federal agency obligations, 11, 12, 13 Assets, foreign branches of U.S. banks, 72 Federal finance: Liabilities of U.S. banks to their foreign branches and Receipts and outlays, 34, 35 foreign branches of U.S. banks, 24, 73 Treasury operating balance, 34 Brokerage balances, 71 Federal funds, 7, 18, 20, 24, 29 Business expenditures on new plant and equipment, 43 Federal home loan banks, 39, 40 Business indexes, 52 Federal Home Loan Mortgage Corporation, 39, 44, 45 Business loans (See Commercial and industrial loans) Federal Housing Administration, 44, 45, 46 Federal intermediate credit banks, 39, 40 Capacity utilization, 52 Federal land banks, 39, 40, 44 Capital accounts: Federal National Mortgage Assn., 39, 40, 44, 45, 46 Banks, by classes, 16, 19, 24 Federal Reserve Banks: Federal Reserve Banks, 12 Condition statement, 12 Central banks, 77, 78 U.S. Govt, securities held, 4, 12, 13, 36, 37 Certificates of deposit, 24 Federal Reserve credit, 4, 6, 12, 13 Commercial and industrial loans: Federal Reserve notes, 12 Commercial banks, 15, 18, 27 Federally sponsored credit agencies, 39, 40 Weekly reporting banks, 20-24, 25 Finance companies: Commercial banks: Loans, 20, 48, 49 Assets and liabilities, 15, 16, 18, 19, 20 Paper, 27, 29 Banking offices, changes in number, 79 Financial institutions, loans to, 18, 20 Consumer loans held, by type, 47 Float, 4 Deposits at, for payment of personal loans, 26 Flow of funds, 58, 59 Loans sold outright, 27 Foreign: Number, by classes, 16 Currency operations, 11, 12 Real estate mortgages held, by type of holder and prop­ Deposits in U.S. banks, 5, 12, 19, 23, 74 erty, 44-46 Exchange rates, 77 Commercial paper, 27, 29 Trade, 61 Condition statements (See Assets and liabilities) Foreigners: Construction, 52, 53 Claims on, 68, 69, 70, 74, 75, 76 Consumer credit: Liabilities to, 24, 63, 64, 65, 66, 67, 74, 75, 76 Instalment credit, 47, 48, 49 Noninstalment credit, 47 Gold: Consumer price indexes, 52, 55 Certificates, 12 Consumption expenditures, 56, 57 Earmarked, 74 Corporations: Net purchases by United States, 62 Profits, taxes, and dividends, 43 Reserves of central banks and govts., 78 Security issues, 41, 42 Stock, 4, 61 Security yields and prices, 30, 31 Government National Mortgage Assn., 44 Cost of living (See Consumer price indexes) Gross national product, 56, 57 Currency and coin, 5, 9, 18 Currency in circulation, 5, 14 Housing permits, 52 Customer credit, stock market, 31, 32 Housing starts, 53 Debits to deposit accounts, 13 Income, national and personal, 56, 57 Debt (See specific types of debt or securities) Industrial production index, 50, 51, 52 )xedni siht n i dettimo si ” A“ xiferp eht hguohtla 08-A hguorht 4-A segap o t era secnerefeR( Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

)xedni siht n i dettimo si ” A“ xiferp eht hguohtla 08-A hguorht 4-A segap o t era secnerefeR( A 90 FEDERAL RESERVE BULLETIN □ AUGUST 1974 Instalment loans, 47, 48, 49 Real estate loans: Insurance companies, 33, 36, 37, 44, 46 Banks, by classes, 18, 21, 32, 44 Insured commercial banks, 16, 18, 26, 79 Mortgage yields, 45, 46 Interbank deposits, 16, 19 Type of holder and property mortgaged, 44-46 Interest rates: Reserve position, basic, member banks, 7 Bond and stock yields, 30 Reserve requirements, member banks, 9 Business loans by banks, 28 Reserves: Federal Reserve Banks, 8 Central banks and govts., 78 Foreign countries, 76, 77 Commercial banks, 19, 22, 24 Money market rates, 29 Federal Reserve Banks, 12 Mortgage yields, 45, 46 Member banks, 5, 6, 15, 19 Prime rate, commercial banks, 28 U.S. reserve assets, 61 Time and savings deposits, maximum rates, 10 Residential mortgage loans, 45, 46 International capital transactions of U.S., 63-76 Retail credit, 47, 48, 49 International institutions, 62, 77, 78 Retail sales, 52 Inventories, 56 Investment companies, issues and assets, 42 Saving: Investments (See also specific types of investments): Flow of funds series, 58, 59 Banks, by classes, 16, 18, 21, 22, 32 National income series, 56, 57 Commercial banks, 15 Savings and loan assns., 33, 37, 44, 46 Federal Reserve Banks, 12, 13 Savings deposits (See Time deposits) Life insurance companies, 33 Savings institutions, principal assets, 32, 33 Savings and loan assns., 33 Securities (See also U.S. Govt, securities): Federally sponsored agencies, 39, 40 Labor force, 54 International transactions, 70, 71 Life insurance companies (See Insurance companies) New issues, 40, 41, 42 Loans (See also specific types of loans): Yields and prices, 30, 31 Banks, by classes, 16, 18, 20, 32 Special Drawing Rights, 4, 12, 60, 61 Commercial banks, 15, 16, 18, 20, 25, 27, 28 State and local govts.: Federal Reserve Banks, 4, 6, 8, 12, 13 Deposits, 19, 23 Insurance companies, 33, 46 Holdings of U.S. Govt, securities, 36, 37 Insured or guaranteed by U.S., 44, 45, 46 New security issues, 40, 41 Savings and loan assns., 33 Ownership of securities of, 18, 22, 32 Yields and prices of securities, 30, 31 Manufacturers: State member banks, 17, 26, 79 Capacity utilization, 52 Stock market credit, 31, 32 Production index, 51, 52 Stocks (See also Securities): Margin requirements, 10 New issues, 41, 42 Member banks: Yields and prices, 30, 31 Assets and liabilities, by classes, 16, 18 Banking offices, changes in number, 79 Tax receipts, Federal, 35 Borrowings at Federal Reserve Banks, 6, 12 Time deposits, 10, 15, 16, 19, 23 Number, by classes, 16 Treasury currency, Treasury cash, 4, 5 Reserve position, basic, 7 Treasury deposits, 5, 12, 34 Reserve requirements, 9 Treasury operating balance, 34 Reserves and related items, 4, 6, 15 Mining, production index, 51 Unemployment, 54 Mobile home shipments, 53 U.S. balance of payments, 60 Money market rates (See Interest rates) U.S. Govt, balances: Money stock and related data, 14 Commercial bank holdings, 19, 23 Mortgages (See Real estate loans and Residential mortgage Member bank holdings, 15 loans) Treasury deposits at Reserve Banks, 5, 12, 34 Mutual funds (See Investment companies) U.S. Govt, securities: Mutual savings banks, 23, 32, 36, 37, 44, 46, 79 Bank holdings, 16, 18, 21, 32, 36, 37 Dealer transactions, positions, and financing, 38 National banks, 16, 26, 79 Federal Reserve Bank holdings, 4, 12, 13, 36, 37 National defense expenditures, 35 Foreign and international holdings, 12, 68, 70, 74 National income, 56, 57 International transactions, 68, 70 Nonmember banks, 17, 18, 19, 26, 79 New issues, gross proceeds, 41 Open market transactions, 11 Open market transactions, 11 Outstanding, by type of security, 36, 37 Ownership, 36, 37 Par and nonpar banking offices, number, 80 Yields and prices, 30, 31 Payrolls, manufacturing index, 52 Utilities, production index, 51 Personal income, 57 Prices: Consumer and wholesale commodity, 52, 55 Veterans Administration, 44, 45, 46 Security, 31 Prime rate, commercial banks, 28 Weekly reporting banks, 20-24 Production, 50, 51, 52 Profits, corporate, 43 Yields (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

BOUNDARIES OF FEDERAL RESERVE DISTRICTS AND THEIR BRANCH TERRITORIES Minneapolis^*] Detroit^ Ctiicagoj OmafuL* Jfincinnam Kansas Citt^ It. Louis XfuirCot**/ VC Oklahoma Citjf '.ittU Rock\ Bin*i^ X tfan ta Dallas Jiouston AewOrCeans Antonio* Miami ‘Drawn hyU.W. Qatvin, Cart ☆ (o T H E F E D E R A L R E S E R V E S Y S T E M g) ft ALAS KA HAWAII L eg en d Boundaries of Federal Reserve D istricts --------Boundaries of Federal Reserve Branch Territories © Board of G overnors of the Federal Reserve System ® Federal Reserve Bank Cities • Federal Reserve B ranch Cities Digitized for FRASER • Federal Reserve Bank Facilities http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis