Federal Reserve Bulletin, 1975-10

OCTOBER 1975 FEDERAL RESERVE BULLETIN Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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FEDERAL RESERVE BULLETIN NUMBER 10 • VOLUME 61 • OCTOBER 1975 CONTENTS 605 Developments in A 1 Financial and Business Statistics International Financial Markets A 1 Contents A 2 U.S. Statistics 618 Changes in Time and Savings Deposits A 58 International Statistics at Commercial Banks, January-April 1975 A 76 Board of Governors and Staff 625 Statements to Congress A 78 Open Market Committee and Staff; Federal Advisory Council 641 Record of Policy Actions of the Federal Open Market Committee A 79 Federal Reserve Banks and Branches 649 Law Department A 80 Federal Reserve Board Publications 705 Announcements A 82 Index to Statistical Tables 710 Industrial Production A 84 Map of Federal Reserve System Inside Back Cover: Guide to Tabular Presentation Statistical Releases: Reference PUBLICATIONS COMMITTEE J. Charles Partee Lyle E. Gramley John M. Denkler Frederic Solomon Ralph C. Bryant Joseph R. Coyne John D. Hawke, Jr. James L. Kichline, Staff Director The Federal Reserve BULLETIN is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed except in official statements and signed articles. Direction for the art work is provided by Mack R. Rowe. Editorial support is furnished by the Economic Editing Unit headed by Elizabeth B. Sette. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Developments in International Financial Markets This article was prepared in the Financial nancing difficulties of oil-importing countries. Markets Section of the Division of International This was accomplished mainly through the Finance. Euro-markets but also through a large expansion in foreign lending by the head offices of U.S. International financial markets' in the past 2 banks. The removal of U.S. capital outflow years have been confronted with a number of controls in early 1974 and modifications of pressures that have tested their capability to capital control policies by other national auadjust to a rapidly changing economic environ- thorities facilitated these flows of funds. ment. The financial strains connected with the This year there has been a recovery of lending fourfold increase in international petroleum through the Euro-currency banking markets, and prices at the beginning of this period loomed U.S. banks continued to increase their holdings as a major adjustment problem for the interna- of foreign assets at a rapid pace until midyear. tional markets. Conditions in these markets have At the same time there has been a strong upsurge changed rapidly in these 2 years, partly as a inf inancingt hrough international bond markets, result of the increase in oil prices, but also in which had been depressed in 1974 by record response to changing conditions in national high interest rates in national markets and in economies. Interest rates in domestic and inter- the Euro-bond markets. national markets moved over a wide range; they first increased to record levels in mid-1974, as BALANCE OF PAYMENTS monetary authorities sought to dampen infla- PROBLEMS tionary pressures, and then declined as the worldwide recession deepened. The oil price increases initiated by the Organi- In mid-1974 concern emerged that banking zation of Petroleum Exporting Countries structures had been weakened and might be (OPEC) near the end of 1973 dramatically alespecially vulnerable to large losses. Tensions tered the geographic pattern of world currentin the international financial markets were account balances. The financial counterpart of greatly increased by reports of the losses expe- this development was a substantial change in rienced by some banks in this country and by the geographic pattern of supplies of and dea number of foreign banks. Largely as a result mands for financing in external markets, as of these confidence problems there was a con- OPEC countries sought outlets for their investisiderable slowing in the growth of credit chan- ble surpluses and oil-importing countries sought neled through the Euro-currency banking mar- capital inflows to finance their current-account kets in the second half of 1974. Bank lending deficits. practices and foreign exchange operating prac- The disruptions caused by the oil price intices were tightened, and central banks re- creases came at a time when international payexamined their responsibilities for supporting ments patterns already were beginning to reflect the structure of international banking. increasing differences among nations in the se- In 1974, despite the slowdown in lending verity of inflation and the pace of growth in real through the Euro-currency banking markets output. The increase in oil prices heightened after midyear, banks around the world chan- existing uncertainties about exchange rate relaneled record amounts of funds to ease the fi- tionships because it was unclear how current- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

606 Federal Reserve Bulletin • October 1975 TABLE 1 increased cost of petroleum imports principally through official borrowings from other govern- Current-account balances^ ments and in the international markets, or In billions of dollars through policies to generate private capital in- 1975 flows, or by accepting reductions in their inter- Country 1972 1973 1974 HI .5 national reserve assets. The investible surpluses of OPEC member S United States 2.3 2.1 15.0 countries have been placed mainly in assets of ^ United Kingdom .8 -1.2 -7.8 -2.2 ^ Canada -.2 .2 -1.3 -4.7 relatively short maturity, denominated in a few ^ France .1 .9 -4.9 «1.8 West Germany 2.4 6.9 12.3 10.3 major currencies (primarily U.S. dollars and to 3 Italy 2.2 -2.3 -7.2 ^-1.1 i Japan 6.0 -.8 -5.3 2.5 . a lesser extent British pounds) and held in a Other industrial limited number of national money markets and countries^ 3.2 3,8 .2 n.a. Total, 14 industrial in the Euro-currency markets. This pattern of countries 7.8 8.8 ~- 11.9 n.a. 1 ! Major oil exporters^ 2.6 5.6 70.0 ^44.0 investments did not result in a direct channeling 1 Non-oil primary of funds to oil-importing countries in proportion producing countries'* ... -7.4 -7.7 --39.8 -47.0 • to their needs for external financing. Thus, there ^Balances on goods, services, and private transfers. was a "recycling" problem: a problem of re- 2 Austria, Belgium-Luxembourg, Denmark, the Netherlands, distributing the flows forthcoming from the Norway, Sweden, and Switzerland. ®OPEC member countries except Ecuador and Gabon; plus OPEC countries. The international financial Bahrain and Oman. markets helped to meet this problem by facili- '*A11 countries classified by the IMF as primary producing countries, other than "major oil exporters." tating capital flows from one oil-importing ® Seasonally adjusted at an annual rate. country to another as well as from the OPEC ®IMF projection for the year 1975. ®Estimated by F.R. staff. countries to borrowers in these markets. n.a.Not available. SOURCE—U.S. Department of Commerce for U.S. data; National sources for U.K., Canada, France, Germany, Italy, GOVERNMENTAL POLICIES and Japan; IMF Annual Report (August 1975) for all other data, except as noted. AFFECTING CAPITAL MOVEMENTS In January 1974, nearly a year ahead of the account balances of individual countries would announced deadline, the United States lifted its be affected and where OPEC surplus earnings restraints on capital outflows. The removal of would be placed. In addition, there were uncer- U.S. outflow controls, in combination with a tainties about the types of policies that national changed thrust of capital control policies in authorities might pursue to counteract their many other countries, was important in facilipayments difficulties. tating the recycling of OPEC surpluses to coun- The developing countries other than the major tries in need of external financing. The United oil exporters were especially hard hit by the oil States eliminated all three of its capital outflow price increase because of their comparatively control programs: the Federal Reserve's foreign limited ability to obtain additional external fi- credit restraint program; the foreign direct innancing in private markets; their difficulties vestment program (FDIP), administered by the were exacerbated in the latter half of 1974 by Commerce Department; and the interest equaa weakening of their export markets as recession lization tax (lET), administered by the Treasury. deepened in the industrialized countries. The elimination of the Federal Reserve pro- Individual oil-importing nations were forced gram, in combination with a reduction in reserve to choose a mix of policies aimed at moderating requirements on borrowings by U.S. banks from the expected worsening of their current-account their branches abroad and other foreign banks, balances and obtaining external financing to enhanced the competitive position of U.S. banks cover all or part of their greatly increased pay- in international lending and borrowing, and ments for petroleum imports. Individually and U.S. banks increased both their foreign assets as a group the oil-importing countries had little and their foreign liabilities by record amounts scope for quickly reducing their current-account . in 1974. Roughly two-thirds of the very large deficits. Most found it necessary to cover the increase in 1974 in U.S. banks' assets abroad Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Developments in International Financial Markets 607 reflected increases in their claims on Japan and Comparative money market rates the non-oil developing countries. The even _ „ Per cent per annum larger increase in U.S. banks' foreign liabilities Weighted average ot^ included large amounts of deposits and borrow- selected foreign rates* ings from European banks as well as deposits 12 received from OPEC countries. The removal of FDIP restraints was reflected in a virtual disappearance of new issues by U.S. 10 companies on the Euro-bond markets, as these companies were freed to rely more heavily on less costly domestic-source financing of their direct investments abroad. The removal of the lET has not yet prompted a large volume of foreign bond issues in the United States by borrowers not previously exempt from the pro- 1973 1974 1975 gram, though the total of foreign issues sold *GNP weighted. Group of Ten and Switzerland. in the United States has been extraordinarily high in 1974-75. simultaneously instituted constraints on capital The capital control measures taken by other outflows. industrialized countries in 1974 and this year In seeking capital inflows to finance their have varied according to the state of their par- worseming current-account balances the national ticular balance of payments situations. Many authorities of many of the developing nations Western European countries and Japan found and of several developed European nations themselves in severe current-account deficit po- (Britain, France, and Italy, in particular) raised sitions by 1974, and several of them attempted several billions of dollars in medium- and longto increase net private capital inflows by relax- term financing in the Euro-currency banking ing or eliminating inflow barriers that had been markets and international bond markets—in erected in past periods of upward pressure on some cases through direct government borrowtheir exchange rates. Some of these countries ings and in others through borrowings by private or quasi-governmental organizations backed by official guarantees or encouraged by subsidization of borrowing costs. In addition, a number TABLE 2 of countries borrowed outside the markets—di- Changes in U.S. banks' claims on, and rectly from OPEC countries and from the IMF liabilities to, residents of foreign countries oil facility. Oil-importing countries' efforts to generate In billions of dollars capital inflows were facilitated in most countries Item 1974 1975 by further increases in already high domestic HI interest rates. Until the late summer or early Claims, total increase (—) -19.4 -7.6 1 fall of 1974,^ restrictive domestic credit market of which, claims on— i policies were generally consistent with the need Japan — - 6.0 2.1 i to moderate domestic inflationary pressures. No Other Asia - 2.1 - .8 Latin America - 6.9 -7.4 single country gained a notable advantage in Bahamas - 2.5 -5.3 attracting foreign capital, as there was an es- Western Europe ~ 2.6 -1.0 sentially parallel escalation of interest rates in Liabilities,' total, increase (4-) of which, due to— ! all industrialized countries. By late 1974 con- \ OPEC countries 4.1 - .5 i cern over inflationary pressures and balance of ! Commercial banks abroad 12.4 -1.6 ; payments financing problems began to give way ^ ' i Net inflow, or outflow (—) 2.4 -12.5 j to concern over the deepening recession, and the monetary authorities of most major indus- * Excluding U.S. Government obligations held in custody for residents of foreign countries. trial countries either allowed or encouraged in- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

608.2 Federal Reserve Bulletin • October 1975 terest rates to fall rapidly. The rapid decline in European countries—increased by an estimated U.S. interest rates that had begun in the late $45 billion, or 34 per cent, in 1974, compared summer of 1974 permitted the governments of with the previous record growth of $40 billion other industrialized countries to be relatively during the worldwide boom in economic activity less concerned about the balance of payments and financial market expansion of 1973. Howconsequences of pursuing more relaxed domes- ever, total Euro-currency liabilities and assets, tic credit policies. Moreover, by that time many including interbank deposits within the eightof the industrialized oil-importing countries had country area, increased much less in 1974 than experienced improvement in their current-ac- the net amount of credit transmitted to ultimate count balances as exports to OPEC nations borrowers because of a sharp contraction in increased rapidly and the volume of petroleum interbank lending in the second half of the year. imports was depressed by the recession in real The data on the Euro-currency banking mareconomic activity. kets used here refer to the market area defined by the Bank for International Settlements (BIS). Throughout 1974, but particularly in the first EURO-CURRENCY half, most international borrowers relied more heavily on bank financing in the Euro-markets BANKING MARKETS and elsewhere than on international bond issues. The outstanding amount of credit transmitted For one thing, long-term borrowing costs in through the Euro-currency banking markets—as both the Euro-bond markets and the major nameasured by the operations of banks in eight tional bond markets were exceptionally high. Selected interest rates. 3-month maturities except where noted 1973 1974 1975 1973 1974 1975 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Developments in International Financial Markets 609 TABLE 3 vived. The net flow of credit transmitted through the markets appears to have been about $18 Euro-currency liabilities of banks in 8 European billion in the first half of this year; at dn annual countries rate this flow was 20 per cent of the credit Amounts in billions of dollars outstanding at the beginning of the year. Total Outstanding net sources THE INVESTMENT End of Euroof All U.S. Per cent currency period currencies* dollars in dollars credit^ OF OPEC SURPLUSES The OPEC countries emerged as the major sup- 1971 102 73 72 71 1972 137 100 73 92 pliers of funds to the Euro-currency banking 1973 200 136 68 132 1974 235 165 70 177 markets in 1974 and 1975. An estimated $23 1975 247 173 70 195 billion of OPEC funds was placed in these (June)® markets (primarily the Euro-dollar market) in ^The sum of (a) external liabilities in certain foreign curren- 1974; this total represented somewhat more than cies (U.S. dollars, German marks, Swiss francs, U.K. pounds, half of the net flow of funds channeled through Dutch guilders, and French francs) of banks located in Britain, Germany, France, Switzerland, the Netherlands, Belgium- these markets that year—in sharp contrast to Luxembourg, and Sweden and (b) these banks' foreign currency liabilities in these currencies to nonbank residents of 1973 when OPEC placements were comparatheir respective countries. tively small. In the first half of 1975 OPEC 2Total liabilities in first column, less inter-Euro-bank deposplacements in the Euro-currency markets are its, plus net conversions of banks' assets from domestic assets in domestic currency to forms counted as Euro-currency. ®Estimates based on preliminary data. SOURCE—Bank for International Settlements. TABLE 4 Many oil-importing countries felt a pressing Estimated uses of OPEC countries' investible need to obtain financing, and they therefore surpluses turned to the bank market to get short- or In billions of dollars intermediate-term loans. In the first half of 1974 the flow of funds through the Euro-ciirrency 1974 1975 Area, and type of banking system to ultimate borrowers is estiinvestment mated to have been about $30 billion to $35 HI H2 Year HI billion, which on an annual basis greatly ex- In United States 4.1 7.1 11.2 2 0 ceeded the 1973 flow of credit through the Banking and money market placements 3 9 6.5 W.4 12 markets. „ Other investments* .2 .6 .8 8 The exceptionally rapid growth in lending by In United Kingdom (excluding Euro-banks in the first half of 1974 was followed Euro-currency deposits) 3.0 4.2 7.2 .7 Banking and money market by much slower expansion in the second half. placements 2.2 3.1 5.3 .4 Other loans and invest- The slowdown partly reflected a decline in fiments' .8 1.1 1.9 .3| nancing demands as the worldwide recession In Euro-currency markets . 12.0 10.8 22.8 6.0l deepened, and a switch toward bond financing In United Kingdom 7.0 6.8 13.8 2.0 In other countries 5.0 4.0 9.0 4 0 near the end of the year as long-term interest rates receded from record high levels. On the International institutions .. -4 2.9 3.3 1 8 Bonds (mostly IBRD) .. .4 1.1 1.5 0 8 supply side, there was a notable reduction in IMF oil facility 1.8 1.8 1 0 the proportion of OPEC surpluses placed in the All other® .5 12.0 12.5 10 5 Euro-currency markets. A particularly important Total® 20.0 37.0 57.0 21 0 factor was the more cautious attitudes—of both depositors and Euro-banks—toward expanding *Real estate, equities, direct investment, direct borrowings commitments in the Euro-currency markets after (for United Kingdom). 2 Partly derived as a residual and includes loans to less-dethe midyear crisis in confidence. veloped countries. Confidence in the markets has improved ®The difference between the total investible surplus and the current account surplus of the OPEC countries (Table 1) greatly in 1975 and interbank business has re- primarily reflects oil-export receivables. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

610.2 Federal Reserve Bulletin • October 1975 Bond yields Per cent per annum 1974 1975 1974 1975 estimated to have totaled about $6 billion, a amounts of funds, and have depth in secondary reduced but still very substantial proportion of markets for marketable instruments. One reason total sources of funds in the markets. for the particular concentration of OPEC in- Estimates of the uses by OPEC countries of vestments in the Euro-dollar market is that intheir investible surpluses in 1974 and the first terest rates there generally have been above half of 1975 indicate that the largest part of their those in U.S. money markets on assets of the money market placements outside the Euro- same maturity. dollar market has been in U.S. instruments— primarily Treasury and Federal agency securi- GEOGRAPHICAL DISTRIBUTION ties and bank deposits—and in sterling-denom- OF SOURCES AND USES OF inated instruments in the United Kingdom. In EURO-CURRENCY CREDIT addition, OPEC countries have participated in arrangements designed to channel funds more The contributions of various countries and reor less directly to oil-importing countries by gions of the world to sources and uses of funds lending to the IMF oil facility, by buying bonds in the Euro-currency banking markets in recent sold by the International Bank for Reconstruc- periods are shown in the flow data in Table 5. tion and Development (IBRD) and other devel- The figures for Middle East countries are only opment institutions, and by making loans and partially indicative of the magnitude of OPEC grants directly to governments or quasi-public sources and uses of funds, because the Middle organizations in various countries. East classification includes some non-OPEC The heavy concentration of OPEC invest- countries, and of particular importance, it exments in the Euro-currency markets and in U.S. cludes Algeria, Nigeria, and Venezuela. and U.K. money markets is explainable in part These data indicate that, along with the OPEC by the fact that these markets are relatively countries, the Western European countries in well-developed. They offer a wide range of which the Euro-banks reside—^the "inside area" maturities, have the facilities to place large as defined by the BIS—^provided the largest flow Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Developments in International Financial Markets 611 of funds into the Euro-currency banking markets area have also been substantial users of funds in 1974 and in the first half of 1975. More than channeled through the Euro-currency banking half of the 1974 inflow from inside-area sources markets in 1974 and 1975. Still, on a net basis, was from sources other than banks; a large these countries, along with the OPEC countries, portion of that amount may have been deposits have been the dominant suppliers of funds by oil companies preparatory to making tax and flowing through the Euro-currency banking sysroyalty payments to authorities in the oil- tem in this period. exporting countries. The United States was a net borrower in the Sources of funds from banks in the inside area Euro-currency banking markets in 1974, but a do not include foreign currency relending in the net lender in the first half of 1975. In addition inter-Euro-bank market by commercial banks of to the direct sources and uses of funds that the reporting area (or by the BIS). But they do appear in Table 5, a substantial part of the include net conversions of funds out of domestic recorded net flow to the markets from the Carcurrency for Euro-currency lending by the re- ibbean area this year may reflect onlending to porting area banks, and also placements of their banks in the eight-country market area by the own currencies in balances with other Euro- Bahamian branches of U.S. banks of funds banks (for example, the acquisition of Euro- received from their head offices. In the first half mark assets in London by German banks). A of 1975 the net flow of funds to these branches large part of these bank-originated sources of from their head offices was about $5.8 billion, funds supplied to the markets from within the part of which is reflected in the data in Table reporting area in 1974 appear to have been from 5 in net lending from the Caribbean area to German and Swiss banks. Euro-banks, while a larger part was used for Countries in the Western European reporting lending elsewhere. TABLE 5 Estimated sources and uses of funds in the Euro-currency markets^ In billions of dollars Flows within periods UUsseess//ssoouurrcceess 1973 1974 \915—Jan.-June* U j S Net U 1 S j Net Net " i Vis-a-vis: Inside area® 12.4 16,3 -3.9 12.9 17.7 -4.8 5.4 11.2 -5.8 of which— Nonbanks 8.7 9.7 -LO 11.5 9.4 2.1 n.a. n.a. Outside area® 27.6 23.7 3.9 32.1 27.3 4.8 12,6 6.8 5.8 of which— Other W. Europe 3.7 4.4 -.7 4.3 1.0 3.3 2.8 3.0 Eastern Europe 2.6 .9 1.7 2.4 1.4 1.0 2.8 -1.2 4.0 Canada 1.8 1.2 .6 -1.7 -1.3 - .4 -.1 -.5 .4 • Japan 3.4 2.0 1.4 7.1 .1 7.0 2.0 .1 1.9 Middle East .9 1,9 -1.0 .9 19.5 -18.6 .7 3.9 -3.2 United States 3.6 2.6 1.0 4.7 2.4 2.3 -1.3 1.5 -2.8 Latin America 4.4 4.0 .4 3.3 .1 3.2 .6 .3 .3 Caribbean area 4.7 2.9 1.8 1.1 2.7 -1.6 Singapore I 7.3 7.0 .3 1.4 .3 1.1 .9 .1 .8 Other and unallocated 5.4 2.1 3.3 3.1 .1 3.0 Total 40.0 40.0 45.0 45.0 — 18.0 18.0 ^Estimates of the geographic composition of the flows con- not regarded as representing Euro-currency deposit and loan tributing to changes in outstanding net sources of Euro-cur- flows. rency credit as defined in Table 3 and in the corresponding ^Estimates based on preliminary data and are subject to uses. considerable uncertainty, =^Those countries listed in Table 3, footnote 1. n.a. Not available. ® Total outside area sources and uses generally are somewhat NOTE.—U = uses; S = sources; Net = uses less sources. less than the sum of the geographic components shown sepa- Data from Bank for International Settlements. rately because of the elimination from the total of certain flows Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

612.2 Federal Reserve Bulletin • October 1975 The net flow of funds through the Euro-cur- Such credits arranged in 1974 totaled $28.6 rency banking markets to Western European billion, up $6.6 billion from 1973. This is equal countries outside the eight-country area in- to roughly two-thirds of the estimated flow of creased markedly in 1974 and the first half of funds—excluding interbank business within the 1975 in relation to previous years. There was eight-country area—in all maturities through the a particularly large increase in net flows to Euro-currency markets in 1974, whereas in Eastern European countries in the first half of 1973 the proportion was a little more than this year. Japan was a very sizable net user of one-half. Euro-currency funds in 1974; although it con- In 1974 the developed nations as a group (as tinued to increase its net debtor position in the classified in Table 6) increased their use of first half of this year, the increase was at a much medium- and long-term Euro-currency bank reduced rate. Canada, which normally borrows financing by about 50 per cent over 1973. Britsizable amounts in external bond markets— ain, France, and Italy together took about twoprimarily the U.S. market, continued to rely on thirds of the credits obtained by developed nathat source of financing in 1974 and 1975. tions. The OPEC countries, which had taken The full amount of net financing provided by about $3 billion of publicized credits in 1973, Euro-banks to the developing nations as a greatly reduced their borrowings in 1974. Like group, and to the non-oil developing nations in the developed nations, the non-oil developing particular, is not revealed in the published BIS data. The ultimate destinations of funds chan- TABLE 6 neled through the Caribbean area and Singapore Publicized medium- and long-term Euroare unknown. But it seems likely that a subcurrency credits, by country of borrower stantial portion went to the non-oil developing countries, particularly from the Caribbean area, In millions of U.S. dollars which has been a net re-exporter of funds in 1974 and 1975 from the Euro-currency markets Borrower 1973 1974 1 H 97 I 5 and the United States combined. It is noteworthy that the role of Latin America as a net Developed countries 11,233 16,925 1,916 recipient of flows of funds channeled through Canada 51 75 20 France 63 3,304 37$ the Euro-currency markets in 1974 and the first West Germany — 9 Hi half of 1975 would be increased by perhaps a Italy 4,713 2,240 10 Japan 150 191 145 billion dollars in each of these periods if Vene- Netherlands 252 558 6 Sweden 99 189 200 zuela—a major oil producer—were excluded Switzerland 108 10 ^ United Kingdom J,070 5,897 238 from the data for Latin America. United States 1,248 1,439 316 Other' 1,480 3,014 603 PUBLICIZED MEDIUM- OPEC countries 3,013 759 1,358 Non-oil developing AND LONG-TERM countries^ 6,228 8,928 3,233": Socialist countries'^ 721 1,017 859 EURO-CURRENCY CREDITS Borrowers unallocated by country 779 821 319 International organiza- An increase in 1974 in the proportion of total tions 50 174 130 Total 22,023 28,624 7,814 Euro-bank lending in maturities greater than 1 year is reflected in the data on publicized meincludes reported borrowings by Australia, Austria, Beldium- and long-term (generally 5 to 7 years) gium, Denmark, Finland, Iceland, Ireland, Luxembourg, New Zealand, Norway, Portugal, and South Africa. Euro-currency credits. These data cover only ^IBRD member countries classified as developing countries publicly announced credits, and they reflect by the IBRD, excluding OPEC countries, but adding certain nonmember countries not otherwise classified above. credit arrangements formally completed but not ^Includes reported borrowings by U.S.S.R., Bulgaria, Cuba, necessarily drawn upon. In addition, the data German Democratic Republic, Hungary, Democratic People's Republic of Korea, and Poland. are on a gross basis; that is, they do not reflect SOURCE.—International Bank for Reconstruction and Deany loan repayments. velopment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Developments in International Financial Markets 613 countries also substantially increased their ar- as reported by the Bank of England. (U.K. rangements for medium- and long-term borrow- banks account for a large part of the total value ings in the Euro-currency markets in 1974. of Euro-currency market operations covered by In the first half of 1975 total publicized me- BIS statistics.) Despite the concentration of dium- and long-term credits arranged for the OPEC placements in relatively short maturities, non-oil developing nations declined sharply; but it appears that over the year 1974 as a whole their share of total publicized credits increased there was not a substantial shortening of the by a third, to more than 40 per cent, as bor- average maturity of all Euro-currency deposits; rowers in the developed countries greatly re- in early 1975 there was even some lengthening duced their reliance on medium- and long-term of average deposit maturities. As OPEC funds Euro-currency bank financing in favor of an have moved into the shorter maturities, deposiincrease in international bond issues. In contrast tors other than OPEC countries apparently have to 1974, several OPEC countries—Indonesia, lengthened the average maturity of their place- Algeria, and Venezuela in particular—this year ments because of increases in longer-term dehave increased their arrangements for medium- posit rates relative to those in very short maand long-term Euro-currency financing, reflect- turities. ing a diminution in the excess of their export In the period of rapidly rising interest rates earnings over imports from and transfers to from early 1974 to the fall of that year, banks other countries. were reluctant to fund additional loans with In 1974, as in previous years, medium- and deposits of comparatively short maturity. Conlong-term Euro-currency credits were denomi- sequently, Euro-banks tended to raise rates on nated almost exclusively in U.S. dollars. Of the deposits and loans in longer maturities relative $28.6 billion of such credits publicized in 1974, to those in shorter maturities, in order to en- $28.0 billion was dollar-denominated; about courage depositors toward longer-term place- $0.5 billion was denominated in German marks ments and borrowers toward shorter-term loans. and most of the remainder was denominated in In the spring and summer months of 1974, sterling, Swiss francs, and Swedish krona. The although interest rates in all maturities in the currency composition of these credits in the first Euro-dollar deposit market rose substantially, half of 1975 was very similar to that in 1974. longer-term rates rose relative to those in the very short maturities. For example, while 6month and 7-day deposit rates were roughly MATURITY equal in January and February 1974, by August TRANSFORMATION PROBLEMS the rate on 6-month deposits exceeded that on The OPEC countries have kept their deposit 7-day deposits by more than 2 percentage balances with a relatively small number of the largest European and U.S. banks. The banks Selected Euro-dollar deposit rates receiving the major portion of OPEC placements Per cent per annum in the Euro-currency markets faced potential problems arising from a widening gap between the maturities of their liabilities and the comparatively longer-term maturities of their assets. The loan maturities desired by borrowers in general, and by countries seeking balance of payments financing in particular, have been longer than the maturities preferred by OPEC depositors. The data summarized in Table 7 reflect the maturity composition of foreign currency assets 1974 1975 and liabilities of banks in the United Kingdom Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

614.2 Federal Reserve Bulletin • October 1975 TABLE 7 Maturity distribution of U.K. banks' claims and liabilities in foreign currencies Per cent of total claims or liabilities Claims Liabilities MMaattuurriittyy Sept. May Nov. May Sept. May Nov. May 1973 1974 1974 1975 1973 1974 1974 1975 Under 8 days 14.9 17.5 17.4 15.3 19.1 21.1 22.2 22.0 8 days to under 1 month 18.7 16.8 17.2 14.9 19.5 19.8 20.8 17.1 I month to under 3 months 24.7 24.8 24.1 24.0 26.2 26.8 28.3 28.3; 3 months to under 6 months 20.9 17.6 15.1 15.1 20.9 19.5 17.0 17.8 6 months to under 1 year 8.2 7.7 5.6 6.8 8.9 7.3 5.2 .. 1.5 1 year to under 3 years 4.8 5.0 5.6 6.8 = 2.4 2.0 2.3 3.1 3 years and over 7.8 10.7 14.9 17.1 3.0 3.5 4.4 4.0 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 SOURCE—Bank of England. points. This differential declined as Euro-dollar countries. None of the major Euro-currency rates fell late last year, but widened again in market banks experienced a foreign exchange early 1975 and has since remained relatively loss large enough to threaten its solvency, but high. concerns arose because many of these banks On the asset side of Euro-banks' balance were active in the foreign exchange markets. sheets, there has been some lengthening of The environment in which these confidence average maturities in 1974 and 1975, with par- problems appeared was to some extent created ticularly large incieases in the proportion of by the heavy concentration of OPEC funds in claims maturing in 3 years or more. Thus, some a relatively small number of large banks and increase in maturity transformation by Euro- in deposits of short maturity, which fostered banks—as reflected in the Bank of England concern over the vulnerability of these banks data—appears to have occurred. However, these to deposit withdrawals and concern over their data tend to overstate the maturity exposure of exposure to maturity transformation risks. More Euro-banks because assets in the three longest importantly, the deepening recession in many maturity categories are almost wholly "float- industrialized countries, high interest rates, and ing-rate" loans. While such loans often commit the tenuous financial position of many non-oil banks to provide funds for a period of years, developing countries generated concern that they normally afford the same protection against Euro-banks might be faced with sizable loan a rise in the cost of short-term deposit funds defaults. There was also concern over the capital as would loans of much shorter maturities. adequacy of banks and uncertainty about the access they might have to official support in the OTHER STRESSES event of large Euro-currency deposit withdrawals or losses on loans. IN THE EURO-MARKETS Well ahead of the Herstatt failure there had Confidence problems began to emerge in the been some "tiering" of the deposit rate struc- Euro-currency banking markets in the spring of ture in the markets. OPEC banking preferences 1974, and the markets reacted sharply to the had permitted certain favored banks to obtain failure in June of the Herstatt Bank in Germany substantial amounts of OPEC funds at rates amid an increasing number of reports of sizable below those being paid to other depositors. At foreign exchange losses by a few banks in the the same time, Euro-banks whose parent coun- United States and a number of banks in other tries faced particularly acute balance of pay- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Developments in International Financial Markets 615 ments problems found themselves in a less pre- nancing demands in the private sector generated ferred risk class and they had to pay above by the beginnings of economic recovery in some normal deposit rates to avoid deposit attrition. countries. The tiering of the rate structure was magnified The resumption of growth in funds channeled following the Herstatt failure—to the disadvan- through the Euro-currency banking markets has tage of smaller banks in general. This situation been aided by a considerable restoration of created particular problems for many smaller confidence in those markets since last summer. banks that were participants in floating-rate loan One important factor contributing to an easing syndicates. The yield on these syndicated loans of tensions was the statement in September 1974 was normally set at a fixed mark-up over the by the central bank governors of the Group of prime London Interbank Offer Rate (LIBOR); Ten countries, which indicated that means were but, for many banks, their own cost of rolling available to deal with a variety of problems that over the funding for these loans rose signifi- might arise in connection with banks' Euro-curcantly in relation to the LIBOR rate. rency operations. A tightening by many central As mentioned earlier, reduced confidence in banks of their supervision and regulation of the Euro-currency banking system during the banks' foreign exchange operations also helped latter half of 1974 contributed to a much slower to improve market sentiment, as did the absence expansion in the net flow of funds through the of any additional bank failures and the general Euro-currency banking markets in that period. relaxation of monetary restraint in late 1974 and The more cautious attitudes of Euro-banks were early 1975. Although the stresses that had apreflected in a sharp contraction in the size of peared in the markets last year have since the interbank market, increased spreads between largely subsided, a residual influence of those bid and offer rates in the brokers' market for stresses is visible in the lending practices of interbank placements, and more conservative Euro-banks, which are generally more conserpolicies in lending to nonbank borrowers, as vative now than before mid-1974. well as an increase in the spread between deposit rates and the loan rates charged to those borrowers. The more cautious attitudes of deposi- INTERNATIONAL tors in the markets were reflected in a widening BOND MARKETS of the difference between Euro-currency interest rates and rates in national money markets on Funds raised by borrowers of all types through instruments of the same currency and matu- bond issues outside their own national markets, rity—most notably in the sizable excess of including both publicly offered issues and pri- Euro-dollar deposit rates over U.S. rates on vate placements, totaled $22.5 billion in 1974 certificates of deposit. and the first half of 1975. This was a larger amount in 18 months than in the preceding 2 years. In 1974, when the new-issue markets A RETURN OF CONFIDENCE were in a depressed state and borrowers were finding it difficult as well as costly to obtain AND RENEWED GROWTH underwriting, about two-thirds of the year's In 1975 there has been a renewed growth in total issues of $12.3 billion were privately the flow of funds channeled through the Euro- placed. This was an unusually large proportion; currency banking markets, and the tiering of the in 1972 and 1973, private placements had reprate structure has been greatly reduced. In addi- resented only 29 per cent and 38 per cent, tion, activity in the international bond markets respectively, of all new international bond has increased markedly. While demands for issues. financing in the international markets this year More than $3 billion of the 1974 issues were have in general continued to reflect the needs privately placed with monetary authorities, of the oil-importing countries, the upturn in governments, and international organizations. market activity has also reflected stronger fi- These were mostly obligations of the IBRD and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

616.2 Federal Reserve Bulletin • October 1975 TABLE 8 smaller than in 1973. The developed countries greatly increased their rate of international bond International bond issues, by type^ issues in the first 6 months of 1975, when their In millions of dollars sales represented nearly three-fourths of the new-issue volume of all borrowers. Important 1975 Type 1972 1973 1974 HI among the issuers of international bonds in 1974 and the first half of 1975 were Canadian com- Euro-bonds 66,,992288 44,,660000 44,,551111 55,,449988 panies and local governments—whose bonds of which— Public offerings 55,,114400 33,,117799 11,,555599 33,,441133 were sold primarily in the U.S. market—and Private placements 1 11,,778888 11,,442211 22,,995522 22,,008855 borrowers residing in France, the Netherlands, Foreign bonds 44,,338855 55,,331144 77,,777766 44,,776644 Sweden, and Japan. of which— Public offerings 22,,993399 22,,997733 22,,552266 33,,00mm International bonds issued by U.S. companies Private placements 11,,444466 22,,334411 55,,225500 77,,77JJtt declined to less than $0.2 billion in 1974— Total 1111,,331133 99,,9911441122,,228877 1100,,22««ii of which— compared with $1.3 billion in 1973 and $2.3 Placed with official billion in 1972—reflecting the termination in institutions^ — 887711 11,,335599 33,,006633 771177 January 1974 of the foreign direct investment ^These data differ, with respect to coverage and classifica- program and the fact that offshore bond issues tion of international issues, from similar data published by generally continued to be costlier for U.S. institutions other than the IBRD. In this table Euro-bonds are defined as internationally syndicated issues offered for sale in companies than issues in U.S. bond markets. several markets; foreign bonds are those principally sold in a single country and denominated in the currency of that country. Despite the increased need for balance of ^Monetary authorities, governments, and certain international organizations. SOURCE.—IBRD. TABLE 9 of Other development institutions, sold by them to authorities in the major oil-exporting coun- International bond issues, tries. by country of borrower^ The general revival in bond markets in late In millions of dollars 1974 and early 1975 brought a marked increase in the volume of publicly offered international Borrower 1973 1974 1975 HI issues. The swelling of the flow of new issues was especially strong in the Euro-bond market. Developed countries 5,476 5,836 7,496^ On an annual-rate basis, publicly offered Euro- Canada 1 1,210 2,402 1,321 bond issues in the first half of 1975 were nearly France 103 674 1,186 West Germany 56 136 128 4V2 times the 1974 volume, while public offer- Italy 25 50 61 Japan 49 249 810 ings of foreign bonds in national markets were Netherlands 160 478 558 almost 2V2 times the 1974 rate. This year the Sweden 145 125 689 Switzerland — 12 79 average maturity of new Euro-bond issues has United Kingdom 1,313 305 175 United States 1,318 190 164 generally been much shorter than in earlier Other 1,098 1,216 2,326 years; most issues have had maturities of 5 to OPEC countries 99 62 35 10 years, and few have exceeded 12 years, Non-oil developing countries 1,173 858 52li whereas in the past maturities of about 15 years ' Socialist countries 50 40 Borrowers unallocated were standard. by country 181 99 207 International organizations 2,935 5,393 2,004 GEOGRAPHIC of which—^ Development 11 COMPOSITION OF BORROWINGS institutions 2,056 3,663 Industrialized countries (those classified as Total ...... 9,914 12,287 10,2^ "developed" in Table 9) borrowed nearly half SOURCE—IBRD. of the $12.3 billion raised through international includes Euro-bonds and foreign bonds, publicly issued and privately placed (including placements with monetary authoribond sales in 1974, a proportion not much ties, governments and international organizations). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Developments in International Financial Markets 617 payments financing, the non-oil developing An increasing though still modest share— countries borrowed less through international about 3 per cent—of Euro-bond issues in the bond issues in 1974 than in 1973 and only first half of 1975 was denominated in the curslightly increased their rate of new-issue sales rencies of the major oil-exporting countries in the first half of 1975. The external financing (principally the Kuwaiti dinar and the Saudi requirements of these countries have been par- Arabian riyal). There was also a larger volume tially met with funds obtained in the interna- of issues denominated in European currencies tional bond markets by the IBRD and other other than the German mark. Composite curdevelopment institutions, which in 1974 sold rency issues (for example, European unit of new issues totaling $3.7 billion, far in excess account issues) remained a small fraction of of their issues of about $2 billion a year in both those sold this year and last, but the market was 1972 and 1973. Other sources of external fi- introduced to its first issues denominated in nancing for the non-oil developing countries special drawing rights (SDR's) in the second have included OPEC investments in the IMF quarter of 1975 when three issues were sold, oil facility and OPEC grants and loans made totaling $112 million equivalent of SDR's. directly to some of these countries. In 1974 and 1975 the U.S. bond markets have continued to absorb a very sizable part of all CURRENCY COMPOSITION OF foreign bonds issued in national markets; various Canadian borrowers, the IBRD, and INTERNATIONAL BOND ISSUES Israel have remained the predominant sellers of Historically, the majority of Euro-bond issues such issues in the United States. As mentioned have been denominated in U.S. dollars; in 1974 earlier, a sizable volume of bonds was sold in nearly 60 per cent pf Euro-bonds sold were 1974 to authorities in OPEC countries by the dollar-denominated. In the first half of 1975, IBRD and other development institutions. The however, dollar-denominated Euro-bond issues permissible volume of foreign bond issues in dropped to about one-third of the total as Ger- Switzerland was reduced in early 1974 and such man mark-denominated issues increased to a issues were prohibited altogether for a few record $2.3 billion equivalent (from $0.6 billion months in the summer of last year. Since Janin 1974) to account for more than 40 per cent uary 1974 the Japanese authorities have prohiof the value of all new issues. bited private placements of foreign bonds in The increase in offerings of German mark- their domestic markets, and as mentioned denominated Euro-bonds was encouraged by the above, a moratorium on foreign issues in Gersteady decline in yields on those issues from many has been in effect since July of this year. the late fall of 1974 through the first half of 1975. During this period mark-denominated Euro-bond yields have generally been below the yields on dollar-denominated Euro-bond issues. Over all, the international financial markets In July of this year the German authorities have shown considerable resilience in the face placed a moratorium on participation by German of the major developments affecting the world financial institutions in underwriting of mark- economy in the past 2 years. Their role in denominated Euro-bond issues—in effect pre- channeling funds from surplus to deficit counventing any such new issues until the morato- tries has helped to make the redistribution of rium is removed. This measure, along with a OPEC investible surpluses less of a problem moratorium on foreign bond issues in the Ger- than many had expected. Thus, the performance man market, was taken to alleviate upward of the international financial markets has probapressures from external sources on long-term bly helped to avoid a proliferation of trade interest rates in Germany. Both of these restric- restrictions or other policies that would have tions have since been renewed and are currently been detrimental to world trade and producin effect. tion. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

618 Changes in Time and Savings Deposits at Commercial Banks, January-i^ril 1975 Time and savings deposits held by individuals, deposits conducted jointly by the Federal Repartnerships, and corporations (IPC's) increased serve System and the Federal Deposit Insurance by $3.0 billion, or less than 1 per cent, not Corporation. Holdings of savings deposits and seasonally adjusted, at insured commercial of nearly all major categories of small-denomibanks in the 3 months ended April 30, according nation (less than $100,000) time deposits grew to the latest quarterly survey of time and savings faster in this period than in other recent survey quarters. However, a sharp decline in outstanding large-denomination ($100,000 or more) time NOTE.—John R. Williams and Virginia Lewis of the deposits offset almost all of this gain and gave Board's Division of Research and Statistics prepared this article. rise to the smallest over-all inflow of time and TABLE 1 Types of time and savings deposits of individuals, partnerships, and corporations held by insured commercial banks on survey dates, July 31, 1974-April 30, 1975 Number of issuing banks Amount (in millions of dollars) Percentage change in deposits 1974 1975 1974 1975 (quarterly rate) Type of deposit Oct. 31- Jan. 31- July 31 Oct. 31 Jan. 31 Apr. 30 July 31 Oct. 31 Jan 31 Apr. 30 Jan. 31 Apr. 30 Total time and savings deposits.. 14,099 14,138 14,204 14,263 347,555 350,995 361,388 364,736 3.0 .9 Savings 13,810 13,857 13,989 14,052 131,701 132,449 135,856 144,250 2.6 6.2 Time deposits in denominations of less than $100,000—Total 13,957 14,033 14,085 14,148 113,803 114,125 117,985 123,550 3.4 4.7 Accounts with original maturity of— Less than 1 year 13,421 13,487 13,464 13,570 36,107 34.621 34,628 36,329 4.9 1 up to 2Vi years 13,656 13,820 13,792 13,851 41,006 38,744 37,240 36,203 -2.8 2Vl up to 4 years 11,889 12,099 12,285 12,573 15,326 15,865 17,365 18,568 9.5 6.9 4 up to 6 years 11,336 11,844 21,364 24,895 27,016 30,027 8.5 11.1 6 years and over: Negotiable deposits ... 2,749 3,860 1,026 1,157 12.8 Nonnegotiable deposits 1,417 1,885 710 1,266 78.3 All maturities: Open accounts—Passbook or statement form 2 3,793 3,620 3.769 3,902 29,653 28,643 28,581 30,714 -.2 7.5 Time deposits in denominations of $100,000 or more 7,855 8,253 8,295 8,363 95,855 98,516 102,082 91,378 3.6 -10.5 Negotiable CD's 3,957 4,217 3,993 3,969 68,212 70,353 71,718 64,298 1.9 -10.3 Nonnegotiable CD's and open account 4,763 7.8 -10.8 4,407 4,553 4,929 27,643 28,163 30,364 27,080 Christmas savings and other special funds 8.770 -7.5 1.7 8,935 7,994 9,044 6,196 5,905 5,465 5,558 1 Less than .05 per cent. Corporation. For July 31, 1974, Jan 31, and Apr. 30, 1975, the in- 2 Includes time deposits, open account, issued in passbook, state- formation was reported by a probability sample of all insured commerment, or other forms that are direct alternatives for regular savings cial banks; for Oct. 31,1974, the data for member banks were reported accounts. Most of these are believed to be in accounts totaling less by virtually all such banks and for insured nonmember banks by the than $100,000. The figures shown on this line are included above in same sample of these banks reporting in earlier surveys. the appropriate maturity category. Some deposit categories include a small amount of deposits outstanding in a relatively few banks that no longer issue these types of NOTE.—Data were compiled jointly by the Board of Governors of deposits and are not included in the number of issuing banks. Dollar the Federal Reserve System and the Federal Deposit Insurance amounts may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Changes in Time and Savings Deposits 619 TABLE 2 Small-denomination time and savings deposits, IPC, held by insured commercial banks on Jan. 31, and Apr. 30, 1975, by type of deposit, by most common rate paid on new deposits in each category, and by size of bank Size of bank (total deposits in Size of bank (total deposits in millions of dollars) millions of dollars) Deposit group. All banks All banks and distribution of deposits by most Less than 100 100 and over Less than 100 100 and over common rate Apr. 30 Jan. 31 Apr. 30 Jan. 31 Apr. 30 Jan. 31 Apr. 30 Jan. 31 Apr. 30 Jan. 31 Apr. 30 Jan. 31 Number of banks, or percentage distribution Amount of deposits (in millions of dollars), or percentage distribution Savings deposits: Issuing banks 1144,,005522 13.989 13,248 13,219 804 770 144,250 135,856 58,897 56,355 85,353 79,501 Distribution: Total 100 100 100 100 100 100 100 100 100 100 100 100 400 or less 7.1 7.4 7.1 7.3 7.2 8.5 5.3 6.3 4.5 4.6 5.8 7.6 4.01-4.50 7.4 7.7 7.0 7.3 13.8 14.6 19.4 20.3 9.4 10.2 26.3 27.4 4.51-5.00 85.5 84.9 85.9 85.4 79.0 76.9 75.3 73.4 86.1 85.2 67.9 65.0 Time deposits in denominations of less than $100,000: Maturities less than 1 year: Issuing banks 13.570 13.464 1122,,776655 1122,,669933 805 771 36,329 34,628 17,591 17,115 18,738 1177,,551133 Distribution: Total 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less 7.8 7.0 7.9 7.0 6.7 6.9 8.6 8.4 6.9 6.6 10.2 10.2 5.01-5.50 92.2 93.0 92.1 93.0 93.3 93. 1 91.4 91.6 93. 1 93.4 89.8 89.8 Maturities of 1 up to 2Vi years: Issuing banks 13,851 13,792 13.056 13.029 795 763 36,203 37,240 2244,,334422 25,136 11,861 1122,,110044 Distribution: Total 100 100 100 100 100 100 100 100 100 100 100 100 5.50 or less 2.7 2.2 2.7 2.3 1.7 1.4 2.4 2.1 1.7 1.5 3.9 3.2 5.51-6.00 97.3 97.8 97.3 97.7 98.3 98.6 97.6 97.9 78.3 98.5 96. 1 96.8 Maturities of up to 4 years: Issuing banks 12,573 12,285 11.806 11,547 767 738 18,568 17,365 11,633 11,024 66,,993355 66,,334411 Distribution: Total 100 100 100 100 100 100 100 100 100 100 100 100 5.50 or less . 1 . 1 .2 .3 , 1 . 1 . 1 0) 1 .1 (1) 5.51-6.00 2.0 1.9 2.0 1.8 2.4 3. 1 2.0 3.1 1.1 K6 3.5 5.8 6.01-6.50 97.9 98.0 98.0 98.0 97.3 96.8 97.9 96.8 98.9 98.3 96.4 94.2 Maturities of 4 up to 6 years: Issuing banks 11,844 11,336 11,079 10,608 765 728 30,027 27,016 14,834 13,250 15,193 13,766 Distribution: Total 100 100 100 100 100 100 100 100 100 100 100 100 6.50 or less 1.4 1.0 1.3 .9 3.2 3.1 1.4 .7 .5 .2 2.3 1.3 6.51-7.00 18.6 20.5 19.1 21.0 11.1 12.7 10.4 11.4 14.4 15.6 6.4 7.3 7.01-7.25 80.0 78.5 79.6 78.1 85.7 84.2 88.2 87.9 85. 1 84.2 91.3 91.4 Maturities of 6 years and over—Negotiable deposits: Issuing banks 3,860 2.749 3,636 2,553 224 196 1,157 1,026 595 418 562 608 Distribution: Total 100 100 100 100 100 100 100 100 100 100 100 100 6.00 or less .5 .7 .4 .3 3.0 6.0 17.4 34.3 2.8 3.0 32.9 55.8 6.01-7.00 1.8 2.5 1.6 2.5 3.2 2.6 3.3 2.4 3.8 5.8 2.7 . 1 7.01-7.50 97.7 96.8 98.0 97.2 93.8 91.4 79.3 63.3 93.4 91.2 64.4 44.1 Maturities of 6 years and over—Nonnegotiable deposits: Issuing banks 1.885 1,417 1,471 1,055 414 362 1,266 710 319 133 947 577 Distribution: Total 100 100 100 100 100 100 100 100 100 100 100 100 6.00 or less .4 2.3 .2 2.4 .7 2.2 .1 5.6 1.1 1 6.6 6.01-7.00 .6 1.0 .4 .3 2.0 2.9 2.1 6.1 .8 2!5 7.3 7.01-7.50 99.0 96.7 99.4 97.3 97.3 94.9 97.8 88.3 99.1 98.1 97.4 86.1 1 Less than .05 per cent. dollar volume of inflows from the time of the last rate change to the NOTE.—^The most common interest rate for each instrument refers survey date. to the basic stated rate per annum (before compounding) in effect on While rate ranges of V4 or Vi of a percentage point are shown in the survey date that was generating the largest dollar volume of de- this and other tables, the most common rate reported by most banks posit inflows. If the posted rates were unchanged during the 30-day was the top rate in the range; for example, 4.00, 4.50, etc. Some period just preceding the survey date, the rate reported as the most deposit categories exclude a small amount of deposits outstanding in common rate was the rate in effect on the largest dollar volume of a relatively few banks that no longer issue these types of deposits and deposit inflows during the 30-day period. If the rate changed during are not included in the number of issuing banks. that period, the rate reported was the rate prevailing on the largest Figures may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

620.2 Federal Reserve Bulletin • October 1975 savings deposits since the October 1970-Jan- latter deposits remained close to the ceiling uary 1971 period. levels set by regulatory authorities. Conse- Interest rates paid on large-denomination time quently, as yields on competitive market instrudeposits declined substantially during the Jan- ments, such as Treasury obligations, continued uary-April period, reflecting a reduction in to decline from their mid-1974 peaks, rates on competition for funds by banks in light of low small-denomination deposits became more atdemands for credit by businesses throughout the tractive. As a result, many small investors apperiod and strong growth in small-denomination parently shifted funds to commercial bank detime and savings deposits. Rates paid on these posits. TABLE 3 Average of most common interest rates paid on various categories of time and savings deposits, IPC, at insured commercial banks on April 30, 1975 Time deposits in denominations of less than $100,000 Savings and Maturing in— Bank location and smallsize of bank denom- Savings (total deposits in ination 6 years and over— millions of dollars) time Total deposits Less than 1 up to 2Vi up to 4 up to 1 year 2Vi years 4 years 6 years Negotiable Nonnegodeposits tiable deposits All banks: All size groups 5.48 4.85 6.23 5.46 5.98 6.49 7.21 7.19 7.46 Less than 10 5.74 4.89 6.16 5.46 5.99 6.49 7.18 7.45 7.50 10-50 5.62 4.90 6.23 5.46 5.98 6.50 7.22 7.47 7.47 50-100 5.52 4.91 6.25 5.47 5.99 6.49 7.21 7.17 7.48 100-500 5.42 4.85 6.24 5.46 5.98 6.49 7.21 7.47 7.45 500 and over 5.33 4.78 6.24 5.44 5.97 6.47 7.21 6.62 7.47 Banks in— Selected large SMSA's All size groups.... 5.36 4.83 6.24 5.45 5.97 6.48 7.21 6.95 7.46 Less than 10 5.55 4.89 6.20 5.46 5.98 6.50 7.19 7.44 7.50 10-50 5.47 4.91 6.27 5.47 5.97 6.50 7.21 7.42 7.44 50-100 5.44 4.91 6.24 5.46 5.99 6.49 7.22 6.96 7.50 100-500 5.37 4.85 6.23 5.47 5.98 6.49 7.22 7.47 7.45 500 and over.... 5.32 4.78 6.24 5.43 5.97 6.46 7.21 6.51 7.46 All other SMSA's: All size groups.... 5.50 4.85 6.24 5.47 5.98 6.49 7.20 7.47 7.45 Less than 10 5.67 4.85 6.26 5.48 5.99 6.50 7.18 7.29 7.50 10-50 5.60 4.85 6.28 5.46 5.99 6.50 7.22 7.50 7.43 50-100 5.52 4.90 6.20 5.45 5.97 6.47 7.18 7.44 7.46 100-500 5.44 4.84 6.24 5.47 5.98 6.48 7.19 7.48 7.44 500 and over 5.44 4.79 6.22 5.48 5.99 6.50 7.25 7.50 7.50 Banks outside SMSA's: All size groups 5.69 4.91 6.20 5.46 5.99 6.49 7.21 7.49 7.50 Less than 10 5.77 4.90 6.15 5.46 5.99 6.48 7.18 7.49 7.50 10-50 5.69 4.91 6.20 5.46 5.99 6.50 7.22 7.50 7.50 50-100 5.67 4.93 6.31 5.49 6.00 6.50 7.22 7.50 7.50 100-500 5.55 4.88 6.29 5.45 5.99 6.48 7.23 7.46 7.50 500 and over 5,74 5.00 6.32 5.50 6.00 6.50 7.25 7.50 1 The selected large Standard Metropolitan Statistical Areas, as defined by the Office of Management and Budget and arranged by size of population in the 1970 Census, are as follows: New York City Minneapolis-St. Paul San Jose Albany-Schenectady-Troy Richmond Los Angeles-Long Beach Seattle-Everett New Orleans Akron Jacksonville Chicago Milwaukee Tampa-St. Petersburg Hartford Flint Philadelphia Atlanta Portland Norfolk-Portsmouth Tulsa Detroit Cincinnati Phoenix Syracuse Orlando San Francisco-Oakland Paterson-Clifton-Passaic Columbus Gary-Hammond-E. Chicago Charlotte Washington, D.C. Dallas Rochester Oklahoma City Wichita Boston Buffalo San Antonio Honolulu West Palm Beach Pittsburgh San Diego Dayton Ft. Lauderdale-Hollywood Des Moines St. Louis Miami Louisville Jersey City Ft. Wayne Baltimore Kansas City Sacramento Salt Lake City Baton Rouge Cleveland Denver Memphis Omaha Rockford Houston San Bernardino-Riverside Ft, Worth Nashville-Davidson Jackson, Miss. Newark Indianapolis Birmingham Youngstown-Warren NOTE.—The average rates were calculated by weighting the most common rate reported on each type of deposit at each bank by the amount of that type of deposit outstanding. Christmas savings and other special funds, for which no rate information was collected, were excluded. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Changes in Time and Savings Deposits 621 CONSUMER-TYPE TIME Deposits in the latter maturity range probably increased for much the same reason that pass- AND SAVINGS DEPOSITS book savings expanded; that is, customers may Passbook savings deposits registered an increase have wished to hold deposits with short maturiof $8.4 billion, or 6.2 per cent, in the 3 months ties in anticipation that rates on alternative inended April 30. This was the largest percentage vestments would soon rise. increase in such deposits during any single quarter since the first quarter of 1971, and the largest absolute rise since the survey of time and savings deposits became quarterly in 1967. LARGE-DENOMINATION With nearly all banks paying ceiling rates on TIME DEPOSITS savings deposits, and given the relatively low level of market rates and the uncertainty re- Outstanding large-denomination time deposits garding future interest rate movements, many decreased substantially—by more than 10 per customers probably considered passbook ac- cent—in the 3 months ended April 30, after counts to be an attractive temporary investment having increased at a reduced pace since the alternative. Although savings accounts have fall of 1974. Banks apparently allowed CD's relatively low yields, the fact that an increasing to run off because the rapid inflow of passbook number of banks are paying interest from day savings and small time deposits supplied more of deposit to day of withdrawal enables cus- than enough funds to satisfy the continued weak tomers to shift quickly and without penalty into loan demand emanating from the sluggish higher paying investments if market conditions economy that had existed throughout the period. warrant. Moreover, many banks may have decreased Small-denomination time deposits also grew their reliance on money-market-type funds in considerably during the January-April period, order to improve their liquidity positions. in large part because of the declining rates on Rates paid on large-denomination time demarket instruments. Typically, most of the in- posits fell steadily between the July 1974 and crease in such deposits was in deposits with April 1975 surveys. Results of the July survey maturities greater than IVi years; growth in had indicated that banks paying rates in excess these longer-maturity deposits has been rapid of 10 per cent held nearly 90 per cent of all since Regulation Q was amended in July 1973 outstanding negotiable CD's. By the end of to impose graduated rate ceilings according to October most banks were paying rates of 8.50 maturity. Inasmuch as most banks offered rates to 9.50 per cent on new CD's, and the January at or near the maximum allowable on each 1975 survey showed that the most common rate maturity range during the reporting period, cus- paid at the majority of banks had fallen to less tomers were encouraged to substitute longer- than 7 per cent. By April 30 rates of 6 per cent maturity deposits for shorter-maturity deposits. or less had become predominant; banks paying As in previous surveys, the 1- to IVi-year such rates held almost two-thirds of all large category showed an absolute decline. Unlike negotiable CD's. Rates on large nonnegotiable previous quarters, however, time deposits ma- CD's and open accounts exhibited declines turing in less than 1 year expanded moderately. similar to those on negotiable CD's. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

622 Federal Reserve Bulletin • October 1975 APPENDIX TABLE 1 Savings deposits Most common interest rates paid by insured commercial banks on new deposits, April 30, 1975 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 4.00 4.00 or 4.50 4.75 5.00 or 4.50 4.75 5.00 less less NUMBER OF BANKS MILLIONS OF DOLLARS All banks 1,002 1,035 33 12,012 7,638 27,987 353 Size of bank (total deposits in millions of dollars): Less than 10 4,920 573 134 4,213 5,491 438 160 4,893 10-50 7,188 320 699 6,169 36,406 1,579 3,818 31,009 50-100 1,140 51 91 998 17,000 644 1,582 14,774 100-500 628 43 79 3 503 31,335 2,303 4,434 353 24,245 500 and over 176 15 32 129 54,018 2,674 17,993 33,351 TABLE 2 Time deposits, IPC, in denominations of less than $100,000—maturing in less than 1 year Most common interest rates paid by insured commercial banks on new deposits, April 30, 1975 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 4.75 4.75 or 5.00 5.25 5.50 or 5.00 5.25 5.50 less less NUMBER OF BANKS MILLIONS OF DOLLARS All banks 13,570 1,047 112 12,405 36,329 3,118 274 32,936 Size of bank (total deposits in millions of dollars): Less than 10 4,660 446 4,196 1,862 146 4 1,712 10-50 6,971 474 6,409 10,970 804 118 10,047 50-100 1,134 73 1,053 4,758 264 71 4,423 100-500 629 38 587 7,686 501 81 7,104 500 and over 176 16 160 11,053 1,403 9,650 TABLE 3 Time deposits, IPC, in denominations of less than $100,000—maturing in 1 up to years Most common interest rates paid by insured commercial banks on new deposits, April 30, 1975 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 5.25 5.25 or 5.50 5.75 6.00 or 5.50 5.75 6.00 less less NUMBER OF BANKS MILLIONS OF DOLLARS All banks 13,851 16 359 335 13,141 36,203 13 861 780 34,549 Size of bank (total deposits in millions of dollars): Less than 10 4,871 114 74 4,673 5,808 48 114 5,645 10-50 7,051 163 207 6,675 15,154 305 299 14,538 50-100 1,133 68 28 1,037 3,381 49 60 3,272 100-500 623 10 14 599 4,866 112 144 4,610 500 and over 173 4 12 157 6,994 347 163 6,484 For notes to Appendix Tables 1-8, see p. 624. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Changes in Time and Savings Deposits 623 TABLE 4 Time deposits, IPC, in denominations of less than $100,000—maturing in 2J years up to 4 years Most common interest rates paid by insured commercial banks on new deposits on April 30, 1975 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 5.75 5.75 or 6.00 6.25 6.50 or 6.00 6.25 6.50 less less NUMBER OF BANKS MILLIONS OF DOLLARS All banks 12,573 88 172 34 12,279 18,568 202 180 60 18,126 Size of bank (total deposits in millions of aoiiars;: Less than 10 4,018 4 53 4 3.957 1,877 1 51 0) 1,825 10-50 6,690 17 63 22 6.588 7,666 5 31 4 7,626 50-100 1.099 64 39 1 995 2,090 (2) 28 (2) 2,042 100-500 602 2 13 5 582 2,566 (2) 41 (2) 2,495 500 and over 164 1 4 2 157 4,369 (2) 29 (2) 4,138 TABLE 5 Time deposits, IPC, in denominations of less than $100,000—maturing in 4 years up to 6 years Most common interest rates paid by insured commercial banks on new deposits on April 30, 1975 Most common rate paid (per cent) Most common rate paid (per cent) GGrroouupp Total Total 6.25 6.25 or 6.50 6.75 7.00 7.25 or ' 6.50 6.75 7.00 7.25 less less NUMBER OF BANKS MILLIONS OF DOLLARS All banks 11,844 40 133 45 2,155 9,471 30,027 176 236 68 3,050 26,497 Size of bank (total deposits in millions of aoiiarsj. Less than 10 3,713 4 38 25 1,056 2,590 1,503 1 5 5 367 1,125 10-50 6,308 12 64 11 856 5,365 9,393 1 17 16 1,236 8,123 50-100 1 ,058 16 14 7 160 861 3,939 9 30 13 508 3,379 100-500 598 7 12 2 71 506 6,178 (2) 78 (2) 587 5,459 500 and over 116677 1 5 1122 114499 99,,001144 ((22)) ((22)) 335522 88,,441111 TABLE 6 Time deposits, IPC, in denominations of less than $100,000—maturing in 6 years or morenegotiable and nonnegotiable deposits Most common rate paid Most common rate paid (per cent) (per cent) GGrroouupp Total Total 7.00 7.25 7.50 7.00 7.25 7.50 or less or less NUMBER OF BANKS MILLIONS OF DOLLARS All banks 5,744 107 228 5,409 2,423 267 142 2,014 Size of bank (total deposits in millions of dollars): Less than 10 1,238 35 55 1,148 98 7 4 87 10-50 3,145 31 127 2,987 544 7 52 485 50-100 723 16 16 691 272 28 15 229 100-500 483 18 26 439 531 5 65 461 500 and over 155 7 4 144 978 220 6 752 For notes to Appendix Tables 1-8, see p. 624. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

624.2 Federal Reserve Bulletin • October 1975 APPENDIX—Continued TABLE 7 Negotiable CD's, IPC, in denominations of $100,000 or more Most common interest rates paid by insured commercial banks on new deposits on April 30, 1975 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 5.75 More 5.75 More or 6.00 6.25 6.50 7.00 7.25 7.50 than or 6.00 6.25 6.50 7.00 7.25 7.50 than less 7.50 less 7.50 NUMBER OF BANKS MILLIONS OF DOLLARS All banks 33,,996699 559944 665555 336600 337700 778822 334422 222244 664422 6644,,229988 1122,,668811 2288,,887799 44,,777711 22,,557799 77,,666600 446600 996644 66,,330044 SSiizzee ooff bbaannkk ((ttoottaall ddeeppoossiittss iinn mmiill-lliioonnss ooff ddooll-llaarrss)):: LLeessss tthhaann 1100 772299 43 71 93 24 150 131 45 172 284 12 37 54 5 61 31 9 75 1100--5500 22,,440000 334 302 168 282 568 173 141 432 2,829 263 455 206 352 784 124 126 519 50-100 338888 92 138 38 17 33 33 23 14 1,737 299 447 189 146 239 155 223 39 100-500 297 93 80 '40 32 18 4 11 19 5,705 1,388 11,,550000 11,,005566 722 353 ((22)) ((22)) 310 500 and over 155 32 64 21 15 13 4 5 53,743 10,719 2266,,444400 33,,226666 1,354 6,223 ((22)) ((22)) 5.361 TABLE 8 Nonnegotiable CD's and open accomit deposits, IPC, in denominations of $100,000 or more Most common interest rates paid by insured commercial banks on new deposits on April 30, 1975 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 5.50 More 5.50 More or 5.75 6.00 6.25 6.50 7.00 7.50 than or 5.75 6.00 6.25 6.50 7.00 7.50 than less 7.50 less 7.50 NUMBER OF BANKS MILLIONS OF DOLLARS All banks 4,929 686 387 944 413 486 888 707 3,378 5,216 7,873 3,125 2,519 2,235 1,085 Size of bank (total deposits in millions of dollars): Less than 10.. .. 478 28 14 121 40 96 95 80 4 97 3 2 23 8 35 12 14 10-50 3,101 384 212 487 284 302 562 547 323 3,202 249 220 525 416 349 823 415 50-100 735 131 73 195 27 28 180 41 60 2,335 222 257 922 125 88 442 153 126 100-500 468 108 70 104 47 48 43 23 25 5,965 684 1,121 1,295 853 834 754 213 211 500 and over.. . . 147 35 18 37 15 12 8 16 6 15,481 2.220 3,616 5,108 1,723 1,213 204 290 1 .107 NOTES TO APPENDIX TABLES 1-8: 1 Less than $500,000. a few banks that had discontinued issuing these instruments but 2 Omitted to avoid individual bank disclosure. still had some deposits outstanding on the survey date. Dollar amounts NOTE.—Data were compiled from information reported by a may not add to totals because of rounding. probability sample of member and insured nonmember commercial In the headings of these tables under "Most common rate paid banks. The data were expanded to provide universe estimates. (per cent)" the rates shown are those being paid by nearly all reporting Figures exclude banks that reported no interest rate paid and banks. However, for the relatively few banks that reported a rate in that held no deposits on the survey dates, and they also exclude between those shown, the bank was included in the next higher rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

625 Statements to Congress Statement by Arthur F. Burns, Chairman, The spending of consumers has not been the Board of Governors of the Federal Reserve only element of strength in the economy this System, before the Committee on the Budget, year. A sharp turnaround in foreign trade has US. Senate, September 25, 1975. also helped to pave the way for recovery. Our merchandise trade balance was unfavorable throughout 1974 and reached an unprecedented I am pleased to meet with this committee today $9 billion annual rate of deficit in the third to discuss the condition of the national economy quarter. But a deep cutback of imports, espeand the course of monetary and fiscal policy. cially of fuel and of industrial supplies, occurred The American economy is now in the process during the recession, while the demand for our of emerging from the deepest decline of busi- exports held up well. The result was a swing ness activity in the postwar period. Total indus- in our trade position to a surplus at an annual trial production has risen in each of the last 4 rate of nearly $14 billion in the second quarter months and the scope of the recovery is broad- of this year. The value of the dollar in foreign ening. At the same time, the demand for labor exchange markets reflects this basic improvehas been improving.. This August Wi million ment of our international competitive position. more workers were employed than in March. The sustained buying by foreigners and The unemployment rate has declined from a American consumers at a time of declining peak of about 9 per cent in May to about 8 industrial production has enabled business firms per cent currently. And the lengthening of the to make remarkable progress in clearing their average workweek in our factories is indicative shelves of excess inventories. Liquidation of of a return to more normal production sched- inventories got under way around the turn of ules. the year, and by the second quarter the rate of As we look back, it is clear that the consumer decline was larger in relation to the gross nahas led the way out of recession and into recov- tional product than in any quarter of the entire ery. Early this year, when price concessions postwar period. The ratio of stocks to sales became common, consumer purchases began to began to decline at retail stores in January; pick up. Retail sales of nondurable goods have reductions soon followed in factories producing risen briskly, and by this summer exceeded their nondurable goods and more recently in durable level in the final quarter of 1974 by 8 per cent goods manufacturing. The improvement in inin dollar terms and 3 per cent in real terms. dustrial production over recent months reflects As confidence improved, consumers also be- the better balance between inventories and sales came more willing to dip into their savings or that developed as this inventory adjustment took to incur new indebtedness in order to purchase place. big ticket items. Thus, outlays for consumer The basis for recovery was laid in large durables have also strengthened. This is clearly measure by adjustments of the private economy evident in the automobile sector, where sales of that served to correct the imbalances that had new cars have been running recently at around precipitated the recession. Most notably, the a 9V2 million annual rate—a considerable ad- slowing of inflation helped to rebuild confidence vance from the 7 million rate recorded last and led to larger consumer spending early this November. year. By the second quarter, the annual rate of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

626.2 Federal Reserve Bulletin • October 1975 increase in the general price level had receded especially of single-family dwellings—have to SVi per cent—half that of a year earlier. In been moving up again. the highly competitive environment created by The recovery process thus appears to be the recession, business managers found it nec- broadening and gathering momentum. Monthly essary to devote more attention to cost controls statistical reports on employment cover each of and improvements in efficiency. Their efforts 172 nonfarm industries. In February only 17 per have begun to bear fruit, as shown by the in- cent of these industries reported an increase in crease in output per manhour during the second employment over the preceding month. Since quarter—the first increase in over 2 years. then, the percentage of industries that are im- The self-corrective forces of the recession proving has gone up steadily, and reached 72 have been aided materially by fiscal and mone- per cent in August. Industrial production rose tary policies that sought to cushion the effects 1.3 per cent last month, far more than the gain of economic adversity and to provide some in any of the previous 3 months. The accelerstimulus to economic recovery. On the fiscal ation of industrial activity reflects stronger conside, public employment programs were ex- sumer demand for goods and services. It also panded, unemployment insurance was liberal- reflects the fact that inventory liquidation has ized, and income taxes were reduced. The Tax slowed or has given way in some branches of Reduction Act of 1975, besides bolstering con- industry to renewed accumulation. This is the sumer purchasing power, strengthened incen- beginning of a process of rebuilding stocks that tives for business investment in fixed capital. should provide considerable thrust to economic On the monetary side, Federal Reserve poli- activity over the next year. cies sought to bring about substantial improve- In addition, many signs now seem to be ment in financial conditions. Interest rates— pointing to an early turnaround in business fixed particularly on short-term loans and on securi- investment. The latest Government survey of ties—moved to lower levels as a result of de- spending on plant and equipment suggests that clining credit demands and the efforts of the business plans for capital outlays have stabi- Federal Reserve to increase the availability of lized. New orders for nondefense capital goods money and credit. Business corporations made already have risen appreciably from their March effective use of the easier credit conditions that trough. Production of business equipment inhave prevailed this year. They have issued ex- creased in August after ten consecutive months ceptionally large amounts of long-term securi- of decline. Contracts for commercial and industies, and they have used much of the proceeds trial construction are moving upward again, and to repay short-term debt or to acquire liquid so too is the rate of formation of new firms—a assets. Banks and other financial institutions useful early indicator of capital investment. also have strengthened their liquidity position. Once expenditures on plant and equipment Consumers too have paid down some of their begin to contribute to cyclical recovery—as I indebtedness, while adding substantially to their believe they soon may—the pace of over-all savings deposits and other financial assets. economic expansion is likely to become quite The easing of credit conditions has been vigorous. helpful to the severely depressed housing sector. The strength of economic recovery, however, Lower rates of interest on market instruments could be undermined by a renewal of strong encouraged a larger flow of savings funds to inflationary pressures. We have already witspecialized mortgage lenders; the turn occurred nessed an ominous upsurge in prices during the last fall, and a substantial rise in new mortgage current quarter. Wholesale prices rose at an loan commitments soon followed. Early this average annual rate of 12 per cent in July and year the volume of sales of both new and old August. Consumer prices have also advanced dwellings turned up, and these sales are contin- more rapidly, though there was some improveuing to run well above their lows of last winter. ment last month. To be sure, special factors— With better market conditions, housing starts— Russian grain purchases and the further rise in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 640.1 energy prices—contributed to the spurt in the the Federal Reserve System has frequently been price indexes, but that is only a part of the story. urged to raise its present target rates for the Price increases have also occurred in various money supply. We have resisted these suggesindustries—autos, steel, aluminum, industrial tions because, in our judgment, such a policy chemicals, among others—where considerable would soon lead to accelerated inflation and slack, exists. thereby frustrate the process of economic re- These developments must be viewed with covery. concern. It was uncontrolled inflation that Month-to-month changes in the monetary agbrought on the severe economic decline we have gregates have deviated this year from the recently experienced, and we must recognize the longer-run target ranges, and they can be exthreat to a sustained recovery embodied in any pected to do so in the future. Since the demands new wave of inflation. Wider expectations and of the public for money are subject to rather fears of inflation already are beginning to mani- wide short-term variations, efforts by the Fedfest themselves. Financial markets—specifically eral Reserve to maintain a constant growth rate the behavior of interest rates and stock prices— of the money supply could lead to sharp swings have become very sensitive to any indication in interest rates and risk damage to financial or suggestion of accelerating inflation. History markets and the economy. For example, there suggests that at this early stage of a business was a huge bulge in the monetary aggregates upturn confidence in the economic future this May and June, when tax rebates and supshould be strengthening steadily. A revival of plementary social security payments disbursed consumer and business confidence is indeed by the Treasury were temporarily added to the under way, but it is being hampered by concern public's holdings of currency, demand deposits, that a fresh burst of double-digit inflation may and savings accounts. Some transitory increase develop and, before long, bring on another in monetary expansion was practically unavoidrecession. able in these circumstances and, as expected, In setting monetary policy, the Federal Re- the bulge was followed by lower monetary serve has been alert to developments in the growth rates in July and August. sphere of prices. We have been equally alert Nevertheless, the extraordinary surge of the to the need to provide the financial basis for money supply last spring threatened to raise the economic recovery. In efl'ect, we have sought longer-term monetary growth rates to unaccepta prudent middle ground. This is reflected in ably high levels, and the Federal Reserve set the monetary growth paths specified by the forces in motion to ensure a return to the more Federal Open Market Committee for the 12 moderate expansion path desired. These actions, months ending in the second quarter of 1976— along with exceptionally heavy Treasury borthat is, growth of 5 to IV2 per cent in Mi, which rowing and the emerging signs of economic includes currency plus demand deposits, SVi to recovery, served to raise short-term market rates 10^2 per cent in Mg, which includes, besides of interest somewhat. This appeared to us to Ml, consumer-type time and savings deposits be necessary if monetary expansion over the at commercial banks, and 10 to 12 per cent in longer run is to be held within appropriate M3, which includes, besides^Mg, deposits at bounds. And our policy moves certainly helped thrift institutions. to reassure the business and financial community These growth ranges are appropriate under that the Federal Reserve would continue to steer current conditions, when the economy is strug- a course toward sustainable economic growth. gling with widespread unemployment of labor The Federal Reserve, however, cannot alone and industrial capital. However, these growth be expected to assure success in the battle ranges are on the generous side by historical against inflation. The general public, as well as standards, and our economy would have little the business and financial community, is watchor no chance of regaining general price stability ing to see whether the Congress and the adminif they were maintained indefinitely. Even so. istration will pursue a course of fiscal prudence. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

628.2 Federal Reserve Bulletin • October 1975 The credit markets currently face an enormous next year with minimal effects on the rate of demand for funds from the Treasury. Recently, inflation. Such recommendations miss the mark official estimates of Treasury borrowing in the for two reasons. First, they fail to take account second half of this year were raised by $3 billion of the sensitivity to rising rates of inflation that to $6 billion because, among other reasons, people in our country and elsewhere have expenditures are outrunning earlier projections. exhibited in recent years. In practically every The announcement of this larger need drove industrial nation, more rapid inflation has led interest rates on Treasury securities to a higher to larger precautionary savings and sluggish level and served to raise private borrowing costs consumer buying. Second, they fail to look far as well. The massive Federal Government defi- enough into the future, for it may not be until cit may well cause a further rise in interest rates, 2 or 3 years down the road that the full inflaand this can have an adverse effect on business tionary impact of more stimulative policies capital investment and on residential con- would be felt. To overlook these basic facts of struction. economic life is to court disaster. Therefore, it is of the utmost importance that Once inflation has come to dominate the this committee persuade the Congress to hold thinking of consumers and businesses—and this expenditures for fiscal 1976 at or below the I believe is our present condition—there is no levels specified in the First Concurrent Resolu- longer a meaningful trade-off between unemtion. Not only that, but this committee and the ployment and inflation. Even if highly expan- Congress should be seeking ways to pull back sionary monetary and fiscal policies could, for on the growth of Federal spending as the recov- a short time, provide some additional thrust to ery gathers momentum. Such a fiscal course will economic activity, the resulting acceleration of enhance the prospects for regaining price stabil- inflation would soon create even more difficult ity and a lasting prosperity. economic problems than we have yet encoun- I find it disturbing that some economists today tered. The American people have paid a heavy are proposing additional stimulative measures penalty for past neglect of economic realities. on the basis of their projections that a larger The only sound fiscal and monetary policy today gain in employment might be achieved over the is a policy of prudence and moderation. • Statement by Arthur F. Burns, Chairman, more workers were employed than in March. Board of Governors of the Federal Reserve The unemployment rate has declined from a System, before the Committee on the Budget, peak of about 9 per cent in May to about 8 U.S. House of Representatives, October 2, per cent currently. And the lengthening of the 1975. average workweek in our factories is indicative of a return to more normal production sched- I am pleased to meet with this committee today ules. to discuss the condition of the national economy As we look back, it is clear that the consumer and the course of monetary and fiscal policy. has led the way out of recession and into recov- The American economy is now in the process ery. Early this year, when price concessions of emerging from the deepest decline of busi- became common, consumer purchases began to ness activity in the postwar period. Total indus- pick up. Retail sales of nondurable goods have trial production has risen in each month since risen briskly, and by this summer exceeded their April, and the scope of the recovery is broaden- level in the final quarter of 1974 by 8 per cent ing. At the same time, the demand for labor in dollar terms and 3 per cent in real terms. has been improving. This August IVi million As confidence improved, consumers also be- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 640.1 came more willing to dip into their savings or and led to larger consumer spending early this to incur new indebtedness in order to purchase year. By the second quarter, the annual rate of big ticket items. Thus, outlays for consumer increase in the general price level had receded durables have also strengthened. This is clearly to 5V2 per cent—half that of a year earlier. In evident in the automobile sector, where sales the highly competitive environment created by of new cars have been running recently at the recession, business managers found it necaround a 10 million annual rate—a considerable essary to devote more attention to cost controls advance from the 7 million rate recorded last and improvements in efficiency. Their efforts November. have begun to bear fruit, as is evidenced by The spending of consumers has not been the the increase in output per manhour during the only element of strength in the economy this second quarter—the first increase in over 2 year. A sharp turnaround in foreign trade has years. also helped to pave the way for recovery. Our The self-corrective forces of the recession merchandise trade balance was unfavorable have been aided materially by fiscal and monethroughout 1974 and reached an unprecedented tary policies that sought to cushion the effects $9 billion annual rate of deficit in the third of economic adversity and to provide some quarter. But a deep cutback of imports, espe- stimulus to economic recovery. On the fiscal cially of fuel and of industrial supplies, occurred side, public employment programs were exduring the recession, while the demand for our panded, unemployment insurance was liberalexports held up well. The result was a swing ized, and income taxes were reduced. The Tax in our trade position to a surplus at an annual Reduction Act of 1975, besides bolstering conrate of over $13 billion in the second quarter sumer purchasing power, strengthened incenof this year. The rise in the value of the dollar tives for business investment in fixed capital. in foreign exchange markets reflects this basic On the monetary side. Federal Reserve poliimprovement of our international competitive cies sought to bring about substantial improveposition. ment in financial conditions. Interest rates— The sustained buying by foreigners and particularly on short-term loans and securi- American consumers at a time of declining ties—moved to lower levels as a result of deindustrial production has enabled business firms clining credit demands and the efforts of the to make remarkable progress in clearing their Federal Reserve to increase the availability of shelves of excess inventories. Liquidation of money and credit. Business corporations made inventories got under way around the turn of effective use of the easier credit conditions that the year, and by the second quarter the rate of have prevailed this year. They have issued exdecline was larger in relation to the gross na- ceptionally large amounts of long-term securitional product than in any quarter of the entire ties, and they have used much of the proceeds postwar period. The ratio of stocks to sales to repay short-term debt or to acquire liquid began to decline at retail stores in January; assets. Banks and other financial institutions reductions soon followed in factories producing also have strengthened their liquidity position. nondurable goods and more recently in durable Consumers too have paid down some of their goods manufacturing. The improvement in in- indebtedness, while adding substantially to their dustrial production over recent months reflects savings deposits and other financial assets. the better balance between inventories and sales The easing of credit conditions has been that developed as this inventory adjustment took helpful to the severely depressed housing sector. place. Lower rates of interest on market instruments The basis for recovery was laid in large encouraged a larger flow of savings funds to measure by adjustments of the private economy specialized mortgage lenders; the turn occurred that served to correct the imbalances that had last fall, and a substantial rise in new mortgage precipitated the recession. Most notably, the loan commitments soon followed. Early this slowing of inflation helped to rebuild confidence year the volume of sales of both new and old Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

630.2 Federal Reserve Bulletin • October 1975 dwellings turned up, and these sales are contin- more rapidly, though there was some improveuing to run well above their lows of last winter. ment in August. To be sure, special factors— With better market conditions, housing starts— Russian grain purchases and the further rise in especially of single-family dwellings—have energy prices—contributed to the spurt in the been moving up again. price indexes, but that is only a part of the story. The recovery process thus appears to be Price increases have also occurred in various broadening and gathering momentum. Monthly industries—autos, steel, aluminum, industrial statistical reports on employment cover each of chemicals, among others—where considerable 172 nonfarm industries. In February only 17 per slack exists. And the recently announced incent of these industries reported an increase in crease in the price of imported oil is bound to employment over the preceding month. Since lead to price advances over a wide range of then, the percentage of industries that are im- domestic petroleum products. proving has gone up steadily and reached 72 These developments must be viewed with per cent in August. Industrial production rose concern. It was uncontrolled inflation that 1.3 per cent in August, far more than the gain brought on the severe economic decline we have in any of the three previous months. The accel- recently experienced, and we must recognize the eraticm of industrial activity reflects stronger threat to a sustained recovery embodied in any consumer demand for goods and services. It also new wave of inflation. Wider expectations and reflects the fact that inventory liquidation has fears of inflation already are beginning to manislowed or has given way in some branches of fest themselves. Financial markets—specifically industry to renewed accumulation. This is the the behavior of interest rates and stock prices— beginning of a process of rebuilding stocks that have become very sensitive to any indication should provide considerable thrust to economic or suggestion of accelerating inflation. History activity over the next year. suggests that at this early stage of a business In addition, many signs now seem to be upturn confidence in the economic future should pointing to an early turnaround in business fixed be strengthening steadily. A revival of consumer investment. The latest Government survey of and business confidence is indeed under way, spending on plant and equipment suggests that but it is being hampered by concern that a fresh business plans for capital outlays have stabi- burst of double-digit inflation may develop and, lized. New orders for nondefense capital goods before long, bring on another recession. already have risen appreciably from their March In setting monetary policy, the Federal Retrough. Production of business equipment in- serve has been alert to developments in the creased in August after ten consecutive months sphere of prices. We have been equally alert of decline. The decline in contracts for com- to the need to provide the financial basis for mercial and industrial construction appears to economic recovery. In effect, we have sought have ended. The rate of formation of new a prudent middle ground. This is reflected in firms—a useful early indicator of capital invest- the monetary growth paths specified by the ment—is moving upward again. Once expendi- Federal Open Market Committee for the 12 tures on plant and equipment begin to contribute months ending in the second quarter of 1976— to cyclical recovery—as I believe they soon that is, growth of 5 to IV2 per cent in Mi, which may—the pace of over-all economic expansion includes currency plus demand deposits, Wi to is likely to become quite vigorous. XWi per cent in M2, which includes, besides The strength of economic recovery, however, Ml, consumer-type time and savings deposits could be undermined by a renewal of strong at commercial banks, and 10 to 12 per cent in inflationary pressures. We have already wit- M3, which includes, besides M2, deposits at nessed an ominous upsurge in prices during the thrift institutions. third quarter. Wholesale prices rose at an These growth ranges are appropriate under average annual rate of 12 per cent in July and current conditions, when the economy is just August. Consumer prices have also advanced beginning to emerge from recession and is still Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 640.1 struggling with widespread unemployment of raise short-term market rates of interest somelabor and industrial capital. However, by his- what. This appeared to us to be unavoidable torical standards, these growth ranges are on the if monetary expansion over the longer run was generous side, and our economy would have to be held within appropriate bounds. Our policy little or no chance of regaining general price moves—and the subsequent moderation in stability if they were maintained indefinitely. monetary growth rates during the summer Even so, the Federal Reserve System has been months—certainly helped to reassure the busifrequendy urged to raise its present target rates ness and financial community that the Federal for the money supply. We have resisted these Reserve would continue to steer a course toward suggestions because, in our judgment, such a sustainable economic growth. policy would soon lead to accelerated inflation The Federal Reserve, however, cannot alone and thereby frustrate the process of economic be expected to assure success in the battle recovery. against inflation. The general public, as well as A similar judgment was reached last spring the business and financial community, is watchby the Senate Committee on Banking, Housing, ing to see whether the Congress and the adminand Urban Affairs in its report on the monetary istration will pursue a course of fiscal prudence. policy oversight hearings. The committee ex- The credit markets currently face an enormous pressed the belief "that pursuit of the monetary demand for funds from the Treasury. Recently, policy plans announced by the Federal Reserve official estimates of Treasury borrowing in the Board will be helpful to the nation's economic second half of this year were raised by $3 billion recovery," and stated unequivocally its agree- to $6 billion because, among other reasons, ment that ''if inflation is rekindled, any recovery expenditures are outrunning earlier projections. will be shortlived and will end in another reces- The announcement of this larger need drove sion, one almost certain to be more virulent than interest rates on Treasury securities to a higher the present one." level and served to raise private borrowing costs Late this spring growth of the various money as well. The massive Federal Government deficit supply measures spurted far above the longer- may well cause a further rise in interest rates, run target ranges, as tax rebates and special and this can have an adverse effect on business social security payments disbursed by the capital investment and on residential con- Treasury were temporarily added to the public's struction. holdings of currency, demand deposits, and Therefore, it is of the utmost importance that savings accounts. Some transitory increase in this committee persuade the Congress to hold monetary expansion was viewed as necessary expenditures for fiscal 1976 at or below the by the Federal Reserve System, in view of the levels specified in the First Concurrent Resolunature of the fiscal actions that had been voted tion. Not only that, but this committee and the by the Congress. The bulge in the monetary Congress should be seeking ways to pull back aggregates was expected to be largely self-cor- on the growth of Federal spending as the recovrecting, as recipients of the Treasury payments ery gathers momentum. Such a fiscal course will spent the proceeds or shifted them to more enhance the prospects for regaining price stabilpermanent savings forms. ity and a lasting prosperity. In fact, the increase in the money supply was I find it disturbing that some economists are considerably larger than we had anticipated and today proposing additional stimulative measures threatened to raise the longer-term monetary on the basis of their projections that a larger growth rates to unacceptably high levels. The gain in employment might be achieved over the Federal Reserve therefore set forces in motion next year with minimal effects on the rate of to ensure a return to the more moderate expan- inflation. Such recommendations miss the mark sion path desired. These actions, along with for two reasons. First, they fail to take account exceptionally heavy Treasury borrowing and the of the sensitivity to rising rates of inflation that early signs of economic recovery, served to people in our country and elsewhere have exhi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

632.2 Federal Reserve Bulletin • October 1975 bited in recent years. In practically every indus- no longer a meaningful trade-off between untrial nation, more rapid inflation has led to larger employment and inflation. Even if highly exprecautionary savings and sluggish consumer pansionary monetary and fiscal policies could, buying. Second, they fail to look far enough for a short time, provide some additional thrust into the future, for it may not be until 2 or 3 to economic activity, the resulting acceleration years down the road that the full inflationary of inflation would soon create even more diffiimpact of more stimulative policies would be cult economic problems than we have yet enfelt. To overlook these basic facts of economic countered. The American people have paid a life is to court disaster. heavy penalty for past neglect of economic Once inflation has come to dominate the realities. The only sound fiscal and monetary thinking of consumers and businesses—and this policy today is a policy of prudence and mod- I believe to be our present condition—there is eration. n Supplemental statement for this date begins on page 640. Statement by Arthur F. Burns, Chairman, cut remedial measures, and there was some Board of Governors of the Federal Reserve loose talk about an investor conspiracy against System, before the Joint Economic Committee, the City. The basic facts, of course, were quite October 8, 1975. simple. First, commercial bankers, being aware of their responsibility for other people's money, felt they may already have approached—if not I am here to join you in discussing the economic exceeded—the limits of prudence in their holdand financial problems posed by the financial ings of New York City securities. Second, the crisis of New York City. many thousands of individuals who invest on The difficulties now facing New York stem their own account likewise focused on safety; from the erosion of its financial position over they were no longer much tempted by promises the past decade. During this period the expend- of an exceptionally high yield. Investor confiitures by the City's government grew rapidly dence in the City's finances thus dwindled, while revenues failed to keep pace. To close while its need to pay current bills and to refithe gap between its revenues and expenditures, nance maturing obligations became more pressthe City relied increasingly on borrowed funds. ing. Once this stage was reached, the possibility Not only 'capital expenditures but also the of default on the City's obligations became very mounting deficits on current operations were real, and it was so advertised almost daily in financed in this fashion. By the end of 1974 our Nation's newspapers. New York City's outstanding debt amounted to The financial crisis confronting the Nation's over $13 billion, much of which was in the form largest city prompted the government of New of short-term notes—that is, obligations matur- York State to offer financial and managerial ing in a year or less. assistance. Starting in April, the State put at Investors may learn slowly, but their inno- the City's disposal substantial sums that were cence does not last forever. As poor manage- not scheduled for payment until some months ment of New York finances persisted, at first later. Then, around mid-June, the State legislaa few, but in time more and more investors ture created a new agency—the Municipal Asbecame concerned about the City's financial sistance Corporation (MAC). This agency was condition. During the past winter and spring the empowered to sell up to $3 billion of its debt City began to experience very serious difficul- obligations, which were to be backed by certain ties in rolling over its debt—to say nothing of tax revenues that otherwise would have gone adding to its outstanding indebtedness. to the City, and then to make the proceeds of Unfortunately, the City failed to take clear- its borrowing available to the City. Armed with Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 640.1 such broad authority, MAC sought to wring many securities dealers have sought to cut back some clarity out of the City's tangled finances on their inventory of municipal securities, and and to help develop a budgetary plan that could they have often found it necessary to offer bonds lead the City back to a balanced budget. for sale at prices considerably below their pur- These measures, however, proved insuffi- chase price. Underwriters of municipal issues cient to restore investor confidence in the City's have generally scaled back on their participation financial management, and even the new se- in new offerings, thereby protecting their capital curities issued by MAC soon came under a in an uncertain and volatile market. Some uncloud. To ward off imminent default by the City derwriters have gone so far as to withdraw of New York, the State adopted firmer measures entirely from bidding syndicates. And inveson September 9. First of all, control of the tors—the ultimate buyers of municipals—have City's finances was turned over to a State-dom- been tending to shift to higher-quality municipal inated Emergency Financial Control Board. securities or to categories of investment judged Second, the power of MAC to issue debt se- to be less hazardous. curities was enlarged. Third, the State sought Trading in the market for outstanding tax-exto arrange additional financing of $2.3 billion empt bonds has therefore slowed appreciably, for the City, of which $750 million in loans and the spread between bid and asked quotations was to be provided by the State. This financial has widened. These developments are characplan was designed to tide the City over until teristic of a period when investor confidence has early December, and it was hoped that by that been shaken, and they are indicative of a weaktime the newly organized control board would ened market. have in being a sufficiently strong program of The recent behavior of investors and dealers budgetary restraints to enable the City to resume has resulted in a rise of the yields on municipal the sale of its securities to the investing public. securities to the highest level ever experienced But when investor confidence is once shaken, in the tax-exempt market. Yields for even the it can rarely be restored quickly or easily. The highest-rated borrowers have risen over the past new financial plan failed to elicit enthusiasm on few months. Some of this increase has been the part of investors. In general, the financial associated with the upward drift of open market community remained skeptical about the City's interest rates since midyear. In addition, muability to avert default and rebuild its financial nicipal yields have been under upward pressure strength. The concern of market participants because of the heavy volume of new tax-exempt was heightened by a judicial ruling on Sep- issues flowing to market. The market for taxtember 29 that brought into question a portion exempt securities is more concentrated, and of the financial aid package, namely, the pur- therefore smaller, than for taxable bonds. chase of MAC bonds by the State pension funds. Hence, when unusually large amounts of such Beyond that the recent intertwining of the securities have to be placed, larger yield adjust- State's finances with the City's finances has ments relative to taxable markets are likely to troubled many investors and damaged the occur. Nevertheless, until the last 2 weeks, I State's credit standing. Thus, the stresses and would judge that the yields on the highest-rated strains that developed in the municipal securities municipal issues have not been out of line with market over the summer months have become those available on corporate bonds of comparamore acute in recent days. ble quality. Since the summer, and to an increasing de- In choosing among tax-exempt securities, gree in recent weeks, the participants in the however, investors have become increasingly municipal market—that is, investment bankers, selective. The differences in yields, comparing securities dealers, and ultimate investors—have lower-rated bonds with higher-rated issues, have been attempting to reduce their exposure to the increased considerably since last spring and risk of loss. This has affected not only securities have become unusually large. Thus, the average bearing a New York name but also issues of yield on Moody's A-rated bonds now exceeds some other State and local governments. Thus, that on Aaa-rated bonds by more than a full Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

634.2 Federal Reserve Bulletin • October 1975 percentage point—or about three times the risk Until this most recent turn of events—which differential required by investors during the I trust will prove to be a transitory phenomepreceding 6 years. Thus, the interest cost for non—the market for municipal securities, taken lower-rated borrowers coming to market has as a whole, functioned very effectively. During risen materially. the third quarter of this year, even as pressures The deterioration of the market for municipals associated with the New York City problem of less than the highest quality has been espe- intensified, new bond issues amounted to about cially pronounced for obligations of New York $9.5 billion. This is by far the largest volume City, New York State, and certain of the State ever for a third quarter, and it would have been agencies. In the case of the State proper, inves- a record even in the absence of the $2.4 billion tors have become concerned that the resources of MAC bonds sold during the period. being diverted to the City are damaging the In seeking ways to resolve New York City's financial position of the State itself. Some of crisis, the suggestion has occasionally been adthe State's agencies that issue "moral obliga- vanced that the Federal Reserve might serve as tion" securities rather than "full faith and a source of emergency credit. No formal applicredit" obligations have been unable in recent cation for such credit was ever received by the months to finance themselves in the public mar- Board of Governors or the Federal Reserve ket. There now appears to be some tendency Bank of New York. But I want to explain why on the part of investors to underestimate the we probably would have disapproved such an financial strength of these agencies—an attitude application had it been made. that stems at least in part from the temporary As the ultimate source of financial liquidity default earlier this year by the Urban Develop- in the economy, the Federal Reserve has certain ment Corporation. To a lesser extent, there has powers to extend emergency credit even to also been some reluctance by investors to ac- institutions that are not members of the System. quire the securities of similar agencies in other But the use of that authority is tightly circum- States. scribed. The basic provision—contained in During the past week or so, the impact of Section 13, paragraph 13, of the Federal Rethe market's unease has spilled over to a wider serve Act—states that emergency loans with range of securities. Significant increases in maturities no longer than 90 days may be made yields have occurred in the case of some out- by the Federal Reserve Banks on the basis of standing bonds of governmental units that enjoy promissory notes backed by Treasury or Federal a high financial standing. Moreover, a few is- agency securities. To qualify for credit assistsuers have not received any bids for their bonds ance under this provision of law, a local govor have rejected the bids received because the ernment would have to possess sizable amounts interest cost was deemed excessive. These de- of unencumbered Federal obligations. This velopments reflect increasing concern over the would be an unusual situation for any distressed crisis of New York City. borrower, and it obviously does not apply to If the weakness of the market for municipals New York City. were to persist and spread further, many soundly The lending authority under paragraph 3 of run, creditworthy communities and public Section 13 of the Federal Reserve Act is agencies could have great difficulty—or suffer broader, permitting the Board, in unusual and excessive costs—in raising needed funds. exigent circumstances, to authorize Reserve Holders of municipal securities, among which Banks to make loans on the kinds of collateral financial institutions are numerous, would to eligible for discount by member banks. Such some degree be affected and so might others paper may not have a maturity of more than less directly involved. Hence, if the New York 90 days and must afford adequate security to City crisis remains unresolved, and if the fate the Reserve Bank against the risk of loss. Furof New York State remains tied to the City's, thermore, in view of restrictions of law and the process of economic recovery now under congressional intent, certain conditions must be way in our Nation could be injured. met in order to permit the extension of emer- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 640.1 gency credit under this authority. Among these as the Nation's lender of last resort. Over the conditions is a requirement that an applicant has years, we have therefore developed contingency exhausted other sources of funds before coming plans to deal with possible emergency situato the Federal Reserve, that the borrower is tions. As I previously informed your chairman, basically creditworthy and possesses adequate our plans have been adapted recently to cope collateral, and that the borrower's need is solely with the financial strains that might be assofor short-term accommodation. It does not ap- ciated with the default of a major municipality. pear that New York City is now in a position In that event, I assure you, the Board is to meet all these requirements. Certainly, its prepared to act promptly. The contingency plan finances would hardly permit early repayment calls for lending to commercial banks through of emergency borrowings. the Federal Reserve discount window beyond In addition to the emergency lending provi- the amounts required by normal discounting sions in Section 13 of the Federal Reserve Act, operations. Credit provided in this manner the Reserve Banks have authority under Section would assist banks in meeting their temporary 14(b) to purchase short-term obligations of State liquidity needs. Not only that, the proceeds of and local governments issued in anticipation of the special loans made at the discount window assured revenues, subject to regulations by the could also be used by the banks to assist mu- Board. Legislative history indicates that this nicipalities, municipal securities dealers, and authority was designed to assist the Federal other customers who are temporarily short of Reserve Banks in meeting their operating ex- cash because of unsettled conditions in the sependitures and also to enable them to make the curities markets. In addition, the System would, discount rate effective when little borrowing of course, be ready to use its broad power to took place at the discount window. There is stabilize markets through open market purchases nothing in the Federal Reserve Act or its legis- of Treasury or agency securities. lative history to suggest that Section 14(b) con- In the event this contingency plan has to be templated the purchase of municipal securities activated, the Board will make funds available as a means of aiding financially distressed com- on whatever scale is deemed necessary to assure munities. an orderly financial environment. The Board The Congress, of course, could amend the recognizes that sizable extensions of Federal Federal Reserve Act so as to relax the require- Reserve credit would run the risk of leading to ments for extending Federal Reserve credit to a substantially larger expansion of bank reserves financially troubled governmental units. But the and the money supply than is consistent with Board of Governors would have the gravest longer-run monetary objectives. Clearly, theredoubts about any such action. If loans were to fore, any such expansion must be only tempobe made to State or local governments, the rary. In time any excessive growth in bank Federal Reserve would have to involve itself in reserves would need to be corrected through the activities of these governmental units, in- offsetting open market operations and through cluding particularly their expenditure budgets repayment of bank borrowing from the System. and the adequacy of their revenues. Moreover, There are also certain supervisory and examsince numerous demands for credit might ensue, ination questions that may arise with respect to the Federal Reserve would have to set standards banks in the event of a major municipal default. of eligibility. Being thus placed in the position In this connection the Board and other regulaof having to allocate credit among governmental tory agencies have plans to revise procedures units, the Nation's central bank would inevita- that apply to the valuation of defaulted securibly become subject to intense political pres- ties, so that any write-downs may be postponed sures, and its ability to function constructively until the market has had a few months to stabiin the monetary area would be undermined. lize and thus provide more reliable indications The Board fully recognizes that the Federal of their value. Reserve System has the responsibility, subject Even so, a default may ultimately require only to restrictions under existing laws, to serve write-downs that could seriously impair the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

636.2 Federal Reserve Bulletin • October 1975 capital of some banks. In that event, the Federal cern is spreading that a New York default may Deposit Insurance Corporation has statutory injure the economic recovery now in process. powers to assist Federally insured banks that I have said enough to indicate that I feel this might find their capital impaired by a decline possibility can no longer be dismissed lightly. in the value of securities in their portfolio. I That, however, does not ease the task that the understand that the Corporation is prepared to Congress faces in dealing with the New York implement, with appropriate safeguards, its problem; for the precise issue is whether Federal contingency plans for dealing with insured financial assistance to New York may not cause banks that require a temporary infusion of sup- national problems over the long run that outplemental capital for the above reason. weigh any temporary national advantage. I think it evident from the far-flung scope of As this matter is debated by the Congress, our contingency plans that we believe a default the adverse effects of a New York City default on debt obligations by New York City could will undoubtedly receive full attention—as they produce serious strains in securities markets. indeed should. I would only urge that the For a time it could also adversely affect munici- longer-run risks also be considered thoroughly. palities that need to issue new debt. The like A program of Federal assistance to the City may is true of financial institutions that hold such well lead to demands for similar assistance for securities in significant volume and also on other hard-pressed communities, even those individual investors who have part of their life whose distress was brought on by gross neglisavings at risk in these bonds. I still believe gence or mismanagement. Substantial Federal that the damage stemming from a prospective credit—whether through insurance, guarantees, default by New York City is likely to be short- or direct loans—would compete directly with lived. Indeed, the possibility of such a default the already huge amounts of Federal financing has already been discounted to an appreciable needs. Most important of all, the provision of degree by the market. But I am also aware of Federal credit for local government will necesthe uncertainty that inherently attaches to a sarily inject a major Federal presence in local judgment on this score; and I recognize that a spending and taxing decisions. default, besides being a very serious matter for It is highly important, therefore, to recognize the City and State of New York, could have that the issue of assistance to New York City troublesome results for the Nation at large. goes to the very heart of our entire Federal The very fact that this committee and other system of separation of powers—a system that, committees of the Congress are holding hearings despite enormous economic and social changes, on New York City's finances implies that con- still prevails in our country. • Statement by J, Charles Partee, Managing in order to keep the Board informed of devel- Director for Research and Economic Policy, opments and implications of the New York City Board of Governors of the Federal Reserve financial situation. A great deal of work of the System, before the Subcommittee on Commerce, kinds I will be describing has been done at the Consumer, and Monetary Affairs, of the Com- Federal Reserve Bank of New York as well as mittee on Government Operations, U.S. House at the Board of Governors. of Representatives, October 8, 1975. As the New York City financial crisis began to deepen this past spring, following shortly upon the temporary default by the Urban De- I am glad to appear before this committee today velopment Corporation—a so-called "moral to describe briefly the program of analysis that obligation" agency of New York State—it behas been carried on by the Federal Reserve staff came clear to« us that there might be four sepa- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 640.1 rate areas of possible involvement by the Fed- palities might find it impossible to carry on eral Reserve System for which background planned financings in the market and could find analysis or contingency planning would be themselves in a temporary liquidity squeeze. needed. Similarly, participants in the municipal mar- First, it seemed conceivable that the Federal ket—both investors and dealers—might be un- Reserve would be approached by the City with able to liquidate positions as planned and could an application for emergency credit assistance. find themselves in necessitous need of tempo- Efforts were made, both at the Federal Reserve rary credit accommodation. Our contingency Bank of New York and at the Board, to assess plans for use of the Federal Reserve Bank disthe basic financial position of New York City, count window—a source of temporary financing in order to be prepared for such an eventuality. that could accommodate larger-than-ordinary Governor Mitchell has already testified before flows of credit through the banking system— this committee, on June 25, as to the consid- were therefore reviewed, updated, and adapted erations the Board would have had to take into for possible use in the event of a municipal account if it were to consider the use of our securities market collapse. existing authority in support of the City. Fourth, the Federal Reserve System has a Our second concern was for the possible bank regulatory responsibility, especially with implications of a New York City default on the regard to the supervision of State-chartered behavior of the financial markets and the per- member banks. Through the spring and summer formance of the economy generally. In this the Federal Reserve Bank of New York kept regard, I should point out that there is little itself informed as to the portfolio position in historical precedent to go on in evaluating the New York City issues of the City's major banks. probable repercussions of a failure of this mag- Then in August, in order to spot where problems nitude, other than the events surrounding the were most likely to develop. Federal Reserve Penn-Central bankruptcy in the spring of 1970. examiners were asked to identify, from their Nevertheless, we have been following develop- worksheets, those State member banks throughments in the municipal securities market and in out the country that held New York City, State, State and local employment and spending trends or State-agency securities that accounted for a with unusual care, and we have attempted at sizable proportion of their capital accounts. every opportunity to probe investor sentiment Later that month we obtained current data from as to current and prospective New York City these banks as to their holdings of New York developments both in the United States and City issues. I am submitting separately, for the abroad. Until very recently, when New York committee's use, a general summary of the State and various other governmental units have results of these informal surveys.^ been caught up in widening investor concerns, The Federal Reserve staff intends to keep the staff view generally has been that a New fully abreast of the financial and economic ram- York City default would not be likely to have ifications of the New York City problem on a significant national repercussions, though its fi- day-to-day basis. All that can be said with nancial and economic effects in the New York confidence at this point is that the potential area could, of course, be substantial. repercussions will depend importantly on the Third, the Federal Reserve necessarily would precise character of developments in the market be concerned with any failure of financial mar- and in the City's situation as they take kets to function because of its role as the ulti- place. • mate source of liquidity to the economy. In the event of a major default, financial flows could well become distorted for a time. Some com- ^Available upon request from Publications Services, Division of Administrative Services, Board of Govermercial banks might suffer deposit outflows or nors of the Federal Reserve System, Washington, D.C. have unusual needs for liquidity. Some munici- 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

638.2 Federal Reserve Bulletin • October 1975 Statement by Jeffrey M. Bucher, Member, interpretation, only deductions from a tagged Board of Governors of the Federal Reserve price are exempted from the point-of-sale fi- System, before the Subcommittee on Consumer nance charge disclosure that is required by the Affairs of the Committee on Banking, Housing, Truth in Lending Act. and Urban Affairs, U.S. Senate, October 9, On the other hand, it has been argued that the 1975. term "discount" envisions any type of two-tier pricing system that results in a lower price to I am pleased to be here today to discuss the cash purchasers, regardless of the form of the difficulties that the Board has encountered in pricing mechanism that results in the lower implementing Section 167 of the Fair Credit price. Under this view, the exemption from Billing Act, which relates to the issue of dis- finance charge disclosure would extend to surcounts for payments in cash. charge and two-tag pricing systems in addition As you are aware, Section 167 provides that to strict discount systems. A surcharge system a discount of up to 5 per cent offered by a is one in which the tagged price is the cash price merchant to induce customers to pay in cash and a premium or surcharge is added to the rather than by credit card does not constitute tagged price if the customer chooses to use a a finance charge under the Truth in Lending Act. credit card. A two-tag system, as the name Previously, the Truth in Lending Act required implies, is one in which all merchandise is that any such discount be disclosed at the point tagged with two prices, one for cash and one of sale as a finance charge. Another provision for credit. The argument is that in each of these of Section 167 prohibits card issuers from con- systems the cash customer pays less and is tractually preventing merchants from offering therefore receiving a discount. these discounts for cash. Thus, in writing the regulations to implement Section 167 is based on the premise that cash Section 167, the Board was faced with a decicustomers are currently being forced to subsi- sion as to how broadly the section should be dize the costs of credit-card plans. Proponents interpreted. Neither the Act nor its legislative of this provision argued that merchants have history provides any clear indication of the increased their prices for all buyers to compen- congressional intent. sate for the rate at which they discount their Relying upon a literal reading of the section, credit-card invoices to card issuers. The theory our proposed regulations interpreted the term behind the section is that merchants should be "discount" in its narrowest sense and provided able to offer a price differential to cash buyers for different treatment of discounts and surthat reflects the savings realized by not having charges. The proposal provided that strict disto pay the card issuer a percentage of the sales counts of up to 5 per cent for cash payment price to service the credit transaction. While did not have to be disclosed as a finance charge nothing in Section 167 requires merchants to but that any surcharge on the use of a credit offer a discount for cash, the section encourages card did have to be disclosed. them to do so by removing the legal and con- Critics of this proposal argued that the Contractual barriers that have made it difficult in gress did not intend to exclude surcharges from the past to offer a discount. the scope of Section 167. They pointed out that The difficulty the Board has encountered in discounts and surcharges are mirror images of connection with Section 167 has arisen over the each other and there is no economic difference interpretation that is to be given to the term between them. Additionally, they argued that "discount." On the one hand, it has been ar- the goal of Section 167 was to eliminate the gued that the term envisions only those pricing subsidy being paid by cash purchasers and that systems under which a percentage of the tagged allowing merchants the flexibility of instituting price is deducted to arrive at the cash price. whichever type of two-tier pricing system that For example, if the tagged price is $100, a best fits their merchandising methods would merchant may offer a discount of 4 per cent make it more likely that some form of discount and charge the cash purchaser $96. Under this would be offered to cash buyers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 640.1 Another criticism of the proposal was that the chants will simply add on an extra charge to Congress, in passing Section 167, desired to cardholders. eliminate what was considered to be an anti- Critics of the proposal also suggested that the competitive practice. Most card issuer-merchant allowance of surcharges will make it more difcontracts prohibit the merchant from passing on ficult to comparison shop because the unsophisto cardholders the fee imposed on the merchant ticated consumer will be faced with many diffor servicing each credit sale, and the Senate ferent prices and pricing systems from one store report on S. 2101 indicates a concern that these to the next. The fact that a 5 per cent surcharge restrictive clauses may violate the antitrust laws. on a $100 item results in a credit price of $105, The argument is that if a prohibition on the while a 5 per cent discount on a $105 item does offering of a discount is anticompetitive, so is not give a cash price of $100 further complicates a prohibition on the imposition of a surcharge, the consumer's choice. and the Congress could not have intended to Taking into account the balance of arguments prohibit the use of one anticompetitive clause cited above, the Board, in promulgating the while allowing the continued use of the other. final regulations, decided to exclude surcharges Taking into account the information received from the scope of the exemption from finance on its initial proposal, the Board, on July 30, charge disclosure. In reaching its decision, the issued a revised proposed regulation providing Board reasoned in part that since the Truth in that surcharges of up to 5 per cent on the use Lending Act is a disclosure statute, any excepof credit cards should be accorded the same tions from its disclosure provisions should be treatment with respect to finance charge disclo- read as narrowly as possible in the absence of sures as discounts. any evidence of congressional intent to the con- The comments on this new proposal raised trary. Because the effect of Section 167 is to several important objections. First, it was ar- exempt certain costs from disclosure as finance gued that the Act does not authorize the Board charges, the regulations view the term "disto give this special treatment to surcharges in- count" in its narrowest sense and exclude surasmuch as the language of Section 167 speaks charge pricing systems from their scope. At the only in terms of "discount." In this connection, same time, the Board sought the assistance of it was maintained that the Congress had carved the Congress in order to obtain express legislaout a narrow exception to the normal finance tive action to clarify the intended application charge disclosures required by the Truth in of Section 167. Lending Act and that the Board would be over- I would now like to discuss the problem stepping its authority by extending that excep- concerning the interplay between Section 167 tion to surcharges. and State usury laws. As discussed earlier, Critics argued that a surcharge carries the discounts—however the term is interpreted—of connotation of a penalty on credit-card users up to 5 per cent to induce payment in cash do while a discount is viewed as a bonus to cash not constitute a finance charge for purposes of customers. They contended that this difference the Truth in Lending Act disclosure requirein psychological impact makes it more likely ments. However, despite the fact that these that surcharge systems will discourage custom- discounts do not constitute a finance charge for ers from using credit cards, with a resulting truth in lending purposes, they may still constiadverse effect on the economy. tute a finance charge, time price differential, or Critics also felt that the allowance of sur- interest, under the usury laws of many States. charges would have the effect of harming Thus, as the law in many States now stands, credit-card purchasers without any corre- if a seller gives a discount for cash, card issuers sponding benefit to cash purchasers. The argu- who are already charging interest at the State ment is that notwithstanding the impact of com- usury ceiling may be placed in violation of the petitive market influences surcharges will have usury laws. Compounding the problem is the an inflationary impact on prices and will not fact that card issuers may not necessarily know reflect the actual costs of credit because mer- whether a merchant is giving discounts and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

640.2 Federal Reserve Bulletin • October 1975 therefore may have no way of determining usury laws by card issuers. It appears that some whether a specific transaction violates the law form of remedial legislation either at the State or not. or Federal level is necessary to make Section The Board has indications that there are a 167 a viable provision. number of States for which discounts or sur- This concludes my testimony on Section 167 charges under Section 167 will violate their of the Fair Credit Billing Act. Clearly, the usury laws. The possible violations of State section raises difficult problems and any guidusury laws threaten to frustrate the intent behind ance that the Congress can give the Board in Section 167. Merchants probably will not offer resolving these problems will be welcomed. I discounts for cash, and where they do, it is appreciate the opportunity extended to me to likely to result in inadvertent violations of the appear before you today. • Statement by Arthur F. Burns, Chairman, sharply depressed level of late 1974. Our ex- Board of Governors of the Federal Reserve ports have been well maintained, in spite of the System, before the Committee on the Budget, sharp recession of economic activity in foreign U.S. House of Representatives, October 2, countries. And with aggregate demand of the 1975. private economy again increasing, our gross national product in real terms rose modestly in the second quarter and quite rapidly during the I shall address myself to five questions that I quarter that has just come to a close. think are of vital interest to you, Mr. Chairman, Industrial production reached a trough this and to the members of your committee. April. In August we had a sharp rise, the fourth First, is the recovery of economic activity successive monthly rise. In that month industrial proceeding satisfactorily? production was reported by the Federal Reserve Second, what is the economic outlook for the Board to have increased 1.3 per cent. I believe year ahead? that that figure will eventually be revised up- Third, what developments may endanger the ward. During the month of September, induscontinuance of economic expansion over the trial production continued to rise, and another coming year? spirited increase will be reported in due course. Fourth, how well is the Federal Reserve Sys- Since March of this year, total employment tem supporting the aim of the Congress of of men and women across the country has risen promoting the recovery of production and jobs? by 1.5 million. The unemployment rate has Finally, fifth, what governmental policies are declined from 9.2 per cent earlier in the year most likely to return our national economy to to 8.4 per cent in August. My guess would be a path of sustainable growth and prosperity? that the September figure will not be any higher. Let me turn, if I may, to these questions, It may well be a little lower. seriatim. The length of the workweek has risen appre- First, is the recovery of economic activity ciably, particularly in manufacturing industries. proceeding satisfactorily? Perhaps most important of all, the recovery has I would answer this question without hesita- been broadening out; it has been diffusing itself tion in the affirmative. Retail sales have been over the economic system. rising quite briskly since the beginning of the The Bureau of Labor Statistics, as you may year. Housing starts have moved up from their know, reports on the employment of 172 indi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 640.1 vidual nonfarm industries. In the month of Feb- some trades, and this process, as it continues ruary, the Bureau reported that only 17 per cent and broadens out, will provide considerable of these 172 industries experienced an increase thrust to economic activity over the coming in employment over the preceding month. That year. was the low point. Since then that percentage Furthermore, early indicators of business has risen month by month, and in August it capital spending suggest that a turnaround of reached a figure of 72 per cent. To me, this business investment in fixed capital cannot be particular series on the diffusion of employment very far away. increases is the most telling evidence of what During the past 6 months or so, contracts for has been happening to our economy; namely, commercial and industrial construction have the recovery process has been broadening out stabilized. In the past few months new orders across the economic system. for business capital goods have risen. During The gains in economic activity have been the past few months, the rate of formation of accompanied by an impressive strengthening of new business firms, a very useful early indicator the dollar in foreign exchange markets. This of business capital investment, has been moving improvement in the position of the dollar, which up. Furthermore, the index of production of has also helped to restore our country's interna- business equipment, which we compile at the tional prestige, reflects fundamentally the im- Federal Reserve Board, turned up in August. provement in our foreign trade balance. This was the first rise after 10 consecutive In the third quarter of last year our foreign months of decline. trade registered a deficit at an annual rate of Once expenditures on plant and equipment $9 billion. In the second quarter of this year begin to contribute to economic recovery, as I our foreign trade registered a surplus of some- believe they soon may, the economic expansion thing over $13 billion, a remarkably large turn- now under way will have a firmer and a more around in a brief period. lasting foundation. I might add that the gains in economic activity So far I have been on the cheerful side. But that we have experienced this year have been now I must turn to the third question; namely, accompanied by a decline in the rate of infla- what developments may endanger the continution. The best measure that we have of the rate ance of economic expansion over the coming of inflation is an index with a complicated name, year? that is, the fixed-weight gross private product I have just presented some telling evidence price index. That index showed in the third on the slowing in the rate of inflation through quarter of last year an advance at an annual rate the second quarter of the year. But this merry of 13.8 per cent. In the fourth quarter, the rate tale has been interrupted by some disturbing of inflation declined to 12.6 per cent, declining price movements since the middle of the year, further to 7.7 per cent in the first quarter of and I have called attention to this development this year and 5.5 per cent in the second quarter. in my prepared statement. This is, all in all, a rather impressive record During the months of July and August, of recent economic performance. wholesale prices rose at an average annual rate Let me turn now to my second question, what of 12 per cent. The figures for September have is the economic outlook for the year ahead? just been released. They show another sizable In my judgment, the economic expansion that advance although the figures are a little difficult is now under way is likely to continue and to to interpret. Laws of arithmetic these days apgain strength. Inventory liquidation was a sharp pear to be no more stable than laws of economdrag on economic activity during the past year, ics. You will grasp the full import of this but liquidation of inventories is now proceeding statement if you study the September numbers at a much diminished rate. Indeed, the process closely. of rebuilding inventories has already begun in Consumer prices have also been advancing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

640.2 Federal Reserve Bulletin • October 1975 more rapidly, though some improvement was omy, the financial crisis of New York City must reported in August. We have had some special be noted. This crisis remains unresolved. Infactors at work, particularly the Russian grain deed, the finances of the State of New York purchases and a further rise in energy prices. are now intricately and perhaps inseparably in- These developments undoubtedly contributed to tertwined with the finances of New York City. the spurt in the price indices, but that is only If this crisis is not resolved, it could injure the part of the story. Price increases have also recovery process that is now under way in our occurred in various industries where consid- national economy. erable slack exists, including, among others, So much for my third question. automobiles, steel, aluminum, and industrial Now I turn to the fourth question that I stated chemicals. And, as you know, OPEC has re- at the outset. This question may be of special cently announced a 10 per cent increase in the interest to this committee; namely, how well price of imported oil; this is bound to lead to is the Federal Reserve System supporting the price increases over a wide range of domestic aim of the Congress to promote recovery of petroleum products in the months ahead. production and jobs? To put this question in These developments, if I may continue refer- more colloquial terms—terms that I occasionring to my prepared statement, must be viewed ally hear but fortunately not often—is the Fedwith concern. It was uncontrolled inflation that eral Reserve working at cross purposes with the brought on the severe economic decline we Congress? recently experienced, and we must recognize the I have addressed that question quite threat to a sustained recovery that is involved thoroughly in my prepared statement. Let me in any new wave of inflation. Wider expectation read the relevant passages, and undoubtedly and fears of inflation already are beginning to members of this committee may want to quesmanifest themselves. Financial markets, spe- tion me further on this issue. cifically the behavior of interest rates and stock As my prepared statement indicated, in setprices, have become very sensitive to any indi- ting monetary policy the Federal Reserve has cation or suggestion of accelerating inflation. been equally alert to the need to prevent the History suggests that at this early stage of release of new inflationary forces and the need a business upturn, confidence in the economic to provide the financial basis for economic refuture should be strengthening steadily. A re- covery. In effect, we have sought a prudent vival of consumer and business confidence is middle ground. This is reflected in the monetary indeed under way, but it is being hampered by growth paths specified by the Federal Open concern that a fresh burst of double-digit infla- Market Committee for the 12 months ending in tion may develop and before long bring on the second quarter of 1976—that is, growth of another recession. 5 to IV2 per cent in Mi (which includes currency Besides the danger of renewed rapid inflation, plus demand deposits), 8^2 to 10^2 per cent in some obstacles to the continuance of economic M2 (which includes, besides Mi, consumer-type expansion may come from energy shortages. time and savings deposits at commercial banks), We have become, as a Nation, very large im- and 10 to 12 per cent in M3 (which includes, porters of oil and we are now dangerously besides M2, deposits at thrift institutions). exposed to high-handed, arbitrary actions by These growth ranges are appropriate under OPEC with respect to the price or availability current conditions when the economy is just of oil. In addition, if this coming winter proves beginning to emerge from recession and is still severe, we could experience a troublesome struggling with widespread unemployment of shortage of natural gas in some parts of our labor and industrial capital. However, by hiscountry. torical standards, these growth ranges are on the Finally, candor compels me to note that generous side, and our economy would have among the possible disturbances of our econ- little or no chance of regaining general price Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 640.1 stability if they were maintained indefinitely. to be held within appropriate bounds. Our policy Even so, the Federal Reserve System has been moves—and the subsequent moderation in frequently urged to raise its present target rates monetary growth rates during the summer for the money supply. We have resisted these months—certainly helped to reassure the busisuggestions because, in our judgment, such a ness and financial community that the Federal policy would soon lead to accelerated inflation Reserve would continue to steer a course toward and thereby frustrate the process of economic sustainable economic growth. recovery. Let me say in conclusion that the Federal A similar judgment was reached last spring Reserve, as it must as a matter of law and ethics by the Senate Committee on Banking, Housing, and good citizenship, is supporting fully the and Urban Affairs in its report on the monetary aims of the Congress to promote recovery of policy oversight hearings. The committee ex- production and jobs. pressed the belief "that pursuit of the monetary I shall turn next to the final question that I policy plans announced by the Federal Reserve listed at the beginning of this hearing, namely, Board will be helpful to the nation's economic what policies are most likely to return our narecovery," and stated unequivocally its agree- tional economy to a path of sustainable growth ment that "if inflation is rekindled, any recovery and prosperity? will be shortlived and will end in another reces- Let us consider, first of all, the subject that sion, one almost certain to be more virulent than is of primary concern to your committee now the present one." that you face the awesome task of acting on Late this spring growth of the various money the second concurrent resolution. supply measures spurted far above the longer- I have, I am bound to say, grave doubts about run target ranges as tax rebates and special the wisdom of resorting at this time to additional social security payments disbursed by the fiscal stimuli. Our Nation already faces an Treasury were temporarily added to the public's enormous deficit this fiscal year. In fact, if the holdings of currency, demand deposits, and books were kept properly, and I do not think savings accounts. Some transitory increase in they are, the deficit would approach $90 billion, monetary expansion was viewed as necessary perhaps even exceed $90 billion. by the Federal Reserve System, in view of the Borrowing by the Treasury is proceeding nature of the fiscal actions that had been voted week by week on a heavy scale, and this borby the Congress. The bulge in the monetary rowing is already exerting upward pressure on aggregates was expected to be largely self-cor- interest rates. A larger deficit would undoubtrecting as recipients of the Treasury payments edly intensify such pressure. spent the proceeds or shifted them to more Now I am well aware of the fact that the permanent savings forms. Federal Reserve System has been widely criti- In fact, the increase in the money supply cized for the recent rise in market interest rates. during the months of May and June was con- The one interest rate over which the Federal siderably larger than we had anticipated, and Reserve System has a strong influence is the threatened to raise the longer-term monetary Federal funds rate, which is essentially an ingrowth rates to unacceptably high levels. The terbank lending rate. But that interest rate, after Federal Reserve therefore set forces in motion rising between June and July, has been quite to ensure a return to the more moderate expan- stable between July and the present time—that sion path desired. These actions, along with is, through September and early October. What exceptionally heavy Treasury borrowing and the has happened to other open market interest early signs of economic recovery, served to rates, particularly Treasury borrowing rates, raise short-term market rates of interest some- during this period? The Treasury bill rate bewhat. This appeared to us to be unavoidable tween July and September rose by 29 basis if monetary expansion over the longer run was points. The 3-month commercial paper rate rose Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

640.2 Federal Reserve Bulletin • October 1975 by 47 basis points. Two-year Treasury notes, simply the willingness to spend money, and the which have been threatening disintermediation, willingness to spend money depends on the state rose between July and September by 60 basis of confidence. points. All this happened while the one interest If the Federal Reserve System were to speed rate over which the Federal Reserve has strong up the growth of the money supply beyond its control, the Federal funds rate, remained sub- present moderate rate, a rate that is quite suffistantially stable. cient to finance a good recovery, the business These facts have to be recognized. I do not and financial community, which has become see how there can be any doubt that further highly sensitive to this factor of finance, would additions to the enormous Federal deficit we very promptly conclude that the Federal Reserve already have will exercise additional and direct has joined the inflationists, and that a new, huge upward pressure on market interest rates. This rate of inflation is being released on our country is only part of the full story. once again. In addition, any increased deficit would exer- If we pursued such a policy, then long-term cise significant, indirect pressure on market in- interest rates, instead of declining, would actuterest rates by strengthening or rekindling infla- ally rise, reflecting higher inflationary expectationary expectations. tions. Such a rise could be quite sizable, and We might as well recognize the fact that when it could injure recovery in homebuilding, in lenders expect the price level to rise, they tend public utility construction, and in other branches to hold out for higher interest rates. Borrowers of investment spending. at such a time are willing to pay higher interest Let me add a word about how the consumer rates, since by and large they expect to be able might behave in such an environment. By now to discharge their indebtedness with cheaper there is compelling evidence in practically every dollars. industrial economy, evidence that is not yet well Now let me say a few words about monetary understood, that when the inflation rate becomes expansion. I also have grave doubts about the moderately high, people tend to hesitate to wisdom of more rapid monetary expansion. The spend their money. The personal saving rate, growth path that the Federal Reserve is pursuing instead of declining, tends to rise, indeed to rise is, in my judgment and that of my colleagues rather sharply. This is a subject that may be in the Federal Reserve System, entirely suffi- of some interest to this committee; and if you cient to finance a vigorous economic recovery. would like to have me elaborate on this aspect I know full well that many economists whom of your problem and my problem and the Na- I respect disagree with this judgment. The main tion's problem, I will be very pleased to cite reason they disagree, I think, is that they con- the detailed evidence. centrate on the stock of money in existence, and All this has implications that we must recograther ignore the turnover—that is, the velocity nize. You might consider this economics turned or the rate of use—of money. upside down, but we have to do fresh thinking It is a historical fact, and one well known to in light of new evidence, and as we find that a small group of business cycle experts—I say old policies are not working the way we thought small group because the number of business they would. cycle experts is so small—that the truly dynamic For a long period conventional policies of factor in the business cycle is not the stock of economic stabilization worked well in our money at all, but the turnover of money. It is country, and they worked well in other counnot so much the money supply that matters in tries. Why? Because during periods of ecothe short run, but the velocity of money. nomic slack, we also had stable or declining The velocity of money or its turnover depends prices. That was a world in which Keynesian on the willingness to use the existing stock of policies could flourish and bring about expected money. The willingness to use money means results, and by and large they did just that. I Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 640.1 favored them from the beginning, as early as are, about the high level of unemployment. I 1930 before Keynes' theories were known, but would like to hasten the process of bringing it we now have a different world. It is a non- down, but I no longer look to special fiscal or Keynesian world. We have unemployment but monetary stimuli to accomplish this. I rather we no longer have stable prices. We have a price look in the direction of structural policies. level that is rising at a disconcerting rate, and I gave a talk on that subject at the University in such a world Keynesian policies no longer of Georgia on September 19. This talk, I am work very well. glad to say, has been placed in the Congres- Therefore, when you men in the Congress and sional Record. Some of you may have had an my fellow economists talk about releasing opportunity to read it, and if you have not, I forces that may increase employment and reduce very much hope that you will. I say this not the very troublesome unemployment that we because I am convinced that what I have had have, and when it is argued that lower taxes to say is wise or right. My main hope is that and more governmental spending and easier what I had to say may contribute to the process credit will tend to produce such a result, I can of rethinking our economic policies. If the proonly say to you that what was good policy at posals that I have made do not appeal to you, an earlier time when we had substantial unem- and I would not be surprised if that were the ployment is unlikely to be good policy at a time case, there are hundreds if not thousands of men like this when we have not only unemployment in this country who should be able to come but also a price level that is rising at a discon- forward with better and wiser proposals. certing pace. What I sought to do, beyond stating my own The question then is: What are we to do? beliefs in that speech, was to direct the attention One alternative would be to let things alone, of legislators and my fellow economists toward trust the economic process that is now under structural policies. This branch of economic way, and trust the economic recovery that is policy has been rather neglected in recent years. gathering momentum to do the basic job If my ideas are unacceptable, then let us produce for us. better ideas, and get on with the job. I for one would not follow that route, because That concludes my statement, Mr. Chairman. I am deeply concerned, as I believe all of you I want to thank you for your patience. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

641 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON AUGUST 19, 1975 1. Domestic Policy Directive The information reviewed at this meeting suggested that output of goods and services—after having fallen sharply for two quarters—had bottomed out in the second quarter of 1975 and was likely to increase appreciably in the current quarter. Staff projections suggested that expansion in output would remain strong in the fourth quarter. It was expected that the rate of increase in prices—which had moderated earlier this year—would be somewhat more rapid in the third and fourth quarters. In July retail sales continued to expand at a vigorous pace, in real as well as in dollar-value terms. Industrial production—which had turned up in June after 8 months of decline—rose moderately further, reflecting in large part gains in output of consumer goods. The average workweek of production workers in manufacturing industries increased considerably, and employment in nonfarm establishments also rose. Although the civilian labor force increased, after having contracted in June, the unemployment rate declined further, from 8.6 to 8.4 per cent. The advance in the index of average hourly earnings for private nonfarm production workers, which had continued to moderate in the second quarter of the year, was relatively slow in July. The wholesale price index rose sharply, in large part because of substantial increases in prices of grains, hogs, meats, and some other foods and foodstuffs; among industrial commodities, prices of fuels and related products and power rose significantly. In June the rise in the consumer price index had accelerated again, reflecting mainly increases in retail prices of foods and fuels. Staff projections for the second half of 1975, compared with those of 5 weeks earlier, suggested a larger rise in prices and a more vigorous recovery in output. The faster rate of expansion in real GNP reflected for the most part a more marked slowing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

642.2 Federal Reserve Bulletin • October 1975 in business inventory liquidation from the sharp rate of liquidation in the second quarter. Business fixed investment outlays now were projected to strengthen late in the year. As before, it was anticipated that real consumption expenditures would increase at a rapid pace and that residential construction also would expand but that exports would rise less than imports. The average exchange value of the dollar against leading foreign currencies—which had begun to appreciate in late June—rose considerably further between mid-July and mid-August, reflecting a continued rise in short-term interest rates on dollar assets relative to comparable rates on assets denominated in other currencies. Moreover, a large increase in the U.S. foreign trade surplus was reported for June—when exports increased sharply while imports declined slightly further—and the surplus for the second quarter as a whole was substantially greater than for the first quarter. Total loans and investments at U.S. commercial banks expanded moderately in July. On a seasonally adjusted basis, outstanding loans to businesses changed little, and the outstanding volume of commercial paper issued by nonfinancial businesses rose somewhat, following several months of decline. Banks continued to add to their holdings of U.S. Government securities but not at so rapid a pace as in earlier months of this year. Most major banks raised the prime rate from 7 to 7% per cent, owing in part to recent increases in short-term market interest rates. Ml increased relatively little in July, after having grown extremely rapidly in May and June in association with disbursement of Federal income tax rebates and of supplementary social security payments. Inflows of consumer-type time and savings deposits to banks and to nonbank thrift institutions—which also had been augmented by the special Treasury payments—slowed in July, but they were still fairly large; growth in M^ and M3, although substantially below the pace in the preceding 2 months, was moderate. System open market operations since the July 15 meeting had been guided by the Committee's decision to maintain about the prevailing bank reserve and money market conditions, provided that growth in monetary aggregates appeared to be slowing substantially from the bulge during the second quarter. Data that had become available immediately after the July meeting suggested that in the July-August period the aggregates would grow at rates above Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 643 the upper limits of the ranges of tolerance that had been specified by the Committee. Accordingly, System operations had been directed toward a slight firming in bank reserve and money market conditions, and the Federal funds rate had risen to the vicinity of 6V8 to 6V4 per cent in the latter part of July from about 6 per cent at the time of the July meeting. Later data suggested that growth in the aggregates would be within the specified ranges, and System operations were directed toward maintaining steady conditions. On July 23 the Treasury announced that it would auction up to $5.8 billion of notes and bonds, of which $4.8 billion represented refunding of publicly held notes that were to mature on August 15. In auctions on July 29, 30, and 31, respectively, the Treasury sold $3 billion of 2%-year notes at an average price to yield 7.94 per cent, $2 billion of 7-year notes at an average price to yield 8.14 per cent, and $800 million of 25-year bonds at an average price to yield 8.44 per cent. On August 6 the Treasury announced that over the following 2 weeks it would sell 2-year and 4-year notes and additional amounts of bills to raise $6 billion in new cash. Market interest rates in general had risen appreciably further since the July meeting of the Committee, in response to indications of the strengthening in economic activity, to the pick-up in the rate of increase in prices, to the large current and prospective financing requirements of the Treasury, and to the firming in money market conditions. In the short-term market, rates on Treasury securities had risen somewhat more than those on private instruments. On the day before this meeting, the rate on 3-month Treasury bills was 6.42 per cent, up about 40 basis points from the rate at the time of the July meeting. In markets for longer-term securities, upward pressures were also greater for Government than for private securities, reflecting the heavy offerings of Treasury coupon issues. Conditions in the market for State and local government securities were adversely affected by the uncertainties stemming from the financing problems of New York City. Offerings of such securities were large in July, but a decline was in prospect for August. On the other hand, upward pressures on corporate bond yields were dampened by cancellation or postponement of some new issues that had been scheduled for Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

644.2 Federal Reserve Bulletin • October 1975 marketing in August. The volume of public offerings of corporate bonds fell in July from the record high of June, and a further decline was in prospect for August. A staff analysis suggested that growth in monetary aggregates would pick up moderately in the August-September period from the reduced rate in July, in part because of the gathering strength in economic activity. It was further suggested that if nominal GNP were to expand over the second half of the year at about the rates now projected, the demand for money would strengthen considerably. At its previous meeting, the Committee had agreed that growth in the monetary and credit aggregates on the average over the period from the second quarter of 1975 to the second quarter of 1976 at rates within the following ranges appeared to be consistent with its broad economic aims: Mj, 5 to IVi per cent; M2, ^Vi to 10^2 per cent; M3, 10 to 12 per cent; and the bank credit proxy, 6y2 to 9y2 per cent. It was understood that the ranges, as well as the particular list of aggregates for which such ranges were specified, would be subject to review and modification at subsequent meetings. It also was understood that from month to month short-run factors might cause the rates of growth of the various aggregates to fall outside the ranges contemplated for annual periods. In the course of the Committee's discussion of current policy at this meeting, it was noted that the economic recovery appeared to have gained strength over the past month—suggesting that expansion in activity would be relatively vigorous over the second half of the year—and that inflationary expectations had increased. It was also suggested, however, that financial markets had overreacted to the minor tightening in bank reserve and money market conditions that had occurred over the past 2 months; that financial markets in general were unsettled, in part because of the financial problems of New York City and the possible repercussions of those problems; and that interest rates were high for this stage of the business cycle. In the circumstances, most members advocated maintenance of about the prevailing bank reserve and money market conditions in the period immediately ahead, provided that the monetary aggregates appeared to be growing in the August-September period at about the moderate rates expected. However, some members advocated a slight further firming in bank reserve and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 645 money market conditions in order to restrain monetary expansion later on. The Committee decided to seek bank reserve and money market conditions consistent with moderate growth in monetary aggregates over the months ahead, while taking account of developments in domestic and international financial markets. Specifically, the members agreed that growth in Mj and M2 over the August-September period at annual rates within ranges of tolerance of AVi to 7 per cent and 8V4 to 10% per cent, respectively, would be acceptable. Such growth rates were thought likely to involve an annual rate of change in reserves available to support private nonbank deposits (RPD's) within a range of —Wi to —4 per cent. The members agreed that in the period until the next meeting the weekly average for the Federal funds rate might be expected to vary in an orderly fashion within a range of 5% to 7 per cent, although it was understood that operations would not be directed toward establishing reserve conditions consistent with a movement in the rate above or below the current 6% to 6V4 per cent area unless it appeared that in the August-September period growth in the monetary aggregates would be substantially stronger or weaker than now expected. It was also understood that the Chairman might call upon the Committee to consider the need for supplementary instructions before the next scheduled meeting if significant inconsistencies 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 output of goods and services bottomed out in the second quarter and is Hkely to increase appreciably in the current quarter. In July retail sales expanded further and industrial production rose moderately for the second consecutive month, following 8 months of decline. Conditions in labor markets improved further: employment increased, the unemployment rate declined from 8.6 to 8.4 per cent, and the average workweek in manufacturing lengthened considerably. Average wholesale prices rose sharply in July, chiefly because of increases in prices of agricultural and energy products. The advance in average wage rates has continued to moderate over recent months. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

646.2 Federal Reserve Bulletin • October 1975 In recent weeks the average exchange value of the dollar against leading foreign currencies has risen considerably further, reflecting additional increases in interest rates on U.S. dollar assets relative to rates on foreign currency assets. In June the U.S. foreign trade surplus rose substantially, as exports increased sharply while imports declined slightly further. In July Ml increased relatively little and growth in M2 and M3 slowed substantially, following a sharp increase in depositors' balances in May and June in connection with Federal income tax rebates and supplementary social security payments. Market interest rates in general have risen appreciably further in recent weeks, in association with indications of strengthening economic activity, more rapid inflation, and larger current and prospective Treasury financing requirements. Corporate bond offerings moderated somewhat in July but State and local government offerings continued large. Financial markets reflected considerable uncertainty stemming from New York City's financing problems. Business demands for short-term credit remained weak, although less so than in earlier months. In light of the foregoing developments it is the policy of the Federal Open Market Committee to foster financial conditions conducive to stimulating economic recovery, while resisting inflationary pressures and contributing to a sustainable pattern of international transactions. To implement this policy, while taking account of developments in domestic and international financial markets, the Committee seeks to achieve bank reserve and money market conditions consistent with moderate growth in monetary aggregates over the months ahead. Votes for this action: Messrs. Burns, Volcker, Baughman, Bucher, Coldwell, Eastburn, Holland, Jackson, MacLaury, Mayo, Mitchell, and Wallich. Votes against this action: None. Subsequent to the meeting, on September 5, the available data suggested that in the August-September period Mj would grow at a rate in the lower part of the range of tolerance that had been specified by the Committee and that M2 would grow at a rate just below the lower limit of its range. In view of the likelihood of substantial strengthening in demands for money and credit over coming months, it appeared that a decline in the Federal funds Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 647 rate at this time might have to be reversed shortly—a sequence that could seriously compound uncertainties in financial markets. Therefore, Chairman Burns recommended that until the next meeting of the Committee the Manager be instructed to continue to maintain reserve conditions consistent with a Federal funds rate in the 6^8 to 6V4 per cent area, while leaning toward the lower figure. Available members of the Committee concurred in the Chairman's recommendation. 2. Authorization for Domestic Open Market Operations On August 6, 1975, Committee members had voted to increase from $2 billion to $3 billion the limit on System holdings of special short-term certificates of indebtedness purchased directly from the Treasury, specified in paragraph 2 of the authorization for domestic open market operations, efi'ective immediately, for the period until the close of business on August 19, 1975. Votes for this action: Messrs. Burns, Bucher, Coldwell, Eastburn, Mitchell, Volcker, Wallich, Balles, and Francis. Votes against this action: None. Absent and not voting: Messrs. Baughman, Holland, Jackson, MacLaury, and Mayo. (Messrs. Balles and Francis voted as alternates for Messrs. MacLaury and Baughman, respectively.) This action, which was ratified at today's meeting, was taken on the recommendation of the System Account Manager. At the time of the recommendation, Treasury balances at Federal Reserve Banks were in overdraft in the amount of $651 million. Overdrafts were expected to continue until August 18 or 19, and it appeared possible that Treasury cash borrowing from the System substantially in excess of the $2 billion limit would be required. 3. Authorization for Foreign Currency Operations The Committee approved an increase from $180 million to $360 million in the System's swap arrangement with the Bank of Mexico and the corresponding amendment to paragraph 2 of the authorization for foreign currency operations, eff'ective after review and approval by Chairman Burns following resolution of certain tech- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

648.2 Federal Reserve Bulletin • October 1975 nical matters. The Chairman approved the increase on August 29, 1975. With this change, paragraph 2 of the authorization read as follows: The Federal Open Market Committee directs the Federal Reserve Bank of New York to maintain reciprocal currency arrangements ("swap" arrangements) for the System Open Market Account for periods up to a maximum of 12 months with the following foreign banks, which are among those designated by the Board of Governors of the Federal Reserve System under Section 214.5 of Regulation N, Relations with Foreign Banks and Bankers, and with the approval of the Committee to renew such arrangements on maturity: Amount of arrangement (millions of Foreign bank dollars equivalent) Austrian National Bank 250 National Bank of Belgium 1,000 Bank of Canada 2,000 National Bank of Denmark 250 Bank of England 3,000 Bank of France 2,000 German Federal Bank 2,000 Bank of Italy 3,000 Bank of Japan 2,000 Bank of Mexico 360 Netherlands Bank 500 Bank of Norway 250 Bank of Sweden 300 Swiss National Bank 1,400 Bank for International Settlements: Dollars against Swiss francs 600 Dollars against authorized European currencies other than Swiss francs 1,250 Votes for this action: Messrs, Burns, Volcker, Baughman, Bucher, Coldwell, Eastburn, Holland, Jackson, MacLaury, Mayo, Mitchell, and Wallich. Votes against this action: None. This action was taken in order to expand the facilities available for coping with the possible temporary pressures on the peso. * He * * 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 45 days after the meeting and are subsequently published in the BULLETIN. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

649 Law Department Statutes, regulations, interpretations, and decisions SECURITIES margin equity security shall be 70 per cent of the current market value of such security, and the CREDIT TRANSACTIONS maximum loan value of an exempted security The Board of Governors has amended its Regu- held in the account on March 11, 1968, and conlations G, T, and U to reinstate the same-day tinuously thereafter shall be the maximum loan substitution level at 30 per cent on November 3, value of the security as determined by the creditor 1975. in good faith. (2) The amount to be included in the adjusted AMENDMENTS TO debit balance of the account pursuant to § REGULATIONS G, T, AND U 220.3(d)(3) as margin required for short sales of securities (other than exempted securities) shall be Effective September 30, 1975 the Supplements 30 per cent of the current market value of each to Regulations G, T, and U are amended to read security. as set forth below: (3) For the period November 5, 1974, through November 2, 1975, all transactions permitted by §§ 220.3(b)(1) and 220.3(g) for accounts not sub- SECURITIES CREDIT ject to section 8(g) shall also be permitted in ac- BY PERSONS OTHER THAN counts subject to section 8(g). BANKS, BROKERS, OR DEALERS SECTION 207,5—SUPPLEMENT CREDIT BY BANKS FOR THE PURPOSE OF PURCHASING (f) Minimum equity ratio. The minimum eq- OR CARRYING MARGIN STOCK uity ratio of a credit subject to § 207.1 is 30 per cent. For the period November 5, 1974, through SECTION 221.4—SUPPLEMENT November 2, 1975, all same-day substitutions of collateral permitted by section 207.1(j)(2) for credits in which the equity ratio equals or exceeds (f) Minimum equity ratio. The minimum eqthe minimum equity ratio shall also be permitted uity ratio of a credit subject to § 221.1 is 30 per for all credits in which the equity ratio is less than cent. For the period November 5, 1974, through the minimum equity ratio. November 2, 1975, all same-day transactions permitted by 221.1(c) for credits in which the equity ratio is equal to or exceeds the minimum equity CREDIT BY BROKERS AND DEALERS ratio shall also be permitted for those credits in which the equity ratio is less than the minimum SECTION 220.8—SUPPLEMENT equity ratio. (g) Account subject to section 8(g). For the TRUTH IN LENDING purposes of the computation described in § 220.3(b)(l)(ii), The Board of Governors has amended its Regu- (1) The maximum loan value of a registered lation Z to implement Titles III and IV of P. L. non-equity security held in the account on March 93-495 relating to fair credit billing and description 11, 1968, and continuously thereafter, and of a of transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

650.2 Federal Reserve Bulletin • October 1975 AMENDMENTS TO REGULATION Z OLD SECTION NO. (cont.) NEW SECTION NO. 226.2(w) 226.2(dd) Effective October 28, 1975, Regulation Z is 226.2(x) 226.2(ee) 226.2(y) 226.2(ff) amended as follows: 226.2(z) 226.2(gg) 1. To implement section 102, § 226.1(a) is 226.2(aa) 226.2(hh) amended as follows: 226.2(bb) 226.2(jj) 226.2(cc) 226.2(kk) a. Section 226.1(a)(1) is revised as set forth 226.2(dd) 226.2(//) below. 3. To implement sections 103 and 161, in § b. Section 226.1(a)(2) is amended by insert- 226.2, redesignated paragraphs (h), (p), (q), (s), ing the following sentence immediately before the (u), and (x) are revised and new paragraphs (j) last sentence to read as set forth below. and (cc) are added as set forth below: SECTION 226.1— SECTION 226.2— AUTHORITY, SCOPE, PURPOSE, etc. DEFINITIONS AND RULES OF CONSTRUCTION (a) Authority, scope, and purpose. (1) This iH * * * * Part comprises the regulations issued by the Board of Governors of the Federal Reserve System pur- (h) "Arrange for the extension of credit" means suant to Title I (Truth in Lending Act) and Title to provide or offer to provide consumer credit V (General Provisions) of the Consumer Credit which is or will be extended by another person Protection Act, as amended (15 U.S.C. § 1601 under a business or other relationship pursuant to et seq.). Except as otherwise provided herein, this which the person arranging such credit. Part, within the context of its related provisions, (1) Receives or will receive a fee, compenapplies to all persons who are creditors, as defined sation, or other consideration for such service, or in paragraph (s) of § 226.2. (2) Has knowledge of the credit terms and (2) *** In addition, this Part is designed to participates in the preparation of the contract docassist the customer to resolve credit billing uments required in connection with the extension disputes in a fair and timely manner, to regulate of credit. certain billing and credit card practices, and to It does not include honoring a credit card or similar strengthen the legal rights of consumers.*** device where no finance charge is imposed at the 2. Certain paragraphs of sections 226.2 and time of that transaction. 226.13 are redesignated as shown below. OLD SECTION NO. NEW SECTION NO. 226.13(a)(1) 226.2(a) (j) "Billing error" means: 226.13(a)(2) 226.2(c) 226.13(a)(3) 226.2(1) (1) A reflection on or with a periodic state- 226.13(a)(4) 226.2(m) ment of an extension of credit which (i) was not 226.13(a)(6) 226.2(r) 226.13(a)(7) 226.2(ii) made to the customer, or (ii) was made to a person 226.2(a) 226.2(b) who did not have actual, implied, or apparent 226.2(b) 226.2(d) authority of the customer to use the account and 226.2(c) 226.2(e) 226.2(d) 226.2(f) from which use the customer received no benefit, 226.2(e) 226.2(g) or (iii) if made, was misidentified, insufficiently 226.2(f) 226.2(h) identified, or was not in the amount indicated or 226.2(g) 226.2(i) 226.2(h) 226.2(k) on the date specified on or with the periodic 226.2(i) 226.2(n) statement, or 226.2(j) 226.2(o) 226.2(k) 226.2(p) (2) A reflection on a periodic statement of 226.2(0 226.2(q) an extension of credit or indebtedness for which 226.2(m) 226.2(s) the customer requests explanation or clarification, 226.2(n) 226.2(t) 226.2(0) 226.2(u) including requests for copies of documentary evi- 226.2(p) 226.2(v) dence of the indebtedness reflected thereon, or 226.2(q) 226.2(w) 226.2(r) 226.2(x) (3) A reflection on a periodic statement of 226.2(s) 226.2(y) an extension of credit for property or services not 226.2(0 226.2(z) accepted by the customer or his designee, or not 226.2(u) 226.2(aa) 226.2(v) 226.2(bb) delivered to the customer or his designee in ac- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 651 cordance with any agreement made in connection requirements of §§ 226.4(i) and 226.13(k) the term with the transaction,^ or "creditor" shall include any person who honors (4) Any failure to properly reflect on a peri- a credit card. odic statement, a payment or other credit to the * * * ** customer's account, or (u) "Customer" means (1) a cardholder or (2) (5) A computational error or similar error of a natural person to whom consumer credit is ofan accounting nature made by the creditor on a fered or to whom it is or will be extended, and periodic statement, including errors in computing includes a comaker, endorser, guarantor, or surety finance charges, late payment charges, or other for such natural person who is or may be obligated charges, or to repay the extension of consumer credit. (6) A failure to mail or deliver a customer's periodic statement to his current designated address, if the creditor has received notification (x) "Open end credit" means consumer credit of any change of address at least 10 days prior extended on an account pursuant to a plan under to the closing date of the billing cycle for which which (1) the creditor may permit the customer the periodic statement was incorrectly mailed or to make purchases or obtain loans, from time to delivered. time, directly from the creditor or indirectly by use of a credit card, check, or other device, as the plan may provide; (2) the customer has the (p) "Consumer credit" means credit offered or privilege of paying the balance in full or in instalextended to a natural person, in which the money, ments; and (3) a finance charge may be computed property, or service which is the subject of the by the creditor from time to time on an outstanding transaction is primarily for personal, family, unpaid balance. For purposes of the requirements household, or agricultural purposes. "Consumer of §§ 226.7(a)(6), (7), (8), and (9); 226.7(b)(l)(i), loan" is one type of "consumer credit." (ii), (iii), (ix), and (x); 226.7(b)(2); 226.7(c), (d), (q) "Credit" means the right granted by a (f), (g), (h), and (i); 226.13(i), (j), and (k); and creditor to a customer to defer payment of debt, 226.14, the term includes consumer credit exincur debt and defer its payment, or purchase tended on an account by use of a credit card, property or services and defer payment therefor. whether or not a finance charge may be imposed. (See also paragraph (jj) of this section.) The term does not include negotiated advances under an open end real estate mortgage or a letter of credit. (s) "Creditor" means a person who in the ordinary course of business regularly extends or (cc) "Proper written notification of a billing arranges for the extension of consumer credit, or error" is any written notification (other than notice offers to extend or arrange for the extension of on a payment medium or other material accomsuch credit, which is payable by agreement in more than four instalments, or for which the pay- panying the periodic statement if the creditor so ment of a finance charge is or may be required, stipulates in the disclosure required by § whether in connection with loans, sales of property 226.7(a)(9), (d), and (i)) received at the address or services, or otherwise. For purposes of the disclosed under § 226.7(b)(l)(x) within 60 days requirements of §§ 226.7(a)(6), (7), (8), and (9); of the first mailing or delivering to the customer's 226.7(b)(l)(i), (ii), (iii), (ix), and (x); 226.7(b)(2); current designated address (as required in § 226.7(c), (d), (f), (g), (h), and (i); 226.13; and 226.7(b)) of the periodic statement on which the 226.14, the term "creditor" shall also include card disputed item(s) or amount(s) is reflected in which issuers, whether or not the payment of a finance the customer charge is or may be required. For purposes of the (1) Sets forth or otherwise enables the creditor to identify the name and account number (if ^The delivery of property or services different from that any) of the customer, described in any agreement, the delivery of the wrong quantity, (2) Indicates the customer's belief that the late delivery, or delivery to the wrong location shall be conperiodic statement contains a billing error and the sidered to be a billing error subject to this paragraph, but any dispute with respect to the quality of property in the physical suspected amount of such error, and possession of the customer or services performed for the (3) Sets forth the reasons for such belief, to customer shall not be considered to be a billing error under the extent applicable or known by the customer. this paragraph. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

652.2 Federal Reserve Bulletin • October 1975 of such discount shall constitute a finance charge under § 226.4(a) to be disclosed in accordance 4. Footnote in section 226.3 is redesignated as with § 226.7(e). follows: (3) The availability of any discount may be limited by the creditor offering such discount to SECTION 226.3— certain types of property or services or to certain EXEMPTED TRANSACTIONS outlets maintained by that creditor provided that Footnote 1 is redesignated la, footnote la is such limitations are clearly and conspicuously disredesignated lb, and new footnote 1 is added as closed. set forth in § 226.2(j)(3) supra. (4) Notwithstanding anything contained in the 5. To implement section 167, § 226.4(i) is foregoing paragraph to the contrary, any amount added as follows: added to the tag, posted, or advertised price of property or services offered by a creditor which SECTION 226.4— is imposed by such creditor as a condition or DETERMINATION OF FINANCE CHARGE consequence of the use of the credit card with respect to a transaction involving such property and services, shall be a finance charge subject to (i) Discounts for payments in cash. (1) Notthe requirements of this section and § 226.7(e). withstanding any other provision of this section, 6. To implement section 171(a) and to provide a discount which a creditor offers, allows, or a transition period to obtain new forms, section otherwise makes available for the purpose of in- 226.6 is amended as follows: ducing payment for a purchase by cash, check, or similar means rather than by use of an open SECTION 226.6— end credit card account, whether or not a credit GENERAL DISCLOSURE REQUIREMENTS card is physically used, is not a finance charge. Provided that: (i) Such discount does not exceed five per (b) Inconsistent State requirements. (1) With cent when computed or expressed as a percentage respect to the requirements of this Part, State law of the tag, posted, or advertised price of the is inconsistent with the requirements of the Act property or services which are the subject of the and this Part, within the meaning of section 111(a) transaction, of the Act to the extent that it: (ii) Such discount is available to all (i) Requires a creditor to make disclosures prospective buyers, whether or not they are card- or take actions different from the requirements of holders, and such fact is clearly and conspicuously this Part with respect to form, content, termidisclosed by a sign or display posted at or near nology, or time of delivery; each public entrance to the seller's place of busi- (ii) Requires disclosure of the amount of ness wherein such discount is offered, and at all the finance charge determined in any manner other locations within the place of business where a than that prescribed in § 226.4; or purchase may be paid for, and (iii) Requires disclosure of the annual per- (iii) If an offer of property or services is centage rate of the finance charge determined in advertised in any medium or if offers are invited any manner other than that prescribed in § 226.5. or accepted through the mail, over the telephone, (2)(i) A State law with respect to credit billing or by means other than personal contact between practices which is similar in nature, purpose, the customer and the creditor offering such a scope, intent, effect, or requisites of the provisions discount, and if customers are allowed to pay by of §§ 161 or 162, or both, of the Act is inconsistent use of a credit card or its underlying account and with the Act and this Part within the meaning of such fact is disclosed in the advertisement, tele- § 171(a) of the Act, and is preempted, if it prophone contact, or in other correspondence, the vides procedures or imposes rights or responavailability of a discount for payments in cash sibilities upon either customers or creditors which must be clearly and conspicuously disclosed in any are different from those required by §§ 161 or 162, advertisement for such offerings and, in any case, or both, of the Act and their implementing provibefore the transaction has been completed by use sions in this Part; except that, any such State law of the credit card or its underlying account. which allows a customer to make inquiry con- (2) With respect to any such discount for cash cerning an open end credit account and imposes which is greater than five per cent, the total amount upon the creditor an obligation to respond to such Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 653 an inquiry after the time allowed in this Part for (iv) A State, through its Governor, Attorthe customer to submit a proper written notifica- ney General, or other appropriate official having tion of a billing error shall not be preempted as primary enforcement or interpretive responto any situation in which the time period for sibilities for its credit billing practices law, may making a proper written notification of a billing apply to the Board for a determination that the error as provided in this Part has expired. State law offers greater protection to customers (ii) A State law which is similar in nature, than a comparable provision(s) of Chapter 4 of purpose, scope, intent, effect, or requisites of a the Act and its implementing provision(s) in this section of Chapter 4 of the Act other than §§161 Part, or is otherwise not inconsistent with Chapter or 162 is not inconsistent with the Act or this Part 4 of the Act and this Part, or for a determination within the meaning of § 171(a) of the Act if the with respect to any issues not clearly covered by creditor can comply with the State law without § 226.6(b)(2)(i), (ii), (iii) as to the consistency violating this Part. If the creditor cannot comply or inconsistency of a State law with Chapter 4 with a State law without violating a provision of of the Act or its implementing provisions in this this Part which implements a section of Chapter Part. 4 of the Act other than § § 161 or 162, such State law is inconsistent with the requirements of the Act and this Part within the meaning of § 171(a) (k) Transition period. Any creditor who can of the Act and is preempted. demonstrate that he has taken bona fide steps, prior (iii) A State law which requires disclosure to October 28, 1975, to obtain printed forms which or notification to customers of provisions of State are necessary to comply with the requirements of law which are inconsistent with Chapter 4 of the this Part may, until such forms are received but Act and its implementing provisions in this Part in no event later than April 30, 1976, utilize within the meaning of § 171(a) of the Act is existing supplies of printed forms for the purpose inconsistent with the Act and this Part within the of complying with the disclosure requirements of meaning of §§ 111(a) and 171(a) of the Act, and this Part, provided that such forms are altered or the creditor shall not make such a disclosure or supplemented as necessary to assure that all of the provide such a notice. When a creditor gives items of information the creditor is required to written notice to a customer of the customer's disclose to the customer are set forth clearly and rights under any provision of State law which conspicuously in every case except: would permit a customer to inquire concerning an (1) Where a creditor has, prior to October open end credit account after the time period 28, 1975, prepared the § 226.7(a) disclosures allowed in this Part for submission of a proper without the notice and statement required by § written notification of a billing error has expired, 226.7(a)(9) and dispersed them to remote locathe creditor shall clearly and conspicuously set tions, as in the case of mail order catalogs, the forth in the notice that reliance upon the longer statement required by § 226.7(a)(9) may be made time period available under State law may result separately from the other § 226.7(a) disclosures in the customer losing important rights which until April 30, 1976, so long as the § 226.7(a)(9) could be preserved by acting more promptly under statement is mailed or delivered to the customer Federal law and that the State law provisions only no later than the date the first payment is due. become operative upon the expiration of the time For the purpose of this paragraph the creditor may period provided by this Part for submitting a disregard the required notice in §226.7(a)(9) until proper written notification of a billing error. If such April 30, 1976; a disclosure is made on the same side of a sheet (2) Where a creditor's forms must be adapted of paper as the disclosures required by §§ 226.7(a) to comply with the disclosure requirements of § (d), and (i) of this Part, such State disclosures shall 226.7(b)(l)(x), the creditor need not supplement appear separately and below the disclosures re- or alter his forms if there is only one address listed quired by §§ 226.7(a) (d), and (i) of this Part; on or with the periodic statement. In the case the disclosures required by §§ 226.7(a) (d), and where a creditor has more than one address listed (i) shall be clearly and conspicuously identified on or with the periodic statement and the creditor by a heading indicating they are made in compli- has not complied with the requirements of § ance with Federal law and the disclosures of State 226.7(b)(l)(x), the creditor must accept as proplaw shall appear separately and below a conspic- erly received any proper written notification of a uous demarcation line. billing error at any of the addresses listed on or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

654.2 Federal Reserve Bulletin • October 1975 with the periodic statement. New forms which regarding your rights to dispute billing errors" and comply with the requirements of § 226.7(b)(l)(x) a separate statement containing substantially the must be in use no later than April 30, 1976; following text, ^^ as applicable, written clearly and (3) Where a creditor's forms must be adapted conspicuously, shall accompany the statement reto comply with the disclosure requirements of § quired by paragraph (a) of this section; or the 226.7(g), the creditor need not supplement or alter following text without the preceding notice may his forms; however, complying forms must be in be included on the statement required by paragraph use no later than April 30, 1976; (a) of this section if disclosed clearly and conspic- (4) Where a creditor is disclosing inconsistent uously; or the following text may be included on State law provisions within the meaning of § the reverse side of the statement required by para- 171(a) of the Act and § 226.6(b)(2) of this Part graph (a) of this section with the following notice or is making disclosures not in compliance with on the face of the statement: "NOTICE: See § 226.6(b)(2)(iii) on or with the disclosure re- reverse side for important information regarding quired by this Part, the creditor need not alter or your rights to dispute billing errors.": supplement his forms; however, complying forms must be in use not later than April 30, 1976; and (5) Where, because of operational limitations, In Case of Errors or Inquiries About Your Bill a creditor is unable to comply with the disclosure The Federal Truth in Lending Act requires prompt correction requirements in § 226.7(b)(l)(i) and (ix), which of billing mistakes. require appropriate identification of credit bal- 1. If you want to preserve your rights under the Act, here's ances, or with the disclosure requirement in § what to do if you think your bill is wrong or if you need 226.7(b)(l)(iii), which requires the dates of pay- more information about an item on your bill: a. Do not write on the bill. On a separate sheet of paper ments and credits, the creditor need not supplewrite [Alternate: Write on the bill or other sheet of paper] ment or alter his forms; however, complying forms (you may telephone your inquiry but doing so will not preserve and procedures must be in use not later than April your rights under this law) the followmg: i. Your name and account number (if any) 30, 1976. ii. A description of the error and an explanation (to 7. To implement sections 127(a)(8), the extent you can explain) why you believe it is an error. 127(b)(ll), 127 (c), 163, 164, 165, and 167, § If you only need more information, explain the item you 226.7 is amended as follows: are not sure about and, if you wish, ask for evidence of the charge such as a copy of the charge slip. Do not send in your a. Paragraph (a)(9) is added as set forth copy of a sales slip or other document unless you have a duplicate below. copy for your records. iii. The dollar amount of the suspected error. b. The text following the heading of paraiv. Any other information (such as your address) which graph (b) is redesigned as paragraph (b)(1). you think will help the creditor to identify you or the reason c. Paragraphs (b)(1) through (9) are redesig- for your complaint or inquiry. b. Send your billing error notice to the address on your nated as paragraphs (b)(l)(i) through (ix). bill which is listed after the words: "Send Inquiries To:" or d. Paragraph (b)(l)(x) is added as set forth similar wording. [Alternate: Send your billing error notice to: (creditor's name and address)]. below. Mail it as soon as you can, but in any case, early enough e. Redesignated paragraphs (b)(l)(i), (ii), to reach the creditor within 60 days after the bill was mailed (iii), (v), and (ix) are revised as set forth below. to you. If you have authorized your bank to automatically pay f. Paragraph (b)(2) is added as set forth from your checking or savings account any credit card bills from that bank, you can stop or reverse payment on any amount below. you think is wrong by mailing your notice so the creditor g. Paragraphs (c)(1) and (2) are revised, and receives it within 16 days after the bill was sent to you. old paragraph (c)(3) is redesignated as paragraph However, you do not have to meet this 16-day deadline to get the creditor to investigate your billing error claim. (c)(4). New paragraph (c)(3) is added. 2. The creditor must acknowledge all letters pointing out h. Paragraphs (d) and (e) are redesignated as possible errors within 30 days of receipt, unless the creditor paragraphs (e) and (f); new paragraphs (d), (g), is able to correct your bill during that 30 days. Within 90 (h), and (i) are added. Redesignated paragraph (e) days after receiving your letter, the creditor must either correct the error or explain why the creditor believes the bill was is revised as set forth below. correct. Once the creditor has explained the bill, the creditor has no further obligation to you even though you still believe that there is an error, except as provided in paragraph 5 below. SECTION 226.7—OPEN END CREDIT ACCOUNTS—SPECIFIC DISCLOSURES 3. After the creditor has been notified, neither the creditor nor an attorney nor a collection agency may send you collection (a) *** '^'•Wherever the word "creditor" appears or is referred to (9) The following notice: "NOTICE: See in the statement, the creditor may substitute appropriate referaccompanying statement for important information ences, such as "company," "bank," "we" or a specific name. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 655 letters or take other collection action with respect to the amount credit balance, an appropriate identification as in dispute; but periodic statements may be sent to you, and such. the disputed amount can be applied against your credit limit. You cannot be threatened with damage to your credit rating (ii)(A) In cases in which an actual copy or sued for the amount in question, nor can the disputed amount of the document evidencing the credit transaction be reported to a credit bureau or to other creditors as delinquent (which does not include a so-called "facsimile until the creditor has answered your inquiry. However, you remain obligated to pay the parts of your bill not in dispute. draft") accompanies the periodic statement on which the transaction is first reflected, the amount 4. If it is determined that the creditor has made a mistake on your bill, you will not have to pay any finance charges of the transaction and either the date of the transor any disputed amount. If it turns out that the creditor has action or the date the transaction is debited to the not made an error, you may have to pay finance charges on customer's account; or the amount in dispute, and you will have to make up any missed minimum or required payments on the disputed amount. (B) In cases in which an actual copy of Unless you have agreed that your bill was correct, the creditor the document evidencing the credit transaction must send you a written notification of what you owe; and if it is determined that the creditor did make a mistake in billing does not accompany the periodic statement, then the disputed amount, you must be given the time to pay which on or with the periodic statement on which the you normally are given to pay undisputed amounts before any credit transaction is first reflected at least: more finance charges or late payment charges on the disputed amount can be charged to you. (1) The date on which the transaction took place^ and the amount of the transaction; and 5. If the creditor's explanation does not satisfy you and you notify the creditor in writing within days after you receive (2) A brief identification^^ of the his explanation that you still refuse to pay the disputed amount, property or services purchased in cases in which the creditor may report you to credit bureaus and other creditors the creditor and the seller are the same person or and may pursue regular collection procedures. But the creditor must also report that you think you do not owe the money, related persons, or the seller's name (as disclosed and the creditor must let you know to whom such reports were on the document evidencing the transaction promade. Once the matter has been settled between you and the creditor, the creditor must notify those to whom the creditor vided to the customer) and the address (city and reported you as delinquent of the subsequent' resolution. state or foreign country, using understandable and generally accepted abbreviations if the creditor so 6. If the creditor does not follow these rules, the creditor is not allowed to collect the first $50 of the disputed amount desires) where the transaction took place in cases and finance charges, even if the bill turns out to be correct. in which the creditor and the seller are not the 7. If you have a problem with property or services purchased same person or related persons. with a credit card, you may have the right not to pay the (C) Notwithstanding the provisions of §§ remaining amount due on them, if you first try in good faith to return them or give the merchant a chance to correct the 226.7(b)(l)(ii)(A) and 226.7(b)(l)(ii)(B), in cases problem. There are two limitations on this right: in which a transaction involving nonsale credit, a. You must have bought them in your home State or such as a cash advance or an overdraft or other if not within your home State within 100 miles of your current mailing address; and checking plan transaction, is reflected on the perib. The purchase price must have been more than $50. odic statement, at least: However, these limitations do not apply if the merchant is (7) An actual copy of the document owned or operated by the creditor, or if the creditor mailed evidencing the transaction which shows the dollar you the advertisement for the property or services. amount of the transaction and either the date of the transaction, the date the transaction was deb- (b) Periodic statements required. (1) Except ited to the customer's account, or the date placed on the document or instrument by the customer in the case of an account which the creditor deems (if the customer signed the document or instruto be uncollectible or with respect to which delinment); or quency collection procedures have been instituted, the creditor of any open end credit account shall mail or deliver to the customer, for each billing ^With respect to transactions which are not billed in full cycle at the end of which there is an outstanding on any single statement but for which precomputed instalments undisputed debit or credit balance in excess of $1 are billed periodically, the date the transaction takes place for in that account or with respect to which a finance purposes of this paragraph shall be deemed to be the date on which the amount is debited to the customer's account. charge is imposed, a statement or statements which ^®For purposes of this paragraph, designations such as the customer may retain, setting forth in accord- "merchandise" or "miscellaneous" shall not be considered ance with paragraph (c) of this section each of sufficient identification of property or services, but a reference to a department in a sales establishment which accurately the following items to the extent applicable: conveys the identification of the type(s) of property or services (i) The outstanding balance in the account which are available in such department shall be sufficient under this paragraph. Identification may be made on an accompanying at the beginning of the billing cycle, using the slip or by symbol relating to an identification list printed on term ''previous balance," and in the case of a the statement. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

656.2 Federal Reserve Bulletin • October 1975 (2) An identification of the transac- which appears on the document evidencing the tion, which characterizes it as a cash advance, credit transaction given to or used by the customer loan, overdraft loan, or other designation as ap- at the time of or in connection with the transaction propriate, and which includes the amount and the may be substituted for the seller's name and address date of the transaction^^ or the date which appears or description of the property or services purchased on the document evidencing the transaction (if the when such information is unavailable to the credicustomer signed the document or instrument). tor. (D) In a case in which any of the infor- (3) The effective date of §§ mation with regard to the date of the transaction, 226.7(b)(l)(ii)(A) through 226.7(b)(l)(ii)(E)(2), inthe date placed on a document signed by the clusive, is July 1, 1976. Until July 1, 1976, the customer, the description of the property and creditor shall disclose the date of each extension services purchased, or the seller's name and of credit or the date such extension of credit is address as required by §§ 226.7(b)(l)(ii)(B) and debited to the account during the billing cycle, 226.7(b)(l)(ii)(C) is not available to the creditor, the amount of such extension of credit and, unless an identifying number or symbol which appears previously furnished, a brief identification^'^ of any on the document evidencing the credit transaction goods or services purchased or other extension of given to or used by the customer at the time of credit. or in connection with the transaction. The provi- (iii) The amounts and dates of crediting to sions of the first sentence of this paragraph shall the account during the billing cycle for payments, not relieve the creditor of responsibility for main- using the term "payments," and for other credits taining procedures reasonably adapted to enable including returns, rebates of finance charges, and the creditor to obtain the primarily required infor- adjustments, using the term "credits," and unless mation at the time the amount of the transaction previously furnished a brief identification^ of each is transmitted to the creditor for debiting to the of the items included in such other credits. customer's account. (E) In complying with the disclosure requirements of paragraphs (b)(l)(ii)(A), (B), (C), and (D): (v) Each periodic rate, using the term "periodic rate" (or "rates"), that may be used to (7) In cases in which the creditor and compute the finance charge (whether or not applied the seller are not the same or related persons, during the billing cycle), the range of balances the creditor may rely upon and disclose the inforto which it is applicable, and the corresponding mation supplied by the seller with respect to the annual percentage rate determined by multiplying date and amount of the transaction. the periodic rate by the number of periods in a (2) Notwithstanding the provisions of paragraph (b)(l)(ii)(D), from July 1, 1976, to year. The words "corresponding annual percent- October 28, 1977, the date of debiting the amount age rate," "corresponding nominal annual perof the transaction to the customer's account may centage rate," "nominal annual percentage rate," be substituted for the date of the transaction or or "annual percentage rate" (or "rates") may be the date placed on the document evidencing a credit used to describe the corresponding annual pertransaction when either such date is unavailable centage rate. The requirements of § 226.6(a) of to the creditor; and an identifying number or symbol this Part with respect to disclosing the term "annual percentage rate" more conspicuously than other required terminology shall not be applicable ^'Mn cases in which an amount is debited to a customer's to the disclosure made under this paragraph, alopen end credit account under an overdraft checking plan, the date of debiting the open end credit account shall be considered though such term (or words incorporating such the date of the transaction for purposes of this paragraph. term) may, at the creditor's option, be shown as ^^For purposes of this paragraph, a person is not related conspicuously as the terminology required under to the creditor simply because he and the creditor have an agreement or contract pursuant to which he is authorized to (b)(l)(vi) of this paragraph. Where a minimum honor the creditor's credit card under the terms specified in charge may be applicable to the account, the the agreement or contract. Franchised or licensed sellers of a creditor's product shall be considered to be related to the creditor for purposes of this paragraph. Sellers who assign or Identification may be made on an accompanying slip or sell open end customer sales accounts to a creditor or arrange by symbol relating to an identification list printed on the for such credit under an open end credit plan which allows statement. the customer to use the credit only in transactions with that ^Identification may be made on an accompanying slip or seller shall be considered related to the creditor for purposes by symbol relating to an identification list printed on the of this paragraph. statement. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 657 amount of such minimum charge shall be dis- disclosure of the balance on which the finance closed.^^ charge was computed, may be made on the reverse side of the periodic statement or on the face of a single supplemental statement which shall accompany the periodic statement. (ix) The closing date of the billing cycle (3) The disclosure required by paragraph and the outstanding balance in the account on that (b)(l)(x) of this section may be made on the date, using the term "new balance," and in the reverse side of the periodic statement. case of a credit balance, appropriately identified (4) If the creditor exercises any of the options as such, accompanied by the statement of the date provided under this paragraph, the face of the by which, or the period within which, if any, periodic statement shall contain one of the followpayment must be made to avoid additional finance ing notices, as applicable: "NOTICE: See reverse charges, except that the creditor may, at his option side for important information" or "NOTICE: See and without disclosure, impose no such additional accompanying statement(s) for important informafinance charges if payment is received after such tion" or "NOTICE: See reverse side and accomdate or termination of such period. panying statement(s) for important information," and the disclosures shall not be separated so as (x) An address to be used by the creditor to confuse or mislead the customer or to obscure for the purpose of receiving billing inquiries from or detract attention from the information required customers. Such address shall be preceded by the to be disclosed. caption "Send Inquiries To:", or other similar language indicating that the address is the proper location to send such inquiries. (d) Semiannual statement required. (1) The (2) If the terms of the open end credit plan creditor shall mail or deliver during two billing provide a time period within which the customer cycles per year to each customer entitled to receive may repay any portion of the new balance without a periodic statement under § 226.7(b) for such incurring an additional finance charge, late pay- billing cycle, the statement required by § ment charge, or other charge, no such charge may 226.7(a)(9), written clearly and conspicuously eibe imposed with respect to any portion of such ther on one or both sides of a separate page or new balance unless the periodic statement disclos- on one or both sides of the periodic statement ing the new balance is mailed or delivered to the required by paragraph (b) of this section. customer at least 14 days prior to the date specified (2) The timing of the mailing or delivery of in the statement as being the date by which pay- such semiannual statements shall be not less than ment of the new balance must be made in order 5 nor more than 7 months after the month in which to avoid the imposition of that finance charge or the last preceding such statement was mailed or late payment charge, except that such time limita- delivered. Provided that: tion shall not apply in any case where the creditor (i) The creditor shall select at least 2 billing has been prevented, delayed, or hindered in mail- cycles in any 12 month calendar period for the ing or delivering the periodic statement within mailing or delivery of such statements; and such time limit because of an act of God, war, (ii) The first semiannual statement to any civil disorder, natural disaster, or strike, new customer may be mailed or delivered to that (c) * * * customer during the next regularly scheduled (1) The information required to be disclosed mailing or delivery of semiannual statements in under paragraph (b)(l)(ii) of this section and which he is entitled to receive a semiannual stateitemization of the amounts and dates required to ment under paragraph (d)(1) of this section. be disclosed under paragraph (b)(l)(iii) of this (3) If the creditor chooses to alter the cycle section and of the amount of any finance charge of mailing or delivering semiannual statements, required to be disclosed under paragraph (b)(l)(iv) the creditor may mail or deliver the semiannual of this section may be made on the reverse side statement less than 5 months after the last precedof the periodic statement or on a separate accom- ing such statement was mailed or delivered, propanying statement(s), provided that the totals of vided that the creditor mails or delivers at least debits and credits are disclosed on the face of the 3 such statements in the next twelve months comperiodic statement; and puted from the month in which the last preceding (2) The disclosures required under paragraph semiannual statement was mailed or delivered. (b)(l)(v) and (b)(l)(viii) of this section, except the (4) Nothing in this section shall be construed Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

658.2 Federal Reserve Bulletin • October 1975 to prohibit a creditor from mailing or delivering required under paragraphs (b)(2) and (d) of § 226.8 the statement required by this section more fre- Credit other than open end—specific disclosures, quently than semiannually. at the time of that transaction, and the annual (5) As an alternative to the requirements of percentage rate to be disclosed shall be determined paragraph (d)(1) of this section, the creditor may by dividing the amount of the finance charge by mail or deliver, on or with each periodic statement the amount financed and multiplying the quotient required under paragraph (b)(1) of this section, (expressed as a percentage) by 12. substantially the following statement and, if appli- (2) The creditor of the open end credit accable, the periodic statement must contain one of count shall not separately consider any charge the notices provided for in paragraph (c)(4) of this imposed under this paragraph for purposes of the section, provided that the creditor must promptly disclosure requirements of paragraphs (a) and (b) but in no event later than 30 days, mail or deliver of this section. to a customer the statement required by § 226.7(a)(9) at any time upon a customer's request and also upon receipt of each billing error notice mailed or delivered to the creditor by a customer: (g) Prompt crediting of payments. Regardless In Case of Errors or Inquiries About Your Bill of the date of actual posting of a payment to an Send your inquiry in writing [at creditor's option: account, such payment shall be credited to the on a separate sheet] so that the creditor receives it within customer's account as of the date such payment 60 days after the bill was mailed to you. Your written inquiry must include: is received by the creditor, and no finance charge, 1. Your name and account number (if any); late payment charge, or other charge shall be 2. A description of the error and why (to the extent imposed with respect to the amount of such payyou can explain) you believe it is an error; and 3. The dollar amount of the suspected error. ment which is properly received by the creditor on or before the time indicated by the creditor as If you have authorized your creditor to automatically pay your bill from your checking or savings account, necessary to avoid imposition thereof. Provided you can stop or reverse payment on any amount you that: think is wrong by mailing your notice so that the creditor receives it within 16 days after the bill was (1) If a creditor fails to post the customer's sent to you. payment in time to avoid the imposition of finance You remain obligated to pay the parts of your bill charges, late payment charges, or other charges, not in dispute, but you do not have to pay any amount the creditor shall adjust the customer's account so in dispute during the time the creditor is resolving the that the finance charges, late payment charges, or dispute. During that same time, the creditor may not take any action to collect disputed amounts or report other charges are credited to the account during disputed amounts as delinquent. the customer's next billing cycle. If you have a problem with property or services (2) For the purposes of paragraph (g) of this purchased with a credit card, you may have the right section the creditor may specify on the periodic not to pay the remaining amount due on them if you first try in good faith to return them or give the merchant statement or on accompanying material that need a chance to correct the problem. There are two limita- not be retained by the customer, reasonable retions on this right: quirements with respect to the form, amount, 1. You must have bought them in your home State or, if not within your home State, within 100 miles manner, location, and time for receipt of payof your current mailing address; and ments, except that: 2. The purchase price must have been more than (i) If no particular hour of the day has been $50. However, these limitations do not apply if the mer- clearly specified by the creditor as the time by chant is owned or operated by the creditor, or if the which payment must be received by the creditor creditor mailed you the advertisement for the property or services. in order to obtain crediting to the customer's This is a summary of your rights; a full statement of account as of that date, payments received prior your rights and the creditor's responsibilities under the to the close of business on that day must be Federal Fair Credit Billing Act will be sent to you both upon request and in response to a billing error notice. credited as of that date; (ii) If no location(s) has been clearly spe- (e) Finance charge imposed at the time of cified as the location(s) at which payment may be transaction. (1) Any creditor, other than the credi- made, then payment at any location where the tor of the open end credit account, who imposes creditor conducts business shall be credited as of a finance charge not excepted by § 226.4(i) Dis- the date such payment is presented; and counts for payments in cash, at the time of honoring (iii) If no particular manner of payment has a customer's credit card, shall make the disclosures been clearly specified, then payment by check, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 659 cash, money order, bank draft or other similar (h)(l)(i) of this section, a creditor may refund any instrument in properly negotiable form shall con- excess payment of any amount, whether or not stitute proper manner of payment. requested by the customer. (3) If the creditor accepts payment at loca- (i) Open end credit accounts existing on Octions other than those specified under paragraph tober 28, 1975. In the case of any open end credit (g)(2)(ii) of this section, the creditor shall credit account in existence and in which a balance of the customer's account promptly (in no case later more than $ 1 is outstanding at or after the closing than 5 days from the date of receipt), provided date of the creditor's first full billing cycle after that the possibility of such delay is clearly dis- October 28, 1975, and which account is deemed closed to the customer on the periodic statement to be collectible and with respect to which delinor on accompanying material that need not be quency collection procedures have not been instiretained by the customer. tuted, the items described in paragraph (a) of this (4) Payments need not be credited as of the section, to the extent applicable and not previously date of receipt (but in any case must be credited required to be disclosed to the customer, shall be promptly) if a delay in crediting does not result disclosed in the form prescribed in paragraph (a) in the imposition of any finance charges, late of this section, and mailed or delivered to the payment charges, or other charges for that billing customer not later than the time of mailing or cycle or a later billing cycle. delivery of the periodic statement required under (5) If, because of operational limitations, the paragraph (b) of this section for that billing cycle. creditor is unable to credit a payment made on 8. To implement section 103(f) and to clarify an average daily balance or daily balance account certain disclosure requirements with respect to as of the date of receipt and there was a "previous credit other than open end which is extended on balance" in the account for the billing cycle in an account by use of a credit card, §§ 226.8(n) which such payment was received, or the account and (o)(6) are revised and § 226.8(q) is added as is one in which the terms do not provide a time follows: period within which the customer may repay any portion of the new balance without incurring an SECTION 226.8—CREDIT OTHER additional finance charge, late payment charge, or THAN OPEN END—SPECIFIC DISCLOSURES other charge, a creditor may credit such payment promptly (in no case later than 5 days from the date of receipt) until October 28, 1976. (n) Periodic statements. (1) If a creditor trans- (h) Crediting and refunding excess payments. mits a periodic billing statement^^ other than a (1) Whenever a customer mails or delivers paydelinquency notice, payment coupon book, or ment to the creditor in excess of the new balance payment passbook, or transmits a statement, bill- (as provided in § 226.7(b)(l)(ix)) to which the ing, or advice relating exclusively to amounts to payment is to be applied, the creditor shall: be paid by the customer as escrows for payment (i) Credit the customer's account with the of taxes, insurance, and water, sewer, and land total amount of the payment as specified in para- rents, it shall be in a form which the customer graph (g) of this section, or may retain and shall set forth: (ii) Credit the customer's account with an (i) The annual percentage rate or rates amount equal to the total new balance as specified unless exempted by § 226.8(b)(2); and in paragraph (g) of this section and promptly (in (ii) The date by which, or the period, if no case later than 5 business days from the credi- any, within which payment must be made in order tor's receipt of the payment) refund the excess to avoid late payment or delinquency charges. amount. (2) If the creditor is required to send a peri- (2) Notwithstanding the provisions of para- odic statement under paragraph (q) of this section, graph (h)(1) of this section, if the customer re- the requirements of §§ 226.7(b)(l)(i), (ii), (iii), quests in writing a refund of any excess payments, (ix), and (x), and § 226.7(b)(2) shall be met, as a creditor shall refund any such excess payments, of $1 or more, promptly (in no case later than 5 business days from receipt of the customer's ^'"^Any statement, notice, or reminder of payment due on request). any transaction payable in instalments which is mailed or delivered periodically to the customer in advance of the due (3) After crediting a customer's account with date of the instalment shall be a periodic billing statement for the total amount of a payment under paragraph the purpose of this paragraph. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

660.2 Federal Reserve Bulletin • October 1975 applicable, in addition to the disclosures required SECTION 226.12—EXEMPTION OF by this paragraph. CERTAIN STATE REGULATED TRANSACTIONS (o) *** (a) Exemption for State regulated transactions. In accordance with the provisions of Sup- (6) If a transaction subject to § 226.8(o) is plements II, IV, and V to Regulation Z, any State debited to an open end credit account, disclosures may make application to the Board for exemption shall be made as specified in paragraph (1) of this of any class of transactions within the State from section and also as specified in § 226.7. The full the requirements of Chapters 2 and 4 of the Act amount of the obligation including the amount of and the corresponding provisions of this Part, the discount may be debited to the open end credit Provided that: account, under § 226.7(b)(l)(ii), and the amount (1) The Board determines that under the law of any finance charge representing the discount of that State, that class of transactions is subject need not be added to any other finance charge for to requirements substantially similar to those imthe purpose of computing and disclosing the total posed under Chapter 2 or Chapter 4 of the Act, amount of finance charge and the annual percent- or both, and the corresponding provisions of this age rate under § 226.5(a) and § 226.7. Part; or in the case of Chapter 4, the consumer is afforded greater protection than is afforded under Chapter 4 of the Act, and (q) Credit card accounts. In addition to the (2) There is adequate provision for enforcerequirements of this section, consumer credit other ment. than open end which is extended on an account (b) Procedures and criteria. The procedures by use of a credit card shall also be subject to and criteria under which any State may apply for the requirements of §§ 226.7(a)(6), (7), (8), and the determination provided for in paragraph (a) of (9); 226.7(b)(l)(i), (ii), (iii), (ix), and (x); this section are set forth in Supplement II to 226.7(b)(2); 226.7(c), (d), (g), (h), and (i); Regulation Z with respect to disclosure and re- 226.13(i), (j), and (k); and 226.14. scission requirements (§§ 121-131 of Chapter 2), 9. Section 226.11(a)(2) and (3) is revised as Supplement IV with respect to the prohibition of follows: the issuance of unsolicited credit cards and the liability of the cardholder for unauthorized use of a credit card (§§ 132-133 of Chapter 2), and in SECTION 226.11—COMPARATIVE INDEX Supplement V which will be issued on or before OF CREDIT COST FOR OPEN END CREDIT October 28, 1975, with respect to fair credit billing requirements (§§ 161-171 of Chapter 4). (a) *** ^ ^ ^ ^ (2) Shall recompute the Comparative Index 11. To implement sections 166, 167, 168, 169, of Credit Cost in accordance with paragraph (b) and 170, § 226.13 is amended as follows: of this section based upon any new open end credit a. Paragraphs (a)(1) through (4), and (a)(6) and account terms to be adopted and shall disclose the (7), are incorporated into § 226.2 as shown in the new Comparative Index of Credit Cost in accor- redesignation table of paragraph 2 above. dance with paragraph (c)(2) of this section con- b. Paragraph (a)(5) is deleted. currently with the notice required under paragraph c. Paragraphs (b) through (i) are redesignated (f) of § 226.7. as paragraphs (a) through (h). (3) Shall, when making such disclosure under d. Paragraphs (a) through (h) are revised and the provisions of paragraphs (a)(5) and (b)(l)(vii) paragraphs (i), (j), (k), and (1) are added as set of § 226.7, make the disclosure to all open end forth below. credit account customers; and SECTION 226.13—CREDIT CARD TRANSACTIONS—SPECIAL REQUIREMENTS 10. To implement § 171, § 226.12(a) and (b) (a) Issuance of credit cards. Regardless of is revised as follows: whether a credit card is to be used for personal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 661 family, household, agricultural, business, or com- "You may be liable for the unauthorized use of your credit mercial purposes, no credit card shall be issued card [or other term which describes the credit device]. You will not be liable for unauthorized use which occurs after you to any person except: notify [name of card issuer or his designee] at [address] orally (1) In response to a request or application or in writing of loss, theft, or possible unauthorized use. In any case liability shall not exceed [insert $50 or any lesser therefor", or amount under other yplicable law or under any agreement (2) As a renewal of, or in substitution for, with the cardholder!.^ an accepted credit card whether such card is issued by the same or a successor card issuer. (e) Notice to card issuer. For the purposes of (b) Conditions of liability of cardholder. A this section, a cardholder notifies a card issuer by cardholder shall be liable for unauthorized use of taking such steps as may be reasonably required each credit card issued only if, in the ordinary course of business to provide the (1) The credit card is an accepted credit card; card issuer with the pertinent information with (2) Such liability does not exceed the lesser respect to loss, theft, or possible unauthorized use of $50 or the amount of money, property, labor, of any credit card, whether or not any particular or services obtained by such use prior to notifica- officer, employee, or agent of the card issuer does, tion of the card issuer pursuant to paragraph (e) in fact, receive such notice or information. Irreof this section; spective of the form of notice provided under (3) The card issuer has given adequate notice paragraph (b)(4) of this section, at the option of to the cardholder of his potential liability on the the cardholder, notice may be given to the card credit card or within two years preceding the issuer or his designee in person or by telephone unauthorized use; and or by letter, telegram, radiogram, cablegram, or, (4) The card issuer has provided the card- other written communication which sets forth the holder with an addressed notification requiring no pertinent information. Notice by mail, telegram, postage to be paid by the cardholder which may radiogram, cablegram, or other written communibe mailed by the cardholder in the event of the cation shall be considered given at the time of loss, theft, or possible unauthorized use of the receipt or, whether or not received, at the expiracredit card. tion of the time ordinarily required for transmis- (c) Other conditions of liability. In addition sion, whichever is earlier. to the conditions of liability in paragraph (b) of (f) Action to enforce liability. In any action this section, no cardholder shall be liable for the by a card issuer to enforce liability for the use unauthorized use of any credit card which was of a credit card, the burden of proof is upon the issued after January 24, 1971, and, regardless of card issuer to show that the use was authorized the date of its issuance, after January 24, 1972, or, if the use was unauthorized, then the burden no cardholder shall be liable for the unauthorized of proof is upon the card issuer to show that the use of any credit card, unless the card issuer has conditions of liability for the unauthorized use of provided a method whereby the user of such card a credit card, as set forth in paragraphs (b) and can be identified as the person authorized to use (c) of this section, have been met. it, such as by signature, photograph, or fingerprint (g) Effect on other applicable law or agreeon the credit card or by electronic or mechanical ment. Nothing in this section imposes liability confirmation. upon a cardholder for the unauthorized use of a (d) Notice to cardholder. The notice to card- credit card in excess of his liability for such use holder pursuant to paragraph (b)(3) of this section under other applicable law or under any agreement may be given by printing the notice on the credit with the card issuer. card, or by any other means reasonably assuring (h) Business use of credit cards. If 10 or more the receipt thereof by the cardholder. An accept- credit cards are issued by one card issuer for use able form of notice must state that liability shall by the employees of a single business or other not exceed $50 (or any lesser amount), that notice organization, nothing in this section prohibits the of loss, theft, or possible unauthorized use may card issuer from agreeing by contract with such be given orally Oi in writing, and the name and business or other organization as to liability for address of the party to receive the notice. It may unauthorized use of any such credit cards without include any additional information which is not regard to the provisions of this section, but in no inconsistent with the provisions of this section. An case may any business or other organization or example of an acceptable notice is as follows: card issuer impose liability on any employee of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

662.2 Federal Reserve Bulletin • October 1975 such business or other organization with respect Simply honoring or indicating that a person to unauthorized use. of such credit card except in honors a particular credit card is not any of the accordance with and subject to the other liability relationships described in paragraphs (A) through limitations of this section. (F) for the purpose of removing the dollar and distance limitations. (i) Right of cardholder to assert claims or (2) The amount of the claim(s) or defense(s) defenses against card issuer. (1) When a person assertable by the cardholder under this section may who provides property or services fails to satisnot exceed the amount of credit outstanding with factorily resolve a dispute as to property or serrespect to the transaction which gave rise to the vices purchased by use of a credit card in connecassertion of the claim(s) or defense(s) at the time tion with a consumer credit transaction, the cardthe cardholder first notifies the card issuer or the holder may assert all claims (other than tort claims) person honoring the credit card for such transacand defenses arising out of the transaction and tion of the existence of such claim(s) or defense(s). relating to such failure against the card issuer, and For purposes of determining the amount of credit the cardholder may withhold payment up to the outstanding with respect to such transactions as amount of credit outstanding with respect to the provided in the preceding sentence, payments and property or services which gave rise to the dispute other credits to the cardholder's account will be and any finance charges, late payment charges, or deemed to have been applied in the order indicated other charges imposed on that amount if: to the payment of: (i) The cardholder has made a good faith (i) Late charges in the order of entry to attempt to obtain satisfactory resolution of the the account, disagreement or problem relating to the transaction (ii) Finance charges in the order of entry from the person honoring the credit card, to the account, (ii) The amount of credit extended by the (iii) Any other debits in the order in which card issuer to the cardholder to obtain the property each debit entry was made to the account, and or services which resulted in the assertion of the (iv) When more than one item is included claim(s) or defense(s) by the cardholder exceeds in a single extension of credit, credits are to be $50, and distributed pro rata according to prices and appli- (iii) The initial transaction which gave rise cable taxes. to the assertion of the claim(s) or defense(s) by (3) This section does not apply to cash adthe cardholder occurred in the same State as the vances obtained with a credit card when the adcardholder's current designated address or, if not vance is unrelated to any specific credit sale item. within the State of the cardholder's address, within (4) If the cardholder refuses to pay the amount 100 miles from such address, except that the of credit outstanding with respect to the property limitations stated in paragraphs (ii) and (iii) of this or services which gave rise to the claim(s) or section shall not apply when the person honoring defense(s) under this section, the creditor may not the credit card: report to any person that particular amount as (A) Is the same person as the card issuer, delinquent until the dispute is settled or judgment or is rendered. (B) Is controlled, directly or indirectly, (j) Prohibition of offsets by card issuer. (1) by the card issuer, or A card issuer may not take any action to offset (C) Is under the direct or indirect control a cardholder's indebtedness arising in connection of a third person who also directly or indirectly with a consumer credit transaction under the relecontrols the card issuer, or vant credit card plan against funds of the card- (D) Controls, directly or indirectly, the holder held on deposit with the card issuer unless card issuer, or a court order^® is obtained. (E) Is a franchised dealer in the card (2) The prohibition in paragraph (j)(l) of this issuer's products or services, or section does not apply to credit card plans in which (F) Has obtained the order for the transaction, relative to which the claim(s) or defense(s) is asserted, through a mail solicitation made by or participated in by the card issuer, in which the cardholder is solicited to enter into such transac- ^^This paragraph does not alter or affect the right of a card tion by using the credit card issued by the card issuer acting under State law to attach or otherwise levy upon funds of a cardholder held on deposit with the card issuer if issuer. that remedy is constitutionally available to creditors generally. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 663 the cardholder authorizes the card issuer as a (2) Within 30 days of the effective date of method of payment to periodically deduct all or these regulations, any card issuer with existing a portion of the cardholder's credit card debt from contracts which include either one or both of the his deposit account with the card issuer (subject restrictive clauses prohibited in paragraph (1) shall to the limitations in § 226.14(c)), Provided that: inform all parties to the contract that such provi- (i) Such automatic debit was previously sions are inapplicable and no longer enforceable. authorized in writing by the cardholder, or 12. To implement sections 161, 162, and 170, (ii) With respect to such automatic debit § 226.14 is added as follows: accounts in existence on October 28, 1975, the card issuer has given notice of the provisions of SECTION 226.14—BILLING paragraph (j) of this section to such accounts prior ERRORS—RESOLUTION PROCEDURE to renewal of the authorization (in no case later than October 28, 1976). (a) Correction of billing errors. After the creditor receives proper written notification of a (k) Prompt notification of returns. (1) When billing error, unless the customer has subsequently any creditor other than the card issuer accepts the agreed that the periodic statement is correct, the return of property or forgives a debt for services creditor shall: which is to be reflected as a credit to the customer's (1) Not later than 30 days after receipt of such open end credit card account, he shall promptly notification, mail or deliver written acknowl- (in no case later than 7 business days from the edgement thereof to the customer's current desigdate the return is accepted) transmit a statement nated address, unless the appropriate actions in with respect thereto to the card issuer through the paragraph (2) of this section are taken within such normal channels established by the card issuer for 30 day period; and the transmittal of such statements. (2) Resolve the dispute not later than 2 com- (2) Upon receipt of a credit statement, the plete billing cycles (in no event more than 90 days) card issuer shall credit the customer's account from the date of receipt of the notice of billing promptly (in no case later than 3 business days error and prior to any action by the creditor to from receipt of the refund statement) with the collect^^ any portion of the amount(s) indicated amount of the refund. by the customer as being a billing error or any (3) If it is a creditor's (other than a card finance charges, late payment charges, or other issuer) policy to give cash refunds to cash cuscharges computed on such disputed amount(s) by: tomers, he must also give credit or cash refunds (i) Correcting the customer's account in the to credit card customers, unless he clearly and full amount indicated by the customer to have been conspicuously discloses that he does not give erroneously billed in accordance with paragraph credit or cash refunds for returns at the time the (b)(2) of this section and mailing or delivering to transaction is consummated. Nothing in this secthe customer a written notification of corrections;^® tion shall be construed to require that a creditor or give refunds for returns nor shall it be construed (ii) Correcting the customer's account by to prohibit refunds in kind. a differing amount from that indicated by the (1) Prohibited acts of card issuers. (1) No card customer as being erroneously billed in accordance issuer may, by contract or otherwise: with paragraph (b)(2) of this section and mailing (i) Prohibit any person from offering any or delivering to the customer an explanation of cash discounts to all customers of such person, the change(s), accompanied by copies of docuincluding cardholder customers, to induce such mentary evidence of the customer's indebtedness customers to pay by cash, check, or similar means rather than by use of a credit card or its underlying account for the purchase of property or services, ^^If, despite the establishment by the creditor of procedures or reasonably adapted to assure compliance with this paragraph, the creditor or his agent, within 2 business days after receiving (ii) Require any person who honors the proper written notification of a billing error pursuant to this card issuer's credit card to open or maintain a section, inadvertently takes action to collect in contravention deposit account or pr jcure any other service not of this paragraph, such inadvertent action to collect will not be considered in violation of this paragraph. essential to the operation of the credit card plan notice on a subsequent billing statement clearly identifrom the card issuer, its subsidiary, agent, or any fying any amount credited to the customer's account in reother person, as a condition of participation in a sponse to a proper written notification of a billing error is one type of a proper transmittal of a written notification of correccredit card plan. tions. 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664.2 Federal Reserve Bulletin • October 1975 if such evidence is requested by the customer; or amount, the creditor may require payment of any (iii) Mailing or delivering a written expla- minimum periodic payment amounts which the nation or clarification to the customer, after having customer did not pay because of the dispute. The conducted a reasonable investigation, setting forth, creditor may not, however, accelerate the custo the extent applicable, the reasons why the tomer's entire debt solely because the customer creditor believes the amount(s) was correctly has exercised rights provided by the Act or this shown on the periodic statement and, if the cus- Part. tomer so requests, furnishing copies of documen- (2) With respect to an erroneous billing, the tary evidence of the customer's indebtedness with creditor must credit the customer's account in any respect to the alleged billing error(s). In any case amount the customer does not owe, plus any where the customer alleges that the periodic statefinance charges, late payment charges, or other ment reflects property or services not delivered to charges imposed as a result of the erroneous billthe customer or his designee in accordance with ing. An erroneous billing by a creditor includes, any agreement made in connection with the transbut is not limited to, a misidentification, action giving rise to the disputed amount, a crediinsufficient identification, or incorrect date of a tor may not construe such amount to be correctly transaction; a mailing of the periodic statement to shown on the periodic statement unless the creditor other than the current designated address; imdetermines, upon reasonable investigation, that proper crediting of payments or other credits; such property or services were actually delivered, computation errors; or a billing for property or mailed, or otherwise sent to the customer or his services not accepted or delivered in accordance designee and provides the customer with a written with any agreement; as well as mistakes in dollar statement explaining such determination. In any amounts. case where the customer alleges that an amount (3) After or upon completion of the dispute of a transaction reflected on the periodic statement resolution procedure prescribed by § 226.14(a): is incorrect because the person honoring the credit (i) If the initial periodic statement is detercard has made an incorrect report to the card issuer mined to be without error with regard to the of the amount which should have been charged, disputed item, the creditor shall promptly mail or the card issuer may not construe such amount to deliver to the customer written notification of the be correctly reflected on the periodic statement amount owed with regard to the disputed item, unless the creditor determines, upon reasonable unless such notification is not required by parainvestigation, that the correct amount is shown on graph (a) of this section, or the periodic statement and provides the customer (ii) If the initial periodic statement is dewith a written statement explaining such determitermined to be in error with regard to the disputed nation . item and the creditor normally allows a period for After complying with the provisions of this the customer to pay such an item without incurring section with respect to an alleged billing error, additional finance charges, late payment charges, a creditor has no further responsibility under this or other charges, the creditor shall mail or deliver section if the customer continues to make substanto the customer written notification of the total tially the same allegation with respect to such amount which the customer owes with regard to error. the disputed item and shall allow the customer the (b) Minimum periodic payments and finance same number of days thereafter as he customarily charges on disputed amounts. (1) When a mini- or by credit agreement allows, whichever is longer mum periodic payment is permitted, the customer (in no case less than 10 days), for the customer may withhold that portion of the minimum peri- to pay undisputed amounts in accordance with § odic payment which the customer believes is re- 226.7(b)(2), or lated to the amount in dispute. When the disputed (iii) If the initial periodic statement is deamount is only a part of the total amount of an termined to be in error with regard to the disputed item, the customer remains obligated to pay the item and the creditor normally does not allow a amount not in dispute, and any minimum periodic period for the customer to pay such an item withpayment and finance charges, late payment out incurring additional finance charges, late paycharges, or other charges may be collected on the ment charges, or other charges, the creditor shall undisputed amount. If, at the completion of the promptly mail or deliver to the customer a notice error resolution procedure, it is determined that of the total amount which the customer owes with the customer owes some or all of the disputed regard to the disputed item. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 665 (4) Nothing in this section shall be construed customer's credit standing or credit rating because to prohibit the mailing or delivery of periodic of the customer's failure to pay the amount specistatements, which include disputed amounts, to the fied in such notification as being a billing error, customer, provided that the creditor indicates on or any finance charges, late payment charges, or the face of the periodic statement that payment other charges imposed thereon, nor shall such of the amount in dispute is not required pending amount be reported as delinquent^® to any third the creditor's compliance with the provisions of person unless such amount remains unpaid after this section. the creditor has complied with all the requirements (5) Nothing in this section shall prohibit any of this section and has allowed that customer the action by a creditor to collect any amount which same number of days thereafter as he customarily has not been indicated by the customer to contain or by credit agreement allows, whichever is longer a billing error. (in no case less than 10 days), for the customer (c) Automatic debit of disputed amounts. (1) to pay undisputed amounts so as to avoid the In the case of credit card plans where the card- imposition of additional finance charges, late payholder has agreed to permit the card issuer to ment charges, or other charges. If, despite estabperiodically pay the cardholder's indebtedness by lishment by the creditor of procedures reasonably deducting the appropriate amount from the cardadapted to assure compliance with this paragraph, holder's deposit account held by the card issuer, the creditor or his agent, within 2 business days if the card issuer receives a proper written notifiafter receiving proper written notification of a cation of a billing error within 16 days from the billing error pursuant to this section, inadvertently date of mailing or delivery of the periodic statetakes action in contravention of this paragraph, ment on which the suspected billing error first such inadvertent action will not be considered in appears, the card issuer shall: violation of this paragraph. (i) Prevent the automatic debiting of any (2) If, within the time limit allowed for paydisputed amounts if receipt of such notification ment in paragraph (e)(1) of this section, the crediprecedes the automatic debiting of the cardholder's tor receives a further written notification from the account, or customer that any portion of a billing error re- (ii) Promptly (in no case more than 2 solved under paragraph (a) of this section is still business days after receipt of the notice) restore in dispute, the creditor may not report to any third to the cardholder's deposit account any portion of party that such disputed amount is delinquent the disputed amount which was previously deunless the creditor also reports that the amount ducted, if receipt of such notification follows the or account is in dispute and, at the same time, automatic debiting of the cardholder's account for notifies the customer in writing of the name and any disputed amounts. address of each party to whom the creditor is (2) Nothing in this paragraph shall limit the reporting information concerning the disputed cardholder's right to dispute an amount he believes amount. If, pursuant to this paragraph, a creditor to be in error within 60 days of the mailing or has reported a disputed amount as being delinquent delivery of the erroneous periodic statement, as to any third person, the creditor shall report otherwise provided in this section. promptly in writing ^^ to any such person subse- (d) Closing of accounts. A creditor may not, quent resolution of the reported delinquency. prior to complying with the requirements of para- (3) If a creditor has reported an amount as graphs (a) and (b) of this section, restrict or close being delinquent to any third person who is in the an account with respect to which the customer has business of collecting and disseminating informaindicated a belief that such account contains a tion relating to the credit worthiness of customers, billing error solely because of the customer's re- and such amount is subsequently disputed by the fusal or failure to pay the amount indicated to be customer in accordance with the requirements of in error. This paragraph does not prohibit the § 226.2(cc), the creditor shall, within one billing creditor from applying any such amount to the cycle after receipt of proper written notification customer's credit limitation. of the billing error, mail or deliver a written (e) Credit reports on amounts in dispute. (1) After receiving a proper written notification of a billing error pursuant to this section, neither the ^^ Nothing in this paragraph prohibits a creditor from reporting the disputed amount or account as being in dispute. creditor nor his agent may directly or indirectly "In writing" shall include transmission by computer threaten to report adversely to any person on the communication. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

666.2 Federal Reserve Bulletin • October 1975 notice^^ to each such third person to whom the an existing customer or cardholder for use in delinquency was reported that the amount is in connection with such account, such device shall dispute. be accompanied by a single written statement (f) Forfeiture penalty. (1) Any creditor who setting forth clearly and conspicuously those disfails to comply with the requirements of this sec- closures of paragraph (a) of this section which tion forfeits any right to collect from the customer specifically relate to the use of such device. Such the amount indicated by the customer to be a disclosure statement shall either be limited to the billing error, whether or not such amount is in disclosures of paragraphs (a)(1), (2), (3), and (4) fact in error, and any finance charges, late payment of this section or contain all disclosures required charges, or other charges imposed thereon, pro- of such paragraph with the pertinent disclosures vided that the amount so forfeited under this sec- clearly and conspicuously referenced on or action shall not exceed $50 for each item or transac- companying that disclosure statement. Such distion on a periodic statement indicated by the cus- closure statement shall not appear on any promotomer to be a billing error. In no case shall a tional material mailed or delivered at the same creditor forfeit any amount for an error in a total time. The requirements of this paragraph shall not figure or subtotal figure reflected on a statement be applicable to checks to be used in conjunction which is caused solely by an error in another item with a checking account even though such checks which is the subject of a dispute, nor shall a may also activate a cash advance under an open creditor suffer any forfeit more than once for any end credit account. item or transaction which may appear on a periodic statement. (2) Nothing in this subsection shall be construed to limit a customer's right to recover under RULES REGARDING § 130 of the Act. ACCESS TO AND REVIEW (g) Exceptions to general rule. This section OF PERSONAL INFORMATION does not apply to credit other than open end, IN SYSTEMS OF RECORDS whether or not a periodic statement is mailed or delivered, unless it is consumer credit extended The Board of Governors has adopted rules by on an account by use of a credit card. which an individual upon request may be notified of the existence of a record in a system of records The Board has also amended Regulation Z to pertaining to him, gain access to that record, rerequire a clear disclosure statement on blank quest amendment to that record, and appeal an checks or other credit devices which are intended initial adverse determination with respect to a reto be used in connection with such open end credit quest for amendment of that record. accounts. Effective September 28, 1975, section 261a is adopted to read as set forth below: Effective January 1, 1976, section 226.7 is amended to read as follows: SECTION 261a. 1—PURPOSE AND SCOPE SECTION 226.7—OPEN END The purpose of this Part is to establish regula- CREDIT ACCOUNTS—SPECIFIC DISCLOSURES tions implementing the provisions of the Privacy Act, 5 U.S.C. § 552a, with regard to access to and review of personal information in systems of records maintained by the Board of Governors of (f) Supplemental credit devices for use in the Federal Reserve System (''Board"). open end credit accounts. If, subsequent to 30 days after delivering the disclosures required under SECTION 261a.2—DEFINITIONS paragraph (a) of this section, a creditor of an open For the purposes of this Part, the following defend credit account mails or delivers, other than initions shall apply: as a renewal or resupply, a blank check, payee (a) The term "individual" means a natural perdesignated check, blank draft or order or other son who is either a citizen of the United States similar credit device other than a credit card, to or an alien lawfully admitted for permanent residence. The term "individual" includes the parent "Written notice" shall include computer communication. of any minor or the legal guardian of any individ- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 667 ual who has been declared to be incompetent due ment with the Board. Requests for other records to physical or mental incapacity or age by a court should be addressed to the Secretary of the Board, of competent jurisdiction. Board of Governors of the Federal Reserve Sys- (b) The term ''maintain" also includes main- tem, Washington, D.C. 20551. Requests for intain, collect, use, disseminate, or control. formation pursuant to paragraph (a) of this section (c) The term "record" means any item, collec- may also be made in person during regular busition or grouping of information about an individ- ness hours at the offices of the Board of Goverual maintained by the Board that contains the in- nors of the Federal Reserve System, Federal Redividual's name, or the identifying number, sym- serve Building, 20th and Constitution Avenue, bol, or other identifying particular assigned to the N.W., Washington, D.C. 20551. individual. (c) An individual making a request pursuant to (d) The term "system of records" means a paragraph (a) of this section may also include in group of any records under the control of the such request a request for the accounting required Board from which information is retrieved by the by section (c) of the Privacy Act, 5 U.S.C. § name of the individual or some identifying num- 552a, of previous disclosures of records pertainber, symbol or other identifying particular as- ing to such individual in a designated system of signed to the individual. records. (e) The term "designated system of records" (d) Every request made pursuant to this section means a system of records that has been listed will be acknowledged or, where practicable, subin the Federal Register pursuant to the require- stantially responded to within 10 business days ments of 5 U.S.C. 552a(e). from receipt. (f) The term "routine use" means, with respect to disclosure of a record, the use of such record SECTION 261a.4—REQUIREMENTS for a purpose which is compatible with the pur- FOR IDENTIFICATION OF pose for which it was collected. INDIVIDUALS MAKING REQUESTS* (g) The term "business days" means all days (a) Each request for information made pursuant except Saturdays, Sundays, and legal public holito section 26la.3 shall include a notarized statedays. ment attesting to the identity of the requestor ex- SECTION 26la.3—PROCEDURES cept in the following instances: FOR REQUESTS PERTAINING TO (1) Where the information requested is otherwise publicly available under the Freedom of In- INDIVIDUAL RECORDS IN A RECORD SYSTEM^ formation Act, 5 U.S.C. § 552, and the Board's Rules Regarding Availability of Information (12 (a) Requests for notification of the existence of CFR 261). or for access to personal information in a desig- (2) Where the requestor makes written request nated system of records may be made by the perfor information in person and presents a driver's son to whom such information pertains. Every license, birth certificate, employment identificasuch request shall be made in writing and shall tion card or other means of identification, suffispecify that it is made pursuant to the Privacy cient to establish his identity. Act. Each request should identify the designated (3) Where the request is only for notification system of records in which the requested record of the existence of records in a designated system is to be found, should reasonably describe the inof records pertaining to the requestor. formation requested and, except as provided in section 26la.4, should include a notarized statement attesting to the identity of the requestor. SECTION 26la.5— (b) Requests made pursuant to paragraph (a) of DISCLOSURE OF REQUESTED this section shall be addressed to the Director of INFORMATION TO INDIVIDUALS the Division of Personnel, Board of Governors of (a) Information requested pursuant to section the Federal Reserve System, Washington, D.C. 26la.3, except for that compiled in reasonable an- 20551, in the case of records relating to employticipation of a civil action or proceeding or otherwise exempted from disclosure as provided in ^The Board's System of Records has been published in the Federal Register (40 Federal Register 43862) and copies are section 261a. 13, will be made available for available upon request to Office of the Secretary or Division inspection and copying during regular business of Personnel, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. hours at the Board's offices. However, where the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

668.2 Federal Reserve Bulletin • October 1975 requested information can be disclosed only by been decided in a previous judicial, quasi-judicial providing a copy of the record, because such or other proceeding. record cannot reasonably be put into a form for individual inspection (e.g., computer tapes), or SECTION 26la.8—AGENCY REVIEW where the requestor may request that copies of re- OF REQUEST FOR AMENDMENT OF RECORD quested information be forwarded, such informa- (a) As appropriate, the Secretary of the Board tion will be mailed to the requestor. Access to or the Director of the Division of Personnel shall or copies of requested information will be acknowledge each request made pursuant to secpromptly provided after the acknowledgment as tion 261 a.7 within 10 business days of its receipt. provided in subsection 26la.3(c), unless good Such acknowledgment may request additional incause for delay is communicated to the requestor. formation necessary for a determination of the re- (b) Fees for copying such records will be asquest for amendment or correction. sessed in accordance with subsection 261a.ll. (b) As appropriate, the Secretary of the Board (c) The requestor of information may be acor the Director of the Division of Personnel shall companied in the inspection and discussion of that promptly review each request made pursuant to information by a person of the requestor's own section 26la.7 in light of the criteria of accuracy, choosing upon the submission by the requestor of relevance, timeliness, completeness and necessity a written and signed statement authorizing the set forth in subsections (e)(1) and (e)(5) of the presence of such person. Privacy Act, 5 U.S.C. § 552a. SECTION 261a.6—SPECIAL (c) Upon completion of review of each request PROCEDURES—MEDICAL RECORDS made pursuant to section 26la.7, the Secretary of the Board or the Director of the Division of Per- Medical records requested pursuant to subsec- sonnel shall immediately inform the requestor of tion 26la.3 will be disclosed to the requestor the determination to grant or deny the requested unless the disclosure of such records directly to amendment or correction. the requestor could, in the judgment of the offi- (d) Where any request pursuant to section cial deemed responsible for such records, have an 261 a.7 has been denied in whole or part, the readverse effect upon the requestor. In such inquestor shall be advised of the reasons therefor, stance, such information will be transmitted to a the procedure for appeal of the determination and licensed physician named by the requestor. the name, title and address of the official to whom SECTION 261a.7—REQUEST FOR such appeal should be directed. CORRECTION OR AMENDMENT TO RECORD SECTION 261a.9—APPEAL OF (a) Where an individual believes that any por- INITIAL ADVERSE DETERMINATION tion of a record in a designated system of records ON CORRECTION OR AMENDMENT used in making a determination about such individual is not accurate, relevant, timely or com- (a) A denial of a request made pursuant to secplete, that individual may request that such record tion 26la.7 may be appealed to the Board of Govbe amended or corrected. Such request should be ernors or any official designated by the Chairman submitted in writing to the appropriate officer as of the Board of Governors within 30 business designated in section 26la.3. Each request for days of issuance of notification of denial. Every amendment or correction of a record should iden- such appeal should be made in writing to the offitify the system of records containing the record cial designated in the letter of initial denial, for which amendment or correction is requested, should specify the previous background of the respecify the portion of that record requested to be quest and should provide reasons why the initial amended or corrected, and describe the nature of determination should be reversed. and reasons for each requested amendment or cor- (b) The Board of Governors or such official desrection. Additionally, each request must include ignated by the Chairman of the Board shall make a notarized statement attesting to the identity of a determination with respect to the review of such the requestor except where the request is pre- appeal not later than 30 business days from its sented in person and the requestor's identity may receipt, unless the reviewing official extends such thereupon be verified. period for good cause shown. (b) Nothing in paragraph (a) of this section (c) If the Board or designated official affirms shall permit collateral attack upon that which has the initial denial of a request to amend or correct Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 669 made pursuant to section 26la.7, such determi- fecting the health or safety of an individual if nation shall be communicated to the requestor to- upon such disclosure notification is transmitted to gether with a statement of the reasons therefor the last known address of such individual; 9) to and the requestor shall be informed of the right either House of Congress, or, to the extent of of judicial review of the determination. The re- matter within its jurisdiction, any committee or questor may then file a concise statement setting subcommittee thereof, any joint committee of forth disagreement with the affirmation of denial Congress or subcommittee of any such joint comwithin 30 days of notification of such determi- mittee; 10) to the Comptroller General, or any of nation and such statement shall be provided to his authorized representatives, in the course of the persons or other agencies to whom the disputed performance of the duties of the General Accountrecord is disclosed. ing Office; or 11) pursuant to the order of a court of competent jurisdiction. SECTION 261a. 10—DISCLOSURE OF RECORD TO PERSON OTHER SECTION 261a. 11—FEES THAN INDIVIDUAL TO WHOM IT PERTAINS (a) Copies of records requested pursuant to sec- (a) No record contained in a designated system tion 26la.3 will be provided at a cost of $.10 per of records shall be disclosed to any person or page for photocopying or at a cost not to exceed agency without the prior written consent of the the direct cost of printing, typing or otherwise individual to whom the record pertains unless the preparing such copies. disclosure is authorized by paragraph (b) of this (b) Documents may be furnished without section. charge where total charges are less than $2. (b) The restrictions on disclosure in paragraph (a) do not apply to any disclosure—1) to those officers and employees of the Board who have a SECTION 261a. 12—PENALTIES need for the record in the performance of their (a) The Privacy Act, 5 U.S.C. § 552a(l)(3), duties; 2) that is required under the Freedom of provides: Any person who knowingly and will- Information Act (5 U.S.C. § 552); 3) for a roufully requests or obtains any record concerning an tine use listed with respect to a designated system individual from an agency under false pretense of records; 4) to the Bureau of the Census for shall be guilty of a misdemeanor and fined not purposes of planning or carrying out a census or more than $5,000. survey or related activity pursuant to the provisions of title 13 of the United States Code; 5) to SECTION 261a. 13—EXEMPTIONS a recipient who has provided the Board with advance adequate written assurance that the record (a) Pursuant to subsection (k) of the Privacy will be used solely as a statistical research or re- Act, 5 U.S.C. § 552a, the Board may exempt cerporting record, and the record is to be transferred tain portions of records within designated systems in a form that is not individually identifiable; 6) of records from the requirements of the Privacy to the National Archives of the United States as Act, (including access to and review of such a record that has sufficient historical or other records pursuant to this Part) if such portions are: value to warrant its continued preservation by the (1) subject to the provisions of section United States Government, or for evaluation by 552(b)(1) of the Freedom of Information Act 5 the Administrator of General Services or his des- U.S.C. § 552 ignee to determine whether the record has such (2) investigatory material compiled for law envalue; 7) to another agency or to an instrumental- forcement purposes, other than material within ity of any governmental jurisdiction within or the scope of subsection (j)(2) of the Privacy Act, under the control of the United States for a civil 5 U.S.C. § 552a: Provided, however, That if any or criminal law enforcement activity if the activity individual is denied any right, privilege, or beneis authorized by law, and if the head of the fit that he would otherwise be entitled by Federal agency or instrumentality has made a written re- law, or for which he would otherwise be eligible, quest to the Board specifying the particular por- as a result of the maintenance of such material, tion desired and the law enforcement activity for such material shall be provided to such individwhich the record is sought; 8) to a person pursu- ual, except to the extent that the disclosure of ant to a showing of compelling circumstances af- such material would reveal the identity of a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

670.2 Federal Reserve Bulletin • October 1975 source who furnished information to the Govern- RULES REGARDING ment under an express promise that the identity DELEGATION OF AUTHORITY of the source would be held in confidence, or, prior to the effective date of the Privacy Act, 5 The Board of Governors has amended its Rules U.S.C. § 552a, under an implied promise that the Regarding Delegation of Authority to delegate to identity of the source would be held in confi- the General Counsel authority to designate Board dence; staff attorneys as Board counsel in hearings pursu- (3) maintained in connection with providing ant to its Rules of Practice for Formal Hearings. protective services to the President of the United States or other individuals pursuant to section AMENDMENTS TO 3056 of title 18 of the United States Code. RULES REGARDING (4) required by statute to be maintained and DELEGATION OF AUTHORITY used solely as statistical records; 1. Effective September 16, 1975, section (5) investigatory material compiled solely for 265.2(b)(6) is added to read as follows: the purpose of determining suitability, eligibility, or qualifications for Federal civilian employment, SECTION 265.2—SPECIFIC military service. Federal contracts, or access to FUNCTIONS DELEGATED TO BOARD classified information, but only to the extent that EMPLOYEES AND FEDERAL RESERVE BANKS the disclosure of such material would reveal the identity of a source who furnished information to the Government under an express promise that the identity of the source would be held in confi- (b) The General Counsel of the Board (or, in dence, or, prior to the effective date of the Pri- his absence, the Acting General Counsel) is auvacy Act, 5 U.S.C. § 552a, under an implied thorized: promise that the identity of the source would be held in confidence; (6) testing or examination material used solely (6) Pursuant to Part 263.6(d) of this Chapter, to determine individual qualifications for appoint- to designate Board staff attorneys as Board counment or promotion in the Federal service the dis- sel in any proceeding ordered by the Board to be closure of which would compromise the objectiv- conducted in accordance with Part 263 of this ity or fairness of the testing or examination Chapter. process; or * * * ** (7) evaluation material used to determine po- The Board has also amended its Rules Regardtential for promotion in the armed services, but ing Delegation of Authority to delegate to the only to the extent that the disclosure of such ma- Secretary of the Board the authority to determine terial would reveal the identity of a source who the average prime rate quoted by commercial furnished information to the Government under an banks to large businesses in September of each express promise that the identity of the source year for use by the Secretary of the Treasury. would be held in confidence, or, prior to the effective date of the Privacy Act, 5 U.S.C. § 552a, 2. Effective September 30, 1975, section under an implied promise that the identity of the 265.2(a)(14) is added to read as follows: source would be held in confidence. SECTION 265 .2—SPECIFIC (b) Those designated systems of records which are exempt from the requirements of this Part or FUNCTIONS DELEGATED TO BOARD any other requirements of the Privacy Act, 5 EMPLOYEES AND FEDERAL RESERVE BANKS U.S.C. § 552a, will be indicated in the notice of (a) The Secretary of the Board (or, in his abdesignated systems of records published by the sence, the Acting Secretary) is authorized: Board. (c) Nothing in this Part shall allow an individual access to any information compiled in reason- (14) Under the provisions of § 6621 of the Inable anticipation of a civil action or proceeding. ternal Revenue Code (26 U.S.C. 6621), to determine and report to the Secretary of Treasury or his delegate, the average predominant prime rate quoted by commercial banks to large businesses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 671 ing company will be liable. If the total of such INTERPRETATION amounts exceeds $500,000, then the Edge Act OF REGULATIONS K AND Y Corporation or bank holding company must apply for the Board's prior specific consent to make Under section 211.8(a) of Regulation K, the such investment. Board of Governors grants its general consent for For example, an Edge Act Corporation plans a corporation organized under section 25(a) of the to acquire a 20 per cent interest in a proposed Federal Reserve Act (an "Edge Act Corpora- foreign corporation by subscribing to 60,000 tion") to invest, directly or indirectly, in the shares with a par value of $10 per share. Initially, shares of foreign corporations not doing business the shares will be 50 per cent paid in for an initial in the United States; but no investment thereunder investment of $300,000; under the Articles of Asshall cause an Edge Act Corporation to have in- sociation of the proposed corporation, the unpaid vested more than $500,000 in the shares, or to balance of $300,000 on the shares may be called hold more than 25 per cent of the voting shares, at any time at the discretion of the corporation's of any foreign corporation. Under § 225.4(f)(2) board of directors. It appears that some Edge Act of Regulation Y, these general consent procedures Corporations have in this situation only included also govern the foreign investments of domestic in their computation the $300,000 initially paid bank holding companies made pursuant to section in to the foreign corporation, and would thus ac- 4(c)(13) of the Bank Holding Company Act of quire the shares of the foreign corporation under 1956, as amended. the general consent procedures. The Board has In computing the $500,000 limitation under the determined that in this situation the total amount general consent procedures, an Edge Act Cor- invested for purposes of the general consent proporation or bank holding company must include cedures is $600,000, as the Edge Act Corporation not only amounts actually paid in for the shares must include in the computation its liability for of the foreign corporation but also any unpaid the unpaid balance on the shares. The proposed amounts on the shares of the foreign corporation investment in this situation would therefore refor which the Edge Act Corporation or bank hold- quire prior specific Board consent. BANK HOLDING COMPANY AND BANK MERGER ORDERS ISSUED BY THE BOARD OF GOVERNORS ORDERS UNDER SECTION 3 OF BANK HOLDING COMPANY ACT ONE CORPORATION, has expired, and the Board has considered the NEW RICHMOND, WISCONSIN application and all comments received in light of the factors set forth in § 3(c) of the Act (12 U.S.C. Order Denying Formation 1842(c)). of Bank Holding Company Applicant is a nonoperating corporation organ- One Corporation, New Richmond, Wisconsin ized under the laws of Wisconsin for the purpose has applied for the Board's approval under § of becoming a bank holding company through the 3(a)(1) of formation of a bank holding company acquisition of Bank. Bank, with deposits of $11.9 through acquisition of 87.8 per cent or more of million,^ is the fourth largest of ten banking orgathe voting shares of The First National Bank of nizations in the relevant banking market^ and holds New Richmond, New Richmond, Wisconsin approximately 15 per cent of total commercial ("Bank"). bank deposits in the market. Inasmuch as this Notice of the application, affording opportunity for interested persons to submit comments and ^AII banking data are as of December 31, 1974. views, has been giyen in accordance with § 3(b) ^The relevant banking market is approximated by boundaries of the Act. The time for filing comments and views of St. Croix County, Wisconsin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

672.2 Federal Reserve Bulletin • October 1975 proposal represents merely a reorganization of ership interest of Bank without any significant existing ownership interests, and since Applicant changes in Bank's operations or the services ofhas no present banking subsidiaries, the acquisi- fered to customers of Bank. Consequendy, contion of Bank by Applicant would not have any siderations relating to the convenience and needs significantly adverse effect upon either existing or of the community to be served lend no weight potential competition within the relevant market. toward approval of the application. Accordingly, the Board concludes that competitive On the basis of the circumstances concerning considerations are consistent with approval of the this application, the Board concludes that the application. banking considerations involved in this proposal The Board has indicated on previous occasions present adverse factors bearing upon the financial that it believes that a holding company should condition and prospects of Applicant and Bank. provide a source of financial and managerial Such adverse factors are not outweighed by any strength to its subsidiary bank(s), and that the procompetitive effects or by benefits that would Board will closely examine the condition of the result in serving the convenience and needs of the Applicant in each case with this consideration in community. Accordingly, it is the Board's judgmind. In connection with this proposal, Applicant ment that approval of the application would not would incur a sizable acquisition debt which Ap- be in the public interest and that the application plicant proposes to service over an eleven-and-one- should be denied. half-year period through Bank dividends and the On the basis of the facts of the record, the tax benefit accruing from filing consolidated in- application is denied for the reasons summarized come tax returns.^ In the Board's view, the debt above. retirement program, which contemplates signifi- By order of the Board of Governors, effective cant dividends from Bank, does not provide Ap- September 17, 1975. plicant with the necessary financial flexibility to service the acquisition debt while maintaining Voting for this action: Vice Chairman Mitchell and Governors Bucher, Holland, Wallich, Coldwell, and Bank's capital at an acceptable level. Furthermore, Jackson. Absent and not voting: Chairman Burns. the financial requirements imposed upon Applicant (Signed) THEODORE E. ALLISON, as a result of the debt could prevent it from [SEAL] Secretary of the Board. resolving any unforeseen problems that may arise at Bank and thereby impair Bank's ability to continue to serve the community as a viable bank- ALABAMA BANCORPORATION, ing organization. BIRMINGHAM, ALABAMA On the basis of the above and other facts of record, the Board is of the view that it would not Order Denying Acquisition of Bank be in the public interest to approve the formation Alabama Bancorporation, Birmingham, Alaof a bank holding company with an initial debt bama, a bank holding company within the meaning structure that could result in impairing Bank's of the Bank Holding Company Act, has applied overall financial condition. Accordingly, the Board for the Board's approval under § 3(a)(3) of the concludes that the considerations relating to the Bank Holding Company Act (12 U.S.C. banking factors weigh against approval of the 1842(a)(3)) to acquire all of the voting shares of application. the successor by merger to Muscle Shoals National As indicated above, the proposed formation Bank, Muscle Shoals, Alabama ("Bank"). The essentially involves the reorganization of the ownbank into which Bank is to be merged has no significance except as a means to facilitate the acquisition of the voting shares of Bank. Accordingly, the proposed acquisition of shares of the ^In addition to a cash purchase of Bank shares. Applicant successor organization is treated herein as the proposes to exchange nonvoting, nonconvertible preferred proposed acquisition of the shares of Bank. shares of Applicant for shares of Bank presently held by two individuals. The agreement between these two individuals and Notice of the application, affording opportunity Applicant provides that the individuals will not redeem the for interested persons to submit comments and stock for a period of twelve years. However, the agreement also contains provision for redemption upon the occurrence views, has been given in accordance with § 3(b) of events beyond the control of the two individuals. In view of the Act. The time for filing comments and views of the possibility that the preferred stock may be redeemed, has expired, and the Board has considered the the Board considers it appropriate for purposes of the proposed acquisitions to treat the preferred stock as acquisition debt. application and all comments received in light of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 673 the factors set forth in § 3(c) of the Act (12 U.S.C. entry by other banking organizations seeking to 1842(c)). gain access to the Florence market. On the basis Applicant, the largest commercial banking or- of the foregoing and other facts of record, the ganization in Alabama, controls 12 banks with Board concludes that approval of the application aggregate deposits of approximately $1.4 billion, would result in significant adverse effects upon representing 16.5 per cent of the total deposits in competition within the relevant banking market. commercial banks in the State.^ Acquisition of Therefore, the competitive factors lend substantial Bank would increase Applicant's share of State weight toward denial of the application. deposits by 0.13 per cent and would not signifi- The financial condition and managerial recantly increase the concentration of banking re- sources of Applicant, its subsidiaries and Bank are sources in Alabama although, as discussed below, generally satisfactory and the future prospects for the proposal would have some adverse effects on each appear favorable. Thus, the banking factors concentration in the relevant market. are consistent with, but do not lend significant Bank holds deposits of approximately $11 mil- weight toward, approval of the application. The lion, representing 4.4 per cent of the total deposits considerations relating to the convenience and in commercial banks in the relevant market, the needs of the communities to be served lend some Florence banking market, and thereby ranks as the weight toward approval of the application. Applisixth largest of eight banks operating in the mar- cant proposes to assist Bank in establishing branch ket.^ Applicant's existing subsidiary bank. Shoals facilities by providing the necessary capital, and National Bank of Florence ("Florence Bank"), provide Bank with managerial expertise in the which is also located in the relevant market, holds areas of dealer, floor plan and inventory loans and deposits of approximately $13 million, repre- leveraged leasing. However, these considerations senting 6.6 per cent of total commercial bank do not, in the Board's view, outweigh the subdeposits in the market, and ranks as the fifth largest stantially adverse competitive effects that would bank operating therein. Consummation of the pro- result from Bank's acquisition by Applicant. Acposal would increase Applicant's share of market cordingly, it is the Board's judgment that condeposits to a total of 11 per cent, and Applicant summation of the subject proposal would not be would become the fourth largest banking organi- in the public interest and that the application to zation operating in the market. In addition to the acquire Bank should be denied. effects on concentration, it is noted that Bank and On the basis of all of the facts of record, the Florence Bank are four miles apart and are both application is denied for the reasons summarized located on a main traffic route with no intervening above. banking office along that route. As a result, there By order of the Board of Governors, effective is significant overlapping of the service areas of September 17, 1975. both banks, as evidenced by the fact that Florence Bank derives a substantial amount of its loan and Voting for this action: Vice Chairman Mitchell and Governors Bucher, Holland, Wallich, and Coldwell. deposit business from the service area of Bank. Present and abstaining: Governor Jackson. Absent and Thus, approval of the application would eliminate not voting: Chairman Burns. meaningful existing competition between Appli- (Signed) THEODORE E. ALLISON, cant and Bank, as well as reduce the number of [SEAL] Secretary of the Board. banking alternatives operating in the market. Moreover, approval of the proposed transaction would remove a viable entry vehicle for an Alabama bank holding company not currently repre- ORDERS UNDER SECTIONS 3 A ND sented in the market. This factor is even more 4 OF B A NK H O L D I NG C O M P A NY ACT significant when viewed in light of the fact that DOWNS BANCSHARES, INC., the market is not particularly attractive for de novo DOWNS, KANSAS Order Denying Formation of Bank Holding Company ^All banking data are as of December 31, 1974, and reflect bank holding company formations and acquisitions approved Downs Bancshares, Inc., Downs, Kansas, has through August 31, 1975. ^The relevant banking market for purposes of analyzing the applied for the Board's approval under § 3(a)(1) competitive effects of the subject application is approximated of the Bank Holding Company Act (''Act") (12 by south central Lauderdale County and north central Colbert County, both in Alabama. U.S.C. 1842(a)(1)) of formation of a bank holding Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

674.2 Federal Reserve Bulletin • October 1975 company through acquisition of 100 per cent (less Board will closely examine the condition of the directors' qualifying shares) of the voting shares applicant in each case with this consideration in of The Downs National Bank, Downs, Kansas mind. In connection with this proposal. Applicant C'Bank"). would incur a sizable acquisition debt, which it Applicant has also applied pursuant to § 4(c)(8) proposes to service over a 12-year period through of the Act (12 U.S.C. 1843(c)(8)) and § Bank dividends and commissions from the insur- 225.4(b)(2) of the Board's Regulation Y, for per- ance activities. In addition. Applicant's principals mission to acquire the assets of Gushing Insurance have provided individual guarantees to furnish the Agency, Downs, Kansas (''Agency"). Thereafter, funds required to supplement Applicant's cash Applicant would engage in the activities of a flow in order to amortize the indebtedness over general insurance agency on the premises of Bank, the 12-year period while maintaining Bank's capiwhich is located in a community of less than 5,000 tal at an acceptable level. Notwithstading the persons. Such activities have been determined by foregoing, in the Board's view, the debt retirement the Board in § 225.4(a)(9)(iii) of Regulation Y program does not provide Applicant with the necto be permissible for bank holding companies, essary financial flexibility to service the acquisition subject to Board approval of individual proposals. debt while maintaining Bank's capital at an ac- Notice of the applications, affording opportunity ceptable level. Furthermore, the financial requirefor interested persons to submit comments and ments imposed upon Applicant as a result of the views, has been given in accordance with §§3 debt could prevent it from resolving any unforeand 4 of the Act (40 Federal Register 30326). The seen problems that may arise at Bank and thereby time for filing comments and views has expired, impair Bank's ability to continue to serve the and the Board has considered the applications and community as a viable banking organization. all comments received in light of the factors set On the basis of the above and other facts of forth in § 3(c) of the Act (12 U.S.C. 1842(c)), record, the Board is of the view that it would not and the considerations specified in § 4(c)(8) of the be in the public interest to approve the formation Act (12 U.S.C. 1843(c)(8)). of a bank holding company with an initial debt Applicant is a recently organized corporation structure that could result in impairing Bank's formed for the express purpose of becoming a bank overall financial condition. Accordingly, the Board holding company and operating a general insur- concludes that the considerations relating to the ance agency. Bank holds deposits of approxi- banking factors weigh against approval of the mately $6 million,^ representing 14.9 per cent of application. the total deposits in commercial banks in the Applicant proposes to make no changes in the relevant market,^ and thereby ranks as the fifth services offered by Bank. Therefore, considlargest of six banks operating in the market. Upon erations relating to the convenience and needs of acquisition of Bank, Applicant would control less the community to be served are consistent with, than one-tenth of one per cent of total deposits but lend no weight toward approval of the appliin Kansas. 'Inasmuch as Applicant presently has cation. no subsidiaries, it appears that consummation of The Board concludes that the banking considthe proposal would not eliminate significant exist- erations involved in this proposal present adverse ing or potential competition, increase the concen- factors bearing on the financial conditions and tration of banking resources, or have an adverse prospects of Applicant and Bank. Such adverse effect on other banks in the relevant market. factors are not outweighed by any procompetitive Therefore, the Board concludes that competitive effects or by benefits that would result in servicing considerations are consistent with approval of the the convenience and needs of the community. application. Accordingly, the Board concludes that consum- The Board has indicated on previous occasions mation of the proposal would not be in the public that it believes that a holding company should interest and that the application should be denied. provide a source of financial and managerial On the basis of all of the facts of record, the strength to its subsidiary bank(s), and that the application^ is denied for the reasons summarized above. ^AIl banking data are as of December 31, 1974. ^The relevant banking market for purposes of analyzing the ^The denial of Applicant's proposal to become a bank competitive effects of the proposal is approximated by Osborne holding company through acquisition of Bank renders moot County, Kansas. its application to acquire the assets of Agency. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 675 By order of the Board of Governors, effective million)^ is the 39th largest of 114 banking orga- September 26, 1975. nizations in the relevant banking market^ and controls approximately five-tenths of one per cent of Voting for this action: Chairman Burns and Goverthe total deposits held by commercial banks in that nors Mitchell, Holland, Coldwell, and Jackson. Absent and not voting: Governors Bucher and Wallich. market. Inasmuch as this proposal merely represents a reorganization of existing ownership inter- (Signed) GRIFFITH L. GARWOOD, ests and Applicant has no present banking subsid- [SEAL] Assistant Secretary of the Board. iaries, the acquisition of Bank by Applicant would not have any significantly adverse effect upon either existing or potential competition within the INDUSTRIAL BANCSHARES, INC. , relevant market. Accordingly, the Board con- KANSAS CITY, KANSAS cludes that competitive considerations are consistent with approval of the application. Order Approving Formation The financial and managerial resources and fuof Bank Holding Company and ture prospects of Applicant are dependent upon Retention of Its Insurance Agency Business those of Bank and its insurance agency activities Industrial Bancshares, Inc., Kansas City, and are considered to be satisfactory and consistent Kansas, has applied for the Board's approval under with approval. Although Applicant will incur debt § 3(a)(1) of the Bank Holding Company Act (12 in connection with the proposal, its projected in- U.S.C. § 1842(a)(1)) of formation of a bank come from its insurance activities and the earnings holding company through acquisition of 80 per from Bank should provide sufficient revenue to cent or more of the voting shares of Industrial State service the debt without impairing the financial Bank, Kansas City, Kansas ("Bank"). condition of Bank. Applicant also proposes to sell Applicant has also applied, pursuant to § 4(c)(8) 24.99 per cent of its voting shares and 100 per of the Act (12 U.S.C. § 1843(c)(8)) and § cent of its nonvoting preferred shares to Valley 225.4(b)(2) of the Board's Regulation Y, for per- View Bancshares, Inc., Overland Park, Kansas, mission to retain its ownership of the insurance in order to enable Applicant to receive additional agency business that is presently being conducted funding to retire its debt without impairing Bank's at the offices of Bank. Applicant would continue financial condition.^ Although there will be no to engage in the activity of acting as an insurance immediate changes in the operation or services of agent for the sale of credit-related insurance issued Bank as a result of this proposal, considerations in connection with extensions of credit by Bank. relating to the convenience and needs of the com- Such activity has been previously determined by munities to be served are regarded as being conthe Board in § 225.4(a)(9) of Regulation Y to be sistent with approval. It is the Board's judgment permissible for bank holding companies, subject that consummation of the holding company forto Board approval of individual proposals in ac- mation would be consistent with the public interest cordance with the procedures of § 225.4(b). and that the application to acquire Bank should Notice of the applications, affording opportunity be approved. for interested persons to submit comments and In connection with the formation of the bank views, has been duly published (39 Federal Reg- holding company. Applicant has also applied to ister 45330 (1974)). The time for filing comments retain the insurance agency business that it curand views has expired, and the Board has considered the applications and all comments received in light of the factors set forth in § 3(c) of the ^All banking data are as of June 30, 1974 unless otherwise Act (12 U.S.C. § 1842(c)), and the considerations indicated. ^The relevant market is Kansas City, Kansas, and is defined specified in § 4(c)(8) of the Act (12 U.S.C. § as Johnson and Wyandotte Counties in Kansas, and Cass (less 1843(c)(8)). the cities of Archie, Drexel, Creighton, and Garden City), Applicant is a newly-formed corporation orga- Clay, Jackson, and Platte Counties in Missouri. ^In a related matter, the Board today approved the applicanized under the laws of Kansas for the purposes tions of Valley View Bancshares, Inc. Overland Park, Kansas, of acquiring the insurance agency business of Bank to acquire 24.99 per cent of the voting shares of Applicant; and under § 4(c)(8) of the Act and § 225.4(b)(2) of Regulation and becoming a bank holding company through Y to engage indirectly in Applicant's insurance agency activithe acquisition of Bank. Bank (deposits of $22.1 ties. (See Board's Order of September 15, 1975.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

676.2 Federal Reserve Bulletin • October 1975 rently operates upon Bank's premises. Applicant (Signed) THEODORE E. ALLISON, proposes to continue operating the insurance [SEAL] Secretary of the Board. agency, pursuant to § 225.4(a)(9) of the Board's Regulation Y, by acting as an agent for the sale of credit life and credit accident and health insur- VALLEY VIEW BANCSHARES, INC., ance that is issued in connection with extensions OVERLAND PARK, KANSAS of credit by Bank. It does not appear that the Order Approving Acquisition retention of the insurance agency business would of Shares of Bank Holding Company have any significantly adverse effect upon either existing or future competition, and approval of the Valley View Bancshares, Inc., Overland Park, retention of the agency would enable Applicant Kansas, a registered bank holding company by to continue offering Bank's customers a conven- virtue of its ownership of 100 per cent of the voting ient source of insurance services, which factor the shares (less directors' qualifying shares) of Valley Board regards as being in the public interest. There View State Bank, Overland Park, Kansas ("Valley is no evidence in the record indicating that con- Bank"), has applied for the Board's approval summation of this proposal would result in any under § 3(a)(3) of the Bank Holding Company Act undue concentration of resources, unfair competi- (12 U.S.C. § 1842(a)(3)) ("Act") to acquire tion, conflicts of interest, unsound banking prac- 24.99 per cent of the voting shares of Industrial tices or other adverse effects on the public interest. Bancshares, Inc., Kansas City, Kansas ("Indus- Based upon the foregoing and other consid- trial"), a proposed bank holding company with erations reflected in the record, the Board has respect to Industrial State Bank, Kansas City, determined that the considerations affecting the Kansas ("State Bank").^ By virtue of such acquicompetitive factors under § 3(c) of the Act, and sition, Applicant would also acquire an interest the balance of the public interest factors the Board in Industrial's insurance activities. Accordingly, must consider under § 4(c)(8) of the Act, both Applicant has applied for the Board's approval favor approval of the Applicant's proposals. under § 4(c)(8) of the Act (12 U.S.C. § On the basis of the record, the applications are 1843(c)(8)) and § 225.4(b)(2) of the Board's Regapproved for the reasons summarized above. The ulation Y, to engage indirectly in the activity of acquisition of Bank shall not be made (a) before acting as an agent for the sale of credit-related the thirtieth calendar day following the effective insurance in connection with extensions of credit date of this Order or (b) later than three months made by State Bank, which is to be the sole after the effective date of this Order, unless such banking subsidiary of Industrial. period is extended for good cause by the Board Notice of the applications, affording opportunity or by the Federal Reserve Bank of Kansas City for interested persons to submit comments and pursuant to delegated authority. The determination views, has been given in accordance with §§ 3 as to Applicant's insurance activities is subject to and 4 of the Act (40 Federal Register 8125 the conditions set forth in § 225.4(c) of Regulation (1975)).^ The time for filing comments and views Y and to the Board's authority to require reports has expired, and all comments and views received by, and to make examinations of, bank holding have been considered by the Board in light of the companies and their subsidiaries and to require factors set forth in § 3(c) of the Act (12 U.S.C. such modification or termination of the activities § 1842(c)) and § 4(c)(8) of the Act (12 U.S.C. of a bank holding company or any of its subsidi- § 1843(c)). aries as the Board finds necessary to assure com- Applicant's subsidiary bank. Valley Bank (with pliance with the provisions and purposes of the deposits of $29.2 million),^ controls approxi- Act and the Board's regulations and orders issued mately seven-tenths of one per cent of the total thereunder, or to prevent evasion thereof. By order of the Board of Governors, effective September 15, 1975. Un a related action, the Board approved today the applica- Voting for this action: Chairman Burns, Governors tion of Industrial to become a bank holding company through Bucher, Wallich, and Jackson. Voting against this ac- the acquisition of 80 per cent or more of the voting shares tion: Governors Mitchell, Holland, and Coldwell. of State Bank. (See Board's Order of September 15, 1975.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 677 deposits held by commercial banks in the relevant somewhat the debt incurred by Industrial in conmarket and is the 29th largest of 114 banking nection with the acquisition of State Bank. Conorganizations in that market.^ While Applicant's siderations relating to the convenience and needs subsidiary bank and State Bank, Industrial's pro- of the communities to be served also appear to posed subsidiary, are located in the same banking be consistent with approval of the application. It market, it appears that the amount of meaningful is the Board's judgment that the proposed transaccompetition that would be eliminated between the tion would be consistent with the public interest, two banks would not be significant in view of some and that the application to acquire shares of Incommon stock ownership between directors of dustrial should be approved.^ both Applicant and Industrial as well as the large Applicant has also applied for the Board's apnumber of banking competitors in the market. proval to engage indirectly in the insurance agency Valley Bank and State Bank hold in the aggregate activity of Industrial as a result of the acquisition only slightly more than one per cent of the mar- of shares in Industrial. The considerations and ket's deposits. Furthermore, on the basis of the public interest factors that the Board must consider facts of record, including the distance of 8.9 miles under § 4(c)(8) of the Act are the same for this separating Valley Bank and State Bank, as well application as for those specified in Industrial's as the number of intervening banks, it appears application to retain its insurance agency business, unlikely that significant competition between Val- and are, likewise, consistent with approval of the ley Bank and State Bank would develop in the application.^ future. Accordingly, the Board concludes that Based upon the foregoing and other considconsummation of the proposal would neither erations reflected in the record, the Board has eliminate any significant existing or future compe- determined that the considerations affecting the tition nor increase the concentration of banking competitive factors under § 3(c) of the Act, and resources in the relevant market or in the State the balance of the public interest factors the Board as a whole. Therefore, competitive considerations must consider under § 4(c)(8) of the Act, both are consistent with approval of the applications. favor approval of Applicant's proposals. The financial and managerial resources and fu- On the basis of the record, the application is ture prospects of Applicant and its present subsid- approved for the reasons summarized above. The iary bank are considered satisfactory and consist- transaction to acquire shares of Industrial shall not ent with approval. Applicant's acquisition of In- be made (a) before the thirtieth calendar day foldustrial's shares would not adversely affect the lowing the effective date of this Order or (b) later overall financial conditions of Applicant, Valley than three months after the effective date of this Bank, or State Bank. On the contrary, it would Order, unless such period is extended for good have the effect of enabling Industrial to reduce cause by the Board or by the Federal Reserve Bank of Kansas City, pursuant to delegated authority. The determination as to Applicant's insurance ac- 2Pursuant to the Supreme Court's holding in Whitney Na- tivities is subject to the conditions set forth in § tional Bank of Jefferson Parish v. Bank of New Orleans and 225.4(a) of Regulation Y and to the Board's Trust Company, 379 U.S. 411, 419 (1965), the Board may authority to require reports by, and to make examinot approve an application by a bank holding company if consummation of the proposal contemplated by such applica- nations of, bank holding companies and their subtion would be prohibited by a valid State law. Kansas law sidiaries and to require such modification or terprohibits the formation of multi-bank holding companies. The relevant statute generally defines a bank holding company as any company that directly or indirectly owns, controls, or holds with power to vote, 25 per cent or more of the voting shares of each of two or more banks; or controls in any manner the ^In connection with its consideration of the subject proposal, election of a majority of the directors of each of two or more the Board has by letter of today's date notified Applicant that, banks (K.S.A. § 9-504). Notice of the subject proposal has upon consummation of the proposal, the Board has determined, been given to the Kansas Banking Commissioner, as required on the basis of the record, that Applicant would be capable by § 3(b) of the Bank Holding Company Act (12 U.S.C. § of exercising a "controlling influence" over the management 1842(b)). The Banking Commissioner has indicated that con- or policies of Industrial within the meaning of § 2(a)(2)(C) summation of the proposal, which involves Applicant's direct of the Act. Accordingly, upon consummation of the proposal. acquisition of 24.99 per c( .it of the voting shares of Industrial, Applicant is required to report Industrial, as well as its subsidwould not contravene the provisions of Kansas law. iaries, as subsidiaries of Applicant and to comply with the ^ All banking data are as of June 30, 1974, unless otherwise applicable provisions of the Act with respect to such subsidiindicated. aries. Applicant has waived the requirement of notice and 4The relevant market is Kansas City, Kansas, and is defined opportunity for a hearing provided in the statute, and this as Johnson and Wyandotte Counties in Kansas, and Cass (less determination becomes final upon consummation of the prothe cities of Archie, Drexel, Creighton, and Garden City), posal . Clay, Jackson, and Platte Counties in Missouri. ®See footnote 1 supra. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

678 Federal Reserve Bulletin • October 1975 mination of the activities of a bank holding com- company-only basis is in our opinion also unduly pany or any of its subsidiaries as the Board finds leveraged. The fact that the bank stock was purnecessary to assure compliance with the provisions chased at higher than book values does not warrant and purposes of the Act and the Board's regula- automatically including such premiums in the tions and orders issued thereunder, or to prevent capital base of the holding company for purposes evasion thereof. of supervisory analyses of capital adequacy. In the By order of the Board of Governors, effective absence of objective evidence clearly signifying September 15, 1975. values exceeding book figures—such as a relatively strong market price for its stock reliably Voting for this action: Chairman Burns, Governors indexed in an objective market, or an unusually Bucher, Wallich, and Jackson. Voting against this aclarge net income flow relative to book value—the tion: Governors Mitchell, Holland, and Coldwell. prudent course, in our view, is to base supervisory (Signed) THEODORE E. ALLISON, judgments concerning the adequacy of bank hold- [SEAL] Secretary of the Board. ing company capital on book values. We see no such persuasive evidence supporting values in Dissenting Statement of excess of book in this case; and book values alone, Governors Mitchell, Holland, and Coldwell as indicated earlier in this dissenting statement, We would deny the companion applications of suggest a relatively narrow equity position. Industrial Bancshares, Inc. (''Industrial"), and In addition, the proposal involves tax avoidance Valley View Bancshares, Inc. ("Valley View"). and a plan in which a group of individuals is In our view, the method of financing entails an attempting to establish a chain of one-bank holding unsound debt structure that is likely to have adcompanies. The public benefit of these arrangeverse effects upon Industrial's proposed subsidiary ments has not been made apparent; from one point bank, as well as upon the existing subsidiary bank of Valley View. of view it is negative. In connection with this proposal. Industrial will In summary, it appears to us that the basic incur an initial acquisition debt of $2,500,000. financial position of Industrial and Valley View This is almost equal to the total equity and reserves as a result of the proposal would be such as to of Industrial Bank which are $2,571,000.^ On a lessen the ability of each to resolve any unforeseen book value basis, therefore, the combination of problems that may arise at their respective subsidthe holding company and bank statements would iary banks, and, thereby might reduce those banks' show an equity of $71,000 against total liabilities overall ability to continue to serve their respective (including deposits) of $26,958,000. Possibly in communities as effective banking organizations. light of this fact. Industrial proposes to sell 24.99 For the above reasons, we would deny the per cent of its voting shares and 100 per cent of its non-voting preferred shares to Valley View, applications. which is controlled by the same individuals. This will provide Industrial with $875,000 in additional funding to reduce its debt to $1,625,000. Valley ORDERS UNDER SECTION 4 View has $32,660,000 in liabilities (including deposits) and $3,521,000 in equity and reserves. OF BANK HOLDING COMPANY ACT Valley View has $810,000 of debt outstanding and BARNETT BANKS, INC., proposes to add $875,000 in order to purchase shares of Industrial. Thus, Valley View's equity JACKSONVILLE, FLORIDA position combined with that of Valley View Bank Modified Order Granting would amount to $1,836,000 against liabilities of Application to Engage in $34,345,000 (including deposits). The combined statements of Industrial and Valley View banks Certain Insurance Agency Activities and holding companies would show liabilities (in- In an Order dated July 14, 1975, the Board of cluding deposits) of $60,428,000 and equity of Governors of the Federal Reserve System ap- $2,782,000. In our judgment such leverage subjects the banks and their customers to greater proved the application by Barnett Banks of exposure than is desirable. Florida, Inc., Jacksonville, Florida (''Barnett"), to engage de novo in certain insurance agency The capital of Valley View, the resulting multiactivities through a newly formed subsidiary to be bank holding company, when viewed on a parentknown as Barnett Winston Insurance Agency, Inc. The Board's Order discussed the proposed in- ^Financial data are as of June 30, 1975. surance agency activities as they related to the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 679 mortgage banking activities of Barnett's mortgage Barnett Winston Insurance Agency, Inc., is hereby banking subsidiary, Barnett Winston Company, modified to read as follows.^ and as viewed within the limitations of the newly Barnett Banks of Florida, Inc., Jacksonville, enacted Florida statute which prohibits insurance Florida C'Barnett"), a bank holding company agents and solicitors associated with certain types within the meaning of the Bank Holding Company of financial institutions from soliciting, negotiat- Act, has applied through its nonbanking subsidiing, selling, effectuating, or servicing any policy ary, Barnett Winston Company C'Barnett Winof insurance, with certain exceptions provided ston"), for the Board's approval under § 4(c)(8) (Section 626.988, Florida Statutes).^ However, the of the Act and § 225.4(b)(1) of the Board's Regu- Board's Order did not discuss the sale of credit lation Y, to engage de novo in certain insurance accident and health (disability) insurance by the agency activities through a newly formed subsidioffices of Barnett Winston Company which are ary to be known as Barnett Winston Insurance located in Florida. Agency, Inc. In a letter dated July 24, 1975, Barnett noted Notice of the application was published in the that the recently enacted Florida statute, cited communities to be served in accordance with above, defines "insurance agency activities" as § 225.4(b)(1) of the Board's Regulation Y. Formal "the procurement of applications, solicitation, ne- objections to the application were made by the gotiation, selling, effectuating or servicing of any National Association of Insurance Agents, Inc. policy or contract of insurance other than credit ("NAIA") and the Florida Association of Insurlife insurance and credit disability insurance.'' ance Agents, Inc. ("FAIA"). By Order of March [Emphasis added.] Thus, credit life and credit 6, 1973, the Board directed that public hearings disability insurance are not within the scope of be held on the subject application before a desigthe prohibitions of the recently enacted Florida nated Administrative Law Judge (38 Federal Regstatute. ister 6441). In addition to the intervenors named The National Association of Insurance Agents, above, a number of additional parties sought, and Inc. ("NAIA") and the Florida Association of were granted permission, to participate in the Insurance Agents, Inc. ("FAIA"), in separate proceeding. Testimony and other evidence in supletters, submitted responses to Barnett's July 24 port of, and in opposition to, the application was letter. Neither NAIA nor FAIA raised objections received in evidentiary hearings held between June to the comments expressed in Barnett's July 24 11, 1973, and June 21, 1973. The hearing and letter. However, both NAIA and FAIA requested related proceedings have been conducted in accorfurther modifications of the Order with respect to dance with the Board's Rules of Practice for Forthe interpretation of the recently enacted Florida mal Hearings (12 CFR 263). Statute and the insurance agency activities which In a Recommended Decision of November 8, may be conducted thereunder by a bank holding 1973, the Administrative Law Judge concluded company. that the evidence supported approval of the appli- The Board has reviewed the July 14 Order in cation and recommended that the Board permit light of the above-mentioned supplemental sub- Applicant to engage in certain insurance agency missions, and has decided that it would be desira- activities in those counties in which Applicant and ble to modify the Order to more specifically clarify its affiliates do not control more than 15 per cent the scope of the permissible insurance agency of the bank deposits and/or mortgage banking activities in terms of the Florida statute. Accord- business. An exception to the recommendation of ingly, the Board's Order of July 14, 1975, ap- approval was noted for various types of surety proving the application of Barnett Banks of bonding. The recommendation was subject to the Florida, Inc., Jacksonville, Florida, to engage de requirement that appropriate statements be furnovo in certain insurance agency activities through nished for execution by borrowers to the effect that the customer understands that the placement of such insurance is not offered as a condition to the grant of a loan, nor as an inducement therefor, ^Barnett Winston Company operates six offices in Florida and one office in Harris County, Texas. The Board's July 14, 1975, Order distinguished the proposed insurance agency activities to be conducted in Florida from those to be conducted in Texas. The instant Order modifies the July 14 Order orily ^Applicant may engage in insurance agency activities only insofar as it concerns the proposed activities in Florida, and to the extent that such authority is specifically granted in this reaffirms the activities approved for the office in Texas. Order, approval granted in the July 14 Order notwithstanding. 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680.2 Federal Reserve Bulletin • October 1975 and, in addition, that similar insurance not neces- ("Insurance Regulation") that the following acsarily naming the lending institution as beneficiary tivities are so closely related to banking or manmay be obtained from independent agents, or in aging or controlling banks as to be a proper incilieu thereof, existing insurance owned by the bor- dent thereto:^ rower may be assigned to the bank. (9) acting as insurance agent or broker at offices at which The Board, having considered the entire record the holding company or its subsidiaries are otherwise engaged in business (or in an office adjacent thereto) with respect to and the exceptions taken to the Recommended the following types of insurance: Decision by the various parties and having deter- (i) Any insurance for the holding company and its subsidimined that the Administrative Law Judge's findaries; ings of fact, conclusions, and order, as modified and supplemented herein, should be adopted as (ii) Any insurance that (a) is directly related to an extension of credit by a bank or a bank-related firm of the kind described the findings, conclusions, and Order of the Board, in this regulation, or (b) is directly related to the provision now makes its findings as to the facts, its conclu- of other financial services by a bank or such a bank-related sions drawn therefrom, and its Order. firm, or (c) is otherwise sold as a matter of convenience to the purchaser, so long as the premium income from sales within Barnett Winston Company is engaged in the this subdivision (ii)(c) does not constitute a significant portion activity of mortgage banking through six offices of the aggregate insurance premium income of the holding company from insurance sold pursuant to this subdivision (ii); in Florida and one in Harris County, Texas. As of year-end 1972 it held a mortgage servicing (iii) Any insurance sold in a community that (a) has a portfolio of approximately $155 million. Barnett population not exceeding 5,000 or (b) the holding company Winston Company proposed to sell the following demonstrates has inadequate insurance agency facilities. Upon reviewing the legislative history of the types of insurance in connection with the real 1970 Amendments to the Bank Holding Company estate financing activities of its subsidiaries Act, the Law Judge concluded that "Congress through a newly-formed subsidiary to be known clearly had the insurance agency business in mind as Barnett Winston Insurance Agency, Inc.: as an enterprise closely related to banking." He (a) Property damage and liability insurance on real estate therefore found that ''the business of selling genmortgaged as security for a loan originated and/or sereral insurance" was an activity so closely related viced by. a bank-related subsidiary of Applicant. to banking or managing or controlling banks as (b) Mortgage guaranty insurance assuring repayment in the to be a proper incident thereto. However, Applievent of default of all or a portion of a mortgage loan originated and/or serviced by a bank-related subsidiary cant did not seek permission to operate a general of Applicant. insurance agency as such but listed in its application the specific insurance coverages that it con- (c) Insurance on the life or health of a borrower indebted on a loan originated and/or serviced by a bank-related templated selling through its newly-formed subsubsidiary of Applicant. sidiary, Barnett Winston Insurance Agency, Inc. Adoption of the Law Judge's recommended find- (d) Homeowner's insurance with respect to a residence mortgaged as security for a loan originated and/or ser- ing that ''selling general insurance" is an activity viced by a bank-related subsidiary of Applicant. closely related to banking would thus confer a (e) Insurance that is otherwise sold as a matter of conven- broader authority than that requested in the subject ience to the purchaser so long as the premium income from such sales does not constitute a significant portion of the aggregate insurance premium of Applicant. ^The Board's Insurance Regulation was adopted after notice The principal issues before the Board which of proposed rule-making and following receipt of comments arise from the subject application are: (1) whether on the substance of the proposed regulation. The insurance activities authorized by the regulation are those that are orgathe insurance agency activities proposed are so nizationally and physically integrated into the operations of closely related to banking or managing or control- the bank holding company. The Board's decisions in this area prior to the 1970 Amendments to the Act are generally to the ling banks as to be a proper incident thereto; (2) same effect (see, for example. Otto Bremer Company, 1959 whether performance of the proposed activities can F.R. BULLETIN 892, First Bank Stock Corporation, 1959 F.R. reasonably be expected to produce benefits to the BULLETIN 917; and United Virginia Bancshares, Inc., 1970 F.R. BULLETIN 599). public, such as greater convenience, increased "Members of both Houses of Congress referred to the Board's competition, or gains in efficiency, which out- prior decisions during the legislative debate to the 1970 weigh possible adverse effects, such as undue Amendments. A member of the Conference Committee, Senator Bennett, stated: "The Federal Reserve Board under the concentration of resources, decreased or unfair existing language of § 4(c)(8) for the past 14 years has competition, conflicts of interest, or unsound approved insurance activities for bank holding companies and there was no intent on the part of the Conference Committee banking practices. The Board has previously deto overrule these past decisions." Congressional Record termined by Regulation (12 CFR 225.4(a)(9)) S-20645, December 18, 1970. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 681 application and would not be an appropriate find- real estate serving as collateral for a loan origiing from the record of this proceeding. nated by a subsidiary of Applicant which is li- Subsequent to the Law Judge's decision in this censed and operating primarily under Chapter 494, case, a bill was passed by the Florida legislature Florida statutes, it would appear to meet the reprohibiting insurance agents and solicitors asso- quirements contained in the exemption to the reciated with certain types of financial institutions cently enacted Florida statute cited above. The from soliciting, negotiating, selling, effectuating, Board has previously found that the sale of such or servicing any policy of insurance (Section coverage is directly related to an extension of 626.988, Florida Statutes). However, the new credit within the meaning of § 225.4(a)(9)(ii)(a) Florida statute provides narrow exceptions which of Regulation Y. The extension of credit on a authorize certain nonbank subsidiaries or affiliates secured loan is founded upon the value of the of bank holding companies to engage to a limited collateral securing the loan. Thus, insurance is extent in certain insurance agency activities. Sec- essential from the lender's standpoint to assure that tion 3 of the statute provides: the value of the collateral will not be impaired by physical damage. The financial nature of the Notwithstanding any other provision of this section, an insur- insurance transaction forms an integral function for ance agent or solicitor licensed by the department of insurance under the provisions of chapter 626, Florida Statutes, who is the borrower as well since the presence or lack affiliated with, under contract with, retained by or owned or of insurance protecting loan collateral is an essencontrolled directly or indirectly to any degree by a bank holding tial element of the credit evaluation. The evidence company subsidiary or affiliate, which is not a bank, licensed and operating primarily under chapter 494, Florida Statutes, in this record confirms that the sale of physical may engage in insurance agency activities, if permitted by the damage insurance on real estate is directly related Board of Governors of the Federal Reserve System, but only to the extent that such activities are directly related to the to a real estate mortgage loan. Accordingly, Apextension of credit, specifically real estate mortgage loans, plicant may engage in this activity subject to the made or brokered by licensees under Chapter 494, Florida limitations imposed by Florida law. Statutes, and only to the extent necessary to protect the real property which is subject to the mortgage loan, against loss Applicant further seeks to sell physical damage or damage. With respect only to residential property consisting insurance on real estate mortgaged as security for of not more than four individual dwelling units, such agent or solicitor may offer a policy affording insurance on the a loan originated and/or serviced by Barnett primary residence, appurtenant structures, personal property Winston in Harris County, Texas. The servicing and personal liability, but excluding any insurance customarily written under an inland marine form. In addition, such agent of loans and other extensions of credit has been may offer decreasing term life insurance on the life of the found by the Board to be a permissible activity borrower not to exceed the amount and term of the mortgage. under § 225.4(a)(3) of Regulation Y, and thus, Thus, it appears that under the recently enacted a provision of a financial service by a bank or Florida statute. Applicant may engage to a limited bank-related firm of the type contemplated in the extent in certain insurance agency activities. Ac- Board's Interpretation permitting the sale of insurcordingly, the Board believes that it may approve ance in connection with such services (12 CFR the proposal herein to the extent permitted by 225.128(d)(4)). Accordingly, the Board concludes Florida law. that the sale of physical damage insurance on real Applicant requests permission for Barnett Win- estate serving as collateral for a loan originated ston Insurance Agency, Inc., to sell physical and/or serviced by Barnett Winston in Harris damage insurance on real estate mortgaged as County, Texas, is a permissible activity within the security for a loan originated and/or serviced by meaning of § 225.4(a)(9)(ii)(a) and/or (b) of the Barnett Winston, a mortgage banking subsidiary Insurance Regulation. of Applicant located in Florida."^ So long as this Applicant seeks prior Board approval to sell request pertains to physical damage insurance on liability insurance on real property when a subsidiary has taken a security interest in such property ''Protestants contend that the proper interpretation of the Florida Statute requires that the insurance be sold by the as the result of its extension of credit. The pur- Chapter 494 subsidiary, itself, and not by a subsidiary or chase of liability insurance by individual boraffiliate of the Chapter 494 subsidiary. This proposed interprerowers in conjunction with or as part of an insurtation is far from clear on the face of the statute. In fact, a literal reading of the statute would appear to support an ance package with insurance that protects real interpretation opposite to that proffered by Protestants. Fur- property which secures an extension of credt apthermore, the Board does not believe that there is any substantive distinction between the Chapter 494 subsidiary itself sell- pears, from the evidence of record, to be the least ing the insurance, or a subsidiary or affiliate of the Chapter costly and most convenient means of obtaining 494 subsidiary engaging only in the sale of insurance on behalf such coverage. Moreover, a ''packaged" insurof, and in connection with, extensions of credit by the Chapter 494 subsidiary. ance policy combining liability insurance with Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

682.2 Federal Reserve Bulletin • October 1975 insurance relating to physical damage on real sell mortgage guaranty insurance for an unqualiproperty purchased from loan proceeds fulfills a fied insurer, its mortgages could not be resold to legitimate need of the lender and borrower alike the Federal Home Loan Mortgage Corporation, a at the time a loan is made. The Board concludes significant buyer of mortgages in the secondary from all the evidence of record that the sale of market. Under these circumstances, the Board liability insurance on real property supports the does not view the sale of mortgage guaranty inlending transactions of a bank or bank-related firm surance by a bank holding company to be in the in the holding company system when it is sold public interest. Accordingly, the application to to borrowers in conjunction with, or as part of, engage in the sale as agent or broker of this an insurance package with insurance protecting specific coverage should be, and hereby is, dereal property, and is a permissible activity within nied.^ § 225.4(a)(9) of the Insurance Regulation. How- Applicant has also requested the Board's prior ever, under the recently enacted Florida statute approval to sell insurance on the life or health of cited above, Applicant would be prohibited from a borrower who is indebted on a loan originated selling this type of insurance in Florida, except and/or serviced by a bank-related subsidiary of in connection with extensions of credit originated Applicant. The Board has previously determined by a subsidiary licensed and operating primarily by Order® that the sale of credit life, credit accident under Chapter 494, Florida Statutes, and except and health, and mortgage redemption insurance is for those instances where the real property secur- so closely related to banking as to be a proper ing an extension of credit consists of residential incident thereto within the meaning of § property of not more than four individual dwelling 225.4(a)(9) of the Insurance Regulation. As noted units. To the extent that Applicant complies with supra, Florida's recently enacted statute expressly these conditions, it may engage in this activity. permits the sale of decreasing term life insurance Insofar as Applicant's request pertains to prior on the life of a borrower where such insurance Board approval to sell liability insurance on real is sold in connection with an extension of credit estate serving as collateral for a loan originated originated by a subsidiary licensed and operating and/or serviced by Barnett Winston in Harris primarily under Chapter 494, Florida Statutes, and County, Texas, the Board concludes from all the where the insurance does not exceed the amount evidence of record that Applicant may engage in and term of the real estate mortgage loan. The this activity in Harris County so long as the liabil- sale of such insurance assures repayment of an ity insurance is sold to borrowers in conjunction extension of credit by the holding company system with, or as part of, an insurance package with in the event of death or disability of the borrower. insurance protecting the real property. The Board finds that the sale of such insurance is directly related to an extension of credit and Applicant has requested the Board's prior apthat Applicant may engage in this activity in proval to sell mortgage guaranty insurance as agent Florida, provided that these conditions are comor broker. This particular insurance protects the plied with. lender against loss of a specified percentage of a The previously noted restrictions under Florida loan in the event of foreclosure and sale of the law on the sale of mortgage redemption insurance collateral. To a large extent, it insures the lender do not limit Applicant's ability to perform this against credit risk. However, none of the major activity in the State of Texas, nor do these restricmortgage insurance underwriters uses agents at the tion apply to, or limit. Applicant's ability to sell present time, and all have been qualified as insurers by the Federal Home Loan Mortgage Corporation. The Board further notes that § 150 of "'^Although the Board initially approved on July 3, 1974, the that Corporation's Eligibility Requirements for application of The Alabama Financial Group, Inc., now qualified insurers prohibits these insurers from Southern Bancorporation ("Southern"), to engage in certain paying a fee, commission, or other compensation insurance agency activities including acting as agent in the sale of mortgage guaranty insurance, that Order was modified to any mortgage lender or to any corporation in on October 29, 1974, by rescinding Board approval for Southwhich the lender, its officers or directors, or its ern to act as agent in the sale of mortgage guaranty insurance. In all other respects, the Board reaffirmed its July 3, 1974 employees have a financial interest. Thus, it ap- Order. pears that qualified underwriters of mortgage ''See the Board's Order of January 28, 1974, granting guaranty insurance would be prohibited from pay- approval to Worcester Bancorp, Inc., Worcester, Massachuing a commission or fee to Applicant in the sale setts, to engage de novo in the sale of credit life, credit accident and health, and mortgage redemption insurance (1974 F.R. of such insurance. Moreover, were Applicant to BULLETIN 393). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 683 credit life and credit accident and health insurance ance that is otherwise sold as a matter of convenin Florida or Texas. The sale of decreasing term ience to the purchaser so long as the premium life insurance in connection with the servicing of income from sales within this category does not loans by a bank or bank-related firm is a coverage constitute a significant portion of the aggregate previously determined by the Board as one directly insurance premium income from insurance sold in related to an extension of credit or the providing connection with loans or other financial services. of financial services (see 12 CFR 225.128(d)). The sale of such insurance has been expressly However, where life insurance on the borrower permitted by the Board under § 225.4(a)(9)(ii)(c) exceeds the extent of the outstanding balance of of the Insurance Regulation. The Board does not the credit extension as occurs in the sale of level regard this provision as being designed to permit term life insurance in connection with installment entry into the general insurance agency business loans, no direct relationship exists. Accordingly, but only permits the limited sale of such insurance the Board finds that the sale of level term life as a matter of convenience to the purchaser. The insurance is not so closely related to banking as Board has previously determined that income atto be a proper incident thereto within the meaning tributable to "convenience" sales will not be of § 225.4(a)(9) of the Insurance Regulation. regarded as constituting a "significant portion" if Thus, Applicant may sell such credit accident and the premium income attributable to "convenhealth insurance and decreasing term life insurance ience" sales is "less than 5 per cent of the aggreunder the provisions of § 225.4(a)(9) of the gate insurance premium income of the holding Board's Insurance Regulation through all of Bar- company system from insurance sold pursuant to nett Winston's offices, so long as such insurance § 225.4(a)(9)(ii)" (see 12 CFR 225.128(e) and is sold in accordance with applicable State laws. (3)).'^ The Board hereby reaffirms its view that this limitation is a necessary and proper means of Applicant has also applied for permission to sell ensuring the continued existence of the close relahomeowner's insurance under a package form of tionship originally found between banking and insurance consisting primarily of physical damage certain insurance agency activities deemed perand liability insurance on a residence combined missible under the Insurance Regulation. Accordwith several other types of coverages. The eviingly, Applicant may sell "convenience" insurdence of record indicates the difficulty of separaance through Barnett Winston's one office in tely obtaining the several types of coverages con- Harris County, Texas.® tained in a homeowner's policy at a price comparable to that for the package. The Board, therefore, In determining whether a particular activity is concludes that the sale of homeowner's insurance a proper incident to banking or managing or consupports the lending transactions of a bank or trolling banks, the 1970 Amendments to the Act bank-related firm in the holding company system require the Board to "consider whether its perwhen it is sold to borrowers as a means of pro- formance by an affiliate of a holding company can tecting the collateral in which the bank or bank- reasonably be expected to produce benefits to the related firm has a security interest and is a permis- public, such as greater convenience, increased sible activity within § 225.4(a)(9) of the Insurance competition, or gains in efficiency, that outweigh Regulation. Accordingly, Applicant's sale of possible adverse effects, such as undue concentrahomeowner's insurance protecting collateral se- tion of resources, decreased or unfair competition, curing a mortgage loan originated and/or serviced conflicts of interests, or unsound banking pracby its mortgage loan office in Harris County, Texas, is a permissible activity within § ^The Board's view in this respect would not be affected 225.4(a)(9) of the Insurance Regulation. In addi- by a proposed revision to clarify the definition of insurance tion, to the extent such policy excludes any insur- sold as a matter of convenience to borrowers under Regulation Y which would, in effect, limit the amount of convenience ance customarily written under an inland marine insurance sold by each insurance-selling subsidiary office to form. Applicant may engage in this activity in less than 5 per cent of that office's total insurrance premium Florida in connection with extensions of credit by income (see F.R. 28536 and 39 F.R. 34682). The Board's decision in the instant Order is based solely on the Insurance a subsidiary licensed and operating primarily under Regulation as presently drafted; no determination has been Chapter 494, Florida Statutes, where the exten- made by the Board on the proposed revision, nor is any implied sions of credit involve real estate mortgage loans herein. ^In view of the recently passed Florida insurance legislation on residential property consisting of not more than (Section 626.988, Florida Statutes), the Board is unable to four individual dwelling units. approve any insurance agency activities for which Barnett (through Barnett Winston) applied other than those already Applicant also requests permission to sell insur- specifically discussed herein. 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684.2 Federal Reserve Bulletin • October 1975 tices." Each of these factors has been separately insurance agency activities will be conducted from considered by the Board in its determination existing facilities of the holding company, the herein. expense of office overhead will be minimal. Effi- The public benefits that may reasonably be ex- ciencies may also result from increased use of the pected to result from the sale of the coverages holding company's computer facilities in handling discussed, supra, appear to be positive in terms insurance sales and billing operations. It is the of greater convenience to the comsumer-borrower. Board's judgment that such efficiences will result The ability of a borrower to complete an entire in positive public benefits in terms of the service credit-related insurance transaction at one location Applicant may offer its borrower-insureds. (so-called "one-stop shopping") is likely to result One of the possible adverse effects which the in a considerable savings in time as well as elimi- Congress directed the Board to consider in deternate the duplication of certain information re- mining whether a particular activity is a proper quirements. Permitting Applicant to engage in the incident to banking or managing or controlling specified insurance agency activities is also likely banks is the danger of an undue concentration of to result in the added convenience of combining resources. As noted in the Conference Report the loan installments and insurance premiums in accompanying H.R. 6778, this particular danger a single payment. "is enhanced when concentrations of power are Approval of the subject application is also likely centered about money, credit and other financial to result in some increased competition among areas, the common denominators of the econinsurance agents in Florida. While it does not omy." Since Applicant is proposing to enter this appear that Applicant can introduce more than a activity de novo, the Board concludes that the minimum of price competition in those insurance danger of an undue concentration of resources such agency markets that it enters, it appears capable as the Congress feared might arise from bank of injecting strong competition in such markets on holding company entry into a particular nonbankthe basis of service. The added convenience of ing activity is not present in this application. completing a credit-insurance transaction at one Another possible adverse effect which the Conlocation is but one of the competitive means gress directed the Board to consider in any § whereby Applicant may improve an insurance 4(c)(8) application concerned the danger of deagent's service to the public. In addition, certain creased or unfair competition. Intervenors vigtechnical efficiencies in the data processing area orously contested this application on the give Applicant the capability of competing effec- ground that permitting Applicant to sell insurtively with independent agents and the assurance ance would lead to coerced or ''voluntary" tying^ of insurance to extensions of credit by Applicant's of efficient service to the public. Based on these subsidiaries. It appears that the Law Judge was and other facts of record, it is the Board's judgconcerned with such a possibility and accordingly ment that approval of the subject application will recommended that Applicant not be permitted to produce public benefits through increased compesell insurance in markets where its banking subtition among insurance agents in both the local sidiaries hold more than 15 per cent of the total Florida and Texas markets. depositis in commercial banks. It is clear that Approval of the subject application is also likely coerced tying is forbidden by § 106 of the Bank to result in some gains in efficiency. The policies Holding Company Act and under certain condisold must, by Board Regulation, be directly related tions by provisions of the antitrust laws. Moreto an extension of credit or the provision of other over, the evidence of record in this proceeding financial services offered by the Applicant; and contains no specific instances of a tying arrangefurthermore, under the recently enacted Florida ment resulting from either coerced or "voluntary" statute, the property and liability policies sold in tying. Finally, the record indicates that the market Florida also must be directly related to real estate power required for the successful practice of tying mortgage loans made by a subsidiary licensed and does not appear to be present. The share of comoperating primarily under Chapter 494, Florida mercial bank deposits that Applicant's banking Statutes. Thus, some savings can be anticipated subsidiaries hold in local Florida markets does not through the reduction or even elimination of advertising and solicitation expenses as the agents' only customers will be those who choose the ^Voluntary tying results not from any coercion placed on "one-stop" convenience of purchasing insurance the borrower by the lender but, rather, from the borrower's at the same time the loan is obtained. Since the presumed desire to enhance the probablility of obtaining a loan. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 685 establish undue market power in those markets. record indicates that no other unsound banking It appears from the record in this proceeding that practices would result from Applicant's entry into there are numerous banking alternatives in Florida's the sale of the specified insurance coverages. banking markets. In addition to commercial banks, Therefore, it is the Board's judgment that conborrowers have access to mortgage loans from summation of the proposed transaction would not savings and loan associations and mortgage bank- result in conflicts of interests or unsound banking ers. Considering these alternative nonbank sources practices. of mortgage credit, together with the numerous It has been suggested by NAIA that, in light commercial banking alternatives available to bor- of the new legislative prohibitions of the Florida rowers, it appears that the dangers of tying are statute limiting Applicant's entry into insurance not substantial and should not bar Applicant's sale agency activities, the public benefits claimed from of insurance in local Florida markets. subject entry should be reexamined. The Board The Law Judge recommended in his decision recognizes that some diminution of the public that "appropriate statements be included in all benefits discussed supra may likely result from a insurance application forms furnished by affiliates more limited form of entry into insurance agency of bank holding companies in bold type above the activities. However, on balance, it is the Board's applicant's signature to the effect that the customer view that sufficient public benefits would exist understands that the placement of such insurance following Applicant's entry into those insurance is not offered as a condition to the grant of the agency activities now permitted by Florida law as loan nor as an inducement therefor. . . ." The to outweigh any possible adverse effects resulting Board notes that similar statements are likely to from such entry. be included in all Truth in Lending disclosures The Board notes that NAIA has objected to the made pursuant to the Board's Regulation Z with exclusion by the Law Judge of certain testimony respect to credit life, accident and health or loss of Mr. Harrison Houghton, witness for NAIA. The of income insurance, and it finds that the evidence Board, after examining the record, concludes that in this record is not sufficient to otherwise require the Law Judge correctly exercised his discretion such language. in refusing to admit this testimony since it was The Law Judge also recommended as a condi- cumulative to other testimony in the record and, tion of approval that language be added to insur- moreover, irrelevant to many of the issues inance application forms indicating that "similar volved in this application. NAIA filed a motion insurance not necessarily naming the lending in- to exclude Board personnel who were involved in stitution as beneficiary may be obtained from in- this hearing from "participating in the making of dependent agents or in lieu thereof existing insur- the Board's decision on these applications." Since ance owned by the borrower may be assigned to such personnel of the Board did not participate the bank" (page 64). The Board has not required in the decisional process, the issue raised by the this specific condition before and the evidence in motion is moot. this record is insufficient to demonstrate that there Based on the foregoing and other considerations are possible adverse effects to be prevented by reflected in the record, the Board has determined, such a statement. in accordance with the provisions of § 4(c)(8), that Finally, in passing on an application under § consummation of this proposal can reasonably be 4(c)(8), the Board is required to consider whether expected to produce benefits to the public that conflicts of interest or unsound banking practices outweigh possible adverse effects. Accordingly, might arise from Applicant's entry into the insur- the Board's July 14, 1975 Order is hereby modiance agency business. We find no evidence in the fied as provided herein, and the application to sell record to support a conclusion that lending affili- the limited coverages enumerated above and exates of an applicant would risk making an unde- pressly permitted under the Florida statute is sirable loan for the purpose of selling the customer hereby approved only to the extent specified in any other form of insurance. Regulatory supervi- this Order. In addition, the coverages specified sion of loans made by banking affiliates of Appli- above that are proposed to be sold in Texas, are cant appears to provide a reasonable safeguard hereby approved. This determination supersedes against this possibility. Accordingly, the Board the Board's Order of July 14, 1975, and is condifinds that the adverse effects that might arise from tioned upon Applicant's conduct of these activities possible conflicts of interests are not present in in accordance with all applicable Florida and this application. In addition, a review of the entire Texas insurance laws. This determination is fur- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

686.2 Federal Reserve Bulletin • October 1975 ther subject to the conditions set forth in § 225.4(c) ance direcdy related to extensions of credit by of Regulation Y and to the Board's authority to Barnett's subsidiary banks. require such modification or termination of the In a letter dated July 24, 1975, BarneU noted activities of a holding company or any of its that the recendy enacted Florida statute, cited subsidiaries as the Board finds necessary to assure above, defines "insurance agency activities" as compliance with the provisions and purposes of "the procurement of applications, solicitation, nethe Act and the Board's regulations and orders gotiation, selling, effectuating or servicing of any issued thereunder or to prevent evasion thereof. policy or contract of insurance other than credit The transaction herein approved shall be consum- life insurance and credit disability insurance.'' mated not later than three months after the effec- [Emphasis added.] Thus, credit life and credit tive date of this Order unless such period is ex- disability insurance are not within the scope of tended for good cause by the Board or by the the prohibitions of the recently enacted Florida Federal Reserve Bank of Atlanta pursuant to au- statute. thority hereby delegated. The National Association of Insurance Agents, By order of the Board of Governors, effective Inc. ("NAIA") and the Florida Association of September 22, 1975. Insurance Agents, Inc. ("FAIA"), in separate letters, submitted responses to Barnett's July 24 Voting for this action: Vice Chairman Mitchell and letter. Neither NAIA nor FAIA raised objections Governors Bucher, Holland, Wallich, Coldwell, and Jackson. Absent and not voting: Chairman Burns. to the comments expressed in Barnett's July 24 letter. However, both NAIA and FAIA requested (Signed) THEODORE E. ALLISON, further modification of the Order with respect to [SEAL] Secretary of the Board. the interpretation of the recently enacted Florida Statute and the insurance agency activities which may be conducted thereunder by a bank holding BARNETT BANKS OF FLORIDA. INC., JACKSON- company. VILLE, FLORIDA; AND THE CHASE MANHATTAN The Board has reviewed the July 14 Order in light of the above-mentioned supplemental sub- CORPORATION, NEW YORK, NEW YORK missions, and has decided that it would be desira- Modified Order Granting ble to modify the Order to more specifically clarify Application to Engage in the scope of the permissible insurance agency Certain Insurance Agency Activities activities in terms of the Florida statute. Accordingly, the Board's Order of July 14, 1975, ap- In an Order dated July 14, 1975, the Board of proving the applications of Barnett Banks of Governors of the Federal Reserve System ap- Florida, Inc., Jacksonville, Florida, and The proved the applications by Barnett Banks of Chase Manhattan Corporation, New York, New Florida, Inc., Jacksonville, Florida (''Barnett") York, to engage de novo in certain insurance and The Chase Manhattan Corporation, New agency activities, is hereby modified to read as York, New York ("Chase"), to engage de novo follows.^ in certain insurance agency activities through sub- Barnett Banks of Florida, Inc., Jacksonville, sidiaries of both of the respective holding compa- Florida ("Barnett"), and The Chase Manhattan nies operating primarily in various parts of the Corporation, New York, New York ("Chase"), State of Florida. both bank holding companies within the meaning The Board's Order discussed the proposed inof the Bank Holding Company Act, have applied surance agency activities as they related to the for the Board's approval, under § 4(c)(8) of the mortgage banking activities of the subsidiaries of Act and § 225.4(b)(1) of the Board's Regulation the respective bank holding companies, and as Y, to engage de novo in certain insurance agency viewed within the limitations of the newly enacted activities through subsidiaries of both of the re- Florida statute which prohibits insurance agents spective holding companies operating primarily in and solicitors associated with certain types of various parts of the State of Florida. financial institutions from soliciting, negotiating, Notices of the two subject applications were selling, effectuating, or servicing any policy of insurance, with certain exceptions provided (Section 626.988, Florida Statutes). However, the ^Applicants may engage in insurance agency activities in Board's Order did not explicitly discuss the sale Florida only to the extent that such authority is specifically granted in this Order, approval granted in the July 14 Order of credit life insurance and credit disability insur- notwithstanding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 687 published in the communities to be served by both representing 6.3 per cent of the total deposits in of the respective bank holding companies in ac- commercial banks in the State.^ Barnett proposes cordance with § 225.4(b)(1) of the Board's Regu- to sell the following types of insurance through lation Y. Formal objections to the applications a newly formed subsidiary known as Barnett were made by the National Association of Insur- Banks Insurance Agency, Inc.: ance Agents, Inc. ("NAIA") and the Florida (a) Insurance for Applicant and its banking subsidiaries in- Association of Insurance Agents, Inc. ("FAIA"). cluding physical damage, loss and liability insurance on By Order of March 6, 1973, the Board directed property owned by Applicant or its banking subsidiaries, group insurance for the protection of employees of Applithat public hearings be held on the subject appli- cant and its banking subsidiaries and fidelity insurance on cations before a designated Administrative Law employees of Applicant and its banking subsidiaries. Judge (38 Federal Register 6441). In Addition to (b) Insurance on the life or health of a borrower from one of Applicant's subsidiary banks in order to ensure repaythe intervenors named above, a number of addiment of an extension of credit. tional parties sought and were granted permission (c) Insurance to protect collateral in which Applicant's subto participate in the proceedings. Testimony and sidiary banks have a security interest as a result of an extension of credit by the banks. other evidence in support of, and in opposition (d) Liability insurance on real property mortgaged to Applito, the applications was received in evidentiary cant's subsidiary banks and liability insurance on motor hearings held between June 11, 1973, and June vehicles in which Applicant's subsidiary banks have a 21, 1973. The hearings and related proceedings security interest as a result of an extension of credit, when such insurance is sold in conjunction with insurance prohave been conducted in accordance with the tecting the collateral. Board's Rules of Practice for Formal Hearings (12 (e) Homeowner's insurance with respect to a residence mort- CFR 263). gaged to one of Applicant's subsidiary banks. In a Recommended Decision of November 8, (f) Insurance against loss of securities or other valuables held by Applicant's subsidiary banks for safekeeping or in a 1973, the Administrative Law Judge concluded safe deposit box. that the evidence supported approval of the appli- (g) Life insurance equal to the difference between the maturity cations and recommended that the Board permit value of a deposit plan for periodic deposits in one of Applicant's subsidiary banks over a specified term and the both Applicants to engage in certain insurance balance in the account at the time of the depositor's death. agency activities in those counties in which Ap- (h) Insurance that is otherwise sold as a matter of convenience plicants and their affiliates do not control more than to the purchaser, so long as the premium income from 15 per cent of the bank deposits and/or mortgage sales within this category does not constitute a significant portion of the aggregate insurance premium income of banking business. An exception to this recom- Applicant. mendation of approval was noted for various types of surety bonding. The recommendation was sub- The Chase Manhattan Corporation controls four ject to the requirement that appropriate statements banks (all in New York State) with aggregate be furnished for execution by borrowers to the domestic deposits of approximately $16.9 billion, effect that the customer understands that the representing about 15.5 per cent of total commerplacement of such insurance is not offered as a cial bank deposits in the State.^ Through a noncondition to the grant of a loan, nor as an induce- banking subsidiary. Housing Investment Corporament therefor, and, in addition, that similar insur- tion of Florida ("HIC"), it operates three offices ance not necessarily naming the lending institution in Florida engaged in the origination of loans on as beneficiary may be obtained from independent multifamily and commercial properties. HIC comagents, or in lieu thereof, existing insurance owned menced operations in September 1972, and in its by the borrower may be assigned to the bank. first nine months made loans in the aggregate The Board, having considered the entire record volume of $170 million. Chase proposes to sell, and the exceptions taken to the Recommended through HIC, credit-related property and liability Decision by the various parties and having deter- insurance, surety bonding, credit life, credit accimined that the Administrative Law Judge's find- dent and health insurance, mortgage redemption ings of fact, conclusions, and order, as modified insurance and homeowner's comprehensive poliand supplemented herein, should be adopted as cies. the findings, conclusions, and order of the Board, The principal issues before the Board which now makes its findings as to the facts, its conclu- arise from the subject applications are: (1) whether sions drawn therefrom, and its Order. the insurance agency activities proposed are so Barnett controls 36 banks and ranks as the third largest bank holding company in Florida with 2 Deposit data as of December 31, 1972. aggregate deposits approximating $1.2 billion, 3 Deposit data as of December 31, 1972. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

688.2 Federal Reserve Bulletin • October 1975 closely related to banking or managing or control- to banking or managing or controlling banks as ling banks as to be a proper incident thereto; (2) to be a proper incident thereto. None of the Apwhether performance of the proposed activities can plicants, however, sought permission to operate reasonably be expected to produce benefits to the a general insurance agency as such. Instead, the public, such as greater convenience, increased Applicants listed in their respective applications competition, or gains in efficiency, which out- the specific insurance coverages that their subsidiweigh possible adverse effects, such as undue aries contemplated selling, and for which prior concentration of resources, decreased or unfair Board approval was sought. Adoption of the Law competition, conflicts of interests, or unsound Judge's recommended finding that "selling general banking practices. The Board has previously de- insurance" is an activity closely related to banking termined by Regulation (12 CFR 225.4(a)(9)) would thus confer a broader authority than that ("Insurance Regulation") that the following ac- requested in any of the subject applications and tivities are so closely related to banking or man- would not be an appropriate finding from the aging or controlling banks as to be a proper inci- record of this proceeding. dent thereto.^ Subsequent to the Law Judge's decision in this case, legislation was passed by the Florida legis- (9) acting as insurance agent or broker in offices at which lature prohibiting insurance agents and solicitors the holding company or its subsidiaries are otherwise engaged in business (or in an office adjacent thereto) with respect to associated with certain types of financial instituthe following types of insurance: tions from soliciting, negotiating, selling, effec- (i) Any insurance for the holding company and its subsidi- tuating, or servicing any policy of insurance (Secaries; tion 626.988, Florida Statutes). However, the new (ii) Any insurance that (a) is directly related to an extension of credit by a bank or a bank-related firm of the kind described Florida statute provides narrow exceptions which in this regulation, or (b) is directly related to the provision authorize certain nonbank subsidiaries or affiliates of other financial services by a bank or such a bank-related of bank holding companies to engage to a limited firm, or (c) is otherwise sold as a matter of convenience to the purchaser, so long as the premium income from sales within extent in certain insurance activities. Section 3 of this subdivision (ii)(c) does not constitute a significant portion the statute provides: of the aggregate insurance premium income of the holding company from insurance sold pursuant to this subdivision (ii); Notwithstanding any other provisions of this section, an (iii) Any insurance sold in a community that (a) has a insurance agent or solicitor licensed by the department of population not exceeding 5,000 or (b) the holding company insurance under the provisions of chapter 626, Florida Statutes, demonstrates has inadequate insurance agency facilities. who is affiliated with, under contract with, retained by or owned or controlled directly or indirectly to any degree by Upon reviewing the legislative history of the a bank holding company subsidiary or affiliate, which is not 1970 Amendments to the Bank Holding Company a bank, licensed and operating primarily under Chapter 494, Florida Statutes, may engage in insurance agency activities, Act, the Law Judge concluded that "Congress if permitted by the Board of Governors of the Federal Reserve clearly had the insurance agency business in mind System, but only to the extent that such activities are directly as an enterprise closely related to banking." He related to the extension of credit, specifically real estate mortgage loans, made or brokered by licensees under chapter 494, therefore found that "the business of selling gen- Florida Statutes, and only to the extent necessary to protect eral insurance" was an activity so closely related the real property which is subject to the mortgage loan, against loss or damage. With respect only to residential property consisting of not more than four individual dwelling units, such agent or solicitor may offer a policy affording insurance on the primary residence, appurtenant structures, personal property and personal liability, but excluding any insurance cus- '^The Board's Insurance Regulation was adopted after notice tomarily written under an inland marine form. In addition, such of proposed rule-making and following receipt of comments agent may offer decreasing term life insurance on the life of on the substance of the proposed regulation. The insurance the borrower not to exceed the amount and term of the activities authorized by the regulation are those that are orgamortgage. nizationally and physically integrated into the operations of the bank holding company. The Board's decisions in this area Thus, it appears that under the recently enacted prior to the 1970 Amendments to the Act are generally to the Florida statute. Applicants may engage to a limited same effect (see, for example. Otto Bremer Company, 1959 F.R. BULLETIN 892; First Bank Stock Corporation, 1959 F.R. extent in certain insurance agency activities. Ac- BULLETIN 917; and United Virginia Bancshares, Inc., 1970 cordingly, the Board believes that it may approve F.R. BULLETIN 599). the proposals herein to the extent permitted by Members of both houses of Congress referred to the Board's prior decisions during the legislative debate to the 1970 Florida law. Amendments. A member of the Conference Committee, Sena- No serious contest was made in this proceeding tor Bennett, stated: "The Federal Reserve Board under the existing language of § 4(c)(8) for the past 14 years has concerning the sale of credit life or credit accident approved insurance activities for bank holding companies and and health (disability) insurance, nor are these there was no intent on the part of the Conference Committee coverages encompassed within the prohibitions of to overrule these past decisions." Congressional Record S20645, December 18, 1970. the recently enacted Florida statute. The Board has Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 689 previously determined by Order^ that the sale of permits the sale of decreasing term life insurance these forms of insurance was so closely related on the life of a borrower where such insurance to banking as to be a proper incident thereto within is sold in connection with an extension of credit the meaning of § 225.4(a)(9) of the Insurance by a subsidiary licensed and operating primarily Regulation. The previous findings of the Board under Chapter 494, Florida Statutes, and where concerning such coverages are reaffirmed herein the insurance does not exceed the amount and term since such insurance assures repayment of an ex- of the real estate mortgage loan. Thus, Chase may tension of credit by the holding company system engage in this activity, through HiC, to the extent in the event of death or disability of the borrower. permitted by Florida law.^ Under these conditions, the Board finds that the Both of the Applicants request permission to sell sale of such insurance is directly related to an various forms of insurance that protect the collatextension of credit. However, where life insurance eral in which a subsidiary has a security interest on the borrower exceeds the outstanding balance as a result of an extension of credit. Insofar as of the credit extension as occurs in the sale of these requests pertain to physical damage insurlevel term life insurance in connection with in- ance on real estate mortgaged as security for a stallment loans, no direct relationship exists. Ac- loan originated by Chase's mortgage banking subcordingly, the Board finds that the sale of level sidiary, HIC, they would appear to meet the reterm credit life insurance on other than single quirements contained in the exemption to the repayment loans is not so closely related to banking cently enacted Florida statute, cited above. The as to be a proper incident thereto within the mean- Board has previously found that the sale of such ing of § 225.4(a)(9) of the Insurance Regulation. coverage is directly related to an extension of Thus, Barnett may sell decreasing term credit life credit within the meaning of § 225.4(a)(9)(ii)(a) insurance and credit accident and health (disabil- of the Insurance Regulation. The extension of ity) insurance which is related to extensions of credit on a secured loan is founded upon the value credit by its subsidiary banks, and Chase may sell of the collateral securing the loan. Thus, insurance such insurance through HIC when the insurance is essential from the lender's standpoint to assure is related to extensions of credit by HIC, pursuant that the value of the collateral will not be impaired to the provisions of § 225.4(a)(9) of the Board's by physical damage. The financial nature of the Insurance Regulation and to the extent that such insurance transaction forms an integral function for activity is consistent with and permitted by appli- the borrower as well since the presence or lack cable Florida statutes.® of insurance protecting loan collateral is an essen- Likewise, no serious contest was made in this tial element of the credit evaluation. The evidence proceeding concerning the sale of mortgage re- in this record confirms that the sale of physical demption insurance. The Board has previously damage insurance on real estate is directly related determined by Order^ that the sale of this insurance to a real estate mortgage loan. Thus, Chase may is so closely related to banking as to be a proper engage in this activity. incident thereto within the meaning of § 225.4(a)(9) of the Insurance Regulation. The previous finding of the Board concerning this cover- ^The Board need make no finding that HIC is a subsidiary age is reaffirmed herein since such insurance is licensed and operating primarily under Chapter 494, Florida Statutes, or how HIC will comply with State insurance laws often purchased to assure repayment of an extenwith respect to licensing of agents and soliciting of insurance sion of credit by the holding company system in sales. These are general questions of State law regulating the event of the death of the borrower. As noted insurance agency and mortgage banking activities which are not related to whether performance per se by a bank holding supra, Florida's recently enacted statute expressly company directly or indirectly of a particular activity would be violative of State law. These, therefore, are not the type of State law issues which the Board must consider pursuant to the Supreme Court decision in Whitney National Bank in ^See the Board's Order of January 28, 1974, granting Jefferson Parish v. Bank of New Orleans and Trust Co., 379 approval to Worcester Bancorp, Inc., Worcester, Massachu- U.S. 411 (1965). It is presumed that Chase will comply with setts, to engage de novo in the sale of credit life, credit accident all relevant State licensing and insurance laws, but it is not and health, and mortgage redemption insurance (1974 F.R. the role of the Board to define the diverse requirements of BULLETIN 393). such laws or to enforce compliance with them. If HIC is not ®In view of the recently enacted Florida insurance legislation a properly licensed Chapter 494 subsidiary the exemption in (Section 626.988, Florida Statutes), the Board is without section 3 of the recently enacted Florida insurance statute authority to approve any of Barnett's proposed insurance clearly does not apply, and HIC will need to be properly agency activities, other than the sale of credit life and credit licensed and operating primarily under Chapter 494 in order disability insurance. to engage in the limited insurance agency activities approved ^See note 5, supra. herein. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

690.2 Federal Reserve Bulletin • October 1975 Applicants also seek prior Board approval to sell ary licensed and operating primarily under Chapter liability insurance on real property when a subsid- 494, Florida Statutes, where the extensions of iary has taken a security interest in such property credit involve residential property consisting of not as the result of its extension of credit. The pur- more than four individual dwelling units. chase of liability insurance by individual bor- In determining whether a particular activity is rowers in conjunction with or as part of an insur- a proper incident to banking or managing or conance package with insurance that protects real trolling banks, the 1970 Amendments to the Act property which secures an extension of credit require the Board to "consider whether its perappears, from the evidence of record, to be the formance by an affiliate of a holding company can least costly and most convenient means of obtain- reasonably be expected to produce benefits to the ing such coverage. Moreover, a ''packaged" in- public, such as greater convenience, increased surance policy combining liability insurance with competition, or gains in efficiency, that outweigh insurance relating to physical damage on real possible adverse effects, such as undue concentraproperty purchased from loan proceeds fulfills a tion of resources, decreased or unfair competition, legitimate need of the lender and borrower alike conflicts of interests, or unsound banking pracat the time a loan is made. The Board concludes tices." Each of these factors has been separately from all the evidence of record that the sale of considered by the Board in its determination liability insurance on real property supports the herein. lending transactions of a bank or bank-related firm The public benefits that may reasonably be exin the holding company system when it is sold pected to result from the sale of the coverages to borrowers in conjunction with, or as part of, discussed, supra, appear to be positive in terms an insurance package with insurance protecting of greater convenience to the consumer-borrower. real property, and is a permissible activity within The ability of a borrower to complete an entire § 225.4(a)(9)(ii)(a) of the Insurance Regulation. credit-related insurance transaction at one location However, under the recently enacted Florida stat- (so-called "one-stop shopping") is likely to result ute cited above. Applicants would be prohibited in a considerable savings in time as well as to from selling this type of insurance except in con- eliminate the duplication of certain information nection with extensions of credit by a subsidiary requirements. Permitting Applicants to engage in licensed and operating primarily under Chapter the specified insurance agency activities is also 494, Florida Statutes, where the real property likely to result in the added convenience of comsecuring the extension of credit consists of resi- bining the loan installments and insurance predential property of not more than four individual miums in a single payment. dwelling units. Thus, Chase may engage in this Approval of the subject applications is also activity through HIC, subject to these conditions. likely to result in some increased competition Both of the Applicants have applied for permis- among insurance agents in Florida. While it does sion to sell homeowner's insurance. This insurance not appear that Applicants can introduce more than is to be sold in a package form consisting primarily a minimum of price competition in those insurance of physical damage and liability insurance on a agency markets that they enter, each appears residence along with several other types of cover- capable of injecting strong competition in such ages. The evidence of record indicates the diffi- markets on the basis of service. The added conculty of separately obtaining the several types of venience of completing a credit-insurance transaccoverages contained in a homeowner's policy at tion at one location, discussed supra, is but one a price comparable to that for the package. The of the competitive means whereby Applicants may Board, therefore, concludes that the sale of home- improve an insurance agent's service to the public. owner's insurance supports the lending transac- In addition, certain technical efficiencies in the tions of a bank or bank-related firm in the holding data processing area give both Applicants the company system when it is sold to borrowers as capability of competing effectively with indea means of protecting the collateral in which the pendent agents and the assurance of efficient serbank or bank-related firm has a security interest vice to the public. Based on these and other facts and is a permissible activity within § 225.4(a)(9) of record, it is the Board's judgment that approval of the Insurance Regulation. Accordingly, to the of the subject applications will produce public extent permitted by Florida law. Chase may en- benefits through increased competition among ingage in the sale of homeowner's insurance in surance agents in local Florida markets. connection with extensions of credit by a subsidi- Approval of the subject applications is also Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 691 likely to result in some gains in efficiency. The that Applicants not be permitted to sell insurance policies sold must, by Board Regulation, be di- in markets where their banking subsidiaries hold rectly related to an extension of credit or the more than 15 per cent of the total deposits in provision of other financial services offered by the commercial banks. It is clear that coerced tying Applicants; and furthermore, under the recently is forbidden by § 106 of the Bank Holding Comenacted Florida statute, the property and liability pany Act and under certain conditions by provipolicies also must be directly related to real estate sions of the antitrust laws. Moreover, the evidence mortgage loans extended by a subsidiary licensed of record in this proceeding contains no specific and operating primarily under Chapter 494, instances of a tying arrangement resulting from Florida Statutes. Thus, some savings can be antic- either coerced or "voluntary" tying. Finally, the ipated through the reduction or even elimination record indicates that the market power required of advertising and solicitation expenses as the for the successful practice of tying does not appear agent's only customers will be those who choose to be present. The share of commercial bank the "one-stop" convenience of purchasing insur- deposits that Barnett's banking subsidiaries hold ance at the same time the loan is obtained. Since in local Florida markets does not establish undue insurance agency activities will be conducted from market power in those markets. It appears from existing facilities of the holding company, the the record in this proceeding that there are nuexpense of office overhead will be minimal. Effi- merous banking alternatives in Florida's banking ciencies may also result in the case of Barnett from markets. In addition to commercial banks, borthe increased use of the holding company's com- rowers have access to mortgage loans from savings puter facilities in handling insurance sales and and loan associations and mortgage bankers. Conbilling operations. It is the Board's judgment that sidering these alternative nonbank sources of such efficiencies will result in positive public ben- mortgage credit, together with the numerous comefits in terms of the service the Applicants may mercial banking alternatives available to boroffer their borrower-insureds. rowers, it appears that the dangers of tying are One of the possible adverse effects which the not substantial and should not bar Applicants' sale Congress directed the Board to consider in deter- of insurance in local Florida markets. mining whether a particular activity is a proper The Law Judge recommended in his decision incident to banking or managing or controlling that "appropriate statements be included in all banks is the danger of an undue concentration of insurance application forms furnished by affiliates resources. As noted in the Conference Report of bank holding companies in bold type above the accompanying H.R. 6778, this particular danger applicant's signature to the effect that the customer ''is enhanced when concentrations of power are understands that the placement of such insurance centered about money, credit and other financial is not offered as a condition to the grant of the areas, the common denominators of the econ- loan nor as an inducement therefor. ..." The omy." Since Applicants are proposing to enter this Board notes that similar statements are likely to activity de novo, the Board concludes that the be included in all Truth in Lending disclosures danger of an undue concentration of resources such made pursuant to the Board's Regulation Z with as the Congress feared might arise from bank respect to credit life, accident and health or loss holding company entry into a particular nonbank- of income insurance, and it finds that the evidence ing activity is not present in these applications. in this record is not sufficient to otherwise require Another possible adverse effect which the Con- such language. gress directed the Board to consider in any 4(c)(8) The Law Judge also recommended as a condiapplication concerned the danger of decreased or tion of approval that language be added to insurunfair competition. Intervenors vigorously conance application forms indicating that "similar tested these applications on the ground that perinsurance not necessarily naming the lending inmitting Applicants to sell insurance would lead to stitution as beneficiary may be obtained from incoerced or "voluntary" tying® of insurance to dependent agents or in lieu thereof existing insurextensions of credit by Applicants' subsidiaries. ance owned by the borrower may be assigned to It appears that the Law Judge was concerned with the bank" (page 64). The Board has not required such a possibility and accordingly recommended this specific condition before and the evidence in this record is insufficient to demonstrate that there ®Voluntary tying results not from any coercion placed on are possible adverse effects to be prevented by the borrower by the lender but, rather, from the borrower's presumed desire to enhance the probability of obtaining a loan. such a statement. 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692.2 Federal Reserve Bulletin • October 1975 Finally, in passing on an application under § consummation of these proposals can reasonably 4(c)(8), the Board is required to consider whether be expected to produce benefits to the public that conflicts of interests or unsound banking practices outweigh possible adverse effects. Accordingly, might arise from Applicants' entry into the insur- the Board's July 14, 1975 Order is hereby modiance agency business. We find no evidence in the fied as provided herein, and the applications to record to support a conclusion that lending affili- sell the limited coverages enumerated above and ates of an applicant would risk making an unde- expressly permitted under the Florida statute are sirable loan for the purpose of selling the customer hereby approved only to the extent specified in any other form of insurance. Regulatory supervi- this Order. This determination supersedes the sion of loans made by banking affiliates of the Board's Order of July 14, 1975, and is conditioned Applicants appear to provide a reasonable safe- upon Applicants' conduct of these activities in guard against this possibility. Accordingly, the accordance with all applicable Florida insurance Board finds that the adverse effects that might arise laws. This determination is further subject to the from possible conflicts of interests are not present conditions set forth in § 225.4(c) of Regulation in these applications. In addition, a review of the Y and to the Board's authority to require such entire record indicates that no other unsound modification or termination of the activities of a banking practices would result from Applicants' holding company or any of its subsidiaries as the entry into the sale of the specified insurance cov- Board finds necessary to assure compliance with erages. Therefore, it is the Board's judgment that the provisions and purposes of the Act and the consummation of the proposed transactions would Board's regulations and orders issued thereunder not result in conflicts of interests or unsound or to prevent evasion thereof. The transactions banking practices. herein approved shall be executed not later than It has been suggested by NAIA that, in light three months after the effective date of this Order of the new legislative prohibitions of the Florida unless such period is extended for good cause by statute limiting Applicants' entry into insurance the Board or by the Federal Reserve Banks of agency activities, the public benefits claimed from Atlanta or New York pursuant to delegated ausubject entry should be reexamined. The Board thority . recognizes that some diminution of the public By order of the Board of Governors, effective benefits discussed supra may likely result from a September 22, 1975. more limited form of entry into insurance agency activities. However, on balance, it is the Board's Voting for this action: Vice Chairman Mitchell and Governors Bucher, Holland, Wallich, Coldwell, and view that sufficient public benefits would exist Jackson. Absent and not voting: Chairman Burns. following Applicants' entry into those insurance (Signed) THEODORE E. ALLISON, agency activities now permitted by Florida law as [SEAL] Secretary of the Board. to outweigh any possible adverse effects resulting from such entry. The Board notes that NAIA has objected to the exclusion by the Law Judge of certain testimony FIRST BANC GROUP, INC., of Mr. Harrison Houghton, witness for NAIA. The CREVE COEUR, MISSOURI Board, after examining the record, concludes that the Law Judge correctly exercised his discretion Order Approving Retention of in refusing to admit this testimony since it was St. Louis Computer Center, Inc. cumulative to other testimony in the record and, First Banc Group, Inc., Creve Coeur, Missouri, moreover, irrelevant to many of the issues ina bank holding company within the meaning of volved in these applications. NAIA filed a motion the Bank Holding Company Act, has applied for to exclude Board personnel who were involved in the Board's approval, under section 4(c)(8) of the this hearing from "participating in the making of Act and § 225.4(b)(2) of the Board's Regulation the Board's decision on these applications." Since Y, to retain all of the voting shares of St. Louis such personnel of the Board did not participate Computer Center, Inc., Creve Coeur, Missouri in the decisional process, the issue raised by the ("Company"). Company engages in the activities motion is moot. of providing bookkeeping and data processing Based on the foregoing and other considerations services for the internal operations of Applicant reflected in the record, the Board has determined, and its banking subsidiaries, and storing and proin accordance with the provisions of § 4(c)(8), that cessing other banking, financial, or related eco- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 693 nomic data including performing payroll, accounts the data processing needs of the relevant commureceivable, accounts payable, and general ledger nity. services for others. Such activities have been de- Based upon the foregoing and other considtermined by the Board to be closely related to erations reflected in the record, the Board has banking (12 CFR 225.4(a)(8)). determined that the balance of the public interest Notice of the application, affording opportunity factors the Board is required to consider under for interested persons to submit comments and section 4(c)(8) is favorable. Accordingly, the apviews on the public interest factors, has been duly plication is hereby approved. This determination published (40 Federal Register 31284). The time is subject to the conditions set forth in section for filing comments and views has expired, and 225.4(c) of Regulation Y and to the Board's authe Board has considered all comments received thority to require such modification or termination in the light of the public interest factors set forth of the activities of a holding company or any of in section 4(c)(8) of the Act (12 U.S.C. its subsidiaries as the Board finds necessary to 1843(c)(8)). assure compliance with the provisions and pur- The Board regards the standards of section poses of the Act and the Board's regulations and 4(c)(8) for the retention of shares in a nonbanking orders issued thereunder, or to prevent evasion company to be the same as the standards for a thereof. proposed section 4(c)(8) acquisition. Applicant is By order of the Board of Governors, effective the 22nd largest banking organization in Missouri September 8, 1975. and controls four banks with aggregate deposits of approximately $72 million, representing .5 per Voting for this action: Governors Bucher, Holland, Wallich, Coldwell, and Jackson. Absent and not voting: cent of total deposits in commercial banks in the Chairman Burns and Governor Mitchell. State.^ Company (1974 revenue of $382,000)^ was (Signed) THEODORE E. ALLISON, virtually a failing concern when acquired. Fur- [SEAL] Secretary of the Board. thermore, at the time of acquisition. Applicant's only subsidiary bank performed data processing activities for its internal use. It does not appear, based upon the facts of record, that the acquisition of Company by Applicant had an adverse effect on competition in the area serviced by Company, which is approximated by the northern half of the PAN AMERICAN BANCSHARES, INC., City and County of St. Louis, Missouri. It further MIAMI, FLORIDA does not appear that the retention of Company would have an adverse effect on competition in Modified Order Granting any relevant area. Neither Applicant nor its other Application to Engage in subsidiaries presently engage in the same activities Certain Insurance Agency Activities as Company. Nor is there any evidence indicating In an Order dated July 14, 1975, the Board of that the retention of Company would lead to an Governors of the Federal Reserve System apundue concentration of resources, conflicts of inproved the application by Pan American Bancterests, or unsound banking practices. Furthershares, Inc., Miami, Florida ("Pan American"), more, approval of the application should enable to acquire Atico Insurance Agency, Miami, Company to remain a viable competitor in serving Florida ("Atico Agency"), through a whollyowned subsidiary, Atico Financial Corporation, Miami, Florida, and thereby to engage in certain insurance agency activities at various locations in ^Banking data are as of December 31, 1974, adjusted to reflect bank holding company formations and acquisitions ap- Florida where Pan American or its banking and proved through July 23, 1975. On July 24, 1975, the Reserve nonbanking subsidiaries are otherwise engaged in Bank of St. Louis approved under delegated authority the application by Applicant to acquire Commonwealth Bank, business. Wentzville, Missouri (deposits of $7.2 million). That proposed The Board's Order discussed the proposed inacquisition has not yet bcjn consummated. surance agency activities as they related to the ^Applicant acquired Company on February 9, 1971. The acquisition of Company was permissible on the basis of section mortgage banking activities of Atico Mortgage 4(c)(12) of the Bank Holding Company Act and section Corporation, a subsidiary of Pan American, and 225.4(d) of the Board's Regulation Y. Applicant is now as viewed within the limitations of the newly seeking Board approval under section 4(c)(8) of the Act to retain Company beyond January 1, 1981. enacted Florida statute which prohibits insurance Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

694.2 Federal Reserve Bulletin • October 1975 agents and solicitors associated with certain types Board's Regulation Y to acquire Atico Insurance of financial institutions from soliciting, negotiat- Agency, Miami, Florida ("Atico Agency"), ing, selling, effectuating, or servicing any policy through a wholly-owned subsidiary, Atico Finanof insurance, with certain exceptions provided cial Corporation, Miami, Florida ("Atico"), and (Section 626.988, Florida Statutes). However, the thereby to engage in certain insurance agency Board's Order did not discuss the sale of credit activities at various locations in Florida where Pan life insurance and credit disability insurance di- American or its banking and nonbanking subsidirectly related to extensions of credit by Pan aries are otherwise engaged in business. American's subsidiary banks. Notice of the application was published in the In a letter dated July 24, 1975 from Barnett communities to be served in accordance with Banks of Florida, Inc., Jacksonville, Florida, a § 225.4(b)(2) of the Board's Regulation Y. Formal bank holding company which was the subject of objections to the application were made by the two Board Orders dated July 14, 1975, which National Association of Insurance Agents, Inc. similarly dealt with insurance agency activities in ("NAIA") and the Florida Association of Insur- Florida, it was noted that the recently enacted ance Agents, Inc. ("FAIA"). By Order of March Florida statute, cited above, defines "insurance 6, 1973, the Board directed that public hearings agency activities" as "the procurement of appli- be held on the subject application before a desigcations, solicitation, negotiation, selling, effec- nated Administrative Law Judge (38 Federal Regtuating or servicing of any policy or contract of ister 6441). In addition to the intervenors named insurance other than credit life insurance and above, a number of additional parties sought and credit disability insurance.'' [Emphasis added.] were granted permission to participate in the pro- Thus, credit life and credit disability insurance are ceeding. Testimony and other evidence in support not within the scope of the prohibitions of the of, and in opposition to, the application was rerecently enacted Florida statute. ceived in evidentiary hearings held between June The National Association of Insurance Agents, 11, 1973, and June . 21, 1973. The hearings and Inc. ("NAIA") and the Florida Association of related proceedings have been conducted in ac- Insurance Agents, Inc. ("FAIA"), in separate cordance with the Board's Rules of Practice for letters, submitted responses to Barnett's July 24 Formal Hearings (12 CFR 263). letter. Neither NAIA nor FAIA raised objections In a Recommended Decision of November 8, to Barnett's July 24 letter. However, both NAIA 1973, the Administrative Law Judge concluded and FAIA requested further modification of the that the evidence supported approval of the appli- Orders with respect to the insurance agency activcation and recommended that the Board permit ities which may be conducted pursuant to the Applicant to engage in certain insurance agency recently enacted Florida statute. activities in those counties in which Applicant and The Board has reviewed the July 14 Order in its affiliates do not control more than 15 per cent light of the above-mentioned supplemental subof the bank deposits and/or mortgage banking missions, and has decided that it would be desirabusiness. An exception to the recommendation of ble to modify the Order to more specifically clarify approval was noted for various types of surety the scope of the permissible insurance agency bonding. The recommendation was subject to the activities. Accordingly, the Board's Order of July requirement that appropriate statements be fur- 14, 1975, approving the application of Pan Amernished for execution by borrowers to the effect ican Bancshares, Inc., Miami, Florida, to acquire that the customer understands that the placement Atico Insurance Agency, Miami, Florida, and of such insurance is not offered as a condition to thereby to engage in certain insurance agency the grant of a loan, nor as an inducement therefor, activities, is hereby modified to read as follows.^ and, in addition, that similar insurance not neces- Pan American Bancshares, Inc., Miami, Florida sarily naming the lending institution as beneficiary ("Pan American"), a bank holding company may be obtained from independent agents, or in within the meaning of the Bank Holding Company lieu thereof, existing insurance owned by the bor- Act, has applied for the Board's approval under rower may be assigned to the bank. § 4(c)(8) of the Act and § 225.4(b)(2) of the The Board having considered the entire record, including the transcript, exhibits, rulings, all briefs and memoranda filed in connection with the hear- ^Applicant may engage in insurance agency activities only ing and the Recommended Decision, findings of to the extent that such authority is specifically granted in this Order, approval granted in the July 14 Order notwithstanding. fact, and conclusions of law filed by the Adminis- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 695 trative Law Judge, together with the exceptions ling banks as to be a proper incident thereto; (2) taken thereto, and having determined that the whether performance of the proposed activities can subject application should be approved to the ex- reasonably be expected to produce benefits to the tent permitted by State law, all findings of the public, such as greater convenience, increased Administrative Law Judge inconsistent with the competition, or gains in efficiency, which outfindings and determination herein are hereby va- weigh possible adverse effects, such as undue cated. The Board now makes the following find- concentration of resources, decreased or unfair ings of fact and conclusions of law. competition, conflicts of interests, or unsound Pan American Bancshares, Inc., ranks as the banking practices. The Board has previously detwelfth largest bank holding company in Florida termined, by Regulation (12 CFR 225.4 (a)(9)) where it has nine subsidiary banks with aggregate ("Insurance Regulation") that the following acdeposits of approximately $436.9 million, repre- tivities are so closely related to banking or mansenting about 2.2 per cent of total commercial aging or controlling banks as to be a proper incibank deposits in the State.^ Through a nonbanking dent thereto.^ subsidiary, Atico Mortgage Corporation, it en- (9) acting as insurance agent or broker at offices at which gages in the activity of mortgage banking. In 1972, the holding company or its subsidiaries are otherwise engaged in business (or in an office adjacent thereto) with respect to Atico serviced a mortgage loan portfolio of apthe following types of insurance: proximately $425 million. Pan American seeks (i) Any insurance for the holding company and its subsidiapproval for Atico Agency to sell the following aries; (ii) Any insurance that (a) is directly related to an extension types of insurance related to the banking and of credit by a bank or a bank-related firm of the kind described nonbanking activities of Pan American: (a) home- in this regulation, or (b) is directly related to the provision owner's; (b) dwelling policies; (c) multiperil poli- of other financial services by a bank or such a bank-related firm, or (c) is otherwise sold as a matter of convenience to cies; (d) physical hazard; (e) builder's risk; (f) the purchaser, so long as the premium income from sales within automobile, watercraft, and aircraft liability and this subdivision (ii)(c) does not constitute a significant portion of the aggregate insurance premium income of the holding physical damage; (g) credit life, accident, and company from insurance sold pursuant to this subdivision(ii); health coverage; (h) mortgage life insurance; (i) (iii) Any insurance sold in a community that (a) has a accidental death and dismemberment; (j) reducing population not exceeding 5,000 or (b) the holding company demonstrates has inadequate insurance agency facilities. or level term life insurance; (k) various types of general insurance with respect to properties owned Upon reviewing the legislative history of the or leased by Pan American and subsidiaries and 1970 Amendments to the Bank Holding Company fidelity insurance for its employees; (I) miscel- Act, the Law Judge concluded that "Congress laneous insurance including lost instrument bonds clearly had the insurance agency business in mind and surety bonds; (m) convenience insurance as an enterprise closely related to banking." He, within the confines of Regulation Y. Such insur- therefore, found that "the business of selling genance will be sold in Miami, Miami Beach, Hia- eral insurance" was an activity so closely related leah. Coral Gables, Fort Lauderdale, Oakland to banking or managing or controlling banks as Park, Lauderhill, Orlando, Tampa, Sarasota, De- to be a proper incident thereto. However, subse- Bary, Ormond Beach, Melbourne, Largo, and quent to the Law Judge's decision in this case. West Palm Beach areas in which Pan American subsidiaries have offices.^ The principal issues before the Board which "•The Board's Insurance Regulation was adopted after notice of proposed rule-making and following receipt of comments arise from the subject application are: (1) whether on the substance of the proposed regulation. The insurance the insurance agency activities proposed are so activities authorized by the regulation are those that are organizationally and physically integrated into the operations of closely related to banking or managing or controlthe bank holding company. The Board's decisions in this area prior to the 1970 Amendments to the Act are generally to the same effect (see, for example. Otto Bremer Company, 1959 F.R. BULLETIN 892; First Bank Stock Corporation, 1959 F.R. 2Deposit data as of December 31, 1972. BULLETIN 917; and United Virginia Bancshares, Inc., 1970 •^By Order dated May 14, 1975, the Board approved the F.R. BULLETIN 599). application of Pan American Bancshares, Inc., to merge with Members of both houses of Congress referred to the Board's General Financial Systems, Inc., Riviera Beach, Florida, under prior decisions during the legislative debate to the 1970 the title and charter of Pan American, pursuant to § 3(a)(5) Amendments. A member of the Conference Committee, Senaof the Bank Holding Company Act. The instant proposal to tor Bennett, stated: "The Federal Reserve Board under the engage in certain insurance agency activities is limited to those existing language of § 4(c)(8) for the past 14 years has locations which were in the record at the time of the evidentiary approved insurance activities for bank holding companies and hearings and were considered by the Administrative Law there was no intent on the part of the Conference Committee Judge, and does not include any of the locations acquired to overrule these past decisions." Congressional Record through the merger with General Financial Systems, Inc. S20645, December 18, 1970. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

696.2 Federal Reserve Bulletin • October 1975 a bill was passed by the Florida legislature pro- the recently enacted Florida statute. The Board has hibiting insurance agents and solicitors associated previously determined by Order^ that the sale of with certain types of financial institutions from these forms of insurance was so closely related soliciting, negotiating, selling, effectuating, or to banking as to be a proper incident thereto within servicing any policies of insurance (Section the meaning of §225.4(a)(9) of the Insurance 626.988, Florida Statutes). An exception to this Regulation. The previous findings of the Board prohibition is authorized under Florida law for concerning such coverages are reaffirmed herein those agencies which were under the same owner- since such insurance assures repayment of an exship and control of a financial institution and which tension of credit by the holding company system were in existence and engaged in insurance agency in the event of death or disability of the borrower. activities as of April 2, 1974. Although Agency Under these conditions, the Board finds that the itself was engaged in a broad range of insurance sale of such insurance is directly related to an activities on April 2, 1974, Applicant divested extension of credit. However, where life insurance itself of all ownership of Agency in August, 1973, on the borrower exceeds the extent of the outin order to facilitate the processing of an applica- standing balance of the credit extension as occurs tion then pending before the Board to acquire in the sale of level term life insurance in connec- Atico Financial Corporation. It appears that the tion with installment loans, no direct relationship subsequent passage of the Florida statute cited exists. Accordingly, the Board finds that the sale above during a period when ownership of Agency of level term credit life insurance on other than was vested in a third party under agreement to single payment loans is not so closely related to repurchase caused Applicant to lose any grandfa- banking as to be a proper incident thereto within ther privileges it might have under the Florida the meaning of § 225.4(a)(9) of the Insurance statute. The new Florida statute also provides Regulation. Thus, Pan American may sell denarrow exceptions which authorize certain non- creasing term credit life insurance and credit accibank subsidiaries or affiliates of bank holding dent and health (disability) insurance which is companies to engage to a limited extent in certain related to extensions of credit by its bank and insurance agency activities. nonbank subsidiaries, pursuant to the provisions Section 3 of the statute provides: of § 225.4(a)(9) of the Board's Insurance Regulation and to the extent that such activity is consist- Notwithstanding any other provision of this section, an insurance agent or solicitor licensed by the department of ent with and permitted by applicable Florida statinsurance under the provisions of Chapter 626, Florida Stat- utes. utes, who is affiliated with, under contract with, retained by or owned or controlled directly or indirectly to any degree Likewise, no serious contest was made in this by a bank holding company subsidiary or affiliate, which is proceeding concerning the sale of mortgage renot a bank, licensed and operating primarily under Chapter 494, Florida Statutes, may engage in insurance agency activi- demption insurance. The Board has previously ties, if permitted by the Board of Governors of the Federal determined by Order® that the sale of this insurance Reserve System, but only to the extent that such activities are is so closely related to banking as to be a proper directly related to the extension of credit, specifically real estate mortgage loans, made or brokered by licensees under Chapter incident thereto within the meaning of 494, Florida Statutes, and only to the extent necessary to §225.4(a)(9) of the Insurance Regulation. The protect the real property which is subject to the mortgage loan, previous finding of the Board concerning this covagainst loss or damage. With respect only to residential property consisting of not more than four individual dwelling units, erage is reaffirmed herein since such insurance is such agent or solicitor may offer a policy affording insurance often purchased to assure repayment of an extenon the primary residence, appurtenant structures, personal property and personal liability, but excluding any insurance sion of credit by the holding company system in customarily written under an inland marine form. In addition, the event of the death of the borrower. As noted such agent may offer decreasing term life insurance on the supra, Florida's recently enacted statute expressly life of the borrower not to exceed the amount and term of the mortgage. permits the sale of decreasing term life insurance on the life of a borrower where such insurance Accordingly, it is the Board's view that Appliis sold in connection with an extension of credit cant is not entitled to grandfather privileges under the Florida statute and may, therefore, only engage in the sale of insurance to the limited extent permitted by Florida law. ••^See the Board's Order of January 28, 1974, granting No serious contest was made in this proceeding approval to Worcester Bancorp, Inc., Worcester, Massachuconcerning the sale of credit life or credit accident setts, to engage de novo in the sale of credit life, credit accident and health, and mortgage redemption insurance (1974 F.R. and health (disability) insurance, nor are these BULLETIN 393). coverages encompassed within the prohibitions of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 697 by a subsidiary licensed and operating primarily the borrower as well since the presence or lack under Chapter 494, Florida Statutes, and where of insurance protecting loan collateral is an essenthe insurance does not exceed the amount and term tial element of the credit evaluation. The evidence of the real estate mortgage loan. Thus, Applicant in this record confirms that the sale of physical may engage in this activity subject to the condi- damage insurance on real estate is directly related tions specified by Florida law.^ to a real estate mortgage loan. Accordingly, Ap- Applicant requests permission to sell various plicant may engage in this activity subject to the forms of insurance that protect the collateral in limitations imposed by Florida law. which a subsidiary has a security interest as a result Applicant seeks prior Board approval to sell of an extension of credit. Insofar as this request liability insurance on real property when a subsidpertains to physical damage insurance on real iary has taken a security interest in such property estate mortgaged as security for a loan originated as the result of its extension of credit. The purby a subsidiary of Applicant which is licensed and chase of liability insurance by individual boroperating primarly under Chapter 494, Florida rowers in conjunction with or as part of an insur- Statutes, it would appear to meet the requirements ance package with insurance that protects real contained in the exemption to the recently enacted property which secures an extension of credit Florida statute cited above. The Board has preappears, from the evidence of record, to be the viously found that the sale of such coverage is least costly and most convenient means of obtaindirectly related to an extension of credit within ing such coverage. Moreover, a "packaged" inthe meaning of§ 225.4(a)(9)(ii)(a) of the Insurance surance policy combining liability insurance with Regulation. The extension of credit on a secured insurance relating to physical damage on real loan is founded upon the value of the collateral property purchased from loan proceeds fulfills a securing the loan. Thus, insurance is essential legitimate need of the lender and borrower alike from the lender's standpoint to assure that the at the time a loan is made. The Board concludes value of the collateral will not be impaired by from all the evidence of record that the sale of physical damage. The financial nature of the inliability insurance on real property supports the surance transaction forms an integral function for lending transactions of a bank or bank-related firm in the holding company system when it is sold to borrowers in conjunction with, or as part of, ^Protestants contend that the proper interpretation of the Florida Statute requires that the insurance be sold by the an insurance package with insurance protecting Chapter 494 subsidiary itself, and not by a subsidiary or affiliate real property and is, therefore, a permissible acof the Chapter 494 subsidiary. This proposed interpretation tivity within §225.4(a)(9)(ii)(a) of the Insurance is far from clear on the face of the statute. In fact, a literal reading of the statute would appear to support an interpreatation Regulation. However, under the recently enacted opposite to that proffered by Protestants. Furthermore, the Florida statute cited above. Applicant would be Board does not believe that there is any substantive distinction between the Chapter 494 subsidiary itself selling the insurance, prohibited from selling this type of insurance exor a subsidiary or affiliate of the Chapter 494 subsidiary cept in connection with extensions of credit origiengaging only in the sale of insurance on behalf of, and in nated by a subsidiary licensed and operating priconnection with, extensions of credit by the Chapter 494 subsidiary. marily under Chapter 494, Florida Statutes, and Moreover, the Board need make no finding as to whether except for those instances where the real property Atico Mortgage Corporation or Atico Financial Corporation securing an extension of credit consists of resiis licensed and operating primarily under Chapter 494, or how Atico Insurance Agency will comply with State insurance laws dential property of not more than four individual with respect to the licensing of agents and soliciting of insurdwelling units. To the extent that Applicant comance sales as Protestants suggest. These are general questions of State law regulating insurance agency activities per se and plies with these conditions,it may engage in this mortgage banking activities which are not related to whether activity. performance by a bank holding company directly or indirectly Applicant has applied for permission to sell of a particular activity would be violative of State law. Consequently, these are not the type of State law issues which the homeowner's insurance. This insurance is to be Board must consider pursuant to the Supreme Court decision sold in a package form consisting primarily of in Whitney National Bank in Jefferson Parish v. Bank of New Orleans and Trust Co., 379 U.S. 411 (1965). It is presumed physical damage and liability insurance on a resithat Pan American will comply with all relevant State licensing dence along with several other types of coverages. and insurance laws, but it is not the role of the Board to define The evidence of record indicates the difficulty of the diverse requirements of such laws or to enforce compliance with them. If Atico is not a properly licensed Chapter 494 separately obtaining the several types of coverages subsidiary (or the affiliate or subsidiary thereof) the exemption contained in a homeowner's policy at a price in section 3 of the recently enacted Florida insurance statute clearly does not apply, and Atico will not be able to engage comparable to that for the package. The Board in the limited insurance agency activities approved herein. concludes that the sale of homeowner's insurance Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

698.2 Federal Reserve Bulletin • October 1975 supports the lending transactions of a bank or minimum of price competition in those insurance bank-related firm in the holding company system agency markets that it enters, it appears capable when it is sold to borrowers as a means of pro- of injecting strong competition in such markets on tecting the collateral in which the bank or bank- the basis of service. The added convenience of related firm has a security interest. Accordingly, completing a credit-insurance transaction at one this is a permissible activity within § 225.4(a)(9) location, discussed supra, is but one of the comof the Insurance Regulation. Pursuant to the re- petitive means whereby Applicant may improve cently enacted Florida statute. Applicant may en- an insurance agent's service to the public. In gage in this activity in connection with extensions addition, certain technical efficiencies in the data of credit by a subsidiary licensed and operating processing area give Applicant the capability of primarily under Chapter 494, Florida Statutes, so competing effectively with independent agents and long as the policies sold exclude any insurance the assurance of efficient service to the public. customarily written under an inland marine form Based on these and other facts of record, it is the and are sold only in connection with real estate Board's judgment that approval of the subject mortgage loans which involve residential property application will produce public benefits through consisting of not more than four individual dwell- increased competition among insurance agents in ing units.® local Florida markets. In determining whether a particular activity is a Approval of the subject application is also likely proper incident to banking or managing or con- to result in some gains in efficiency. The policies trolling banks, the 1970 Amendments to the Act sold must, by Board Regulation, be directly related require the Board to "consider whether its per- to an extension of credit or the provision of other formance by an affiliate of a holding company can financial services offered by Applicant; and, furreasonably be expected to produce benefits to the thermore, under the recently enacted Florida statpublic, such as greater convenience, increased ute, the property and liability policies also must competition, or gains in efficiency, that outweigh be directly related to real estate mortgage loans possible adverse effects, such as undue concentramade by a subsidiary licensed and operating prition of resources, decreased or unfair competition, marily under Chapter 494, Florida Statutes. Thus, conflicts of interests, or unsound banking pracsome savings can be anticipated through the retices." Each of these factors has been separately duction or even elimination of advertising and considered by the Board in its determination solicitation expenses as the agent's customers will herein. only be those who choose the ''one-stop" con- The public benefits that may reasonably be ex- venience of purchasing insurance at the same time pected to result from the sale of the coverages the loan is obtained. Since the insurance agency discussed, supra, appear to be positive in terms activities will be conducted from existing facilities of greater convenience to the consumer-borrower. of the holding company, the office overhead will The ability of a borrower to complete an entire be minimal. Efficiencies may also result from use credit-related insurance transaction at one location of the holding company's computer facilities in (so-called "one-stop shopping") is likely to result handling sales and billing operations. It is the in a considerable savings in time as well as elimi- Board's judgment that such efficiencies will result nate the duplication of certain information rein positive public benefits in terms of the service quirements. Permitting Applicant to engage in the Applicant may offer its borrower-insureds. specified insurance agency activities is also likely One of the possible adverse effects which the to result in the added convenience of combining Congress directed the Board to consider in deterthe loan installments and insurance premiums in mining whether a particular activity is a proper a single payment. incident to banking or managing or controlling Approval of the subject application is also likely banks is the danger of an undue concentration of to result in some increased competition among resources. As noted in the Conference Report insurance agents in Florida. While it does not accompanying H.R. 6778, this particular danger appear that Applicant can introduce more than a "is enhanced when concentrations of power are centered about money, credit and other financial areas, the common denominators of the econ- ^In view of the recently enacted Florida insurance legislation (Section 626.988, Florida Statutes), the Board is unable to omy." Since Applicant's proposal involves approve any insurance agency activities for which Pan Ameri- entering this activity by means of a very can applied other than those already specifically discussed herein. limited acquisition, the Board concludes that the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 699 danger of an undue concentration of resources such Board notes that similar statements are likely to as the Congress feared might arise from bank be included in all Truth in Lending disclosures holding company entry into a particular nonbank- made pursuant to the Board's Regulation Z with ing activity is not present in this application. respect to credit life, accident and health or loss Another possible adverse effect which the Con- of income insurance, and it finds that the evidence gress directed the Board to consider in any in this record is not sufficient to otherwise require § 4(c)(8) application concerned the danger of de- such language. creased or unfair competition. Intervenors vi- The Law Judge also recommended as a condigorously contested this application on the ground tion of approval that language be added to insurthat permitting Applicant to sell insurance would ance application forms indicating that "similar lead to coerced or "voluntary" tying^ of insurance insurance not necessarily naming the lending into extensions of credit by Applicant's subsidiaries. stitution as beneficiary may be obtained from in- It appears that the Law Judge was concerned with dependent agents or in lieu thereof existing insursuch a possibility and accordingly recommended ance owned by the borrower may be assigned to that Applicant not be permitted to sell insurance the bank" (page 64). The Board has not required in markets where its banking subsidiaries hold this specific condition before and the evidence in more than 15 per cent of the total deposits in this record is insufficient to demonstrate that there commercial banks. It is clear that coerced tying are possible adverse effects to be prevented by is forbidden by § 106 of the Bank Holding Com- such a statement. pany Act and under certain conditions by provi- Finally, in passing on an application under sions of the antitrust laws. Moreover, the evidence § (c)(8), the Board is required to consider whether of record in this proceeding contains no specific conflicts of interest or unsound banking practices instances of a tying arrangement resulting from might arise from Applicant's entry into the insureither coerced or "voluntary" tying. Finally, the ance agency business. We find no evidence in the record indicates that the market power required record to support a conclusion that lending for the successful practice of tying does not appear affiliates of an applicant would risk making an to be present. The share of commercial bank undesirable loan for the purpose of selling the deposits that Applicant's banking subsidiaries hold customer any other form of insurance. Regulatory in local Florida markets does not establish undue supervision of loans made by banking affiliates of market power in those markets. It appears from Applicant appears to provide a reasonable safethe record in this proceeding that there are nu- guard against this possibility. Accordingly, the merous banking alternatives in Florida's banking Board finds that the adverse effects that might arise markets. In addition to commercial banks, bor- from possible conflicts of interests are not present rowers have access to mortgage loans from savings in this application. In addition, a review of the and loan associations and mortgage bankers. Con- entire record indicates that no other unsound sidering these alternative nonbank sources of banking practices would result from Applicant's mortgage credit, together with the numerous com- entry into the sale of the specified insurance covmercial banking alternatives available to bor- erages. Therefore, it is the Board's judgment that rowers, it appears that the dangers of tying are consummation of the proposed transaction would not substantial and should not bar Applicant's sale not result in conflicts of interests or unsound of insurance in local Florida markets. banking practices. The Law Judge recommended in his decision It has been suggested by NAIA that, in light that "appropriate statements be included in all of the new legislative prohibitions of the Florida insurance application forms furnished by affiliates statute limiting Applicant's entry into insurance of bank holding companies in bold type above the agency activities, the public benefits claimed from applicant's signature to the effect that the customer subject entry should be reexamined. The Board understands that the placement of such insurance recognizes that some diminution of the public is not offered as a condition to the grant of the benefits discussed supra may likely result from a loan nor as an inducement therefor. . . ." The more limited form of entry into insurance agency activities. However, on balance, it is the Board's view that suflficient public benefits would exist ^Voluntary tying results not from any coercion placed on following Applicant's entry into those insurance the borrower by the lender but, rather, from the borrower's agency activities now permitted by Florida law as presumed desire to enhance the probability of obtaining a loan. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

700.2 Federal Reserve Bulletin • October 1975 to outweigh any possible adverse effects resulting ORDER UNDER SECTION from such entry. 25 OF FEDERAL RESERVE ACT The Board notes that NAIA has objected to the exclusion by the Law Judge of certain testimony EXCHANGE NATIONAL BANK OF CHICAGO, of Mr. Harrison Houghton, witness for NAIA. The CHICAGO, ILLINOIS Board, after examining the record, concludes that Order Approving Acquisition the Law Judge correctly exercised his discretion of Shares of Japhet Bank Ltd. in refusing to admit this testimony since it was cumulative to other testimony in the record and, Exchange National Bank of Chicago, Chicago, moreover, irrelevant to many of the issues in- Illinois ("ENB"), has applied for the Board's volved in this application. NAIA filed a motion approval under Section 25 of the Federal Reserve to exclude Board personnel who were involved in Act to acquire up to 25 per cent of the shares this hearing from ''participating in the making of of Japhet Bank Ltd., Tel Aviv, Israel ("JB"). the Board's decision on these applications." Since ENB would acquire and hold shares of JB as part such personnel of the Board did not participate of a transaction involving the transfer to JB of in the decisional process, the issue raised by the the assets and liabilities of ENB's two branches motion is moot. in Israel. Based on the foregoing and other considerations The Board has received objections to consumreflected in the record, the Board has determined, mation of the proposed transaction from a group in accordance with the provisions of § 4(c)(8), that of five directors of ENB (hereinafter collectively consummation of this proposal can reasonably be referred to as the "Protestants") who are also expected to result in benefits to the public that shareholders and directors of Exchange Internaoutweigh possible adverse effects. Accordingly, tional Corporation, Chicago, Illinois, the parent the Board's July 14, 1975 Order is hereby modi- bank holding company of ENB. The Board has fied as provided herein, and the application to sell considered all requests and issues raised by Prolimited coverage enumerated above and expressly testants and the information submitted in support permitted under the Florida statute is hereby ap- thereof, and has determined, on the basis of the proved only to the extent specified in this Order. record, that action on ENB's application at this This determination supersedes the Board's Order time is in the public interest. of July 14, 1975, and is conditioned upon Appli- On the basis of the record, the application is cant's conduct of these activities in accordance approved for reasons set forth in the Board's with all applicable Florida insurance laws. This Statement, which will be released at a later date. determination is further subject to the conditions The Board's approval is granted subject to the set forth in § 225.4(c) of Regulation Y and to condition that the dollar amount of the investment the Board's authority to require such modification will not exceed the maximum amount specified or termination of the activities of a holding com- by ENB in its application. pany or any of its subsidiaries as the Board finds By order of the Board of Governors, effective necessary to assure compliance with the provisions September 15, 1975. and purposes of the Act and the Board's regulations and orders issued thereunder or to prevent Voting for this action: Chairman Burns and Governors Mitchell, Bucher, Holland, Wallich, and Coldwell. evasion thereof. The transaction herein approved Absent and not voting: Governor Jackson. shall be executed not later than three months after (Signed) THEODORE E. ALLISON, the effective date of this Order unless such period [SEAL] Secretary of the Board. is extended for good cause by the Board or by the Federal Reserve Bank of Atlanta pursuant to delegated authority. Statement By order of the Board of Governors, effective Exchange National Bank of Chicago, Chicago, September 22, 1975. Illinois ("ENB"), has applied for the Board's approval, under section 25 of the Federal Reserve Voting for this action: Vice Chairman Mitchell and Governors Bucher, Holland, Wallich, Coldwell, and Act, to acquire up to 25 per cent of the shares Jackson. Absent and not voting: Chairman Burns. of Japhet Bank Ltd., Tel Aviv, Israel C'JB"). ENB would acquire and hold shares of JB as part (Signed) THEODORE E. ALLISON, of a transaction involving the transfer to JB of [SEAL] Secretary of the Board. the assets and liabilities of ENB's two branches Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 701 in Israel. ENB is at present the only United States exchanging its branch assets and liabilities for bank with branches in Israel. stock of JB, ENB has agreed that it will pay JB Under section 25 of the Federal Reserve Act the amount of all branch loans transferred to JB (12 U.S.C. 601), the Board has the power to which are uncollectible. Protestants have claimed, approve or reject, in whole or in part, an applica- on the basis of counsel's opinion, that the proposed tion by a national banking association to acquire transaction, and, in particular, the guarantee of shares of a foreign bank if for any reason it deems branch loans, could cause default by ENB under the granting of such application to be inexpedient. an existing capital note borrowing agreement, Consistent with its supervisory and regulatory re- which in turn could cause a default under an sponsibilities under the Federal Reserve Act, the existing loan agreement involving EIC. Protestants Board in acting upon any such application consid- also claimed that such a guarantee could cause ers, among other relevant factors, the financial and ENB to violate the provision of the National Bank managerial resources and future prospects of the Act that prohibits a national bank from incurring national bank and foreign bank concerned, the liabilities in excess of paid-in capital plus 50 per types of financial and nonfinancial activities en- cent of unimpaired surplus (12 U.S.C. 82). gaged in by the foreign bank and the risks asso- In applications of this type, the Board normally ciated with such activities, the degree of control assumes that the Applicant has taken the necessary that the national bank will have over the foreign steps to ensure that contractual relations with third bank, the legal or perceived moral responsibility parties will not be violated by the proposal in the national bank will have for the financial condi- question. Where, as in this case, however, there tion and operations of the foreign bank, and the is put in issue the possible violation of certain effects of the proposal in promoting the foreign agreements and such a violation may harm the commerce of the United States. Where, as in this Applicant's financial condition, the Board seeks case, the national bank involved is also a subsidi- to determine whether the Applicant has taken the ary of a bank holding company, the Board, con- necessary prudent steps to guard against the possisistent with its supervisory responsibilities under bility that agreements may be deemed violated and the Bank Holding Company Act of 1956, as whether the proposal is so clearly violative of amended (12 U.S.C. 1841 et seq.) and the Finan- existing agreements as to expose the Applicant to cial Institutions Supervisory Act of 1966, as unnecessary liabilities. In the Board's judgment, amended (12 U.S.C. 1818(b)), will also consider it appears that Applicant has considered the effect the effect of the transaction on the financial and of the proposed transaction on outstanding agreemanagerial resources of the parent bank holding ments, has secured waivers when deemed necescompany. sary by its counsel, and has obtained an opinion The Board has received objections to consum- of counsel that waiver is not necessary with respect mation of the proposed transaction from a group to the capital note agreement in question. This of five directors of ENB (hereinafter collectively latter opinion appears to be a reasonable assessreferred to as the "Protestants") who are also ment of the legal effect of the proposed transaction shareholders and directors of Exchange Interna- on the outstanding note agreement. Consequently, tional Corporation, Chicago, Illinois C'EIC"), the the Board has determined, on the basis of inforparent bank holding company of ENB. Protestants mation in the record, that Applicant has acted have raised a number of issues concerning this reasonably to ensure that the proposed transaction application and have urged that Board action be will not violate its outstanding agreements with delayed pending resolution of those issues. third parties. Protestants have claimed that, in general, the With respect to Protestants' claim that the guarproposed transaction would have an adverse im- antee of branch loans may cause a violation of pact on the financial resources of both ENB and the National Bank Act, the Board believes that EIC. They have sought to substantiate this claim 12 U.S.C. 82 and the Comptroller's interpretations by questioning several aspects of the proposed cited in connection therewith^ were not meant to transaction that, in their judgment, pose potentially include in the computation under that section the serious threats of loss or financial harm to ENB and EIC. Specifically, the Protestants have noted that in ^ 12 CFR 7.7000 and 7.7519 (1975). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

702.2 Federal Reserve Bulletin • October 1975 total amount of loans guaranteed pursuant to a sale present their analysis to the Board.^ It appears of branch assets. However, even if the total from information in the record that delay in acting amount of loans at ENB's Israeli branches must on this application could cause some harm to be included in ENB's outstanding indebtedness ENB's operations in Israel.^ The Board believes under 12 U.S.C. 82, it appears from the record that there is suflficent information in the record to that ENB would not be in violation of 12 U.S.C. act on the application at this time and that any 82. further delay is not warranted. Furthermore, it The remaining issues raised by Protestants does not appear from the record that delay would question the fairness of the transaction to ENB result in significant additional information being and EIC and specifically whether the management presented to the Board. of ENB took into account tax, labor, and other Based on the foregoing and other considerations specified liabilities that must be considered by reflected in the record, the Board has determined management in the course of any business trans- that the application should be approved. The action of this type. The Board notes, in this regard, Board's approval is granted subject to the condithat the transaction in question was approved by tion that the dollar amount of the investment not the boards of directors of both ENB and EIC, at exceed the maximum amount specified by ENB special meetings at which Protestants were present in its application. and registered their disapproval. In the Board's judgment, the proposed transac- September 22, 1975 tion is not expansionary because no additional investment abroad is required. While ENB will 2Protestants claim that, as directors of EIC and ENB, they apparendy have a contingent liability for uncol- have not been dealt with fairly by Applicant. Specifically, they claim that they were not informed of negotiations leading up lectible loans sold to JB, it does not appear that to the agreement with JB and that they were not afforded the liability would be significant based on the adequate time to examine the proposal before being required amount of classified loans in the latest reports of to vote on it at a special meeting of the boards of directors of ENB and EIC. examination. On the basis of the record, it is the •''Certain of the employees of ENB's Israeli branches went Board's judgment that considerations relating to on strike because of the uncertainty of their employment status as a result of this proposal. An injunction was issued halting banking factors are consistent with approval of the the strike and requiring the employees to return to work. It application. appears from information in the record that this injunction will In connection with their protest, Protestants expire September 16, 1975, and there does not appear to be a reasonable likelihood that it can be extended beyond that have requested that the Board delay action on the date. It appears that if action is delayed beyond the expiration application. It appears that the reason for such date of the injunction, the strike would recommence. In the opinion of the local banking authority, further delay at this delay would be to allow Protestants further time time could have a serious adverse effect on ENB\s operations to examine the transaction more closely and to in Israel. ORDERS APPROVED UNDER THE BANK HOLDING COMPANY ACT- BY THE BOARD OF GOVERNORS During September 1975, the Board of Governors approved the applications listed below. The orders have been published in the Federal Register, and copies are available upon request to Publications Services, Division of Administrative Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. SECTION 3 Board action Federal (effective Register Applicant Bank(s) date) citation Chase County Corporation, Chase County Bank 9/19/75 40 F.R. 44627 Imperial, Nebraska & Trust Company, 9/29/75 Imperial, Nebraska National City Corporation, First National 9/19/75 40 F.R. 44629 Cleveland, Ohio Bank of Ashland, 9/29/75 Ashland, Ohio Peoples BancShares, Inc., The Scio Bank 9/4/75 40 F.R. 42242 Canton, Ohio Company, Scio, 9/11/75 Ohio Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 703 SECTION 4 Board action Federal Nonbanking company (effective Register Applicant (or activity) date) citation United Jersey Banks, United Jersey Credit 9/12/75 40 F.R. 43277 Princeton, New Jersey Life Insurance 9/19/75 Company, Phoenix, Arizona SECTIONS 3 A ND 4 Nonbanking Federal company Effective Register Applicant Bank(s) (or activity) date citation ^Southern Illinois Bancor- Farmers and Sale of 9/24/75 40 F.R. 45236 poration, Inc. Merchants permissible 10/1/75 Highland, Illinois Bank of credit-related Highland, insurance Highland, Illinois BY FEDERAL RESERVE BANKS During September 1975, 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 are available upon request to the Reserve Bank. SECTION 3 Federal Reserve Effective Register Applicant Bank(s) Bank date citation First National Cincinnati The Miami Deposit Cleveland 8/29/75 40 F.R. 43558 Corporation, Cincinnati, Bank, Yellow 9/22/75 Ohio Springs, Ohio Banks of Iowa, Inc., Key City Bank and Chicago 9/9/75 40 F.R. 43095 Cedar Rapids, Iowa Trust Company, 9/18/75 Dubuque, Iowa Texarkana National Bancshares, Texarkana National Dallas 9/3/75 40 F.R. 42797 Inc., Texarkana, Texas Bank; and Twin 9/16/75 City Bank, Texarkana, Texas. ^Approved by the Secretary of the Board under delegated authority. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

704.2 Federal Reserve Bulletin • October 1975 PENDING CASES I N V O L V I NG T HE B O A RD OF GOVERNORS* Reserve Enterprises, Inc. v. Arthur F. Burns, etal., filed September 1975, U.S.D.C. for the District of Minnesota. Logan V. Secretary of State, et al, filed September 1975, U.S.D.C. for the District of Columbia. Ellsworth V. Burns, filed September 1975, U.S.D.C. for the District of Arizona. Florida Association of Insurance Agents, Inc. v. Board of Governors and National Association of Insurance Agents, Inc. v. Board of Governors, filed August 1975, actions consolidated inU.S.C.A. for the Fifth Circuit. Henry M. Smith v. National State Bank of Boulder, etal, filed June 1975, U.S.D.C. for the Northern District of Texas. Bank of Boulder v. Board of Governors, et al., filed June 1975, U.S.C.A. for the Tenth Circuit. fDavid R. Merrill, et al. v. Federal Open Market Committee of the Federal Reserve System, filed May 1975, U.S.D.C. for the District of Columbia. Curvin J. Trone v. United States, filed April 1975, U.S. Court of Claims. Richard S. Kaye v. Arthur F. Burns, et al, filed April 1975, U.S.D.C. for the Southern District of New York. Cook, et al. v. Board of Governors, filed March 1975, U.S.D.C. for the District of Columbia. Purolator Courier Corporation v. Board of Governors, filed December 1974, U.S.C.A. for the District of Columbia Circuit. Tri-State Bancorporation, Inc. v. Board of Governors, filed November 1974, U.S.C.A. for the Seventh Circuit. Georgia Association of Insurance Agents, et al. v. Board of Governors, filed October 1974, U.S.C.A. for the Fifth Circuit. Alabama Association of Insurance Agents, et al. v. Board of Governors, filed July 1974, U.S.C.A. for the Fifth Circuit. Investment Company Institute v. Board of Governors, dismissed July 1975, U.S.D.C. for the District of Columbia; appeal pending, U.S.C.A for the District of Columbia Circuit. George Brice, Jr., et al. v. Board of Governors, filed April 1974, U.S.C.A. for the Ninth Circuit. National Automobile Dealers Association, Inc. v. Board of Governors, filed April 1974, U.S.C.A for the District of Columbia Circuit. East Lansing State Bank v. Board of Governors, filed December 1973, U.S.C.A. for the Sixth Circuit. Independent Bankers Association of America, Inc. v. Board of Governors and National Courier Association, et al. v. Board of Governors, filed December 1973, U.S.C.A. for the District of Columbia Circuit. Independent Bankers Association of Georgia v. Board of Governors, filed September 1973, U.S.C.A for the District of Columbia Circuit. ^^^lowa Independent Bankers v. Board of Governors, filed September 1973, U.S.C.A for the District of Columbia Circuit, petition for certiorari filed. Consumers Union of the United States, Inc., et al. v. Board of Governors, filed September 1973, U.S.D.C. for the District of Columbia. Bankers Trust New York Corporation v. Board of Governors, filed May 1973, U.S.C.A. for the Second Circuit. *This list of pending cases does not include suits against Federal Reserve Banks in which the Board of Governors is not named as a party. **Decisions have been handed down in these cases, subject to appeals noted. tThe Board of Governors is not named as a party in this action. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

705 Announcements CHANGE IN finance companies, department stores, and creditcard issuers. RESERVE REQUIREMENTS The Board issued proposed regulations for pub- The Board of Governors of the Federal Reserve lic comment on April 23 and September 8, 1975, System on October 15, 1975, announced a reduc- and held a public hearing on May 28-29. The new tion in reserve requirements on member bank time regulation that was issued—Regulation B— deposits with an original maturity of 4 years or reflects hundreds of oral and written comments more. The action will release about $350 million received on the basis of the drafts previously made in reserves to the banking system. available for the public's information. This action was designed primarily to encourage In issuing the new regulation the Board said: banks to lengthen the structure of their liabilities. The Equal Credit Opportunity Act consti- It will also help meet the seasonal need for bank tutes a determination by the Congress that sex or marital status of an applicant shall not be reserves over the coming weeks and facilitate used, as such, in evaluating the applicant's moderate growth in the monetary aggregates. creditworthiness. Under the restructuring action, reserve require- The regulation attempts to reconcile the ments on time deposits with an original maturity statutory goal of equal access to credit— without regard to sex or marital status—with of 4 years or more will be reduced from 3 per the need to preserve the creditor's ability to cent to 1 per cent. In no case, however, may the distinguish, in the creditor's own judgment, average of reserves on time and savings deposits between applicants that are, or are not, creditat each bank be less than 3 per cent, the minimum worthy. level specified by law. We have issued this regulation pursuant to the direction of the Congress that the Federal The new reserve ratio will apply to the level Reserve Board should write implementing of deposits beginning the week of October 16-22, rules, to be enforced by a number of Federal and will affect required reserves beginning the agencies acting in their own jurisdiction, after statement week of October 30-November 5. very extensive consultation with the public including women's groups, other consumers, creditors large and small, individuals and the REGULATION B— Congress. Our aim is to facilitate broader and EQUAL CREDIT OPPORTUNITY fairer access to credit on a basis of creditworthiness alone. The Board of Governors on October 16, 1975, The principal ways in which the regulation will published regulations implementing the Equal affect the practices of creditors include: Credit Opportunity Act, which forbids discrim- 1. Credit scoring on the basis of marital status ination by creditors on the basis of sex or marital —The regulation forbids the use of sex or maristatus. tal status in credit scoring systems. The Act makes the Federal Reserve responsible 2. Reasons for denying credit for writing an implementing regulation. Enforce- —Upon the request of an applicant, creditors ment of the Act and the regulation is the respon- will be required to provide the reasons for terminsibility of the Federal Trade Commission except ating or denying credit. as specifically assigned to other Federal agencies, including the Federal Reserve Board, the Federal ^Federal Home Loan Bank Board acting directly or Deposit Insurance Corporation, the Comptroller of through the Federal Savings and Loan Insurance Corthe Currency, and several others.^ poration; Administrator of the National Credit Union The Act went into effect October 28. It covers Administration; Interstate Commerce Commission; all who regularly extend credit, including banks, Civil Aeronautics Board; Secretary of Agriculture; Farm Credit Administration; Securities and Exchange Com- ^This note appears in opposite column. mission; and the Small Business Administration. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

706.2 Federal Reserve Bulletin • October 1975 3. Childbearing applicant less favorably than other applicants on —Creditors may not inquire into birth control the basis of sex or marital status." practices or into childbearing capabilities or inten- In several instances, where changes must be tions, or assume, from her age, that an applicant made on a large scale in recordkeeping or comor an applicant's spouse may drop out of the labor puter programs, in training of employees, or in force due to childbearing and thus have an inter- forms and information supplied to customers in ruption of income. order to conform to the regulation, the Board gave 4. Income creditors various periods of time in which to —A creditor may not discount part-time income comply. However, the Act's provisions against but may examine the probable continuity of the discrimination on the basis of sex or marital status applicant's job. are in force during the transition period. —A creditor may ask and consider whether and A failure to comply with certain requirements to what extent an applicant's income is affected of the regulation is not a violation if it is caused by obligations to make alimony or child support by mechanical, electronic, or clerical error in or maintenance payments. circumstances making it clear that the creditor had —A creditor may ask to what extent an appli- established and was maintaining suitable complicant is relying on alimony or child support or ance procedures. maintenance payments to repay the debt being The regulation exempts from numerous specific incurred. But the applicant must first be informed procedural provisions credit issued as an incident that no such disclosure is necessary if the applicant to doing business, such as credit given by dentists, does not rely on such income to obtain the credit. doctors, or small shopkeepers not obtained by use Where an applicant chooses to rely on alimony of a credit card, where no finance or late charge a creditor shall consider such payments as income is made and where there is no agreement making to the extent the payments are likely consistently the credit payable in more than four instalments to be made. (Section 202.10b). 5. Recordkeeping There are also partial exceptions from proce- —Effective November 30, 1975, creditors must dural provisions for business credit (Section keep applications and related materials, including 202.10c), securities credit (202. lOd), and public any written charges submitted by the applicant utilities credit (202. lOe). alleging discrimination, for 15 months following These partial exemptions, however, do not exthe date the creditor gives the applicant notice of empt such creditors from the basic prohibition of action. the Act against discrimination on the basis of sex —For all accounts established on or after No- or marital status. vember 1, 1976, the creditor must identify for Effective June 30, 1976, the regulation requires consumer reporting agencies or others to whom that—except where applications for credit are the creditor furnishes information those accounts made by telephone, or made orally for an amount that both spouses may use or for which they are not exceeding an existing limit on an open-end both liable, so the credit history can be utilized account—creditors must give applicants the folin the name of each spouse. lowing written notice: —No later than February 1, 1977, the creditor The Federal Equal Credit Opportunity Act is required to inform holders of existing accounts prohibits creditors from discriminating of a similar right to have credit history reported against credit applicants on the basis of sex in both names. or marital status. The Federal agency which The Equal Credit Opportunity Act was passed administers compliance with this law concerning this (insert appropriate description— by the Congress and signed by President Ford in bank, store, etc.) is (name and address of the October 1974. appropriate agency). The Act provides that an aggrieved applicant may file suit against creditors for actual damages By February 1, 1977, creditors are required to and for punitive damages up to $10,000. In class mail to all customers, or to all married customers, actions, penalties up to $100,000, or 1 per cent a notice set forth in the regulation (Section 202.6) of the creditor's net worth, whichever is less, may notifying them of their rights under the Act to have be assessed. credit reports of accounts of married persons made The regulation defines discrimination on the in both names. Both spouses are entitled to the basis of sex or marital status as treating ''an credit history of the account where both are con- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 707 tractually liable for the account or are allowed to asked only in a community property State, or if use it. The information must be retrievable in the necessary to comply with certain State laws as to name of either spouse. permissible finance charges or loan ceilings. With respect to notification of applicants who 2. Where the applicant seeking credit relies on request a statement of the reasons for denial or the creditworthiness of the nonapplicant spouse, termination of credit, the regulation permits credi- the creditor may request and consider any infortors to design their own form or methods of mation that might be considered about the spouse. compliance. The notification may be given orally 3. Creditors may not prohibit an applicant from or in writing. The regulation also provides an opening or maintaining an account in birth-given example of a possible form of response. This form first and surnames. lists various reasons, under five main headings, 4. Creditors may require the signatures of both that may be checked to indicate why credit was spouses where State law requires, or probably denied. These are: requires, both signatures in order to pass clear title, 1. Credit application: to create valid liens, or to waive inchoate (potennot completed tial) rights to property or to assign earnings. lack of credit references credit ref. too new to check 5. State law notwithstanding, a creditor may 2. Employment: unemployed extend separate credit to each spouse if each aptemporary, irregular plies separately and voluntarily. Where this preunable to verify _length of employment empts State law, each spouse is solely responsible 3. Income: for the credit separately obtained. -insufficient _unable to confirm —Where separate credit is extended, each ac- -information refused count is treated separately in determining permis- 4. Residence: too short a period sible finance charges or loan ceilings, under con- -temporary 5. Other (specify): ditions described in the regulation. State laws are pre-empted only if they conflict Other main provisions of the regulation include: with the Act or regulation, and only to the extent —Creditors may not, on the basis of sex or that they do so. marital status, discourage potential applicants from applying for credit. —Separate accounts may not be refused to R E I N S T A T E M E NT OF S A M E - D AY qualified applicants on the basis of sex or marital C R E D IT R E S T R I C T I ON F OR S T O C KS status. —Terms in the application form must be neutral The Board of Governors announced on September as to sex. Only the terms "married," "unmar- 16, 1975, that effective November 3 it will reinried," and "separated" are acceptable where any state a rule that limits the use of the same-day inquiry as to marital status is permitted. If the substitution privilege in stock margin accounts. applicant is asked to designate a title such as Mr., Under the reinstated rule, use of the same-day Mrs., Ms., or Miss, it must be made clear that substitution privilege will be limited to accounts this is optional. with an equity of 30 per cent or more of the market The regulation forbids: value of the stock collateral in the account. This —With certain exceptions, terminating credit on ratio had been set at 40 per cent prior to suspension an existing account because of a change in an of the privilege last November 4. applicant's marital status without evidence that the The rule was suspended to permit the Board to applicant is unable or unwilling to pay. consider the impact of the rule on margin custom- —With certain exceptions, requiring or using ers, brokerage firms, and the stock market. The any unfavorable information about a spouse or suspension was to have expired on September 30, former spouse where an applicant applies for credit but the Board extended it through November 2 independently of his or her spouse and can dem- to allow brokerage firms time to make the necesonstrate that the unfavorable history should not be sary operating and computer changes prior to applied. reinstatement. The regulation provides certain permissible in- In announcing the reinstatement, the Board said quiries or actions regarding a spouse, which may the benefits of the rule—which is designed to have the following scope: improve the quality of margin credit—outweigh 1. Where an applicant seeks unsecured individ- any potential adverse effects. ual credit, questions as to marital status may be Under the same-day substitution privilege, cus- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

708.2 Federal Reserve Bulletin • October 1975 tomers are permitted to substitute one security for announced will, therefore, enable member banks another in their accounts through offsetting pur- to compete more effectively with savings instituchases and sales made on the same day, without tions. applying additional margin for the purchase or The Board asked the banks to classify their using any of the proceeds of the sale to strengthen business savings accounts as a separate item for an account that is below the initial margin re- reporting purposes. quirement. In Massachusetts and New Hampshire, where The reinstatement applies to extensions of credit the law permits financial institutions to offer deby brokers and dealers (Regulation T) and loans posits subject to negotiable orders of withdrawal by banks and other lenders (Regulations U and (NOW's—check-like use of interest-bearing de- G, respectively) for the purpose of purchasing or posits), such accounts will continue to be available carrying stocks registered on a national exchange only to individuals and other qualifying organior named on the Board's over-the-counter margin zations. Businesses are not eligible to establish list. NOW accounts. AMENDMENT TO REGULATION Z SUBSCRIPTION RATES: Capital Market Developments and The Board of Governors on September 15, 1975, Selected Interest and Exchange Rates— issued an amendment to its Regulation Z (Truth in Lending) that requires creditors to disclose in Weekly Series of Charts a clear and conspicuous manner the credit terms To help defray a portion of the distribution costs, involved in the use of cash-advance checks. the Board's Publications Committee recently ap- The amendment is effective January 1, 1976. proved subscription rates for the weekly reports The Board had proposed such an amendment last entitled, ''Capital Market Developments," and December 18, and clarifying changes were made "Selected Interest and Exchange Rates—Weekly in the light of comment received from the public. Series of Charts." The following annual subscrip- A number of banks operating credit-card plans tion rates will apply to these reports beginning have been sending blank checks to credit-card November 1, 1975: holders that can be used to obtain cash advances on a credit-card account. Under the amendment, Annual subscriptions: disclosures specifically related to the charges im- Domestic $15.00 Foreign 20.00 posed when these checks are used will be required the first time the cash-advance check or other Single copies: Domestic .40 similar credit device is sent to a customer. Foreign 50 Quantities: Annual subscriptions for 10 or more AMENDMENTS TO copies sent to a single address 13.50 REGULATIONS D AND Q 10 or more copies of one issue sent to a single address .35 The Board of Governors on October 2, 1975, amended the definition of savings deposits in its Regulations D and Q to permit corporations, DESIGNATION OF MR. MITCHELL partnerships, and other profitmaking organizations AS MEMBER OF COMMISSION ON to maintain savings accounts at member banks. ELECTRONIC FUND TRANSFERS The amendments, effective November 10, 1975, place a ceiling on business savings deposits of Chairman Arthur F. Burns of the Board of Gover- $150,000. nors of the Federal Reserve System has designated The dollar ceiling is intended to make such George W. Mitchell, the Board's Vice Chairman, accounts attractive chiefly to small businesses that as a member of the National Commission on do not have access to the money markets to earn Electronic Fund Transfers. interest on tem^porarily idle funds. Public Law 93-495, signed on October 28, Savings accounts have not previously been 1974, created the 26-member commission to study available, in general, at member banks to profit- and recommend actions necessary for the possible making business organizations. They have been development of public or private electronic fund available at savings and loan associations and other transfer systems. Membership on the commission thrift institutions. The regulatory amendments as includes Chairman Burns or his delegate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 709 Vice Chairman Mitchell has been active in the Assistant Adviser to Associate Adviser; and in the development of the payments mechanism Division of Banking Supervision and Regulation, throughout his career at the Board of Governors. John E. Ryan from Adviser to Assistant Director. He is currently chairman of the Federal Reserve Steering Committee on Improving the Payments FEDERAL RESERVE BANK Mechanism. BRANCH DIRECTOR CHANGES REVISED OTC STOCK LIST W. H. Knoell, President, Cyclops Corporation, Pittsburgh, Pennsylvania, was appointed a director The Board of Governors has published a revised of the Pittsburgh Branch of the Federal Reserve list of over-the-counter (OTC) stocks that are sub- Bank of Cleveland, effective August 29, 1975, to ject to its margin regulations effective at the opensucceed Robert J. Buckley, President, Allegheny ing of business September 29, 1975. The list, LudlumIndustries, Inc., Pittsburgh, Pennsylvania, which supersedes the list of OTC margin stocks who resigned. that was issued on July 29, 1974, is available on John T. Cannon, III, President, Barnett Bank request from Publications Services, Division of of Cocoa, N.A., Cocoa, Florida, was appointed Administrative Services, Board of Governors of a director of the Jacksonville Branch of the Federal the Federal Reserve System, Washington, D.C. Reserve Bank of Adanta, effective July 1, 1975, 20551. to succeed Michael J. Franco, Chairman, City National Bank of Miami, Florida, who resigned CHANGES IN BOARD STAFF to become a director of the Miami Branch. Martin C. Miler, Chairman of the Board and The Board of Governors has announced the fol- President, The Hibernia National Bank, New Orlowing appointments. leans, Louisiana, was appointed a director of the Brian Carey as an Assistant Director in the New Orleans Branch of the Federal Reserve Bank Division of Federal Reserve Bank Operations, of Atlanta, effective July 1, 1975, to succeed effective September 15, 1975. Mr. Carey, who James H. Jones, Chairman of the Board and Chief joined the Board's staff in 1972, holds a B.S. from Executive Officer, First National Bank of Comthe Rensselaer Polytechnic Institute. merce, New Orleans, Louisiana, who resigned. Jerauld C. Kluckman as Assistant Director in G. Larry Kelley, President, Pickens-Bond Conthe Office of Saver and Consumer Affairs, effecstruction Co., Little Rock, Arkansas, was aptive October 12, 1975. Mr. Kluckman joined the pointed a director of the Little Rock Branch of Board's staff in 1969. He holds a B.S. from the the Federal Reserve Bank of St. Louis, effective University of South Dakota. July 7, 1975, to succeed W. M. Pierce, President, Robert E. Mannion as Adviser in the Legal Arkansas Business Development Corporation, Division, effective October 12, 1975. Mr. Man- Little Rock, Arkansas, who resigned. nion, who has been on the Board's staff since Mary S. Jensen, Chairman of the Board, Idaho 1970, received a B.A. from Georgetown Univer- State Bank, Glenns Ferry, Idaho, was appointed sity and a J.D. from Catholic University. a director of the Salt Lake City Branch of the James R. Wetzel, Assistant Commissioner, Federal Reserve Bank of San Francisco, effective Bureau of Labor Statistics, as Associate Adviser September 5, 1975, to succeed Joseph Bianco, and Chief of a new Wages, Prices, and Produc- Chairman of the Board and President, Bank of tivity Section in the Division of Research and Idaho, N.A., Boise, Idaho, who resigned. Statistics, effective October 26, 1975. Mr. Wetzel was assigned to the National Income Section of ADMISSION OF the Board's Division of Research and Statistics from 1968 to 1973; he holds a B.A. from Michi- STATE BANK TO MEMBERSHIP gan State University and an M.A. from American IN THE FEDERAL RESERVE SYSTEM University. The Board has also announced the following The following bank was admitted to membership promotions: in the Division of Research and Sta- in the Federal Reserve System during the period tistics, James L. Kichline and Joseph S. Zeisel September 16, 1975, through October 15, 1975: from Advisers to Associate Directors; Edward C. Ettin and John H. Kalchbrenner from Associate Texas Advisers to Advisers; and Helmut F. Wendel from Fort Worth .... State Bank of East Fort Worth Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

710 Industrial Production Released for publication October 16 als also advanced. Output of industrial fuel and power increased sharply as coal production rose Industrial production increased by an estimated 1.9 12 per cent from the strike-curtailed August level. per cent in September, and at 116.2 per cent of the 1967 average was at its highest level since INDUSTRIAL PRODUCTION last December. This was the fifth straight monthly Seasonally adjusted, ratio scale, 1967=100 140 MATERIALS advance in the index, which is now 5.7 per cent above the April low. The figures for July and - \ / August were revised upward and now show in- PRODUCTS, TOTAL creases of 1.0 per cent and 1.6 per cent, respec- 1 tively. CONSUMER For the third quarter as a whole, the index was GOODS j 3.4 per cent above the second-quarter average—an /BUSINI ESS EQ. 1 increase at an annual rate of ISVi per cent. Auto assemblies rose 2.5 per cent further in _ CONSUMER GOODS: September and were at an annual rate of 7.6 million units. Output of consumer durables, such as household appliances and other home goods, continued to advance briskly, and production of nondurable consumer goods moved up further. Notably, output of business equipment rose for the second month in a row after 10 months of decline, and construction products continued to gain. The September increase in production of materials was substantial and widespread. Output of 19^ im W" steel and other durable materials rose further, and F.R. indexes, seasonally adjusted. Latest figures: September. production of textile, paper, and chemical materi- *Auto sales and stocks include imports. Seasonally adjusted 1967 = 100 Per cent changes from— Industrial production 1975 June July Aug.^ Sept.^ Month Year Q2 to ago ago Q3 Total 111.1 112.2 114.0 116.2 1.9 -7.5 3.4 Products, total 114.2 115.4 116.3 117.6 1.1 -4.9 2.6 Final products 114.5 115.7 116.5 117.7 1.0 -4.0 2.6 Consumer goods 123.3 125.4 126.3 127.4 .9 -1.1 4.1 Durable goods 113.2 115.4 116.9 119.0 1.8 -7.8 6.0 Nondurable goods 127.2 129.1 129.9 130.6 .5 1.5 3.5 Business equipment 113.9 114.0 115.1 116.6 1.3 -11.9 .3 Intermediate products 112.8 114.3 115.6 117.1 1.3 -8.2 2.5 Construction products 106.8 107.9 109.3 110.8 1.4 -13.0 1.0 Materials 106.0 106.8 110.6 114.0 3.1 -11.8 4.8 ^Preliminary. ''Estimated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 1 Financial and Business Statistics CONTENTS GUIDE TO TABULAR PRESENTA- A 32 Federal finance TION ON INSIDE BACK COVER A 34 U.S. Government securities A 37 Federally sponsored credit agencies STATISTICAL RELEASES: REFER- A 38 Security issues ENCE ON INSIDE BACK COVER A 41 Business finance A 42 Real estate credit U.S. STATISTICS A 45 Consumer credit A 48 Industrial production A 2 Member bank reserves, Reserve Bank A 50 Business activity credit, and related items A 50 Construction A 5 Federal funds—Money market banks A 52 Labor force, employment, and A 6 Reserve Bank interest rates unemployment A 1 Reserve requirements A 8 Maximum interest rates; margin 53 Consumer prices requirements 53 Wholesale prices A 9 Open market account 54 National product and income A 10 Federal Reserve Banks 56 Flow of funds A 11 Bank debits A 12 Money stock INTERNATIONAL STATISTICS A 13 Bank reserves; bank credit A 14 Commercial banks, by classes A U. S. balance of payments A 18 Weekly reporting banks A Foreign trade A 23 Business loans of banks A U.S. reserve assets A 24 Demand deposit ownership A Gold reserves of central banks and A 25 Loan sales by banks governments A 25 Open market paper A 61 International capital transactions of the United States A 26 Interest rates A 74 Open market rates A 29 Security markets A 75 Central bank rates A 29 Stock market credit A 75 Foreign exchange rates A 30 Savings institutions A 82 INDEX TO STATISTICAL TABLES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 2 BANK RESERVES AND RELATED ITEMS • OCTOBER 1975 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 Drawing cur- Gold Rights rency Held Other stock certificate out- Bought under Loans Float3 F.R. Totals account stand- Total out- repur- assets 4 ing right 2 chase agreement Averages of daily figures 1939_Dec 2,510 2,510 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 I960—Dec 27,248 27,170 78 94 1,665 29,060 17,954 5,396 1969—De c 57,500 57,295 205 1,086 3,235 2,204 64,100 10,367 6,841 1970—De c 61,688 61,310 378 321 3,570 1,032 66,708 11,105 400 7,145 1971—De c 69,158 68,868 290 107 3,905 982 74,255 10,132 400 7,611 1972—De c 71,094 70,790 304 1,049 3,479 1,138 76,851 10,410 400 8,293 1973—De c 79,701 78,833 868 1,298 3,414 1,079 85,642 11,567 400 8,668 1974—Sep t 84,384 84,049 335 3,287 2,239 1,349 91,617 11,567 400 8,992 Oct 83,735 83,303 432 1,793 2,083 2,984 90,971 11,567 400 9,041 Nov 84,052 83,395 657 1,285 2,409 3,171 91,302 11,567 400 9,113 Dec 86,679 85,202 1,477 703 2,734 3,129 93,967 11,630 400 9,179 1975—Ja n 86,039 85,369 670 390 2,456 3,391 93,002 11,647 400 9,235 Feb 84,744 83,843 901 147 2,079 3,419 91,168 11,626 400 9,284 Mar 84,847 84,398 449 106 1,994 3,142 90,819 11,620 400 9,362 Apr 87,080 86,117 963 110 2,061 3,237 93,214 11,620 400 9,410 May 91,918 89,355 2,563 60 1,877 3,039 97,845 11,620 429 9,464 June 88,912 87,618 1,294 271 2,046 3,098 95,119 11,620 500 9,536 July 88,166 87,882 284 261 1,911 3,100 94,144 11,620 500 9,616 Aug 86,829 86,348 481 211 1,691 2,953 92,395 11,604 500 9,721 Sept.f 89,191 87,531 1,660 397 1,869 3,060 95,324 11,599 500 9,793 Week ending— 1975—July 2 91,559 88,834 2,725 871 1,887 3,010 98,243 11,620 500 9,573 9 89,020 88,473 547 222 2,260 3,007 95,272 11,620 500 9,569 16 87,497 87,263 234 202 2,131 3,050 93,566 11,620 500 9,618 23 87,997 87,850 147 382 1,800 3,125 93,995 11,620 500 9,630 30 87,868 87,609 259 253 1,420 3,246 93,479 11,620 500 9,641 Aug. 6 86,727 86,727 180 1,525 3,217 92,328 11,617 500 9,700 13 85,221 85,221 179 1,847 3,225 91,135 11,603 500 9,704 20 87,075 86,692 383 204 1,900 2,684 92,538 11,602 500 9,715 27 87,572 86,615 957 272 1,581 2,707 92,885 11,600 500 9,715 Sept. 3 88,224 86,708 1,516 222 1,548 2,973 93,814 11,599 500 9,801 10 86,653 86,653 385 2.036 3,000 92,736 11.598 500 9,765 17 87,286 86,466 "'sio' 327 1,854 3,097 93,269 11.599 500 9,789 24P 90,530 88,373 2,157 395 2.037 3,062 96,884 11,599 500 9,811 End of month 1975—July 86,966 86,966 177 1,734 3,196 92,758 11,620 500 9,769 Aug 88,032 86,677 1,355 231 1,473 3,012 93,588 11.598 500 9,851 Sept.f 93,080 89,715 3,365 283 1,230 3,259 98,800 11.599 500 9,819 Wednesday 1975—July 2 90,026 89,512 514 272 2,078 2,932 96,000 11,620 500 9,562 9 84,483 84,483 80 2,849 3,064 91,162 11,620 500 9,612 16 89,369 87,729 1,640 1,132 2,241 3,076 96,498 11,620 500 9,627 23 88,662 87,631 1,031 2,000 2,157 3,222 96,790 11,620 500 9,637 30 88,064 87,112 952 149 1,678 3,238 93,839 11,620 500 9,647 Aug. 6 84,871 84,871 117 2,576 3,228 91,456 11,608 500 9,689 13 86,227 86,227 543 2,194 3,304 92,925 11,602 500 9,710 20 88,832 86,146 2,686 644 2,336 2,604 95,141 11,600 500 9,715 27 86,887 86,887 159 1,919 2,846 92,482 11,599 500 9,715 Sept. 3 89,037 86,647 2,390 208 1,732 2,915 94,799 11,599 500 9,738 1 0 85,234 85,234 1,695 2,576 3,123 93,280 11,599 500 9,776 17 85,206 85,206 338 2,837 3,075 92,107 11,599 500 9,795 24P 93,289 88,656 '4;633' 1,402 2,226 3,048 100,839 11,599 500 9,819 1 Includes Federal agency issues held under repurchase agreements 4 Beginning Apr. 16, 1969, "Other F.R. assets" and "Other F.R. beginning Dec. 1, 1966, and Federal agency issues bought outright be- liabilities and capital" are shown separately; formerly, they were netted ginning Sept. 29, 1971. together and reported as "Other F.R. accounts." 2 Includes, beginning 1969, securities loaned—fully guaranteed by U.S. 5 Includes industrial loans and acceptances until Aug. 21, 1959, when Govt, securities pledged with F.R. Banks, and excludes (if any), securities industrial loan program was discontinued. For holdings of acceptances sold and scheduled to be bought back under matched sale-purchase on Wed. and end-of-month dates, see table on F.R. Banks on p. A-10. transactions. See also note 3. 3 Beginning with 1960 reflects a minor change in concept; see Feb. 1961 BULLETIN, p. 164. Notes continued on opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • BANK RESERVES AND RELATED ITEMS A 3 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 CCuurr-- TTrreeaass-- reserves OOtthheerr reserves rreennccyy uurryy with F.R. Banks OOtthheerr FF..RR.. PPeerriioodd oorr ddaattee iinn ccaasshh FF..RR lliiaa-cciirr-- hhoolldd-- aacc-- bbiilliittiieess ccuullaa-- iinnggss ccoouunnttss 44 aanndd With Curttiioonn Treas- For- Other 3,6 ccaappiittaaHH F.R. rency Total 8 ury eign Banks and coin 7 Averages of daily figures 7,609 2,402 616 7:J 9 248 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 '"2i595" 19,283 1960—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. 71,646 323 1,892 406 717 2,942 28,352 6,635 35,068 1973—Dec. 75,098 303 2,451 456 766 3,345 30,156 6,920 37,076 1974—Sept. 75,654 315 1,601 294 869 3,260 29,985 6,811 36,796 Oct. 77,029 302 864 370 770 3,149 29,898 6,939 36,837 Nov. 78,951 220 1,741 357 874 3,266 29,767 7,174 36,941 Dec. 77,780 221 2,087 336 884 3,264 29,713 7,779 37,492 1975—Jan. 76,979 236 2,374 317 711 3,358 28,503 7,062 35,565 Feb. 77,692 277 1,887 363 958 3,076 27,948 6,831 34,779 Mar. 78,377 309 3,532 307 718 3,137 28,264 6,870 35,134 Apr. 79,102 326 8,115 262 746 3,231 27,576 6,916 34,492 May 80,607 355 3,353 272 989 3,191 28,007 6,969 34,976 June 81,758 358 2,207 269 711 3,135 27,442 7,213 34,655 July 81,822 368 818 274 660 3,096 27,183 7,299 34,482 . Aug. 81,903 361 3,415 308 798 3,169 27,262 7,432 34,694 Sept.f Week ending— 81,094 366 5,774 274 729 3,323 28,376 7,105 35,481 1975—July 2 81,898 367 3,393 264 729 3,016 27,294 7,318 34,612 :...9 82,164 358 1,198 296 676 3,110 27,502 7,362 34,864 16 81,761 345 1,370 240 690 3,147 28,192 6,706 34,898 23 81,287 364 1,830 262 711 3,237 27,550 7,449 34,999 30 81,531 354 1,205 277 662 3,108 27,007 7,546 34,553 Aug. 6 82,036 377 209 271 607 2,941 26,501 7,662 34,163 ..13 82,028 366 299 302 583 3,060 27,717 6,912 34,629 20 81,615 366 1,178 240 715 3,196 27,390 7,080 34,470 27 81,979 363 1,806 300 839 3,253 27,173 7,356 34,529 Sept. 3 82,242 359 1,402 351 840 2,913 26,493 7,605 34,098 10 82,166 354 1,181 326 946 3,069 27,116 7,436 34,552 17 81,688 364 5,032 285 717 3,256 27,452 7,179 34,631 24P End of month 81,475 350 2,675 369 686 3,354 25,740 7,546 33,286 1975—July 81,912 364 2,349 342 776 3,311 26,484 7,356 33,840 Aug. 81,609 370 8,075 324 616 3,472 26,252 7,559 33,811 Sept.f Wednesday 81,708 369 5,291 253 765 2,877 26,418 7,105 33,523 1975—July 2 82,372 370 1,381 239 694 3,022 24,817 7,318 32,135 :...9 82,193 354 597 224 673 3,193 31,011 7,362 38,373 16 81,709 349 1,333 276 795 3,171 30,914 6,706 37,620 23 81,478 370 1,386 284 574 3,339 28,175 7,449 35,624 30 82,064 351 » 259 665 2,895 27,018 7,546 34,564 Aug. 6 82,328 359 * 293 594 2,989 28,174 7,662 35,836 ...13 82,059 342 660 333 554 3,148 29,861 6,912 36,773 20 81,881 359 833 232 838 3,217 26,937 7,080 34,017 27 82,346 363 804 247 868 2,913 29,096 7,356 36,452 Sept. 3 82,490 357 405 295 1,036 2,949 27,623 7,605 35,228 ..10 82,169 346 2,421 242 854 3,060 24,908 7,436 32,344 17 81,694 356 7,249 234 660 3,381 29,183 7,179 36,362 24^' <» Includes certain deposits of domestic nonmember banks and foreign- averages. Beginning Sept. 12, 1968, amount is based on close-of-business owned banking institutions held with member banks and redeposited in figures for reserve period 2 weeks previous to report date. full with F.R. Banks in connection with voluntary participation by non- 8 Beginning with week ending Nov. 15, 1972, includes $450 million of member institutions in the Federal Reserve System's program of credit reserve deficiencies on which F.R. Banks are allowed to waive penalties restraint. for a transition period in connection with bank adaptation to Regulation J As of Dec. 12, 1974, the amount of voluntary nonmember and foreign as amended effective Nov. 9, 1972. Beginning 1973, allowable deficiencies agency and branch deposits at F.R. Banks that are associated with margi- included are (beginning with first statement week of quarter): Ql, $279 nal reserves are no longer reported. However, deposits voluntarily held million; Q2, $172 million; Q3, $112 million; Q4, $84 million. Beginning by agencies and branches of foreign banks operating in the United States 1974, Ql, $67 million, Q2, $58 million. Transition period ended after as reserves and Euro-dollar liabilities are reported. second quarter, 1974. 7 Part allowed as reserves Dec. 1, 1959—Nov. 23, 1960; all allowed thereafter. Beginning Jan. 1963, figures are estimated except for weekly For other notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 4 BANK RESERVES AND RELATED ITEMS • OCTOBER 1975 RESERVES AND BORROWINGS OF MEMBER BANKS (In millions of dollars) All member banks Large banks 2 All other banks PPPeeerrriiioooddd Reserves Borrowings New York City City of Chicago Other Total Re- Excess 1 Total Sea- Excess Borrow- Excess Borrow- Excess Borrow- Excess Borrowheldi quired sonal ings ings ings ings 1939—Dec 111111111111111111111111,,,,,,,,,,,,444444444444777777777777333333333333 666666666666,,,,,,,,,,,,444444444444666666666666222222222222 555555555555,,,,,,,,,,,,000000000000111111111111111111111111 333333333333 2,611 540 1,188 671 3 1941—Dec 111111111111222222222222,,,,,,,,,,,,888888888888111111111111222222222222 999999999999,,,,,,,,,,,,444444444444222222222222222222222222 333333333333,,,,,,,,,,,,333333333333999999999999000000000000 555555555555 989 295 1,303 1 804 4 1945__Dec 111111111111666666666666,,,,,,,,,,,,000000000000222222222222777777777777 111111111111444444444444,,,,,,,,,,,,555555555555333333333333666666666666 111111111111,,,,,,,,,,,,444444444444999999999999111111111111 333333333333333333333333444444444444 48 192 14 418 96 1.011 46 1950—Dec 111111111111777777777777,,,,,,,,,,,,333333333333999999999999111111111111 111111111111666666666666,,,,,,,,,,,,333333333333666666666666444444444444 111111111111,,,,,,,,,,,,000000000000222222222222777777777777 111111111111444444444444222222222222 125 58 8 232 50 663 29 I960—Dec 111111111111999999999999,,,,,,,,,,,,222222222222888888888888333333333333 111111111111888888888888,,,,,,,,,,,,555555555555222222222222777777777777 777777777777555555555555666666666666 888888888888777777777777 29 19 4 8 100 20 623 40 1965—Dec 222222222222222222222222,,,,,,,,,,,,777777777777111111111111999999999999 222222222222222222222222,,,,,,,,,,,,222222222222666666666666777777777777 444444444444555555555555222222222222 444444444444555555555555444444444444 41 111 15 23 67 228 330 92 1967—^Dec 222222222222555555555555,,,,,,,,,,,,222222222222666666666666000000000000 222222222222444444444444,,,,,,,,,,,,999999999999111111111111555555555555 333333333333444444444444555555555555 222222222222333333333333888888888888 18 40 13 50 105 267 80 1968—Dec 222222222222777777777777,,,,,,,,,,,,222222222222222222222222111111111111 222222222222666666666666,,,,,,,,,,,,777777777777666666666666666666666666 444444444444555555555555555555555555 777777777777666666666666555555555555 100 230 15 85 90 270 250 180 1969—Dec 222222222222888888888888,,,,,,,,,,,,000000000000333333333333111111111111 222222222222777777777777,,,,,,,,,,,,777777777777777777777777444444444444 222222222222555555555555777777777777 111111111111,,,,,,,,,,,,000000000000888888888888666666666666 56 259 18 27 6 479 177 321 1970—Dec 222222222222999999999999,,,,,,,,,,,,222222222222666666666666555555555555 222222222222888888888888,,,,,,,,,,,,999999999999999999999999333333333333 222222222222777777777777222222222222 333333333333222222222222111111111111 34 25 7 4 42 264 189 28 1971—Dec 333333333333111111111111,,,,,,,,,,,,333333333333222222222222999999999999 333333333333111111111111,,,,,,,,,,,,111111111111666666666666444444444444 111111111111666666666666555555555555 111111111111000000000000777777777777 25 35 1 8 -35 22 174 42 1972—Dec 333333333333111111111111,,,,,,,,,,,,333333333333555555555555333333333333 333333333333111111111111,,,,,,,,,,,,111111111111333333333333444444444444 222222222222111111111111999999999999 111111111111,,,,,,,,,,,,000000000000444444444444999999999999 -20 301 13 55 -42 429 -160 264 1973—Dec 35,068 34,806 262 1,298 41 -23 74 43 28 28 761 133 435 1974_Sept 37,076 36,885 191 3,287 139 133 1,662 20 17 -77 792 115 816 Oct 36,796 36,705 91 1,793 117 -49 502 -18 36 36 569 122 686 Nov 36,837 36,579 258 1,285 67 -8 257 38 14 90 566 138 448 Dec 36,941 36,602 339 703 32 132 80 5 18 39 323 163 282 1975—Jan 37,492 37,556 -64 390 13 -119 156 -16 16 -91 87 162 131 Feb 35,565 35,333 232 147 10 31 37 17 10 41 29 143 71 Mar 34,779 34,513 266 106 7 53 22 20 10 56 28 137 46 Apr 35,134 35,014 120 110 7 32 25 -23 14 -4 38 115 33 May 34,492 34,493 -1 60 9 -28 24 -21 -89 13 137 23 June 34,976 34,428 548 271 11 142 90 47 2 217 114 142 65 July 34,655 34,687 -32 261 17 -22 54 -24 23 -118 62 132 122 Aug 34,482 34,265 217 211 38 -18 14 5 98 51 132 145 Sept.f 34,694 34,448 246 397 62 12 68 20 -42 140 96 186 Week ending— 11997744——SSeepptt.. 44 37,239 36,918 321 3,906 152 -66 1,729 40 19 171 1,125 176 ,033 36,737 36,628 109 3,084 132 127 1,567 -35 20 -110 766 127 731 18 37,086 37,004 82 2,921 134 -150 1,517 15 16 90 740 127 648 25 36,946 36,872 74 3,531 141 80 1,782 12 10 -93 871 75 868 1975—Mar. 5 34,795 34,386 409 70 9 117 90 10 198 60 12 34,482 34,252 230 60 7 122 15 -20 19 113 41 19 34,510 34,490 20 167 6 -96 -37 10 36 143 43 26....... 34,819 34,675 144 155 7 54 16 44 -12 58 86 45 Apr. 2 35,087 34,808 279 51 7 -30 7 99 203 43 9, 34,663 34,552 111 30 8 62 15 -51 7 85 23 16 35,295 35,076 219 22 6 25 -14 36 4 172 18 23 35,249 35,179 70 165 6 -3 42 16 -23 77 80 21 30 35,495 35,306 189 241 7 67 1 56 71 143 66 May 7 35,237 34,926 311 34 11 177 21 -5 118 34 14 34,517 34,518 -1 17 8 -106 -26 -17 1 148 16 21 34,702 34,631 71 121 7 -33 98 9 -34 2 129 21 28 34,209 34,045 164 84 9 53 9 4 -5 54 112 21 June 4 34,511 34,177 334 84 9 18 61 19 137 160 23 11 33,707 33,743 -36 38 11 -76 -32 11 -55 127 25 18 34,937 34,603 334 77 10 80 49 12 69 173 28 25 34,706 34,615 91 188 11 19 97 -4 5 38 71 53 July 2 35,481 35,085 396 871 15 57 189 39 117 468 183 214 9 34,612 34,479 133 222 13 18 -20 -20 90 155 132 16 34,864 34,791 73 202 15 -72 78 2 54 6 16 137 54 23 34,898 34,695 203 382 19 107 151 9 50 -13 57 100 124 30 34,999 34,718 281 253 23 82 15 67 91 117 162 Aug. 6 34,553 34,354 199 180 29 13 10 31 14 145 166 13 34,163 34,147 16 179 35 -46 47 -22 -45 18 129 108 20 34,629 34,418 211 204 37 -4 19 73 77 123 127 27 34,470 34,174 296 272 40 127 "is" -7 48 87 128 170 Sept. 3 34,529 34,228 301 222 50 28 24 81 58 168 164 10 34,098 34,104 -6 385 53 -45 215 -31 -66 34 136 136 17 34,552 34,285 267 327 60 79 19 17 174 152 142 24f 34,631 34,586 45 395 64 -74 "is" -35 -102 115 18 202 1 Beginning with week ending Nov. 15, 1972, includes $450 million of demand deposits of more than $400 million), as described in the BULLETIN reserve deficiencies on which F.R. Banks are allowed to waive penalties for July 1972, p. 626. Categories shown here as "Large" and "AU other" for a transition period in connection with bank adaptation to Regulation J parallel the previous "Reserve city" and "Country" categories, respectively as amended effective Nov. 9, 1972. Beginning 1973, allowable deficiencies (hence the series are continuous over time). included are (beginning with first statement week of quarter): Ql, $279 million; Q2, $172 million; Q3, $112 million; Q4, $84 million. Beginning NOTE.—Monthly and weekly data are averages of daily figures within 1974, Ql, $67 million; Q2, $58 million. Transition period ended after the month or week, respectively. second quarter, 1974. For weeks for which figures are preliminary, figures Borrowings at F.R. Banks: Based on closing figures. by class of bank do not add to the total because adjusted data by class are Effective Apr. 19, 1973, the Board's Regulation A, which governs lendnot available. ing by F.R. Banks, was revised to assist smaller member banks to meet 2 Beginning Nov. 9, 1972, designation of banks as reserve city banks the seasonal borrowing needs of their communities. for reserve-requirement purposes has been based on size of bank (net Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • MONEY MARKET BANKS A 5 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 and Total Borweek ending— Excess Net Per cent two-way Pur- Loans row- Net re- Bor- inter- Surplus of Pur- trans- chases Sales to ings loans serves 1 rowings bank or avg. chases Sales actions 2 of net of net dealers 3 from at F.R. Federal deficit required buying selling dealers 4 Banks funds reserves banks banks trans. Total—46 banks 1975_Aug. 6 162 2 13,789 -13,630 87.5 19,306 5,516 4,803 14,503 713 2,343 571 1,772 13 -31 59 15,539 -15,628 100.1 20,062 4,523 4,211 15,851 312 2,477 537 1,940 20 51 33 13,423 -13,405 85.4 18,285 4,862 4,490 13,795 373 2,328 521 1,808 27 206 43 13,347 -13,183 85.8 18,357 5,010 4,439 13,918 571 1,711 492 1,219 Sept. 3 222 8 12,357 -12,143 78.4 18,973 6,616 5,682 13,291 934 2,027 619 1,408 10 -23 240 15,099 -15,362 99.2 20,512 5,413 4,697 15,815 716 2,830 340 2,490 17 53 126 13,953 -14,026 90.1 18,658 4,705 4,395 14,262 309 3,095 368 2,727 24: 13 120 11,476 -11,583 74.4 16,937 5,461 4,395 12,542 1,066 2,365 431 1,934 8 in New York City 1975—Aug. 6 86 4,168 -4,082 64.3 5,037 869 869 4,168 1,361 341 1,020 13 10 47 4,951 -4,988 78.2 5,669 718 718 4,951 1,273 294 979 20 -1 3,671 -3,672 56.9 4,575 903 833 3,741 70 1,109 288 821 27 121 3,434 -3,313 53.5 4,407 973 973 3,434 898 312 586 Sept. 3 130 2,874 -2,745 43.7 4,796 1,922 1,778 3,019 144 1,046 298 747 10 -14 215 4,655 -4,884 76.8 5,403 748 729 4,675 19 1,268 241 1,027 17 71 4,003 -3,932 62.3 4,658 655 656 4,002 1,306 211 1,095 24 -28 "79 3,083 -3,190 51.2 4,332 1,249 1,007 3,325 242 1,116 210 906 38 outside New York City 1975—Aug. 6. 76 9,622 -9,547 103.5 14,269 4,647 3,934 10,335 713 982 230 752 13. -41 10,588 -10,640 115.3 14,392 3,804 3,493 10,900 312 1,204 243 961 20. 52 9,752 -9,733 105,3 13,711 3,959 3,656 10,054 303 1,219 233 986 27. 86 9,913 -9,870 107.7 13,949 4,037 3,466 10,484 571 813 180 633 Sept. 3. 92 9,483 -9,399 102. 14,177 4,694 3,905 10,273 789 982 321 661 10. -9 26 10,444 -10,478 114.7 15,109 4,665 3,968 11,141 697 1,562 99 1,462 17. -18 126 9,951 -10,094 109.0 14,000 4,049 3,740 10,260 309 1,789 157 1,632 24. 41 41 8,393 -8,393 89.9 12,605 4,212 3,388 9,217 824 1,249 221 1,028 5 in City of Chicago 1975—Aug. 6. 4,087 -4,057 248.1 5,000 913 913 4,087 384 384 13. 4,245 -4,271 256.9 5,069 824 816 4,253 9 427 427 20. 3,651 -3,637 219.7 4.718 1,067 1,019 3,699 49 384 384 27. 4,146 -4,143 253.5 5,225 1,079 966 4,259 113 332 332 Sept. 3.. 3,821 -3,788 226.2 5,087 1,266 1,122 3,966 145 315 315 10.. 4,264 -4,281 264.0 5,351 1,088 1,058 4,293 29 403 403 17.. 3,852 -3,858 225.8 4,;— 1,036 1,014 3,874 22 421 421 24.. 2,958 -2,955 179.1 4,306 1,348 1,202 3,103 145 321 321 33 others 1975—Aug. 6.. 5,535 -5,491 72.4 9,269 3,734 3,021 6,248 713 598 230 368 13.. 6,343 -6,370 84.2 9,324 2,980 2,677 6,646 304 776 243 534 20.. 6,101 -6,096 80.3 8,993 2,892 2,638 6,355 254 836 233 603 27.. 5,767 -5,727 76. 8,725 2,957 2,500 6,225 458 481 180 302 .at:: Sept. 5,662 -5,610 74.5 9,090 3,428 2,783 6,307 644 667 321 346 6,181 -6,198 82.5 9,758 3,577 2,910 6,848 667 1,159 99 1,059 17.. 6,098 -6,236 82.6 9,111 3,013 2,726 6,386 287 1,368 157 1,211 24.. 5,435 -5,438 70.8 8,299 2,864 2,185 6,114 679 928 221 707 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 6 F.R. BANK INTEREST RATES • OCTOBER 1975 CURRENT RATES (Per cent per annum) Loans to member banks— Under Sec. 10(b)2 Loans to all others under Under Sees. 13 and 13a i last par. Sec. 134 Federal Reserve Bank Regular rate Special rate 3 Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous 9/30/75 date rate 9/30/75 date rate 9/30/75 date 3 rate 9/30/75 date rate Boston 5/16/75 It! 5/16/75 3/10/75 91/2 New York.... 5/16/75 5/16/75 6/24/75 3/10/75 Philadelphia. . 5/16/75 eVA in 5/16/75 6/9/75 3/10/75 Cleveland 5/16/75 61/4 5/16/75 6/9/75 3/10/75 91/2 Richmond.... 5/16/75 in 5/16/75 6/9/75 3/10/75 91/2 Atlanta 5/16/75 5/16/75 6/3/75 71/i 3/10/75 91/2 Chicago 5/16/75 61/4 in 5/16/75 6/9/75 3/14/75 St. Louis 5/16/75 6V4 5/16/75 7/15/75 3/14/75 Minneapolis... 5/23/75 6V2 5/23/75 6/9/75 3/10/75 Kansas City. . 5/16/75 6V4 5/16/75 7/9/75 3/10/75 D Sa a n ll a F s r ancisco. 5 5 / / 1 1 6 6 / / 7 7 5 5 6 6 1 V /4 4 61/i 5 5 / / 1 1 6 6 / / 7 7 5 5 I 6 6 /2 /9 4 / / 7 7 5 5 3 3 / / 1 1 4 0 / / 7 7 5 5 1 Discounts of eligible paper and advances secured by such paper or by 3 Applicable to special advances described in Section 201.2(e)(2) of U.S. Govt, obligations or any other obligations eligible for F.R. Bank Regulation A. purchase. 4 Advances to individuals, partnerships, or corporations other than 2 Advances secured to the satisfaction of the F.R. Bank. Advances member banks secured by direct obligations of, or obligations fully secured by mortgages on 1- to 4-family residential property are made at guaranteed as to principal and interest by, the U.S. Govt, or any the Section 13 rate. agency thereof. 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, 1955. 21/2 2Vi 1964—Nov. 24. 1971—Nov. II.. 43 4 4 3 -5 4 30. 19.. 1956—Apr. 13. 21/2-3 234 Dec. 13.. 20. 234-3 234 1965—Dec. 6. 17.. Aug. 24. 234-3 3 13. 24.. 41/2 31. 3 3 1967—Apr. 7. 1973_jan. 15., 5 1957_Aug. 9.. 3 -31^ 3 14. Feb. 26.. 5 -51^ 23.. . 3Vi 31^ Nov. 20. Mar. 2.. 51/2 Nov. 15., 3 -31/i 3 27. Apr. 23.. S^A-SVa Dec. 2., 3 3 1968—Mar. 15. May 4.. 22. 1958—Jan. 22., 234-3 3 Apr. 19. 18*.! 6 24., 234-3 234 26. June II.. 6 Mar. 7., 21/4-3 214 Aug. 16. 15.. e'A 2 13 1 . . 21 2 4 1 -2 4 3 4 2 2 1 1 4 4 Dec. 3 1 0 8 . . A Ju u l g y . 1 2 4 . . . , Apr. 18. 134-214 m 20. 23., May 9. 134 m Aug. 15. 13/4-2 1V4 1969—Apr. 4. 1974_Apr. 25., 7V|-8 Sept. 12. 134-2 2 8. 30. 23. 2 Dec. 9.. 73743-/84 Oct. 24. 2 -21^ 2 1970—Nov. 11. 16.. Nov. 7. 21/i 21/2 1 16 3 . . 1975—Jan. 6.. 71/4-734 1959—Mar. 6. 21/2-3 3 Dec. 1, 10., iVA-m 16. 3 3 4. 24., 714 May 29. 3 -31^ 31/2 11. Feb. 5., 634-714 June 12. 7., Sept. 11. 1971—Jan. 8, Mar. 10. 61/4-'634 1960— S J A u e u n p g e t . . 1 1 1 1 2 8 9 0 4 3 . . . . . . 3 3 3 1 1 4 3 3 4 ^ 1 - - - 3 / 4 4 2 1 /2 4 4 3 3 3 3 1 1 / / i i Feb. 2 2 1 1 1 1 2 9 9 5 3 9 , , , . In effec M t, a S y e p 1 2 1 t. 6 3 4 . 3 . . , 0,1975.... 6 6 6 - 1 6 4 1 4 July 16 1963—July 17. 3 -m 31/2 23 26. 31/2 31/2 NOTE.—Rates under Sees. 13 and 13a (as described in table and notes above). For data before 1956, 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

OCTOBER 1975 • RESERVE REQUIREMENTS A 7 RESERVE REQUIREMENTS ON DEPOSITS OF MEMBER BANKS (Deposit intervals are in millions of dollars. Requirements are in per cent of deposits.) Net demand 2 Time 3 (all classes of banks) EEEffffffeeeccctttiiivvveee dddaaattteee 111 Reserve city Other Other time SSaavviinnggss 0-5 Over 5 0-5 Over 5 0-5 Over 5 In effect Jan. 1, 1963 1166»»//22 1122 4 1966 July 14,21 44 44 555 Sept. 8,15 666 1967 Mar. 2 Mar 16 11996688——JJaann.. 1111,,1188........ 111777 111222 11996699——AApprr.. 1177 111222111///222 IIIfff^^^ 1970—Oct. 1 55 Beginning Nov. 9, 1972 Net demand 2,4 Time 3 Other time Effective date 0-2 2-10 10-100 100-400 Over Savings Over 5 5, maturing in— 400 0-5 30-179 180 days days and over 1972—Nov. 9 8 10 12 . 161/2 171/2 7 3 7 3 7 5 Nov. 16 1973 July 19 llOOii//ii 1133VV22 18 1974 Dec. 12 111777VVViii 6 3 1975—Feb. 13 mm 10 12 13 111666VVViii In effect Aug. 31,1975 mm 10 12 13 111666111///222 3 3 6 3 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 member bank will maintain reserves related to the size of its net demand city banks and the second to the change at country banks. For changes deposits. The new reserve city designations are as follows: A bank having prior to 1963 see Board's Annual Reports. net demand deposits of more than $400 million is considered to have the 2 (a) Demand deposits subject to reserve requirements are gross de- character of business of a reserve city bank, and the presence of the head mand deposits minus cash items in process of collection and demand office of such a bank constitutes designation of that place as a reserve balances due from domestic banks. city. Cities in which there are F.R. Banks or branches are also (b) Requirement schedules are graduated, and each deposit interval reserve cities. Any banks having net demand deposits of $400 million or applies to that part of the deposits of each bank. less are considered to have the character of business of banks outside of (c) Since Oct. 16, 1969, member banks have been required under reserve cities and are permitted to maintain reserves at ratios set for banks Regulation M to maintain reserves against foreign branch deposits not in reserve cities. For details, see Regulation D and appropriate supcomputed on the basis of net balances due from domestic offices to their plements and amendments. foreign branches and against foreign branch loans to U.S. residents. 5 A marginal reserve requirement was in effect between June 21, 1973, Since June 21,1973, loans aggregating $100,000 or less to any U.S. resident and Dec. 11,1974, against increases in the aggregate of the following types have been excluded from computations, as have total loans of a bank to of obligations: (a) outstanding time deposits of $100,000 or more, (b) U.S. residents if not exceeding $ 1 million. Regulation D imposes a similar outstanding funds obtained by the bank through issuance by a bank's reserve requirement on borrowings from foreign banks by domestic offices affiliate of obligations subject to existing reserve requirements on time of a member bank. The reserve percentage applicable to each of these deposits, and (c) beginning July 12, 1973, funds from sales of finance bills. classifications is 4 per cent. The requirement was 10 per cent originally, The requirement applied to balances above a specified base, but was not was increased to 20 per cent on Jan. 7, 1971, was reduced to 8 per cent applicable to banks having obligations of these types aggregating less effective June 21, 1973, and was reduced to the current 4 per cent effective than $10 million. For details, including percentages and maturity classifi- May 22, 1975. Initially certain base amounts were exempted in the com- cations, see "Announcements" in BULLETINS for May, July, Sept., and putation of the requirements, but effective Mar. 14, 1974, the last of these Dec. 1973 and Sept. and Nov. 1974. reserve-free bases were eliminated. For details, see Regulations D and M. 6 The 16Vi 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. 7 See columns above for earliest effective date of this rate. 4 Effective Nov. 9, 1972, a new criterion was adopted to designate reserve cities, and on the same date requirements for reserves against net NOTE.—Required reserves must be held in the form of deposits with demand deposits of member banks were restructured to provide that each F.R. Banks or vault cash. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 8 MAXIMUM INTEREST RATES; MARGIN REQUIREMENTS • OCTOBER 1975 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 and size July 20, Sept. 26, Apr. 19, Jan. 21, Type and size July 1, Nov. 1, Nov. 27, Dec. 23 ol deposit 1966 1966 1968 1970 of deposit 1973 1973 1974 1974 Savings deposits Savings deposits Other time deposits Other time deposits (multiple- Multiple maturity:2 and single-maturity): i, 2 30-89 days 4 Less than $100,000: 90 days to 1 year 30-89 days. 5 5 5 1-2 years 5 90 days to 1 year 51/2 2 years or more l-lYz years 6 Single-maturity: 2Vi years or more 6Vi 61/2 61/2 Less than $100,000: Minimum denomination 30 days to 1 year of $1,000: 1-2 years 5Vt 4-6 years (4) 71/4 m 2 years or more 6 years or more $100,000 or more: Governmental units (5) (5) 1V2 30-59 days SVz (3) $100,000 or more (3) (3) (3) 60-89 days 90-179 days 5^/2 180 days to 1 year 61/4 1 year or more 6V4 1 For exceptions with respect to certain foreign time deposits, see amount were subject to the 6i/i per cent ceiling that applies to time de- BULLETIN for Feb. 1968, p. 167. posits maturing in lYj years or more. 2 Multiple-maturity time deposits include deposits that are automati- Effective Nov. 1, 1973, a ceiling rate of 71^ per cent was imposed on cally renewable at maturity without action by the depositor and deposits certificates maturing in 4 years or more with minimum denominations that are payable after written notice of withdrawal. of $1,000. There is no limitation on the amount of these certificates that 3 Maximum rates on all single-maturity time deposits in denominations banks may issue. of $100,000 or more have been suspended. Rates that were effective 5 Prior to Nov. 27, 1974, no distinction was made between the time Jan. 21, 1970, and the dates when they were suspended are: deposits of governmental units and of other holders, insofar as Regulation Q ceilings on rates payable were concerned. Effective Nov. 27, 1974, 3 6 0 0 - - 5 8 9 9 d d a a y y s s 6 ^ 1 V / i 4 p p e e r r c c e e n n t t June 24, 1970 g re o c v e e iv r e n m in e t n er ta e l s t u r n a i t t e s s w on e re ti m p e e r d m ep it o te s d it s to w i h th o l d d e n s o a m vin in g a s ti d o e ns p o u s n it d s er a n $ d 1 0 c 0 o ,0 u 0 ld 0 90-179 days 6% per cent irrespective of maturity, as high as the maximum rate permitted on such 180 days to 1 year 7 per cent May 16, 1973 deposits at any Federally insured depositary institution. 1 year or more 71^ per cent NOTE.— Maximum rates that may be paid by member banks are estab- Rates on multiple-maturity time deposits in denominations of $100,000 lished by the Board of Governors under provisions of Regulation Q; or more were suspended July 16, 1973, when the distinction between however, a member bank may not pay a rate in excess of the maximum single- and multiple-maturity deposits was eliminated. rate payable by State banks or trust companies on like deposits under 4 Between July 1 and Oct. 31, 1973, there was no ceiling for certificates the laws of the State in which the member bank is located. Beginning maturing in 4 years or more with minimum denominations of $1,000. Feb. 1, 1936, maximum rates that may be paid by nonmember insured The amount of such certificates that a bank could issue was limited to commercial banks, as established by the FDIC, have been the same as 5 per cent of its total time and savings deposits. Sales in excess of that those in effect for member banks. 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. 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 I960—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. 3 . 65 50 65 1971—Dec. 6 1972—Nov. 22 55 50 55 1972—Nov. 24 1974—Jan. 2.. 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

OCTOBER 1975 • OPEN MARKET ACCOUNT A 9 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 i Others within 1 year 2 1-5 years 5-10 years Over 10 years PPeerriioodd 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 1111111111111111111111111111111111,,,,,,,,,,,,,,,,,000000000000000007777777777777777744444444444444444 5555555555555555555,,,,,,,,,,,,,,,,,,,222222222222222222211111111111111111114444444444444444444 222222,,,,,,111111666666000000 999999999999 --------33333333,,,,,,,,444444448888888833333333 888888444444888888 55555555,,,,,,,,444444443333333300000000 222222444444999999 -------1111111,,,,,,,888888844444445555555 9999999933333333 -------111111100000002222222 1971 88888888888888888,,,,,,,,,,,,,,,,,888888888888888889999999999999999966666666666666666 3333333333333333333,,,,,,,,,,,,,,,,,,,666666666666666666644444444444444444442222222222222222222 111111,,,,,,000000666666444444 111111,,,,,,000000333333666666 --------66666666,,,,,,,,444444446666666622222222 111111,,,,,,333333333333888888 44444444,,,,,,,,666666667777777722222222 999999333333333333 666666688888885555555 333333331111111111111111 111111155555550000000 1972 88888888888888888,,,,,,,,,,,,,,,,,555555555555555552222222222222222222222222222222222 6666666666666666666,,,,,,,,,,,,,,,,,,,444444444444444444466666666666666666667777777777777777777 222222,,,,,,555555444444555555 111111222222555555 22222222,,,,,,,,999999993333333333333333 777777888888999999 --------11111111,,,,,,,,444444440000000055555555 555555333333999999 -------2222222,,,,,,,000000099999994444444 111111116666666677777777 222222255555550000000 1973 1111111111111111155555555555555555,,,,,,,,,,,,,,,,,555555555555555551111111111111111177777777777777777 4444444444444444444,,,,,,,,,,,,,,,,,,,888888888888888888888888888888888888880000000000000000000 333333,,,,,,444444000000555555 111111,,,,,,333333999999666666 --------111111114444444400000000 555555777777999999 --------22222222,,,,,,,,000000002222222288888888 555555000000000000 888888899999995555555 111111112222222299999999 88888887777777 1974 ... 1111111111111111111111111111111111,,,,,,,,,,,,,,,,,666666666666666666666666666666666600000000000000000 5555555555555555555,,,,,,,,,,,,,,,,,,,888888888888888888833333333333333333330000000000000000000 444444,,,,,,555555555555000000 444444555555000000 --------11111111,,,,,,,,333333331111111144444444 777777999999777777 --------666666669999999977777777 444444333333444444 1111111,,,,,,,666666677777775555555 111111119999999966666666 222222200000005555555 111111999999777777444444——————AAAAAAuuuuuugggggg........................ 11111111111111111,,,,,,,,,,,,,,,,,666666666666666665555555555555555522222222222222222 888888888888888888855555555555555555550000000000000000000 --------22222222,,,,,,,,888888886666666677777777 11111111,,,,,,,,000000005555555577777777 1111111,,,,,,,999999944444440000000 -------111111133333330000000 SSSSSSeeeeeepppppptttttt 777777777777777771111111111111111177777777777777777 555555555555555555566666666666666666665555555555555555555 777777777777788888888888886666666666666 2222 --------222222220000000000000000 6655 222222220000000000000000 5533 3333333377777777 OOOOOOcccccctttttt 555555555555555554444444444444444477777777777777777 1111111111111111111,,,,,,,,,,,,,,,,,,,111111111111111111111111111111111111110000000000000000000 1111111111111,,,,,,,,,,,,,000000000000066666666666663333333333333 NNNNNNoooooovvvvvv........................ 11111111111111111,,,,,,,,,,,,,,,,,444444444444444442222222222222222222222222222222222 222222222222222222277777777777777777773333333333333333333 111111111111100000000000007777777777777 111144448888 ---111,,,666222333 99999992222222 111,,,777555777 77777778888888 --446655 22222225555555 220000 DDDDDDeeeeeecccccc............ ............ 999999999999999997777777777777777733333333333333333 444444444444444444422222222222222222226666666666666666666 6666666666666 88885555 111222666 111111122222223333333 ---111222666 55555553333333 22222220000000 111111999999777777555555______jjjjjjaaaaaannnnnn 333333333333333334444444444444444411111111111111111 999999999999999999944444444444444444445555555555555555555 666666666666600000000000000000000000000 11114444 333333300000005555555 66666661111111 22222226666666 FFFFFFeeeeeebbbbbb.................. ...... 333333333333333335555555555555555577777777777777777 444444444444444444466666666666666666660000000000000000000 999999999999900000000000000000000000000 222,,,444333777 111111122222229999999 ---222,,,888333666 111111111111113333333 224499 77777774444444 115500 MMMMMMaaaaaarrrrrr........................ 777777777777777776666666666666666600000000000000000 111111111111111111155555555555555555556666666666666666666 444444444444488888888888887777777777777 11111,,,,,555557777799999 ---111,,,444999444 333333366666661111111 111999444 444444455555550000000 222222211111112222222 22222222222222222,,,,,,,,,,,,,,,,,111111111111111111111111111111111199999999999999999 333333333333333333311111111111111111118888888888888888888 555555555555500000000000006666666666666 111114444488888 444444488888885555555 222222277777774444444 111111166666664444444 MMMMMMaaaaaayyyyyy''''''......''''''......''''''...... 999999999999999990000000000000000033333333333333333 333333333333333333355555555555555555554444444444444444444 444444444444400000000000007777777777777 5555500000 ---333,,,111333111 666,,,666333555 --33,,880011 229988 JJJJJJuuuuuunnnnnneeeeee.................. 444444444444444442222222222222222211111111111111111 111111111111111111166666666666666666661111111111111111111 666666666666611111111111112222222222222 2222200000 666999111 448888 ---555222999 118800 110099 JJJJJJuuuuuullllllyyyyyy 1111111111111111111,,,,,,,,,,,,,,,,,,,555555555555555555500000000000000000005555555555555555555 888888888888800000000000000000000000000 AAuugg...... ,, 331122 222222222222222222288888888888888888882222222222222222222 444444444444400000000000000000000000000 22,,000022 --22,,114444 115500 11,,229999 6644 --11,,444444 4477 330000 Matched sale-purchase Repurchase Federal agency obligations Bankers Total outright 1 transactions agreements Net acceptances, (U.S. Govt, (U.S. Govt, change net securities) securities) in U.S. Outright Repur- Net Period Govt, chase change • securi- Repur- Gross Gross Gross ties Gross Sales or ments, chase pur- Gross Redemp- Gross pur- pur- Gross pur- redemp- net Out- agreechases sales tions sales chases chases sales chases tions right ments 197 0 12,362 5,214 2,160 12,177 12,177 33,859 33,859 4,988 -6 4,982 197 1 12,515 3,642 2,019 16,205 16,205 44,741 43,519 8,076 485 101 22 181 8,866 197 2 10,142 6,467 2,862 23,319 23,319 31,103 32,228 -312 1,197 370 -9 -145 272 197 3 18,121 4,880 4,592 45,780 45,780 74,755 74,795 8,610 865 239 29 -2 -36 9,227 1974 13,537 5,830 4,682 64,229 62,801 71,333 70,947 1,984 3,087 322 469 511 420 6,149 1974_Aug.. 1,652 850 9,061 11,287 2,096 2,096 3,028 238 3 59 3,322 Sept. 893 565 786 9,420 9,782 3,551 3,551 -96 207 16 40 187 322 Oct.. 547 1,110 1,063 12,574 12,516 4,618 4,618 -1,684 -100 -185 -1,970 Nov.. 1,765 273 238 6,880 6,404 6,990 6,121 1,647 331 369 174 218 2,739 Dec., 1,254 426 6 8,855 7,962 11,470 11,895 -498 360 142 188 201 393 1975—Jan.. 746 945 600 9,237 10,367 9,260 8,748 844 -409 103 -136 387 Feb.. 673 460 900 7,167 6,634 11,267 10,305 -258 376 246 -12 39 309 Mar. 3,362 156 1,788 15,933 16,763 5,011 6,928 332 210 -347 -5 -323 -136 Apr.. 3,189 318 506 12,375 12,216 12,774 8,551 6,428 883 24 496 7,829 May. 953 354 407 2,996 3,044 19,489 21,952 -2,224 -567 55 -375 -3,207 June. 1,217 161 450 12,914 13,026 15,219 16,810 -873 -255 -62 -121 -1,317 July. 1,505 800 15,532 15,139 5,977 6,146 -2,866 -61 3 -2,926 Aug.. "'2^574 282 2,389 14,234 13,730 8,146 6,881 663 353 90 156 1,222 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 holddirectly from the Federal Reserve, as follows: June 1971, 955; Sept. 1972, ings; all other figures increase such holdings. Details may not add to 38; Aug. 1973, 351; Sept.'1973, 836; Nov. 1974, 131; Mar. 1975, 1,560; totals because of rounding. Aug. 1975, 1,989. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 10 FEDERAL RESERVE BANKS • OCTOBER 1975 CONSOLIDATED STATEMENT OF CONDITION OF ALL FEDERAL RESERVE BANKS (In millions of dollars) Wednesday End of month IIIttteeemmm 1975 1975 1974 Sept. 24 Sept. 17 Sept. 10 Sept. 3 Aug. 27 Sept. 30 Aug. 31 Sept. 30 Assets Gold certificate account 11,599 11,599 11,599 11,598 11,599 11,599 11,598 11,460 500 500 500 500 500 500 500 400 390 372 359 350 358 403 363 237 Loans: Member bank borrowings 1,402 338 1,695 208 159 283 231 2,920 Other Acceptances: Bought outright 668822 651 651 667744 671 669988 668844 317 Held under repurchase agreements 119922 1 223333 * 225500 115566 187 Federal agency obligations: Bought outright 55,,339955 5,395 5,395 55,,339966 5,396 55,,778899 55,,339966 4,011 Held under repurchase agreements 442200 119911 229933 9900 U.S. Govt, securities: Bought outright: Bills 3344,,775577 31,674 32,158 3333,,557700 34,083 3355,,442222 3333,,660000 38,219 Certificates—Special Other NNootteess 43,400 43,157 42,812 42,812 42,586 43,400 42,812 39,719 BBoonnddss 5,104 4,980 4,869 4,869 4,822 5,104 4,869 3,097 TToottaall bboouugghhtt oouuttrriigghhtt 11 8833,,226611 1 79,811 1 79,839 11 8811,,225511 181,491 11 8833,,992266 118811,,228811 1 81,035 HHeelldd uunnddeerr rreeppuurrcchhaassee aaggrreeeemmeennttss 44,,221133 22,,119999 33,,007722 11,,226655 TToottaall UU..SS.. GGoovvtt,, sseeccuurriittiieess 8877,,447744 7799,,881111 7799,,883399 8833,,445500 8811,,449911 8866,,999988 8822,,554466 81,035 TToottaall llooaannss aanndd sseeccuurriittiieess 9955,,556655 8866,,119955 8877,,558811 9900,,115522 8877,,771177 9944,,331111 8899,,110033 88,470 ff 77,,220099 88,,553377 77,,330000 77,,779999 66,,445577 77,,005599 55,,777799 5,867 BBaannkk pprreemmiisseess 330055 330066 330066 330066 330055 330066 330055 248 OOnneerraattiinnee eeaauuiitt>>mmeenntt 44 44 44 22 22 44 22 OOOOOOtttttthhhhhheeeeeerrrrrr aaaaaasssssssssssseeeeeettttttssssss:::::: DDDDDDeeeeeennnnnnoooooommmmmmiiiiiinnnnnnaaaaaatttttteeeeeedddddd iiiiiinnnnnn ffffffoooooorrrrrreeeeeeiiiiiiggggggnnnnnn ccccccuuuuuurrrrrrrrrrrreeeeeennnnnncccccciiiiiieeeeeessssss 5511 3311 2266 2266 2211 224477 2266 242 AAAAAAllllllllllll ooooootttttthhhhhheeeeeerrrrrr 22,,668888 22,,773344 22,,778877 22,,558811 22,,551188 22,,770022 22,,667799 991 TTTTTToooooottttttaaaaaallllll aaaaaasssssssssssseeeeeettttttssssss f118,311 110,278 110,462 113,314 109,477 f117,131 110,355 107,915 LLLLLLiiiiiiaaaaaabbbbbbiiiiiilllllliiiiiittttttiiiiiieeeeeessssss FFFFFF......RRRRRR...... nnnnnnooooootttttteeeeeessssss 72,621 73,093 73,430 73,319 72,882 72,563 72,787 66,219 DDDDDDeeeeeeppppppoooooossssssiiiiiittttttssssss:::::: MMMMMMeeeeeemmmmmmbbbbbbeeeeeerrrrrr bbbbbbaaaaaannnnnnkkkkkk rrrrrreeeeeesssssseeeeeerrrrrrvvvvvveeeeeessssss I'29,183 24,908 27,623 29,096 26,937 f26,252 26,484 29,266 7,249 2,421 405 804 833 8,075 2,349 3,209 FFFFFFoooooorrrrrreeeeeeiiiiiiggggggnnnnnn 234 242 295 247 232 324 342 411 OOOOOOtttttthhhhhheeeeeerrrrrr:::::: AAAAAAllllllllllll ooooootttttthhhhhheeeeeerrrrrr222222 660 854 1,036 868 838 616 776 718 TTTTTToooooottttttaaaaaallllll ddddddeeeeeeppppppoooooossssssiiiiiittttttssssss f37,326 28,425 29,359 31,015 28,840 f35,267 29,951 33,604 4,983 5,700 4,724 6,067 4,538 5,829 4,306 4,407 OOOOOOtttttthhhhhheeeeeerrrrrr lllllliiiiiiaaaaaabbbbbbiiiiiilllllliiiiiittttttiiiiiieeeeeessssss aaaaaannnnnndddddd aaaaaaccccccccccccrrrrrruuuuuueeeeeedddddd ddddddiiiiiivvvvvviiiiiiddddddeeeeeennnnnnddddddssssss 1,188 974 966 1,038 998 1,165 1,037 1,407 TTTTTToooooottttttaaaaaallllll lllllliiiiiiaaaaaabbbbbbiiiiiilllllliiiiiittttttiiiiiieeeeeessssss 116,118 108,192 108,479 111,439 107,258 ^^ 114,824 108,081 105,637 CCCCCCaaaaaappppppiiiiiittttttaaaaaallllll aaaaaaccccccccccccoooooouuuuuunnnnnnttttttssssss CCCCCCaaaaaappppppiiiiiittttttaaaaaallllll ppppppaaaaaaiiiiiidddddd iiiiiinnnnnn 914 916 916 914 914 914 914 886 897 897 897 897 897 897 897 844 OOOOOOtttttthhhhhheeeeeerrrrrr ccccccaaaaaappppppiiiiiittttttaaaaaallllll aaaaaaccccccccccccoooooouuuuuunnnnnnttttttssssss 382 273 170 64 408 496 463 548 TTTTTToooooottttttaaaaaallllll lllllliiiiiiaaaaaabbbbbbiiiiiilllllliiiiiittttttiiiiiieeeeeessssss aaaaaannnnnndddddd ccccccaaaaaappppppiiiiiittttttaaaaaallllll aaaaaaccccccccccccoooooouuuuuunnnnnnttttttssssss p118,311 110,278 110,462 113,314 109,477 f117,131 110,355 107,915 Contingent liability on acceptances purchased for 11,,445599 Marketable U.S. Govt, securities held in custody for foreign and international accounts 42,035 42,941 43,051 43,230 42,476 41,360 43,204 3300,,883333 Federal Reserve Notes—Federal Reserve Agents* Accounts F.R. notes outstanding (issued to Bank) 78,613 78,727 78,715 78 ,532 78,340 78,643 78,553 71,124 Collateral held against notes outstanding: Gold certificate account 11,596 11,596 11,596 11 ,596 11,596 11,596 11,596 2,360 Special Drawing Rights certificate account. 302 302 302 302 302 302 302 Acceptances U.S. Govt, securities 69,305 69,305 69,305 69., 305 69,005 69,330 69,305 70,115 Total collateral. 81,203 81,203 81,203 81:, 203 80,903 81,228 81,203 72,475 1 See note 2 on p. A-2. 2 See note 6 on p. A-3. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • FEDERAL RESERVE BANKS; BANK DEBITS A 11 MATURITY DISTRIBUTION OF LOANS AND U.S. GOVERNMENT SECURITIES HELD BY FEDERAL RESERVE BANKS (In millions of dollars) Wednesday End of month Item 1975 1975 1974 Sept. 24 Sept. 17 Sept. 10 Sept. 3 Aug. 27 Sept. 30 Aug. 31 Sept. 30 Loans—Total 1,402 336 1,696 209 158 283 231 2,920 Within 15 days... 1,385 319 1,653 184 153 251 196 2,814 16-90 days 17 17 43 25 5 32 35 106 91 days to 1 year.. Acceptances—^Total. 874 651 652 907 671 948 840 504 Withm 15 days... 308 111 108 343 104 353 268 202 16-90 days 309 333 360 369 395 288 381 253 91 days to 1 year. 257 207 184 195 172 307 191 49 U.S. Govt, securities—^Total. 87,474 79,811 79,839 83,450 81,491 86,998 82,546 81,035 Within 15 daysi 8,104 3,932 3,040 5,271 3,913 5,608 3,826 3,340 16-90 days 17,569 15,404 16,149 17,508 17,125 19,533 16,758 21,747 91 days to 1 year 21,864 20,905 21,536 21,557 21,556 22,198 22,805 22,794 1-5 years 30,377 30,129 29,815 29,815 29,708 30,099 29,858 21,289 5-10 years 5,893 5,847 5,756 5,756 5,693 5,893 5,756 9,946 Over 10 years 3,667 3,594 3,543 3,543 3,496 3,667 3,543 1,919 Federal agency obligations—Total. 5,815 5,395 5,395 5,587 5,396 6,082 5,486 4,011 Within 15 days 1 430 10 296 140 303 230 25 16-90 days 201 201 169 169 113 201 113 155 91 days to 1 year 590 590 632 558 579 613 579 577 1-5 years 2,788 2,758 2,788 2,700 2,700 3,073 2,700 1,894 5-10 years 1,253 1,253 1,253 1,311 1,311 1,310 1,311 872 Over 10 years 553 583 553 553 553 582 553 488 1 Holdings under repurchase agreements are classified as maturing w ithin 15 days in accordance with maximum maturity of the agreements. BANK DEBITS AND DEPOSIT TURNOVER (Seasonally adjusted annual rates) Debits to demand deposit accounts i Turnover of demand deposits (billions of dollars) Period Leading SMSA's Total 232 Leading SMSA's Total 232 Total SMSA's 226 Total SMSA's 226 233 (excl. other 233 (excl. other SMSA's N.Y. 6 others2 N.Y.) SMSA's SMSA's N.Y. 6 others 2 N.Y.) SMSA's 1974_Aug.... 21.481.7 9,240.8 5.173.0 12,241.0 7,068.0 123.4 286.4 132.0 86.3 68.9 Sept 22,017.5 9,970.8 5.092.1 12.046.7 6,954.7 125.1 310.5 127.5 83.8 66.9 Oct.. . . 22.348.8 10,271.1 5,084.7 12.077.6 6.993.0 127.0 316.8 127.3 84.1 67.5 Nov.... 22,918.7 10,538.9 5.160.2 12.379.8 7,219.6 131.8 324.6 131.5 87.5 70.6 Dec.... 22,192.4 9,931.8 5.152.7 12,260.6 7,107.9 128.0 312.8 131.8 86.6 69.3 1975—Jan 21,856.3 10,157.8 4,868.4 11.698.4 6.830.1 127.2 321.8 125.9 83.4 67.3 Feb 22,952.7 10.918.0 4.992.8 12.034.7 7,041.9 133.3 343.2 127.4 85.8 69.6 Mar.... 22.182.9 10.241.1 4.899.9 71.941.8 11,041.9 125.1 320.4 118.2 82.2 67.8 22,707.7 10,810.3 4,770.6 11.897.5 7,126.9 128.3 337.5 115.3 82.1 68.8 MayW. 22.739.7 10,826.1 4,852.6 11.913.6 7,016.0 129.7 341.3 121.3 83.0 68.2 June... 22,504.2 10.612.2 4,755.2 11,892.0 7,136.9 124.6 328.6 115.5 80.2 66.7 July.... >•22,830.2 10,709.5 '•4,841.1 ••12,120.7 >•7,279.5 >•126.4 331.0 >•116.4 >•81.7 68.2 Aug 23.277.8 10,628.8 5,125.0 12,649.0 7,524.0 130.4 335.0 124.4 86.2 71.3 1 Excludes interbank and U.S. Govt, demand deposit accounts. NOTE.—Total SMSA's include 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 12 MONEY STOCK • OCTOBER 1975 MEASURES OF THE MONEY STOCK (In billions of dollars) Seasonally adjusted Not seasonally adjusted Period ML Mi MA Mi M5 ML M2 Ml MI MB Composition of measures is described in the NOTE below. 1972—Dec 255.8 525.7 844.9 569.7 888.8 263.0 530.7 848.0 574.9 892.2 1973—Dec 271.5 572.2 919.6 636.0 983.4 279.1 577.3 922.8 641.3 986.8 1974—Aug 280.5 601.9 962.6 685.7 1,046.4 277.3 598.4 958.7 685.5 1,045.8 Sept 280.7 603.4 965.0 688.2 1,049.9 278.9 600.3 960.8 689.0 1,049.5 Oct 281.6 607.6 970.7 693.8 1,056.9 281 .2 605.7 967.4 694.5 1,056.2 Nov 283.6 611.6 976.9 697.1 '•1,062.4 285.1 '•609.7 972.8 696.8 1,059.9 Dec 284.4 613.5 981.7 '•703.7 1,072.0 292.3 618.6 '^985.0 '•709.0 1,075.5 I975_jan.' 281.6 614.8 986.3 107.6 1,079.1 288.6 620.7 991.7 712.7 1,083.6 Feb.'- 282.4 619.1 994.4 711.2 1,086.5 279.4 616.7 992.1 705.9 1,081.4 Mar. 285.0 625.1 1,005.9 714.8 1,095.7 282.2 624.6 1,007.3 712.7 1,095.4 Apr. '• 285.8 628.9 1,015.7 717.3 1,104.1 287.3 633.3 1,022.4 719.1 1,108.2 May'- 288.5 635.9 1,028.3 721.5 1,113.9 283.7 634.1 1,028.2 718.2 1,112.3 June*^ 293.0 646.1 1,045.3 730.1 1,129.4 291.1 645.5 1,047.1 727.9 1,129.4 July 293.5 650.5 1,055.9 732.6 1,138.0 293.1 650.1 1,057.5 731.4 1,138.8 Aug 294.2 653.7 1,064.2 731.7 1,142.2 290.9 650.0 1,060.2 731.1 1,141.4 NOTE.—Composition of the money stock measures is as follows: Mz: Mt. plus mutual savings bank deposits, savings and loan shares, and credit union shares (nonbank thrift). Mw Averages of daily figures for (1) demand deposits of commercial Mi: Mz plus large negotiable CD's. banks other than domestic interbank and U.S. Govt., less cash items in Ms: Ms plus large negotiable CD's. process of collection and F.R. float; (2) foreign demand balances at F.R. For a description of the latest revisions in MI, M2, and M3, see "Revi- Banks; and (3) currency outside the Treasury, F.R. Banks, and vaults of sion of Money Stock Measures and Member Bank Reserves and Deposits" commercial banks. on pp. 817-27 of the Dec. 1974 BULLETIN. Mi: Averages of daily figures for M\ plus savings deposits, time de- Latest monthly and weekly figures including revisions since Oct. 1974 posits open account, and time certificates other than negotiable CD's of are available from the Board's Sept. 18, 1975, H.6 release. Back data are $100,000 of large weekly reporting banks. available from the Banking Section, Division of Research and Statistics. COMPONENTS OF MONEY STOCK MEASURES AND RELATED ITEMS (In biUions of dollars) Seasonally adjusted Not seasonally adjusted Commercial banks Commercial banks Time and savings Non- Demand deposits Time and savings Non- U.S. Period deposits bank deposits bank Govt, Cur- De- thrift Cur- thrift deren- mand insti- ren- insti- poscy de- tu- cy Do- tu- its 3 pos- tions 2 mes- tions 2 its CD'si Other Total Total Mem- tic CD'si Other Total ber nonmember 1972—Dec.. 56.9 198.9 43.9 269.9 313.8 319.1 57.9 205.1 152.4 51.4 44.2 267.6 311.8 317.3 7.4 1973—Dec.. 61.6 209.9 63.8 300.7 364.5 347.4 62.7 216.4 157.0 56.6 64.0 298.2 362.2 345.6 6.3 1974—Aug.. 65.5 215.0 83.8 321.5 405.2 360.7 65.7 211.6 152.3 56.1 87.1 321.1 408.2 360.3 4.0 Sept.. 65.9 214.8 84.8 322.7 407.5 361.7 65.8 213.1 153.3 56.6 88.7 321.3 410.1 360.5 5.5 Oct.., 66.5 215.2 86.2 325.9 412.1 363.2 66.4 214.7 154.4 57.1 88.8 324.6 413.3 361.7 3.7 Nov.. 67.4 216.2 85.5 328.0 '•413.5 365.3 67.9 217.3 156.0 57.7 87.1 324.6 411.7 363.0 3.4 Dec.. 67.9 216.5 90.3 329.1 '•419.3 368.2 69.0 223.3 160.4 58.9 90.5 326.3 416.7 366.5 4.9 1975_jan.r 68.2 213.4 92.7 333.2 426.0 371.5 67.8 220.9 158.8 58.5 91.9 332.1 424.0 371.0 4.0 Feb.'- 68.7 213.7 92.1 336.7 428.8 375.3 67.8 211.6 152.3 56.1 89.2 337.3 426.5 375.4 3.3 Mar.' 69.4 215.6 89.8 340.1 429.9 380.8 68.8 213.4 153.9 56.2 88.1 342.4 430.5 382.7 3.8 Apr.' 69.5 216.3 88.4 343.1 431.5 386.8 69.1 218.2 157.5 57.7 85.8 345.9 431.8 389.1 4.0 May*" 70.2 218.3 85.5 347.4 432.9 392.4 70.0 213.7 154.0 56.9 84.1 350.4 434.5 394.1 4.1 June'' 71.1 221.9 84.1 353.1 437.1 399.2 71.2 219.9 157.7 59.2 82.3 354.4 436.7 401.5 4.1 July^ 71.4 222.1 82.1 357.0 439.1 405.4 71.9 221.1 158.3 59.8 81.3 357.0 438.3 407.4 3.3 Aug.. 71.9 222.3 78.0 359.4 437.4 410.5 72.2 218.7 156.3 59.5 81.1 359.1 440.2 410.3 2.6 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, for savings capital at savings and loan associations, and for credit union shares. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • BANK RESERVES; BANK CREDIT A 13 AGGREGATE RESERVES AND MEMBER BANK DEPOSITS (In billions of dollars) Member bank reserves. S.A.i Deposits SIj bject to reserve req [uirements TToott aall mmeemmbbeerr bbaann iikk ddeeppoossiittss pplluuss nnoonnddeeppoossiitt S.A. N.S.A. iitteemmss 44 PPPPeeeerrrriiiioooodddd NNNooonnn--- TTToootttaaalll bbbooorrr--- RRReee--- AAAvvvaaaiiilll--- Demand Demand rrrooowwweeeddd qqquuuiiirrreeeddd aaabbbllleee 222 TTiimm TTiimmee TToottaall aanndd TToottaall aanndd SS..AA.. NN..SS..AA.. ssaavviinn ggss Private U.S. ssaavviinnggss Private U.S. Govt. Govt. 1971—Dec 31., 33 31.20 31.15 29 .03 360. ,3 210. ,7 143.8 5.8 364,. 6 209.7 149., 2 5. .7 365,. 2 369.5 1972—Dec 31., 46 30.41 31.17 29,. 09 402. 0 242. 0 154.5 5.6 406, .8 240.7 160,. 1 6, ,1 406, .4 411.2 l973_Dec 35, ,16 33.87 34.86 32,. 97 442. ,2 280. ,0 158.2 3.9 447, .5 278.5 164,. 0 5, ,0 448, .7 454.0 1974_Aug 37. .27 33.93 37.08 35,. 27 478. .5 312. 4 159.9 6.2 475, .1 315.3 157,, 0 2, .9 487, .5 484.2 Sept 37. ,28 34.00 37.08 35,. 30 480. 6 314. 4 159.9 6.3 479, .7 317.2 158. ,3 4, .2 489, .2 488.2 Oct 36. 85 35.04 36.73 34,. 89 480. ,5 317. .2 159.5 3.7 480, .5 318.6 159,, 1 2. ,7 488, .3 488.3 Nov.... 36,. 88 35.62 36.67 34 .87 483, .6 318, .4 160.6 4.6 481 .2 317.4 161,. 4 2, .4 491, .2 488.8 Dec 36, .91 36.18 36.65 34 .64 485, .9 323, .4 160.7 1.9 491 .8 321.7 166,. 6 3,, 5 494 .3 500.1 1975_jan 36, .91 36.51 36.76 34 .41 488. ,2 328, ,5 159.0 0.7 495 .1 327.2 165,. 0 2, .9 495 .8 502.6 Feb 35,. 46 35.32 35.27 33 .61 489, ,2 328, ,9 159.7 0.6 487 .0 326.5 158,. 0 2, .4 495 .7 493.5 Mar.... 34,. 85 34.74 34.65 33 .03 491, ,6 329. .2 161.7 0.7 491 .6 328.9 159,. 8 2. .8 498 .1 498.1 Apr 35,. 08 34.97 34.93 33 .11 493. ,5 329. ,7 161.7 2.1 495, .4 329.1 163,. 2 3., 1 500,, 2 502.2 May.... 34,. 63 34.56 34.47 32 .80 493. 7 329. 0 162.6 2.1 491, .8 329.8 159,, 0 3., 0 501,, 2 499.2 June 34,. 87 34.65 34.67 33 .00 500., 5 330. ,8 165.9 3.8 497, .5 330.2 164,, 2 3., 1 507,, 5 504.5 July 34,. 99 34.69 34.80 32 .94 498. ,5 330. ,8 165.2 2.5 497. .2 330.2 164,, 5 2, ,5 505,, 3 504.0 Aug.. .. 34 .57 34.36 34.37 32 .77 496, ,0 327,, 9 165.3 2.9 494 .8 330.5 162,, 3 2. 0 503.. 0 501.8 1 Averages of daily figures. Member bank reserve series reflects actual by Regulation D. Private demand deposits include all demand deposits reserve requirement percentages with no adjustment to eliminate the except those due to the U.S. Govt., less cash items in process of collection eflFect of changes in Regulations D and M. Required reserves were in- and demand balances due from domestic commercial banks. creased by $660 million effective Apr. 16, 1969, and $400 million eff-ective 4 "Total member bank deposits" subject to reserve requirements, plus Oct. 16, 1969; were reduced by $500 million (net) effective Oct. 1, 1970. Euro-dollar borrowings, loans sold to bank-related institutions, and Required reserves were reduced by approximately $2.5 billion, effective certain other nondeposit items. This series for deposits is referred to as Nov. 9, 1972; by $1.0 billion, effective Nov. 15; and increased by $300 "the adjusted bank credit proxy." 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 Money Stock Measures and Member Bank Reserves and as (1) required reserves for (a) private demand deposits, (b) total time Deposits" on pp. 817-27 of the Dec. 1974 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. LOANS AND INVESTMENTS AT ALL COMMERCIAL BANKS (In billions of dollars) Seasonally adjusted Not seasonally adjusted Loans Securities Loans Securities TTToootttaaalll TTToootttaaalll DDDaaattteee llloooaaannnsss Commercial llloooaaannnsss Commercial aaannnddd and industrial aaannnddd and industrial 3 iiinnnvvveeesssttt--- PPlluuss UU..SS.. iiinnnvvveeesssttt--- PPlluuss UU..SS.. mmmeeennntttsss 111 TToottaa 1111 llooaannss Plus TTrreeaass-- OOtthheerr 44 mmmeeennntttsss 111 TToottaall 11 llooaannss Plus TTrreeaass-- OOtthheerr44 ssoolldd 22 Total loans uurryy ssoolldd 22 Total loans uurryy sold 2 sold 2 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—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 I974_Sept. 25 5.... 689. 9 500, .2 505.5 181,. 4 184 .2 52.3 137,. 4 689.5 501 .2 506 .5 181 .5 184.3 50.7 137.6 Oct. 30 690. 8 502 .0 507.2 183,, 2 186 .0 49.8 139. ,0 689.5 500 .7 505 .9 182 .0 184.8 50.7 138.1 Nov. 276.... 692. 5 503, .8 508.7 184,. 3 187 .0 49.1 139., 6 692.2 502 .0 506 .9 183 .2 185.9 52.1 138.1 Dec. 31 687. ,1 498 .2 503.0 182, .6 185 .3 48.8 140, ,1 705.6 510 .7 515, .5 186 .8 »-I89.6 '•54.5 140.5 1975—Jan. 29f.... 689. ,3 500 .7 505.3 183,. 9 186 .6 48.8 139,. 8 688.3 495 .9 500, .5 181 .7 184.4 53.6 138.9 Feb. 26f.... 691. 0 497 .6 502.1 182,. 1 184 .8 53.3 140,, 1 685.3 491, .5 496 .0 180 .3 183.0 54.7 139.1 Mar. 26?'.... 694. ,7 496 .4 501.1 180,. 4 183 .2 58.7 139., 6 690.2 490 .3 495 .0 180 .0 182.8 59.6 140.3 Apr. 30^... 696. .2 492 .4 497.0 179,. 8 182 .5 64.5 139., 3 695.2 490 .6 495, .2 180 .4 183.1 63.7 140.9 May 28f.... 698. ,3 489 .6 494.3 178,. 2 181 .0 68.8 139., 9 694.7 488, .4 493, .1 177,. 8 180.6 65.6 140.6 June 30P,... 698, ,8 484 .5 489.2 175,. 3 178 .2 73.0 141,. 3 703.0 491 .8 496 .5 177 .9 180.8 68.8 142.4 July 30P.... 702. ,1 485 .8 490.3 176,, 0 178,. 8 74.0 142., 3 700.6 487, .9 492. ,4 175,. 9 178.7 70.4 142.4 Aug. 27P.... 706. ,1 486 .9 491.4 175,, 8 178,. 6 76.3 142. 9 701.3 485, .8 490. .3 174,. 3 177.1 72.8 142.6 Sept. 24f.. . 707, ,4 486 .6 491.1 174,, 6 177 .4 77.9 142., 9 707.2 487, .9 492, ,4 174 .9 177.7 76.3 143.1 1 Adjusted to exclude domestic commercial interbank loans. <> As of Oct. 31, 1974, "Total loans and investments" of all commercial 2 Loans sold are those sold outright for banks' own foreign branches, banks were reduced by $1.5 billion in connection with the liquidation nonconsolidated nonbank affiliates of the bank, the banks' holding of one large bank. Reductions in other items were: "Total loans," $1.0 company (if not a bank), and nonconsolidated nonbank subsidiaries of billion (of which $0.6 billion was in "Commercial and industrial loans"), the holding company. Prior to Aug. 28, 1974, the institutions included and "Other securities," $0.5 billion. In late November "Commercial and had been defined somewhat differently, and the reporting panel of banks industrial loans" were increased by $0.1 billion as a result of loan rewas also different. On the new basis, both "Total loans" and "Com- classifications at another large bank. mercial and industrial loans" were reduced by about $100 million. 3 Reclassification of loans at one large bank reduced these loans by NOTE.—Total loans and investments: For monthly data, Jan. 1959about $400 million as of June 30, 1972. June 1973, see Nov. 1973 BuLLEnN, pp. A-96-A-97, and for 1948-58. 4 Farmers Home Administration insured notes included in "Other Aug. 1968 BULLETIN, pp. A-94-A-97. For a description of the current securities" rather than in loans beginning June 30, 1971, when such notes seasonally adjusted series see the Nov. 1973 BULLETIN, pp. 831-32, and totaled about $700 million. the Dec. 1971 BULLETIN, pp. 971-73. Commercial and industrial loans: 5 Data beginning June 30, 1974, include one large mutual savings For monthly data, Jan. 1959-June 1973, see Nov. 1973 BULLETIN, pp. bank that merged with a nonmember commercial bank. As of that date A-96-A-98; for description see July 1972 BULLETIN, p. 683. Data are for there were increases of about $500 million in loans, $100 million in "Other last Wednesday of month except for June 30 and Dec. 31; data are partly Digitized for s F e R cu A ri S tie E s, R " and $600 million in "Total loans and investments." or wholly estimated except when June 30 and Dec. 31 are call dates. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 14 COMMERCIAL BANKS • OCTOBER 1975 PRINCIPAL ASSETS AND LIABILITIES AND NUMBER, BY CLASS OF BANK (Amounts in millions of dollars) Loans and ii ivestmer Its Total De posits assets- Total Classification by Secur ities lia- Interbank 3 Other Total Num- FRS membership Cash bilities Bor- capital ber and FDIC assets 3 and row- of insurance Total Loans capital Total 3 Demand ings counts banks U.S. Other ac- De- Treas- 2 counts 4 mand Time Times ury U.S. Other Govt. Last-Wednesday-of-month series 6 All commercial banks: 1941—Dec. 31.. 50,746 21,714 21,808 7,225 26,551 79,104 71,28; 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, lo; 1,343 94,36' 35,360 6: 10,059 14,181 1960—Dec. 31.. 199,509 117,642 61,003 20,864 52,150 257,552 229,84; 5,945 133.379 71,641 163 20,986 13,472 1970—Dec. 318. 461,194 313,334 61,742 86,118 93,643 576,242 480,940 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 10,169 220,375 272,289 25,912 47,211 13,783 1972—Dec. 31.. 598,808 414,696 67,028 117,084 [13,128 739,033 616,03' 10,875 252,223 314,891 38,083 52,658 13,927 1973—Dec. 31.. 683,799 494,947 58,277 130,574 118,276 835,224 681,84' 36,839 6,773 9,865 263,367 365,002 58,994 58,128 14,171 1974—Sept. 25.. 721,160 532,890 50,690137,580 107,390 873,710 692,830 29,76010,610 7,380 236,550 408,530 67,920 61,850 14,398 Oct. 309. 723,330 534,520 50,730138,080 110,770 880,750 700,420 33,15010,180 3 243,090 410,920 68,350 62,180 14,422 Nov. 27.. 729,640 539,400 52,140138,100 116,220 894,530 708,150 34,23010,310 3;910 248.730 410,970 71,470 62,210 14,440 Dec. 31.. 744,107 549,183 54,451 140,473 128,042 919,552 747,903 43,48311,496 4,807 267,506 420,61 58,369 63,650 14,465 1975—Jan. 29^. 724,080 531,630 53,560138 ,890101,400 873,940 701,390 29,90011,740 4,530 233,730 421,490 61,320 64,010 14,475 Feb. 26P. 724,010 530,160 54.720139 ,130103,470 877,120 701,120 29,77010,440 2,640 234.380 423,890 63,920 64,460 14,497 Mar. 26P. 729,500 529,590 59,620;i40,.2 900 110 5,.2 30 886,450 710,440 30,16011,680 3,970 236,540 428,090 62,830 65,100 14,523 Apr. 30f. 728,300 523,680 63.7201401 ,900113,280 895,310 720,410 32,790,11,880 7,950 242,150 425,640 60,620 64,940 14,535 May 28f. 730,170 523,950 65,5801401 ,640113,340 896,550 722,290 32,03011.200 2,980 245,960 430,120 60.810 64,890 14,555 June 252^. 733,230 523,060 67,980 110,710 898,130 721,170 31,210 10;830 3,810 244,600 430,620 62,720 65,430 14,569 July 30f. 734,710 521,940 70,370 105,750 894,870 720,670 32,640 10,640 2,260 243,100 432,030 60,780 65,920 14,580 Aug. 272'. 736,450 520,990 72,830 102,970 893,570 719,360 30,990 10,380 2,880 241,890 433,220 58,780 66,350 14,592 Sept. 24P. 738,220 518,890 76,250 104,240 898,260 721,030 30,770 10,800 3,250 239,950 436,260 59,740 66,670 14,592 Members of F.R. System: 1941—Dec. 31 .. 43,521 18,021 19,539 5,961 23,113 68,121 61,71 10,385 140 1,709 37,136 12,347 4 5,1 6,619 1947—Dec. 31.. 97,846 32,628 57,914 7,304 32,84; 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. 318. 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—Dec. 31.. 528,124 391,032 41,494 95,598 100,098 655,898 526,83 34,782 5,843 8,273 202,564 275,374 55,61 44,741 5,735 1974—Sept. 25.. 550,84: 417,631 34,683 98,529 91,002 679,160 531,194 27,831 9,522 5,782 180,114 307,94; 62,166 47,054 ,774 Oct. 309. 548,62: 415,941 34,813 97,868 93,674 680,173 535,128 31,043 9,089 2,117 184,573 308,306 60,80 47,131 ,775 Nov. 27.. 556.088 421,428 36,394 98,266 98,603 694,743 542,51 32,422 9,222 2,859 189,688 308,324 65,411 47,320 ,774 Dec. 31.. 568,532 429,537 38,921 100,073 106,995 715,615 575,56: 41,062 10,052 3,183 204,203 317,064 52,850 48,240 ,780 1975_jan. 29.. 550,264 414,426 37,549 98,289 86,321 676.905 536,256 28,31 10,299 3,247 177,701 316,698 56,136 48,41 ,783 Feb. 26.. 549,144 412,076 38,628 98,440 88,430 678,970 535,250 28,157 8,991 1,989 178,596 317,51 58,868 48,741 ,785 Mar. 26.. 552,95' 411,446 42,544 98,967 89,68 685.906 542,076 28,564 10,231 2,794 180,214 320,27: 58,030 49,219 ,785 Apr. 30.. 550,756 406,676 45,142 98,938 96,694 692,147 549,824 31,102 10,433 6,212 184,693 317,384 55,738 49,267 ,789 May 28.. 551,264 405,803 46,918 98,543 96,45: 691,48l 549,996 30,191 9,751 2,178 187,439 320,43 56,140 49,188 ,790 June 25.. 553,091 404,580 48,695 99,816 94,405 692,583 548,631 29,557 9,388 2,859 186,266 320,561 57,959 49,593 ,795 July 30.. 553,545 403,742 50,050 99,753 89,898 688,756 547,222 30,980 9,198 1,541 184,595 320,908 56,094 49,951 ,796 Aug. 27p. 554,007 402,281 51,899 99,827 87,208 686,266 545,021 29,335 8,932 2,099 183,283 321,372 54,17; 50,281 ,792 Sept. 24^'. 555,096 400,695 54,35; 100,046 88,004 689,71 546,360 29,150 9,360 2,343 181,340 324,16' 54,929 50,543 ,792 Call date series Insured banks: Total: 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 I960—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 1972—Dec. 31... 594,502 411 .525 66,679 116,298 111,333 732,519 612,822 33,366 4,113 10 ,820 250,693 313,830 37,, 556 52,166 13,721 1973—Dec. 31... 678,113 490 ,527 57,961 129,625 116,266 827,081 677,358 36,248 6,429 9;, 856 261;530 363,294 57;, 531 57,603 13,964 1974—June 30... 709,904 521,. 424 51,832 136,648 123,536 871,986 703,767 40,534 8,427 8,, 355 250,225 396,226 65,, 514 61,003 14,108 Dec. 31... 734,516 541;, 111 54,132 139,272 125,375 906,325 741,665 42,587 10,693 4:, 799 265,444 418,142 55;, 988 63,039 14,216 1975—Aprl 16... 733,913 529., 350 59,540 145,023 110,950 893,141 720,607 31,291 10,845 4: ,628 249,373 424,470 65,, 274 64,578 14,274 National member: 1941—Dec. 31... 27,571 11 ,725 12,039 3,806 14,977 43,433 39,458 6,786 1 ,0, 88 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 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—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—June 30... 418,329 313 ,659 27,631 77,039 73,703 516,632 407,915 20,086 4,912 5,, 038 145,954 231,925 48 ,123 34,966 4,693 Dec. 31... 428,433 321:, 466 29,075 77,892 76,523 534,207 431,039 23,497 6,750 2;. 437 154,397 243,959 39 ,603 35,815 4,706 1975—Apr. 16... 425,928 312 ,844 32,503 80,581 66,841 523,006 416,620 17,146 7,157 2: .809 144,014 245,494 44 ,405 36,652 4,720 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • COMMERCIAL BANKS A 15 PRINCIPAL ASSETS AND LIABILITIES AND NUMBER, BY CLASS OF BANK—Continued (Amounts in millions of dollars) Loans and investments Dep.o sits Total assets- Classification by Secur ities Total Interbank 3 Other TToottaall Num- FRS membership Cash lia- Bor- ccaappiittaall ber and FDIC assets 3 bilities row- aacc-- of insurance Total Loans U.S. and Total 3 Demand ings ccoouunnttss banks Treas- Other capital De- Time ury ac- mand Time 5 counts 4 U.S. Other 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 25.472 125,460 101,512 11,091 750 1,720 45.734 42,218 5,478 9,232 1,147 1972—Dec. 31... [15,426 82,889 11,530 21,008 29,176 150,697 123,186 12,862 1,406 2,378 51,017 55,523 9,651 10,886 1,092 1973—Dec. 31... 130,240 97,828 10,532 21,880 29,387 166,780 131,421 14,425 1,968 2,318 49,859 62,851 15,914 11,617 1,076 1974—June 30... 132,388 101,732 8,303 22,353 35,268 175,896 139,446 19,125 2,906 1,586 47,690 68,138 14,713 11,980 1,068 Dec. 31... 140,373 108,346 9,846 22,181 30.473 81,683 144,799 17,565 3,301 746 49,807 73,380 13,247 12,425 1,074 1975—Apr. 16... 136,425 102,992 10,127 23,306 29,358 177,453 135,949 12,984 3,047 735 46,287 72,895 17,988 12,586 1,066 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 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 ,199 10,938 8,017 1973—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 ,920 12,862 8,229 1974—June 30... 159,186 106,033 15,898 37,255 14,565 179,457 156,406 1,323 610 1,731 56,580 96,162 2,678 14,057 8,347 Dec. 31... 165,709 11,300 15,21 39,199 18,380 190,435 165,827 1,525 642 1,616 61,240 100,804 3,138 14,799 8,436 1975—Apr. 16... 171,559 13,513 16,909 41,136 14,750 192,682 168,039 1,161 641 1,084 59,071 106,082 2,881 15,339 8,488 Noninsured nonmember: 1941_Dec. 31... 1,457 455 761 241 763 2,283 1,872 329 ,291 253 13 329 852 1947_Dec. 317.. 2,009 474 ,280 255 576 2,643 2,251 177 185 ,392 478 4 325 783 I960—Dec. 31... 1,498 550 53 413 314 1,883 1,443 159 132 846 293 14 358 352 1970—Dec. 318.. 3,079 2,132 304 642 934 4,365 2,570 375 101 1,298 756 226 532 184 1971—Dec. 31... 3,147 2,224 239 684 1,551 5,130 2,923 380 116 1,273 1,134 283 480 181 1972—Dec. 31... 4,865 3,731 34? 785 1,794 7,073 3,775 488 81 1,530 1,620 527 491 206 1973—Dec. 31... 6,192 4,92' 316 949 2,010 8,650 4,996 591 344 1,836 2,215 1,463 524 207 1974—June 30... 9,269 7,98' 1,001 2,951 12,770 6,610 1,481 476 2,209 2,432 2,033 620 229 Dec. 31.. 9,981 8,461 1,201 2,667 13,616 6,627 897 803 2,062 2,857 2,382 611 249 Total nonmember: 1941_Dec. 31... 7,233 3,696 2,270 1,266 3,431 10,992 9,573 457 504 3,613 18 1,288 7,662 1947—Dec. 31.., 18,454 5,43: 11,318 1,703 4,659 23,334 21,591 439 190 167 13,758 7,036 12 1,596 7,261 I960—Dec. 31.. 33,910 17,71< 11,90- 4,287 6,396 40,99 36,834 643 160 657 20,986 14,388 33 3,590 7,300 1970—Dec. 318., 95,478 59,621 16,34: 19,514 12,14: 110,822 96,568 1,466 243 1,478 41,303 52,078 796 8,858 7,919 1971—Dec. 31.. 111,674 69,41 17,29' 24,966 13,64: 129,100 112,764 1,592 359 1.742 45,990 63,081 866 9,932 8,056 1972—Dec. 31.. 133,198 85,32: 18,313 29,559 16,562 154,08 134,091 1,895 633 1,850 54,406 75,305 1,726 11,429 8,223 1973—Dec. 31.. 155,830 104,070 16,783 34,976 18,17' 179,480 155,165 2,057 930 1,592 60,802 89,784 3,383 13,386 8,436 1974—June 30.. 168,456 14,02C 16,180 38,256 17,516 192,22' 163,016 2,804 1,086 1.743 58,789 98,593 4,711 14,677 8,576 Dec. 31.. 175,690 119,761 15,530 40,400 21,04 204,051 172,454 2,422 1,445 1,624 63,302 103,661 5.520 15,410 8,685 1 Loans to farmers directly guaranteed by CCC were reclassified as 9 Member bank data foi Oct. dude assets of $3.6 billion of one large securities and Export-Import Bank portfolio fund participations were nk. 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-16. 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: 3 before Jan. 1960 and 2 through Dec. 1960. Those banks change, approximately $300 million was transferred to "Other securities" 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-24. a small national bank in the Virgin Islands; also, member banks exclude, 2 See first 2 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. exclude 1 national bank in Puerto Rico. 5 See third paragraph of note 1 above. Beginning Dec. 31, 1973, June 30,1974, and Dec. 31, 1974, respectively, 6 For the last-Wednesday-of-the-month series, figures for call dates member banks exclude and noninsured nonmember banks include 1, 2, are shown for June and December as soon as they became available. and 3 noninsured trust companies that are members of the Federal Re- 7 Beginning with Dec. 31, 1947, the series was revised; for description, serve System. see note 4, p. 587, May 1964 BULLETIN. Comparability of figures for classes of banks is affected somewhat by 8 Figure takes into account the following changes, which became changes in F.R. membership, deposit insurance status, and by mergers effective June 30, 1969: (1) inclusion of consolidated reports (including etc. figures for all bank-premises subsidiaries and other significant majority- Figures are partly estimated except on call dates. owned domestic subsidiaries) and (2) reporting of figures for total loans For revisions in series before June 30, 1947, see July 1947 BULLETIN, and for individual categories of securities on a gross basis—that is, before pp. 870-71. deduction of valuation reserves—rather than net as previously reported. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 16 COMMERCIAL BANKS • OCTOBER 1975 ASSETS BY CLASS OF BANK, DECEMBER 31, 1974 (Amounts in millions of dollars) Member banks i All Insured Large banks Account commercial commercial Nonbanks banks member Total New City of Other All other banks 1 York Chicago large City Cash bank balances, items in process 128,042 125,375 106,995 27,604 4,816 40,126 34,449 21,047 Currency and coin 11,658 11,633 8,846 691 198 2,889 5,068 2,812 Reserves with F.R. Banks 27,109 27,109 27,109 4,960 1,783 10,356 10,011 Demand balances with banks in United States 36,073 34,317 21,685 7,265 357 4,382 9,681 •'•i4;388' Other balances with banks in United States 4,173 3,872 2,602 62 275 853 1,413 1,571 Balances with banks in foreign countries 1,751 1,331 1,165 412 89 532 132 586 Cash items in process of collection 47,278 47,113 45,588 14,214 2,115 21,115 8,144 1 ,690 Total securities held—Book value 194,924 193,404 138,995 16,412 5,612 47,254 69,716 55,929 U.S. Treasury 54,451 54,132 38,921 5,332 1,820 13,323 18,445 15,529 Other U.S. Govt, agencies 32,841 32,380 20,858 2,005 874 6,450 11,529 11,984 States and political subdivisions 100,376 100,010 74,261 8,288 2,706 25,761 37,507 26,115 All other securities 7,256 6,882 4,954 787 212 1,719 2,235 2,302 Trade-account securities 7,989 7,984 7,916 3,040 831 3,805 240 74 U.S. Treasury 2,548 2,543 2,521 970 461 1 ,037 53 27 Other U.S. Govt, agencies 1,352 1,352 1 ,347 541 120 637 49 4 States and political subdivisions 3,370 3,370 3,337 1,341 250 1,612 135 34 All other 719 719 710 188 519 3 9 Bank investment portfolios 186,934 185,420 131,079 13,372 4,781 43,449 69,476 55,855 U.S. Treasury 51,902 51,589 36,400 4,362 1,360 12,286 18,393 15,502 Other U.S. Govt, agencies 31,489 31,028 19,510 1 ,464 753 5,813 11,480 11,979 States and political subdivisions 97,006 96,640 70,925 6,947 2,456 24,150 37,372 26,081 All other 6,537 6,163 4,244 599 212 1,200 2,232 2,293 Federal funds sold and securities resale agreements... 40,042 38,881 29,848 1,887 985 14,741 12,235 10,194 Commercial banks 33,807 32,645 23,723 1,052 698 10,628 11,345 10,084 Brokers and dealers 4,386 4,386 4,330 615 253 2,815 647 56 Others 1,849 1,849 1,795 220 35 1,298 243 54 Other loans 509,531 502,231 399,963 82,049 24,261 149,804 143,849 109,567 Real estate loans 130,585 130,301 94,576 8,184 1,325 35,945 49,123 36,009 Secured by farmland 5,904 5,887 2,634 14 2 345 2,274 3,270 Secured by residential 81,606 81,403 60,573 4,567 887 24,133 30,986 21,033 1- to 4-family residences 74,039 73,863 54,316 3,135 827 21 ,198 29,155 19,723 FHA insured 5,914 5,870 5,110 254 40 2,815 2,000 805 VA guaranteed 3,191 3,147 2,703 188 20 1,401 1,094 488 Other 64,933 64,846 46,503 2,693 766 16,982 26,062 18,430 Multifamily 7,567 7,540 6,257 1,432 59 2,934 1,831 1,310 FHA insured 938 921 820 166 27 355 272 118 Other 6,629 6,619 5,437 1,266 32 2,579 1,559 1,192 Secured by other properties 43,075 43,012 31,369 3,602 437 11,467 15,863 11,706 Loans to domestic and foreign banks 12,265 10,017 9,500 4,731 679 3,628 462 2,765 Loans to other financial institutions 35,235 35,011 33,626 12,911 5,009 13,047 2,660 1,609 Loans on securities to brokers and dealers 5,241 5,193 5,073 3,597 550 763 161 169 Other loans for purch./carry securities 4,026 4,001 3,343 566 329 1,527 921 683 Loans to farmers 18,237 18,216 10,501 120 252 2,457 7,672 7,735 Commercial and industrial loans. 186,826 182,802 156,340 43,095 13,408 60,473 39,365 30,485 Loans to individuals 103,210 102,951 74,460 5,213 1,558 26,751 40,938 28,750 Instalment loans 80,242 80,033 57,440 3,177 835 20,819 32,608 22,802 Passenger automobilies 32,847 32,763 22,125 462 161 6,954 14,549 10,722 Residential-repair/modernize 5,546 5,536 4,074 206 39 1,734 2,096 1,472 Credit cards and related plans 11,078 11,077 9,807 1,113 388 5,479 2,828 1,271 Charge-account credit cards 8,281 8,280 7,430 665 358 4,273 2,134 851 Check and revolving credit plans 2,797 2,797 2,377 447 30 1,206 694 420 Other retail consumer goods 15,381 15,357 10,831 155 118 3,799 6,758 4,549 Mobile homes 8,997 8,996 6,520 97 54 2,353 4,016 2,477 Other 6,383 6,362 4,311 59 64 1,447 2,742 2,072 Other instalment loans 15,390 15,299 10,602 1,242 129 2,853 6,378 4,789 Single-payment loans to individuals 22,968 22,919 17,020 2,036 723 5,932 8,330 5,948 All other loans 13,906 13,738 12,543 3,631 1,152 5,214 2,546 1,362 Total loans and securities 744,496 734,516 568,806 100,348 30,859 211,799 225,800 175,690 Fixed assets—Buildings, furniture, real estate 15,106 15,027 11,374 1,116 448 4,622 5,189 3,732 Investments in subsidiaries not consolidated 1,763 1,739 1,723 768 134 752 69 41 Customer acceptances outstanding 10,857 10,648 i0,364 5,629 451 3,912 372 493 Other assets 19,677 19,020 16,628 5,104 872 7,132 3,519 3,049 Total assets 919,941 906,325 715,890 140,569 37,581 268,343 269,398 204,051 Number of banks 14,465 14,216 5,780 13 9 155 5,603 8,685 1 Member banks exclude and nonmember banks include 3 noninsured NOTE.—Data include consolidated reports, including figures for all trust companies that are members of the Federal Reserve System, and bank-premises subsidiaries and other significant majority-owned domestic member banks exclude 2 national banks outside the continental United subsidiaries. Figures for total loans and for individual categories of States. securities are reported on a gross basis—that is, before deduction of 2 See table (and notes), Deposits Accumulated for Payment of Personal valuation reserves. Loans, p. 24. Back data in lesser detail were shown in previous BULLETINS. Beginning 3 Demand deposits adjusted are demand deposits other than domestic with the fall Call Report, data for future spring and fall Call Reports will commercial interbank and U.S. Govt., less cash items reported as in be available from the Data Production Section of the Division of Data process of collection. Processing. Details may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 D COMMERCIAL BANKS A 17 LIABILITIES AND CAPITAL BY CLASS OF BANK, DECEMBER 31, 1974 (Amounts in millions of dollars) Member banks i All Insured Large banks Non- Account commercial commercial member banks banks Total All other banks 1 New City of Other York Chicago large City Demand deposits 315,796 312,829 248,448 55,556 11,307 88,451 93,134 67,348 Mutual savings banks 1,363 1,197 1,121 559 3 190 370 242 Other individuals, partnerships, and corporations. 235,774 234,780 180,792 30,816 7,538 67,111 75,327 54,982 U.S. Government 4,807 4,799 3,183 226 36 815 2,106 1,624 States and political subdivisions 18,615 18,484 13,125 666 218 3,889 8,353 5,489 Foreign governments, central banks, etc 2,124 1,882 1,855 1,465 24 357 8 269 Commercial banks in United States 35,316 35,053 33,824 14,399 3,039 11,985 4,401 1,492 Banks in foreign countries 6,804 6,336 6,116 4,593 198 1,192 134 688 Certified and officers' checks, etc 10,993 10,297 8,431 2,833 251 2,912 2,436 2,562 Time and savings deposits 432,496 428,836 327,390 51,799 17,491 119,486 138,614 105,106 Savings deposits 135,597 135,353 97,585 6,061 2,060 34,273 55,191 38,012 Accumulated for personal loan payments 2 389 387 275 69 206 115 Mutual savings banks 479 463 451 261 3 171 16 28 Other individuals, partnerships, and corporations. 221,752 219,947 170,180 30,329 11,996 62,467 65,388 51,572 U.S. Government 477 477 352 39 6 146 160 125 States and political subdivisions 50,102 49,930 37,057 2,060 1,307 16,494 17,196 13,046 Foreign governments, central banks, etc 12,683 12,049 11,891 7,369 1,315 3,174 32 792 Commercial banks in United States 8,611 8,417 7,858 4,119 775 2,546 418 753 Banks in foreign countries 2,406 1,814 1,742 1,561 29 145 7 663 Total deposits 748,292 741,665 575,838 107,355 28,799 207,936 231,748 172,454 Federal funds purchased and securities sold under agreements to repurchase 52,325 51,139 48,349 10,048 4,295 26,357 7,649 3,976 Other liabilities for borrowed money 6,045 4,848 4,501 1,571 63 2,406 460 I,544 Mortgage indebtedness 715 712 509 77 4 259 169 206 Bank acceptances outstanding 11,433 11,221 10,936 6,155 469 3,938 373 497 Other liabilities 28,788 25,047 20,426 4,397 1,346 8,029 6,653 8,362 Total liabilities. 847,597 834,632 660,559 129,603 34,977 248,927 247,052 187,038 Minority interest in consolidated subsidiaries. 5 2 2 3 Total reserves on loans/securities 8,649 7,088 1,594 488 2,668 2,338 II,600 Reserves for bad debts (IRS) 8,402 8,366 6,909 1,593 488 2,598 2,229 1,493 Other reserves on loans 116 115 70 1 17 51 46 Reserves on securities 171 169 110 53 57 60 Total capital accounts 63,650 63,039 48,240 9,372 2,115 16,748 20,005 15,410 Capital notes and debentures. 4,290 4,226 3,422 755 61 1,673 933 868 Equity capital 59,360 58,813 44,818 8,616 2,054 15,076 19,072 14,542 Preferred stock 54 43 24 10 13 30 Common stock 14,820 14,723 11,014 'ijiss '"568" 3,560 4,698 3,806 Surplus 25,396 25,224 19,226 3,720 1,140 6,840 7,525 6,170 Undivided profits 18,122 17,917 13,905 2,704 301 4,398 6,502 4,216 Other capital reserves 968 904 649 4 44 267 334 319 Total liabilities, reserves, minority interest, capital accounts 919,941 906,325 715,890 140,569 37,581 268,343 269,398 204,051 Demand deposits adjusted 3 228,395 225,864 165,853 26,717 6,117 54,535 78,483 62,542 Average total deposits (past 15 days). 724,418 717,811 555,884 103,014 27,229 199,287 226,354 168,534 Average total loans (past 15 days) 519,192 510,810 401,666 81,665 24,493 150,485 145,023 117,525 Selected ratios: Percentage of total assets Cash and balances with other banks. 13.9 13.8 14.9 19.6 12.8 15.0 12.8 10.3 21.2 21.3 19.4 11.7 14.9 17.6 25.9 27.4 Total securities held Trading account securities .9 1.1 2.2 2.2 1.4 U.S. Treasury .3 .3 .4 .7 1.2 .4 States and political subdivisions.... .4 .4 .5 1.0 .7 .6 All other trading account securities. .2 .2 .3 .5 .3 .4 Bank investment portfolios 20.3 20.5 18.3 9.5 12.7 16.2 25.8 27.4 U.S. Treasury 5.6 5.7 5.1 3.1 3.6 4.6 6.8 7.6 States and political subdivisions. 10.5 10.7 9.9 4.9 6.5 9.0 13.9 12.8 All other portfolio securities 4.1 4.1 3.3 1.5 2.6 2.6 5.1 7.0 Other loans and Federal funds sold. 59.7 59.7 60.0 59.7 67.2 61.3 57.9 58.7 All other assets 5.2 5.1 5.6 9.0 5.1 6.1 3.4 3.6 Total loans and securities 80.9 81.0 79.5 71.4 82.1 78.9 83.8 86.1 Reserves for loans and securities. .9 1.0 I.O 1.1 1.3 1.0 .9 .8 Equity capital—Total 6.5 6.5 6.3 6.1 5.5 5.6 7.1 7.1 Total capital accounts 6.9 7.0 6.7 6.7 5.6 6.2 7.4 7.6 Number of banks. 14,465 14,216 5,780 13 155 5,603 8,685 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 18 WEEKLY REPORTING BANKS • OCTOBER 1975 ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKS (In millions of dollars) Loans Federal funds sold, etc. i Other To brokers For purchasing and dealers or carrying securities TToo nnoonnbbaannkk Total involving— ffiinnaanncciiaall loans iinnssttiittuuttiioonnss Wednesday and To brokers To invest- TTTooo CCCooommm--- and dealers others ments cccooommm--- TTTooo mmmeeerrr--- AAAgggrrriii--- TTToootttaaalll mmmeeerrr--- UU..SS.. OOtthheerr ooottthhheeerrrsss TTToootttaaalll ccciiiaaalll cccuuulll--- RRReeeaaalll ccciiiaaalll TTrreeaass-- ssee-- aaannnddd tttuuurrraaalll Pers. eeessstttaaattteee bbbaaannnkkksss uurryy ccuurrii-- iiinnnddduuusss--- U.S. U.S. and ssee-- ttiieess tttrrriiiaaalll Treas- Other Treas- Other sales Other ccuurrii-- ury sees. ury sees. finan. ttiieess sees. sees. COS., etc. Large banks— Total 1974 Sept. 4 397,698 15,987 13,468 1,446 406 667 298,419 127,466 3,879 567 3,838 97 2,673 10,295 21,848 59,529 11 401,011 17,171 13,932 1,782 669 788 299,880 127,978 3,859 1,958 4,390 93 2,649 10,202 21,929 59,642 18 399,635 16,473 12,254 2,637 779 803 300,343 128,668 3,830 1,445 4,470 94 2,656 10,187 22,173 59,775 25 395,413 15,419 11,995 1,859 750 815 298,052 128,407 3,803 947 3,812 95 2,642 9,900 21,902 59,855 1975 Aug. 6 390,355 17,303 13,744 2,565 538 456 280,693 120,052 3,566 1,484 3,618 115 2,295 8,965 20,055 58,990 13 388,160 15,888 13,430 1,530 471 457 279,409 119,506 3,638 815 3,739 115 2,285 8,917 19,967 59,012 20 387,219 14,251 11,898 1,285 519 549 279,216 119,257 3,649 676 3,519 119 2,260 9,022 19,955 58,994 27 388,100 16,110 13,751 1,453 452 454 278,349 118,832 3,640 896 3,380 99 2,274 8,812 19,926 58,994 Sept. 3 390,590 16,909 14,738 1,187 477 507 279,378 118,946 3,629 696 3,463 99 2,272 9,272 19,892 58,967 10 393,730 18,722 14,964 2,543 622 593 279,356 118,979 3,624 1,118 3,490 96 2,275 9,034 19,811 58,979 1 7 392,257 16,674 13,041 2,354 673 606 280,042 119,160 3,635 1,602 3,605 94 2,268 9,096 19,645 59,055 2 4 388,303 14,409 12,091 1,307 391 620 278,707 118,926 3,631 763 3,246 80 2,270 9,037 19,437 59,072 New York City 1974 Sept. 4 91,376 1,880 1,635 207 1 37 73,967 38,134 129 492 2,296 24 559 3,557 8,408 7,226 11 92,745 1,442 1,214 185 7 36 75,235 38,341 125 1,683 2,829 23 559 3,373 8,478 7,239 1 8 92,969 1,895 1,711 140 44 75,411 38,620 123 1,198 3,051 22 556 3,455 8,518 7,283 2 5 90,898 2,101 1,903 156 42 73,790 38,608 121 698 2,452 21 550 3,377 8,333 7,290 1975 Aug. 6 86,765 1,352 849 356 147 69,919 36,693 89 1,133 2,451 50 433 3,069 7,826 7,435 13 86,239 1,753 1,557 51 145 68,850 36,443 88 634 2,552 50 432 2,992 7,771 7,463 20 86,670 1,837 1,536 46 255 68,558 36,186 90 596 2,272 51 416 3,021 7,776 7,475 27 86,096 2,037 1,812 62 163 68,030 35,996 89 809 2,162 31 412 2,953 7,794 7,501 Sept. 3 87,078 2,540 2,367 27 146 68,379 36,104 87 603 2,146 29 412 3,173 7,765 7,489 10 87,129 1,150 943 23 184 68,863 36,279 88 1,023 2,213 29 411 3,210 7,684 7,494 1 7 87,167 1,524 1,276 51 197 68,991 36,234 89 1,308 2,278 29 406 3,205 7,623 7,540 2 4 86,634 2,178 1,883 33 72 190 68,070 36,207 89 707 1,914 15 406 3,193 7,485 7,591 Outside New York City 1974 Sept. 4 306,322 14,107 11,833 1,239 405 630 224,452 89,332 3,750 75 1,542 73 2,114 6,738 13,440 52,303 11 308,266 15,729 12,718 1,597 662 752 224,645 89,637 3,734 275 1,561 70 2,090 6,829 13,451 52,403 1 8 306,666 14,578 10,543 2,497 779 759 224,932 90,048 3,707 247 1,419 72 2,100 6,732 13,655 52,492 2 5 304,515 13,318 10,092 1,703 750 773 224,262 89,799 3,682 249 1,360 74 2,092 6,523 13,569 52,565 1975 Aug. 6 303,590 15,951 12,895 2,209 538 309 210,774 83,359 3,477 351 1,167 65 1,862 5,896 12,229 51,555 13 301,921 14,135 11,873 1,479 471 312 210,559 83,063 3,550 181 1,187 65 1,853 5,925 12,196 51,549 20 300,549 12,414 10,362 1,239 519 294 210,658 83,071 2,559 80 1,247 68 1,844 6,001 12,179 51,519 27 302,004 14,073 11,939 1,391 452 291 210,319 82,836 3,551 87 1,218 68 1,862 5,859 12,132 51,493 Sept. 3 14,369 12,371 1,160 477 361 210,999 82,842 3,542 93 1,317 70 1,860 6,099 12,127 51,478 10 306,601 17,572 14,021 2,520 622 409 210,493 82,700 3,536 95 1,277 67 1,864 5,824 12,127 51,485 17 305,090 15,150 11,765 2,303 673 409 211,051 82,926 3,546 294 1,327 65 1,862 5,891 12,022 51,515 24 301,669 12,231 10,208 1,274 319 430 210,637 82,719 3,542 56 1,332 65 1,864 5,844 11,952 51,481 For notes seep ageA -22. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • WEEKLY REPORTING BANKS A 19 ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKS—Continued (In millions of dollars) Loans (cont.) Investments Other (cont.) U.S. Treasury securities Other securities To commer- Notes and bonds cial banks maturing— Obligations Other bonds, of States corp. stocks, Wednesday and and Con- For- political securities sumer eign All Certif- subdivisions instal- govts. other Total Bills icates Total Do- For- ment mes- eign Within I to After Certif. tic 1 yr. 5yrs. 5 yrs. Tax of r w an a t r s - 3 o A th l e l r p p a a r t t io ic n i- ot A he ll rs Large banks— Total 1974 3,828 6,906 34,849 1,680 20,964 21,268 2,632 3,831 10,709 4,096 62,024 6,665 41,188 2,539 11,632 Sept. 4 3,635 6,857 34,899 1,621 20,168 21,782 3,202 3,819 10,701 4,060 62,178 6,672 41,103 2,603 11,800 3,677 6,755 34,965 1,639 20,009 20,876 2,472 3,737 10,636 4,031 61,943 6,601 41,043 2,557 11,742 3,566 6,526 35,069 1,579 19,949 20,069 1,771 3,722 10,610 3,966 61,873 6,561 40,819 2,616 11,877 25 1975 2,394 5,818 34,048 1,488 17,805 32,097 6,914 5,136 17,003 3,044 60,262 6,498 39,615 2.400 11,749 Aug. 6 2 2 , , 1 1 7 4 6 6 5 5 , , 7 7 2 7 6 0 3 3 4 4 , , 1 1 3 9 7 7 1 1 , , 4 4 4 6 4 1 1 1 7 8, , 1 9 9 3 1 2 3 32 2 , , 9 6 7 4 5 0 7 8 , ,1 5 0 56 2 5 4 , , 1 4 3 2 4 6 1 1 6 7 , , 8 3 9 5 3 9 3 3 , , 0 0 5 8 7 8 6 6 0 0 , , 2 7 2 7 3 7 6 6 , , 5 6 7 5 1 0 4 3 0 9 , , 0 55 4 7 6 2 2 . , 4 4 0 0 1 0 1 1 1 1, , 6 6 8 9 1 4 2 1 0 3 2,248 5,580 34,307 1,561 17,800 33,410 8,577 4,594 17,070 3,169 60,231 6,244 40.113 2,386 11,488 27 2,236 5,846 34,341 1,530 18,189 34,288 9,049 4,937 17,276 3,026 60,015 6,213 39,904 2,395 11,503 Sept. 3 2,261 5,785 34,361 1,432 18,111 35,243 9,637 5,295 17,308 3,003 60,409 6,451 39,944 2,415 11,599 10 2,368 5,713 34,414 1,414 17,973 35,013 9,838 5,351 16,959 2,865 60,528 6,503 40.114 2,394 11,517 17 2,444 5,866 34,467 1,407 18,061 35,013 10,069 5,303 16,774 2,867 60,174 6,413 39,799 2,377 11,585 24 New York City 1974 1,766 3,226 2,557 892 4,701 4,788 910 431 1,846 1,601 10,741 2,118 5,838 518 2,267 Sept. 4 1 1 1 , , , 5 5 6 6 6 0 1 1 4 3 3 3 , , , 1 1 0 4 7 4 5 6 2 2 2 2 , , , 6 5 5 2 7 8 2 2 0 8 8 8 6 6 3 9 3 2 4 4 4 , , , 3 2 4 8 5 4 7 2 4 4 5 4 , , , 3 0 5 1 9 2 5 1 1 1,5 9 4 5 4 1 8 9 8 4 4 41 0 0 8 3 2 1 1 1 , , , 7 7 8 6 2 2 8 0 4 1 1 1 , , , 4 4 5 6 7 3 5 1 1 1 1 1 0 0 1 , , , 9 7 0 8 5 7 6 3 2 2 2 2, , , 3 1 3 5 0 5 5 8 1 5 5 5 , , , 6 8 7 5 7 8 5 8 0 5 5 5 1 4 0 3 1 9 2 2 2 , , , 4 3 3 3 5 3 5 2 4 2 1 1 1 5 8 1975 1,128 2,601 2,552 570 3,889 6,534 1,143 609 3,960 822 8,960 1,418 5,033 514 1,995 Aug. 6 1,091 2,500 2,554 560 3,720 6,808 1,592 583 3,791 842 8,828 1,432 4,951 517 1,928 13 1,079 2,547 2,560 561 3,928 7,105 1,811 458 3,987 849 9,170 1,449 5,264 512 1,945 20 1,106 2,385 2,566 655 3,571 6,935 1,601 481 3,924 929 9,094 1,294 5,405 509 1,886 27 1.032 2,568 2,571 614 3,786 7,163 1,850 510 3,981 822 8,996 1,239 5,351 507 1,899 Sept. 3 1.033 2,506 2,578 535 3,780 8,032 2,498 515 4,230 789 9,084 1,268 5,398 515 1,903 10 1 1, , 0 0 5 6 4 3 2 2 , , 4 5 0 3 7 6 2 2, , 5 5 8 8 8 4 5 5 2 3 9 0 3 3 , , 7 6 5 9 5 6 7 7 , , 3 2 5 6 1 4 2 2 , , 2 2 2 7 5 8 5 4 3 9 7 4 3 3, , 8 9 1 1 8 3 6 6 8 6 4 6 9 9 , ,1 3 2 01 2 1 1 , , 3 3 5 8 6 8 5 5 , , 4 58 4 8 4 5 49 0 6 6 1 1, , 8 8 2 1 6 9 2 1 4 7 Outside New York City 1974 2,062 3.680 32,292 788 16,263 16,480 1,722 3,400 8,863 2,495 51,283 4,547 35,350 2,021 9,365 Sept. 4 2,074 3.681 32,327 789 15,724 16,467 1,644 3,417 8,877 2,529 51,425 4,564 35,323 2,090 9,448 2,073 3,610 32,385 770 15,622 16,285 1,523 3,334 8,868 2,560 50,871 4,250 35,165 2,048 9,408 V.'.V.V.'.V.V.V.H 2,005 3,484 32,447 716 15,697 16,048 1,353 3,304 8,890 2,501 50,887 4,206 35,164 2,075 9,442 25 1,266 3,217 31,496 918 13,916 25,563 5,771 4,527 13,043 2,222 51,302 5,080 34,582 1,886 9,754 1975 1,085 3,226 31,583 884 14,212 25,832 5,964 4,551 13,102 2,215 51,395 5,139 34,606 1,884 9,766 Aug. 6 1 1 , , 0 1 6 4 7 2 3 3, , 1 2 9 2 5 3 3 3 1 1 , , 6 7 3 4 7 1 9 9 0 0 6 0 1 1 4 4 , , 2 2 6 2 3 9 2 26 5 , , 4 8 7 7 5 0 6 6 , ,2 9 9 7 1 6 4 3 , , 1 9 1 6 3 8 1 13 3 , , 1 3 4 7 6 2 2 2 . . 2 2 3 4 9 0 5 5 1 1 , , 6 1 0 3 7 7 5 4 , , 2 9 0 5 1 0 3 34 4 , , 7 7 0 8 8 2 1 1 , , 8 8 7 8 7 8 9 9 , , 7 6 3 0 6 2 2 1 0 3 1 1 1 1 , , , , 3 2 2 3 0 2 0 9 5 8 4 0 3 3 3 3 . . , , 2 2 3 3 7 7 0 3 9 8 6 0 3 3 3 3 1 1 1 1 , , , , 7 8 7 8 8 7 7 3 3 9 0 0 9 8 8 8 1 9 8 7 6 7 5 7 1 1 1 1 4 4 4 4 , , , , 4 3 2 3 0 7 0 3 3 7 6 1 2 2 2 2 7 7 7 7 , , , , 1 7 6 2 2 6 4 1 5 2 9 1 7 7 7 7 , , , , 1 1 5 8 3 9 4 6 9 9 4 0 4 4 4 4 , , , , 4 8 7 7 2 5 6 8 7 7 6 0 1 1 1 1 3 3 3 2 , , , , 2 0 0 9 9 7 4 5 5 8 6 6 2 2 2 2, , , , 1 1 2 2 8 9 1 0 3 9 4 4 5 5 5 5 1 1 1 1 , , , , 3 0 2 0 2 1 2 5 5 9 7 2 4 5 5 5 , , , , 1 1 0 9 1 8 5 7 5 3 7 4 3 3 3 3 4 4 4 4 , , , , 3 5 5 5 5 5 4 2 5 3 6 6 1 1 1 1 , , , , 8 8 8 9 8 8 8 0 1 8 8 0 9 9 9 9 , , , , 6 6 6 7 9 9 5 0 6 8 9 4 Sept. 2 2 1 1 3 4 7 0 7 For notes see p. A-22. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 20 WEEKLY REPORTING BANKS • OCTOBER 1975 ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKS—Continued (In millions of dollars) Deposits Demand Cash Bal- Investitems Re- Cur- ances ments Total in serves rency with in sub- Other assets/ Domestic Wednesday process with and do- sidiar- assets total interbank of F.R. coin mestic ies not liabil- States collec- Banks banks consol- ities and tion idated Total polit- U.S. 6 IPC ical Govt. Com- Mutual sub- mer- savdivi- cial ings sions Large banks— Total 1974 Sept. 4 37,602 25,671 4,350 11,563 1,626 29,230 507,740 163,679 117,574 6,094 1,343 24,974 698 32,897 22,681 4,711 11,187 1,616 29,163 503,266 158,643 115,076 5,799 1,735 22,815 635 is;!!!;;;;;;: 31,479 21,833 4,709 10,955 1,628 28,678 498,917 158,107 113,850 5,609 4,579 21,342 603 31,307 25,124 4,756 10,695 1,590 29,530 498,415 156,348 111,863 6,300 4,331 20,384 572 25 1975 31,217 21,304 4,431 11,294 1,748 36,772 497,121 157,934 115,157 5,873 1,688 23,150 811 Aug. 6 30,30S 22,005 4,865 10,704 1,739 36,348 494,129 155,203 115,919 5,609 1,157 20,908 724 13 30,23S 23,451 4,889 10,823 1,734 35,788 494,142 156,232 115,059 5,668 2,050 22,396 671 20 30,300 20,581 5,104 11,259 1,741 36,360 493,445 156,113 115,359 5,639 1,382 21,961 712 27 Sept. 3 36,974 22,651 4,796 11,787 1.752 37,356 505,906 165,445 120,411 6,198 1,243 24,635 781 10 31,764 20,995 4,927 10,760 1.753 38,210 502,139 160,028 118,669 6,088 1,473 21,677 711 17 32,351 18,689 4,964 11,301 1,751 37,740 499,053 161,658 118,337 5,847 2,764 22,175 700 2 4 2S,659 22,436 5,052 11,668 1,747 37,946 495,811 154,488 113,681 6,050 1,456 21,518 668 New York City 1974 Sept. 4. 11,368 8,475 487 4,821 748 9,359 126,634 45,901 25,865 409 151 11,521 361 10,396 8,310 514 4,827 727 9,497 127,016 44,113 24,638 303 335 11,057 326 is;;;;;;;;;;; 9,642 5,007 507 4,803 728 9,306 122,962 42,499 24,147 301 974 9,644 313 10,833 7,215 522 4,586 713 9,928 124,695 44,073 24,829 494 820 9,848 285 2 5 1975 10,103 6,603 515 4,565 789 12,701 122,041 43,037 24,803 288 120 10,951 461 Aug. 6 9,305 7,084 519 4,146 787 12,479 120,559 41,365 24,341 328 92 9,871 390 13 9,736 6,913 495 4,709 792 11,760 121,075 43,095 24,978 325 408 11,244 353 20 10,532 5,315 520 4,729 791 12,531 120,514 43,257 25,029 254 212 10,789 386 27 Sept. 3 11,063 6,252 517 4,648 795 12,595 122,948 44,789 25,673 389 99 10,936 421 10. 10,321 6,624 544 4,493 787 13,255 123,153 43,016 25,410 318 206 10,050 372 2 1 4 7 1 9 0 , , 3 5 3 1 6 8 6 4 , , 0 2 2 16 8 5 5 2 1 5 8 5 4 , , 4 8 0 1 5 7 7 7 9 8 6 8 1 1 2 2 , , 4 6 2 1 5 7 1 1 2 2 1 0 , , 3 4 4 4 1 9 4 4 2 3 , , 4 97 8 6 0 2 2 4 5 , , 1 3 2 3 6 4 3 3 8 3 1 7 2 1 8 7 2 8 1 1 0 0, , 6 8 3 6 5 9 3 3 6 3 5 8 Outside New York City 1974 Sept. 4 26,234 17,196 3,863 6,742 878 19,871 381,106 117,778 91,709 5,685 1,192 13,453 337 11 22,501 14,371 4,197 6,360 889 19,666 376,250 114,530 90,438 5,496 1,400 11,758 309 IS 21,837 16,826 4,202 6,152 900 19,372 375,955 115,608 89,703 5,308 3,605 11,698 290 2 5 20,474 17,909 4,234 6,109 877 19,602 373,720 112,275 87,034 5,806 3,511 10,536 287 1975 Aug. 6 21,114 14,701 3,916 6,729 959 24,071 375,080 114,897 90,354 5,585 1,568 12,199 350 13 21,003 14,921 4,346 6,558 952 23,869 373,570 113,838 91,578 5,281 1,065 11,037 334 20 20,502 16,538 4,394 6,114 942 24,028 373,067 113,137 90,081 5,343 1,642 11,152 318 27 19,768 15,266 4,584 6,530 950 23,829 372,931 112,856 90,330 5,385 1,170 11,172 326 Sept. 3 25,911 16,399 4,279 7,139 957 24,761 382,958 120,656 94,738 5,809 1,144 13,699 360 10 21,443 14,371 4,383 6,267 966 24,955 378,986 117,012 93,259 5,770 1,267 11,627 339 17 21,833 14,473 4,446 6,484 963 25,315 378,604 117,682 93,003 5,510 2,482 11,540 335 24 19,323 16,408 4,527 6,263 951 25,329 374,470 112,008 89,555 5,669 1,278 10,649 330 For notes see page A-22. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • WEEKLY REPORTING BANKS A 21 ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKS—Continued (In millions of dollars) Deposits (cont.) Borrowings from— Demand (cont.) Time and savings Federal Other Foreign IPC funds liabili- Certi- States pur- ties, Wednesday fied and Do- chased, etc. 8 and polit- mes- For- etc. 7 F.R. Com- offi- Total 6 ical tic eign Banks Others Govts., mer- cers' Sav- Other sub- inter- govts.' etc. 2 cial checks ings divi- bank banks sions Large banks— Total 1974 1,149 5,178 6,669 219,454 57,059 118,780 24,240 7,445 10,311 53,030 2,572 5,935 24,365 Sept. 4 1,442 5,079 6,062 219,904 56,960 119,273 24,334 7,417 10,242 53,265 1,927 5,988 24,760 11 1,211 4,966 5,947 219,282 56,881 118,662 24,253 7,528 10,290 49,413 2,569 6,060 24,809 18 1,302 5,138 6,458 220,289 56,876 119,135 24,412 7,736 10,407 47,705 4,433 5,779 25,236 25 1975 1,261 4,944 5,050 222,313 65,439 112,913 22,917 7,607 12,056 49,275 29 4.012 22,146 Aug. 6 1,253 4,531 5,102 222,775 65,382 113,335 22,969 7,721 12,022 47,624 446 4,017 22,602 13 1,158 4,496 4,734 221,953 65,308 113,436 22,683 7,552 11,642 47,280 517 3,928 22,866 20 1,030 4,752 5,278 222,139 65,253 113,780 22,568 7,585 11,649 46,951 34 3,773 23,059 27 1,215 5,023 5,939 222,765 65,246 114,625 22,366 7,815 11,409 49,020 85 4,036 22,933 Sept. 3 1,144 4,651 5,615 223,268 65,223 115,079 22,096 7,742 11,798 48,006 1,589 4,075 23,545 10 1,297 4,941 5,597 222,937 65.207 114,875 22,023 7,770 11,782 45,170 201 4.013 23,520 17 1,037 5,081 4,997 225,016 65.208 116,283 22,144 7,983 11,997 45,861 1,182 4,023 23,604 24 New York City 1974 941 3,767 2,886 45,909 4,916 27,606 1,863 4,366 6,115 13,189 440 2,155 8,847 Sept. 4 1,258 3,735 2,461 46,178 4,916 27,956 1,880 4,310 6,043 14,785 2,260 9,473 1,005 3,584 2,531 46,104 4,902 27,781 1,782 4,424 6,119 12,132 250 2,387 9,418 1 1 1 8 1,069 3,685 3,043 46,285 4,902 27,635 1,880 4,527 6,214 10,934 1,527 2,236 9,507 25 1975 1,010 3,523 1,881 44,392 5,775 25,513 1,225 3.410 7,545 13,646 1,952 7,863 Aug. 6 1,023 3,333 1,987 44,521 5,779 25,611 1,263 3,533 7,445 13,267 329 1,973 7,937 13 957 3,228 1,602 44,157 5,752 25,615 1,190 3.411 7,316 12,670 1,857 8,140 20 834 3,514 2,239 44,243 5,774 25,838 1,156 3,367 7,253 11,687 1,897 8,246 27 996 3,723 2,552 44,686 5,739 26,429 1.134 3,447 7,110 11,987 2,099 8,169 Sept. 3 929 3,348 2,383 44,694 5,729 26,238 1.135 3,303 7,421 12,272 1,502 2,075 8,344 10 1,014 3,618 2,391 44,483 5,720 26,079 1,116 3,201 7,528 10,486 2,060 8,238 . 17 828 3,754 2,006 44,989 5,717 26,320 1,101 3,221 7,674 11,614 "•556 2,066 8,386 24 Outside New York City 1974 208 1,411 3,783 173,545 52,143 91,174 22,377 3,079 4,196 39,841 2,132 3,780 15,518 Sept. 4 184 1,344 3,601 173,726 52,044 91,317 22,454 3,107 4,199 38,480 1,927 3,728 15,287 11 206 1,382 3,416 173,178 51,979 90,881 22,471 3,104 4,171 37,281 2,319 3,673 15,391 18 233 1,453 3,415 174,004 51,974 91,500 22,532 3,209 4,193 36,771 2,906 3,543 15,729 25 1975 251 1,421 3,169 177,921 59,664 87,400 21,692 4,197 4,511 35,629 29 2,060 14,283 Aug. 6 230 1,198 3,115 178,254 59,603 87,724 21,706 4,188 4,577 34,357 117 2,044 14,665 13 201 1,268 3,132 177,796 59,556 87,821 21,493 4,141 4,326 34,610 517 2,071 14,726 20 196 1,238 3,039 177,896 59,479 87,942 21,412 4,218 4,396 35,264 34 1,876 14,813 27 219 1,300 3,387 178,079 59,507 88,196 21,232 4,368 4,299 37,033 85 1 ,937 14,764 Sept. 3 215 1,303 3,232 178,574 59,494 88,841 20,961 4,439 4,377 35,734 87 2,000 15,201 , . 10 283 1,323 3,206 178,454 59,487 88,796 20,907 4,569 4,254 34,684 201 1,953 15,282 17 209 1,327 2,991 180,027 59,491 89,963 21,043 4,762 4,323 34,247 632 1,957 15,218 24 For notes see p. A-22. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 22 WEEKLY REPORTING BANKS • OCTOBER 1975 ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKS—Continued (In millions of dollars) Reserves Memoranda for— Total Total Large negotiable Gross capital loans time CD's All other large liabili- Wednesday ac- Total and De- included in time time deposits 12 ties of Secur- counts loans invest- mand and savings deposits 11 banks Loans ities (gross) ments deposits to ad- (gross) ad- their justed 9 ad- justed 10 Issued Issued Issued Issued foreign justed 9 Total to to Total to to branches IPC's others IPC's others Large banks— Total 1974 Sept. 4 5,116 33,527 297,110 380,402 99,760 88,475 61,506 26,969 3,002 5,198 33,519 299,484 383,444 101,196 88,981 62,078 26,903 3,334 18.".''.V.' 5,148 33,467 300,885 383,704 100,707 88,209 61,284 26,925 3,449 5,144 33,419 297,910 379,852 100,326 89,116 61,712 27,404 2,918 25 1975 5.732 35,611 281,858 374,217 101,879 80,834 53,853 26,981 33,751 17,842 15,909 1,826 Aug. 6 5,741 35,652 279,691 372,554 102,830 81,389 54,196 27,193 34,102 17,963 16,139 2,205 13 5.733 35,564 279,432 373,175 101,548 80,811 54,218 26,593 33,429 17,932 15,497 2,848 20 5,747 35,559 278,460 372,101 102,470 81,244 54,554 26,690 33,363 18,048 15,315 2,617 27 Sept. 3 5,775 35,763 279,313 373,616 102,593 81,814 55,222 26,592 33,277 18,046 15,231 2,327 10 5,797 35,762 280,853 376,505 105,114 82,374 55,622 26,752 33,288 18,099 15,189 2,353 1 7 5,791 35,693 281,307 376,848 104,368 82,078 55,332 26,746 33,204 18,202 15,002 2,613 24. 5,794 35,774 278,581 373,768 102,855 84,138 56,750 27,388 33,239 18,202 15,037 2,312 New York City 1974 Sept. 4 1,405 8,788 72,446 87,975 22,861 29,615 19,832 9,783 1,820 11 1,409 8,798 73,902 89,970 22,325 29,837 20,162 9,675 2,068 1 8 1,417 8,755 73,991 89,654 22,239 29,746 20,027 9,719 2,246 25 1,424 8,709 72,427 87,434 22,572 29,969 19,931 10,038 1,793 1975 Aug. 6 1,690 9,461 69,294 84,788 21,863 28,396 18,275 10,121 7,792 4,822 2,970 1,066 13 1.700 9,467 67,955 83,591 22,097 28,603 18,408 10,195 7,773 4.853 2,920 1,014 20. 1.701 9,455 67,780 84,055 21,707 28,375 18,503 9,872 7,645 4,756 2,889 1,817 27 1,718 9,466 67,149 83,178 21,724 28,527 18,757 9,770 7,623 4,767 2,856 1,536 Sept. 3 1.732 9,486 67,520 83,679 22,691 28,812 19,166 9,646 7,722 4.854 2,868 1,528 10 1,741 9,509 68,037 85,153 22,439 28,857 19,025 9,832 7,738 4,849 2,889 1,605 1 7 1,731 9,475 68,176 84,828 22,541 28,658 18,855 9,803 7,662 4,819 2,843 1,765 2 4 1.733 9,523 67,311 83,697 22,097 29,333 19,266 10,067 7,536 4,691 2,845 1,482 Outside New York City 1974 Sept. 4 3,711 24,739 224,664 292,427 76,899 58,860 41,674 17,186 1,182 11 3,789 24,721 225,582 293,474 78,871 59,144 41,916 17,228 1,266 1 8 3,731 24,712 226,894 294,050 78,468 58,463 41,257 17,206 1,203 2 5 3,720 24,710 225,483 292,418 77,754 59,147 41,781 17,366 1,125 1975 Aug. 6 4.042 26,150 212,564 289,429 80,016 52,438 35,578 16,860 25,959 13,020 12,939 760 13 4,041 26,185 211,736 288,963 80,733 52,786 35,788 16,998 26,329 13,110 13,219 1,191 20 4,032 26,109 211,643 289,120 79,841 52,436 35,715 16,721 25,784 13,176 12,608 1,031 27 4,029 26,093 211,311 288,923 80,746 52,717 35,797 16,920 25,740 13,281 12,459 1,081 Sept 3 4.043 26,277 211,793 289,937 79,902 53,002 36,056 16,946 25,555 13,192 12,363 799 10 4,056 26,253 212,816 291,352 82,675 53,517 36,597 16,920 25,550 13,250 12,300 748 17. 4.060 26,218 213,131 292,020 81,827 53,420 36,477 16,943 25,542 13,383 12,159 848 24 4.061 26,251 211,270 290,071 80,758 54,805 37,484 17,321 25,703 13,5r 12,192 830 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. 12 All other time deposits issued in denominations of $100,000 or more (not included in large negotiable CD's). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • BUSINESS LOANS OF BANKS A 23 COMMERCIAL AND INDUSTRIAL LOANS OF LARGE COMMERCIAL BANKS (In millions of dollars) Outstanding Net change during— Industry 1975 1975 1975 1975 1974 Sept. Sep.. Sept. Sept. Au.- 1st 2nd 24 10 Sept. Aug. July III II I half half Durable goods manufacturing: Primary metals 2,009 2,011 1,947 1,970 1,986 23 1 -38 -14 -23 41 18 140 Machinery 6,535 6,777 6,806 6,789 6,836 -301 -244 -347 -892 -642 -672 -1,314 222 Transportation equipment 3,304 3,348 3,343 3,371 3,293 11 -214 -3 -206 -296 -6 -302 705 Other fabricated metal products... 2,439 2,451 2,421 2,429 2,440 — 1 -55 -228 -284 -211 23 -188 75 Other durable goods 33,,997711 33,,999966 33,,998877 33,,999977 33,,999922 -21 -83 -66 -170 -316 -402 -718 247 Nondurable goods manufacturing: Food, liquor, and tobacco 3,334 3,280 3,200 3,222 3,205 129 134 -241 22 -519 -1,090 -1,609 984 Textiles, apparel, and leather 3,167 3,235 3,282 3,204 3,240 -73 16 1 -56 -148 -139 -287 -618 Petroleum refining 2,593 2,507 2,526 2,500 2,540 53 17 45 115 283 -55 228 967 Chemicals and rubber 2,873 2,859 2,820 2,783 2,774 99 -79 -269 -249 -321 61 -260 256 Other nondurable goods 22,,007766 22,,009911 22,,007755 22,,008888 22,,004455 31 -120 -58 -147 10 -293 -283 23 Mining, including crude petroleum and natural gas 5,139 5,118 5,046 4,992 5,011 128 -43 175 260 109 -267 -158 846 Trade: Commodity dealers 1,249 1,233 1,294 1,234 1,128 121 11 12 144 -328 -644 -972 508 Other wholesale 5,584 5,557 5,557 5,560 5,611 -27 -27 18 -36 -534 -574 -1,108 484 5,983 5,953 6,036 6,051 6,103 -120 -14 -192 -326 -212 -186 -398 -465 Transportation 5,950 5,968 6,015 6,011 5,988 -38 -33 -42 -113 -142 -181 -323 283 Communication 2,029 2,065 2,014 2,075 2,105 -76 -24 -15 -115 17 -372 -355 -2 Other public utilities 6,966 6,908 6.890 6,905 6,943 23 -148 -104 -229 -404 -1,019 -1,423 1,697 Construction 5,504 5,532 5; 484 5,476 5,532 -28 -27 -2 -57 -77 -545 -622 36 Services 10,584 10,624 10,544 10,516 10,536 48 -152 -146 -250 -388 -732 -1,120 304 All other domestic loans 9,723 9,770 9,817 9,904 9,752 -29 -71 63 -37 -65 -307 -372 744 Bankers acceptances 1,973 2,036 2,071 2,048 2,009 -36 -278 27 -287 28 571 599 -56 Foreign commercial and industrial loans 5,077 5,028 4,948 5,019 4,904 173 13 360 546 233 61 294 -447 Total classified loans 98,062 98,347 98,123 98,144 9977,,997733 89 --11,,442200 --11,,005500 --22,,338811 --33,,994466 --66,,772277 --1100,,667733 66,,993333 CCoommmm.. ppaappeerr iinncclluuddeedd iinn ttoottaall ccllaass-ssiiffiieedd llooaannss 11 224422 Total commercial and industrial loans of large commercial banks 118,926 119,160 118,979 118,946 118,832 94 -1,779 -1,274 -2,959 -3,845 -6,236 -10,081 8,354 For notes see table below. "TERM" COMMERCIAL AND INDUSTRIAL LOANS OF LARGE COMMERCIAL BANKS (In millions of dollars) Outstanding Net change during— Industry 1975 1975 1974 1975 Sept. Aug. July June May Apr. Mar. Feb. Jan. 1st. 24 27 30 25 28 30 26 26 29 III II I IV half Durable goods manufacturing: Primary metals 1,338 1,286 1,269 1,288 1,280 1,323 1,284 1,237 1,249 50 4 74 77 78 Machinery 3,737 3,825 3,864 3,977 4,269 4,302 4,071 4,117 4,138 -240 -94 -74 249 -168 Transportation equipment 1,693 1,722 1,725 1,740 1,726 1,705 1,672 1,712 1,737 -47 68 -1 138 67 Other fabricated metal products 1,268 1,228 1,196 1,222 1,245 1,280 1,312 1,323 1,243 46 -90 115 131 25 Other durable goods 2,012 2,042 2,058 2,090 2,122 2,210 2,251 2,256 2,288 -78 -161 -140 123 -301 Nondurable goods manufacturing: Food, liquor, and tobacco 1,471 1,461 1,440 1,514 1,616 1,571 1,561 1,614 1,703 -43 -47 -202 114 -249 Textiles, apparel, and leather 1,103 1,077 1,116 1,095 1,075 1,091 1,158 1,083 1,124 8 -63 13 -6 -50 Petroleum refining 1,967 1,889 1,828 1,709 1,611 1,617 1,483 1,458 1,542 258 226 -35 421 191 Chemicals and rubber...., 1,665 1,645 1,678 1,762 1,784 1,814 1,846 1,812 1,839 -97 -84 -32 100 -116 Other nondurable goods. 1,056 1,023 1,085 1,143 1,114 1,126 1,130 1,119 1,221 -87 13 -105 31 -92 Mining, including crude petroleum and natural gas 3,847 3,754 3,801 3,734 3,646 3,626 3,537 3,446 3,523 113 197 -164 362 33 Trade: Commodity dealers. 150 148 152 148 140 142 150 153 169 2 -2 -5 16 -7 Other wholesale.... 1,319 1,371 1,344 1,329 1,344 1,387 1,450 1,420 1,472 -10 -121 -42 43 -163 Retail 2,124 2,139 2,111 2,136 2,143 2,192 2,283 2,298 2,369 -12 -147 -311 67 -458 Transportation 4,391 4,405 4,399 4,425 4,424 4,492 4,524 4,505 4,455 -34 -99 -26 201 -125 Communication 1,132 1,149 1,136 1,133 1,159 1,148 1,135 1,125 1,158 -1 -2 53 53 51 Other public utilities 3,966 3,902 4,018 4,045 4,047 4,017 4,034 3,870 3,885 -79 11 71 291 82 Construction 2,359 2,367 2,360 2,314 2,291 2,272 2,197 2,191 2,224 45 117 -97 22 20 Services 5,151 5,010 5,155 5,140 5,246 5,352 5,430 5,370 5,320 11 -290 -102 182 -392 All other domestic loans ... 3,244 3,257 3,232 3,258 3,186 3,210 3,082 3,144 3,079 -14 176 -142 102 34 Foreign commercial and industrial loans 2,763 2,695 2,676 2,594 2,547 2,596 2,528 2,544 2,524 169 66 71 56 137 Total loans 47,756 47,395 47,643 47,796 48,015 48,473 48,118 47,797 48,262 -40 -322 -1,081 2,773 -1,403 1 New item to be reported as of the last Wednesday of each month. For description of series see article "Revised Series on Commercial and Industrial Loans by Industry," Feb. 1967 BULLETIN, p. 209. 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 mg 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 24 DEMAND DEPOSIT OWNERSHIP • OCTOBER 1975 GROSS DEMAND DEPOSITS OF INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS' an billions of dollars) Type of holdei r Total Class of bank, and quarter or month deposits, F b i u n s a in n e c s ia s l No b n u f s in in a e n s c s i al Consumer Foreign o A th l e l r IPC All insured commercial banks: 1970 Dec 17.3 92.7 53.6 1.3 10.3 175.1 1971 Sept 17.9 91.5 57.5 1.2 9.7 177.9 Dec 18.5 98.4 58.6 1.3 10.7 187.5 1972 Mar 20.2 92.6 54.7 1.4 12.3 181.2 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 Dec 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 1974_Mar 18.9 108.4 70.6 2.3 11.0 211.2 June 18.2 112.1 71.4 2.2 11.1 215.0 Sept 17.9 113.9 72.0 2.1 10.9 216.8 Dec 19.0 118.8 73.3 2.3 11 .7 225.0 1975—Mar 18.6 111 .3 73.2 2.3 10.9 216.3 Junef 19.4 115.1 74.8 2.3 10.6 222.2 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 Dec 14.9 66.2 28.0 2.2 6.8 118.1 1974—Sept 13.9 64.4 28.4 2.0 6.3 115.0 Oct 14.7 64.4 28.4 2.0 6.4 115.8 NOV 14.6 65.9 28.7 2.1 6.5 117.7 Dec 14.8 66.9 29.0 2.2 6.8 119.7 1975 Jan 14.8 65.6 29.2 2.2 6.6 118.3 Feb 14.4 63.1 27.9 2.3 6.2 113.9 Mar 14.1 63.2 28.2 2.2 6.4 114.1 Apr 15.0 63.3 30.1 2.2 6.5 117.0 May 14.2 63.1 29.2 2.3 6.2 115.0 June 15.1 65.1 29.5 2.2 6.2 118.1 July 15.0 65.3 29.8 2.2 6.5 118.7 AugJ' 14.4 64.6 29.1 2.0 5.9 116.1 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. 16, Class of Dec. 31, June 30, Dec, 31, Apr. 16, bank 1973 1974 1974 1975 bank 1973 1974 1974 1975 555555000000777777 444444666666000000 333333888888999999 All member—Cont. Insured 555555000000333333 444444555555777777 333333888888777777 """"""""""""333333666666333333"""""" Other large banks i 555555888888 666666333333 666666999999 7777733333 National member 222222888888888888 222222666666555555 222222333333666666 222222222222444444 All other member i 222222999999444444 222222666666777777 222222000000666666 111118888888888 State member 666666444444 666666555555 333333999999 333333777777 All nonmember 111111555555555555 111111333333000000 111111111111555555 111110000022222 All member 333333555555222222 333333333333000000 222222777777555555 222222666666111111 111111555555222222 111111222222777777 111111111111222222 111110000022222 Noninsured. 333333 333333 333333 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 p. A-14; member" parallel the previous "Reserve City" (other than in New York from the figures for weekly reporting banks as shown on pp. A-18-A-22 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-13. But they are included in the figures for "Time deposits" and "Loans" for call dates as shown on pp. A-14-A-17. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • LOAN SALES BY BANKS; OPEN MARKET PAPER A 25 LOANS SOLD OUTRIGHT BY LARGE COMMERCIAL BANKS (Amounts outstanding; in millions of dollars) To selected related institutions i By type of loan DDDaaattteee TToottaall Commercial Real All and estate other industrial 1975—June 4 4,615 2,829 198 1,588 11 4,628 2,849 198 1,581 18 4,631 2,849 198 1,584 4,667 2,895 196 1,576 JJuullyy 2 4,648 2,907 196 1,545 9 4,599 2,827 192 1,580 16 4,484 2,755 189 1,540 23 4,470 2,734 188 1,548 4,500 2,763 186 1,551 AAuugg.. 6 4,470 2,758 195 1,517 1 To bank's own foreign branches, nonconsolidated non- 13 4,510 2,794 195 1,521 bank affiliates of the bank, the bank's holding company (if 20 4,463 2,764 195 1,504 not a bank), and nonconsolidated nonbank subsidiaries of 4,479 2,757 198 1,524 the holding company. NOTE.—Series changed on Aug. 28, 1974. For a comparison SSeepptt.. 4,420 2,703 198 1,519 of the old and new data for that date, see p. 741 of the Oct. 10 4,446 2,741 198 1,507 1974 BULLETIN. Revised figures received since Oct. 1974 17 4,479 2,775 198 1,506 that affect that comparison are shown in note 2 to this table 24 4,498 2,763 199 1,536 in the Dec. 1974 BULLETIN, p. A-27. COMMERCIAL PAPER AND BANKERS ACCEPTANCES OUTSTANDING (In millions of dollars) Commercial paper Dollar acceptances Financial Bank-related 5 Held by- Based on— End companies i of Nonperiod All finan- Accepting banks F.R. Banks issuers cial Total Im- Ex- Dealer- Di- com- Dealer- Di- Others ports ports All placed 2 rectly- panies placed rectly- For- into from other placed 3 placed Total Own Bills Own eign United United bills bought acct. corr. 6 States States 196 6 13,645 2.332 10,556 757 3,603 1,198 983 215 193 191 2,022 997 829 1,778 196 7 17,085 2,790 12,184 2,11 4,317 1,906 1,447 459 164 156 2,090 1,086 989 2,241 196 8 21,173 4,427 13,972 2,774 4,428 1,544 1,344 200 58 109 2)717 1,423 952 2,053 196 9 32,60C 6,503 20.741 5,356 1,160 3,134 5,451 1,567 1,318 249 64 146 3,674 1,889 1,153 2,408 197 0 33,071 5,514 20,424 7,133 352 1,997 7,058 2,694 1,960 735 57 250 4,057 2,601 1,561 2,895 197 1 32,126 5,297 20,582 6,247 524 1,449 7,889 3,480 2,689 791 261 254 3,894 2,834 1,546 3,509 197 2 34,721 5,655 22,098 6,968 1,226 1,411 6,898 2,706 2,006 700 106 179 3,907 2,531 1,909 2,458 197 3 41,073 5,487 27,204 8,382 1,938 2,943 8,892 2,837 2,318 519 68 581 5,406 2,273 3,499 3,120 1974-July. 45,561 4,655 30,344 10,562 1,465 5,585 15,686 3,499 2,983 516 218 ,023 10,947 3,589 3,774 8,323 Aug.. 47,967 5,308 31,774 10,885 2,425 6,350 16,167 3,388 2,866 522 277 1,202 11,300 3,585 3,933 8,649 Sept. 49,087 5.333 31,095 12,659 2,185 6,446 16,035 3,347 2,942 405 504 1,459 10,724 3,526 3,806 8,703 Oct.. 51,754 5,242 32,509 14,003 2,046 6,408 16,882 3,291 2,872 419 218 2,037 11,335 3,793 3,759 9,330 Nov. 51,883 4,860 32,491 14,532 1,947 6,697 17,553 3,789 3,290 499 611 ,756 11,398 3,810 3,709 10,035 Dec. 49,070 4,611 31,765 12,694 1,874 6,444 18,484 4,226 3,685 542 999 1,109 12,150 4,023 4,067 10,394 1975-Jan.. 51,528 5,029 31,851 14,648 1,946 6,625 18,602 4,357 3,903 454 966 560 12,718 4,120 4,314 10,168 Feb.. 52,325 5,167 32,426 14,732 1,854 7,228 18,579 4,864 4,370 494 993 325 12,398 3,974 4,210 10,396 Mar., .50,745 5,342 31,139 14,264 1,738 7,190 18,730 4.773 4,085 688 665 263 13,029 3,845 4,296 10,589 Apr. 51,552 5,461 32,073 14,018 1,654 6,931 18,727 4,485 3,900 585 1,185 235 13,034 3,690 4,206 10,831 May. 51,238 5,889 32.742 12,607 1,587 7,017 18,108 4,450 3,892 558 865 234 12,559 3,665 4,186 10,257 June. 48,851 5,604 31,202 12,045 1,608 7,316 17,740 4.774 4,224 550 682 319 11,965 3,466 4,080 10,193 July. 49,298 6,018 31,208 12,072 1,697 6,983 16,930 4,778 4,275 503 685 329 11,138 3,474 3,865 9,591 1 Financial companies are institutions engaged primarily in activities 4 Nonfinancial companies include public utilities and firms engaged such as, but not limited to, conmiercial, savings, and mortgage banking; primarily in activities such as communications, construction, manufacsales, personal, and mortgage financing-; factoring, finance leasing, and turing, mining, wholesale and retail trade, transportation, and services. other business lending; insurance underwriting; and other investment 5 Included in dealer- and directly-placed financial company columns. activities. Coverage of bank-related companies was expanded in Aug. 1974. Most 2 As reported by dealers; includes all financial company paper sold in of the increase resulting from this expanded coverage occurred in directlythe open market. placed paper. 3 As reported by financial companies that place their paper directly 6 Beginning November 1974, the Board of Governors terminated the with investors. System guarantee on acceptances purchased for foreign official accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 26 INTEREST RATES • OCTOBER 1975 PRIME RATE CHARGED BY BANKS (Per cent per annum) Effective date Rate Effective date Rate Effective date Rate Monthly average rate 1974—Apr. 11 10 1975—Jan. 9. 1975—July 18 IV4 1974—Sept. 12.00 19 15. 28 m Oct. 11.68 25 20. Nov. 10.83 28. 9Vi Aug. 12 73/4 Dec. 10.50 May 2 ,03/. 6 Feb. 3. 91/4 Sept. 15 1975—Jan. 10.05 10 11V4 10. 9 Feb. 8.96 17 111/2 18. 8% Mar. 7.93 24. 7.50 June 26 113/4 May 7.40 Mar. 5. 81/4 June 7.07 July 5 12 10. 8 July 7.15 18. 73/4 Aug. 7.66 Oct. 7 24. Sept. 7.88 21 28 11 May 20, m 7 Nov. 4 11 June 9 14 1034 25 101/2 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. Rate shown is the predominant rate," this table shows only the "large-business prime rate," which is the prime rate quoted by a majority of large "money market" banks to large range of rates charged by commercial banks on short-term loans to large businesses. businesses with the highest credit standing. RATES ON BUSINESS LOANS OF BANKS Size of loan (in thousands of dollars) AAllll ssiizzeess 1-9 10-99 100-499 500-999 1,000 and over CCCeeennnttteeerrr Aug. May Aug. May Aug. Aug. May Aug. May Aug. May 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 Short-term 35 centers 8.22 8.16 9.42 9.57 9.02 9.10 8.48 8.52 8.29 8.18 8.00 7.90 New York City 8.00 7.88 9.28 9.27 8.89 9.02 8.44 8.55 7.93 7.86 7.93 7.76 7 Other Northeast 8.43 8.37 9.83 10.00 9.33 9.34 8.71 8.63 8.67 8.51 8.01 7.95 8 North Central 8.12 8.00 9.01 9.11 8.79 8.82 8.39 8.32 8.25 7.91 7.94 7.82 3 Southeast 8.41 8.70 9.58 9.86 9.21 9.40 8.57 8.97 8.32 8.67 7.94 8.15 8 Southwest 8.28 8.34 9.21 9.35 8.76 8.89 8.27 8.32 8.32 8.24 8.06 8.15 4 West Coast 8.45 8.33 9.67 9.72 9.21 9.23 8.51 8.58 8.28 8.23 8.37 8.18 Revolving credit 35 centers 8.17 7.95 9.73 9.59 9.06 8.91 8.45 8.58 8.68 8.23 8.07 7.84 New York City 8.37 7.92 8.91 9.04 8.94 8.94 8.41 8.37 8.30 8.16 8.37 7.88 7 Other Northeast 8.09 7.92 10.11 10.45 9.01 8.66 8.01 8.21 8.78 7.56 7.98 7.91 8 North Central 8.27 8.20 9.70 9.78 9.58 10.01 8.81 9.24 8.56 8.12 8.12 8.03 7 Southeast 7.82 8.41 10.07 9.90 9.47 8.61 8.35 8.68 7.-50 7.97 7.50 8.40 8 Southwest 8.41 8.40 9.36 9.44 8.88 8.66 8.46 8.51 8.11 8.47 8.49 8.29 4 West Coast 8.02 7.84 9.27 8.91 8.84 8.54 8.39 8.44 9.10 8.40 7.83 7.69 Long-term 35 centers 8.89 8.22 9.45 9.94 9.47 9.36 9.01 8.83 8.54 8.47 8.89 8.05 New York City 8.77 8.38 8,80 9.92 8.53 9.50 8.86 8.69 8.01 9.02 8.80 8.31 7 Other Northeast 8.96 8.53 9.35 9.99 10.09 9.76 9.56 9.41 9.28 7.96 8.60 8.28 8 North Central 9.45 7.22 9.71 9.06 9.24 8.68 8.50 8.64 8.23 8.09 9.81 6.80 7 Southeast 8.91 8.91 8.87 10.94 9.66 9.14 9.54 7.93 8.04 9.47 8.30 9.50 8 Southwest 8.41 8.47 9.69 10.74 9.38 9.86 8.67 8.37 8.62 8.68 8.18 8.28 4 West Coast 8.57 8.71 9.60 9.15 9.24 9.20 9.28 9.06 8.47 8.67 8.47 8.66 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • INTEREST RATES A 27 MONEY MARKET RATES (Per cent per annum) U.S. Government securities 5 PPrriimmee FFFiiinnnaaannnccceee ccoommmmeerrcciiaall CCCOOO... PPPrrriiimmmeee FFFeeeddd--- PPPeeerrriiioooddd ppaappeerr11 pppaaapppeeerrr bbbaaannnkkkeeerrrsss''' eeerrraaalll 3-month bills6 6-month bills 6 9- to 12-month issues ppplllaaaccceeeddd aaacccccceeepppttt--- fffuuunnndddsss 33-- ttoo 55-dddiiirrreeeccctttlllyyy,,, aaannnccceeesss,,, rrraaattteee 444 yyeeaarr 90-119 4 to 6 333 tttooo 666 999000 dddaaayyysss333 Rate Market Rate Market 1 -year iissssuueess 77 days months mmmooonnnttthhhsss 222 on new yield on new yield bill (mar- Other? issue issue ket yield) 6 1967 55555.....1111100000 44444.....8888899999 44444.....7777755555 44444.....2222222222 44444.....333332222211111 44444.....2222299999 44444.....666663333300000 44444.....6666611111 44444.....7777711111 44444.....8888844444 55555.....0000077777 1968 55555.....9999900000 55555.....6666699999 55555.....7777755555 55555.....6666666666 55555.....333333333399999 55555.....3333344444 55555.....444447777700000 55555.....4444477777 55555.....4444466666 55555.....6666622222 55555.....5555599999 1969 77777.....8888833333 77777.....1111166666 77777.....6666611111 88888.....2222211111 66666.....666667777777777 66666.....6666677777 66666.....888885555533333 66666.....8888866666 66666.....7777799999 77777.....0000066666 66666.....8888855555 1970 77777.....7777722222 77777.....2222233333 77777.....3333311111 77777.....1111177777 66666.....444445555588888 66666.....3333399999 66666.....555556666622222 66666.....5555511111 66666.....4444499999 66666.....9999900000 77777.....3333377777 1971 55555.....1111111111 44444.....9999911111 44444.....8888855555 44444.....6666666666 44444.....333334444488888 44444.....3333333333 44444.....555551111111111 44444.....5555522222 44444.....6666677777 44444.....7777755555 55555.....7777777777 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 1974 10.05 9.87 8.62 9.92 10.51 7.886 7.84 7.926 7.95 7.71 8.25 7.81 1974—Sept. 11.36 11.23 9.41 11.06 11.34 8.363 8.06 8.599 8.53 8.52 8.95 8.38 Oct 9.55 9.36 9.03 9.34 10.06 7.244 7.46 7.559 7.74 7.59 8.04 7.98 Nov. 8.95 8.81 8.50 9.03 9.45 7.585 7.47 7.551 7.52 7.29 7.67 7.65 Dec, 9.18 8.98 8.50 9.19 8.53 7.179 7.15 7.091 7.11 6.79 7.33 7.22 1975_jan.. 7.39 7.30 7.31 7.54 7.13 6.493 6.26 6.525 6.36 6.27 6.74 7.29 Feb.. 6.36 6.33 6.24 6.35 6.24 5.583 5.50 5.674 5.62 5.56 5.97 6.85 Mar 6.06 6.06 6.00 6.22 5.54 5.544 5.49 5.635 5.62 5.70 6.10 7.00 Apr. 6.11 6.15 5.97 6.15 5.49 5.694 5.61 6.012 6.00 6.40 6.83 7.76 May 5.70 5.82 5.74 5.76 5.22 5.315 5.23 5.649 5.59 5.91 6.31 7.49 June, 5.67 5.79 5.53 5.70 5.55 5.193 5.34 5.463 5.61 5.86 6.26 7.26 July. 6.32 6.44 6.01 6.40 6.10 6.164 6.13 6.492 6.50 6.64 7.07 7.72 Aug., 6.59 6.70 6.39 6.74 6.14 6.463 6.44 6.940 6.94 7.16 7.55 8.12 Sept, 6.79 6.86 6.53 6.83 6.24 6.383 6.42 6.870 6.92 7.20 7.54 8.22 Week ending— 1975—June 7 5.48 5.60 5.50 5.59 5.24 5.258 5.23 5.505 5.48 5.77 6.15 7.29 14 5.55 5.63 5.50 5.55 5.15 5.080 5.00 5.283 5.25 5.50 5.94 7.05 21,, . 5.58 5.65 5.45 5.58 5.31 4.767 5.24 5.129 5.55 5.74 6.13 7.14 28..., 5.98 6.18 5.63 6.03 5.72 5.665 5.80 5.935 6.07 6.32 6.69 7.49 JJuullyy 5 6.25 6.34 5.81 6.19 6.31 6.009 5.98 6.262 6.28 6.47 6.89 7.62 6.28 6.45 6.00 6.38 6.06 6.203 6.06 6.510 6.39 6.50 6.91 7.65 19 6.28 6.43 6.00 6.35 5.93 6.045 6.05 6.344 6.41 6.53 6.91 7.67 26 6.38 6.48 6.03 6.52 6.14 6.247 6.27 6.626 6.65 6.82 7.27 7.79 AAuugg.. 2 6.43 6.53 6.18 6.48 6.25 6.318 6.28 6.719 6.69 6.86 7.35 7.86 9 6.50 6.63 6.25 6.66 6.09 6.456 6.42 6.864 6.88 7.11 7.50 8.05 16,, , 6.63 6.68 6.33 6.75 6.08 6.349 6.42 6.809 6.93 7.17 7.58 8.13 23 6.63 6.75 6.50 6.79 6.15 6.452 6.46 7.000 7.00 7.26 7.63 8.20 30, , 6.63 6.75 6.50 6.83 6.23 6.593 6.49 7.085 6.98 7.16 7.54 8.12 SSeepptt.. 6 . , 6.75 6.75 6.50 6.82 6.06 6.381 6.38 6.866 6.89 7.07 7.43 8.07 13 6.75 6.75 6.50 6.85 6.15 6.389 6.43 6.889 6.88 7.14 7.51 8.26 20 6.85 6.93 6.50 6.82 6.28 6.444 6.45 6.901 6.97 7.31 7.64 8.34 27 6.78 6.95 6.58 6.81 6.29 6.316 6.38 6.824 6.90 7.21 7.52 8.18 1 Averages of the most representative daily oflfering rate quoted by of transactions at these rates. For earlier statement weeks, the averages dealers. were based on the daily effective rate—the rate considered most repre- 2 Averages of the most representative daily offering rate published by sentative of the day's transactions, usually the one at which most transfinance companies, for varying maturities in the 90-179 day range. actions occurred. 3 Beginning Aug. 15, 1974, the rate is the average of the midpoint of 5 Except for new bill issues, yields are averages computed from daily the range of daily dealer closing rates offered for domestic issues; prior closing bid prices. data are averages of the most representative daily offering rate quoted by 6 Bills quoted on bank-discount-rate basis. dealers. 7 Selected note and bond issues. 4 Seven-day averages for week ending Wednesday. Beginning with statement week ending July 25, 1973, weekly averages are based on the NOTE.—Figures for Treasury bills are the revised series described on p. daily average of the range of rates on a given day weighted by the volume A-35 of the Oct. 1972 BULLETIN. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 28 INTEREST RATES • OCTOBER 1975 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 1 States ( t l e o r n m g ) - Total 1 Aaa Baa New ce R n e t - ly Aaa Baa In t d ri u a s l - R ro a a i d l- P u u ti b li l t i y c Pre- Com- Comissue 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 7.12 197 4 6.99 6.19 5.89 6.53 9.33 9.34 8.98 8.57 9.30 8.78 8.98 9.27 8.23 4.47 11.60 1974_Sept 7.30 6.77 6.49 7.18 10.38 10.30 9.67 9.24 10.12 9.44 9.46 10.11 8.93 5.45 14.35 Oct 7.22 6.56 6.21 6.99 10.16 10.23 9.80 9.27 10.41 9.53 9.64 10.31 8.78 5.38 Nov 6.93 6.54 6.06 7.01 9.21 9.34 9.60 8.89 10.50 9.30 9.59 10.14 8.60 5.13 Dec 6.78 7.04 6.65 7.50 9.53 9.56 9.56 8.89 10.55 9.23 9.59 10.02 8.78 5.43 12.97 1975—Jan 6.68 6.89 6.39 7.45 9.36 9.45 9.55 8.83 10.62 9.19 9.52 10.10 8.41 5.07 Feb 6.61 6.40 5.96 7.03 8.97 9.09 9.33 8.62 10.43 9.01 9.32 9.83 8.07 4.61 Mar 6.73 6.70 6.28 7.25 9.35 9.38 9.28 8.67 10.29 9.05 9.25 9.67 8.04 4.42 10.18 Apr 7.03 6.95 6.46 7.43 9.67 9.65 9.49 8.95 10.34 9.30 9.39 9.88 8.27 4.34 May 6.99 6.95 6.42 7.48 9.63 9.65 9.55 8.90 10.46 9.37 9.49 9.93 8.51 4.08 June 6.86 6.96 6.28 7.48 9.25 9.32 9.45 8.77 10.40 9.29 9.40 9.81 8.34 4.02 July 6.89 7.07 6.39 7.60 9.41 9.42 9.43 8.84 10.33 9.26 9.37 9.81 8.24 4.02 Aug 7.06 7.12 6.40 7.71 9.46 9.49 9.51 8.95 10.35 9.29 9.41 9.93 8.41 4.36 Sept 7.29 7.40 6.70 7.96 9.68 9.57 9.55 8.95 10.38 9.35 9.42 9.98 8.56 4.39 Week ending— 1975—Aug. 2 6.92 7.07 6.40 7.58 9.37 9.35 9.44 8.86 10.31 9.26 9.37 9.82 8.45 4.19 9 7.00 7.11 6.40 7.70 9.44 9.51 9.48 8.93 10.31 9.28 9.38 9.88 8.40 4.30 16 7.01 7.11 6.40 7.70 9.43 9.49 9.51 8.95 10.35 9.29 9.40 9.93 8.39 4.31 23 7.14 7.12 6.40 7.72 9.53 9.54 9.52 8.96 10.36 9.31 9.42 9.96 8.38 4.44 30 7.12 7.12 6.40 7.72 9.49 9.50 9.53 8.96 10.37 9.31 9.44 9.96 8.47 4.38 Sept. 6., 7.11 7.29 6.60 7.85 9.41 9.53 8.93 10.37 9.32 9.43 9.95 8.48 4.30 13. 7.25 7.35 6.66 7.91 9.64 9.50 9.54 8.94 10.36 9.34 9.43 9.97 8.53 4.42 20. 7.34 7.45 6.76 8.01 9.68 9.61 9.56 8.98 10.39 9.36 9.42 9.99 8.61 4.50 27. 7.35 7.49 6.79 8.06 9.70 9.70 9.55 8.94 10.40 9.36 9.41 10.00 8.61 4.34 Number of issues2.. . 15 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 Investors 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, weekly averages compiled by the Board of 23, 1967, there is no longer an Aaa-rated railroad bond series. Governors of the Federal Reserve System; and rates for seasoned issues, 2 Number of issues varies over time; figures shown reflect most recent 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 as of end of period. NOTE.—Annual yields are averages of weekly, monthly, or quarterly Preferred stock ratio based on 8 median yields for a sample of nondata. callable issues—12 industrial and 2 public utility. Common stock ratios Bonds: Monthly and weekly yields are computed as follows: (1) U.S. on the 500 stocks in the price index. Quarterly earnings are seasonally Govt., averages of daily figures for bonds maturing or callable in 10 years adjusted at annual rates. or more; from Federal Reserve Bank of New York. (2) State and local NOTES TO TABLES ON OPPOSITE PAGE: Security Prices: Stock Market Customer Financing: NOTE.—Annual data are averages of daily or weekly figures. Monthly 1 Margin credit includes all credit extended to purchase or carry stocks and weekly data are averages of daily figures unless otherwise noted and are or related equity instruments and secured at least in part by stock (Dec. computed as follows: U.S. Govt, bonds, derived from average market 1970 BULLETIN, p. 920). Credit extended by brokers is end-of-month data yields in table on p. A-28 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 acyear 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, presently 1971. conducted 5 days per week for 6 hours per day. 2 In addition to assigning a current loan value to margin stock generally. Regulations T and U permit special loan values for convertible bonds and 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

OCTOBER 1975 • SECURITY MARKETS A 29 SECURITY PRICES Common stock prices VVVooollluuummmeee ooofff BBBooonnnddd ppprrriiiccceeesss New York Stock Exchange AAAmmmeeerrr--- tttrrraaadddiiinnnggg iiinnn (((pppeeerrr ccceeennnttt ooofff pppaaarrr))) iiicccaaannn ssstttoooccckkksss SSStttoooccckkk (((ttthhhooouuusssaaannndddsss ooofff PPPPeeeerrrriiiioooodddd Standard and Poor's index New York Stock Exchange index EEExxx--- ssshhhaaarrreeesss))) (1941-43= 10) (Dec. 31, 1965 = 50) CCChhhaaannn gggeee tttoootttaaalll iiinnndddeeexxx ( G t l U e o o r . n m S v g t . ) , - S l a o t n c a d a te l p A C o A r o a A r t - e Total In tr d i u a s l - R ro a a i d l- P u u ti b li l t i y c Total In tr d i u a s l - T p t r o i a o r n t n a s - - Utility na F n i- ce 111999 111000 777 000 333 ))) === NYSE AMEX 1970 60.52 72.3 61.6 83.22 91.29 32.13 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 15,381 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 1974 57.45 76.3 58.8 82.85 92.91 37.53 38.91 43.84 48.08 31.89 29.82 49.67 79.97 13,883 1,908 1974—Sept 55.13 71.0 56.2 68.12 76.54 31.55 30.93 35.69 39.29 25.86 24.94 36.42 65.70 13,998 1,808 Oct 55.69 72.7 55.9 69.44 77.57 33.70 33.80 36.62 39.81 27.26 26.76 39.28 66.78 16,396 1,880 Nov 57.80 72.6 56.3 71.74 80.17 35.95 34.45 37.98 41.24 28.40 27.60 41.89 63.72 14,341 1,823 Dec 58.96 68.6 56.1 67.07 74.80 34.81 32.85 35.41 38.32 26.02 26.18 39.27 59.88 15,007 2,359 1975—Jan 59.70 70.9 56.4 72.56 80.50 37.31 38.19 38.56 41.29 28.12 29.55 44.85 68.31 19,661 2,117 Feb 60.27 74.1 56.6 80.10 89.29 37.80 40.37 42.48 46.00 30.21 31.31 47.59 76.08 22,311 2,545 Mar 59.33 70.9 56.2 83.78 93.90 38.35 39.55 44.35 48.63 31.62 31.04 47.83 79.15 22,680 2,665 Apr 57.05 69.5 55.8 84.72 95.27 38.55 38.19 44.91 49.74 31.70 30.01 47.35 82.03 20,334 2,302 May 57.40 69.6 56.6 90.10 101.05 38.92 39.69 47.76 53.22 32.28 31.02 49.97 86.94 21,785 2,521 June 58.33 69.8 56.7 92.40 103.68 38.97 43.65 49.21 54.61 30.79 32.78 52.20 90.57 '•21,286 2,743 July 58.09 68.5 56.6 92.49 103.84 38.04 43.67 49.54 54.96 32.88 32.98 52.51 93.28 20,076 2,750 Aug 56.84 68.3 55.6 85.71 96.21 35.13 41.04 45.71 50.71 30.14 31.02 46.55 85.74 13,404 1,476 Sept 55.23 66.1 55.8 84.62 94.96 34.94 40.53 44.97 50.05 29.46 30.65 43.38 84.26 12,717 1,439 Week ending— 1975—Sept. 6, 56.49 66.9 55.9 85.92 96.31 35.11 40.88 45.76 50.81 29.92 31.01 45.12 85.70 12,053 1,265 13 55.52 66.6 55.8 84.21 94.39 34.65 40.62 44.76 49.73 29.18 30.76 43.53 84.40 13,080 1,278 20 54.83 65.6 55.6 83.46 93.59 34.46 39.98 44.27 49.27 28.80 30.27 42.51 82.95 13,816 1,744 27 54.79 65.1 55.9 85.52 95.95 35.47 40.64 45.37 50.61 30.04 30.64 43.18 84.56 14,250 1,476 For notes see opposite page. STOCK MARKET CUSTOMER FINANCING (In millions of dollars) Margin credit at brokers and banks i Regulated 2 UUnnrreegguu-llaatteedd 33 FFFFrrrreeeeeeee ccccrrrreeeeddddiiiitttt bbbbaaaallllaaaannnncccceeeessss aaaatttt bbbbrrrrooookkkkeeeerrrrssss **** EEEEEnnnnnddddd ooooofffff pppppeeeeerrrrriiiiioooooddddd By source By type Margin stock Convertible Subscription NNoonnmmaarrggiinn bonds issues ssttoocckk TToottaall BBrrookkeerrss BBaannkkss ccrreeddiitt aatt bbaannkkss Brokers Banks Brokers Banks Brokers Banks Margin Cash accts. accts. 1974—July 6,028 5,005 1,023 4,840 978 158 33 7 12 2,091 402 1,391 Aug 5,705 4,752 953 4,590 912 156 29 6 12 2,119 429 1,3»2 Sept 5,167 4,243 924 4,090 881 148 31 5 12 2,060 437 1,354 Oct 5,066 4,150 916 4,000 872 145 32 5 12 2,024 431 1,419 Nov 5,074 4,183 891 4,040 851 139 29 4 11 2,054 410 1,447 Dec 4,906 4,050 856 3,910 815 137 30 3 11 2,064 411 1,424 1975—Jan 5,014 4,166 848 4,030 806 134 29 2 13 1,919 410 1,446 Feb '•5,169 4,339 830 4,200 783 136 34 3 13 1,897 478 1,604 Mar 5,244 4,400 844 4,260 800 134 30 6 14 1,882 515 1,760 Apr 5,407 4,583 824 4,440 781 138 30 5 13 1,885 505 1,790 May 5,746 4,927 819 4,780 779 140 27 7 13 11,,888833 520 1,705 June 5,160 5,010 146 4 519 1 790 July.. 55,,446666 55,,332200 114433 33 555577 IIJJIIOO For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 30 STOCK MARKET CREDIT; SAVINGS INSTITUTIONS • OCTOBER 1975 EQUITY STATUS OF MARGIN ACCOUNT DEBT SPECIAL MISCELLANEOUS ACCOUNT BALANCES AT BROKERS AT BROKERS, BY EQUITY STATUS OF ACCOUNIS (Per cent of total debt, except as noted) (Per cent of total, except as noted) TToottaall Equity class (per cent) Equity class of accounts ddeebbtt NNeett in debit status TToottaall ((mmiill-- EEnndd ooff ppeerriioodd ccrreeddiitt bbaallaannccee EE ppee nndd rrii oo oo dd ff ll dd iioo oo oo nn ff ll -- ss 8 m 0 o r o e r 70-79 60-69 50-59 40-49 Un 4 d 0 e r ssttaattuuss 60 o r p e m r o c r e e n t 6 L 0 e s p s e r t h c a e n n t ooff (( mm dd ii oo llll ll ii ll oo aa nn rrss ss )) llaarrss))!! 1974—July 40.2 36.5 23.2 6,695 1974—July.. 4,840 4.0 4.8 7.9 13.3 22.2 47.9 Aug 39.9 34.0 26.0 6,783 Aug.. 4,590 3.5 4.0 6.6 11.2 18.4 56.3 40.7 31.2 27.0 7,005 Sept.. 4,090 3.5 3.9 6.1 10.2 18.0 58.3 Oct 40.9 35.1 24.0 7,248 Oct... 4,000 4.6 5.5 9.4 16.8 27.3 36.4 Nov 40.0 34.6 25.3 6,926 Nov.. 4,040 4.2 5.1 8.5 14.8 24.4 42.8 Dec 41.1 32.4 26.5 7,013 Dec.. 3,910 4.3 4.6 8.8 13.9 23.0 45.4 1975—Jan 41.1 39.3 19.8 7,185 1975—Jan. . 4.030 5.6 7.3 13.5 24.6 28.1 21.2 Feb 42.2 40.1 17.8 7,303 Feb.. 4; 200 5.9 7.2 14.6 25.4 28.5 18.4 44.4 40.1 15.5 7,277 Mar.. 4,260 6.5 8.0 15.3 27.6 25.8 16.9 45.2 41.1 13.7 7,505 Apr.. 4,440 7.1 8.7 16.1 28.7 23.5 15.9 May 44.5 43.2 12.3 7,601 May. 4,780 7.0 9.1 16.7 31 .5 21 .0 13.4 June 45.9 43.1 11.0 7,875 June. 5,010 7.4 9.9 18.3 32.7 20.4 11.4 45.6 41.1 13.1 7,772 July.. 5,320 6.0 8.3 13.9 23.6 30.4 17.9 NOTE.—Special miscellaneous accounts contain credit balances that 1 Note 1 appears at the bottom of p. A-28. 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 TTToootttaaalll MMoorrttggaaggee llooaann aaasssssseeetttsss——— ccoommmmiittmmeennttss 22 EEEnnnddd ooofff pppeeerrriiioooddd MM ggaa oo gg rr ee tt-- OOtthheerr GG UU oo ..SS vvtt .. .. SS gg ll aa oo oo tt nn cc aa vv dd aa tt tt ee ll .. oo CC tt rr aa oo hh aa nn rr tt ee dd pp ee rr oo 11 -- CCCaaassshhh OOO aaasss ttt sss hhh eee eee tttsss rrr g l g l g l rrr iii eee TTT eee aaa aaa ttt sss ooo nnn iii bbb eee nnn eee eee ttt iii sss ddd rrr aaa lll rrr vvv iii aaa --lll eee lll DDDeee iiittt ppp sss ooo sss--- lll OOO iiiaaa ttt ttt iii bbb eee hhh iii sss eee lll iii rrr &#45;&#45;&#45; GGG rrr ccc eee ooo eee sss aaa uuu nnn eee ccc nnn eee rrr --- vvv ttt rrr sss aaa eee lll ccllaassss (( iiff ii ii nn ee dd mm bb oo yy nn tt mm hhss aa )) tt uurriittyy aaacccccctttsss... 3 or 3-6 6-9 Over Total less 9 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 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 74,891 3,812 2,555 930 22,550 2,167 2,645 109,550 98,701 2,888 7,961 664 418 232 726 2,040 1974_July... 74,541 4,311 2,650 884 22,383 1,402 2,487 108,660 97,713 3,144 7,803 990 586 316 1,076 2,968 Aug 74,724 4,031 2,604 879 22,292 1,334 2,519 108,383 97,067 3,475 7,841 949 496 417 977 2,839 Sept.. . 74,790 4,087 2,574 876 22,218 1,303 2,573 108,420 97,425 3,089 7,906 932 382 450 904 2,668 Oct.... 74,835 3,981 2,525 870 22,190 1,303 2,608 108,313 97,252 3,158 7,904 775 374 360 792 2,301 Nov.... 74,913 4,226 2,553 877 22,201 1,406 2,633 108,809 97,582 3,291 7,936 724 398 317 743 2,182 Dec.... 74,891 3,812 2,555 930 22,550 2,167 2,645 109,550 98,701 2,888 7,961 664 418 232 726 2,040 1975—Jan 74,957 4,287 2,571 967 22,979 1,706 2,663 110,130 99,211 2,948 7,971 726 400 225 620 1,971 Feb. . . 75,057 4,658 2,677 1,017 23,402 1,856 2,709 111,376 100,149 3,211 8,016 654 360 217 579 1 ,810 Mar.. . 75,127 4,736 2,975 1,095 24,339 2,101 2,672 113,045 102,285 2,712 8,049 824 312 294 564 1 ,994 Apr— 75,259 4,407 3,419 1,121 24,994 1,841 2,780 113,821 102,902 2,849 8,071 913 335 312 538 2,098 May... 75,440 4,593 3,616 1,137 25,579 2,077 2,811 115,252 104,056 3,080 8,116 955 383 300 573 2,211 June... 75,763 4,492 3,744 1,240 26,470 2,088 2,954 116,751 105,993 2,594 8,164 973 510 195 565 2,243 July... 76,097 4,396 3,965 1,436 26,976 1,835 3,004 117,709 106,533 2,970 8,208 957 463 266 526 2,212 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 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 btate bank supervisory agencies. previously reported by National Assn. of Mutual Savings Bank, which Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • SAVINGS INSTITUTIONS A 31 LIFE INSURANCE COMPANIES (In millions of dollars) Government securities Business securities End of period Total Mort- Real Policy Other assets Total U S n ta i t t e e s d Sta lo te c a a l n d Foreign i Total Bonds Stocks gages estate loans assets 197 1 222,102 11,000 4,455 3,363 3,182 99,805 79.198 20,607 75,496 6,904 17,065 11,832 197 2 239,730 11,372 4,562 3,367 3,443 112.985 86,140 26,845 76,948 7,295 18,003 13,127 197 3 252,436 11,403 4,328 3,412 3,663 117,715 91,796 25.919 81,369 7,693 20,199 14,057 197 4 263,817 11,890 4,396 3,653 3,841 119,580 97,430 22,150 86,258 8,249 22,899 14,941 1974_Ju]y. 258,712 11,722 4,312 3,600 3,810 119,655 95,917 23,738 83,657 7,957 21,563 14,158 Aug. 258,508 11,789 4,365 3,603 3,821 118,319 96,076 22,243 84,082 8,037 21,867 14,414 Sept. 258,116 11,762 4,316 3,618 3,828 116,884 96,162 20,722 84,427 8,100 22,175 14,768 Oct.. 261,183 11,804 4,344 3,620 3,840 119,225 96,815 22,410 85,016 8,140 22,473 14,525 Nov. 262,253 11,871 4,394 3,626 3,851 119,246 97.199 22,047 85,481 8,207 22,676 14,772 Dec. 263,349 11,965 4,437 3,667 3,861 118,572 96,652 21.920 86,234 8,331 22,862 15,385 1975—Jan.. 266,823 12,065 4,461 3,669 3,935 121.986 98,876 23,110 86,526 8,313 23,058 14,875 Feb. 269,715 12,161 4,512 3,686 3,960 124,158 99,571 24,587 86,929 8,402 23,224 14,841 Mar. 272,143 12,338 4,581 3,712 4,045 125,512 100,116 25,396 87,187 8,582 23,391 15,133 Apr. 273,523 12,374 4,608 3,719 4,047 126,256 99,725 26,531 87,638 8,782 23,459 15,014 May 275,816 12,464 4,678 3,739 4,047 127,847 100,478 27,369 87,882 8,843 23,570 15,210 June 278,343 12,560 4,738 3,762 4,060 129,838 101,238 28,600 88,035 8,989 23,675 15,246 July. 279,354 12,814 4,843 3,902 4,069 130,298 102,675 27,623 88,162 9,058 23,794 15,228 1 Issues of 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- End of period M ga o g r e t s - I s n m e v c e e u n s r t t - - Cash Other l a ia s T b s o i e l t i t t a s ie — l s S c a a v p in it g a s l w N or e th t 2 m ro B o w n o e e r- y d 3 Other ou m a p t t s i e t e t m r a n io n e d d d n i o t 4 n s f g ities 1 197 1 174,250 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 19735 231,733 21,055 19,117 271,905 226,968 17,056 17,172 4,667 6,042 9,526 1974'- 249,293 23,240 22,991 295,524 242,959 18,436 24,780 3,244 6,105 7,454 1974—Aug.'- 246,702 22,087 22,290 291,079 236,502 18,377 22,862 4.607 8,731 9,851 Sept. 247,612 21,172 22,687 291,471 237,911 18,201 24,104 4,253 7,002 9.126 Oct. ^ 248,177 22,132 22,940 293,249 238,338 18,444 24,508 3,840 8,119 8.127 Nov."- 248,699 23,255 23,222 295,176 239,567 18,675 24,510 3,479 8,945 7,723 Dec. 249,293 23,240 22,991 295,524 242,959 18,436 24,780 3,244 6,105 7,454 1975_Jan.^ 249,719 25,390 23,252 298,361 246,227 18,586 23,355 3,057 7,136 7,887 Feb. ^ 250,828 27,003 23,669 301,500 249,524 18,816 21,895 3,049 8,216 8,787 Mar.'- 252,442 28,304 24,210 304,956 256,017 18,654 20,373 3,275 6,637 10,050 254,727 29,047 24,868 308,642 258,875 18,882 19,845 3.608 7,432 11,653 May'-. 257,911 30,648 25,520 314,079 262,770 19,128 19,317 4,105 8,759 12,557 June '•. 261,336 30,880 25,786 318,003 268,978 18,992 18,881 4,446 6,706 12,363 July.. 264,458 32,054 26,311 322,823 272,032 19,266 18,765 4,771 7,989 12,611 Aug.f 267,718 31,708 27,105 326,531 273,493 19,495 19,232 4,999 9,312 12,641 1 Excludes stock of the Federal Home Loan Bank Board. Compensating in other assets. The effect of this change was to reduce the mortgage changes have been made in "Other" assets. 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 passall, associations. through type, previously included in "Cash" and "Investment securities" 3 Advances from FHLBB and other borrowing. are included in "Other" assets. These amounted to about $2.4 billion at 4 Data comparable with those shown for mutual savings banks (on the end of 1972. opposite 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 Govt.-insured mortgage- preceding year are preliminary even when revised. type investments, previously included in mortgage loans, are included Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 32 FEDERAL FINANCE • OCTOBER 1975 FEDERAL FISCAL OPERATIONS: SUMMARY (In millions of dollars) U.S. budget Means of financing Borrowings from the public Less: Cash and monetary assets Other means Period Surplus Less: Invest- of Receipts Outlays or Public ments by Govt, Trea- financdeficit debt Agency accounts i Less: Equals: sury ing, (-) securi- securi- Special Total operat- Other net 3 ties ties notes 2 ing S is p s e u c e ia s l Other balance Fiscal year: 197 2 208,649 231,876 -23,227 29,131 -1,269 6,796 1,623 19,442 1,362 1,108 6,003 197 3 232,225 246,526 -14,301 30,881 216 11,712 109 19,275 2,459 -1,613 -4,129 197 4 264,932 268,392 -3,460 16,918 903 13,673 1,140 3,009 -3,417 898 -2,063 197 5 280,997 324,601 -43,604 58,953 -1,069 9,252 -1,825 50,853 -1,570 1,891 -5,794 Half year: 1973—July-Dec. 124,256 130,362 -6,106 11,756 478 5,376 845 6,014 -2,202 -319 -2,429 1974—Jan.-June 140,676 138,032 2,647 5,162 426 8,297 295 -3,004 -1,215 1,089 231 July-Dec. 139,807 153,399 -13,591 18,429 -646 2,840 150 14,794 -3,228 248 -4,183 1975—Jan.-June, 141,190 171,202 -30,012 40,524 -423 6,412 -1,975 36,059 1,658 1,643 2,084 Month: 1974—Au g 23,620 25,408 -1,787 6,447 -56 4,133 -25 2,283 -1,012 83 -1,425 Sept 28,377 24,712 3,666 -326 -167 -1,311 250 569 3,244 797 -194 Oct 19,633 26,460 -6,827 -1,242 -242 -2,053 -152 721 -6,445 -338 -677 Nov 22,292 24,965 -2,673 5,139 -17 653 -31 4,500 816 96 -915 Dec 24,946 27,442 -2,496 7,300 -38 2,276 -90 5,077 2,874 268 561 1975—Ja n 25,020 28,934 -3,914 1,475 -23 -2,173 -42 3,667 -58 319 508 Feb 19,975 26,200 -6,225 5,571 -306 1,224 -495 4,535 -2,359 -132 -801 Mar 20,134 27,986 -7,852 9,949 5 -1,216 -79 11,249 3,115 285 3 Apr 31,451 29,601 1,850 7,081 -37 10 -451 7,485 7,666 1,847 178 May 12,793 28,186 -15,394 11 ,418 -6 3,296 -440 8,556 -5,757 -732 349 June 31,817 30,296 1,521 5,030 -55 '•4,131 '•276 567 -949 56 -1,847 July 20,197 31,249 -11,052 5,051 -23 '•-2,427 -346 7,800 -3,390 -1,373 -1,511 Aug 23,584 30,634 -7,050 9,472 6 2,384 94 7,189 -630 -263 -1,032 Selected balances Treasury operating balance Borrowing from the public. End Memo: pe o ri f o d B F a . n R k . s ac l c T a o o n a a u d x n n ts d t O a e r p t i h e o e s s r i 4 - Total se P c d u u e b r b i l t i t i c e s s A ec g u e r n it c ie y s S is G p s I e n o u c v e v i e a s t, s l L t a e m c s c e s o n : u t O s n t t o s h f e i r S n L p o e e te s c s s ia : 2 l E T q o u t a a l l s : s c p p D o G r o N r e iv n o p b o a s v s t w o t . t e — . r o - e 5 f d Fiscal year: 197 1 1,274 7,372 109 8,755 398,130 12,163 82,740 22,400 825 304,328 37,086 197 2 2,344 7,934 139 10,117 427,260 10,894 89,536 24,023 825 323,770 41,814 197 3 4,038 8,433 106 12,576 458,142 11,109 101,248 24,133 825 343,045 51,325 197 4 2,919 6,152 88 9,159 475,060 12,012 114,921 25,273 825 346,053 65,411 197 5 5,773 1,473 343 7,589 533,188 10,943 123,033 24,192 396,906 76,092 Calendar year: 197 3 2,543 7,760 70 10,374 469,898 1,586 106,624 24,978 825 349,058 59,857 1974 3,113 2,749 70 5,932 492,664 1,367 117,761 25,423 360,847 Month: 1974—Aug.... 3,304 2,049 91 5,443 481,792 11,831 118,196 25,446 349,980 69,951 Sept 3,211 5,384 92 8,687 481,466 11,664 116,885 25,696 350,549 73,068 Oct 789 1,381 71 2,241 480,224 11,422 114,832 25,544 351,270 75,343 Nov.. .. 1,494 1,571 3,066 485,364 11,404 115,485 25,513 355,770 75,706 Dec 3,113 2,745 70 5,928 492,664 11,367 117,761 25,423 360,847 76,459 1975—Ja n 3,541 2,115 220 5,876 494,139 11,343 115,588 25,380 364,514 76,921 Feb 2,884 410 220 3,514 499.710 11,037 116,812 24,886 369,049 75,964 Mar.... 4,269 2,140 220 6,629 509,659 11,042 115,596 24,807 380,298 76,392 Apr 8,363 5,411 521 14,295 516,740 11,004 115,606 24,355 387,783 77,124 May.... 7,036 981 521 8,538 528,158 10,998 118,902 23,915 396,339 75,140 June 5,773 1,473 343 7,589 533,188 10,943 123,033 24,192 396,906 76,092 July.... ''2,775 '•880 '•544 '•4,199 538,240 10,920 120,606 '•23,847 404,707 77,173 Aug 2,349 1,211 9 3,569 547.711 10,926 122,990 23,752 411,895 1 With the publication of the Oct. 1974, Federal Reserve BULLETIN, taries" (deposits in certain commercial depositaries that have been conthese series have been corrected (beginning in fiscal year 1971) to exclude verted from a time to a demand basis to permit greater flexibility in special issues held by the Federal home loan banks and the General Treasury cash management). Services Adm. Participation Certificate Trust, which are not Govt, ac- 5 Includes debt of Federal home loan banks. Federal land banks, R.F.K. counts. Stadium Fund, FNMA (beginning Sept. 1968), and Federal intermediate 2 Represents non-interest-bearing public debt securities issued to the credit banks and banks for cooperatives (both beginning Dec. 1968). International Monetary Fund and international lending organizations. 6 Beginning July 1974, public debt securities excludes $825 million of New obligations to these agencies are handled by letters of credit. notes issued to International Monetary Fund to conform with Office of 3 Includes net outlays of off-budget Federal agencies, accrued interest Management and Budget's presentation of the budget. payable on public debt securities, deposit funds, miscellaneous liability and asset accounts, and seigniorage. 4 As of Jan. 3, 1972, the Treasury operating balance was redefined to NOTE.—Half years may not add to fiscal year totals due to revisions in exclude the gold balance and to include previously excluded "Other deposi- series that are not yet available on a monthly basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • FEDERAL FINANCE A 33 FEDERAL FISCAL OPERATIONS: DETAIL (In millions of dollars) Budget receipts Individual income taxes Corporation Social insurance taxes income taxes and contributions Period Employment Total Pres. taxes and Excise Cus- Estate Misc. Elec- Non- Gross contribution 2 Un- Other taxes toms and re- With- tion with- Re- Net re- Re- empl. net Net gift ceipts 4 held Cam- held funds total ceipts funds insur. re- total paign Pay- Self- ceipts 3 Fundi roll empl. taxes Fiscal year: 197 2 208,649 83,200 25,679 14,143 94,737 34,926 2,760 44,088 2,032 4,357 3,437 53,914 15,477 3,287 5,436 3,633 197 3 232,225 98,093 27,0177 22 1,866 103,246 39,045 2,893 52,505 2,371 6,051 3,614 64,542 16,260 3,188 4,917 3,921 197 4 264,932 112,064 28 30,812 23,952 118,952 41,744 3,125 62,878 3,008 6,837 4,051 76,780 16,844 3,334 5,035 5,369 1975'- 280,997 122,071 34,297 34,013 122,386 45,747 5,125 71,789 3,417 6,770 4,466 86,441 16,551 3,676 4,611 6,711 Half year: 1973—July-Dec.. 124,256 52,964 6,207 999 58,172 16,589 1,494 29,965 201 2,974 1,967 35,109 8,966 1,633 2,514 2,768 1974—Jan.-June. 140,676 59,100 28 24,605 22,953 60,782 25,155 1,631 32,919 2,807 3,862 2,084 41,671 7,878 1,701 2,521 2,601 July-Dec.. 139,807 61,377 7,099 1,016 67,460 18,247 2,016 34,418 254 2,914 2,187 39,774 8,761 1,958 2,284 3,341 1975—Jan.-June. 141,190 60,694 27,198 32,997 54,926 27,500 3,109 37,371 3,163 3,856 2,279 46,667 7,790 1,718 2,327 3,370 Month: 1974—Au g 23,620 10,223 491 229 10,485 1,084 256 7,813 1,363 368 9,544 1,415 355 453 540 Sept 28,377 9,754 4,323 130 13,947 6,082 435 5,428 240 62 389 6,119 1,465 305 352 543 Oct 19,633 10,106 561 78 10,590 1,717 511 4,558 221 363 5,142 1,401 347 370 578 Nov 22,292 10,638 305 111 10,832 1,111 314 6,633 762 353 7,748 1,474 319 350 773 Dec 24,946 10,428 461 90 10,799 6,458 190 4,982 14 356 5,441 1,489 307 341 301 1975—Ja n 25,020 10,252 5,366 132 15,487 1,745 557 4,802 223 245 402 5,673 1,351 307 385 629 Feb 19,975 10,957 1,046 4,264 7,747 1,275 496 7,670 225 732 352 8,979 1,277 260 399 535 Mar 20,134 9,617 2,661 8,152 4,134 7,228 649 6,268 208 21 373 6,870 1,160 295 356 741 Apr 31,451 9,542 15 12,766 6,258 16,065 5,819 726 5,438 ,743 557 388 8,126 1,166 286 317 399 May 12,793 10,300 819 12,749 -1,630 1,192 18 7,689 340 2,209 350 10,588 1,373 270 459 559 June 31,817 10,027 4,540 1,444 13,123 10,241 664 5,552 373 92 413 6,431 1,464 301 412 508 July 20,197 9,205 908 498 9,615 1,838 471 5,309 444 374 6,128 1,514 313 503 757 Aug 23,584 10,246 488 331 10,403 1,045 425 8,085 1,257 372 9,713 1,394 302 430 723 Budget outlays5 Gen- Nat- Educa- Gen- Reveral ural Com- tion, eral enue Undis- Na- sci- Agri- re- Com- mun. man- Health Govt., shar. trib. Period Total tional Intl. ence. cul- sources. merce and power. and Vet- Inter- law and offde- affairs space. ture envir.. and region. and wel- erans est en- fiscal setting fense and and transp. devel- social fare force.. assist- retech. energy opment serv. and ance ceipts 6 justice Fiscal year: 1973 246,526 75,072 2,956 4,169 4,855 5,461 9,938 5,869 11,874 91,790 12,013 22,813 4,813 7 7,222 -12,318 1974 268,392 78,569 3,593 4,154 2,230 6,390 13,100 4,910 11,600 106,505 13,386 28,072 5,789 6,746 -16,652 1975 324,601 88,238 4,198 4,154 1,991 7,921 15,566 4,410 15,110 136,333 16,595 31,019 6,464 6,700 -14,098 19768 358,900 94,100 5,500 4,600 2,000 10,300 15,700 6,100 16,800 151,800 17,100 34,400 6,500 7,300 -20,000 Month: 1975—Mar 27,986 7,435 503 379 347 723 1,415 1,519 1,209 12,154 1,811 2,656 568 3 -1,236 Apr 29,601 7,555 109 368 275 611 1,088 309 1,838 12,379 1,466 2,716 152 1,524 -1,053 May 28,186 8,000 408 384 42 679 995 383 1,647 11,968 1,468 2,607 240 -873 June 30,296 7,854 557 256 179 788 1,289 453 1,684 14,158 1,412 2,521 '•521 ""-14 -1,601 July 31,249 7,307 531 476 270 821 2,256 402 1,237 13,092 1,367 2,637 322 1,625 -1,094 Aug 30,634 8,229 448 402 117 770 2,165 568 1,690 12,431 1,447 2,672 334 213 -1,071 1 Collections of these receipts, totaling $2,427 million for fiscal year 6 Consists of interest received by trust funds, rents and royalties on the 1973, were included as part of nonwithheld income taxes prior to Feb. Outer Continental Shelf, and Govt, contributions for employee retirement. 1974. 7 Contains retroactive payments of $2,617 million for fiscal 1972. 2 Old-age, disability, and hospital insurance, and Railroad Retirement 8 Estimates presented in Mid-Session Review of the 1976 Budget, May accounts. 30, 1975. Breakdowns do not add to totals because special allowances for 3 Supplementary medical insurance premiums and Federal employee contingencies, civilian agency pay raises, and energy tax equalization payretirement contributions. ments totaling $6,800 million for fiscal 1976 are not included. 4 Deposits of earnings by F. R. Banks and other miscellaneous receipts. 5 Budget outlays reflect the new functional classification of outlays presented in the 1976 Budget. For a description of these functions, see NOTE.—Half years may not add to fiscal year totals due to revisions in Budget of the U.S. Government, Fiscal Year 1976, pp. 64-65. series that are not yet available on a monthly basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 34 U.S. GOVERNMENT SECURITIES • OCTOBER 1975 GROSS PUBLIC DEBT, BY TYPE OF SECURITY (In billions of dollars) Public issues (interest-bearing) TTT gggrrr ooo ooo ttt sss aaa sss lll Marketable Nonmarketable Special End of period pppuuubbbllliiiccc CCoonn-- issues 5 dddeeebbbttt 111 TToottaall Total Bills C c e a r t t e if s i - Notes Bonds 2 bb vv ii oo bb ee nn ll rr ee dd tt-- ss Total 3 F is o su re e i s g n ^ S b a o a v n n in d d g s s notes 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—Dec. 469.9 360.7 270.2 107.8 124.6 37.8 2.3 88.2 26.0 60.8 107.1 19 74—Sept. 481.5 362.7 272.6 111 1 127.7 33.8 2.3 87.8 23.2 63.0 117.4 Oct., 480.2 363.9 273.5 112.'l 127.7 33.8 2.3 88.1 23.1 63.3 115.3 Nov. 485.4 368.2 277.5 114.6 129.6 33.3 2.3 88.4 23.1 63.6 115.9 Dec. 492.7 373.4 282.9 119.7 129.8 33.4 2.3 88.2 22.8 63.8 118.2 1975—Jan.. 494.1 377.1 286.1 120.0 131.8 33.3 2.3 88.8 23.0 64.2 116.0 Feb., 499.7 381.5 289.8 123.0 132.7 34.1 2.3 89.4 23.3 64.5 117.2 Mar. 509.7 392.6 300.0 124.0 141.9 34.1 2.3 90.4 24.0 64.8 116.0 Apr. 516.7 399.8 307.2 127.0 145.0 35.3 2.3 90.3 23.6 65.2 116.0 May 528.2 407.8 314.9 131.5 146.5 36.8 2.3 90.6 23.5 65.5 119.2 June 533.2 408.8 315.6 128.6 150.3 36.8 2.3 90.9 23.2 65.9 123.3 July. 538.2 416.3 323.7 133.4 153.6 36.7 2.3 90.4 22.2 66.3 120.9 Aug. 547.7 423.5 331.1 138.1 155.2 37.8 2.3 90.1 21.6 66.6 123.3 Sept. 553.6 431.5 338.9 142.8 158.5 37.7 2.3 90.3 21.5 66.9 121.1 1 Includes non-interest-bearing debt (of which $622 million on Sept. 30, 4 Nonmarketable certificates of indebtedness, notes, and bonds in the 1975, 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): despositary bonds, retirement plan bonds, Rural Electrification Administration bonds. State and local govern- NOTE.—Based on Monthly Statement of the Public Debt of the United ment bonds, and Treasury deposit funds. States, published by 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 nd ri o o d f p T g d u r o e o b t b s l a i t s c l ag G t U e a r o u n n .S v c s d i t t . e . s B F a . n R k . s Total m C b e a o r n m c k ia - s l M s b a u a v n t in u k g a s s l p I c n a a o n s n 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 c a v d a t t s e l . Sav I in n g d s iv idu O al t s h er n F a i o n t a i r t o n e e n d i r g a - n l 1 t i O m o n r v t i s h s e c e s 2 . r funds bonds securities 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—Dec 469.9 129.6 78.5 2bl.7 60.3 2.9 6.4 10.9 29.2 60.3 16.9 55.6 19.3 1974—July 475.3 137.5 78.1 259.7 '•53.5 2.6 5.7 11.3 28.8 62.2 19.4 56.9 '•19.2 Aug 481.8 141.6 81.1 259.0 '•53.1 2.6 5.7 11.0 29.2 62.3 20.3 56.0 ns.9 Sept 481.5 140.6 81.0 259.8 '•52.0 2.5 5.7 10.5 29.3 62.5 20.8 56.0 '•20.6 Oct 480.2 138.4 79.4 262.5 '•52.7 2.5 5.9 11.2 28.8 62.8 21.0 56.6 '•21.1 Nov 485.4 139.0 81.0 265.3 ••53.7 2.5 5.9 11.0 28.7 63.2 21.1 58.3 '^20.8 Dec 492.7 141.2 80.5 271.0 ^55.6 2.5 6.1 11.0 29.2 63.4 21.5 58.4 '•23.2 1975—Jan 494.1 139.0 81.3 273.8 '•54.6 2.6 6.2 11.3 30.0 63.7 21.6 61.5 22.3 Feb 499.7 139.8 81.1 278.9 '•56.5 2.7 6.2 11 .4 30.5 64.0 21.3 64.6 '•21 .6 Mar 509.7 138.5 81.4 289.8 '•61 .8 2.9 6.6 12.0 29.7 64.4 21.4 65.0 '•26.1 Apr 516.7 138.0 87.8 290.9 '•64.1 3.2 6.7 12.5 29.8 64.7 21.4 64.9 ^^23.6 May 528.2 140.9 85.6 301.7 67.7 3.4 6.9 13.7 29.8 65.1 21.5 66.8 26.8 June 533.2 145.3 84.7 303.2 69.2 3.5 7.1 13.2 29.6 65.5 21.6 66.0 llA Julyp 538.2 142.5 81.9 313.8 71.4 3.7 7.3 15.0 30.8 65.9 21.7 66.4 31.7 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 pensions 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. Beginning in July 1974, total gross public debt includes Federal trust funds; Treasury estimates for other groups. Financing Bank bills and excludes notes issued to the IMF ($825 million). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • U.S. GOVERNMENT SECURITIES A 35 OWNERSHIP OF MARKETABLE SECURITIES, BY MATURITY (Par value, in millions of dollars) \ Vithin 1 yea r 1-5 5-10 10-20 Over Type of holder and date Total years years years 20 years Total Bills Other All holders: 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—Dec. 31 282,891 148,086 119,747 28,339 85,311 27,897 14,833 6,764 1975—July 31 323,701 168,767 133,445 35,322 105,271 26,825 14,466 8,373 Aug. 31 331,080 175,467 138,086 37,381 106,272 25,443 14,431 9,467 U.S. Govt, agencies and trust funds: 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_Dec. 31 21,391 2,400 588 1,812 7,823 4,721 4,670 1,777 1975_july 31 20,188 2,171 384 1,787 7,532 4,263 4,233 1,990 Aug. 31 20,088 . 3,106 409 2,697 6,692 4,050 4,233 2,006 Federal Reserve Banks: 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—Dec. 31 80,501 45,388 36,990 8,399 23,282 9,664 1,453 713 1975_july 31 81,883 43,184 34,475 8,709 28,366 7,137 1,419 1,777 Aug. 31 82,546 42,790 34,085 8,705 30,404 5,782 1,460 2,111 Held by private investors: 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—Dec. 31 180,999 100,298 82,168 18,130 54,206 13,512 8,710 4,274 1975—July 31 221,630 123,412 98,586 24,826 69,373 15,425 8,814 4,606 Aug. 31 228,446 129,571 103,592 25,979 69,176 15,611 8,738 5,350 Commercial banks: 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—Dec. 31 42,755 14,873 6,952 7,921 22,717 4,151 733 280 1975_july 31 55,517 20,735 10,352 10,383 29,618 4,294 622 249 Aug. 31 57,763 22,833 12,166 10,667 29,955 4,077 614 286 Mutual savings banks: 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—Dec. 31 1,477 399 207 192 614 174 202 88 1975—July 31 2,606 547 239 308 1 ,294 422 242 100 Aug. 31 2,771 594 248 346 1,383 448 233 113 Insurance companies: 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—Dec. 31 4,741 722 414 308 1,061 1,310 1,297 351 1975—July 31 5,812 826 479 347 1,677 1,777 1,166 366 Aug. 31 5,864 912 505 407 1,717 1,716 1,148 371 Nonfinancial corporations: 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—Dec. 31 4,246 2,623 1,859 764 1,423 115 26 59 1975—July 31 6,911 4,072 3,216 856 2,528 223 64 23 Aug. 31 6,652 4,304 3,521 783 2,034 217 72 25 Savings and loan associations: 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—Dec. 31 1,663 350 87 263 835 282 173 23 1975_July 31 2,536 795 495 300 1,343 269 105 24 Aug. 31 2,624 839 536 303 1,392 264 106 23 State and local governments: 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_Dec. 31 7,864 4,121 3,319 802 1,796 815 800 332 1975_july 31 9,169 5,317 4,477 840 1,769 725 845 514 Aug. 31 8,920 5,081 4,347 734 1,716 774 826 523 All others: 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—Dec. 31 118,253 77,210 69,330 7,880 25,760 6,664 5,479 3,141 1975_july 31 139,079 91,119 79,329 11,790 31,144 7,715 5,770 3,332 Aug. 31 143,850 95,009 82,270 12,739 30,979 8,114 5,738 4,008 NOTE.—Direct public issues only. Based on Treasury Survey of banks, and 732 insurance companies combined, each about 90 per cent; Ownership. (2) 458 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) 501 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) 5,555 commercial banks, 473 mutual savings Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 36 U.S. GOVERNMENT SECURITIES • OCTOBER 1975 DAILY-AVERAGE DEALER TRANSACTIONS (Par value, in millions of dollars) U.S. Government securities By maturity By type of customer UUU...SSS... GGGooovvvttt... PPPeeerrriiioooddd aaagggeeennncccyyy TToottaall ssseeecccuuurrriiitttiiieeesss Within 1-5 5-10 Over U.S. Govt, U.S. Govt, Com- All 1 year years years 10 years securities securities mercial other 1 dealers brokers banks 1974—Aug 3,097 2,407 389 238 64 554 876 789 878 857 Sept 4,118 3,327 472 265 50 683 1,351 1,022 1,058 1,228 Oct 3,543 2,802 498 193 50 607 1,087 928 920 1,150 NOV 3,977 2,872 635 384 86 560 1,049 1,144 1,224 1,186 Dec 4,111 3,126 550 369 67 671 1,196 1,120 1,124 1,087 1975—Jan 5,415 3,495 1,514 303 104 887 1,549 1,503 1,478 1,244 Feb 5,770 3,353 1,521 711 185 698 2,044 1,511 1,518 1,233 Mar 4,467 2,812 994 464 197 671 1,183 1,198 1,415 928 Apr 5,197 3,682 1,096 285 134 704 1,450 1 ,242 1,801 904 May 6,419 4,181 1,615 466 158 981 1,917 1,454 2,067 1,049 June 5,732 3,745 1,484 372 132 801 1,689 1,336 1,906 1,217 July 4,675 3,301 1 ,131 172 71 669 1,294 1,100 1,613 778 Aug 5,183 3,375 1,340 333 134 742 1,405 1,185 1,851 844 Week ending— 1975—Aug. 6 5,525 3,273 1,257 744 251 827 1,612 1,138 1,949 517 13 4,534 3,072 913 422 128 567 1,332 1,015 1,620 668 20 4,687 2,978 1,419 206 84 683 1,113 1,144 1,747 1,155 27 6,225 4,223 1,730 192 80 903 1,601 1,499 2,222 893 Sept. 3 5,480 3,885 1,355 151 89 879 1,481 1,217 1,904 893 10 4,864 3,836 858 106 65 774 1,231 1,143 1,716 560 17 5,033 3,400 1,371 135 128 794 1,133 1,097 2,010 577 24 6,874 4,911 1,711 144 108 1,167 1,916 1,397 2,395 1,128 1 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 UU..SS.. PPeerriioodd m t a A ie t l u s l r i- W y i e th ar in y 1 ea -5 rs y 5 e - a 1 rs 0 y O e 1 v a 0 e r s r aa ss GG gg ee ttii ee cc oo ee uu nn vv ss cc rr tt ii .. yy -- PPeerriioodd ssoo AA uurr ll cc ll eess Y N C o e it r w y k w E h ls e e r - e CC tt oo iioo rrpp nnss oo rr 11 aa -- oo AA tthh ii ee ll rr 1974—Aug 2,432 2,361 215 337 66 1,041 4,138 988 1,248 548 1,354 Sept 3,033 2,692 329 328 59 1,190 Sept 4,709 1,312 1,247 480 1,671 Oct.*- 2,837 2,149 420 247 21 1,414 Oct 4,621 1,194 1,003 571 1,853 NOV.'- 4,478 2,998 714 602 163 1,505 Nov 5,626 1,466 1,245 561 2,355 Dec.'^ 4,821 3,100 974 553 195 1,773 Dec 6,904 2,061 1,619 691 2,534 1975—Jan 4,634 2,689 1,236 600 113 1,578 1975—Jan 6,185 1,455 1,277 864 2,590 Feb 5,588 3,658 1,180 536 213 1,469 Feb 6,295 1,672 1,077 714 2,832 Mar 5,737 3,435 1,486 618 198 1,444 Mar 6,881 1,879 1,650 838 2,513 Apr 4,453 3,123 1,036 218 77 937 Apr 5,696 1,655 1,326 583 2,132 May 6,332 4,917 1,094 248 73 896 May 6,656 1,684 1,567 452 2,953 June 6,768 5,923 748 100 -3 790 June 7,682 1,955 1,979 737 3,012 July 5,736 4,978 775 47 -64 626 July 6,594 1,365 1,435 929 2,865 Aug 5,501 4,491 609 262 138 610 6,167 1,009 1,148 1,120 2,890 Week ending— Week ending— 1975—July 2 6,195 4,917 1,187 148 -57 682 1975—July 2. .. 6,819 1,352 1,221 742 3,504 9 5,701 4,841 812 92 -44 657 9... 6,454 1,185 1,573 855 2,840 16 5,773 5,184 610 37 -59 523 16. .. 7,002 1,597 1,667 954 2,784 23 5,753 5,002 834 -3 -81 602 23... 6,929 1,497 1,568 995 2,869 20 5,435 4,952 660 -95 -81 680 30... 5,997 994 999 967 3,037 Aug. 6 6,115 4,552 811 559 192 722 Aug. 6... 6,584 1,318 1,270 934 3,061 13 5,350 4,575 411 233 130 586 13... 5,976 1,076 1,201 1,011 2,688 20 5,153 4,409 426 184 134 560 20... 6,061 1,110 1,197 1,227 2,527 27 5,787 4,682 815 192 97 581 27... 6,229 679 1,021 1,240 3,289 NOTE.—The figures include all securities sold by dealers under repur- 1 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

OCTOBER 1975 • FEDERALLY SPONSORED CREDIT AGENCIES A 37 OUTSTANDING ISSUES OF FEDERALLY SPONSORED CREDIT AGENCIES, AUGUST 31, 1975 Cou- Amount Cou- Amount Cou- Amount Agency, and date of issue pon (millions Agency, and date of issue pon (millions Agency, and date of issue pon (millions and maturity rate of dollars) and maturity rate of dollars) and maturity rate of dollars) Federal home loan banks Federal National Mortgage Banks for cooperatives Bonds: Association—Cont. Bonds: 12/18/70- 11/25/75 6.50 350 Debentures: 3/3/75-9/2/75 6.05 411 5/25/73 - 11/25/75 7.05 600 10/13/70 - 9/10/75 7.50 350 4/1/75 - 10/1/75 5.85 373 5/28/74- 11/25/75 9.10 700 3/12/73 -9/10/75 6.80 650 5/1/75 - 11/3/75 6.15 374 6/21/74- 2/25/76 8.70 400 3/10/72 - 12/10/75 5.70 500 66//22//7755 -- 1122//11//7755 5.80 497 8/25/71 -2/25/76 7.38 300 9/10/73 - 12/10/75 8.25 300 77//11//7755 -- 11//55//7766 5.65 424 8/27/73 -2/25/76 8.75 300 3/11/71 - 3/10/76 5.65 500 8/4/75 - 2/2/76 6.80 525 88//2266//7744 -- 22//2255//7766 9.20 600 6/12/73 -3/10/76 7.13 400 10/1/73 -4/4/77 7.70 200 66//2222//7733 -- 55//2255//7766 7.20 600 6/10/71 -6/10/76 6.70 250 1122//22//7744-- 1100//11//7799 8.00 201 1111//2277//7733 --55//2255//7766 7.45 300 2/10/72 -6/10/76 5.85 450 77//2255//7733 -- 88//2255//7766 7.80 500 999///111000///777444---666///111000///777666 10.00 700 9/25/74-8/25/76 9.55 700 111111///111000///777111 --- 999///111000///777666 6.13 300 Federal intermediate 10/25/74- 11/26/76 8.60 600 666///111222///777222---999///111000///777666..................... 5.85 500 credit banks 7/25/74- 11/26/76 9.55 500 12/10/74-9/10/76 7.50 200 Bonds: 10/25/73 -2/25/77 7.20 500 777///111222///777111 --- 111222///111000///777666 7.45 300 12/2/74 -9/2/75 8.05 783 11/25/74-2/25/77 8.05 500 111222///111111///777222--- 111222///111000///777666 6.25 500 1/2/75 - 10/1/75 7.35 593 6/21/74- 5/25/77 8.70 500 666///111000///777444---111222///111000///777666 8.45 600 2/3/75 - 11/3/75 7.05 824 6/25/71 - 5/25/77 6.95 200 3/13/62 - 2/10/77 4.50 198 3/3/75-12/1/75 6.15 897 4/12/73 - 8/25/77 7.15 300 9/11/72 - 3/10/77 6.30 500 3/1/73 - 1/5/76 6.65 261 5/28/74-8/25/77. ...... 8.80 600 33//1111//7744 --33//1100//7777 7.05 400 4/1/75 - 1/5/76 6.05 1,079 2/26/73 - 11/25/77 6.75 300 1122//1100//7700 -- 66//1100//7777 6.38 250 5/1/75 -2/2/76 6.60 909 111111///222777///777333--- 111111///222555///777777 7.45 300 555///111000///777111 ---666///111000///777777 6.50 150 6/2/75 - 3/1/76 6.15 840 888///222666///777444--- 111111///222555///777777 9.15 700 111222///111000///777333 ---666///111000///777777 7.20 500 7/1/75 -4/1/76 5.80 739 999///222555///777444 --- 222///222777///777888 9.38 400 999///111000///777111 ---999///111222///777777 6.88 300 8/4/75 -5/3/76 7.00 888 9/21/73 - 5/25/78 7.60 500 99//1100//7733 -- 99//1122//7777 7.85 400 7/2/73 - 1/3/77 7.10 236 88//2266//7744-- 1111//2277//7788 9.10 500 77//1100//7733 -- 1122//1122//7777 7.25 500 7/1/74-4/4/77 8.70 321 66//2211//7744-- 22//2266//7799 8.65 600 10/1/73 - 12/12/77 7.55 500 1/2/74- 1/3/78 7.10 406 9/25/74-2/26/79 9.45 600 6/10/74-3/10/78 8.45 650 1/2/75 -1/2/79 7.40 410 1100//2255//7744--55//2255//7799 8.65 500 3/10/75-3/10/78 6.70 350 7/1/75 -1/2/80 7.40 531 55//2288//7744 -- 55//2255//7799 8.75 400 6/12/73 -6/12/78 7.15 600 7/25/74 - 8/27/79 9.50 500 6/10/75 -6/12/78 7.45 400 11/25/74- 11/26/79 8.15 500 3/11/74-9/11/78.. 7.15 550 Federal land banks 1122//2233//7744 -- 1111//2266//7799 7.50 500 10/12/71 - 12/11/78.... 6.75 300 Bonds: 33//2255//7700 -- 22//2255//8800 7.75 350 77//1100//7744-- 1122//1111//7788 8.95 450 7/20/71 - 10/20/75 7.20 300 2/25/74-2/25/80 7.05 300 1122//1100//7733 --33//1122//7799 7.25 500 1100//2233//7733 -- 1100//2200//7755 7.40 362 10/15/70- 10/15/80 7.80 200 9/10/73 -6/11/79 7.85 300 44//2200//7722 -- 11//2200//7766 6.25 300 10/27/71 - 11/27/81 6.60 200 9/10/74 - 6/11/79 9.80 600 7/22/74 - 1/20/76 9.20 650 1100//2255//7744-- 1111//2255//8811 8.65 400 6/12/72-9/10/79 6.40 300 2/21/66 - 2/24/76 5.00 123 88//2255//7755 -- 22//2255//8822 8.63 500 12/10/74 -9/10/79 7.80 700 111///222222///777333 --- 444///222000///777666 6.25 373 4/12/73 -5/25/83 7.30 183 12/10/71 - 12/10/79.... 6.55 350 444///222222///777444---444///222000///777666 8.25 400 2/25/75 - 11/25/83 7.38 400 6/10/75 - 12/10/79 7.75 650 777///222000///666666 --- 777///222000///777666 5.38 150 5/28/74-5/25/84 8.75 300 2/10/72 - 3/10/80 6.88 250 1/21/74 - 7/20/76 7.05 360 10/25/73 - 11/26/93 7.38 400 3/10/75-3/10/80 7.25 750 4/23/73 - 10/20/76 7.15 450 4/1/75 -4/10/80 7.63 300 4/21/75 - 1/20/77 7.45 750 Federal Home Loan 6/10/74-6/10/80 8.50 600 7/21/75 -10/20/76...... 7.20 650 MMMMMooooorrrrrtttttgggggaaaaagggggeeeee CCCCCooooorrrrrpppppooooorrrrraaaaatttttiiiiiooooonnnnn 2/16/73 - 7/31/80 5.19 1 4/22/74 - 4/20/77 8.25 565 BBBBBooooonnnnndddddsssss::::: 2/16/73 -7/31/80 3.18 9 7/20/73 - 7/20/77 7.50 550 55555/////2222299999/////7777733333 ----- 88888/////2222255555/////7777766666 77..0055 440000 10/1/73 -9/10/80 7.50 400 10/20/71 - 10/20/77 6.35 300 55555/////1111111111/////7777722222 -----22222/////2222255555/////7777777777 66..1155 335500 1/16/73 - 10/30/80 4.46 5 10/21/74- 1/23/78 8.70 546 1111111111/////1111199999/////7777700000----- 1111111111/////2222277777/////9999955555 88..6600 114400 12/11/72 - 12/10/80 6.60 300 2/20/63 -2/20/73-78.... 4.13 148 77777/////1111155555/////7777711111 -----88888/////2222266666/////9999966666 77..7755 115500 6/29/72- 1/29/81 6.15 156 5/2/66 - 4/20/78 5.13 150 55555/////1111111111/////7777722222----- 55555/////2222266666/////9999977777 77..1155 115500 3/12/73 - 3/10/81 7.05 350 1/20/75 -4/20/78 7.60 713 CCCCCeeeee 22222 rrrrr ///// ttttt 22222 iiiiifffff 55555 iiiiiccccc /////77777 aaaaa 55555 ttttteeeee sssss ----- ::::: 33333/////1111155555/////0000055555 88..2200 330000 4 3 / / 1 2 8 1 / / 7 7 3 3 - - 3 5 / / 1 1 0 /8 /8 1 1 4 6. . 5 5 9 0 2 1 6 8 7 7/ / 2 2 0 2 / / 7 7 2 4 - - 7 / 7 2 / 0 2 / 0 7 /7 8 8 9 6 . . 1 4 5 0 2 3 6 5 9 0 Federal National Mortgage 3/21/73-5/1/81 5.77 2 1100//2233//7733 -- 1100//1199//7788 7.35 550 Association— 1/21/71 - 6/10/81 7.25 250 22//2200//6677 -- 11//2222//7799 5.00 285 Secondary market 9/10/71 -9/10/81 7.25 250 1/21/74- 1/22/79 7.10 300 operations 9/10/74-9/10/81 9.70 300 9/15/72-4/23/79 6.85 235 Discount notes 2,323 33//1111//7744--1122//1100//8811 7.30 250 222///222000///777444 --- 777///222333///777999 7.15 389 Capital debentures: 77//1100//7744 -- 33//1100//8822 8.88 300 111000///222333///777222 --- 111000///222333///777999 6.80 400 9/30/71 - 10/1/96 4.38 248 6/28/72-5/1/82 5.84 58 111///222222///777333 --- 111///222111///888000 6.70 300 1100//22//7722-- 1100//11//9977 7.40 250 2/10/71 - 6/10/82 6.65 250 77//2200//7733 -- 77//2211//8800 7.50 250 9/11/72 - 9/10/82 6.80 200 1100//2211//7744-- 1100//2200//8800 8.70 400 Mortgage-backed bonds: 12/10/73 - 12/10/82 7.35 300 2/23/71 -4/20/81 6.70 224 3/14/73 - 1/15/81 3.58 53 3/11/71 -6/10/83 6.75 200 7/22/74 - 7/20/81 9.10 265 3/14/73 - 1/15/81 5.48 5 6/12/73 - 6/10/83 7.30 300 1 /20/75 - 1 /20/82 7.80 400 6/21/73- 7/1/82 5.85 71 11/10/71 -9/12/83 6.75 250 4/20/72 - 4/20/82 6.90 200 6/21/73- 7/1/82 5.92 35 6/10/75 - 12/12/83 8.00 300 4/21/75 -4/20/82 8.15 300 3/1/73 -8/31/84 5.50 10 4/12/71-6/11/84 6.25 200 4/23/73 - 10/20/82 7.30 239 33//11//7733 -- 1100//3311//8855 5.49 21 7/10/75 -7/10/84 8.20 300 7/21/75 -1/20/83 8.20 464 33//11//7733 -- 33//11//8866 5.74 81 12/10/74-9/10/84 7.95 300 111000///222333///777333 --- 111000///222000///888333 7.30 300 9/29/70- 10/1/90 8.63 200 12/10/71 - 12/10/84 6.90 250 666///222333///777555 --- 777///222222///888555 8.10 391 3/10/75-3/11/85 7.65 500 3/10/72 - 3/10/92 7.00 200 66//1122//7722--66//1100//9922 7.05 200 1122//1111//7722-- 1122//1100//9977--8822.... 7.10 200 NOTE.—These securities are not guaranteed by the U.S. Govt.; see also note to table at top of p. A-38. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 38 FEDERALLY SPONSORED CREDIT AGENCIES • OCTOBER 1975 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 and Mortto ments de- and de- stock gage and cooper- Bonds dis- Bonds 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 6,395 197 1 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 7,063 197 2 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 8,012 197 3 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_Aug.. 19,653 2,052 80 18,759 1,935 2,495 28,022 26,639 3,026 2,622 8,548 8,381 12,941 11,782 Sept.. 20,772 2,681 135 20,647 2,160 2,543 28,641 27,312 3,092 2,835 8,931 8,502 13,185 11,782 Oct.. 21,409 3,224 105 22,058 2,129 2,580 29,139 27,543 3,598 2,855 8,838 8,482 13,418 12,427 Nov. 21,502 2,568 106 21,474 2,182 2,603 29,407 28,024 3,573 3,295 8,700 8,441 13,643 12,427 Dec.. 21,804 3,094 144 21,878 2,484 2,624 29,709 28,201 3,575 3,561 8,848 8,400 13,643 12,427 1975—Jan.. 20,728 4,467 113 21,778 2,612 2,699 29,797 28,030 3,910 3,653 8,888 8,419 14,086 13.020 Feb.. 19,460 4,838 99 20,822 2,819 2,698 29,846 27,730 3,821 3,592 9,031 8,484 14,326 13.021 Mar. 18,164 6,415 154 20,754 3,025 2,677 29,870 28,420 3,741 3,439 9,303 8,703 14,641 13,021 17,528 6,836 98 20,738 2,651 2.660 29,931 28,257 3,650 3,329 9,520 9,061 14,917 13,571 May! 17,145 5,745 98 19,463 2,708 2,656 29,977 27,714 3,499 2,982 9,763 9,231 15,180 13,571 June. 16,803 6,259 134 19,396 2,831 2,653 30,136 28,237 3,371 2,948 10,031 9,357 15,437 13,961 July. 16,685 6,174 119 19,446 2,436 2,656 30,453 28,419 3,520 2,914 10,163 9,556 15,654 14,351 Aug.. 16,945 4,680 89 19,736 2,281 2,660 30,881 28,718 3,738 3,004 10,176 9,715 15,851 14,351 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 FN MA 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 ered 3 Total G o e b a n l l e i- r- R n e u v e e - HAAi G l U o o a .S v n t s . , State di S a s t n t a r d t i , c t Other2 Total c E a d ti u o - n b R r a i o d n a g d d e s s i U tie ti s l - 4 H in o g u s s - V a e a n t i e d s* r - O p t u h r e - r gations auth. 197 1 24,963 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 23,653 13,305 9,332 959 57 4,991 9,496 9,165 19,959 4,981 1,689 4,638 1,910 6,741 197 3 -^23,969 12,257 10,632 1,022 ''58 4,212 9,505 10,249 22,397 4,311 1,458 5,654 2,639 8,335 1974 24,315 13,563 10,212 461 79 4,784 8,638 10,817 23,508 4,730 768 5,634 1,064 11,312 1974—Aug. ., 1,109 576 529 4 141 400 565 1,067 228 85 257 15 482 Sept.., 1,705 869 832 4 448 641 611 1,669 251 11 380 21 1,006 Oct... 2,865 1,707 1,153 5 328 974 1,558 2,738 343 110 236 110 1,939 Nov.. . 2,487 1,110 1,374 3 689 1,005 789 2,403 698 4 866 9 826 Dec... 1,500 761 717 22 222 558 700 1,475 297 64 424 53 637 1975—Jan... 2,367 1,364 997 6 372 702 1,293 2,332 710 49 644 172 757 Feb... 2,327 1,704 618 5 877 582 861 2,287 432 206 417 105 1,127 Mar.^ 2,126 1,283 841 2 376 709 1,041 2,071 463 94 471 35 1,008 Apr. »•. 2,400 1,492 901 7 368 876 1,153 2,312 405 61 734 38 1,074 May^ 2,880 1,860 1,015 5 811 1,196 865 2,783 419 211 559 25 1,569 June*". 3,022 1,736 1,284 2 938 1,119 964 2,823 430 164 816 27 1,386 July^. 3,542 1,353 2,183 6 1,577 1,040 921 3,523 381 123 869 37 2,113 Aug... 2,740 1,053 1,684 3 376 1,628 736 2,516 376 54 599 67 1,420 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 s 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

OCTOBER 1975 • SECURITY ISSUES A 39 TOTAL NEW ISSUES (In millions of dollars) Gross proceeds, all issues ^ Noncorporate Corporate Period Bonds Stock Total G U o . v S t. . 2 a G g U e o . n S v c t . y . 3 a ( n U S d . t S a lo t . e ) c 4 a l Others Total Total P o u ff b e l r i e c d ly P p ri l v a a c t e e d l y Preferred Common 1971. 105,233 17,235 16,283 24,370 2,165 44,914 31,999 24,790 7,209 3,679 9,236 1972. 96,522 17,080 12,825 23,070 1,589 40,787 27,727 18,347 9,378 3,373 9,689 1973., 100,417 19,057 23,883 22,700 1,385 33,391 22,268 13,649 8,620 3,372 7,750 1974. 37,837 31,551 25,337 6,214 2,253 4,033 1974_june. 2,981 2,455 1,939 516 113 413 July.. 3,257 2,702 2,086 616 228 327 Aug.. 2,668 2,341 2,042 299 107 218 Sept.. 1,617 1,204 897 307 126 '•287 Oct.., 4,609 3,778 3,423 355 196 635 Nov.. 3,746 3,346 3,016 330 93 307 Dec.. 3,505 3,052 2,172 880 152 301 1975—Jan... '•5,376 '•4,787 3,635 '•1,130 235 354 Feb.., 4,526 3,904 3,201 703 173 449 Mar.. 5,368 4,471 3,971 500 253 644 Apr.. '•4,439 '•3,193 2,771 '^360 347 '•899 May. 5,646 4,316 3,796 520 346 984 June. 5,570 4,565 3,943 622 230 775 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 a s n d Transportation Public utility Communication a R nd e al f i e n s a t n a c te ia l Bonds Stocks Bonds Stocks Bonds Stocks Bonds Stocks Bonds Stocks Bonds Stocks 197 1 9,551 2,102 2,158 2,370 2,006 434 7,576 4,201 4,222 1,596 6,484 2,204 1972 4,796 1,812 2,669 2,878 1,767 187 6,398 4,967 3,680 1,127 8,415 2,096 197 3 4,329 643 1,283 1,559 1,881 43 5,585 4,661 3,535 1,369 5,661 2,860 197 4 9,890 543 1,851 956 983 22 8,872 3,964 3,710 222 6,241 587 1974_June 434 43 303 139 5 15 859 288 355 1 491 39 July. 1,051 43 257 93 62 1 318 300 242 53 773 65 Aug. 601 4 38 62 14 862 216 364 462 44 Sept. 186 2 46 45 40 384 296 331 18 217 48 Oct.. 725 3 102 29 306 1,414 695 439 36 791 69 Nov. 1,697 2 116 100 336 739 225 62 31 397 44 Dec. 1,456 196 180 23 14 435 194 150 25 817 15 1975—Jan.. 1,898 3 179 74 84 >-761 507 933 5 '•931 Feb. 1,631 44 65 60 75 1,471 486 124 1 539 32 Mar. 2,368 111 271 74 83 828 679 317 604 34 Apr. '•1,498 233 293 211 r97 794 '584 ''354 209 156 9 May 2,265 214 241 141 415 845 704 153 260 399 10 June 2,180 123 381 194 210 838 640 362 594 47 1 Gross proceeds are derived by multiplying principal amounts or 5 Foreign governments and their instrumentalities, International Bank number of units by offering price. for Reconstruction and Development, and domestic nonprofit organ- 2 Includes guaranteed issues. izations. 3 Issues not guaranteed. 4 See NOTE to table at bottom of opposite page. NOTE.—Securities and Exchange Commission estimates of new issues maturing in more than 1 year sold for cash in the United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 40 SECURITY ISSUES • OCTOBER 1975 NET CHANGE IN OUTSTANDING CORPORATE SECURITIES (In millions of dollars) Derivation of change, all issuersi PPeerriioodd All securities Bonds and notes Common and preferred stocks New issues Retirements Net change New issues Retirements Net change New issues Retirements Net change 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 33,559 11,804 21,754 21,501 8,810 12,691 12,057 2,993 9,064 1974 39,334 9,935 29,399 31,554 6,255 25,098 7,980 3,678 4,302 1974—11 9,637 2,048 7,589 7,847 1,584 6,263 1,790 465 1,326 Ill 8,452 2,985 5,467 6,611 1,225 5,386 1,841 1,759 82 IV 12,272 2,871 9,401 10,086 2,004 8,082 2,186 866 1,319 1975—I 15,211 2,088 13,123 12,759 1 ,587 11,172 2,452 501 1,951 II 15,602 3,211 12,390 11,460 2,336 9,124 4,142 875 3,266 Type of issues Manu- Commercial Transpor- Public Communi- Real estate Period facturing and other 2 tation 3 utility cation and financial ^ Bonds Bonds Bonds Bonds Bonds Bonds and Stocks and Stocks and Stocks and Stocks and Stocks and Stocks notes notes notes notes notes notes 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 1,399 3,523 1,181 1974 7,404 17 1,116 -135 341 -20 7,308 3,834 3,499 398 5,428 207 1974 II 1,921 -12 698 213 -13 12 1,699 1,038 1,080 -7 877 82 Ill 1,479 -421 189 -664 49 -6 1,358 862 1,116 222 1,194 88 IV 3,098 126 240 -47 342 9 2,079 1,107 628 107 1,695 17 1975—1 5,134 262 373 77 1 1 2,653 1,569 1,269 24 1,742 18 II 4,574 500 483 490 429 7 1,977 1,866 810 359 852 43 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- ternal funds or with proceeds of issues for that purpose. actions only. As contrasted with data shown on preceding 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 1963 2,460 1,504 952 25,214 1,341 23,873 1974—Aug.. 446 339 127 35,106 4,953 30,153 1964 3,404 1,875 1,528 29,116 1,329 27,787 Sept.. 499 292 207 31,985 5,078 26,907 1965 4,359 1,962 2,395 35,220 1,803 33,417 Oct.. 816 311 505 37,115 5,652 31,463 Nov.. 619 335 284 36,366 5,804 30,562 1966 4,671 2,005 2,665 34,829 2,971 31,858 Dec.. 736 411 325 35,777 5,637 30,140 1967 4,670 2,745 1,927 44,701 2,566 42,135 1968 6,820 3,841 2,979 52,677 3,187 49,490 1975—Jan.. 1,067 428 639 3,7407 3,889 33,518 Feb.. 889 470 419 39,330 4,006 35,324 1969 6,717 3,661 3,056 48,291 3,846 44,445 Mar. 847 623 224 40,449 3,870 36,579 1970 4,624 2,987 1,637 47,618 3,649 43,969 808 791 17 42,353 3,841 38,512 1971 5,145 4,751 394 55,045 3,038 52,007 May'. 677 735 -58 43,832 3,879 39,953 June. 705 811 -108 45,538 3,640 41,898 1972 4,892 6,563 -1,671 59,831 3,035 56,796 July.. 763 981 -239 42,896 3,591 39,305 1973 4,358 5,651 -1,261 46,518 4,002 42,516 Aug.. 753 788 -35 41,672 3,660 38,012 1974 5,346 3,937 1,409 35,777 5,637 30,140 1 Includes contractual and regular single-purchase sales, voluntary and NOTE.—Investment Company Institute data based on reports of memcontractual accumulation plan sales, and reinvestment of investment in- bers, which comprise substantially all open-end investment companies come dividends; excludes reinvestment of realized capital gains dividends. registered with the Securities and Exchange Commission. Data reflect 2 Market value at end of period less current liabilities. newly formed companies after their initial offermg of securities. 3 Cash and deposits, receivables, all U.S. Govt, securities, and other short-term debt securities, less current liabilities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • BUSINESS FINANCE A 41 CORPORATE PROFITS, TAXES, AND DIVIDENDS (In billions of dollars) Corporate Corporate Year P b ta e ro x fo e fi r s t e s c ta o I x n m e - e s P t a a r f o x t f e e i s t r s 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 n a t l s i l p o o u i n w t m a - l p - Quarter P b ta e ro x fo f e i r s t e s c ta o I x n m e - e s P t a a r f o x t e e fi s r 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 s e s - d co c a t n a i l s o l p o u n i w t m a - l p ances 1 ances 1 1968 87.6 39.9 47.8 23.6 24.2 46.8 1973—III... 122.7 49.9 72.9 29.8 43.1 71.6 1969 84.9 40.1 44.8 24.3 20.5 51.9 IV... 122.7 49.5 73.2 30.7 42.5 73.1 1970 74.0 34.8 39.3 24.7 14.6 56.0 1971 83.6 37.5 46.1 25.0 21.1 60.4 1974—1. . .. 135.4 52.2 83.2 31.6 51.6 74.1 1972 99,2 41.5 57.7 27.3 30.3 66.3 II. .. 139.0 55.9 83.1 32.5 50.5 75.7 1973 122.7 49.8 72.9 29.6 43.3 71.2 III... 157.0 62.7 94.3 33.2 61.1 77.6 1974 140.7 55.7 85.0 32.7 52.4 76.7 IV... 131.5 52.0 79.5 33.3 46.2 79.3 1975—I. ... 101.2 39.0 62.3 33.8 28.5 81.2 II.... 113.3 43.0 70.3 34.0 36.3 83.0 1 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 NNNeeettt Notes and accts. Notes and accts. EEEnnnddd ooofff pppeeerrriiioooddd wwwooorrrkkkiiinnnggg UU..SS.. receivable payable AAccccrruueedd cccaaapppiiitttaaalll TToottaall CCaasshh ss GG ee oo ccuu vv rr tt ii ,, -- II tt nn oo vv rrii ee ee nn ss -- OOtthheerr TToottaall FF iinn ee cc dd oo ee mm rraa ee ll OOtthheerr ttiieess G U o . v S t . . i Other G U o . v S t . . i Other ttaaxxeess 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 203.6 529.6 53.3 11.0 3.5 217.6 200.4 43.8 326.0 4.9 215.6 13.1 92.4 1972 221.3 573.5 57.5 9.3 3.4 240.0 215.2 48.1 352.2 4.0 230.4 15.1 102.6 1973—11 235.4 608.2 59.0 10.0 2.9 255.4 230.1 50.8 372.7 4.5 241.7 15.0 111.6 Ill 239.5 625.3 58.9 9.7 3.0 264.4 238.0 51.3 385.8 4.4 250.2 16.5 114.7 IV 242.3 643.2 61.6 11.0 3.5 266.1 246.7 54.4 401 .0 4.3 261.6 18.1 117.0 1974—1 250.1 666.2 59.4 12.1 3.2 276.2 258.4 56.9 416.1 4.5 266.5 20.6 124.5 II 253.9 685.4 58.8 10.7 3.4 289.8 269.2 53.5 431 .5 4.7 278.5 19.0 129.1 Ill 259.5 708.6 60.3 11.0 3.5 295.5 282.1 56.1 449.1 5.1 287.0 22.7 134.3 IV 261.5 712.2 62.7 11.7 3.5 289.7 288.0 56.6 450.6 5.2 287.5 23.2 134.8 1975—1 260.4 698.4 60.6 12.1 3.2 281.9 285.2 55.4 438.0 5.3 271.2 21.8 139.8 II 269.0 703.2 63.7 12.7 3.3 284.8 281.4 57.3 434.2 5.8 270.1 17.7 140.6 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 TToottaall Period TToottaall Durable d N ur o a n b - le MMiinniinngg R ro a a i d l- Air Other Electric and G a o s th er nn CC ii oo ccaa mm ttii mm oonn uu ss -- OOtthheerrii AA ((SS ..RR ..AA ..)) .. 197 1 81.21 14.15 15.84 2.16 1.67 1.88 1.38 12.86 2.44 10.77 18.05 197 2 88.44 15.64 15.72 2.45 1.80 2.46 1.46 14.48 2.52 11.89 20.07 197 3 99.74 19.25 18.76 2.74 1.96 2.41 1.66 15.94 2.76 12.85 21.40 197 4 112.40 22.62 23.39 3.18 2.54 2.00 2.12 17.63 2.92 13.96 22.05 1973—11.. 24.73 4.65 4.51 .71 .46 .72 .43 3.91 .68 3.27 5.40 97.76 III. 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 II.. 28.16 5.59 5.69 .78 .64 .61 .49 4.56 .75 3.60 5.46 111.40 III., 28.23 5.65 5.96 .80 .64 .43 .58 4.42 .78 3.39 5.57 113.99 IV. 31.92 6.64 6.99 .91 .78 .48 .71 4.80 .87 3.78 5.97 116.22 1975—1.. 25.82 5.10 5.74 .91 .59 .44 .62 3.84 .58 3.11 4.88 114.57 II.. 28.43 5.59 6.55 .97 .71 .47 .77 4.15 .79 3.22 5.19 112.46 IIP 28.08 5.36 6.49 .91 .60 .51 .72 4.34 .90 8.24 113.48 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 42 REAL ESTATE CREDIT • OCTOBER 1975 MORTGAGE DEBT OUTSTANDING BY TYPE OF HOLDER (In millions of dollars) End of year End of quarter Type of holder, and type of property 1974 1975 1971 1972 1973 III IV ALL HOLDERS 499,758 564,825 634,954 664,291 678,681 688,563 695,337 709,279 1- to 4-family 307,200 345,384 386,240 402,131 410,175 414,950 418,663 428,710 Multifamilyi 67,367 76,496 85,401 88,258 90,269 92,042 92,913 93,644 Commercial 92,333 107,508 123,965 132,121 135,046 137,280 138,278 140,127 Farm 32,858 35,437 39,348 41,781 43,191 44,291 45,483 46,798 PRIVATE FINANCIAL INSTITUTIONS. 394,239 450,000 505,400 528,166 537,512 542,576 546,894 558,402 1- to 4-family 253,540 288,053 322,047 335,408 340,848 343,363 346,073 354,471 Multifamilyi 52,498 59,204 64,730 66,583 ei,ui 68,520 69,019 69,964 Commercial 78,345 92,222 107,128 114,184 116,509 118,263 119,261 121,210 Farm 9,856 10,521 11,495 11,991 12,312 12,430 12,541 12,757 Commercial banks 2 82,515 99,314 119,068 127,320 130,582 132,105 132,105 133,305 1- to 4.family 48,020 57,004 67,998 72,253 73,987 74,758 74,740 75,419 Multifamily i 3,984 5,778 6,932 7,313 7,496 7,619 7,614 7,684 Commercial 26,306 31,751 38,696 41,926 43,092 43,679 43,700 44,097 Farm 4,205 4,781 5,442 5,828 6,007 6,049 6,051 6,105 Mutual savings banks 61,978 67,556 73,230 74,225 74,809 74,920 75,160 75,726 1- to 4-family 38,641 41,650 44,246 44,398 44,604 44,670 44,796 45,133 Multifamilyi 14,386 15,490 16,843 17,070 17,208 17,234 17,292 17,417 Commercial 8,901 10,354 12,084 12,698 12,938 12,956 12,997 13,100 Farm 50 62 57 59 59 60 75 76 Savings and loan associations 174,250 206,182 231,733 243,393 247,612 249,293 252,442 261,336 1- to 4-family 142,275 167,049 187,750 197,002 200,343 201,553 204,099 211,290 Multifamilyi 17,355 20,783 22,524 23,342 23,573 23,683 23,831 24,409 Commercial 14,620 18,350 21,459 23,049 23,696 24,057 24,512 25,637 Life insurance companies 75,496 76,948 81,369 83,228 84,509 86,258 87,187 88,035 1- to 4-family 24,604 22,350 22,053 21,755 21,914 22,382 22,438 22,629 Multifamilyi 16,773 17,153 18,431 18,858 19,566 19,984 20,282 20,454 Commercial 28,518 31,767 34,889 36,511 36,783 37,571 38,052 38,376 Farm 5,601 5,678 5,996 6,104 6,246 6,321 6,415 6,576 FEDERAL AND RELATED AGENCIES, 39,357 45,790 55,664 62,585 67,829 72,267 75,973 79,807 1- to 4-family 26,453 30,147 35,454 39,784 43,188 45,748 47,751 50,500 Multifamily i 4,555 6,086 8,489 9,643 10,644 11,790 12,662 12,898 Commercial 11 Farm 8,338 9,557 11,721 13,158 13,997 14,729 15,560 16,409 Government National Mortgage Association 5,323 5,113 4,029 3,618 4,052 4,848 5,584 5,612 1- to 4-family 2,770 2,490 1,330 1,194 1,337 1,600 1,843 1,852 Multifamilyi 2,542 2,623 2,699 2,424 2,715 3,248 3,741 3,760 Commercial 11 Farmers Home Administration 819 837 1,200 1,400 1,500 1,600 1,700 1,800 1- to 4-family 398 387 550 642 688 734 780 826 Farm 421 450 650 758 812 866 920 974 Federal Housing and Veterans Administra- 3,389 3,338 3,476 3,619 3,765 3,900 4,025 4,150 1- to 4-family 2,517 2,199 2,013 1,980 2,037 2,083 2,119 2,155 Multifamilyi 872 1,139 1,463 1,639 1,728 1,817 1,906 1,995 Federal National Mortgage Association 17,791 19,791 24,175 26,559 28,641 29,578 29,754 30,015 1- to 4-family 16,681 17,697 20,370 21,691 23,258 23,778 13,1A3 23,988 Multifamilyi 1,110 2,094 3,805 4,868 5,383 5,800 6,011 6,027 Federal land banks (farm only) 7,917 9,107 11,071 12,400 13,185 13,863 14,640 15,435 Federal Home Loan Mortgage Corporation 964 1,789 2,604 3,191 3,713 4,586 4,608 4,944 1- to 4-faniily 934 1,754 2,446 2,951 3,414 4,217 4,231 4,543 Multifamilyi 30 35 158 240 299 369 377 401 GNMA Pools 3,154 5,815 9,109 11,798 12,973 13,892 15,662 17,851 1- to 4-family 3,153 5,620 8,745 11,326 12,454 13,336 15,035 17,136 Multifamilyi 1 195 364 472 519 556 627 715 INDIVIDUALS AND OTHERS 3 66,162 69,035 73,890 73,540 73,340 73,720 11,A1Q 71,070 1- to 4-family n,2oi 27,184 28,739 26,939 26,139 25,839 24,839 23,739 Multifamily i 10,314 11,206 12,182 12,032 11,782 11,732 11,232 10,782 Commercial 13,977 15,286 16,837 17,937 18,537 19,017 19,017 18,917 Farm 14,664 15,359 16,132 16,632 16,882 17,132 17,382 17,632 1 Structure of 5 or more units. NOTE.—Based on data from various institutional and Govt, sources, 2 Includes loans held by nondeposit trust companies but not bank trust with some quarters estimated in part by Federal Reserve in conjunction departments. with the Federal Home Loan Bank Board and the Dept. of Commerce. 3 Includes some U.S. agencies for which amounts are small or separate Separation of nonfarm mortgage debt by type of property, where not data are not readily available. reported directly, and interpolations and extrapolations where required, estimated mainly by Federal Reserve. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • REAL ESTATE CREDIT A 43 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) Total 1 F su H in re A - d - a g V n u t A e a e - r- d c P ha u s r e - s Sales d p M e u a r r i i d o n e d g st O i a n n u g d t - - Total F V H A A - t C v io e o n n n a - - l c P ha u s r e - s Sales p d M e u a r r i i d o n e d g s O t i a n u n g t d - - 197 1 17,791 12,681 5,110 3,574 336 9,828 6,497 968 821 147 778 64 182 197 2 19,791 14,624 5,112 3,699 211 8,797 8,124 1,789 1,503 286 1,298 408 1,606 198 197 3 24,175 16,852 6,352 6,127 71 8,914 7.889 2,604 1,743 861 1,334 409 1,629 186 197 4 29,578 19,189 8,310 6,953 5 10,765 7,960 4,586 1,904 2,682 2,191 52 4,553 2,390 1974—Aug.. 28,022 18,526 7,704 868 1,202 9,115 3,451 1,886 1,565 155 81 3,500 Sept. 28,641 18,758 7,994 760 997 9,043 3,713 1,896 1,817 273 69 3,278 Oct.. 29,139 18,966 8,206 612 878 8,987 4,107 1,910 2,197 410 7 30 2,871 Nov.. 29,407 19,083 8,291 379 201 8,532 4,352 1,908 2,445 270 12 28 2,621 Dec.. 29,578 19,189 8,310 278 231 7,960 4,586 1,904 2,682 266 16 34 2,390 1975—Jan.. 29,670 19,231 8,318 208 146 7,285 4,744 1,900 2,845 199 26 26 2,190 Feb.. 29,718 19,256 8,313 169 137 6,672 4,533 1,893 2,640 113 309 21 2,070 Mar. 29,754 19,277 8,304 151 639 6,636 4,608 1,887 2,722 113 19 52 1,040 Apr.. 29,815 19,282 8,337 211 913 6.890 4,634 1,890 2,744 121 71 297 1,161 May. 29,858 19,251 8,395 247 621 6,615 4,773 1,920 2,854 203 38 42 969 June. 30,015 19,282 8,498 326 557 6,549 4,944 1,936 3,008 210 5 28 700 July. 30,351 19,385 8,693 538 575 6,119 5,015 1,943 3,072 161 63 139 530 Aug. 30,777 19,507 8,942 594 814 5,888 1 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- Terms 1 Yields (per cent) in insured primary market loans—Yield Period in private C ra o c te n e t n ( r t p a ) e c r t (p F c e e h e r a s c r g e a e n n s t) d 2 M (y a e tu ar r s it ) y L ( o p a e r r n a / t c p io e r n ic t e ) p o r P i f c u e d r c o ( h l t l h a a o s rs e u ) s . (t a d h m L o o l o u o la a s u r n . n s ) t o f F s H er L ie B s B 3 s H er U ie D s 4 s m ec a o r n k d e a t 5 ry 197 1 7.60 .87 26.2 74.3 36.3 26.5 7.74 7.75 7.70 197 2 7.45 .88 27.2 76.8 37.3 28.1 7.60 7.64 7.53 197 3 7.78 l.Il 26.3 77.3 37.1 28.1 7.95 8.30 8.19 197 4 8.71 1.30 26.3 75.8 40.1 29.8 8.92 9.22 9.55 1974—Aug.. 8.87 1.32 26.4 75.3 40.2 29.5 9.09 9.60 10.30 Sept.. 8.97 1.30 26.1 74.8 42.4 31.1 9.19 9.80 10.38 Oct.. . 8.95 1.37 26.7 74.7 42.3 30.7 9.17 9.70 10.13 Nov.. 9.04 1.40 26.2 73.6 41.3 30.2 9.27 9.55 Dec... 9.13 1.44 27.5 75.5 42.4 31.3 9.37 9.45 9.51 1975—Jan... 9.09 1.51 26.7 73.8 43.2 31.6 9.33 9.15 8.99 Feb... 8.88 1 .44 26.8 76.5 44.4 33.0 9.12 9.05 8.84 Mar.. 8.79 1.61 26.5 75.1 45.9 33.7 9.06 8.90 8.69 8.71 1 .53 26.5 76.4 44.5 33.4 8.96 9.00 May'.'. 8.63 1 .63 27.0 75.5 43.5 32.2 8.90 9.05 9.16 June.. 8.73 1.42 26.5 76.4 43.1 32.4 8.96 9.00 9.06 July. . 8.66 1.40 26.0 75.9 44.1 32.9 8.89 9.00 9.13 Aug.f 8.65 1.61 26.7 77.3 45.2 34.3 8.91 9.15 9.33 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 precosts 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-44: 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 44 REAL ESTATE CREDIT • OCTOBER 1975 FEDERAL NATIONAL MORTGAGE ASSOCIATION AUCTIONS OF COMMITMENTS TO BUY HOME MORTGAGES Date of auction Item 1975 Apr. 21 May 5 May 19 June 2 June 16 June 30 July 14 July 28 Aug. 11 Aug. 25 Sept. 8 Sept. 22 Amounts (millions of dollars): Govt.-underwritten loans Offered 1 470.9 525.5 165.6 172.5 73.4 358.7 333.2 415.8 578.7 643.1 530.1 293.6 Accepted 247.3 280.4 115.0 80.4 38.6 246.9 174.9 247.7 365.5 223.0 197.7 114422..00 Conventional loans Offered 1 79.2 69.8 46.4 51.2 28.5 67.5 71.4 56.5 96.9 98.5 96.9 68.8 Accepted 51.3 43.9 38.4 27.1 15.7 47.3 35.8 34.5 48.9 31.0 43.9 35.2 Average yield (per cent) on shortterm commitments 2 Govt.-underwritten loans 9.13 9.29 9.25 9.14 9.06 9.07 9.10 9.17 9.32 9.50 9.70 9.86 Conventional loans 9.26 9.43 9.41 9.26 9.21 9.18 9.20 9.26 9.38 9.55 9.75 9.92 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 requirepaid 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) Sept. 30, Dec. 31, Mar. 31, June 30, Sept. 30, Dec. 31, Mar. 31, Holder 1973 1973 1974 1974 1974 1974 1975 All holders 133.8 135.0 136.7 137.8 138.6 140.3 142.0 FHA 85.6 85.0 85.0 84.9 84.1 84.1 84.3 VA 48.2 50.0 51.7 52.9 54.5 56.2 57.7 Commercial banks 11.7 11.5 11.1 11.0 10.7 10.4 10.5 FHA 8.4 8.2 7.8 7.6 7.4 7.2 7.2 VA 3.3 3.3 3.3 3.4 3.3 3.2 3.3 Mutual savings banks 28.6 28.4 28.2 27.9 27.8 27.5 27.6 FHA 15.7 15.5 15.3 15.1 15.0 14.8 14.8 VA 12.9 12.9 12.9 12.8 12.8 12.7 12.8 Savings and loan assns F VA H A 1 30.1 } 29.7 ) 29.8 } 29.7 ] 29.8 } 29.8 } 29.8 Life insurance cos ^ 13.7 ^ 13.6 ^ 13.3 13.1 ^ 12.9 12.7 12.5 FHA 9.3 9.2 9.0 8.8 8.7 8.6 8.4 VA 4.5 4.4 4.3 4.3 4.2 4.2 4.1 Others 50.0 52.1 54.3 56.1 57.4 59.9 61.6 FHA VA 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 TToottaall PPeerriioodd oo NN ff uu ll mm ooaa bb nn ee ss rr (( cc mm oo (( aa ii dd mm ll mm ll oo ii mm oo ll oo llaa nn uu iitt rr ss nn tt ss ee tt )) dd oo ff ( o th f a o m L d u o o o s a l u a l n a n n r t d s s ) ( C p in o e r t n r e a t r c t r e e a e s n c t t t ) (y M rs a . t /m ur o it s y . ) (p t L e o r o r a - v a t c a io e n l - u n e t) C (p a t e p io r it n a c l e r iz a n a t t ) e - co D r v a e e t r i b o a t g e P co e n r s c t e a n n t t 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 1973 2,140 4,833.3 2,259 8.76 23/3 74.3 9.5 1.29 10.0 1974 1,166 2,603.0 2,232 9.47 21/3 74.3 10.1 1.29 10.6 1974_june 147 287.5 1,956 9.35 20/10 75.7 10.1 1.24 10.7 July 121 234.6 1,939 9.60 20/0 74.1 10.1 1.26 10.8 Aug 105 312.4 2,975 9.80 22/10 74.3 10.2 1.31 10.7 Sept 95 241.6 2,543 10.04 20/11 74.4 10.3 1.29 11.1 Oct 57 108.3 1,899 10.29 19/7 74.6 10.6 1.25 11.5 Nov 47 79.7 1,695 10.37 18/4 74.0 10.7 1.26 11.6 Dec 37 140.0 3,784 10.28 19/10 74.8 11.0 1.33 11.3 1975—Jan 31 43.8 1,414 10.44 18/4 71.9 11.0 1.33 11.9 Feb 46 94.6 2,057 10.08 22/11 74.3 10.9 1.34 11.0 Mar 46 109.6 2,382 10.37 23/1 74.1 11.3 1.34 11.3 Apr 32 108.4 3,386 10.02 23/0 75.6 10.8 1.36 10.8 May 73 227.5 3,116 10.23 20/9 74.7 10.8 1.30 11.1 June 61 167.5 2,745 10.11 21/9 73.0 10.5 1.29 11.2 See NOTE on preceding page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • CONSUMER CREDIT A 45 TOTAL CREDIT (In millions of dollars) Instalment Noninstalment EEnndd ooff ppeerriioodd Total Other Home Charge accounts Auto- consumer improve- Personal Single- Service Total mobile goods ment loans Total payment credit paper paper loans 1 loans Retail Credit outlets cards2 1965 89,883 70,893 28,437 18,483 3,736 20,237 18,990 7,671 5,724 706 4,889 1966 96,239 76,245 30,010 20,732 3,841 21,662 19,994 7,972 5,812 874 5,336 1967 100,783 79,428 29,796 22,389 4,008 23,235 21,355 8,558 6,041 1,029 5,727 1968 110,770 87,745 32,948 24,626 4,239 25,932 23,025 9,532 5,966 1,227 6,300 1969 121,146 97,105 35,527 28,313 4,613 28,652 24,041 9,747 5,936 1,437 6,921 1970 127,163 102,064 35,184 31,465 5,070 30,345 25,099 9,675 6,163 1,805 7,456 1971 138,394 111,295 38,664 34,353 5,413 32,865 27,099 10,585 6,397 1,953 8,164 1972 157,564 127,332 44,129 40,080 6,201 36,922 30,232 12,256 7,055 1,947 8,974 1973 180,486 147,437 51,130 47,530 7,352 41,425 33,049 13,241 7,783 2,046 9,979 1974 190,121 156,124 51,689 52,009 8,162 44,264 33,997 12,979 8,012 2,122 10,884 1974—Aug 187,369 154,472 52,772 49,322 8,214 44,164 32,897 13,202 6,983 2,282 10,430 Sept 187,906 155,139 52,848 49,664 8,252 44,375 32,767 13,131 6,876 2,277 10,483 Oct 188,023 155,328 52,736 49,986 8,287 44,319 32,695 13,003 7,027 2,156 10,509 Nov 188,084 155,166 52,325 50,401 8,260 44,180 32,918 12,950 7,174 2,144 10,650 Dec 190,121 156,124 51,689 52,009 8,162 44,264 33,997 12,979 8,012 2,122 10,884 1975 Jan 187,080 153,952 50,947 51,142 8,048 43,815 33,128 12,675 7,162 2,153 11,138 Feb 185,381 152,712 50,884 50,136 7,966 43,726 32,669 12,560 6,468 2,074 11,567 Mar 184,253 151,477 50,452 49,391 7,925 43,709 32,776 12,542 6,452 2,033 11,749 Apr 184,344 151,271 50,360 49,247 7,880 43,784 33,073 12,526 6,735 2,062 11 ,750 May 185,010 151,610 50,465 49,329 7,908 43,908 33,400 12,443 7,268 2,073 11,616 June 186,099 152,668 50,927 49,519 7,973 44,249 33,431 12,470 7,361 2,088 11 ,512 July 187,211 153,930 51,556 49,637 8,040 44,697 33,281 12,282 7,388 2,180 11,431 Aug 188,821 155,263 52,011 50,061 8,094 45,097 33,558 12,362 7,392 2,247 11,557 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 "Conheating-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 Noninstalment End of period Total Automobile paper Other consumer goods paper Home Personal loans improve- Single- Total ment payment Purchased Direct Mobile Credit Other loans Check Other loans homes cards credit 1 1 196 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 11,753 197 4 84,010 72,510 18,582 11,787 7,645 8,242 6,414 4,458 2,424 12,958 11,500 1974—Aug. 84,982 73,302 19,511 12,344 7,681 7,491 6,541 4,409 2,312 13,013 11,680 Sept. 85,096 73,455 19,389 12,314 7,706 7,638 6,527 4,445 2,348 13,088 11,641 Oct.. 84,887 73,372 19,246 12,195 7,709 7,749 6,530 4,480 2,376 13,087 11,515 Nov. 84,360 72,896 18,981 12,031 7,700 7,846 6,469 4,490 2,362 13,017 11,464 Dec. 84,010 72,510 18,582 11,787 7,645 8,242 6,414 4,458 2,424 12,958 11,500 1975—Jan.. 82,986 71,776 18,230 11,581 7,587 8,325 6,323 4,399 2,448 12,883 11,210 Feb.. 82,229 71,151 18,104 11,497 7,522 8,149 6,272 4,359 2,447 12,801 11,078 Mar. 81,201 70,183 17,754 11,377 7,459 7,890 6,272 4,318 2,403 12,710 11,018 Apr., 81,155 70,134 17,613 11,387 7,417 7,909 6,312 4,318 2,411 12,767 11,021 May, 81,066 70,130 17,529 11,417 7,391 7,903 6,373 4,353 2,383 12,781 10,936 June, 81,429 70,475 17,560 11,482 7,375 7,977 6,446 4,403 2,375 12,857 10,954 July. 81,767 70,996 17,708 11,613 7,351 8,042" 6,497 4,463 2,396 12,926 10,771 Aug. 82,305 71,445 17,676 11,712 7,335 8,210 6,524 4,522 2,420 13,046 10,860 See NOTE to table above. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 46 CONSUMER CREDIT • OCTOBER 1975 INSTALMENT CREDIT HELD BY NONBANK LENDERS (In millions of dollars) Finance companies Other financial lenders Retail outlets Other consumer EEnndd ooff ppeerriioodd Auto- goods paper Home Per- Mis- Auto- Other Total mobile improve- sonal Total Credit cellaneous Total mobile retail ppaappeerr ment loans unions lenders 1 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,' 775 174 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 1974 38,925 12,435 3,570 4,751 993 17,176 25,216 22,116 3,100 19,473 286 19,187 1974—Aug 38,943 12,267 3,539 4,680 1,097 17,360 24,677 21,402 3,275 17,550 299 17,251 Sept 38,921 12,345 3,573 4,662 1,073 17,268 25,085 21,792 3,293 17,678 298 17,380 Oct 38,901 12,458 3,597 4,658 1,054 17,134 25,204 21,893 3,311 17,851 296 17,555 Nov 38,803 12,462 3.603 4,611 1,021 17,106 25,195 21,975 3,220 18,272 292 17,980 Dec 38,925 12,435 3,570 4,751 993 17,176 25,216 22,116 3,100 19,473 286 19,187 1975—Jan 38,340 12,315 3,559 4,642 967 16,857 25,032 21,966 3,066 18,804 282 18,522 Feb 38,194 12,406 3,539 4,580 923 16,746 25,213 22,089 3,124 18,154 280 17,874 Mar 37,910 12,371 3,519 4,427 903 16,690 25,506 22,227 3,279 17,878 276 17,602 Apr 37,746 12,349 3,513 4,366 867 16,651 25,623 22,415 3,208 17,768 275 17,493 May 37,711 12,406 3,507 4,315 833 16,650 25,917 22,674 3,243 17,852 275 17,577 June 37,828 12,571 3,508 4,288 807 16,654 26,478 23,186 3,292 17,887 276 17,611 July 38,177 12,793 3,503 4,258 778 16,845 26,837 23,507 3,330 17,920 280 17,640 Aug 38,340 12,982 3,498 4,251 741 16,868 27,348 24,043 3,305 18,130 282 17,848 1 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 1973~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 12.42 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 20.57 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 13.07 18.90 20.57 June. 10.81 11.21 13.01 13.20 17.23 12.50 17.06 July.. 10.96 11.46 13.14 13.42 17.20 12.58 17.18 "'i9;24'" "'26.'78" Aug.. 11.15 11.71 13.10 13.45 17.21 12.67 17.32 Sept.. 11.31 11.72 13.20 13.41 17.15 12.84 17.61 13.42 19.30 20.93 Oct.. 11.53 11.94 13.28 13.60 17.17 12.97 17.78 Nov.. 11.57 11.87 13.16 13.47 17.16 13.06 17.88 13.60 19.49 21.16 Dec.. 11.62 11.71 13.27 13.60 17.21 13.10 17.89 1975—Jan... 11.61 11.66 13.28 13.60 17.12 13.08 17.27 13.60 19.80 21.09 Feb.., 11.51 12.14 13.20 13.44 17.24 13.07 17.39 Mar.. 11.46 11.66 13.07 13.40 17.15 13.07 17.52 13.59 20.00 20.86 11.44 11.78 13.22 13.55 17.17 13.07 17.58 May! 11.39 11.57 13.11 13.41 17.21 13.09 17.65 13.57 19.63 20.75 June. 11.26 12.02 13.10 13.40 17.10 13.12 17.67 July. 11.30 11.94 13.13 13.49 17.15 13.09 17.69 13.78 19.87 20.97 Aug.. 11.31 11.80 13.05 13.37 17.14 13.10 17.70 NOTE.—Rates are reported on an annual percentage rate basis as specified maturities; finance company rates are weighted averages for specified in Re_g ulation 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

OCTOBER 1975 • CONSUMER CREDIT A 47 INSTALMENT CREDIT EXTENDED AND REPAID (In millions of dollars) Type Holder Period Total Automobile Other Home Personal Commercial Finance Other Retail ppaappeerr consumer improve- loans banks companies financial outlets goods paper ment loans lenders Extensions 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 1974 166,478 42,756 71,077 4,650 47,995 69,554 41,809 24,510 30,605 1974—Aug 14,394 3,887 5,993 388 4,126 6,034 3,476 2,290 2,594 Sept 14,089 3,835 5,935 302 4,017 6,050 3,408 2,079 2,552 Oct 13,626 3,369 5,948 348 3,961 5,600 3,229 2,160 2,637 Nov 12,609 3,062 5,700 321 3,526 5,390 2,823 1,863 2,533 Dec 12,702 3,205 5,798 294 3,405 5,012 3,240 1,901 2,549 1975_jan 12,859 3,348 5,430 289 3,792 5,368 3,068 2,048 2,375 Feb 13,465 3,856 5,561 302 3,746 5,649 3,195 2,104 2,517 Mar 12,797 3,419 5,535 339 3,504 5,357 2,872 2,044 2,524 Apr 13,181 3,454 5,584 313 3,830 5,457 3,145 2,142 2,437 May 13,149 3,467 5,757 334 3,591 5,473 2,985 2,032 2,659 June 13,959 3,752 5,976 373 3,858 5,772 3,316 2,141 2,730 July 14,378 4,073 5,927 378 4,000 5,959 3,424 2,361 2,634 Aug 14,358 3,932 6,077 349 4,000 6,047 3,386 2,178 2,747 Repayments 1967 83,988 26,534 27,847 2,202 27,405 29,549 26,681 10,337 17,421 1968 91,667 27,931 31,270 2,303 30,163 32,611 28,763 11,705 18,588 1969 99,786 29,974 34,645 2,457 32,710 36,470 30,981 13,193 19,142 1970 107,199 30,137 40,721 2,506 33,835 40,398 31,705 14,354 20,742 1971 115,050 31,393 44,933 2,901 35,823 45,395 31,730 16,033 21,892 1972 126,914 34,729 49,872 3,218 39,095 50,796 35,259 18,117 22,742 1973 144,978 39,452 59,409 3,577 42,540 60,014 38,066 20,358 26,540 1974 157,791 42,197 66,598 3,840 45,156 66,539 40,127 21,861 29,264 1974--Aug 12,882 3,443 5,444 309 3,686 5,463 3,166 1,851 2,402 Sept 13,412 3,604 5,700 279 3,829 5,808 3,371 1,723 2,510 Oct 13,224 3,470 5,499 321 3,934 5,542 3,250 1,962 2,470 Nov 13,009 3,423 5,561 325 3,700 5,671 2,981 1,860 2,497 Dec 13,516 3,668 6,037 341 3,470 5,803 3,308 1,822 2,583 1975—Jan 13,260 3,534 5,549 336 3,841 5,669 3,331 1,827 2,433 Feb 13,228 3,605 5,632 350 3,641 5,747 3,134 1,824 2,523 Mar 13,234 3,772 5,708 357 3,397 5,924 2,971 1 ,782 2,557 Apr 13,423 3,719 5,632 369 3,703 5,769 3,263 1,947 2,444 May 13,274 3,625 5,694 349 3,606 5,737 3,169 1,894 2,474 June 13,537 3,728 5,799 358 3,652 5,774 3,307 1,806 2,650 July 13,509 3,690 5,860 348 3,611 5,749 3,227 1,957 2,576 Aug 13,858 3,820 5,826 358 3,854 5,941 3,366 1,952 2,599 Net change 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 1974 8,687 559 4,479 810 2,839 3,015 1,682 2,649 1,341 1974—Aug 1,512 444 549 79 440 571 310 439 192 Sept 677 231 235 23 188 242 37 356 42 Oct 402 -101 449 27 27 58 -21 198 167 Nov -400 -361 139 -4 -174 -281 -158 3 36 Dec -814 -463 -239 -47 -65 -791 -68 79 -34 1975—Jan -401 -186 -119 -47 -49 -301 -263 221 -58 Feb 237 251 -71 -48 105 -98 61 280 -6 Mar -437 -353 -173 -18 107 -567 -99 262 -33 Apr -242 -265 -48 -56 127 -312 -118 195 -7 May -125 -158 63 -15 -15 -264 -184 138 185 June 422 24 177 15 206 -2 9 335 80 July 869 383 67 30 389 210 197 404 58 Aug 500 112 251 -9 146 106 20 226 148 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 48 INDUSTRIAL PRODUCTION: S.A. • OCTOBER 1975 MARKET GROUPINGS (1967 = 100) Grouping 1 p p ti 9 r o o o 6 r n - - 7 a 1 a v 9 e g 7 e r 4 - Sept. Oct 1 . 974 N ov. Dec. Jan, Feb. Mar. Apr. M 19 a 7 y 5 June'" July Aug.p Sept.® Total index 100.0 124.8 125.6 124.8 121.7 117.4 113.7 Ill .2 110.0 109.9 110.1 111.1 112.2 114.0 116.2 Products, total 62.21 123.1 123.6 122.9 121.4 118.7 115.4 113.7 112.4 112.9 113.4 114.2 115.4 116.3 117.6 Final products 48.95 121.7 122.6 122.3 120.9 118.2 114.9 113.3 112.2 112.6 113.7 114.5 115.7 116.5 117.7 Consumer goods 28.53 128.8 128.8 128.2 126.3 123.4 120.1 118.8 118.2 119.6 121 .2 123.3 125.4 126.3 127.4 Equipment 20.42 111.7 113.8 114.0 113.2 110.7 107.8 105.3 103.9 103.0 102.9 102.2 102.2 102.8 104.3 Intermediate products 13.26 128.3 127.6 125.3 123.0 120.5 117.6 115.2 112.7 113.4 112.4 112.8 114.3 115.6 117.1 Materials 37.79 127.4 129.3 128.1 122.1 114.8 110.5 107.4 105.9 105.2 104.9 106.0 106.8 110.6 114.0 Consumer goods Durable consumer goods 7.86 127.9 129.1 126.5 119.7 110.1 104.0 101.0 103.1 107.8 110.5 113.2 115.4 116.9 119.0 Automotive products 2.84 110.0 111.6 114.7 102.1 87.5 80.3 78.2 86.8 93.6 97.6 103.4 106.9 106.6 108.4 Autos 1.87 94.9 99.6 108.4 91.0 69.8 62.6 58.9 73.1 82.4 86.3 93.2 97.7 96.8 99.2 Auto parts and allied goods .97 139.0 134.5 126.9 123.6 121.5 114.4 115.5 113.2 115.2 119.3 122.8 124.8 125.3 126.0 Home goods 5.02 138.0 139.0 133.2 129.7 123.0 117.5 114.0 112.3 115.9 117.8 118.8 120.1 122.8 125.0 Appliances, TV, and radios 1.41 132.0 133.2 120.9 115.3 102.5 94.4 89.0 85.0 96.7 102.4 103.5 104.3 107.6 Appliances and A/C .92 148.8 150.2 139.5 131.9 119.8 108.0 104.8 99.1 114.2 118.4 118.3 118.2 123.9 TV and home audio .49 76.0 78.0 77.1 •'79.1 Carpeting and furniture 1.08 'l53."5 '155.'4 'isi.'s 'i44!7 "i43!8 'is^.i 'i32!3 'i27.'9 "iiiis •i28.'6 131 .1 133.5 140.6 Misc. home goods 2.53 134.7 135.3 132.2 131.4 125.5 123.0 120.1 121.0 121.4 121 .7 122.1 123.3 123.8 'iis'.i Nondurable consumer goods 20.67 129.2 128.7 128.9 128.8 128.4 126.3 125.5 124.1 124.0 125.3 127.2 129.1 129.9 130.6 Clothing 4.32 109.0 106.0 104.5 103.1 102.0 95.0 94.5 90.9 89.2 94.4 97.7 101.6 Consumer staples 16.34 134.5 134.8 135.4 135.6 135.5 134.5 133.6 132.7 133.3 133.5 134.9 136.4 i37!i isi'.e Consumer foods and tobacco.... 8.37 125.4 124.4 125.2 126.2 125.3 123.3 123.2 120.7 122.7 122.4 124.1 125.6 125.3 125.5 Nonfood staples 7.98 144.0 145.7 146.1 145.3 146.2 146.4 144.5 145.3 144.3 145.3 146.4 147.8 149.6 150.1 Consumer chemical products.. 2.64 158.4 157.7 159.8 155.2 159.1 160.6 157.1 158.2 157.6 158.4 159.2 161.2 166.6 Consumer paper products 1.91 125.2 130.9 128.5 127.4 126.7 122.0 121.9 120.9 118.4 122.8 123.3 124.1 125.4 Consumer fuel and lighting... 3.43 143.8 144.6 145.4 147.9 147.3 149.2 147.2 149.0 148.6 147.8 149.4 150.6 149.9 Residential utilities 2.25 153.7 156.2 155.5 159.3 159.0 159.9 159.7 163.1 161.9 160.9 161 .3 160.5 Equipment Business equipment 12.74 129.4 132.3 132.0 131.0 127.1 122.3 119.3 117.0 115.4 115.0 113.9 114.0 115.1 116.6 Industrial equipment 6.77 128.7 132.0 130.9 129.3 126.7 122.9 120.4 118.8 116.4 115.3 114.0 113.3 113.7 114.8 Building and mining equip 1.45 136.0 139.8 141.2 140.1 137.4 138.4 137.0 137.7 132.3 131 .7 127.7 126.9 128.3 131.0 Manufacturing equipment 3.85 121.7 124.4 122.5 119.4 116.5 111.8 109.4 106.6 105.6 105.0 104.3 105.5 104.9 105.0 Power equipment 1.47 139.9 144.2 142.8 144.5 142.6 136.6 132.1 131.8 128.9 126.2 125.8 120.3 122.3 124.0 Commercial, transit, farm equip.. . 5.97 130.3 132.8 133.2 132.9 127.6 121.6 118.0 115.1 114.2 114.7 113.9 114.8 116.5 118.7 Commercial equipment 3.30 141.1 143.3 144.1 143.1 139.3 135.2 130.4 127.8 123.2 121.5 120.7 123.0 123.1 124.6 Transit equipment 2.00 109.6 111.8 111.2 109.8 102.9 91.8 91 .5 88.8 92.2 98.6 98.0 98.0 101.6 105.1 Farm equipment .67 138.7 144.1 145.4 151.9 143.7 143.8 135.9 130.2 135.7 129.0 127.3 124.5 128.8 Defense and space equipment 7.68 82.3 83.1 84.1 83.7 83.4 83.8 82.4 82.1 82.4 82.7 82.9 82.6 82.5 83.6 Military products 5.15 81.2 82.3 82.5 81.8 81.3 81.5 80.7 80.3 80.7 82.0 82.0 82.1 82.2 83.5 Intermediate products Construction products 5.93 129.6 127.4 123.5 121 .3 118.3 115.7 112.1 109.1 110.1 107.6 106.8 107.9 109.3 110.8 Misc. intermediate products 7.34 127.3 127.8 126.8 124.2 122.5 119.2 118.4 115.6 116.1 116.2 117.5 119.4 120.7 Materials Durable goods materials 20.91 127.3 129.2 129.3 123.5 114.2 110.3 107.0 104.7 101.6 100.2 99.8 100.2 105.7 109.2 Consumer durable parts 4.75 112.1 117.2 115.2 104.1 91.7 83.7 82.1 84.7 86.0 87.7 90.8 92.9 101.3 104.8 Equipment parts 5.41 123.8 125.0 124.0 122.2 118.3 116.9 112.0 108.7 104.6 102.1 97.3 96.7 100.0 101.8 Durable materials nec 10.75 135.9 136.6 138.3 132.7 122.9 118.8 115.4 111.4 106.9 104.7 105.1 105.2 110.7 114.8 Nondurable goods materials 13.99 128.5 129.3 126.8 122.1 116.2 109.2 105.7 105.3 107.9 109.5 112.3 113.9 116.5 119.9 Textile, paper, and chem. mat 8.58 139.8 142.2 138.1 131.1 122.9 112.9 108.5 106.2 110.4 113.2 117.0 118.8 122.9 127.0 Nondurable materials n.e.c 5.41 110.6 108.9 108.9 107.8 105.7 103.3 101.1 103.9 104.0 103.7 105.1 106.0 106.5 108.7 Fuel and power, industrial 2.89 122.6 129.0 126.4 112.7 113.0 117.8 118.2 118.0 117.5 118.0 119.5 121.0 117.3 121.1 Supplementary groups Home goods and clothing 9.34 124.6 123.8 120.0 117.4 113.2 107.1 105.0 102.3 103.6 106.9 109.1 111.5 113.4 115.3 Containers 1.82 139.4 136.7 131.5 127.6 120.3 126.1 119.9 122.3 124.2 124.3 128.4 132.8 133.5 Gross value of products in market structure (In billions of 1963 dollars) Products, total 286.3 447.1 445.7 439.0 426.7 416.4 410.1 405.1 409.6 408.6 414.5 416.8 420.2 426.8 Final products 221.4 346.1 346.5 341.3 331.0 322.3 317.7 315.3 319.0 319.4 325.0 325.5 327.9 333.5 Consumer goods 156.3 233.1 233.7 228.9 222.3 216.4 213.7 213.2 217.6 217.8 223.6 224.9 226.6 229.8 Equipment 65.3 112.8 112.7 112.4 108.8 105.9 103.9 102.2 101.4 101.5 101.3 100.6 101.3 103.5 Intermediate products 64.9 101.0 99.4 97.4 95.8 94.3 92.3 90.0 90.5 89.2 89.6 91.2 92.4 93.3 For NOTE see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • INDUSTRIAL PRODUCTION: S.A. A 49 INDUSTRY GROUPINGS (1967 = 100) 1967 pro- 1974 1974 1975 Grouping p ti o o r n - a a v g e e r - Sept. Oct. Nov. Dec, Jan. Feb. Mar. Apr. May*" June'" July Aug.f Sept.* Manufacturing 88.55 124.4 125.5 124.6 120.9 116.1 111.7 109.2 107.7 107.9 108.2 109.5 110.5 112.7 114.7 Durable 52.33 120.7 122.1 121.6 117.9 112.2 108.2 104.8 103.5 103.3 102.5 103.2 103.5 105.4 108.0 Nondurable 36.22 129.7 130.5 128.9 125.4 121.9 117.0 115.6 113.7 114.8 116.1 118.6 120.8 123. 124.6 Mining and utilities 11.45 127.3 128.7 128.5 125.9 125.7 127.0 127.3 128.8 128.1 126.5 126.8 127.4 126.9 127.8 Mining 6.37 109.3 109.2 110.5 105.0 104.4 107.0 108.6 108.9 108.5 105.9 106.3 106.5 105.3 106.7 Utilities 5.08 149.9 153. 151.2 152.3 152.6 153.0 150.9 154.0 153.1 152.3 152.6 153.6 154.1 154.4 Durable manufactures Primary and fabricated metals.... 72.55 127.5 127.2 127.6 124.4 116.0 112.4 107.7 105.1 103.2 99.8 100.8 100.8 104.2 107.7 Primary metals 6.61 124.1 123.0 126.0 121.0 108.6 107.2 102. 98. 95.0 89.9 91.8 93.0 96.4 100.5 Iron and steel, subtotal 4.23 119.9 119. 123.9 117.7 107.9 110.6 105.0 103.1 99.4 90.1 88.7 87.0 90. 96.0 Fabricated metal products 5.94 131.4 132.0 129.6 128.2 124. 118.2 113.7 112.9 112.4 100.9 110.9 109.7 113.0 115.9 Machinery and allied goods J2.44 116.3 118.8 118.4 114.9 109.6 105.4 102.4 101.5 101.9 101.7 102.3 102.4 103.7 106.0 Machinery . 17.39 128.1 132.5 131.1 128.9 124.8 119.6 115.6 112.2 110.8 109.0 108.2 108.4 109.8 111.7 Nonelectrical machinery 9.17 133.8 137.8 137.4 135. 132.5 126.7 123.6 119.3 116.9 113.7 112.3 112.9 114.7 116.7 Electrical machinery 8.22 125.2 126.4 124.0 121.7 116.3 111.5 106.6 104.3 104.0 103.8 103.8 103.4 104.2 106.1 Transportation equipment 9.29 96.9 100.4 102.1 93.7 83.6 78.9 77.1 81.0 84.7 87.6 90.5 91.0 93.0 96.3 Motor vehicles and parts.... 4.56 113.2 118.6 123.0 107.1 86.4 78.2 77.6 85.4 93.1 95.0 100.0 103.2 107.3 112.3 Aerospace and misc. trans, eq... 4.73 81.1 82.8 81.9 80.9 80.9 79.5 76.6 76.7 76.6 80.4 81.3 79.3 79.3 81.0 Instruments 2.07 143.9 144.9 142.0 142.3 139.5 139.1 134.2 130.6 131.1 129.7 130.9 132.0 131.5 133.7 Ordnance, private and Govt.... 3.69 86.1 87.5 87.2 86.6 86.6 86.2 86.9 86.7 86.7 86.7 87.7 86.4 86.5 87.2 Lumber^ clay, and glass 123.6 120.6 117.8 113.7 111.0 109.6 104.6 102.6 104.8 105.9 107.0 108.0 109.3 110.5 Lumber and products 1.65 120.1 116.6 109.3 105.2 101.3 99.9 99.6 99.8 104. 108.0 110.3 112.0 112.6 Clay, glass, and stone products 2.79 125.7 123.0 122.9 118.8 116.9 115.3 107.8 104.2 105.4 104.7 105. 105.7 107.2 Furniture and miscellaneous 2.90 136.1 138.8 136.7 129.0 128.4 120.0 119.6 118.7 117.6 119.7 120.1 121.1 123.9 126.2 Furniture and fixtures 1.38 126.9 129.4 125.5 120.5 120.4 110.6 110.6 106.7 105.6 109.6 107.9 110.1 112.9 Miscellaneous manufactures 1.52 144.4 147.5 146.9 136.9 135.7 128.9 128.0 129.7 128.5 129.0 131.1 131.2 133.9 Nondurable manufactures Textiles, apparel, and leather 6.90 108.9 106.5 105.1 101.9 96.3 88.9 89.6 87.5 90.4 93.2 94.9 97.3 99.6 103.0 Textile mill products 2.69 122.7 121.9 119. 112.8 102.9 95.6 93.3 96.8 100.4 103.8 106.9 110.6 114.5 Apparel products 3.33 105.4 102.5 102.8 100. 98.0 94.0 92.6 86.4 88.2 90.9 91.5 92.8 Leather and products .88 77.3 74.2 70.6 74.7 69.7 66.1 66.7 63.5 68.0 70.0 71.2 73.6 '7^.2 Paper and printing 7.92 121.0 122.7 120.8 115.7 112.3 108.2 106.6 104.2 102.4 103.9 107.3 107.3 110.8 112.5 Paper and products 3.18 134.0 135.3 133.9 124.3 116.1 114.3 109.5 104.5 105.8 105.8 109.5 111.7 117.3 Printing and publishing 4.74 112.3 114.4 111.9 110.0 109.8 104. 104.7 104.0 100.2 102.6 105.9 104.4 106.5 iojj Chemicals, petroleum, and rubber.... 11.92 151.7 154.7 152.4 146.5 141.6 136.5 132.4 130.2 131.0 132.5 136.2 140.6 143.7 144.5 Chemicals and products 7.86 154.3 158.3 155.9 148.3 143.1 139.0 134.6 133.6 132.8 135.7 138.2 143.7 146.6 146.9 Petroleum products 1.80 124.0 121.9 125.4 127.0 125.8 126.8 123.7 120. 120.2 118.5 122.4 125.6 127.4 127.7 Rubber and plastics products 2.26 164.4 168.6 161.8 155.7 148.9 135.4 132.0 126.8 133.5 132.7 140.1 141.6 146.6 Foods and tobacco 9.48 124.8 124.3 123.7 123.8 123.5 120.0 121.3 120.0 122.4 122.4 123.5 124.7 124.7 125.5 Foods 8.81 126.2 125.7 124.8 125.4 125.7 121.2 122.3 121.3 122.9 123.8 125.1 126.2 126.0 126.8 Tobacco products .67 106.4 106.0 110.3 103.8 96.2 104.7 108.4 102.6 115.9 103.8 102.2 104.8 Mining Metal, stone, and earth minerals 1.26 117.2 115.4 121.3 120.7 117.9 119.1 116.2 113.4 113.3 106.2 101.5 104 A 109.5 108.5 Metal mining .51 129.2 130.5 141.4 136.8 134.7 133.8 131.1 125.4 125.8 114.8 110.6 110. 121.5 Stone and earth minerals .76 109.1 105.0 107.5 109.8 106.4 109.0 106.1 105.1 104.7 100.4 95.3 100.5 101.2 Coal, oil, and gas 5.11 107.3 107.7 107.8 101.2 101.1 103.9 106.8 107.7 107.4 105.8 107.6 107.0 104.3 106.2 Coal .69 105.1 112.1 110.3 61.6 85.3 111.3 in.5 117.4 112.2 113.6 120.4 120.6 102. 116.3 Oil and gas extraction 4.42 107.7 107.1 107.4 106.4 103.6 102.9 105.0 106.1 106.6 104.5 105.5 104.9 104.6 105.0 UtUities Electric 3.90 159.5 162.4 161.2 162.9 163.0 162.5 161.1 165.4 164.1 163.0 163.3 164.5 Gas 1.17 117.9 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 Industrial Production release. System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 50 BUSINESS ACTIVITY; CONSTRUCTION • OCTOBER 1975 SELECTED BUSINESS INDEXES (1967= 100, except as noted) Industrial production MMaannuu-- PPrriicceess 44 ffaaccttuurriinngg 22 IInn-- CCCCCaaaaa----- MMaarrkkeett dduussttrryy pppppaaaaaccccciiiiitttttyyyyy NNNNNooooonnnnnaaaaaggggg----uuuuutttttiiiiillllliiiiizzzzzaaaaa----- CCCCCooooonnnnn----- rrrrriiiiicccccuuuuulllll----- PPPPPeeeeerrrrriiiiioooooddddd Products tttttiiiiiooooonnnnn ssssstttttrrrrruuuuuccccc----- tttttuuuuurrrrraaaaalllll TTTTToooootttttaaaaalllll WWWhhhooollleee--- TTTToooottttaaaallll iiiiinnnnn mmmmmfffffggggg..... tttttiiiiiooooonnnnn eeeeemmmmm----- EEEmmm--- PPPaaayyy--- rrrrreeeeetttttaaaaaiiiiilllll CCCooonnn--- sssaaallleee Final (((((11111999996666677777 cccccooooonnnnn----- pppppllllloooooyyyyy----- pppllloooyyy--- rrrooollllllsss sssssaaaaallllleeeeesssss 33333 sssuuummmeeerrr cccooommm--- TToottaall MMaattee-- MMaannuu-- ooooouuuuutttttpppppuuuuuttttt tttttrrrrraaaaaccccctttttsssss mmmmmeeeeennnnnttttt————— mmmeeennnttt mmmooodddiiitttyyy Inter- rriiaallss ffaaccttuurr-- ===== 111110000000000))))) TTTTToooootttttaaaaalllll 11111 Con- Equip- mediate iinngg Total sumer ment goods 1955. 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 1956. ^. ^ 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 1957. 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 1958. 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 1959. 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 1960. 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 1961. 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 1962. 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 1963. 76.5 76.2 74.9 82.0 65.6 81., 1 77.. 0 75.8 83. 0 "86! i 86.1 87.8 76.0 79 91.7 94.5 1964. '. 81.. 7 81.2 79.6 86.8 70.1 87.3 82.. 6 81.2 85., 5 89,A 88.6 89.3 80.1 83 92.9 94.7 1965. 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 1966. 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 1967. 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 1968. 105.. 7 105.8 105.8 106.6 104.7 105,. 7 105,. 7 105.7 87. 7 113.. 2 103.2 101.4 108.3 109 104.2 102.5 1969. 110,. 7 109.7 109.0 111.1 106., 1 112.. 0 112,. 4 110.5 86., 5 123.. 7 106.9 103.2 116.6 114 109.8 106.5 1970. 106 .6 106.0 104.5 110.3 96.. 3 Ill .7 107,. 7 105.2 78. 3 123., 1 107.7 98.1 114.1 120 116.3 110.4 1971. 106 .8 106.4 104.7 115.7 89,. 4 112,. 6 107,. 4 105.2 75. 0 145., 4 108.1 94.2 116.7 122 121.2 113.9 1972. 115,. 2 113.8 111.9 123.6 95,. 5 121,. 1 117,. 4 114.0 78. 6 165., 3 111.9 97.6 131.5 142 125.3 119.8 1973. 125 .6 123.4 121 .3 131.7 106 .7 131 .1 129 .3 125.2 83. 0 181 .,3 '•116.8 '•103.2 '•149.2 133.1 134.7 1974. 124 .8 123.1 121 .7 128.8 111 .7 128 .3 127 .4 124.4 78,. 9 168,. 6 '•119.1 102.1 '•157.1 147.7 160.1 1974-— S A e u p g t 1 1 2 2 5 5 . . 6 2 1 12 2 3 3 . . 5 6 1 1 2 2 2 2 . . 6 1 1 1 2 2 8 9 . . 8 8 1 1 1 1 3 1 . . 8 4 1 12 2 8 7 . . 6 6 1 12 2 8 9 . . 3 5 1 1 2 2 5 5 . . 5 2 J 1 i 579 , A4 1 1 8 7 7 0 , , . , 0 0 '^ 1 1 1 1 9 9 . . 7 6 '• 1 1 0 0 2 2 . . 6 4 ' '• • 1 1 6 6 1 2 . . 4 9 1 1 8 7 0 6 1 15 4 1 9 .9 .7 1 1 6 6 7 7 . . 2 4 Oct 124 .8 122.9 122.3 128.2 114 .0 125 .3 128 _ 1 124.6 148,. 0 '•119.6 '•101.4 '•162.6 175 153.0 170.2 Nov 121 .7 121 .4 120.9 126.3 113 .2 123 .0 122 1 120.9 • 75,, 7 154,. 0 '•119.0 '^99.3 '•157.5 170 154.3 171.9 Dec 117 .3 118.7 118.2 123.4 110 .7 120 .5 114 !8 116.1 176,. 0 118.0 '•96.5 '•153.2 171 155.4 171.5 1975-—Jan 113 .7 115.4 114.9 120.1 107 .8 117 .6 110 .5 111 .7 135,. 0 '•117.4 '•93.9 '•149.5 176 156.1 171 .8 Feb 111 .2 113.7 113.3 118.8 105 .3 115 .2 107 .4 109.2 68., 2 ''139 .0 '•116.6 '•91.2 '•143.5 179 157.2 171.3 Mar 110 .0 112.4 112.2 118.2 103 .9 112 .7 105 .9 107.7 153,. 0 '•116.1 '•90.3 '•143.3 176 157.8 170.4 Apr 109 .9 112.9 112.6 119.6 103 .0 113 .4 105 .2 107.9 189,. 0 '•116.1 '•89.9 >•144.7 179 158.6 172.1 May 110 .1 113.4 113.7 121.2 102 .9 112 .4 104 .9 108.2 '•67,, 0 182,. 0 ni6.2 '•90.1 '•144.7 184 159.3 173.2 June'' 111 .1 114.2 114.5 123.3 102 .2 112 .8 106 .0 109.5 174,. 0 115.9 89.8 146.4 186 160.6 173.7 July 112 .2 115.4 115.7 125.4 102 .2 114 .3 106 .8 110.6 165,. 0 116.4 89.7 148.7 191 162.3 175.7 Aug. 114 .0 116.3 116.5 126.3 102 .8 115 .6 110 .6 112.7 69,, 0 208,. 0 117.0 90.9 153.7 189 162.8 176.7 Sept 116 .2 117.6 117.7 127.4 104 .3 117 114 .0 114.7 117.2 92.1 156.3 177.7 1 Employees only: excludes personnel in the Armed Forces. Construction contracts: McGraw-Hill Informations Systems Company 2 Production workers only. Revised back to 1973. 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. Employment and payrolls: Based on Bureau of Labor Statistics data; 5 Figure is for 3rd quarter 1974. includes data for Alaska and Hawaii beginning with 1959. NOTE.—All series: Data are seasonally adjusted unless otherwise noted. Prices: Bureau of Labor Statistics data. Capacity utilization: Based on data from Federal Reserve, McGraw- Hill Economics Department, and Dept. of Commerce. CONSTRUCTION CONTRACTS AND PRIVATE HOUSING PERMITS (In millions of dollars, except as noted) 1974 1975 Type of ownership and 11997733 11997744 type of construction Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Total construction contracts 1 99,304 93,076 8,416 8,359 7,227 6,179 7,304 5,100 4,955 6,574 9,598 9,143 9,324 9,044 10,037 By type of ownership: Public 26,563 32,209 3,311 3,273 2,720 2,391 2,496 2,254 2,031 2,182 2,768 2,875 3,891 3,784 3,040 Private 1 72,741 60,867 5,105 5,689 4,508 3,788 4,809 2,846 2,924 4,393 6,830 6,268 5,432 5,260 6,997 By type of construction: Residential building 1 45,696 34,174 3,060 2,503 2,457 1,931 1,715 1,562 1,583 2,316 3,029 3,073 3,116 3,093 2,784 Nonresidential building 31,534 33,859 3,246 3,320 2,710 2,618 2,451 2,233 2,199 2,402 2,987 2,877 3,169 3,165 2,666 Nonbuilding 22,074 25,042 2,110 2,536 2,061 1,630 3,139 1,305 1,172 1,856 3,582 3,193 3,040 2,786 4,587 Private housing units authorized... 1,820 1,074 928 853 811 770 837 689 701 677 837 912 r949 '•1,042 985 (In thousands, S.A., A.R.) 1 Because of improved procedures for collecting data for 1-family homes, NOFE.—Dollar value of construction contracts as reported by the some totals are not strictly comp rable with those prior to 1968. To im- McGraw-Hill Informations Systems Company, F.W. Dodge Division. prove comparability, earlier levels may be raised by approximately 3 per Totals of monthly data may differ from annual totals because adjustments cent for total and private construction, in each case, and by 8 per cent for are made in accumulated monthly data after original figures have been residential building. published. Private housing units authorized are Census Bureau series for 14,000 reporting areas with local building permit systems. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 o CONSTRUCTION A 51 VALUE OF NEW CONSTRUCTION ACTIVITY (In millions of dollars) Private Public 2 Nonresidential Period Total Total d R e e n s ti i a - l Total In tr d i u a s l - B m u C i e l o d r m c in i - a g l s b O in u g th i s l e d 1 r - Other Total M ta i r l y i- H w ig a h y - d C v e m o a a v n t e n e i s d o n l e o n t r p - - Other 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 25,536 695 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 93,728 65,404 33,200 32,204 6,783 9,401 4,971 11.049 27,964 879 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 3 135,456 102,894 57,623 45,271 6,243 15,453 5,888 17,687 32,562 1,170 10,559 2,313 18,520 1974'- 135,481 97,079 47,044 50,053 7,902 15,945 5,797 20,409 38,402 1,185 12,083 2,782 22,352 1974—Aug.'' 135,627 97,097 47,695 49,402 7,813 15,623 5,766 20,200 38,530 1,038 12,199 2,682 22,611 Sept. 133,299 94,878 45,903 48,975 7,478 15,890 5,739 19,868 38,421 1,180 12,835 2,880 21,526 Oct.^ 134,466 95,576 44,182 51,394 8,702 16,372 5,701 20,619 38,890 1,103 12,374 3,029 22,384 Nov.»- 131,948 93,795 42,503 51,292 8,890 15,939 5,697 20,766 38,153 1,102 11,140 2,999 22,912 Dec. r 134,047 92,529 41,060 51,469 9,006 15,842 5,571 21.050 41,518 1,169 11,973 3,358 25,018 1975—Jan. ^ 132,274 91,169 39,556 51,613 8,412 15,646 5,903 21,652 41,105 1,223 12,356 2,842 24,684 Feb. 128,862 89,023 38,523 50,500 8,724 14,971 5,883 20,922 39,839 1,319 11,993 3,329 23,198 Mar.'- 125,501 85,687 37,999 47,688 7,869 13,032 5,363 21,424 39,814 1,337 11,377 3,024 24,076 Apr.'- 120,892 84,607 37,894 46,713 7,500 12,765 5,636 20,812 36,285 1,473 10,963 2,769 21,080 May- 121,490 84,044 38,844 45,200 8,197 12,109 5,268 19,626 37,446 1,180 12,227 3,132 20,907 June*" 125,928 84,026 39,834 44,192 7.677 11,756 5,415 19,344 41,902 1,120 12,251 3,529 25,002 July. . 124,752 86,052 41,009 45,043 7,714 11,978 5,319 20,032 38,700 1,263 Aug.?' 126,157 86,950 42,006 44,944 7,504 11,735 5,405 20,300 39,207 1,328 1 Includes religious, educational, hospital, institutional, and other build- NOTE.—Census Bureau data; monthly series at seasonally adjusted ings. annual rates. 2 By type of ownership, State and local accounted for 86 per cent of public construction expenditures in 1974. PRIVATE HOUSING ACTIVITY (In thousands of units) Starts Completions Under construction New 1-family homes sold (end of period) and for sale i Units Median prices (in thousands Mobile of dollars) of Period home units 1- 2-or- 1- 2-or- 1- 2-or- ship- Total ffaammiillyy more Total ffaammiillyy more Total ffaammiillyy more ments family family family For sale For Sold (end of Sold sale period). 196 6 1,165 779 386 217 461 196 21.4 22.8 196 7 1,292 844 448 240 487 190 22.7 23.6 196 8 1,508 899 608 1,320 859 461 318 490 218 24.7 24.6 196 9 1,467 811 656 1,399 807 591 885 350 '•535 413 448 228 25.6 27.0 197 0 1,434 813 621 1,418 802 617 922 381 541 401 485 227 23.4 26.2 197 1 2,052 1,151 901 1,706 1,014 692 1,254 505 749 497 656 294 25.2 25.9 197 2 2,357 1,309 1,047 1,971 1,143 828 1,586 640 947 576 718 416 27.6 28.3 197 3 2,045 1,132 913 2,014 1,174 840 1,599 583 1,016 567 620 456 32.5 32.9 197 4 1,337 888 450 1,692 931 760 1,189 516 673 371 501 407 35.9 36.2 1974_Aug.. 1,156 826 329 1,592 919 674 1,406 570 836 316 466 425 35.7 35.5 Sept. . 1,157 845 313 1,562 899 663 1,372 565 807 258 495 414 36.2 35.7 Oct.. . 1,106 792 314 1,627 908 719 1,322 553 769 227 433 409 37.2 35.9 Nov.. 1,017 802 215 1,657 893 763 1,255 541 714 204 435 404 37.3 36.0 Dec... 880 682 198 1,606 852 754 1,229 545 684 195 382 400 37.4 36.2 1975_jan.. . 999 739 260 1,535 964 571 1,176 522 654 185 404 404 37.2 36.4 Feb... 1,000 733 267 1,320 770 550 1,156 522 634 219 411 409 37.9 36.6 Mar.. 985 775 210 1,305 734 571 1,113 520 593 199 463 396 38.8 36.5 Apr... 980 762 218 1,211 756 455 J, 085 515 570 194 '•570 388 '•39.2 36.7 May.. 1,130 887 243 '•1,276 '•832 '•444 1,066 '•518 ••548 224 '•593 382 39.6 36.9 June 1,094 884 210 1,148 771 377 1,045 515 530 210 565 377 38.1 37.2 July. . 1,239 932 307 1,206 865 341 1,045 521 524 225 521 381 39.2 37.4 Aug.2' 11,,226600 997777 228833 1 Merchant builders only. for mobile homes, which are private, domestic shipments as reported by the Mobile Home Manufacturers* Assn. and seasonally adjusted by NOTE.—All series except prices, seasonally adjusted. Annual rates for Census Bureau. Data for units under construction seasonally adjusted by starts, completions, mobile home shipments, and sales. Census data except Federal Reserve. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 52 EMPLOYMENT • OCTOBER 1975 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT (In thousands of persons, except as noted) Civilian labor force (S.A.) Period i p n T ( o s o N t p t i a . t u S u l l a t . n i A t o o i . o n ) n n a - l la ( b N N o . o r S t . f A o in r . ) c e ( T l f a S o o b r . t c A o a e r . l ) Total Total E In m c n u p o l l t o n u y a r e a g d l r i - i In U pl n o e y m ed - U (p n e e m r S a r m . e t A c e n p e . 2 t ) l n o t y ; industries agriculture 196 9 137,841 53,602 84,240 80,734 77,902 74,296 3,606 2,832 3.5 197 0 140,182 54,280 85,903 82,715 78,627 75,165 3,462 4,088 4.9 197 1 142,596 55,666 86,929 84,113 79,120 75,732 3,387 4,993 5.9 197 2 145,775 56,785 88,991 86,542 81,702 78,230 3,472 4,840 5.6 197 3 148,263 57,222 91,040 88,714 84,409 80,957 3,452 4,304 4.9 197 4 150,827 57,587 93,240 91,011 85,936 82,443 3,492 5,076 5.6 1974_Sept. 151,367 57,706 93,922 91,705 86,402 82,913 3,489 5,303 5.8 Oct.. 151,593 57,489 ^94,057 91,844 86,304 82,864 3,440 5,540 6.0 Nov. 151,812 57,991 ^93,920 91,708 85,689 82,314 3,375 6,019 6.6 Dec.. 152,020 58,482 94,015 91,803 85,202 81,863 3,339 6,601 7.2 1975_Jan.. 152,230 58,888 94,284 92,091 84,562 81,179 3,383 7,529 8.2 Feb.. 152,445 59,333 93,709 91,511 84,027 80,701 3,326 7,484 8.2 Mar. 152,646 59,053 94,027 91,829 83,849 80,584 3,265 7,980 8.7 Apr.. 152,840 59,276 94,457 92,262 84,086 80,848 3,238 8,176 8.9 May. 153.051 59,101 95,121 92,940 84,402 80,890 3,512 8,538 9.2 June. 153,278 57,087 94,518 92,340 84,444 81,140 3,304 7,896 8.6 July. 153,585 56,540 95,102 92,916 85,078 81,628 3,450 7,838 8.4 Aug., 153,824 57,331 95,331 93,146 85,352 81,884 3,468 7,794 8.4 Sept. 154.052 59,087 95,361 93,191 85,418 81,872 3,546 7,773 8.3 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) Contract Transporta- Period Total M t a u n r u in fa g c- Mining con ti s o t n ru c- ti p o u n b a li n c d Trade Finance Service G m ov e e n r t n utilities 70,442 20,167 619 3,525 4,435 14,704 3,562 11,228 12,202 70,920 19,349 623 3,536 4,504 15,040 3,687 11,621 12,561 71,216 18,572 603 3,639 4,457 15,352 3,802 11,903 12,887 73,711 19,090 622 3,831 4,517 15,975 3,943 12,392 13,340 76,896 20,068 644 4,015 4,644 16,674 4,091 13,021 13,739 1974 78,413 20,046 694 3,957 4,696 17,017 4,208 13,617 14,177 SEASONALLY ADJUSTED 1974—Sept 78,830 20,104 708 3,902 4,683 17,143 4,224 13,767 14,299 Oct 78,790 19,972 728 3,872 4,686 17,154 4,228 13,797 14,353 Nov 78,374 19,638 722 3,826 4,683 17,058 4,226 13,822 14,399 Dec 77,723 19,190 686 3,770 4,659 16,935 4,229 13,833 14,421 1975—Jan 77,319 18,798 723 3,749 4,603 16,903 4,219 13,857 14,467 Feb 76,804 18,375 724 3,592 4,565 16,879 4,210 13,865 14,594 Mar 76,468 18,226 729 3,467 4,506 16,851 4,207 13,864 14,618 Apr 76.462 18,155 732 3,441 4,508 16,847 4,209 13,878 14,692 May 76,510 18,162 738 3,439 4,491 16,857 4,208 13,889 14,726 June 76,343 18,100 741 3,392 4,469 16,877 4,202 13,871 14,691 July 76,679 18,084 743 3,395 4,464 16,984 4,203 13,990 14,816 Aug.f 77,029 18,246 751 3,404 4,464 17,016 4,215 14,044 14,889 Sept.f 77,211 18,429 749 3,401 4,452 17,026 4.228 14,085 14,841 NOT SEASONALLY ADJUSTED 1974—Sept 79,171 20,374 713 4,160 4,720 17,182 4,228 13,767 14,027 Oct 79,465 20,174 718 4,120 4,714 17,249 4,220 13,825 14,445 Nov 79,151 19,799 719 3,952 4,697 17,361 4,213 13,808 14,602 Dec 78,462 19,209 681 3,695 4,659 17,608 4,208 13,764 14,638 1975—Jan 76,207 18,573 715 3,348 4,548 16,700 4,177 13,608 14,538 Feb 75,772 18,165 714 3,208 4,492 16,493 4,172 13,699 14,829 Mar 75,778 18,037 719 3,197 4,470 16,530 4,178 13,753 14,894 Apr 76,177 18,000 726 3,310 4,472 16,691 4,192 13,878 14,908 May 76,689 18,071 740 3,439 4,487 16,819 4,208 13,986 14,939 June 77,183 18,255 756 3,555 4,523 16,971 4,248 14,079 14,796 July 76,439 18,007 758 3,605 4,504 16,936 4,266 14,144 14,219 Aug.f 76,903 18,442 765 3,676 4,491 16,959 4,270 14,156 14,144 Sept.?' 77,502 18,696 755 3,625 4,488 17,065 4,232 14,085 14,556 NOTE.—Bureau of Labor Statistics; data include all fuU- and part- domestic servants, unpaid family workers, and members of Armed time employees who worked during, or received pay for, the pay period Forces are excluded. that includes the 12th of the month. Proprietors, self-employed persons. Beginning with 1973, series has been adjusted to Mar. 1974 benchmark. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • PRICES A 53 CONSUMER PRICES (1967 = 100) Housing Health and recreation Period ite A m ll s Food Total Rent H ow s o h n m i e p e r - - F c a o o u n i a e l d l l t e r G a i l c e n a i c d s t - y o n F t i p a n i i e u o s n g r h n d r s a - - - A u p p a k p n e a d e r e p l T p t r o i a o r n t n a s - - Total M c ic a e a r d e l - s c P o a e n r r a e - l r R e t a i c e i n n o r a g e d n d a - - g O s a i o c e t n o h e r d v d e s - s r 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 "ko'.s' "si.'4' 44.8 "44.2 "37.'6' "4i'.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 "ss.i' 79.1 90.1 87.3 87.8 1965. 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 1966. 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 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 1968. 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 1969. ••••••••••• 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 1970. 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 1971. 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 1972. 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 1973. 133.1 141.4 135.0 124.3 146.7 136.0 126.4 124.9 126.8 123.8 130.2 137.7 125.2 125.9 129.0 1974. 147.7 161.7 150.6 130.2 163.2 214.6 145.8 140.5 136.2 137.7 140.3 150.5 137.3 133.8 137.2 1974—Aug 149.9 162.8 152.8 130.9 165.4 220.9 148.5 143.9 138.1 141.3 142.6 153.7 139.3 135.2 139.4 Sept 151.7 165.0 154.9 131.4 167.9 222.7 150.2 146.6 139.9 142.2 144.0 155.2 141.2 137.0 140.4 Oct 153.0 166.1 156.7 132.2 170.1 225.5 151.5 149.0 141.1 142.9 145.2 156.3 143.0 137.8 141.4 Nov 154.3 167.8 158.3 132.8 171.7 229.2 154.0 151.0 142.4 143.4 146.3 157.5 144.2 138.8 142.7 Dec 155.4 169.7 159.9 133.5 174.0 228.8 156.7 152.3 141.9 143.5 147.5 159.0 145.3 139.8 143.9 1975—Jan 156.1 170.9 161 .2 134.0 175.6 228.9 160.2 153.2 139.4 143.2 148.9 161.0 146.5 141.0 144.8 Feb 157.2 171.6 162.7 135.1 177.3 229.5 162.7 154.7 140.2 143.5 150.2 163.0 147.8 141.8 145.9 Mar 157.8 171.3 163.6 135.5 178.2 228.3 164.0 155.6 140.9 144.8 151.1 164.6 148.9 142.0 146.5 Apr 158.6 171 .2 164.7 135.9 179.4 229.0 166.3 156.8 141 .3 146.2 152.1 165.8 149.5 143.5 146.8 May 159.3 171.8 165.3 136.4 180.1 230.2 167.3 157.4 141.8 147.4 152.6 166.8 149.9 143.8 147.1 June 160.6 174.4 166.4 136.9 181.4 230.6 169.4 158.1 141 .4 149.8 153.2 168.1 150.3 144.1 147.3 July... 162.3 178.6 167.1 137.3 182.3 234.1 170.4 158.3 141.1 152.6 154.0 169.8 151.2 144.4 147.6 Aug 162.8 178.1 167.7 138.0 182.8 235.7 171.2 158.8 142.3 153.6 154.6 170.9 151.4 144.7 148.1 NOTE.—Bureau of Labor Statistics index for city wage earners and clerical workers. WHOLESALE PRICES: SUMMARY (1967 = 100, except as noted) Industrial commodities Period m c t A o i o e m l d s l i - - p F u r a c o r t d m s - c f f e P o e a s o e n r s o d d d e - s s d Total t T e il e e tc x s . - , H e id tc e . s, F e u tc e . l , C ic e h a t e c ls m . , - R b e u e tc b r . , - L b e u e t m c r . , - P e a t p c e . r, M e a t l e s c t , . - e c M a q e h n r u i a y n d i - p - - F t e u u t r r c e n . , i - N t m m a o l i e l n n i - c - - T e p t r q o i a o u r n n t i a p s - - - n c M e e o l i l s u a - s ment erals ment! 1960. 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 ioo.'s' 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 IlO.l 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 IIO.O 112.4 177.2 122.1 132.8 121.7 115.2 130.2 115.1 119.7 1974. 160.1 187.7 170.9 153.8 139.1 145.1 208.3 146.8 136.2 183.6 151.7 171.9 139.4 127.9 153.2 125.5 133.1 1974—Sept 167.2 182.7 176.8 162.9 142.1 148.1 225.0 161.7 145.6 180.4 164.2 187.1 146.8 132.8 159.8 127.7 136.3 Oct.. 170.2 187.5 183.5 164.8 140.5 145.2 228.5 168.5 147.5 169.4 166.0 186.9 150.0 135.5 162.2 134.2 137.1 Nov 171.9 187.8 189.7 165.8 139.8 144.5 227.4 172.9 148.5 165.8 166.9 186.7 152.7 136.9 163.4 135.1 140.7 Dec 171.5 183.7 188.2 166.1 138.4 143.2 229.0 174.0 149.4 165.4 167.2 184.6 154.0 137.7 164.3 137.0 142.4 1975—Jan 171.8 179.7 186.4 167.5 137.5 142.1 232.2 176.0 149.6 164.7 169.8 185.5 156.6 138.8 168.5 137.1 145.5 Feb 171.3 174.6 182.6 168.4 136.5 141.7 232.3 178.1 150.0 169.3 169.8 186.3 157.7 139.1 170.3 138.2 146.4 Mar 170.4 171.1 177.3 168.9 134.3 143.2 233.0 181.8 149.7 169.6 170.0 186.1 158.8 138.5 170.8 139.5 146.8 172.1 177.7 179.4 169.7 134.4 147.5 236.5 182.4 149.4 174.9 169.7 185.7 159.7 138.5 173.0 139.9 147.3 M a y ; ;; *.!; 173.2 184.5 179.0 170.3 135.2 147.7 238.8 182.1 148.9 183.0 169.8 185.1 160.4 138.6 173.1 139.9 147.5 June 173.7 186.2 179.7 170.7 135.9 148.7 243.0 181.2 148.6 181.0 169.8 184.5 161.0 139.0 173.3 140.1 147.5 July 175.7 193.7 184.6 171.2 136.8 149.3 246.6 181.4 150.1 179.6 170.0 183.4 161.7 139.2 174.7 140.1 147.7 Aug 176.7 193.2 186.3 172.2 137.6 149.3 252.4 182.1 150.0 179.7 170.0 184.3 162.2 139.8 175.8 140.5 147.8 Sept 177.7 197.1 186.1 173.1 138.4 151.3 254.9 182.2 150.8 179.9 170.3 185.5 163.1 140.1 176.1 141.1 148.2 1 Dec. 1968=100. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 54 NATIONAL PRODUCT AND INCOME • OCTOBER 1975 GROSS NATIONAL PRODUCT (In billions of dollars) 1974 1975 1929 1933 1941 1950 1970 1971 1972 1973 1974 III IV Gross national product. 103.1 55.6 124.5 284.8 977.1 1,054.9 1,158.0 1,294.9 1,397.4 1,383.8 1,416.3 ,430.9 1,416.6 1,440.9 Final purchases 101.4 57.2 120.1 278.0 972.6 1M8.6 1,U9.6 1,279.6 1,388.2 1,370.3 1,407.6 1.413.1 1.435.8 1,471.9 Personal consumption expenditures. 77.2 45.8 80.6 191.0 617.6 667.1 119.Q 805.2 SI 6.1 869.1 901.3 895.8 913.2 938.6 Durable goods 9.2 3.5 9.6 30.5 91.3 103.9 118.4 130.3 127.5 129.5 136.1 120.7 124.9 130.6 Nondurable goods 37.7 22.3 42.9 98.1 263.8 278.4 299.7 338.0 380.2 375.8 389.0 391.7 398. 410.1 Services 30.3 20.1 28.1 62.4 262.6 284.8 310.9 336.9 369.0 363.8 376.2 383.5 389.5 397.9 Gross private domestic investment 16.2 1.4 17.9 54.1 136.3 153.7 179.3 209 209.4 211.8 205.8 209.4 163.1 148.1 Fixed investment 14.5 3.0 13.4 47.3 131.7 147.4 170.8 194.0 195.2 198.3 197.1 191.6 182.2 179.1 Nonresidential 10.6 2.4 9.5 27.9 100.6 104.6 116.8 136. 149.2 149.4 150.9 151.2 146.2 142.7 Structures 5.0 .9 2.9 9.2 36.1 37.9 41. 1 47.0 52.0 52.2 51.0 53.7 52.8 49.1 Producers' durable equipment. 5.6 1.5 6.6 18.7 64.4 66.6 75.7 89.8 97.1 97.2 99.9 97.5 94.2 93.6 Residential structures 4.0 .6 3.9 19.4 31.2 42. 54.0 57.2 46.0 48.8 46.2 40.4 35.3 36.4 Nonfarm 3.8 .5 3.7 18.6 30.7 42.3 53.4 56.7 45.2 48.0 45.4 39.7 34.8 35.6 Change in business inventories.... 1.7 -1.6 4.5 6.8 4.5 6.3 8.5 15.4 14.2 13.5 8.7 17.8 -19.2 -31.0 Nonfarm 1.8 -1.4 4.0 6.0 4.3 4.9 7.8 11.4 11.9 10.4 6.6 17.5 -17. -30.6 Net exports of goods and services. 1.1 .4 1.3 1.8 3.6 -.2 -6.0 3.9 2.1 -1.5 -3.1 1.9 8.8 16.2 Exports 7.0 2.4 4.9 13.8 62.9 65.4 72.4 100.4 140.2 138.5 143.6 147.5 142.2 136.0 Imports 5.9 2.0 4.6 12.0 59.3 65.6 78.4 96.4 138.1 140.0 146.7 145.7 133.4 119.8 Government purchases of goods and services 8.5 8.0 24.8 37.9 219.5 234.2 255.7 276.4 309.2 304.4 312.3 323.8 331.6 338.1 Federal 1.3 2.0 16.9 18.4 96.2 97.6 104.9 106.6 116.9 114.3 117.2 124.5 126.5 128.4 National defense 13.8 14.1 74.6 71.2 74.8 74.4 78.7 76.6 78.4 84.0 84.7 84.8 Other 3.1 4.3 21.6 26.5 30.1 32.2 38.2 37.7 38.8 40.6 41.8 43.6 State local 7.2 6.0 7.9 19.5 123.3 136.6 150.8 169.8 192.3 190.1 195.1 199.3 205.1 209.7 Gross national product in constant (1958) dollars 203.6 141.5 263.7 355.3 722.5 746.3 792.5 839.2 821.2 827.1 823.1 804.0 780.0 785.6 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) 1974 1975 Item 1929 1933 1941 1950 1970 1971 1972 1973 1974 III IV National income. 86.8 40.3 104.2 241.1 800.5 857.7 946.5 1,065.6 1,142.5 1,130.2 1,155.5 1,165.4 1,150.7 1,175.4 Compensation of employees. 51.1 29.5 64.8 154.6 603.9 643.1 707.1 786.0 855.8 848.3 868.2 877.7 875.6 885.4 Wages and salaries.... 50.4 29.0 62.1 146.8 542.0 573.6 626.8 691.6 750.7 744.6 761.5 769.2 765.1 773.0 Private 45.5 23.9 51.9 124.4 426.9 449.5 491.4 545.1 592.4 588.3 602.5 605.1 597.4 601.9 Military .3 .3 1.9 5.0 19.6 19.4 20.5 20.6 21.2 20.9 20.8 22.0 22.0 21.9 Government civilian. 4.6 4.9 8.3 17.4 95.5 104.7 114.8 126.0 137.1 135.4 138.2 142. 145.7 149.2 Supplements to wages and salaries... .7 .5 2.7 7.8 61.9 <59.5 80.3 94.4 105.1 103.7 106.7 108.6 110.5 112.4 Employer contributions for social insurance .1 .1 2.0 4.0 29.7 33.1 38.6 48.4 53.6 53.2 54.5 54.6 55.2 55.7 Other labor income .6 .4 .7 3.8 32.2 36.4 41.7 46.0 51.4 50.5 52.3 54.0 55.3 56.7 Proprietors' income 15.1 5.9 17.5 37.5 66.9 69.2 75.9 96.1 93.0 89.9 92.1 91.6 84.9 86.1 Business and professional. 9.0 3.3 11. 24.0 50.0 52.0 54.9 57.6 61.2 60.7 62.3 62.5 62.7 63.4 Farm 6.2 2.6 6.4 13.5 16.9 17.2 21.0 38.5 31.8 29.1 29.8 29.1 22.2 22.7 Rental income of persons 5.4 2.0 3.5 9.4 23.9 25.2 25.9 26.1 26.5 26.3 26.6 26.8 27.0 27.1 Corporate profits and inventory valuation adjustment 10.5 -1.2 15.2 37.7 69.2 78.7 92.2 105.1 105.6 105.6 105.8 103.4 94.3 104.9 Profits before tax 10,0 1.0 77.7 42.6 74.0 83.6 99.2 122.7 140.7 139.0 157.0 131.5 101.2 113.3 Profits tax liability 1.4 .5 7.6 17.8 34.8 37.5 41.5 49.8 55.7 55.9 62.7 52.0 39.0 43.0 Profits after tax 8.6 .4 10.1 24.9 39.3 46.1 57.7 72.9 85.0 83.1 94.3 79.5 62.3 70.3 Dividends 5.8 2.0 4.4 8.8 24.7 25.0 27.3 29.6 32.7 32.5 33.2 33.3 33.8 34.0 Undistributed profits. 2.8 -1.6 5.7 16.0 14.6 21.1 30.3 43.3 52.4 50.5 61.1 46.2 28.5 36.3 Inventory valuation adjustment. . .. .5 -2. -2.5 -5.0 -4.8 -4.9 -7.0 -17.6 -35.1 -33.4 -51.2 -28.1 -7.0 -8.4 Net interest 4.7 4.1 3.2 2.0 36.5 41.6 45.6 52.3 61.6 60.1 62.8 65.9 68.9 71.9 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

OCTOBER 1975 • NATIONAL PRODUCT AND INCOME A 55 RELATION OF GROSS NATIONAL PRODUCT, NATIONAL INCOME, AND PERSONAL INCOME AND SAVING (In billions of dollars) 1974 1975 Item 1929 1933 1941 1950 1970 1971 1972 1973 1974 II III IV I II Gross national product 103.1 55.6 124.5 284.8 977.1 1,054.9 1,158.0 1,294.9 1,397.4 1,383.8 1,416.3 1,430.9 1,416.6 1,440.9 Less: Capital consumption allowances 7.9 7.0 8.2 18.3 87.3 93.7 102.9 110.8 119.5 118.6 120.7 122.9 125.2 127.4 Indirect business tax and nontax liability 7.0 7.1 11.3 23.3 93.5 102.7 110.0 119.2 126.9 125.9 129.5 129.8 132.2 135.4 Business transfer payments .6 .7 .5 .8 4.0 4.3 4.6 4.9 5.2 5.2 5.3 5.3 5.4 5.5 Statistical discrepancy .7 .6 .4 1.5 -6.4 -2.3 -3.8 -5.0 .4 .3 3.0 4.8 1.6 -4.4 Plus: Subsidies less current surplus of government enterprises -.1 .1 .2 1.7 1.1 2.3 .6 -2.9 -3.7 -2.4 -2.7 -1.6 -1.6 Equals: National income 86.8 40.3 104.2 241.1 800.5 857.7 946.5 1,065.6 1,142.5 1,130.2 1,155.5 1,165.4 1,150.7 1,175.4 Less: Corporate profits and inventory valuation adjustment 10.5 -1.2 15.2 37.7 69.2 78.7 92.2 105.1 105.6 105.6 105.8 103.4 94.3 104.9 Contributions for social insurance .2 .3 2.8 6.9 57.7 63.8 73.0 91.2 101.5 100.8 103.0 103.2 104.6 105.4 Excess of wage accruals over disbursements .0 .6 .0 -.1 -.5 -.6 -1.5 .0 .0 .0 Plus: Government transfer payments.. .9 1.5 2.6 14.3 75.1 89.0 98.6 113.0 134.6 130.6 138.7 145.8 158.7 170.9 Net interest paid by government and consumers 2.5 1.6 2.2 7.2 31.0 31.2 33.0 38.3 42.3 41.9 42.7 43.6 43.7 45.0 Dividends 5.8 2.0 4.4 8.8 24.7 25.0 27.3 29.6 32.7 32.5 33.2 33.3 33.8 34.0 Business transfer payments .6 .7 .5 .8 4.0 4.3 4.6 4.9 5.2 5.2 5.3 5.3 5.4 5.5 Equals: Personal income. 85.9 47.0 96.0 227.6 808.3 864.0 944.9 1.055.0 1,150.5 1,134.6 1,168.2 1,186.9 1,193.4 1,220.5 Less: Personal tax and nontax payments 2.6 1.5 3.3 20.7 116.6 117.6 142.4 151.3 170.8 168.2 175.1 178.1 178.0 142.0 Equals: Disposable personal income. . 83.3 45.5 92.7 206.9 691.7 746.4 802.5 903.7 979.7 966.5 993.1 1,008.8 1,015.5 1,078.5 Less: Personal outlays 79.1 46.5 81.7 193.9 635.5 685.9 749.9 829.4 902.7 894.9 927.6 922.3 939.5 964.7 Personal consumption expenditures 77.2 45.8 80.6 191.0 617.6 667.1 729.0 805.2 876.7 869.1 901.3 895.8 913.2 938.6 Consumer interest payments. 1.5 .5 .9 2.4 16.8 17.7 19.8 22.9 25.0 24.8 25.3 25.5 25.4 25.2 Personal transfer payments to foreigners .3 .2 .2 .5 1.0 1.1 1.1 1.3 1.0 1.0 .9 .9 .9 .9 Equals: Personal saving. 4.2 -.9 11.0 13.1 56.2 60.5 52.6 74.4 77.0 71.5 65.5 86.5 75.9 113.8 Disposable personal income in constant (1958) doUars 150.6 112.2 190.3 249.6 534.8 555.4 580.5 619.6 602.8 603.5 602.9 594.8 591.0 620.2 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) 1974 1975 1973 1974 Aug. Sept. Oct. Nov. Dec, Jan. Feb. Mar. Apr. May June July Aug, Total personal income 1,055.0 1,150.5 ,167.2 ,178.0 ,185.0 ,184.5 ,191.0 ,191.1 1,193.4 ,195.7 ,203.1 1,314. 1,244.1 1238 1256.9 Wage and salary disbursements. 691.7 751.2 761.6 767.7 773.0 767.8 766.6 765.7 763.6 766.0 768.0 772. 778.1 782 793.8 Commodity-producing industries 251.9 270.9 276.5 278.3 279.5 272.3 269.3 266.4 260.7 260.5 261.2 262. 264.6 266 272.5 Manufacturing only 196.6 211.3 215.5 217.8 219.4 214.2 209.7 206.4 202.9 203.1 203.8 204. 206.7 208 213.8 Distributive industries. . .. 165.1 178.9 180.7 183. 183.8 183.9 183.8 183.2 184.0 183.8 184.3 186. 187.0 187, 190.5 Service industries 128.2 142.6 144.9 146.4 146.9 147.4 148.3 149.8 151.2 152.6 152.4 153. 154.6 155, 157.0 Government 146.6 158.8 159.5 159.9 162.8 164.2 165.2 166.2 167.6 169.2 170.3 171. 171.9 173, 173.8 Other labor income. 46.0 51.4 52.3 52.' 53.5 54.0 54.5 54.9 55.3 55.7 56.2 56.7 57.2 57.7 58.2 Pro B p u r s i i e n t e o s r s s ' a i n n d c o p m ro e f essional... 9 5 6 7 . . 1 6 9 6 3 1 . . 0 2 9 6 3 2 . . 1 5 9 6 3 2 . . 2 5 9 6 1 2 . . 7 5 9 6 1 2 . . 6 5 9 6 1 2 . . 5 5 8 6 8 2 . . 7 7 8 62 5 . . 8 0 8 6 0 2 . . 9 5 6 8 3 3 . . 0 6 8 6 6 3 , . 6 8 3 8 . . 9 4 9 6 1 4 . . 9 6 5 4. . 5 0 Farm 38.5 31.8 30.7 29.0 26.0 22.2 18.4 20.6 23. 27. 30.5 30.6 29.2 29.1 24.5 Rental income 26.1 26.5 26.6 26.6 26.7 26.8 26.9 27.0 27.0 27.0 27.1 27. 27.2 27. 27.2 Dividends 29.6 32.7 33.2 33.4 33.5 33.6 32.7 33.9 33.8 33.7 33.9 34. 34.0 34. 34.5 Personal interest income. 90.6 103.8 105.3 106.9 108.0 109.5 111.1 111.9 112.5 113.3 114.8 116. 119.0 119. 120.7 Transfer payments 117.8 139.8 143.6 146.0 147.6 149.8 156. 158.6 165.5 168.3 168.9 169. 190.2 176.3 178.3 Less: Personal contributions for social insurance. — 42.8 47.9 48.4 48.6 48.9 48.5 48.4 49.5 49.2 49.3 49.4 49.7 50.0 50.2 50.8 Nona^^ricultural income 1,008.(1 1,109.0 1,126.8 ,137.4 1,145.7 1,145.2 1,151.4 1,154.3 1,160.1 1,166.2 1,171.1 1,179.7 1,207.9 1199.5 1214.4 Agricultural income 47.0 41.5 40.4 40.6 39.3 39.3 39.5 36.8 33.3 29.6 32.1 34.6 36.2 39.4 42.6 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 56 FLOW OF FUNDS • OCTOBER 1975 SUMMARY OF FUNDS RAISED IN U.S. CREDIT MARKETS (Seasonally adjusted annual rates; in billions of dollars) 1974 1975 Transaction category, or sector 1966 1967 1968 1969 1970 1971 1972 1973 1974 HI H2 HI Credit market funds raised by nonfinancial sectors 1 Total funds raised by nonfinancial sectors 67.9 82.4 96.0 91 .8 98 .2 147 .4 169 .4 187 .4 180 .1 187.3 172.4 188.4 1 2 Excluding equities 66.9 80.0 96.0 87 .9 92 .4 135 .9 158 .9 180 .1 176 .2 181.9 170.0 179.6 2 3 U.S. Government 3.6 13.0 13.4 -3 .7 12 .8 25 .5 17 .3 9 .7 12 .0 5.1 18.9 81.4 3 4 Public debt securities 2.3 8.9 10.4 -1 .3 12 .9 26 .0 13 .9 7 .7 12 .0 3.9 20.2 82.6 4 5 Agency issues and mortgages 1.3 4.1 3.1 .4 - .1 - .5 3 .4 2 .0 • 1.2 -1.3 -1.2 5 6 All other nonfinancial sectors 64.3 69.4 82.6 95 .5 85 .4 121 .9 152 .1 177 .7 168 .1 182.2 153.4 107.0 6 7 Corporate equities 1 .0 2.4 * 3 .9 5 .8 11 .5 10 .5 7 .2 3 .8 5.4 2.3 8.8 7 8 Debt instruments 63.3 67.0 82.6 91 .6 79 .7 110 .4 141 .6 170 .4 164 .2 176.8 151.1 98.2 8 Private domestic 9 Nonfinancial sectors 62.7 65.4 79.7 91 .8 82 .7 117 .3 147 .8 170 .1 152 .7 162.2 142.6 100.1 9 10 Corporate equities 1.3 2.4 -.2 3 .4 5 .7 11 .4 10 .9 7 .4 4 .1 5.6 2.6 8.7 10 11 Debt instruments 61.5 63.0 79.9 88 .4 77 .0 105 .8 136 .9 162 .7 148 .6 156.6 140.0 91.4 11 12 Debt capital instruments 38.2 44.5 49.5 49 .6 56 .7 83 .2 93 .8 96 .1 92 .9 99.6 86.2 106.9 12 13 State and local obligations 5.6 7.8 9.5 9 .9 11 .2 17 .6 14 .4 13 .7 17 .4 18.3 16.5 17.4 13 14 Corporate bonds 10.2 14.7 12.9 12 .0 19 .8 18 .8 12 .2 9 .2 19 .7 18.1 21 .3 38.2 14 15 Home mortgages 11.7 11.5 15.1 15 .7 12 .8 26 .1 39 .5 43 .3 .7 35.8 27.6 34.3 15 16 Multifamily residential mortgages 3.1 3.6 3.4 4 .7 5 .8 8 .8 10 .3 8 .4 7 7.3 8.2 6.2 16 17 Commercial mortgages 5.7 4.7 6.4 5 .3 5 .3 10 .0 14 .8 17 .0 77 .5 15.7 7.2 5.7 17 18 Farm mortgages 1.8 2.3 2.2 1 .9 1 .8 2 .0 2 .6 4 .4 4 .9 4.5 5.4 5.1 18 19 Other debt instruments 23.3 18.5 30.4 38 .8 20 .3 22 .6 43 .0 66 .6 55 .6 57.0 53.8 -15.4 19 20 Consumer credit 6.4 4.5 10.0 10 .4 6 .0 11 .2 19 .2 22 .9 9 .6 12.7 6.1 -.6 20 21 Bank loans n.e.c 10.9 9.8 13.6 15 .5 6 .7 7 .8 18 .9 35 .8 27 .3 32.6 21 .9 -16.1 21 22 Open-market paper 1 .1 1 .7 1 .8 3 .0 3,. 0 -1 .2 .5 .4 6 .6 5.1 8.2 -1.5 22 23. Other 5.0 2.6 5.0 9 .9 4,. 6 4 .8 5 .5 8 .3 12 .1 6.6 17.5 2.8 23 24 By borrowing sector: 62.7 65.4 79.7 91 ;8 82 .7 117 .3 147 .8 170 .1 152 .7 162.2 142.6 100.1 24 25 State and local governments 6.3 7.9 9.8 10 .7 11 .3 17 .8 14 .2 12,. 3 16 .6 16.4 16.7 14.0 25 26 Households 22.7 19.3 30.0 31 .7 23 .4 39 .8 63 1 72,. 8 44 .0 47.5 40.0 37.5 26 27 Farm 3.1 3.6 2.8 3 .2 3,. 2 4 .1 4 '.9 8,. 6 7 .8 7.7 7.9 6.9 27 28 Nonfarm noncorporate 5.4 5.0 5.6 7 .4 5,. 3 8 .7 10 .4 9,. 3 7 .2 7.1 7.3 3.2 28 29 Corporate 25.3 29.6 31.6 38 .9 39.. 5 46 .8 55 .3 67 .2 77 .1 83.5 70.7 38.6 29 30 Foreign 1.5 4.0 2.8 3 .7 2,, 7 4 .6 4 .3 7,. 5 15 .4 20.0 10.9 6.9 30 31 Corporate equities -.3 .1 .2 .5 .1 * — .4 — .2 — .3 -.2 -.3 .1 31 32 Debt instruments 1.8 4.0 2.7 3 .2 2 .7 4 .6 4 .7 7.. 7 75 .7 20.2 11.1 6.8 32 33 Bonds .7 1.2 1.1 _1 .0 .9 .9 1 .0 1,. 0 2.. 2 2.1 2.3 5.0 33 34 Bank loans n.e.c -.2 -.3 -.5 .2 —, .3 1!. 6 2 .9 2,. 8 4 .7 9.6 -.2 -.5 34 35 Open-market paper -.1 .5 -.2 .3 .8 .3 -1 .0 2,. 2 1 .1 7.0 7.1 -.4 35 36 U.S. Government loans 1 .3 2.6 2.2 2 .1 1,. 3 1 .8 I .8 1 .,7 1 .7 1.5 1 .8 2.7 36 37 Memo: U.S. Govt, cash balance -.4 1.2 -1.1 .4 2,. 8 3,. 2 — .3 -1, .7 -4 .6 -2.0 -7.1 3.1 37 Totals net of changes in U.S. Govt, cash balances— 38 Total funds raised 68.3 81.3 97.1 91 .4 95,. 5 144 .2 169 .7 189 .0 184 .7 189.3 179.5 185.3 38 39 By U.S. Government 4.0 11.8 14.6 -4 .1 10 .0 22 .3 17 .6 11 .4, 16 .6 7.1 26.0 78.2 39 Credit market funds raised by financial sectors 1 Total funds raised by financial sectors 11.7 2.0 18.3 33,. 7 12. 6 16,, 5 28,. 9 52. 0 38,, 0 40.8 35.2 4.2 1 2 Sponsored credit agencies 4.8 -.6 3.5 8,. 8 8.. 2 3,. 8 6 .2 19,, 6 22,. 1 16.8 27.4 8.0 2 4 3 L U o .S an . s G f o r v o e m r n U m . e S n . t G s o e v c e u r ri n ti m es e nt - 5 .2 .1 - -. . 1 6 3. . 2 2 _9 . . 1 3 .. 8., 2 3,. 8 6 .2 19,, 6 21 . . 4 7 16.8 26 1 . . 0 4 6 1 . . 9 1 4 3 5 Private financial sectors 6.9 2.6 14.9 24!. 9 J J • '22.' .k "32: A 15!. 9 '"24!1 7.8 -3.8 5 6 Corporate equities 3.7 3.0 6.4 6,. 1 4. ,6 3,. 3 2,. 4 ,8 1 .7 .5 3.0 3.8 6 7 Debt instruments 3.2 -.4 8.5 18.. 8 —, .3 9,. 3 20.. 3 31'., 6 14., 2 23.6 4.8 -7.6 7 8 Corporate bonds .9 1.3 1.1 1., 5 3., 1 5,. 1 7,. 0 2. ,3 1,. 4 2.0 .9 2.3 8 9 Mortgages -.9 1.0 .4 .2 ,7 2,. 1 1 .7 -1 , ,2 -1, .3 .1 -2.7 1.7 9 1 1 1 0 O Ba p n e k n l m oa a n r s k e n t .e p . a c p er and RP's -1 3 . . 0 3 -2 1 . . 0 9 2 3 . . 5 6 1 2 0 . , . . 3 7 - — 5. . , . 5 0 3 1 , . , 0 8 6 4 , , . . 8 9 1 9 3 , . , , 5 8 _7, , . 5 1 5 8 . . 8 9 -6 6 . . 0 2 -8 5 . . 8 3 1 1 0 1 12 Loans from FHLB's .9 -2.5 .9 4,. 0 1., 3 -2. .7 * 7, ,2 6!. 7 6.8 6.5 -8.1 12 13 Total funds raised, by sector 11.7 2.0 18.3 33,, 7 12. 6 16,, 5 28,. 9 52., 0 38,. 0 40.8 35.2 4.2 13 14 Sponsored credit agencies 4.8 -.6 3.5 8,. 8 8,, 2 3,. 8 6 .2 19,. 6 22 .1 16.8 27.4 8.0 14 15 Private financial sectors 6.9 2.6 14.9 24,. 9 4., 3 12,. 7 22 .8 32,. 4 15 .9 24.1 7.8 -3.8 15 1 1 6 7 C Ba o n m k m a e ff r i c li i a a t l e b s anks ...... .1 * 1.2 A I . . . 4 2 - - 3 1 . . , , 1 9 _2, , . 5 4 4 . . 0 7 4 2 , , , . 5 2 -1 2 . . 9 4 2 4 . . 6 1 -6.4 .7 5. . 8 9 1 1 6 7 18 Foreign banking agencies • J .2 ,1 1!. 6 .8 5,. 1 2 .9 2.7 3.1 -.9 18 19 Savings and loan associations .1 -1.7 1.1 4!. 1 1!, 8 —, .1 2 .0 6 .0 6 .3 8.6 4.0 -8.0 19 20 Other insurance companies .1 .1 .2 ,5 ,4 .6 .5 ,5 .4 .4 .3 .3 20 21 Finance companies 3,1 1.2 5.7 .3 1!, 6 4.. 2 9 .3 9' .4 3!. 9 3.6 4.2 -3.4 21 22 REITS .7 1 .3 2,, 7 3 .0 6 1 6,. 3 1 .0 2.8 -.9 -1.3 22 23 Open-end investment companies •"3!7 "y.o 5.8 4,. 8 2. ,6 1 .1 — '.1 -1, .6 1 .0 -.8 2.8 2.9 23 Total credit market funds raised, all sectors, by type 1 Total funds raised 79.6 84.4 114.3 125. 5 110.8 163.9 198. 3 239. 4 218. 1 228.1 207.6 192.6 1 2 Investment company shares 3.7 3.0 5.8 4. 8 2.6 1 1 — ,7 -1. 6 1. 0 -.8 2.8 2.9 2 3 Other corporate equities 1.1 2.5 .6 5., 2 7. 7 13! 6 u'. ,6 9. 6 4. ,6 6.7 2.5 9.7 3 4 Debt instruments 74.9 79.0 107.9 115., 5 100.4 149.. 1 185.. 4 231. 3 212., 5 222.2 202.3 179.9 4 5 U.S. Government securities 8.8 12.5 16.7 5. 5 21 .1 29.4 23., 6 29. 4 33., 5 21.9 45.1 88.2 5 6 State and local obligations 5.6 7.8 9.5 9. ,9 11. 2 17.6 14., 4 13. 7 17., 4 18.3 16.5 17.4 6 7 Corporate and foreign bonds 11.8 17.2 15.0 14., 5 23. 8 24. 8 20. .2 12. 5 23,, 3 22.2 24.5 45.5 7 8 Mortgages 21.3 23.0 27.4 27., 8 26.4 48.9 68., 8 71. 9 54., 5 63.4 45.6 52.9 8 9 Consumer credit 6.4 4.5 10.0 10., 4 6.0 11. 2 19.. 2 22. 9 9,. 6 12.7 6.1 -.6 9 10 Bank loans n.e.c 9.7 7.5 15.7 17., 6 5. 8 12. 4 28.. 5 52. 1 39., 5 51.1 27.9 -25.4 10 11 Open-market paper and RP's 4.4 4.0 5.2 14., 1 -1. 2 9 3., 3 11. 6 13,, 6 17.8 9.4 3.3 11 12 Other loans 6.9 2.5 8.3 15., 8 7. 3 4'. 0 7. ,4 17., 2 21,. 1 14.9 27.2 -1.5 12 NOTE.—Full statements for sectors and transaction types quarterly, and Flow of Funds Section, Division of Research and Statistics, Board of annually for flows and for amounts outstanding, may be obtained' from Governors of the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • FLOW OF FUNDS A 57 DIRECT AND INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS (Seasonally adjusted annual rates; in billions of dollars) 1974 1975 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11996666 11996677 11996688 11996699 11997700 11997711 11997722 11997733 11997744 HI H2 HI 1 Total funds advanced in credit markets to nonfinancial sectors 66.9 80.0 95.9 88.0 92.5 135.9 158.9 180.1 176.2 181.9 170.0 179.6 1 By public agencies and foreign 2 Total net advances 11.9 11.3 12.2 15.7 28.1 41.7 18.3 33.2 49.2 39.5 58.9 36.1 2 3 U.S. Government securities 3.4 6.8 3.4 .7 15.9 33.8 8.4 11.0 8.6 6.9 10.4 27.6 3 4 Residential mortgages 2.8 2.1 2.8 4.6 5.7 5.7 5.2 7.6 13.8 11.7 15.9 16.8 4 5 FHLB advances to S&L's .9 -2.5 .9 4.0 1.3 -2.7 * 7.2 6.7 6.8 6.5 -8.1 5 6 Other loans and securities 4.8 4.9 5.1 6.3 5.2 4.9 4.6 7.5 20.1 14.1 26.1 -.3 6 By agency— 7 U.S. Government 4.9 4.6 4.9 2.9 2.8 3.2 2.6 3.0 7.4 2.4 12.4 12.3 7 8 Sponsored credit agencies 5.1 -.1 3.2 8.9 10.0 3.2 7.0 20.3 24.1 20.5 27.6 10.1 8 9 Monetary authorities 3.5 4.8 3.7 4.2 5.0 8.9 .3 9.2 6.2 6.1 6.2 6.9 9 10 Foreign -1.6 2.0 .3 -.3 10.3 26.4 8.4 .7 11.6 10.5 12.6 6.8 10 11 Agency borrowing not included in line 1 4.8 -.6 3.5 8.8 8.2 3.8 6.2 19.6 22.1 16.8 27.4 8.0 11 Private domestic funds advanced 12 Total net advances 59.8 68.1 87.2 81.1 72.6 98.1 146.7 166.5 149.1 159.2 138.5 151.5 12 13 U.S. Government securities 5.4 5.7 13.3 4.8 5.2 -4.4 15.2 18.4 24.9 15.0 34.7 60.6 13 14 State and local obligations 5.6 7.8 9.5 9.9 11.2 17.6 14.4 13.7 17.4 18.3 16.5 17.4 14 15 Corporate and foreign bonds 10.3 16.0 13.8 12.5 20.0 19.5 13.2 10.1 20.6 19.2 21.9 43.1 15 16 Residential mortgages 12.0 13.0 15.5 15.7 12.8 29.1 44.6 44.1 25.6 31.4 19.8 23.6 16 17 Other mortgages and loans 27.4 23.1 35.9 42.2 24.6 33.7 59.5 87.4 67.4 82.1 52.2 -1.3 17 18 Less: FHLB advances .9 -2.5 .9 4.0 1.3 -2.7 * 7.2 6.7 6.8 6.5 -8.1 18 Private financial intermediation 19 Credit market funds advanced by private financial institutions 45.4 63.5 75.3 55.3 74.9 110.7 153.4 158.8 131.5 155.7 106.9 115.0 19 20 Commercial banking 17.5 35.9 38.7 18.2 35.1 50.6 70.5 86.6 64.6 87.5 41.3 17.4 20 21 Savings institutions 7.9 15.0 15.6 14.5 16.9 41.4 49.3 35.1 26.9 35.4 18.3 61.6 21 22 Insurance and pension funds 15.5 12.9 14.0 12.7 17.3 13.3 17.7 22.1 34.3 29.1 39.4 34.8 22 23 Other finance 4.5 -.3 7.0 9.9 5.7 5.3 15.8 15.0 5.7 3.7 7.9 1.1 23 24 Sources of funds 45.4 63.5 75.3 55.3 74.9 110.7 153.4 158.8 131.5 155.7 106.9 115.0 24 25 Private domestic deposits 22.5 50.0 45.9 2.6 63.2 90.3 97.5 84.9 72.5 93.7 51.1 98.6 25 26 Credit market borrowing 3.2 -.4 8.5 18.8 -.3 9.3 20.3 31.6 14.2 23.6 4.8 -7.6 26 27 Other sources 19.8 13.9 21.0 34.0 12.0 11.0 35.5 42.4 44.8 38.4 50.9 24.0 27 28 Foreign funds 3.7 2.3 2.6 9.3 -8.5 -3.2 5.2 6.5 13.6 10.7 16.4 -5.4 28 29 Treasury balances -.5 .2 -.2 * 2.9 2.2 .7 -1.0 -5.1 -2.1 -8.1 -1.9 29 30 Insurance and pension reserves 13.6 12.0 11.4 10.8 13.1 9.1 13.1 16.7 27.9 22.7 33.2 26.5 30 31 Other, net 3.0 -.6 7.2 13.8 4.4 2.9 16.5 20.2 8.4 7.1 9.4 4.7 31 Private domestic nonfinancial investors 32 Direct lending in credit markets 17.6 4.2 20.4 44.5 -2.6 -3.2 13.7 39.3 31.8 27.0 36.4 28.9 32 33 U.S. Government securities 8.4 -1.4 8.1 17.0 -9.0 -14.0 1.6 18.8 18.1 13.7 22.6 -5.0 33 34 State and local obligations 2.6 -2.5 -.2 8.7 -1.2 .6 2.1 4.4 10.8 8.3 13.3 13.5 34 35 Corporate and foreign bonds 2.0 4.6 4.7 6.6 10.7 9.3 5.2 1.1 -1.7 -1.4 -1.9 14.9 35 36 Commercial paper 2.3 1.9 5.8 10.2 -4.4 -.6 4.0 11.3 1.6 4.3 -1.0 2.7 36 37 Other 2.3 1.7 2.1 2.0 1.4 1.5 .8 3.8 2.9 2.2 3.5 2.8 37 38 Deposits and currency 24.4 52.1 48.3 5.4 66.6 93.7 101.9 88.8 78.8 102.3 55.2 105.9 38 39 Time and savings accounts 20.3 39.3 33.9 -2.3 56.1 81.0 85.2 76.3 71.9 89.0 54.8 87.7 39 40 Large negotiable CD's -.2 4.3 3.5 -13.7 15.0 7.7 8.7 18.5 23.6 30.0 17.2 -22.0 40 41 Other at commercial Banks 13.3 18.3 17.5 3.4 24.2 32.9 30.6 29.5 26.6 32.4 20.7 39.3 41 42 At savings institutions 7.3 16.7 12.9 8.0 16.9 40.4 45.9 28.2 21.8 26.6 16.9 70.4 42 43 Money 4.1 12.8 14.5 7.7 10.5 12.7 16.7 12.6 6.8 13.3 .4 18.1 43 44 Demand deposits 2.1 10.6 12.1 4.8 7.1 9.3 12.3 8.6 .5 4.8 -3.7 10.9 44 45 Currency 2.0 2.1 2.4 2.8 3.5 3.4 4.4 3.9 6.3 8.5 4,1 7.3 45 46 Total of credit market instr., deposits, and currency. 42.0 56.3 68.7 49.9 64.1 90.5 115.7 128.1 110.5 129.3 91.6 134.8 46 47 Public support rate (in per cent). 17.9 14.1 12.7 17.8 30.4 30.7 11.5 18.4 27.9 21.7 34.6 20.1 47 48 Private financial intermediation (in per cent) 75.9 93.2 86.4 68.3 103.1 112.8 104.5 95.4 88.2 97.8 77.2 75.9 48 49 Total foreign funds 2.1 4.3 2.9 9.1 1.8 23.2 13.6 7.2 25.1 21.2 29.0 1.4 49 Corporate equities not included above 1 Total net issues 4.8 5.5 6.4 10.0 10.4 14.8 12.9 8.0 5.6 5.9 5.3 12.7 1 2 Mutual fund shares 3.7 3.0 5.8 4.8 2.6 1.1 -.7 -1.6 1.0 -.8 2.8 2.9 2 3 Other equities 1.1 2.5 .6 5.2 7.7 13.6 13.6 9.6 4.6 6.7 2.5 9.7 3 44 AAccqquuiissiittiioonnss bbyy ffiinnaanncciiaall iinnssttiittuuttiioonnss 6.0 9.1 10.8 12.2 11.4 19.3 16.0 13.4 6.1 8.5 3.6 11.1 4 55 OOtthheerr nneett ppuurrcchhaasseess -1.2 -3.6 -4.4 -2.2 -1.0 -4.5 -3.1 -5.4 -.5 -2.7 1.7 1.6 5 Notes 29. Demand deposits at commercial banks. Line 30. Excludes net investment of these reserves in corporate equities. 1. Line 2 of p. A-56. 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. tranches, and liabilities of foreign banking agencies to foreign affiliates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 58 U.S. BALANCE OF PAYMENTS • OCTOBER 1975 1. U.S. BALANCE OF PAYMENTS SUMMARY (In millions of dollars. Quarterly figures are seasonally adjusted unless shown in italics.) 1974 1975 LLiinnee CCrreeddiittss ((++)),, ddeebbiittss ((--)) 1972 1973 1974'- II'- III'^ IV r I IIP 1 Merchandise trade balance i -6,409 955 -5,277 -1,459 -2,315 -1,380 1,830 3,345 2 Exports 49,388 71,379 98,309 24,218 25,034 26,593 27,188 25,694 3 Imports -55,797 -70,424 -103,568 -25,677 -27,349 -27,973 -25,358 -22,349 4 Military transactions, net -3,621 -2,317 -2,158 -646 -513 -498 -349 -412 5 Travel and transportation, net -3,024 -2,862 -2,692 -111 -721 -741 -572 -419 6 Investment income, net 2 4,321 5,179 10,121 1,964 2,354 2,559 1,176 1,629 7 U.S. direct investments abroad 2 6,416 8,841 17,679 4,399 4,700 4,080 2,156 2,375 8 Other U.S. investments abroad 3,746 5,157 8,389 2,048 2,354 2,358 2,148 2,070 9 Foreign investments in the United States 2 -5,841 -8,819 -15,946 -4,483 -4,700 -3,879 -3,128 -2,816 10 Other services, net 2 2,803 3,222 3,830 936 960 1,049 1,093 1,116 11 Balance on goods and services ^ -5,930 4,177 3,825 78 -235 989 3,178 5,259 Not seasonally adjusted 73 -2,871 2,348 4,230 5,467 12 Remittances, pensions, and other transfers -1,606 -1,903 -1,721 -457 -457 -439 -448 -475 13 Balance on goods, services, and remittances -7,537 2,274 2,104 -319 -692 550 2,730 4,784 Not seasonally adjusted -394 -3,340 1,904 3,812 4,982 14 U.S. Government grants (excluding military) -2,173 -1,938 4-5,461 -1,408 -808 -649 -111 -723 15 Balance on current account -9,710 335 4-3,357 -1,787 -1,500 -99 2,003 4,061 Not seasonally adjusted -1,868 -4,104 1,289 3,075 4,191 16 U.S. Government capital flows excluding nonscheduled 17 No r n e s p c a h y e m d e u n le ts d , r n e e p t a 5 y ments of U.S. Government assets -1,7 1 0 3 6 7 -2,9 2 3 8 3 9 44O 1 8 273• -195 * -985* -1,015 -838 18 U.S. Government nonliquid liabilities to other than foreign official reserve agencies 234 1,154 710 211 278 125 541 473 19 Long-term private capital flows, net -69 177 -8,447 -999 -2,157 5,554 -2,202 -2,085 20 U.S. direct investments abroad -3,530 -4,968 -7,455 -1,572 -1,828 -3,310 -1,041 -2,001 21 Foreign direct investments in the United States 380 2,656 2,224 1,700 -1 -653 340 623 22 Foreign securities -618 -759 -1,990 -313 -304 -726 -2,021 -1,001 23 U.S. securities other than Treasury issues 4,507 4,055 672 440 204 -663 650 678 24 Other, reported hy U.S. banks -1,158 -706 -1,150 -906 48 -269 -437 -488 27 Other, reported by U.S. nonbanking concerns 351 -101 -748 -348 -276 67 307 104 26 Balance on current account and long-term capital 5 -11,113 -977 -10,686 -2,302 -3,574 -6,513 -673 1,611 Not seasonally adjusted -2,441 -6,097 -4,600 -137 1,670 27 Nonliquid short-term private capital flows, net -1,542 -4,238 -12,949 -5,248 -1,462 -2,331 1,911 -1,036 28 Claims reported by U.S. banks -1,457 -3,886 -12,186 -5,319 -1,618 -2,432 1,715 -958 29 Claims reported by U.S. nonbanking concerns -306 -1,183 -2,603 -682 -276 -137 250 -188 30 Liabilities reported by U.S. nonbanking concerns 221 831 1,840 753 432 238 -54 110 31 Allocations of Special Drawing Rights (SDR's) 710 32 Errors and omissions, net -1,884 ' -2^436 •4;593 •"i;332 '"i;i26 •"i,'i27 "'i,'876 45i 33 Net liquidity balance -13,829 -7,651 -19,043 -6,218 -3,910 -7,717 3,108 1,026 Not seasonally adjusted -6,654 -5,551 -6,594 4,253 869 34 Liquid private capital flows, net 3,475 2,343 10,669 2,020 4,028 2,870 -6,375 -2,642 35 Liquid claims -1,247 -1,951 -6,113 -1,297 -228 -1,968 -4,755 -2,364 36 Reported by U.S. banks -742 -1,161 -5,980 -1,306 -732 -1,599 -5,073 -2,466 37 Reported by U.S. nonbanking concerns -505 -790 -133 9 504 -369 318 102 38 Liquid liabilities— 4,722 4,294 16,782 3,317 4,256 4,838 -1,620 -278 39 Foreign commercial banks 3,717 3,028 12,636 2,413 3,150 2,773 -2,684 286 40 International and regional organizations 103 377 1,295 298 219 1,308 862 -668 41 Other foreigners 902 889 2,851 606 887 757 202 104 42 Oflicial reserve transactions balance, financed by changes in— -10,354 -5,308 -8,374 -4,198 118 -AMI -3,267 -1,616 Not seasonally adjusted -4,048 -1,683 -4,049 -2,220 -1,203 43 Liquid liabilities to foreign official agencies 9,734 4,456 8,481 3,930 751 3,864 2,758 1,347 Other readily marketable liabilities to foreign official agen- 44 cies 6 399 1,118 672 183 135 631 841 321 Nonliquid liabilities to foreign official reserve agencies re- 45 ported by U.S. Govt 189 -475 655 443 -1 215 -6 -1 U.S. official reserve assets, net 32 209 -1,434 -358 -1,003 137 -326 -51 46 Gold 547 47 SDR's -703 9 "'-172 • • • • 1:29' "-i23 • • " 1:26 -5 ••"•-38 48 Convertible currencies 35 233 3 -85 -152 241 -14 -6 49 Gold tranche position in IMF 153 -33 -1,265 -244 -728 -84 -307 -7 50 Memoranda: 51 Transfers under military grant programs (excluded from lines 2, 4, and 14) 4,492 2,809 1,811 564 352 490 787 1,243 52 Reinvested earnings of foreign incorporated affiliates of U.S. firms (excluded from lines 7 and 20) 4,521 8,124 53 Reinvested earnings of U.S. incorporated affiliates of foreign firms (excluded from lines 9 and 21) 548 945 Balances excluding allocations of SDR's: 54 Net liquidity, not seasonally adjusted -14,539 -7,651 -19,043 -6,654 -5,551 -6,594 4,253 869 55 Official reserve transactions, N.S.A -11,064 -5,308 -8,374 -4,048 -1,683 -4,049 -2,220 -1,203 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • FOREIGN TRADE; U.S. RESERVE ASSETS A 59 2. MERCHANDISE EXPORTS AND IMPORTS (Seasonally adjusted; in millions of dollars) Exports ] Imports 2 Trade balance 1972 1973 1974 1975 1972 1973 19743 1975 1972 1973 19743 1975 Month: Jan... 4,074 4,955 7,150 9,412 4,436 5,244 6,498 9,622 -361 -289 +652 -211 Feb... 3,824 5,070 7,549 8,789 4,473 5,483 7,318 7,872 -649 -413 +231 +917 Mar... 3,869 5,311 7,625 8,716 4,515 5,414 7,742 7,336 -647 -103 -117 + 1,380 Apr... 3,820 5,494 8,108 8,570 4,417 5,360 8,025 8,013 -596 + 133 + 83 + 557 May.. 3,882 5,561 7,652 8,145 4,486 5,703 8,265 7,093 -604 -142 -612 + 1,052 June.. 3,971 5,728 8,317 8,692 4,468 5,775 8,577 6,954 -497 -47 -260 + 1,737 July.., 4,074 5,865 8,307 8,885 4,565 5,829 8,922 7,908 -491 + 37 -615 +977 Aug... 4,191 6,042 8,379 8,996 4,726 6,011 9,267 7,961 -535 + 32 -888 + 1,035 Sept... 4,176 6,420 8,399 4,612 5,644 8,696 -436 +776 -297 Oct... 4,312 6,585 8,673 4,738 5,996 8,773 -426 +589 -100 Nov... 4,468 6,879 8,973 5,148 6,684 8,973 -680 + 195 Dec... 4,553 6,949 8,862 5,002 6,291 9,257 -449 +658 -395 Quarter: I 11,767 15,336 22,325 26,917 13,424 16,140 21,558 24,830 -1,657 -804 +767 +2,087 I I 11,673 16,783 24,077 25,406 13,370 16,839 24,867 22,060 -1,697 -56 -790 +3,346 III.... 12,442 18,327 25,085 13,903 17,483 26,885 -1,461 +844 -1 ,800 TV.... 13,333 20,413 26,508 14,888 18,972 27,003 -1,555 + 1,441 -495 Year4.. 49,199 70,823 97,908 55,583 69,476 100,251 -6,384 + 1,347 -2,343 1 Exports of domestic and foreign merchandise (f.a.s. value basis); basis. For calender year 1974, the f.a.s. import transactions value was excludes Department of Defense shipments under military grant-aid $100.3 billion, about 0.7 per cent less than the corresponding Customs programs. import value of $101.0 billion. 2 General imports, which includes imports for immediate consumption 4 Sum of unadjusted figures. plus entries into bonded warehouses. See also note 3. 3 Beginning with 1974 data, imports are reported on an f.a.s. trans- NOTE.—Bureau of the Census data. Details may not add to totals beactions value basis; prior data are reported on a Customs import value cause of rounding. 3, U.S. RESERVE ASSETS (In millions of dollars) EE yy nn ee dd aa rr oo ff Total Tot G a o l2 l d st T o r c e k a 1 s ury v c fo e u C c r r r o i e t r e i e n i b s g n - l n e - pp RR oo II ee MM ss ss iinn ii ee FF tt ii rr oo vv nn ee SDR's3 EE mm nn oo dd nn tt oo hh ff TToottaall Tot G al o 2 l d s T to re c a k sury v c fo e C u c r r r o e i t r e i e n i b s g n - l n e - p R o e I s M s in i e t F i r o v n e SDR's3 1961... 18,753 16,947 16,889 116 1,690 1974 1962... 17,220 16,057 15,978 99 1,064 Sept.... 15,893 11,652 11,567 246 1,713 2,282 1963... 16,843 15,596 15,513 212 1,035 Oct.... 15,890 11,652 11,567 193 1,739 2,306 1964... 16,672 15,471 15,388 432 769 Nov.... 15,840 11,652 11,567 43 1,816 2,329 Dec.... 15,883 11,652 11,652 5 1,852 2,374 1965... 15,450 13,806 13,733 781 863 1966... 14,882 13,235 13,159 1,321 326 1975— 1967... 14,830 12,065 11,982 2,345 420 Jan 15,948 11,635 11,635 2 1,908 2,403 1968... 15,710 10,892 10,367 3,528 1,290 Feb 16,132 11,621 11,621 2 2,065 2,444 1969... 416,964 11,859 10,367 42,781 2,324 Mar ,, , 16,256 11,620 11,620 19 2,194 2,423 Apr 16,183 11,620 11,620 2 2,168 2,393 1970... 14,487 11,072 10,732 629 1,935 851 May.... 16,280 11,620 11,620 4 2,218 2,438 1971 ... 512,167 10,206 10,132 5 276 585 1,100 June 16,242 11,620 11,620 25 2,179 2,418 19726. . 13.151 10,487 10,410 241 465 1,958 July 16,084 11,618 11,618 2 2,135 2,329 19737. . 14,378 11,652 11,567 8 552 2,166 16,115 11,599 11,599 26 2,169 2,321 1974... 15,883 11,652 11,652 5 1,852 2,374 Sept , ,, 816,291 11,599 11,599 247 82,144 82,301 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 7 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: 8 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 Includes gain of $67 million resulting from revaluation of the German in the IMF are also valued on this basis beginning July 1974. At valuamark in Oct. 1969, of which $13 million represents gain on mark holdings tion used prior to July 1974 (SDR 1 = $1.20635) SDR holdings at end at time of revaluation. of Sept. amounted to $2,406 million reserve position in IMF, $2,226 5 Includes $28 million increase in dollar value of foreign currencies million, and total U.S. reserve assets, $16,478. revalued to reflect market exchange rates as of Dec. 31, 1971. 6 Total reserve assets include an increase of $1,016 million resulting NOTE.—See Table 20 for gold held under earmark at F.R. Banks for from change in par value of the U.S. dollar on May 8, 1972; of which. foreign and international accounts. Gold under earmark is not included in the gold stock of the United States. NOTES TO TABLE 1 ON OPPOSITE PAGE: 1 Adjusted to balance of payments basis; excludes exports under U.S. resenting the refinancing of economic assistance loans to India; a cormilitary agency sales contracts, and imports of U.S. military agencies. responding reduction of credits is shown in line 16. 2 Fees and royalities from U.S. direct investments abroad or from 5 Includes some short-term U.S. Govt, assets. foreign direct investments in the United States are excluded from invest- 6 Includes changes in long-term liabilities reported by banks in the ment income and included in * Other services." United States and in investments by foreign official agencies in debt 3 Includes special military shipments to Israel that are excluded from the securities of U.S. Federally-sponsored agencies and U.S. corporations. "net exports of goods and services" in the national income and products (GNP) accounts of the United States. NOTE.—^Data are from U.S. Department of Commerce, Bureau of Eco- 4 Includes under U.S. Government grants $2 billion equivalent, rep- nomic Analysis. Details may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 60 GOLD RESERVES • OCTOBER 1975 4. 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 world 1 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. 49,850 6,478 11,652 31,720 231 169 311 881 1,781 927 97 77 103 1974—Aug.. 6,478 11,652 231 169 312 882 1,781 927 97 76 103 Sept.. 49,830 6,478 11,652 31,700 231 169 312 882 1,781 927 97 76 103 Oct... 6,478 11,652 231 169 312 882 1,781 927 97 76 103 Nov.. 6,478 11,652 231 169 312 882 1,781 927 97 76 103 Dec.. 49,790 6,478 11,652 31,660 231 169 312 882 1,781 927 97 76 103 1975—Jan... . 6,478 11,635 231 169 312 882 1,781 927 97 76 103 Feb.... 6,478 11,621 231 169 312 882 1,781 927 97 76 103 Mar... 49,760 6,478 11,620 31,660 231 169 312 882 1,781 927 97 76 103 Apr 6,478 11,620 231 169 312 882 1,781 927 97 76 103 May. . 6,478 11,620 231 169 312 882 1,781 927 97 76 June.. 2'49,760 6,478 11,620 1,660 231 169 312 882 1,781 927 97 76 July... 6,478 11,618 231 312 882 1,781 927 97 76 Aug.^*. 6,478 11,599 231 312 882 1,781 927 97 76 Ger- End of France many, Greece India Iran Iraq Italy Japan Kuwait Leb- Libya Mexi- Netherperiod Fed. anon lands Rep. of 197 0 3,532 3,980 117 243 131 144 2,887 532 86 288 85 176 1,787 197 1 3,523 4,077 98 243 131 144 2,884 679 II 322 85 184 1,909 197 2 3,826 4,459 133 264 142 156 3,130 801 350 93 188 2,059 197 3 4.261 4,966 148 293 159 173 3,483 891 120 388 103 196 2,294 1974—Aug. 4.262 4,966 150 293 158 173 3,483 891 130 389 107 154 2,294 Sept. 4,262 4,966 150 293 158 173 3,483 891 130 389 103 154 2,294 Oct.. 4,262 4,966 150 293 158 173 3,483 891 138 389 103 154 2,294 Nov. 4,262 4,966 150 293 158 173 3,483 891 138 389 103 154 2,294 Dec.. 4,262 4,966 150 293 158 173 3,483 891 148 389 103 154 2,294 1975—Jan.. 4,262 4,966 150 293 158 173 3,483 891 140 389 103 154 2,294 Feb.. 4,262 4,966 150 293 158 173 3,483 891 140 389 103 154 2,294 Mar. 4,262 4,966 150 293 158 173 3,483 891 154 389 103 154 2,294 Apr.. 4,262 4,966 150 293 158 173 3,483 891 154 389 103 154 2,294 May. 4,262 4,966 150 293 158 173 3,483 891 175 389 103 154 2,294 June, 4,262 4,966 150 293 158 173 3,483 891 154 389 103 2,294 July. 4,262 4,966 150 293 158 173 3,483 891 154 389 103 2,294 Aug.: 4,262 4,966 150 158 3,483 891 154 389 103 2,294 United Bank End of Paki- Portu- Saudi South Spain Sweden Switzer- Thai- Turkey King- Uru- Vene- for Intl. period stan gal Arabia Africa land land dom guay zuela Settlements 2 1970 54 902 119 666 498 200 2,732 92 126 1,349 162 384 -282 1971 55 921 108 410 498 200 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 67 1,163 129 802 602 244 3,513 99 151 886 148 472 235 1974—Aug 67 1,180 129 778 602 244 3,513 99 151 886 148 472 255 Sept 67 1,180 129 778 602 244 3,513 99 151 886 148 472 259 Oct 67 1,180 129 786 602 244 3,513 99 151 886 148 472 271 Nov 67 1,180 129 774 602 244 3,513 99 151 886 148 472 251 Dec 67 1,180 129 771 602 244 3,513 99 151 886 148 472 250 1975—Jan 67 1,175 129 764 602 244 3,513 99 151 886 148 472 265 Feb 67 1,175 129 759 602 244 3,513 99 151 886 148 472 272 Mar 67 1,175 129 755 602 244 3,513 99 151 886 148 472 259 Apr 67 1,175 129 747 602 244 3,513 99 151 148 472 260 May. 6666677777 11111,,,,,111117777755555 111112222299999 777774444422222 666600002222 222224444444444 33333,,,,,555551111133333 9999999999 111155551111 111444888 444447777722222 222223333399999 June 6666677777 11111,,,,,111117777755555 111112222299999 777773333344444 666600002222 222224444444444 33333,,,,,555551111133333 9999999999 111155551111 111444888 444447777722222 222226666622222 July 6666677777 11111,,,,,111117777755555 111112222299999 777774444422222 666600002222 222224444444444 33333,,,,,555551111133333 9999999999 111155551111 444447777722222 222226666644444 Aug ^ 6666677777 11111,,,,,111117777755555 111112222299999 777774444444444 222224444444444 33333,,,,,555551111133333 9999999999 444447777722222 222226666644444 1 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 People's Republic of China. 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

OCTOBER 1975 • INTL. CAPITAL TRANSACTIONS OF THE U.S. A 61 5. U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS, AND LIQUID LIABILITIES TO ALL OTHER FOREIGNERS (In millions of dollars) Liabilities to foreign countries LLLiiiqqquuuiiiddd LLLiiiqqquuuiiiddd Official institutions 2 Liquid liabilities to other llliiiaaabbbiiillliii--llliiiaaabbbiiillliii--- foreigners tttiiieeesss tttooo tttiiieeesss tttooo nnnooonnn--- End IIIMMMFFF LLiiqquuiidd mmmooonnneee--of TTToootttaaalll aaarrriiisssiiinnnggg Short- lliiaabbiillii-- Short- tttaaarrryyy period fffrrrooommm term Market- Non- Other ttiieess term Market- iiinnntttlll... gggooolllddd liabili- able market- readily ttoo ccoomm-- liabili- able aaannnddd rrreee--tttrrraaannnsss--- ties re- U.S. able U.S. market- mmeerrcciiaall ties re- U.S. gggiiiooonnnaaalll aaaccctttiiiooonnnsss 111 Total ported Treas. Treas. able bbaannkkss Total ported Treas. ooorrrgggaaannniii--by bonds bonds liabili- aabbrrooaadd66 by bonds zzzaaatttiiiooonnnsss 888 banks and and ties 5 banks and in notes 3 notes 4 in notes 3,7 U.S. U.S. 1963 26,394 800 14,425 12,467 1,183 766 9 5,817 3,387 3,046 341 1,965 /29,313 800 15,790 13,224 1,125 1,283 158 7,271 3,730 3,354 376 1,722 19649 129,364 800 15,786 13,220 1,125 1,283 158 7,303 3,753 3,377 376 1,722 1965'- 29,568 834 15,825 13,066 1,105 1,534 120 7,419 4,059 3,587 472 1,431 19669r / \3 3 1 1 , , 0 1 1 4 9 4 1 1, , 0 0 1 1 1 1 1 14 4 , , 8 8 9 4 5 0 1 1 2 2 , , 5 4 3 8 9 4 8 8 6 6 0 0 5 5 8 8 3 3 9 9 1 1 3 3 1 9 0 , , 9 1 3 1 6 6 4 4, , 2 2 7 7 2 1 3 3 , , 7 7 4 4 3 4 5 5 2 2 8 8 9 9 0 0 5 6 /35,819 1,033 18,201 14,034 908 1,452 1,807 11,209 4,685 4,127 558 691 19679 135,667 1,033 18,194 14,027 908 1,452 1,807 11,085 4,678 4,120 558 677 19689 / 1 3 3 8 8 , , 6 4 8 7 7 3 1 1 , , 0 0 3 3 0 0 1 1 7 7 , , 4 3 0 4 7 0 1 1 1 1 , , 3 3 1 1 8 8 4 5 6 2 2 9 3 3 , , 2 2 1 1 9 9 2 2 , , 3 3 4 4 1 1 1 1 4 4 , , 4 4 7 7 2 2 4 5 , , 9 0 0 5 9 3 4 4 , , 4 4 4 4 4 4 4 6 6 0 5 9 7 7 2 2 5 2 '0/45,755 1,109 1015,975 11,054 346 10 3,070 1,505 23,638 4,464 3,939 525 659 19699 145,914 1,019 15,998 11,077 346 3,070 1,505 23,645 4,589 4,064 525 663 1970_Dec / 1 4 4 7 6 , , 0 9 0 6 9 0 5 56 6 6 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 3 3 , , 4 4 5 5 2 2 6 6 9 9 5 5 1 1 7 7 , , 1 1 6 3 9 7 4 4 , , 6 6 0 7 4 6 4 4 , , 0 0 3 2 9 9 6 56 4 5 7 8 84 4 6 4 (67,681 544 51,209 39,679 1,955 9,431 144 10,262 4,138 3,691 447 1,528 1971—Dec. 11.... 167,808 544 50,651 39,018 1,955 9,534 144 10,949 4,141 3,694 447 1,523 1972—De c 82,862 61,526 40,000 5,236 15,747 543 14,666 5,043 4,618 425 1,627 1973—De c 92,456 66,827 43,923 5,701 15,530 1,673 17,694 5,932 5,502 430 2,003 1974_Aug 110,080 71,083 48,481 4,940 15,985 1,677 29,384 7,495 7,129 366 2,178 Sept 110,810 72,730 50,149 4,880 15,985 1,716 28,056 8,010 7,617 393 2,014 Oct 112,137 73,836 50,921 4,880 16,196 1,839 28,095 8,058 7,627 439 2,148 Nov 115,698 75,200 51,860 4,906 16,196 2,238 29,782 8,336 7,855 481 2,503 Dec 119,097 76,658 53,057 5,059 16,196 2,346 30,314 8,803 8,305 498 3,322 1975—Jan 118,189 75,960 51,832 5,177 16,324 2,627 29,414 8,629 8,121 508 4,186 Feb 119,584 78,689 54,310 5,279 16,324 2,776 27,629 9,015 8,405 610 4,251 Mar 120,170 79,210 53,696 6,003 16,324 3,187 27,773 9,004 8,368 636 4,183 121,163 79,081 53,521 5,941 16,365 3,254 29,194 8,809 8,154 655 4,079 May! 121,627 79,751 52,351 6,064 17,925 3,411 28,588 9,049 8,426 623 4,239 June 121,705 80,468 51,814 6,119 19,027 3,508 28,615 9,109 8,455 654 3,513 JulyP 122,592 79,705 50,308 6,160 19,474 3,763 29,577 9,032 8,322 710 4,278 Aug.f 123,896 79,254 49,912 6,276 19,324 3,742 30,732 9,555 8,884 671 4,355 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. of gold by the IMF to the United States to acquire income-earning assets. 11 Data on the second line differ from those on first line because cer- 2 Includes BIS and European Fund. tain accounts previously classified as official institutions are included 3 Derived by applying reported transactions to benchmark data; with banks; a number of reportmg banks are included in the series for breakdown of transactions by type of holder estimated for 1963. the first time; and U.S. Treasury securities payable in foreign currencies 4 Excludes notes issued to foreign official nonreserve agencies. issued to official institutions of foreign countries have been increased in 5 Includes long-term liabilities reported by banks in the United States value to reflect market exchange rates as of Dec. 31, 1971. and debt securities of U.S. Federally-sponsored agencies and U.S. corporations. NOTE.—Based on Treasury Dept. data and on data reported to the ® Includes short-term liabilities payable in dollars to commercial banks Treasury Dept. by banks and brokers in the United States. Data correspond abroad and short-term liabilities payable in foreign currencies to commer- generally to statistics following in this section, except for the exclusion cial banks abroad and to other foreigners. of nonmarketable, nonconvertible U.S. Treasury notes issued to foreign 7 Includes marketable U.S. Treasury bonds and notes held by commer- official nonreserve agencies, the inclusion of investments by foreign cial banks abroad. official reserve agencies in debt secu-ities of U.S. Federally-sponsored 8 Principally the International Bank for Reconstruction and Develop- agencies and U.S. corporations, and minor rounding differences. Table ment and the Inter-American and Asian Development Banks. excludes IMF holdings of dollars, and holdings of U.S. Treasury letters 9 Data on the 2 lines shown for this date differ because of changes of credit and nonnegotiable, non-interest-bearing special U.S. notes held in reporting coverage. Figures on first line are comparable with those by other international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 62 INTL. CAPITAL TRANSACTIONS OF THE U.S. • OCTOBER 1975 6. U.S. LIABILITIES TO OFFICIAL INSTITUTIONS OF FOREIGN COUNTRIES, BY AREA (Amounts outstanding; in millions of dollars) Total Western Latin Other foreign Europe i American countries 2 End of period countries Canada republics Asia Africa 197 1 50,651 30,134 3,980 1,429 13,823 415 870 197 2 61,526 34,197 4,279 1,733 17,577 111 2,963 197 3 66,827 45,730 3,853 2,544 10,887 788 3,025 1974—Aug... 71,083 42,347 3,953 4,157 15,554 2,272 2,800 Sept.., 72,730 42,662 3,819 4,445 16,299 2,850 2,655 Oct.. . 73,836 43,019 3,805 4,046 17,329 2,947 2,690 Nov.., 75,200 43,193 3,705 3,768 18,673 3,204 2,657 Dec... 76,658 44,185 3,662 4,419 18,604 3,161 2,627 1975—Jan.. . 75,960 43,331 3,621 3,659 19,555 3,232 2,562 Feb.. . 78,689 44,770 3,616 4,223 20,274 3,356 2,450 Mar.. 79,210 45,776 3,546 4,390 19,441 3,433 2,624 79,081 45,059 3,251 4,506 20,062 3,493 2,710 May!! 79,751 45,262 3,101 4,600 20,423 3,448 2,917 June.. 80,468 45,211 3,008 4,723 20,457 3,800 3,269 Julyp. 79,705 44,241 2,966 4,748 21,299 3,319 3,132 Aug.^ 79,254 44,063 2,929 4,924 29,972 3,392 2,974 1 Includes Bank for International Settlements and European Fund. foreign official holdings of marketable and nonmarketable U.S. Treasury 2 Includes countries in Oceania and Eastern Europe, and Western Euro- securities with an original maturity of more than 1 year, except for nonpean dependencies in Latin America. marketable notes issued to foreign official nonreserve agencies; and investments by foreign official reserve agencies in debt securities of U.S. NOTE.—Data represent short- and long-term liabilities to the official Federally-sponsored agencies and U.S. corporations. inkitutions of foreign countries, as reported by banks in the United States; 7. SHORT-TERM LIABILITIES TO FOREIGNERS REPORTED BY BANKS IN THE UNITED STATES, BY TYPE (Amounts outstanding; in millions of dollars) To nonmonetary international To all foreigners and regional organizations 6 IIIIMMMMFFFF Payable in dollars ggggoooolllldddd Deposits PPPaaayyyaaabbbllleee iiiinnnnvvvveeeesssstttt---- UUU...SSS... End of period iiinnn mmmmeeeennnntttt 5555 TTTrrreeeaaasssuuurrryyy OOOttthhheeerrr TToottaall 11 Deposits UU..SS.. OOtthheerr fffooorrreeeiiigggnnn TToottaall bbbiiillllllsss aaannnddd ssshhhooorrrttt--- TTrreeaassuurryy sshhoorrtt-- cccuuurrr--- ccceeerrrtttiiifffiii--- ttteeerrrmmm Total bbiillllss aanndd tteerrmm rrreeennnccciiieeesss DDeemmaanndd TTiimmee 22 cccaaattteeesss llliiiaaabbb...777 Demand Time 2 cceerrttiiffii-- lliiaabb..44 ccaatteess 33 197 1 55.428 55,036 6,459 4,217 33,025 11,335 392 400 1,367 73 192 210 892 197 2 60,696 60,200 8,290 5,603 31,850 14,457 496 1,412 86 202 326 799 197 3 69,074 68,477 11,310 6,882 31,886 18,399 597 1,955 101 83 296 1,474 1974_Aug... 86,916 86,170 11,841 9,103 33,179 32,047 746 1,921 81 68 146 1,627 Sept.. 87,722 87,026 12,769 9,252 33,467 31,539 696 1,900 128 69 75 1,629 Oct... 88,642 87,924 11,228 9,822 34,187 32,686 719 2,000 125 92 93 1,690 Nov.. 91,835 91,091 12,860 9,567 35,212 33,452 744 2,339 128 95 285 1,830 Dec... 94,847 94,081 14,068 10,106 35,662 , 34,246 766 3,171 139 111 497 2,424 1975—Jan... 93,285 92,564 12,288 10,155 38,108 32,013 721 3,918 123 111 1,234 2,450 Feb... 94,317 93,584 12,139 10,308 40,428 30,708 733 3,973 118 102 1,260 2,492 Mar.. 93,322 92,640 12,324 10,143 40,094 30,080 682 3,485 189 116 777 2,402 94,460 93,719 11,699 10,390 40,424 31,206 742 3,592 99 126 781 2,585 May". 93,204 92,539 11,925 10,374 40,628 29,612 665 3,839 115 133 1,994 1,598 June. 92,323 91,739 12,595 10,471 38,265 30,408 584 3,439 106 133 996 2,205 Julyf. 92,316 91,755 12,215 10,376 38,553 30,611 560 4,109 146 134 2,518 1,311 Aug.2' 93,782 93,219 12,215 10,810 38,518 31,677 562 4,254 110 148 3,156 839 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • INTL. CAPITAL TRANSACTIONS OF THE U.S. A 63 7. SHORT-TERM 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 institutions 8 Payable in dollars Payable in dollars Payable End of period in Payable Total Deposits U.S. Other foreign Total Deposits U.S. Other in Treasury short- cur- Treasury short- foreign bills and term rencies bills and term currencies Demand Time 2 certifi- liab.4 Demand Time 2 certifi- liab.7 cates 3 cates 3 197 2 59,284 8,204 5,401 31,523 13,659 496 40,000 1,591 2,880 31,453 3,905 171 197 3 67,119 11,209 6,799 31,590 16,925 597 43,923 2,125 3,911 31,511 6,248 127 1974—Aug.. 84,994 11,760 9,035 33,033 30,421 746 48,481 2,474 4,429 32,687 8,764 127 Sept.. 85,822 12,641 9,183 33,392 29,910 696 50,149 2,825 4,282 32,955 9,960 127 Oct... 86,643 11,104 9,730 34,094 30,996 719 50,921 2,168 4,400 33,634 10,591 127 Nov.. 89,497 12,732 9,472 34,927 31,622 744 51,860 2,472 4,058 34,467 10,736 127 Dec.. 91,676 13,928 9,995 35,165 31,822 766 53,057 2,951 4,257 34,656 11,066 127 1975—Jan... 89,367 12,165 10,044 36,874 29,563 721 51,832 2,185 4,296 36,531 8,821 Feb.. 90,344 12,021 10,206 39,169 28,216 733 54,310 2,058 4,306 38,840 9,106 Mar.. 89,837 12,135 10,027 39,316 27,677 682 53,696 2,323 4,303 39,015 8,054 90,869 11,600 10,264 39,643 28,620 742 53,521 2,147 4,193 39,316 7,864 May".! 89,365 11,811 10.241 38,634 28,015 665 52,351 2,175 4,331 38,372 7,473 June. 88,884 12,490 10,338 37,269 28,203 584 51,814 2,564 4,256 36,994 8,000 July J'. 88,207 12,070 10.242 36,035 29,300 560 50,308 2.492 4,098 35,803 7,915 Aug.2', 89,528 12,104 10,662 35,362 30,837 562 49,912 2.493 4,239 35,055 8,125 To banks 9 To other foreigners To banks Payable in dollars and other foreigners End of period Total Payable in Deposits U.S. Other Deposits U.S. Other foreign Treasury short- Treasury short- cur- Total bills and term Total bills and term rencies Demand Time 2 certifi- liab.4 Demand Time 2 certifi- liab.7 cates cates 197 2 19,284 14,340 4,658 405 9,272 4,618 1,955 2,116 65 481 325 197 3 23,196 17,224 6,941 529 11 9,743 5,502 2,143 2,359 68 933 469 1974_Aug.. 36,513 28,766 6,890 1,456 200 20,220 7,129 2,396 3,150 145 1.437 618 Sept.. 35,673 27,488 7,096 1,637 258 18,497 7,617 2,721 3,264 179 1,454 568 Oct.. . 35,722 27,504 6,361 1,908 268 18,967 7,626 2,574 3,422 193 1.438 591 Nov.. 37,637 29,166 7,622 1.807 253 19,484 7,855 2,638 3,608 207 1,402 617 Dec... 38,619 29,676 8,248 1,942 232 19,254 8,304 2,729 3,796 277 1,502 639 1975—Jan... 37,534 28,693 7,355 1,989 158 19,192 8,121 2,625 3,760 186 1,550 721 Feb.. . 36,035 26,896 7,142 2,039 129 17,586 8,405 2,820 3,861 200 1,524 733 Mar.. 36,142 27,092 7,072 1.808 101 18,111 8,368 2,740 3,916 200 1,512 682 37,348 28,453 6,897 2,102 107 19,347 8,154 2,556 3,969 220 1,409 742 May'.! 37,014 27,923 6,852 1,821 105 19,144 8,426 2,784 4,089 156 1,398 665 June. 37,070 2a, 032 7,067 1,949 99 18,917 8,454 2,859 4,133 176 1,286 584 Julyi*. 37,899 29,016 6,882 2,037 80 20,017 8,322 2,696 4,107 152 1,367 560 Aug. 2', 39,616 30,170 6,907 1,830 77 21,356 8,884 2,705 4,592 230 1,357 562 1 Data exclude "holdings of dollars" of the IMF. 7 Principally bankers' acceptances, commercial paper, and negotiable 2 Excludes negotiable time certificates of deposit, which are included time certificates of deposit. in "Other short-term liabilities." 8 Foreign central banks and foreign central govts, and their agencies, 3 Includes nonmarketable certificates of indebtedness and Treasury and Bank for International Settlements and European Fund. biUs issued to official institutions of foreign countries. 9 Excludes central banks, which are included in "Official institutions." 4 Includes liabilities of U.S. banks to their foreign branches, liabilities of U.S. agencies and branches of foreign banks to their head offices and NOTE.—"Short term" refers to obligations payable on demand or having foreign branches, bankers' acceptances, commercial paper, and negotiable an original maturity of 1 year or less. For data on long-term liabilities time certificates of deposit. reported by banks, see Table 9. Data exclude the holdings of dollars 5 U.S. Treasury bills and certificates obtained from proceeds of sales of of the International Monetary Fund; these obligations to the IMF constigold by the IMF to the United States to acquire income-earning assets. tute contingent liabilities, since they represent essentially the amount of Upon termination of investment, the same quantity of gold was reac- dollars available for drawings from the IMF by other member countries. quired by the IMF. Data exclude also U.S. Treasury letters of credit and nonnegotiable, non- 6 Principally the International Bank for Reconstruction and Develop- interest-bearing special U.S. notes held by the Inter-American Development and the Inter-American and Asian Development Banks. ment Bank and the International Development Association. Includes difference between cost value and face value of securities in IMF gold investment account. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 64 INTL. CAPITAL TRANSACTIONS OF THE U.S. • OCTOBER 1975 8. SHORT-TERM LIABILITIES TO FOREIGNERS REPORTED BY BANKS IN THE UNITED STATES, BY COUNTRY (End of period. Amounts outstanding; in millions of dollars) 1973 1974 1975 Area and country Dec. Nov. Dec Jan. Feb. Mar. Apr. May June JulyP Aug.f Europe: Austria 161 557 607 597 624 599 629 627 627 661 667 Belgium-Luxembourg 1,483 2,295 2,506 2,391 2,647 2,539 2,810 2,875 3,070 2,982 2,890 Denmark 659 338 369 369 324 370 340 323 355 325. 308 Finland 165 262 266 204 204 202 212 181 365 361 406 France 3,483 3,835 4,287 4,206 4,035 4,226 4,600 4,982 5,397 5,515 5.493 Germany 13,227 9.102 9,420 9,948 10,801 11,235 10,229 8,203 6,460 5,440 5,277 Greece 389 213 248 253 242 192 202 273 254 299 307 Italy 1,404 2,192 2,617 2,101 2,260 2,449 2,498 2,157 2,298 1,427 1,056 Netherlands 2,886 3,177 3,234 3,208 3,197 3,414 3,302 3,351 3,535 3,539 3,300 Norway 965 1,181 1,040 874 826 843 827 846 945 1,118 1,052 Portugal 534 338 310 310 303 288 247 267 264 280 268 Spain 305 332 382 379 320 358 361 341 362 392 288 Sweden 1,885 1.103 1,138 1,132 1,215 1,209 1,477 1,697 1,847 2,010 2,203 Switzerland 3,377 9,378 9,986 9,517 9,407 8,802 8,747 8,553 8,458 7,892 8,298 Turkey 98 102 152 169 131 243 103 87 124 106 134 United Kingdom 6,148 8,198 7,559 6,671 6,205 7,025 7,039 6,980 6,403 6,447 8,276 Yugoslavia 86 105 183 187 168 158 122 126 83 106 107 Other Western Europe i 3,352 3,434 4,073 3,136 2,934 2,641 2,516 2,467 2,462 2,535 2,261 U.S.S.R 22 33 82 65 59 35 34 61 62 29 50 Other Eastern Europe 110 140 206 172 120 218 123 148 370 181 160 Total 40,742 46,313 48,667 45,888 46,020 47,045 46,419 44,546 43,743 41,642 42,802 Canada 3,627 3,725 3,517 3,398 3,781 3,448 3,946 3,951 3,617 3,921 3,637 Latin America; Argentina 924 938 886 900 894 822 964 989 1,061 1,054 Bahamas 852 1,747 1,448 2,155 2,046 1,746 2,446 2,045 2,181 2,471 2,670 Brazil 860 952 1,034 859 927 1,065 1,077 984 1,081 853 921 Chile 158 297 276 284 281 258 278 260 289 301 281 Colombia 247 305 305 319 317 326 313 307 400 375 367 Mexico 1,296 1,746 1,770 1,747 1,814 1,668 1,727 1,876 1,819 1,794 1,811 Panama 282 474 488 500 476 519 656 514 473 584 575 Peru 135 183 272 256 238 225 217 206 219 228 208 Uruguay 120 140 147 152 164 171 174 168 155 190 153 Venezuela 1,468 2,921 3,413 2,918 3,351 3,501 3,559 3,866 3,726 3,964 4,243 Other Latin American republics 884 1,176 1,316 1,211 1,263 1,348 1,401 1,353 1,506 1,410 1,366 Netherlands Antilles and Surinam. 71 135 158 155 133 143 113 123 134 107 108 Other Latin America 366 846 526 905 478 307 761 903 991 1,479 1,494 Total 7,664 1,862 12,038 12,361 12,382 12,300 13,610 13,571 13,964 14,819 15,250 China, People's Rep. of (China Mainland) 38 45 50 50 73 62 63 56 65 50 55 China, Republic of (Taiwan) 757 808 818 977 1,015 1,037 1,038 999 1,071 1,015 1,054 Hong Kong 372 551 530 558 546 528 543 596 598 540 577 India 85 156 261 179 177 183 127 168 145 133 214 Indonesia 133 1,363 1,221 1,327 1,083 497 582 279 365 527 289 Israel 327 279 386 417 473 508 490 536 470 369 340 Japan 6,967 10,891 10,897 10,442 10,909 11,390 10,993 ,109 11,223 11,669 11,218 Korea 195 309 384 315 327 311 345 341 361 366 374 Philippines 515 731 747 702 642 745 660 662 697 632 669 Thailand 247 333 333 337 327 455 446 342 370 284 256 Middle East oil-exporting countries 2. ... 4,633 4,960 5,213 3,673 3,922 •,315 3,850 4,437 4,819 Other 3 "i^ioi •5;68i 813 1,043 923 978 905 861 906 767 919 Total 10,839 21,147 21,073 21,307 21,708 20,368 20,112 20,262 20,119 20,790 20,783 Africa; Egypt 35 109 103 105 106 92 112 113 514 253 295 South Africa 114 155 130 150 188 191 159 179 141 132 147 Oil-exporting countries 4 2,814 2,858 2,943 3,041 3,070 3,009 2,965 2,785 2,873 Other 3 907 '3^340 504 551 572 524 526 594 572 558 551 Total 1,056 3,604 3,551 3,664 3,809 3,848 3,867 3,895 4,192 3,727 3,866 Other countries: Australia 3,131 2,759 2,742 2,661 2,568 2,761 2,856 3,069 3,185 3,231 3,114 All other 59 86 89 76 66 60 71 64 77 75 Total 3,190 2,845 2,831 2,748 2,644 2,828 2,916 3,140 3,249 3,308 3,189 Total foreign countries 67,119 89,497 91,676 89,367 90,344 89,837 90,869 89,365 88,884 88,207 89,258 International and regional: Internationals 1,627 2,055 2,900 3,643 3,683 3,222 3,291 3,600 3,205 3,844 3,950 Latin American regional 272 213 202 226 233 218 211 155 141 175 215 Other regional 6 57 70 69 50 57 44 90 84 94 90 Total 1,955 2,339 3,171 3,918 3,973 3,485 3,592 3,839 3,439 4,109 4,254 Grand total 69,074 91,835 94,847 93,285 94,317 93,322 94,460 93,204 92,323 92,316 93,782 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • INTL. CAPITAL TRANSACTIONS OF THE U.S. A 65 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 7 1973 1974 1975 1973 1974 1975 Area and country Area and country Apr. Dec. Apr. Dec. Apr. Apr. Dec, Apr. Dec. Apr. Other Western Europe: Other Asia—Cont.: Cyprus 9 19 10 7 17 Laos 3 3 3 3 5 Iceland 12 8 11 21 20 Lebanon 55 62 68 119 180 Ireland, Rep. of 22 62 53 29 29 Malaysia 59 58 40 63 92 Pakistan 93 105 108 91 118 Other Latin American republics: Singapore 53 141 165 240 215 Bolivia 65 68 102 96 93 Sri Lanka (Ceylon) 6 13 13 14 13 Costa Rica 75 86 88 117 120 Vietnam 98 88 98 126 70 Dominican Republic 104 118 137 127 214 Oil-exporting countries 8 486 652 1,331 Ecuador 109 92 90 122 157 El Salvador 86 90 129 129 144 Guatemala 127 156 245 214 255 Haiti 25 21 28 35 34 Other Africa: Honduras 64 56 71 88 92 Algeria 8 51 111 110 Jamaica 32 39 52 69 62 Ethiopia (incl. Eritrea) 75 79 118 76 Nicaragua 79 99 119 127 125 Ghana 28 20 22 13 Paraguay 26 29 40 46 38 Kenya 19 23 20 32 Trinidad and Tobago 17 17 21 107 Liberia 31 42 29 33 Libya 8 312 331 257 Other Latin America: Nigeria 8 140 78 736 Bermuda 127 242 201 107 100 Southern Rhodesia 1 2 1 2 3 British West Indies 100 109 354 116 610 Sudan 3 3 2 4 14 Tanzania 16 12 12 11 21 Other Asia: Tunisia 11 7 17 19 23 Afghanistan 19 22 11 18 19 Uganda 19 6 11 13 Burma 17 12 42 65 Zambia 37 22 66 22 Cambodia 3 2 4 4 Jordan 4 6 6 22 30 All other: New Zealand 34 39 33 47 36 1 Includes Bank for International Settlements. 6 Asian, African, and European regional organizations, except BIS, 2 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Sandi Arabia, which is included in "Europe." and United Arab Emirates (Trucial States). 7 Represent a partial breakdown of the amounts shown in the other 3 Until Dec. 1974 includes oil-exporting countries. categories (except "Other Eastern Europe"). 4 Comprises Algeria, Gabon, Libya, and Nigeria. 8 Beginning Dec. 1974 oil-exporting countries in Middle East and 5 Data exclude holdings of dollars of the International Monetary Fund, Africa as groups are shown in the table on the opposite page. 9. LONG-TERM LIABILITIES TO FOREIGNERS REPORTED BY BANKS IN THE UNITED STATES (Amounts outstanding; in millions of dollars) To foreign countries Country or area TToo iinnttll.. EEnndd ooff ppeerriioodd TToottaall aanndd Official Other United Total All rreeggiioonnaall Total institu- Banks i foreign- Ger- King- Total Latin Middle Other other tions ers many dom Europe America East 2 Asia 3 countries 1972 111111,,,,,,000000111111888888 555555888888000000 444444333333999999 999999333333 222222555555999999 888888777777 111111666666555555 666666333333 222222666666000000 111111333333666666 333333333333 111111000000 1973 111111,,,,,,444444666666222222 777777666666111111 777777000000000000 333333111111000000 222222999999111111 111111000000000000 111111555555999999 666666666666 444444777777000000 111111333333222222 888888333333 111111666666 1974—Aug 111111,,,,,,444444999999888888 111111,,,,,,000000000000555555 444444999999333333 111111333333666666 222222888888111111 777777666666 111111555555333333 555555555555 222222444444000000 111111444444111111 999999888888 111111333333 Sept . . 111111,,,,,,333333666666777777 999999222222000000 444444444444777777 999999333333 222222888888111111 777777333333 111111555555333333 555555555555 222222444444000000 111111222222333333 777777111111 111111333333 Oct 111111,,,,,,222222999999333333 888888444444999999 444444444444555555 111111111111111111 222222666666333333 777777111111 111111555555333333 444444333333 222222222222888888 111111111111666666 888888888888 111111333333 Nov 111111,,,,,,333333555555444444 999999000000555555 444444444444999999 111111111111222222 222222666666222222 777777555555 111111555555222222 444444333333 222222222222777777 111111111111666666 888888999999 111111777777 Dec 1,285 822 464 124 261 79 152 43 227 115 95 7 20 1975—Jan 1,406 846 560 223 266 71 150 42 218 118 189 12 21 Feb 1,441 776 666 336 264 66 147 41 211 119 304 10 21 Mar 1,548 800 748 426 255 67 137 41 202 120 394 10 21 Apr 1,410 626 784 462 253 68 135 41 201 121 429 11 22 May 1,446 585 861 544 248 69 129 41 197 121 514 7 21 June 1,411 518 893 576 247 70 120 59 198 121 544 7 23 Julyp 1,409 438 970 651 242 77 121 61 201 121 619 7 24 Aug.f 1,352 378 974 651 243 81 120 61 202 123 619 7 23 1 Excludes central banks, which are included with "Official institutions." Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial 2 Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, States). 3 Until Dec. 1974 includes Middle East oil-exporting countries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 66 INTL. CAPITAL TRANSACTIONS OF THE U.S. • OCTOBER 1975 10. ESTIMATED FOREIGN HOLDINGS OF MARKETABLE U.S. TREASURY BONDS AND NOTES (End of period; in millions of dollars) 1974 1975 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Julyi' Aug.P Europe: Belgium-Luxembourg.. 9 10 10 10 10 11 12 14 14 14 14 14 14 Germay 9 9 9 9 9 9 9 208 209 209 209 209 210 Sweden 260 250 250 276 251 252 252 252 252 251 252 252 278 Switzerland 34 34 30 30 30 31 30 29 32 34 37 37 41 United Kingdom 439 459 485 498 493 529 578 599 611 564 522 536 520 Other Western Europe. '•92 '•87 '•93 '•89 '•88 '•80 rJ4 r79 '•95 r97 97 98 102 Eastern Europe 5 5 5 5 5 5 5 5 5 5 5 5 5 Total. 849 854 883 917 885 916 959 1,186 1,217 1,174 1,135 1,151 1,169 Canada 756 706 707 711 713 697 584 588 460 412 412 408 406 Latin America: Latin American republics 11 11 Ij 11 12 11 11 11 11 11 13 13 13 Netherlands Antilles and Surinam. 5 15 23 60 83 82 142 130 125 118 134 178 149 Other Latin America 2 2 2 5 6 6 5 4 4 5 5 5 Total. 16 28 36 74 100 99 159 147 140 133 152 196 167 Asia: Japan 3,498 3,497 3,497 3,498 3,498 3,498 3,496 3,496 3,496 3,496 3,496 3,496 3,496 Other Asia. 12 12 12 12 212 325 541 1,071 1,121 1,291 1,397 1,418 1,498 Total 3,510 3,509 3,509 3,509 3,709 3,822 4,037 4,567 4,617 4,787 4,893 4,914 4,994 Africa 151 151 151 151 151 151 151 151 161 181 181 201 211 All other 25 25 25 25 Total foreign countries. 5,306 5,273 5,311 5,387 5,557 5,685 5,889 6,639 6,596 6,687 6,773 6,870 6,945 International and regional: International 124 46 97 98 89 207 219 620 411 334 21 121 58 Latin American regional.. 71 68 52 67 61 61 59 79 77 65 52 48 43 Total 195 114 149 165 150 268 277 699 488 399 74 169 101 Grand total. 5,502 5,387 5,460 5,552 5,708 5,953 6,167 7,337 7,084 7,087 6,847 7,039 7,048 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 Loans to- AAcccceepptt-- FFoorreeiiggnn EEEnnnddd ooofff pppeeerrriiioooddd TTToootttaaalll CCoolllleecc-- aanncceess ggoovvtt,, ssee-ttiioonnss mmaaddee DDeeppoossiittss ccuurriittiieess,, TToottaall Official oouutt-- ffoorr aacccctt.. OOtthheerr TToottaall wwiitthh ffoorr-- ccoommll.. OOtthheerr Total institu- Banks 1 Others 2 ssttaanndd-- ooff ffoorr-- eeiiggnneerrss aanndd ffii-tions iinngg eeiiggnneerrss nnaannccee ppaappeerr 1971 13,272 12,377 3,969 231 2,080 1,658 2,475 4,254 1,679 895 548 173 174 19723 /15,471 14,625 5,674 163 2,975 2,535 3,269 3,204 2,478 846 441 223 182 115,676 14,830 5,671 163 2,970 2,538 3,276 3,226 2,657 846 441 223 182 1973 20,723 20,061 7,660 284 4,538 2,838 4,307 4,160 3,935 662 428 119 115 1974 Aug 35,377 34,572 11,543 453 7,744 3,346 5,295 9,502 8,232 805 461 180 164 Sept 34,464 33,546 10,551 528 6,672 3,352 5,245 9,572 8,178 918 468 217 233 Oct 34,647 33,617 10,033 378 6,317 3,338 5,356 10,072 8,155 1,030 547 243 240 Nov 36,833 35,805 10,999 446 7,121 3,433 5,345 10,724 8,737 1,028 515 283 229 Dec 38,913 37,703 11,301 381 7,342 3,579 5,637 11,237 9,527 1,210 668 289 253 1975—Jan 38,977 37,688 10,195 361 6,281 3,553 5,565 11,062 10,866 1,289 719 351 219 Feb 39,772 38,582 10,275 379 6,376 3,521 5,346 11,127 11,833 1,190 609 336 244 Mar 42,186 41,023 9,626 310 5,682 3,633 5,415 11,341 14,641 1,162 626 290 246 Apr 42,806 41,547 10,658 362 6,518 3,778 5,339 11,441 14,109 1,260 764 241 254 May 45,106 44,038 11,862 366 7,648 3,848 5,546 10,951 15,679 1,068 478 301 290 June 45,705 44,481 11,340 494 6,793 4,053 5,345 10,639 17,157 1,224 591 335 299 Julyf 45,542 44,354^ 11,700 572 6,833 4,295 5,383 10,204 17,068 1,188 608 296 284 Aug.» 45,098 43,938 13,086 626 7,963 4,497 5,314 9,990 15,548 1,160 610 240 310 1 Excludes central banks, which are included with "Official institutions." in reporting coverage. Figures on the first line are comparable in cover- 2 Includes international and regional organizations. age with those shown for the preceding date; figures on the second line 3 Data on the 2 lines shown for this date differ because of changes are comparable with those shown for the following date. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • INTL. CAPITAL TRANSACTIONS OF THE U.S. A 67 12. SHORT-TERM CLAIMS ON FOREIGNERS REPORTED BY BANKS IN THE UNITED STATES, BY COUNTRY (End of period. Amounts outstanding; in millions of dollars) 1973 1974 1975 Area and country Dec. Nov. Dec, Jan. Feb. Mar. Apr. May June Julyf Aug. Europe: Austria 42 21 18 38 22 16 19 17 16 28 Belgium-Luxembourg 147 308 384 401 591 550 674 647 600 620 598 Denmark 48 45 46 54 53 41 53 49 64 62 60 Finland 108 107 122 132 136 137 147 137 133 142 143 France 621 802 673 892 893 896 859 723 581 666 740 Germany 311 438 589 390 435 387 399 389 428 482 448 Greece 35 57 64 52 42 46 54 37 37 46 50 Italy 316 340 345 351 277 287 334 329 339 363 336 Netherlands 133 183 348 195 210 187 157 221 219 288 338 Norway 72 97 119 115 106 104 114 •126 98 91 106 Portugal 23 25 20 16 39 32 26 25 25 27 22 Spain 222 206 196 184 166 150 234 251 235 257 214 Sweden 153 160 180 128 99 72 101 132 115 155 185 Switzerland 176 339 335 252 267 230 227 277 252 254 290 Turkey 10 14 15 23 17 19 37 30 40 26 43 United Kingdom 1,459 2,332 2,441 2,700 2,770 2,896 3,174 3,712 3,476 3,458 3,868 Yugoslavia 10 28 22 38 18 16 28 39 31 36 40 Other Western Europe 25 38 22 22 27 24 31 25 22 22 62 U.S.S.R 46 28 46 44 48 34 51 83 77 80 79 Other Eastern Europe 44 86 131 124 100 110 113 117 118 130 110 Total. 3,970 5,675 6,117 6,130 6,331 6,239 6,831 7,370 6,907 7,222 7,760 Canada 1,955 2,517 2,791 2,904 2,643 2,934 2,911 3,096 2,852 2,666 2,354 Latin America: Argentina 499 708 720 783 808 869 958 1,007 1,111 1,105 1,116 Bahamas 883 2,978 3,398 3,737 4,699 5,926 5,715 6,997 8,658 7,811 6,465 Brazil 900 1,493 1,415 1,264 1,345 1,266 1,299 1,272 1,184 1,390 1,505 Chile 151 291 290 303 351 395 433 422 429 472 435 Colombia 397 675 713 706 679 695 710 702 687 666 668 Mexico 1,373 1,898 1,972 1,898 2,006 2,116 2,236 2,380 2,541 2,669 2,751 Panama 274 402 503 604 458 546 531 671 527 581 578 Peru 178 486 518 504 531 555 606 590 623 626 646 Uruguay 55 63 63 75 86 104 116 100 85 90 73 Venezuela 518 643 704 795 747 736 757 745 791 902 956 Other Latin American republics 505 823 866 899 920 915 967 973 966 1,056 1,009 Netherlands Antilles and Surinam 13 74 62 45 39 39 36 44 83 62 54 Other Latin America 154 920 1,138 1,438 1,535 1,583 1,722 2,219 1,830 1,679 2,091 Total. 5,900 11,453 12,362 13,051 14,202 15,747 16,085 18,122 19,514 19,108 18,346 Asia: China, People's Rep. of (China Mainland) 31 5 4 18 65 19 12 9 13 13 China, Republic of (Taiwan) 140 483 500 526 473 500 448 434 479 463 503 Hong Kong 147 238 223 203 184 291 210 288 315 201 190 India 16 16 14 19 22 17 21 17 20 23 38 Indonesia 88 140 157 142 159 145 134 119 115 113 88 Israel 155 216 255 271 284 322 299 287 312 362 358 Japan ;,398 12,441 12,514 11,821 11,246 11,600 11,028 10,603 10,245 10,308 10,293 Korea 403 835 955 1,116 1,286 1,356 1,503 1,415 1,523 1,462 1,502 Philippines 181 325 372 302 342 353 398 455 478 480 410 Thailand 273 428 458 391 374 406 413 374 441 461 506 Middle East oil-exporting countries ^. 330 307 336 369 563 411 418 523 493 Other 2 392 666 441 436 445 477 444 555 489 545 572 Total. 8,224 15,795 16,222 15,549 15,216 15,855 15,472 14,969 14,844 14,955 14,967 Africa: Egypt 35 91 111 106 114 122 142 138 149 134 141 South Africa 129 299 329 364 396 413 458 475 498 489 492 Oil-exporting countries 3. 115 81 108 108 95 128 120 144 134 Other2..... 224 404 300 234 235 232 278 276 302 296 347 Total. 388 795 855 785 853 875 973 1,018 1,068 1,064 1,114 Other countries: Australia 243 492 466 433 431 436 428 440 428 446 467 All other 43 104 99 125 95 99 107 89 81 80 Total 286 597 565 558 526 535 535 528 509 526 554 Total foreign countries.... 20,723 36.832 38.912 38.976 39.771 42.185 42.805 45,104 45,694 45.541 45,096 International and regional. 1 0 1 1 1 2 11 1 3 Grand total 20,723 36.833 38.913 38.977 39.772 42.186 42.806 45,106 45,705 45.542 45,098 1 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, made to, and acceptances made for, foreigners; drafts drawn against and United Arab Emirates (Trucial States). foreigners, where collection is being made by banks and bankers for 2 Until Dec. 1974 includes oil-exporting countries. their own account or for account of their customers in the United States; 3 Comprises Algeria, Gabon, Libya, and Nigeria. and foreign currency balances held abroad by banks and bankers and their customers in the United States. Excludes foreign currencies held NOTE.—Short-term claims are principally the following items payable by U.S. monetary authorities. on demand or with a contractual maturity of not more than 1 year: loans Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 68 INTL. CAPITAL TRANSACTIONS OF THE U.S. • OCTOBER 1975 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 Total Payable period Loans to— in TToottaall Total Middle Other All Other foreign EEuurrooppee Canadk Latin JJaappaann East 3 Asia 4 other long- curren- America coun- Official Other term cies tries 2 Total institu- Banksi foreign- claims tions ers 2 1972 5,063 4444444,,,,,,,555555588888888888888 844 430 3333,,,,333311114444 435 40 853 406 22,,002200 353 918 514 1973 5,996 5555555,,,,,,,444444444444446666666 11,,116600 591 3333,,,,666699994444 478 72 1,272 490 22,,111166 251 11,,333311 536 111999777444———AAAuuuggg 7,055 6666666,,,,,,,444444444444448888888 11,,445566 913 4444,,,,000088880000 539 68 1,830 503 22,,552277 269 11,,441166 511 SSSeeepppttt 6666,,,,999999999999 6666666,,,,,,,333333388888886666666 1,419 853 4444,,,,111111113333 542 71 1,801 543 22,,447799 247 11,,442255 505 OOOcccttt 7777....222255559999 6666666,,,,,,,555555588888880000000 1,451 914 44,,221155 608 71 22,,005588 523 22,,449955 267 11,,339999 517 Nov 7777....222266660000 6666666,,,,,,,555555577777770000000 11,,338833 933 44,,225533 618 72 11,,999911 506 22,,557744 260 11,,339955 534 Dec 7777,,,,111155556666 6666666,,,,,,,444444488888882222222 11,,333333 931 4,219 609 65 1,907 486 2,602 258 384 997777 '•542 1975—Jan 7,262 6,624 1,368 968 4,289 583 54 1,992 475 2,603 248 373 1,015 557 Feb . 7,457 6,797 1,378 1,035 4,384 606 54 2,096 485 2,675 348 388 967 598 Mar 7,554 6,900 1,399 1,063 4,438 598 55 2,126 485 2,695 247 385 1,024 592 Apr 7,583 6,915 1,239 1,110 4,566 605 63 2,188 490 2,786 242 247 1,002 630 May.... 7,870 7,194 1,287 1,187 4,720 . 610 66 2,325 476 2,851 254 242 1,042 679 June 7,915 7,118 1,266 1,204 4,648 719 77 2,304 446 2,841 264 241 1,135 684 Julyf . .. 8,187 7,320 1,280 1,290 4,749 792 75 2,323 456 2,985 270 241 1.204 710 Aug. 2'., . 8,250 7,392 1,270 1,336 4,787 787 71 2,390 423 3,004 259 237 1.205 732 Excludes central banks, which are included with "Official institutions." Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates 2 Includes international and regional organizations. (Trucial States). 3 Comprises Middle East oil-exporting countries as follows: Bahrain, 4 Until Dec. 1974 includes Middle East oil-exporting countries. 14. PURCHASES AND SALES BY FOREIGNERS OF LONG-TERM SECURITIES, BY TYPE (In millions of dollars) Marketable U.S. Treas. bonds and notes i U.S. corporate Foreign bonds 3 Foreign stocks 3 securities 2 Net purchases or sales Period Pur- Net pur- Pur- Net pur- Pur- Net pur- Intl. Foreign chases Sales chases or chases Sales chases Sales Sales chases or Total and sales sales sales regional Total 4 Official Other 197 3 305 -165 470 465 6 18,574 13,810 4,764 1,474 2,467 -993 1,729 1,554 176 197 4 -472 101 -573 -642 69 16,183 14,677 1,506 1,045 3,284 -2,240 1,903 1,719 183 1975—Jan.-Aug.?' 1,340 -49 1,389 1,217 172 13,557 10,483 3,074 1,472 5,470 -3,999 1,139 -84 1974— S A e u p g t -1 -4 1 7 2 5 3 -8 4 3 1 1 5 - - 8 3 3 4 3 8 - - 7 6 3 0 -1 2 3 1 7 8 1 1 1 , , , 4 6 4 7 2 8 8 4 7 1 1 1 , , , 1 1 5 8 6 1 8 7 1 2 3 1 9 2 1 1 0 3 8 5 7 6 9 2 2 3 1 1 6 5 4 2 2 - - 2 1 -8 7 5 0 6 5 1 1 9 4 4 1 6 6 1 1 1 5 0 1 2 0 7 -6 2 4 2 9 7 Oct 91 16 76 25 50 1,414, 1,518 -104 92 170 -78 124 102 22 Nov 156 -15 171 153 17 1,101 1,246 -145 101 524 -423 117 87 30 Dec 1975—Ja n 245 118 127 118 9 1,229 900 330 131 1,207 -1,076 147 156 -9 Feb 214 9 205 102 102 1,661 1,403 258 118 554 -436 134 173 -39 Mar 1,171 421 749 724 25 1,755 1,155 600 197 647 -450 148 159 -11 -254 -210 -43 -62 20 1,640 1,397 243 167 341 -174 155 141 14 May.' 3 -89 92 123 -31 1,845 1,679 166 172 345 -173 145 157 -12 June -240 -326 86 56 31 1,754 1,332 422 215 855 -640 129 143 -15 Julyf 192 95 96 41 56 2,251 1,278 973 315 1,011 -696 109 115 -6 Aug.f 9 -67 77 -48 125 1,421 1,338 82 158 511 -353 89 95 -6 1 Excludes nonmarketable U.S. Treasury bonds and notes issued to 1975 Middle East Africa official institutions of foreign countries. 2 Includes State and local govt, securities, and securities of U.S. Govt, Jan.-Aug.f 1,246 60 agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. corporations organized to finance direct investments Jan. 100 abroad. Feb. 209 3 Includes transactions of international and regional organizatiosn. Mar. 525 4 Includes transactions (in millions of dollars) of oil-exporting countries Apr. 50 10 in Middle East and Africa as shown in the tabulation in the opposite May 175 20 column : June 106 Julyi' 1 20 Aug.f 10 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 • INTL. CAPITAL TRANSACTIONS OF THE U.S. A 69 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 Total Total Middle Other Period chases Sales chases or France many lands land King- EEuurrooppee Canada America Easti Asia2 Other 3 sales (-) dom Latin 197 3 12,767 9,978 2,790 439 2 339 686 366 2,104 99 4 577 '•5 197 4 7,634 7,095 540 203 39 330 36 -377 281 -6 -33 288 '•lO 1975—Jan.-Aug.f 10,250 7,365 2,884 185 162 261 633 438 1,763 140 16 879 66 20 1974—Aug . 4 5 6 9 0 0 4 5 4 0 5 2 8 1 8 5 -9 1 9 1 1 7 8 2 1 1 6 -6 1 5 - - 3 1 8 0 -1 4 9 6 1 6 4 9 4 2 1 3 8 * 1 Sept 673 695 -22 17 -30 9 -39 -82 -115 3 2 95 -8 Oct 604 616 -13 5 1 -2 -35 -51 -77 -2 -5 70 Nov 450 429 21 13 13 20 -10 -76 -30 14 10 27 * Dec....... 1975—Ja n 731 541 190 34 15 8 42 -8 107 12 -15 86 -2 2 Feb 1,383 849 533 21 25 14 115 147 331 20 18 153 -3 15 Mar 1,148 913 236 12 11 40 39 38 146 15 -5 85 -5 -1 Apr....... 1,318 1,058 259 -15 23 26 44 54 136 -5 2 119 2 3 May 1,527 1,149 378 -6 4 27 100 59 193 36 1 113 36 -1 June 1,321 1,063 258 32 1 19 71 36 152 21 8 87 9 -19 Julyf 1,669 1,080 589 55 31 80 139 74 396 20 13 153 -2 5 Aug.?' 1,153 712 441 52 52 47 83 38 302 21 -6 82 27 16 1 Comprises Middle East oil-exporting countries as follows: Bahrain, 2 Until 1975 includes Middle East oil-exporting countries. Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates 3 Includes international and regional organizations. (Trucial States). 16. NET PURCHASES OR SALES BY FOREIGNERS OF U.S. CORPORATE BONDS, BY COUNTRY (In millions of dollars) Ger- Nether- Switzer- United Total Total Middle Other Total Other Intl. and Period Total France many lands land KKiinnggddoomm Europe Canada Latin Easti Asia 2 Africa countries rreeggiioonnaall America 197 3 1,948 201 -33 -19 307 275 1,204 49 44 588 * 10 52 952 96 27 183 96 329 672 50 43 632 8 10 -455 197 4 192 52 21 -32 95 -146 35 89 1 932 -23 * 1 -844 1975—Jan.-Aug.f 232 1 1 -1 29 20 2 4 199 * * 7 1974—Au g 276 1 -1 2 64 65 4 2 60 * 145 Sept, 135 10 -1 13 6 24 18 5 100 * * -11 Oct -92 4 — 2 2 -1 -9 -13 6 1 399 * * -483 Nov -166 1 -4 1 64 66 -4 17 93 * * -337 Dec 1975—Ja n 140 2 * 6 59 94 14 -1 151 1 * * -120 Feb -275 -4 * 3 -91 -87 16 * 35 1 * 1 -241 Mar... ... 365 1 — 1 -1 10 23 32 4 -4 341 -19 * * 10 Apr -16 1 -26 35 -99 -100 5 3 80 1 * * -6 May -212 3 -1 7 -81 -72 7 1 81 -11 * * -6 June 164 9 8 5 32 58 4 * 65 -1 * • -218 Julyf 384 27 16 6 35 80 183 33 1 179 4 * * -17 Aug.f -358 13 -3 -18 -6 -69 -73 6 1 -1 1 * * -292 1 See note 1 to Table 15. NOTE.—Statistics include State and local govt, securities, and securities 2 See note 2 to Table 15. of U.S. Govt, agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. corporations organized to finance direct 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) 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) 1973 -818 139 -957 -141 -569 -120 -168 3 37 1972—Sept 286 336 1974 -2,056 -60 -1,997 -546 -1,529 -93 142 7 22 Dec 372 405 1975— 1973—Mar 310 364 Jan.—Aug.f -4,083 -1,347 -2,742 -125 -1,709 -300 -511 21 -116 316 243 290 255 1974—Aug.... -125 2 -127 -35 -126 -9 42 -1 1 Dec 333 231 Sept.... -34 12 -46 -41 -37 5 23 1 3 Oct -338 2 -340 -81 -244 • -16 -1 2 383 225 Nov.... -56 3 -59 -21 -8 -14 -21 2 3 354 241 Dec.. .. -393 -95 -298 -27 -190 -25 -67 12 * Sept 298 178 Dec.^' 293 193 1975—Jan -1,085 -572 -514 -41 -405 -28 -60 20 * Feb.. .. -475 -147 -328 19 -159 -97 -94 2 * 1975—Mar.2' 349 209 Mar.... -462 -106 -356 -66 -175 -3 -112 -2 1 Apr.... -160 -57 -103 -57 -6 17 -59 * 2 May. .. -185 31 -216 39 -168 * -88 -2 2 NOTE.—Data represent the money credit balances and June... -655 * -655 -22 -478 * -30 2 -111 money debit balances appearing on the books of reporting July?'... -702 -475 -232 -22 -116 -25 -69 * 4 brokers and dealers in the United States, in accounts of Aug.f.. -359 -21 -338 25 -202 -164 1 2 foreigners with them, and in their accounts carried by foreigners. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 70 INTL. CAPITAL TRANSACTIONS OF THE U.S. • OCTOBER 1975 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- forbank tutions eigners IN ALL FOREIGN COUNTRIES Total, all currencies 1972—Dec 78,202 4,678 2,113 2,565 71,304 11,504 35,773 1,594 22,432 2,220 1973—Dec 121,866 5,091 1,886 3,205 111,974 19,177 56,368 2,693 33,736 4,802 1974—July 145,058 6,402 3,787 2,614 132,945 25,726 61,949 3,689 41,580 5,711 Aug 148,719 9,366 6,868 2,498 133,473 26,428 60,524 3,423 43,098 5,880 Sept 147,720 6,267 3,622 2,645 135,272 26,322 61 ,301 3,721 43,927 6,181 Oct 145,906 4,661 2,027 2,634 135,284 26,958 59,617 3,849 44,860 5,962 Nov 150,274 7,751 5,159 2,592 136,442 28,366 58,727 4,019 45,330 6,081 Dec 151,905 6,898 4,464 2,434 138,713 27,559 60,283 4,077 46,795 6,294 1975—Jan 151,140 7,029 4,360 2,669 138,143 27,894 58,863 4,152 47,234 5,968 Feb 151,662 5,486 2,882 2,604 140,345 28,969 58,794 4,246 48,335 5,832 Mar 155,204 5,326 2,638 2,688 143,750 28,330 61,611 4,407 49,402 6,127 Apr 155,616 5,831 3,052 2,779 143,949 29,195 60,292 4,353 50,109 5,836 May 156,909 7,725 4,889 2,837 143,101 27,581 60,330 4,494 50,697 6,083 June 162,207 5,538 2,341 3,196 150,385 30,830 63,709 4,824 51,021 6,284 Julyp 160,587 5,915 2,785 3,129 148,114 30,122 62,438 4,795 50,759 6,558 Payable in U.S. doUars. 1972—Dec 52,636 4,419 2,091 2,327 47,444 7,869 26,251 1,059 12,264 773 1973—Dec 79,445 4,599 1,848 2,751 73,018 12,799 39,527 1,777 18,915 1,828 1974—July 101,534 6,110 3,738 2,373 92,733 18,480 46,422 2,889 24,942 2,691 Aug 105,827 9,055 6,816 2,239 93,893 19,694 45,681 2,780 25,738 2,879 Sept 104,345 5,990 3,564 2,426 95,304 19,413 46,517 2,873 26,501 3,050 Oct 101,977 4,379 1,970 2,409 94,650 19,785 44,832 3,006 27,027 2,948 Nov 105,066 7,445 5,105 2,340 94,581 20,623 43,741 3,192 27,026 3,039 Dec 105,969 6,602 4,428 2,174 96,210 19,688 45,067 3,289 28,166 3,157 1975—Jan 105,776 6,706 4,318 2,387 95,989 20,448 43,151 3,370 29,020 3,082 Feb 104,360 5,141 2,839 2,302 96,327 20,827 42,672 3,431 29,397 2,891 Mar 107,519 5,012 2,607 2,405 99,637 19,836 46,118 3,604 30,079 2,870 Apr 108,399 5,466 3,009 2,456 100,231 20,993 45,172 3,599 30,467 2,702 May 111,637 7,316 4,824 2,491 101,384 21,281 45,403 3,685 31,016 2,938 June 117,295 5,111 2,280 2,832 109,181 24,529 49,132 3,949 31,571 3,003 JulyP 117,265 5,508 2,734 2,774 108,281 24,180 48,572 3,929 31,600 3,476 IN UNITED KINGDOM Total, all currencies 1972—Dec 43,467 2,234 1,138 1,096 40,214 5,659 23,842 606 10,106 1,018 1973—Dec 61,732 1,789 738 1,051 57,761 8,773 34,442 735 13,811 2,183 1974_july 69,197 3,046 2,205 840 63,974 12,486 34,575 718 16,195 2,177 Aug 70,382 3,599 2,858 741 64,496 12,790 33,942 666 17,097 2,287 Sept 70,965 2,860 2,087 774 65,596 12,436 34,959 829 17,372 2,509 Oct 68,123 1,325 502 823 64,462 12,386 33,608 887 17,581 2,336 Nov 69,137 3,387 2,568 818 63,571 13,122 32,128 753 17,567 2,179 Dec 69,804 3,248 2,472 776 64,111 12,724 32,701 788 17,898 2,445 1975—Jan 68,451 2,633 1,902 731 63,527 12,873 32,057 854 17,743 2,291 Feb 67,038 1,818 1,023 796 63,250 13,246 31,641 848 17,515 1,970 Mar 69,654 1 ,798 982 817 65,693 12,806 34,260 929 17,699 2,163 Apr 69,248 2,017 1 ,126 891 65,330 13,314 33,079 919 18,018 1,902 May 68,707 2,535 1,689 845 64,269 12,491 32,443 920 18,415 1,904 June 70,751 1,834 641 1,192 66,868 13,765 34,634 948 17,522 2,049 Julys' 70,382 1,904 807 1,097 66,277 14,414 33,431 923 17,509 2,202 Payable in U.S. dollars. 1972—Dec 30,257 2,146 1,131 1,015 27,664 4,326 17,331 543 5,464 446 1973—Dec 40,323 1,642 730 912 37,816 6,509 23,389 510 7,409 865 I974_July 48,158 2,958 2,194 765 44,061 9,932 24,132 566 9,432 1,138 Aug 49,406 3,507 2,847 660 44,677 10,529 23,948 563 9,637 1,222 Sept 50,075 2,774 2,067 708 45,960 10,305 25,044 676 9,937 1,339 Oct 47,968 1,235 479 756 45,421 10,234 24,499 734 9,954 1,312 Nov 48,710 3,277 2,546 730 44,198 10,796 22,936 615 9,852 1,235 Dec 49,211 3,146 2,468 678 44,693 10,265 23,716 610 10,102 1,372 1975—Jan 47,769 2,542 1,892 650 43,959 10,421 22,610 661 10,268 1,267 Feb 46,019 1,697 1,017 680 43,244 10,615 21,918 657 10,055 1,077 Mar 48,939 1,687 974 713 46,039 10,373 24,874 736 10,057 1,212 Apr 48,797 1,885 1,109 776 45,923 10,995 23,990 721 10,217 989 May 48,506 2,404 1,671 733 45,180 10,656 23,320 698 10,506 922 June 51,365 1,669 623 1,045 48,713 12,054 25,761 721 10,178 983 Julyf 51,665 1,742 793 949 48,787 12,664 25,143 713 10,267 1,136 IN BAHAMAS AND CAYMANS i Total, all currencies 1972—Dec 12,642 1,486 214 1,272 10,986 725 5,507 431 4,322 170 ; 973—Dec 23,771 2,210 317 1,893 21,041 1,928 9,895 1,151 8,068 520 1974—July 30,403 2,380 870 1,510 27,208 3,044 12,059 1,719 10,386 815 Aug 32,317 4,624 3,153 1,471 26,914 3,056 11,488 1,612 10,757 779 Sept 30,080 2,315 750 1,564 26,910 2,770 11,515 1,728 10,896 856 Oct 30,071 2,206 711 1,495 27,075 3,178 11,347 1,756 10,795 790 Nov 32,313 3,299 1,816 1,484 28,130 3,829 11,371 1,993 10,937 883 Dec 31,733 2,463 1,081 1,382 28,455 3,478 11,354 2,022 11,601 815 1975—Jan 33,131 3,223 1,594 1,629 29,070 3,644 11,194 2,027 12,206 838 Feb 33,534 2,563 1,072 1,491 30,137 3,855 11,474 2,060 12,748 834 Mar 33,793 2,405 839 1,567 30,671 3,568 11,634 2,393 13,077 716 Apr 35,666 2,587 1,006 1,581 32,359 4,320 12,229 2,419 13,392 720 May 38,198 4,125 2,468 1,657 33,215 4,270 13,181 2,531 13,233 858 June 39,645 2,632 987 1,645 36,182 5,831 13,747 2,772 13,832 831 Julyf 239,611 2,783 1,131 1,652 35,678 5,015 14,065 • 2,747 13,851 1,150 Digitized for FRASFEorR n otes see p. A-74. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1975 a INTL. CAPITAL TRANSACTIONS OF THE U.S. A 71 19b. LIABILITIES OF FOREIGN BRANCHES OF U.S. BANKS (In millions of dollars) To U.S. To foreigners Total Other Offi- Non- Other Month-end LLooccaattiioonn aanndd ccuurrrreennccyy ffoorrmm Total Parent Other Total branches Other cial bank bank of parent banks insti- forbank tutions eigners IN ALL FOREIGN COUNTRIES 78,203 3,501 997 2,504 72,121 11,121 41,218 8,351 11,432 2,580 1972—Dec. Total, all currencies 121,866 5,610 1,642 3,968 111,615 18,213 65,389 10,330 17,683 4,641 1973—Dec. 145,057 10,129 4,373 5,757 128,616 25,313 66,855 15,030 21,418 6,312 1974—July 148,719 9,419 4,123 5,296 132,774 26,007 68,772 16,304 21,690 6,527 Aug. 147,720 9,981 5,058 4,923 131,016 26,337 66,071 17,488 21,121 6,723 Sept. 145,906 10,449 5,853 4,596 128,910 26,619 62,606 18,171 21,514 6,548 Oct. 150,275 11,901 6,249 5,652 131,619 27,717 63,596 19,979 20,327 6,755 Nov. 151,905 11,982 5,809 6,173 132,990 26,941 65,675 20,185 20,189 6,933 Dec. 151,140 11,831 6,356 5,476 132,775 27,019 64,147 21,683 19,926 6,533 1975—Jan. 151,662 12,561 6,607 5,954 132,594 28,185 63,402 21,951 19,057 6,507 Feb. 155,204 15,407 8,849 6,557 133,540 28,214 63,419 22,577 19,330 6,257 Mar. 155,617 14,936 8,703 6,233 134,594 29,192 62,287 23,236 19,879 6,088 Apr. 156,910 16,860 10,366 6,494 133,806 26,725 64,700 22,223 20,158 6,243 May 162,207 18,611 12,197 6,414 137,097 30,347 64,933 21,104 20,713 6,499 June'" 160,587 17,695 11,533 6,162 136,728 30,185 65,928 20,371 20,244 6,163 JulyP 54,878 3,050 847 2,202 50,406 7,955 29,229 6,781 6,441 1,422 1972—Dec. PPaayyaabbllee iinn UU..SS.. ddoollllaarrss 80,374 5,027 1,477 3,550 73,189 12,554 43,641 7,491 9,502 2,158 1973—Dec. 102,432 9,494 4,160 5,334 89,264 18,438 45,768 12,337 12,721 3,675 1974—July 106,909 8,786 3,932 4,853 94,178 19,456 48,394 13,508 12,821 3,945 Aug. 106,004 9,294 4,833 4,461 92,630 19,599 46,020 14,533 12,478 4,080 Sept. 103,934 9,905 5,650 4,255 90,136 19,481 42,690 15,076 12,889 3,893 Oct. 107,427 11,215 6,023 5,192 92,233 20,242 43,147 16,789 12,054 3,979 Nov. 107,890 11,437 5,641 5,795 92,503 19,330 43,656 17,444 12,072 3,951 Dec. 108,190 11,368 6,204 5,164 93,044 19,999 42,854 18,343 11,848 3,778 1975—Jan. 106,125 12,063 6,460 5,603 90,426 20,109 40,701 18,708 10,907 3,636 Feb. 109,501 14,795 8,660 6,135 91,338 19,880 41,216 19,303 10,939 3,368 Mar. 110,405 14,280 8,520 5,760 92,712 20,683 40,996 19,909 11,123 3,414 Apr. 114,105 16,259 10,192 6,067 94,449 20,521 43,860 18,928 11,139 3,397 May 119,385 18,000 12,011 5,990 97,825 23,969 44,199 17,968 11,688 3,560 June 119,316 17,090 11,335 5,755 99,010 24,112 45,894 17,393 11,610 3,216 JulyP IN UNITED KINGDOM 43,467 1,453 113 1,340 41,020 2,961 24,596 6,433 7,030 994 1972—Dec. Total, all currencies 61,732 2,431 136 2,295 57,311 3,944 34,979 8,140 10,248 1,990 1973—Dec. 69,197 3,439 611 2,828 63,557 5,099 34,393 11,543 12,521 2,201 1974—July 70,382 3,701 713 2,988 64,309 4,794 33,920 12,737 12,858 2,373 Aug. 70,965 3,503 635 2,867 64,919 5,428 33,766 13,544 12,181 2,543 Sept. 68,123 3,227 683 2,544 62,621 5,237 30,621 14,051 12,712 2,275 Oct. 69,137 4,376 889 3,487 62,397 5,071 30,352 15,454 11,521 2,363 Nov. 69,804 3,978 510 3,468 63,409 4,762 32,040 15,258 11,349 2,418 Dec. 68,451 3,804 873 2,931 62,360 4,567 30,266 16,419 11,108 2,287 1975—Jan. 67,038 4,376 913 3,462 60,546 4,693 29,207 16,517 10,127 2,117 Feb. 69,654 5,095 1,224 3,871 62,363 4,630 29,990 17,305 10,438 2,196 Mar. 69,248 4,596 1,342 3,254 62,625 5,394 28,666 17,812 10,753 2,026 Apr. 68,708 4,772 1,337 3,435 61,772 '5,325 28,957 16,726 10,764 2,164 May 70,751 4,668 1,451 3,217 63,857 7,030 30,030 15,524 11,274 2,226 June 70,382 4,679 1,718 2,961 63,501 6,475 30,636 15,312 11,077 2,203 JulyP 30,810 1,272 72 1,200 29,002 2,008 17,379 5,329 4,287 535 1972—Dec. PPaayyaabbllee iinn UU..SS.. ddoollllaarrss 39,689 2,173 113 2,060 36,646 2,519 22,051 5,923 6,152 870 1973—Dec. 48,018 3,176 568 2,608 43,528 3,364 22,388 9,450 8,326 1,314 1974—July 49,481 3,448 692 2,756 44,654 3,278 22,558 10,437 8,382 1,380 Aug. 50,212 3,177 605 2,572 45,550 3,667 22,818 11,035 8,030 1,486 Sept. 48,314 2,988 651 2,337 44,033 3,690 20,203 11,444 8,696 1,294 Oct. 49,668 4,037 865 3,172 44,256 3,557 20,200 12,808 7,691 1,375 Nov. 49,666 3,744 484 3,261 44,594 3,256 20,526 13,225 7,587 1,328 Dec. 48,490 3,599 854 2,744 43,578 3,172 19,061 13,736 7,609 1,313 1975—Jan. 46,698 4,164 895 3,269 41,350 3,266 17,673 13,932 6,479 1,184 Feb. 49,533 4,805 1,189 3,616 43,546 3,072 19,128 14,688 6,658 1,183 Mar. 49,177 4,297 1,313 2,984 43,758 3,886 17,997 15,158 6,717 1,122 Apr. 49,479 4,487 1,314 3,173 43,784 4,220 18,640 14,135 6,789 1,208 May 51,848 4,369 1,412 2,957 46,312 5,962 20,039 13,083 7,228 1,167 June 51,826 4,421 1,684 2,737 46,217 5,478 20,775 12,915 7,049 1,188 JulyP IN BAHAMAS AND CAYMANS 1 12,643 1,220 312 908 11,260 1,818 7,875 230 1,338 163 1972—Dec. TToottaall,, aallll ccuurrrreenncciieess 23,771 1,573 307 1,266 21,747 5,508 14,071 492 1,676 451 1973—Dec. 30,403 3,684 1,238 2,446 26,039 7,663 14,595 1,627 2,153 681 1974—July 32,317 2,909 1,123 1,786 28,670 8,079 16,688 1,715 2,188 738 Aug. 30,080 3,721 2,151 1,571 25,626 7,072 14,419 1,840 2,295 733 Sept. 30,071 4,311 2,706 1,605 24,995 7,211 13,669 1,980 2,135 765 Oct. 32,313 4,426 2,699 1,727 27,107 8,538 14,132 2,296 2,141 779 Nov. 31,733 4,815 2,636 2,180 26,140 7,702 14,050 2,377 2,011 778 Dec. 33,131 5,036 2,926 2,111 27,343 8,269 14,259 2,595 2,220 752 1975—Jan. 33,534 5,243 3,281 1,962 27,498 8,975 13,550 2,711 2,262 793 Feb. 33,793 7,228 5,081 2,147 25,875 8,498 12,614 2,520 2,243 690 Mar. 35,667 7,420 5,083 2,337 27,536 8,756 13,694 2,769 2,318 711 Apr. 38,198 9,090 6,766 2,324 28,309 6,872 16,018 2,977 2,441 799 May 39,645 10,866 8,322 2,544 27,987 8,075 14,482 3,036 2,393 793 June i39,611 9,988 7,404 2,584 28,933 8,401 15,539 2,500 2,492 690 Julyp Digitized forF ForR nAotSesE sRee p. A-74, http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 72 INTL. CAPITAL TRANSACTIONS OF THE U.S. • OCTOBER 1975 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 EEnndd ooff EEnndd ooff UUnniitteedd ppeerriioodd DDeeppoossiittss U se .S cu . r T it r ie e s a s i . Ear g m o a ld rk ed ppeerriioodd TToottaall Deposits i S n t h e ve o rm s rt t - - Deposits i S n t h e ve o rm s rt t - - KK dd ii oo nn mm gg-- CCaannaaddaa ments I ments 1 1972 325 50,934 215,530 1973 251 52,070 217,068 1,491 1,062 161 183 86 663 534 1974 418 55,600 16,838 1,141 697 150 173 121 372 443 1974—Sept... 411 53,849 16,892 19712 / 1 I 1 ,6 ,5 4 0 8 7 1 1, , 0 0 7 9 8 2 2 1 0 2 3 7 2 23 3 4 4 1 6 2 8 0 5 5 7 8 7 0 4 5 4 8 3 7 Oct.... 376 54,691 16,875 N De o c v . . . . . . 4 6 1 2 8 6 5 5 5 5 , , 9 6 0 0 8 0 1 1 6 6 , , 8 8 6 3 5 8 19722 / ( I 2 , , 9 3 6 7 5 4 1 1 , , 4 9 4 1 6 0 1 5 6 5 9 3 3 0 4 7 0 4 6 2 8 7 9 0 1 2 1 4 5 8 3 5 6 1973 3,162 2,588 37 427 109 1,118 770 I975_jan.... 391 58,001 16,837 Feb... 409 60,864 16,818 1974—July 3,771 3,223 74 341 133 1,441 828 Mar... 402 60,729 16,818 Aug 3,504 2,941 51 369 144 1,436 872 Apr.... 270 60,618 16,818 Sept . , 3,073 2,491 30 362 189 1,194 864 May. . 310 61,539 16,818 Oct 2,698 2,132 25 325 216 1,122 835 June... 373 61,406 16,803 Nov 2,998 2,380 15 326 277 1,285 941 July... 369 60,999 16,803 Dec 3,303 2,582 56 403 261 1,342 951 Aug... 342 60,120 16,803 Sept.. . 324 58,420 16,795 1975—Jan 3,215 2,511 45 314 345 1,136 1,112 Feb 3,326 2,512 46 356 412 1,079 1,136 Mar 3,234 2,434 66 347 387 1,055 1,132 1 Marketable U.S. Treasury bills, certificates of in- Apr 3,359 2,449 39 313 559 1,065 1,277 debtedness, notes, and bonds and nonmarketable U.S. May , 3,182 2,216 47 391 527 905 1,238 Treasury securities payable in dollars and in foreign June?' 3,112 2,232 95 351 433 970 1,107 currencies. JulyJ' 3,221 2,278 118 420 405 904 1,106 2 The value of earmarked gold increased because of the changes in par value of the U.S. dollar in May 1972, and in Oct. 1973. 1 Negotiable and other readily transferable foreign obligations payable on demand or having a contractual maturity of not more than 1 year from the date on which the NOTE.—Excludes deposits and U.S. Treasury securities obligation was incurred by the foreigner. held for international and regional organizations. Ear- 2 Data on the 2 lines for this date differ because of changes in reporting coverage. marked gold is gold held for foreign and international Figures on the first line are comparable in coverage with those shown for the preceding accounts and is not included in the gold stock of the date; figures on the second line are comparable with those shown for the following date. 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 foreign currencies EEEnnnddd ooofff pppeeerrriiioooddd PPaayyaabbllee PPaayyaabbllee PPaayyaabbllee TToottaall iinn iinn TToottaall iinn ddoollllaarrss ffoorreeiiggnn ddoollllaarrss Deposits with ccuurrrreenncciieess banks abroad Other in reporter's name 1971—Sept 2,564 2,109 454 4,894 4,186 383 326 / 2,704 2,229 475 5,185 4,535 318 333 Dec. 1 \ 2,763 2,301 463 5,000 4,467 289 244 1972—Mar 2,844 2,407 437 5,173 4,557 317 300 June 2,925 2,452 472 5,326 4,685 374 268 Sept 2,933 2,435 498 5,487 4,833 426 228 / 3,119 2,635 484 5,721 5,074 410 237 1 3,399 2,921 478 6,312 5,645 393 274 1973 Mar 3,307 2,828 478 7,028 6,150 456 422 June 3,286 2,754 532 7,304 6,453 493 358 Sept 3,574 2,915 659 7,648 6,710 528 411 Dec 3,962 3,249 713 8,438 7,522 485 431 1974 Mar 4,382 3,563 819 10,407 9,465 400 542 June 5,133 4,168 965 10,965 10,030 420 516 Sept 5,600 4,646 954 10,632 9,656 419 558 Dec 5,766 4,851 915 11,170 10,125 455 590 1975—Mar.f 5,723 4,860 863 10,792 9,679 398 715 1 Data on the 2 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

OCTOBER 1975 • INTL. CAPITAL TRANSACTIONS OF THE U.S. A 73 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 1974 1975 1974 1975 Mar. June Sept. Dec. Mar.f Mar. June Sept. Dec. Mar.f Europe: Austria 5 12 18 20 26 16 17 15 26 15 Belgium-Luxembourg... 226 417 500 515 467 152 139 114 128 103 Denmark 17 18 22 24 23 37 27 25 42 35 Finland 8 9 12 16 16 42 80 91 120 76 France 134 177 164 202 151 384 511 463 431 329 Germany, Fed. Rep. of.. 237 220 246 314 350 337 348 328 339 276 Greece 21 28 28 39 25 87 76 69 65 59 Italy 121 131 137 128 113 322 395 415 397 315 Netherlands 114 104 120 117 121 103 126 144 148 157 Norway 9 8 10 9 9 22 35 32 36 34 Portugal 24 17 20 19 13 112 101 69 81 42 Spain 60 45 48 56 54 406 409 414 369 359 Sweden 43 52 40 38 32 74 106 97 89 66 Switzerland 92 112 106 140 157 91 78 154 136 86 Turkey 9 11 20 8 12 23 28 24 26 33 United Kingdom 1,118 1,244 1,415 1,216 1,101 1,839 1,871 1,768 1,853 1,635 Yugoslavia 16 18 17 40 52 15 23 23 22 33 Other Western Europe.. 3 6 7 5 5 19 23 20 21 23 Eastern Europe 29 34 80 70 54 79 97 90 142 114 Total. 2,284 2,662 3,010 2,976 2,781 4,159 4,491 4,355 4,471 3,790 Canada. 338 312 298 298 260 1,534 1,577 1,570 1,615 1,868 Latin America: Argentina 19 19 28 36 31 52 53 59 69 75 Bahamas 211 307 325 281 299 746 977 518 594 616 Brazil 78 125 160 118 121 411 523 419 461 376 Chile 7 10 14 22 23 78 64 124 106 69 Colombia 18 22 13 14 11 44 51 49 51 51 Cuba * * * * * 1 1 1 1 1 Mexico 77 76 64 63 72 260 263 287 297 325 Panama 14 19 21 28 18 94 84 114 132 110 Peru 17 11 15 14 18 65 60 40 44 46 Uruguay 3 2 2 2 3 6 5 6 5 15 Venezuela 50 43 53 49 39 136 172 190 190 178 Other L.A. republics 45 60 63 83 65 172 172 182 193 194 Neth. Antilles and Surinam. 5 7 8 24 48 13 17 14 20 16 Other Latin America 37 59 50 81 114 167 157 169 147 192 Total. 581 761 818 816 862 2,245 2,599 2,169 2,308 2,266 Asia: China, People's Republic of (China Mainland) 20 39 23 17 8 8 3 8 17 19 China, Rep. of (Taiwan) 51 72 72 93 102 175 118 127 137 121 Hong Kong 24 19 19 19 19 69 68 64 63 82 India 14 13 10 7 10 36 31 37 37 32 Indonesia 13 22 38 60 63 51 67 81 85 110 Israel 31 39 40 50 63 38 37 53 44 46 Japan 374 374 352 348 331 1,214 957 1,100 1,148 1,238 Korea 38 45 66 75 43 109 124 123 201 165 Philippines 9 19 28 25 19 87 86 108 93 86 Thailand 7 7 10 10 9 21 22 23 24 30 Other Asia 262 404 431 536 645 264 314 311 387 399 Total 844 1,054 1,089 1,239 1,311 2,074 1,827 2,034 2,237 2,328 Africa: Egypt 35 12 6 3 5 9 13 16 15 24 South Africa 22 24 35 43 54 69 85 90 101 109 Zaire 21 15 17 18 17 20 17 13 24 18 Other Africa 134 156 114 129 142 154 199 205 234 242 Total 212 206 172 193 217 253 314 325 374 393 Other countries: Australia 73 51 57 56 60 110 117 134 116 100 All other 22 24 32 30 31 31 39 44 49 44 Total 95 74 89 86 91 142 157 178 165 144 International and regional 29 63 125 159 201 1 1 1 • 1 Grand total 4,382 5,133 5,600 5,766 5,723 10,407 10,965 10,632 11,170 10,792 NOTE.—Reported by exporters, importers, and industrial and com- Data exclude claims held through U.S. banks, and intercompany accounts mercial concerns and other nonbanking institutions in the United States. between U.S. companies and their foreign affiliates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 74 INTL. CAPITAL TRANSACTIONS OF THE U.S. • OCTOBER 1975 24. LONG-TERM LIABILITIES TO AND CLAIMS ON FOREIGNERS REPORTED BY NONBANKING CONCERNS (Amounts outstanding; in millions of dollars) Claims Country or area EEEnnnddd ooofff pppeeerrriiioooddd TTToootttaaalll llliiiaaabbbiiillliiitttiiieeesss TToottaall K U in n g it d e o d m E O u t r h o e p r e Canada Brazil Mexico A O m La t e h t r e i i n c r a Japan O A t s h i e a r Africa o A th ll e r 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 TA 1 / 3,159 3,118 128 705 761 174 60 652 141 327 86 85 1 3,138 3,068 128 704 717 174 60 653 136 325 86 84 1972—June 3,300 3,206 108 712 748 188 61 671 161 377 86 93 Sept 3,448 3,187 128 695 757 177 63 662 132 390 89 96 1 / 3,540 3,312 163 715 775 184 60 658 156 406 87 109 \ 3,592 3,284 191 745 759 187 64 703 133 378 86 38 1973—Mar 3,770 3,421 156 802 775 165 63 796 123 393 105 45 June 3,771 3,472 180 805 782 146 65 825 124 390 108 48 Sept 3,979 3,632 216 822 800 147 73 832 134 449 108 51 Dec 3,867 3,695 290 763 854 145 79 824 122 450 115 53 1974_Mar 3,816 3,813 368 737 888 194 81 800 118 448 119 61 June 3,514 3,809 363 696 907 184 138 742 117 477 122 61 Sept 3,340 3,932 370 702 943 181 145 776 114 523 118 59 Dec 3,677 4,112 364 640 975 187 143 1,018 107 505 121 54 1975—Mar.f 3,924 4,113 339 653 1,019 182 160 966 102 528 130 54 1 Data on the 2 lines shown for this date differ because of changes shown for the preceding date; figures on the second line are comparable in reporting coverage. Figures on the first line are comparable with those with those shown for the following date. 25. 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 days 4 197 3 5.43 5.27 10.45 9.40 8.27 7.96 8.92 6.40 10.18 4.07 4.94 5.09 1974 7.63 7.69 12.99 11.36 9.85 9.48 12.87 6.06 8.76 6.90 8.21 6.67 1974—Sept. 8.70 8.84 12.11 10.91 10.69 9.50 13.41 5.63 9.00 7.42 5.08 7.00 Oct., 8.67 8.56 11.95 10.93 10.81 9.50 13.06 5.63 8.88 7.38 7.81 7.00 Nov. 7.84 7.86 12.07 10.98 7.70 9.50 12.40 5.63 7.20 6.72 7.00 7.00 Dec. 7.29 7.44 12.91 10.99 7.23 9.50 11.88 5.13 8.25 6.69 6.96 7.00 1975—Jan.. 6.65 6.82 11.93 10.59 8.40 9.30 11.20 5.13 7.54 6.60 6.18 7.00 Feb. 6.34 6.88 11.34 9.88 7.72 9.50 9.91 3.88 4.04 6.56 7.33 7.00 Mar. 6.29 6.73 10.11 9.49 7.53 8.22 9.06 3.38 4.87 5.94 5.87 7.00 6.59 6.68 9.41 9.26 7.50 7.09 8.34 3.38 4.62 5.53 4.13 6.50 May 6.89 6.88 10.00 9.47 7.81 6.25 7.56 3.38 5.32 3.82 1.98 6.50 June 6.96 6.88 9.72 9.43 7.00 6.25 7.31 3.38 4.91 2.78 1.37 6.50 July. 7.22 7.17 9.86 9.71 7.34 6.25 7.25 3.38 3.98 2.98 1 .99 6.50 Aug. 7.72 7.42 10.59 10.43 8.59 6.43 7.16 3.38 1.93 2.90 1.51 6.00 Sept. 8.37 7.74 10.43 10.36 9.40 6.50 6.91 4.25 2.60 0.94 5.50 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-70 AND A-71, 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 $36,177 million and $36,583 million, respectively, on July 31, 1975. 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

OCTOBER 1975 • CENTRAL BANK AND EXCHANGE RATES A 75 26. CENTRAL BANK RATES FOR DISCOUNTS AND ADVANCES TO COMMERCIAL BANKS (Per cent per annum) Rate as of September 30, 1975 Rate as of September 30, 1975 CCoouunnttrryy Country Per Month Per Month cent effective cent effective Argentina. . 111111111888888888.........000000000 FFFFFFFFFeeeeeeeeebbbbbbbbb......... 111111111999999999777777777222222222 Italy 666666666.........000000000 SSSSSSSSSeeeeeeeeepppppppppttttttttt......... 111111111999999999777777777555555555 Austria 666666666.........000000000 AAAAAAAAAppppppppprrrrrrrrr......... 111111111999999999777777777555555555 777777777.........555555555 AAAAAAAAAuuuuuuuuuggggggggg......... 111111111999999999777777777555555555 Belgium 666666666.........000000000 AAAAAAAAAuuuuuuuuuggggggggg......... 111111111999999999777777777555555555 444444444.........555555555 JJJJJJJJJuuuuuuuuunnnnnnnnneeeeeeeee 111111111999999999444444444222222222 Brazil.. 111111111888888888.........000000000 FFFFFFFFFeeeeeeeeebbbbbbbbb......... 111111111999999999777777777222222222 Netherlands 444444444.........555555555 SSSSSSSSSeeeeeeeeepppppppppttttttttt......... 111111111999999999777777777555555555 Canada 999999999.........000000000 SSSSSSSSSeeeeeeeeepppppppppttttttttt......... 111111111999999999777777777555555555 555555555.........555555555 MMMMMMMMMaaaaaaaaarrrrrrrrr......... 111111111999999999777777777444444444 Denmark 777777777.........555555555 AAAAAAAAAuuuuuuuuuggggggggg......... 111111111999999999777777777555555555 666666666.........000000000 AAAAAAAAAuuuuuuuuuggggggggg......... 111111111999999999777777777555555555 France 888888888.........000000000 SSSSSSSSSeeeeeeeeepppppppppttttttttt......... 111111111999999999777777777555555555 Switzerland 333333333.........555555555 SSSSSSSSSeeeeeeeeepppppppppttttttttt......... 111111111999999999777777777555555555 Germany Fed Rep of . 333333333.........555555555 SSSSSSSSSeeeeeeeeepppppppppttttttttt......... 111111111999999999777777777555555555 United Kingdom 111111111111111111 .........000000000 JJJJJJJJJuuuuuuuuulllllllllyyyyyyyyy 111111111999999999777777777555555555 555555555.........000000000 OOOOOOOOOcccccccccttttttttt......... 111111111999999999777777777000000000 NOTE.—Rates shown are mainly those at which the central bank either Japan—Penalty rates (exceeding the basic rate shown) for borromings 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 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, Argentina—3 and 5 per cent for certaui rural and industrial paper, de- per cent for advances against government bonds, and per cent for pending on type of transaction; rediscounts of certain industrial paper and on advances against promissory Brazil—% per cent for secured paper and 4 per cent for certain agricultural notes or securities of first-class Venezuelan companies. paper; 27. 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) 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 1974. 143.89 5.3564 2.5713 102.257 16.442 20.805 38.723 12.460 234.03 .15372 .34302 1974--Sept 144.87 5.2975 2.5364 101.384 16.111 20.831 37.580 12.316 231.65 .15103 .33439 Oct 130.92 5.4068 2.5939 101.727 16.592 21.131 38.571 12.416 233.29 .14992 .33404 Nov 131.10 5.5511 2.6529 101.280 16.997 21.384 39.836 12.397 232.52 .14996 .33325 Dec 131.72 5.7176 2.7158 101.192 17.315 22.109 40.816 12.352 232.94 .15179 .33288 1975—Jan 132.95 5.9477 2.8190 100.526 17.816 22.893 42.292 12.300 236.23 .15504 .33370 Feb 134.80 6.0400 2.8753 99.957 18.064 23.390 42.981 12.550 239.58 .15678 .34294 Mar 135.85 6.0648 2.9083 99.954 18.397 23.804 43.120 12.900 241.80 .15842 .34731 Apr 134.16 5.9355 2.8433 98.913 18.119 23.806 42.092 12.686 237.07 .15767 .34224 May 134.04 6.0033 2.8631 97.222 18.299 24.655 42.546 12.391 232.05 .15937 .34314 June 133.55 6.0338 2.8603 97.426 18.392 24.971 42.726 12.210 228.03 .15982 .34077 July 130.95 5.7223 2.7123 97.004 17.477 23.659 40.469 11.777 218.45 .15387 .33741 Aug 128.15 5.4991 2.6129 96.581 16.783 22.848 38.857 11.379 211.43 .14963 .33560 Sept 128.87 5.4029 2.5485 97.437 16.445 22.367 38.191 11.281 208.34 .14740 .33345 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) 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 1974 41.682 8.0000 37.267 140.02 18.119 3.9506 146.98 1.7337 22.563 33.688 234.03 1974_Sept 41.443 8.0000 36.870 139.64 17.993 3.8565 142.69 1.7339 22.333 33.371 231.65 Oct 41.560 8.0000 37.639 129.95 18.165 3.9246 142.75 1.7422 22.683 34.528 233.29 Nov 43.075 8.0000 38.438 130.42 18.404 3.9911 143.88 1.7522 23.175 36.384 232.52 Dec 42.431 8.0000 39.331 130.56 18.873 4.0400 144.70 1.7716 23.897 38.442 232.94 1975—Jan 43.359 8.0000 40.715 131.72 19.579 4.0855 145.05 1.7800 24.750 39.571 236.23 Feb 44.136 8.0000 41.582 133.30 19.977 4.1139 147.16 1.7784 25.149 40.450 239.58 Mar 44.582 8.0000 42.124 134.31 20.357 4.1276 148.70 1.7907 25.481 40.273 241.80 Apr 43.797 8.0000 41.291 132.66 20.049 4.0596 147.01 1 .7756 25.171 39.080 237.07 May 44.278 8.0000 41.581 131.66 20.198 4.0933 146.69 1.7871 25.422 39.851 232,05 June 43.856 8.0000 41.502 130.86 20.393 4.1124 146.31 1.7922 25.532 40.086 228.03 July 41.442 8.0000 39.154 127.73 19.241 3.9227 139.75 1.7446 24.213 38.272 218.45 Aug 39.779 8.0000 37.887 111.79 18.304 3.7700 139.72 1.7140 23.174 37.332 211.43 Sept 38.219 8.0000 37.229 105.50 17.834 3.7048 131.40 1.6914 22.501 36.905 208.35 NOTE.—^Averages of certified noon buying rates in New York for cable transfers. For desr iption of rates and back data, see "International Finance," Section 15 of Supplement to Banking and Monetary Statistics, 1962. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

ON Board of Governors of the Federal Reserve System ARTHUR F. BURNS, Chairman GEORGE W. MITCHELL, Vice Chairman JEFFREY M. BUCHER PHILIP E. COLDWELL ROBERT C. HOLLAND HENRY C. WALLICH PHILIP C. JACKSON, JR. OFFICE OF M A N A G I NG DIRECTOR OFFICE OF BOARD MEMBERS OFFICE OF M A N A G I NG DIRECTOR FOR FOR OPERATIONS RESEARCH A ND ECONOMIC POLICY THOMAS J. O'CONNELL, Counsel to the Chairman J. CHARLES PARTEE, Managing Director JOHN M. DENKLER, Managing Director ROBERT SOLOMON, Adviser to the Board STEPHEN H. AXILROD, Adviser to the Board ROBERT J. LAWRENCE, Deputy Managing JOSEPH R. COYNE, Assistant to the Board ARTHUR L. BROIDA, Assistant to the Board Director KENNETH A. GUENTHER, Assistant to the Board STANLEY J. SIGEL, Assistant to the Board GORDON B. GRIMWOOD, Assistant Director JAY PAUL BRENNEMAN, Special Assistant to the MURRAY ALTMANN, Special Assistant to the and Program Director for Board Board Contingency Planning JOHN J. HART, Special Assistant to the Board NORMAND R. V. BERNARD, Special Assistant WILLIAM W. LAYTON, Director of Equal FRANK O'BRIEN, JR., Special Assistant to the to the Board Employment Opportunity Board BRENTON C. LEAVITT, Program Director for DONALD J. WINN, Special Assistant to the Banking Structure Board PETER E. BARNA, Program Director for DIVISION OF RESEARCH AND STATISTICS Bank Holding Company Analysis LYLE E. GRAMLEY, Director JAMES L. KICHLINE, Associate Director JOSEPH S. ZEISEL, Associate Director EDWARD C. ETTIN, Adviser LEGAL DIVISION JOHN H. KALCHBRENNER, Adviser PETER M. KEIR, Adviser JOHN D. HAWKE, JR., General Counsel JAMES B. ECKERT, Associate Adviser DIVISION OF FEDERAL RESERVE BANK JOHN NICOLL, Deputy General Counsel JOHN J. MINGO, Associate Adviser OPERATIONS BALDWIN B. TUTTLE, Assistant General ELEANOR J. STOCKWELL, Associate Adviser Counsel HELMUT F. WENDEL, Associate Adviser JAMES R. KUDLINSKI, Director CHARLES R. MCNEILL, Assistant to the JAMES R. WETZEL, Associate Adviser *E. MAURICE MCWHIRTER, Associate Director General Counsel ROBERT M. FISHER, Assistant Adviser WALTER A. ALTHAUSEN, Assistant Director ROBERT E. MANNION, Adviser J. CORTLAND G. PERET, Assistant Adviser BRIAN M. CAREY, Assistant Director ALLEN L. RAIKEN, Adviser STEPHEN P. TAYLOR, Assistant Adviser HARRY A. GUINTER, Assistant Director GARY M. WELSH, Adviser LEVON H. GARABEDIAN, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

DIVISION OF FEDERAL RESERVE BANK OFFICE OF SAVER AND CONSUMER AFFAIRS DIVISION OF INTERNATIONAL FINANCE EXAMINATIONS AND BUDGETS FREDERIC SOLOMON, Assistant to the *RALPH C. BRYANT, Director WILLIAM H. WALLACE, Director Board and Director JOHN E. REYNOLDS, Acting Director CLYDE H. FARNSWORTH, JR., Assistant Director JANET O. HART, Deputy Director ROBERT F. GEMMILL, Adviser THOMAS E. MEAD, Assistant Director P. D. RING, Assistant Director JERAULD C. KLUCKMAN, Assistant Director REED J. IRVINE, Adviser ROBERT S. PLOTKIN, Assistant Director *HELEN B. JUNZ, Adviser SAMUEL PIZER, Adviser DIVISION OF DATA PROCESSING GEORGE B. HENRY, Associate Adviser OFFICE OF THE SECRETARY CHARLES J. SIEGMAN, Associate Adviser CHARLES L. HAMPTON, Director EDWIN M. TRUMAN, Associate Adviser BRUCE M. BEARDSLEY, Associate Director THEODORE E. ALLISON, Secretary GLENN L. CUMMINS, Assistant Director GRIFFITH L. GARWOOD, Assistant Secretary WARREN N. MINAMI, Assistant Director TROBERT SMITH III, Assistant Secretary ROBERT J. ZEMEL, Assistant Director DIVISION OF BANKING SUPERVISION DIVISION OF PERSONNEL AND REGULATION KEITH D. ENGSTROM, Director BRENTON C. LEAVITT, Director CHARLES W. WOOD, Assistant Director FREDERICK R. DAHL, Assistant Director JACK M. EGERTSON, Assistant Director OFFICE OF THE CONTROLLER JOHN N. LYON, Assistant Director JOHN T. MCCLINTOCK, Assistant Director JOHN KAKALEC, Controller JOHN E. RYAN, Assistant Director TYLER E. WILLIAMS, JR., Assistant Controller THOMAS A. SIDMAN, Assistant Director WILLIAM W. WILES, Assistant Director DIVISION OF ADMINISTRATIVE SERVICES WALTER W. KREIMANN, Director tOn loan from the Federal Reserve Bank of Dallas. DONALD E. ANDERSON, Assistant Director JOHN D. SMITH, Assistant Director *On leave of absence. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 78 Federal Open Market Committee ARTHUR F. BURNS, Chairman PAUL A. VOLCKER, Vice Chairman ERNEST T. BAUGHMAN DAVID P. EASTBURN ROBERT P. MAYO JEFFREY M. BUCHER ROBERT C. HOLLAND GEORGE W. MITCHELL PHILIP E. COLDWELL PHILIP C. JACKSON, JR. HENRY C. WALLICH BRUCE K. MACLAURY ARTHUR L. BROIDA, Secretary LYLE E. GRAMLEY, Economist MURRAY ALTMANN, Deputy Secretary (Domestic Business) NORMAND R. V. BERNARD, Assistant ROBERT SOLOMON, Economist Secretary (International Finance) THOMAS J. O'CONNELL, General Counsel EDWARD G. BOEHNE, Associate Economist EDWARD G. GUY, Deputy General Counsel *RALPH C. BRYANT, Associate Economist JOHN NICOLL, Assistant General Counsel RICHARD G. DAVIS, Associate Economist J. CHARLES PARTEE, Senior Economist RALPH T. GREEN, Associate Economist STEPHEN H. AXILROD, Economist JOHN KAREKEN, Associate Economist (Domestic Finance) JOHN E. REYNOLDS, Associate Economist KARL O. SCHELD, Associate Economist ALAN R. HOLMES, Manager, System Open Market Account PETER D. STERNLIGHT, Deputy Manager for Domestic Operations SCOTT E. PARDEE, Deputy Manager for Foreign Operations ^On leave of absence Federal Advisory Council THOMAS I. STORRS, FIFTH FEDERAL RESERVE DISTRICT, President GEORGE B. ROCKWELL, FIRST FEDERAL EDWIN S. JONES, EIGHTH FEDERAL RESERVE DISTRICT RESERVE DISTRICT ELLMORE C. PATTERSON, SECOND FEDERAL GEORGE H. DIXON, NINTH FEDERAL RESERVE DISTRICT RESERVE DISTRICT JAMES F. BODINE, THIRD FEDERAL EUGENE H. ADAMS, TENTH FEDERAL RESERVE DISTRICT RESERVE DISTRICT CLAIR E. FULTZ, FOURTH FEDERAL BEN F. LOVE, ELEVENTH FEDERAL RESERVE DISTRICT RESERVE DISTRICT LAWRENCE A. MERRIGAN, SIXTH FEDERAL JAMES B. MAYER, TWELFTH FEDERAL RESERVE DISTRICT RESERVE DISTRICT WILLIAM F. MURRAY, SEVENTH FEDERAL RESERVE DISTRICT HERBERT V. PROCHNOW, Secretary WILLIAM J. KORSVIK, Associate Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 79 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK, Chairman President Vice President branch, or facility Zip Deputy Chairman First Vice President in charge of branch BOSTON* 02106 Louis W. Cabot Frank E. Morris Robert M. Solow James A. Mcintosh NEW YORK* 10045 Roswell L. Gilpatric Paul A. Volcker Frank R. Milliken Richard A. Debs Buffalo 14240 Donald Nesbitt Ronald B. Gray PHILADELPHIA 19105 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 Phillip R. Shriver Robert E. Showalter Pittsburgh 15230 G. Jackson Tankersley Robert D. Duggan RICHMOND* 23261 Robert W. Lawson, Jr. Robert P. Black E. Craig Wall, Sr. George C. Rankin Baltimore 21203 James G. Harlow Jimmie R. Monhollon Charlotte 28201 Charles W. DeBell Stuart P. Fishburne Culpeper Communications Center 22701 Albert D. Tinkelenberg ATLANTA 30303 H. G. Pattillo Monroe Kimbrel Clifford M. Kirtland, Jr. Kyle K. Fossum Birmingham 35202 Frank P. Samford, Jr. Hiram J. Honea Jacksonville 32203 James E. Lyons Edward C. Rainey Miami 33152 Castle W. Jordan W. M. Davis Nashville 37203 John C. Tune Jeffrey J. Wells _New Orleans 70161 Floyd W. Lewis George C. Guynn CHICAGO* 60690 Peter B. Clark Robert P. Mayo Robert H. Strotz Daniel M. Doyle 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 Ronald W. Bailey John F. Breen Louisville 40201 James H. Davis Donald L. Henry Jeanne L. Holley L. Terry Britt Memphis 38101 Bruce B. Dayton Bruce K. MacLaury MINNEAPOLIS 55480 James P. McFarland Clement A. Van Nice William A. Cordingley Howard L. Knous Helena 59601 Robert T. Person George H. Clay KANSAS CITY 64198 Harold W. Andersen John T. Boysen Maurice B. Mitchell J. David Hamilton D O e k n la v h e o r m a City 7 8 3 0 1 2 2 1 5 7 James G. Harlow, Jr. William G. Evans Durward B. Varner Robert D. Hamilton Omaha 68102 John Lawrence Ernest T. Baughman DALLAS 75222 Charles T. Beaird T. W. Plant Herbert M. Schwartz Fredric W. Reed H El o u P s a t s o o n 7 7 7 9 0 9 0 9 1 9 Thomas J. Barlow James L. Cauthen Pete J. Morales, Jr. Carl H. Moore San Antonio 78295 O. Meredith Wilson John J. Balles SAN FRANCISCO ....94120 Joseph F. Alibrandi John B. Williams Joseph R. Vaughan Richard C. Dunn Los Angeles 90051 Loran L. Stewart Angelo S. Carella Portland 97208 Sam Bennion A. Grant Holman Sah Lake City 84110 Malcolm T. Stamper James J. Curran Seattle 98124 * Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, New Jersey 07016; Jericho, New York 11753; Columbus, Ohio 43216; Columbia, South Carolina 29210; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 80 Federal Reserve Board Publications Available from Publications Services, Division of Ad- request and be made payable to the order of the Board ministrative Services, Board of Governors of the Fed- of Governors of the Federal Reserve System in a form eral Reserve System, Washington, D C. 20551. Where collectible at par in U.S. currency. (Stamps and a charge is indicated, remittance should accompany coupons are not accepted.) THE FEDERAL RESERVE SYSTEM—PURPOSES AND 9. Federal Reserve Banks. 1965. 36 pp. $.35. Sec. FUNCTIONS. 1974. 125 pp. $1.00 each; lOormore 10. Member Bank Reserves and Related Items. to one address, $.75 each. 1962. 64 pp. $.50. Sec. 11. Currency. 1963. 11 ANNUAL REPORT pp. $.35. Sec. 12. Money Rates and Securities Markets. 1966. 182 pp. $.65. Sec. 14. Gold. 1962. FEDERAL RESERVE BULLETIN. Monthly. $20.00 per year or $2.00 each in the United States, its posses- 24 pp. $.35. Sec. 15. International Finance. 1962. sions, and certain foreign countries^; 10 or more 92 pp. $.65. Sec. 16 (New). Consumer Credit. of same issue to one address, $18.00 per year or 1965. 103 pp. $.65. $1.75 each. Elsewhere, $24.00 or $2.50 each. THE FEDERAL FUNDS MARKET. 1959. Ill pp. $1.00 each; 10 or more to one address, $.85 each. FEDERAL RESERVE CHART BOOK ON FINANCIAL AND BUSINESS STATISTICS. Monthly. Subscription in- TRADING IN FEDERAL FUNDS. 1965. 116 pp. $1.00 cludes one issue of Historical Chart Book. $12.00 each; 10 or more to one address, $.85 each. per year or $1.25 each in the United States, its INDUSTRIAL PRODUCTION—1971 EDITION. 1972. 383 possessions, and certain foreign countries^; 10 or pp. $4.00 each; 10 or more to one address, $3.50 more of same issue to one address, $1.00 each. each. Elsewhere, $15.00 per year or $1.50 each. THE PERFORMANCE OF BANK HOLDING COMPANIES. 1967. 29 pp. $.25 each; 10 or more to one address, HISTORICAL CHART BOOK. Issued annually in Sept. Subscription to monthly chart book includes one $.20 each. issue. $1.25 each in the United States, its posses- BANK CREDIT-CARD AND CHECK-CREDIT PLANS. 1968. sions, and certain foreign countries^; 10 or more 102 pp. $1.00 each; 10 or more to one address, to one address, $1.00 each. Elsewhere, $1.50 each. $.85 each. CAPITAL MARKET DEVELOPMENTS. Weekly. $15.00 per SURVEY OF FINANCIAL CHARACTERISTICS OF CONyear or $.40 each in the United States, its posses- SUMERS. 1966. 166 pp. $1.00 each; 10 or more sions, and certain foreign countries^ 10 or more to one address, $.85 each. of same issue to one address, $13.50 per year or SURVEY OF CHANGES IN FAMILY FINANCES. 1968. 321 $.35 each. Elsewhere, $20.00 per year or $.50 pp. $1.00 each; 10 or more to one address, $.85 each. each. SELECTED INTEREST AND EXCHANGE RATES—WEEKLY REPORT OF THE JOINT TREASURY-FEDERAL RESERVE SERIES OF CHARTS. Weekly. $15.00 per year or STUDY OF THE U.S. GOVERNMENT SECURITIES $.40 each in the United States, its possessions, and MARKET. 1969. 48 pp. $.25 each; 10 or more to certain foreign countries^; 10 or more of same issue one address, $.20 each. to one address, $13.50 per year or $.35 each. JOINT TREASURY-FEDERAL RESERVE STUDY OF THE Elsewhere, $20.00 per year or $.50 each. GOVERNMENT SECURITIES MARKET: STAFF STUD- IES—PART 1. 1970. 86 pp. $.50 each; 10 or more THE FEDERAL RESERVE ACT, as amended through December 1971, with an appendix containing provi- to one address, $.40 each. PART 2. 1971. 153 pp. sions of certain other statutes affecting the Federal and PART 3. 1973. 131 pp. Each volume $1.00; Reserve System. 252 pp. $1.25. 10 or more to one address, $.85 each. REGULATIONS OF THE BOARD OF GOVERNORS OF THE OPEN MARKET POLICIES AND OPERATING PROCE- FEDERAL RESERVE SYSTEM DURES—STAFF STUDIES. 1971. 218 pp. $2.00 each; 10 or more to one address, $1.75 each. PUBLISHED INTERPRETATIONS OF THE BOARD OF GOV- ERNORS, as of June 30, 1975. $2.50. REAPPRAISAL OF THE FEDERAL RESERVE DISCOUNT SUPPLEMENT TO BANKING AND MONETARY STATISTICS. MECHANISM. Vol. 1. 1971. 276 pp. Vol. 2. 1971. Sec. 1. Banks and the Monetary System. 1962. 173 pp. Vol. 3. 1972. 220 pp. Each volume $3.00; 35 pp. $.35. Sec. 2. Member Banks. 1967. 59 10 or more to one address, $2.50 each. pp. $.50. Sec. 5. Bank Debits. 1966. 36 pp. $.35. THE ECONOMETRICS OF PRICE DETERMINATION CON- Sec. 6. Bank Income. 1966. 29 pp. $.35. Sec. FERENCE, October 30-31, 1970, Washington, D.C. Oct. 1972. 397 pp. Cloth ed. $5.00 each; 10 or more to one address, $4.50 each. Paper ed. $4.00 each; 10 or more to one address, $3.60 each. FEDERAL RESERVE STAFF STUDY: WAYS TO MODERATE 'Bolivia, Canada, Chile, Colombia, Costa Rica. Cuba, Dominican Republic, Ecuador, Guatemala, Haiti. Republic of FLUCTUATIONS IN HOUSING CONSTRUCTION, Dec. Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, El 1972. 487 pp. $4.00 each; 10 or more to one Salvador, Uruguay, and Venezuela. address, $3.60 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Board Publications A 81 LENDING FUNCTIONS OF THE FEDERAL RESERVE MONETARY AGGREGATES AND MONEY MARKET CON- BANKS. 1973. 271 pp. $3.50 each; 10 or more DITIONS IN OPEN MARKET POLICY. 2/71. to one address, $3.00 each. INTEREST RATES, CREDIT FLOWS, AND MONETARY AG- INTRODUCTION TO FLOW OF FUNDS. 1975. 64 pp. $.50 GREGATES SINCE 1964. 6/71. each; 10 or more to one address, $.40 each. REVISED MEASURES OF MANUFACTURING CAPACITY IMPROVED FUND AVAILABILITY AT RURAL BANKS (Re- UTILIZATION. 10/71. port and study papers of the Committee on Rural REVISION OF BANK CREDIT SERIES. 12/71. Banking Problems). June 1975. 133 pp. $1.00; 10 ASSETS AND LIABILITIES OF FOREIGN BRANCHES OF or more to one address, $.85 each. U.S. BANKS. 2/72. BANK DEBITS, DEPOSITS, AND DEPOSIT TURNOVER— REVISED SERIES. 7/72. STAFF ECONOMIC STUDIES YIELDS ON NEWLY ISSUED CORPORATE BONDS. 9/72. RECENT ACTIVITIES OF FOREIGN BRANCHES OF U.S. Studies and papers on economic and financial subjects BANKS. 10/72. that are of general interest in the field of economic REVISION OF CONSUMER CREDIT STATISTICS. 10/72. research. ONE-BANK HOLDING COMPANIES BEFORE THE 1970 AMENDMENTS. 12/72. SUMMARIES ONLY PRINTED IN THE BULLETIN YIELDS ON RECENTLY OFFERED CORPORATE BONDS. (Limited supply of mimeographed copies of ful! 5/73. text available upon request for single copies) CAPACITY UTILIZATION IN MAJOR MATERIALS INDUS- TRIES. 8/73. THE IMPACT OF HOLDING COMPANY ACQUISITIONS ON CREDIT-CARD AND CHECK-CREDIT PLANS AT COMMER- AGGREGATE CONCENTRATION IN BANKING, by CIAL BANKS. 9/73. Samuel H. Talley. Feb. 1974. 24 pp. RATES ON CONSUMER INSTALMENT LOANS. 9/73. OPERATING POLICIES OF BANK HOLDING COMPANIES— NEW SERIES FOR LARGE MANUFACTURING CORPORA- PART II: NONBANKING SUBSIDIARIES, by Robert J. TIONS. 10/73. Lawrence. Mar. 1974. 59 pp. MONEY SUPPLY IN THE CONDUCT OF MONETARY HOUSEHOLD-SECTOR ECONOMIC ACCOUNTS, by David POLICY. 11/73. F. Seiders. Jan. 1975. 84 pp. U.S. ENERGY SUPPLIES AND USES, Staff Economic THE PERFORMANCE OF INDIVIDUAL BANK HOLDING Study by Clayton Gehman. 12/73. COMPANIES, by Arthur G. Fraas. Aug. 1975. 27 CAPACITY UTILIZATION FOR MAJOR MATERIALS: REpp. VISED MEASURES. 4/74. NUMERICAL SPECIFICATIONS OF FINANCIAL VARIABLES PRINTED IN FULL IN THE BULLETIN AND THEIR ROLE IN MONETARY POLICY. 5/74. INFLATION AND STAGNATION IN MAJOR FOREIGN IN- Staff Economic Studies shown in list below. DUSTRIAL COUNTRIES. 10/74. REVISION OF THE MONEY STOCK MEASURES AND MEM- BER BANK DEPOSITS. 12/74. U.S. INTERNATIONAL TRANSACTIONS IN 1974. 4/75. REPRINTS MONETARY POLICY IN A CHANGING FINANCIAL ENVI- (Except for Staff Papers, Staff Economic Studies, and RONMENT: OPEN MARKET OPERATIONS IN 1974. some leading articles, most of the articles reprinted do 4/75. not exceed 12 pages.) THE STRUCTURE OF MARGIN CREDIT. 4/75. SEASONAL FACTORS AFFECTING BANK RESERVES. 2/58. CHANGES IN BANK LENDING PRACTICES, 1974. 4/75. MEASURES OF MEMBER BANK RESERVES. 7/63. NEW STATISTICAL SERIES ON LOAN COMMITMENTS AT RESEARCH ON BANKING STRUCTURE AND PERFORM- SELECTED LARGE COMMERCIAL BANKS. 4/75. ANCE, Staff Economic Study by Tynan Smith. RECENT TRENDS IN FEDERAL BUDGET POLICY. 7/75. 4/66. BANKING AND MONETARY STATISTICS, 1974. Selected A REVISED INDEX OF MANUFACTURING CAPACITY, series of banking and monetary statistics for 1974 Staff Economic Study by Frank de Leeuw with only. 2/75, 3/75, 4/75 and 7/75. Frank E. Hopkins and Michael D. Sherman. 11 /66. CHANGES IN TIME AND SAVINGS DEPOSITS AT COM- U.S. INTERNATIONAL TRANSACTIONS: TRENDS IN MERCIAL BANKS. January-April 1975. 10/75. 1960-67. 4/68. RECENT DEVELOPMENTS IN INTERNATIONAL FINANCIAL MEASURES OF SECURITY CREDIT. 12/70. MARKETS. 10/75. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 82 Federal Reserve Bulletin • October 1975 Index to Statistical Tables References are to pages A-2 through A-75 although the prefix "A" is omitted in this index (For list of tables published periodically, but not monthly, see inside back cover) ACCEPTANCES, bankers, 9, 25, 27 Demand deposits: Agricultural loans of commercial banks, 16, 18 Adjusted, commercial banks, 11, 13, 17 Assets and liabilities (See also Foreigners): Banks, by classes, 14, 17, 20, 21 Banks, by classes, 14, 16, 17, 18, 30 Ownership by individuals, partnerships, and cor- Federal Reserve Banks, 10 porations, 24 Nonfinancial corporations, current, 41 Subject to reserve requirements, 13 Automobiles: Turnover, 11 Consumer instalment credit, 45, 46, 47 Deposits (See also specific types of deposits): Production index, 48, 49 Accumulated at commercial banks for payment of personal loans, 24 BANK credit proxy, 13 Banks, by classes, 14, 17, 20, 21, 30 Bankers balances, 16, 17, 20 Federal Reserve Banks, 10, 72 (See also Foreigners) Subject to reserve requirements, 13 Banks for cooperatives, 38 Discount rates at Federal Reserve Banks (See Interest Bonds (See also U.S. Govt, securities): rates) New issues, 38, 39, 40 Discounts and advances by Reserve Banks (See Loans) Yields and prices, 28, 29 Dividends, corporate, 41 Branch banks: Assets, foreign branches of U.S. banks, 70 EMPLOYMENT, 50, 52 Liabilities of U.S. banks to their foreign branches and foreign branches of U.S. banks, 22, 71 FARM mortgage loans, 42 Brokerage balances, 69 Federal agency obligations, 9, 10, 11 Business expenditures on new plant and equipment, 41 Federal finance: Business indexes, 50 Receipts and outlays, 32, 33 Business loans (See Commercial and industrial loans) Treasury operating balance, 32 Federal funds, 5, 16, 18, 21, 27 CAPACITY utilization, 50 Federal home loan banks, 37, 38 Capital accounts: Federal Home Loan Mortgage Corporation, 37, 42, 43 Banks, by classes, 14, 17, 22 Federal Housing Administration, 42, 43, 44 Federal Reserve Banks, 10 Federal intermediate credit banks, 37, 38 Central banks, 60, 75 Federal land banks, 37, 38, 42 Certificates of deposit, 22 Federal National Mortgage Assn., 37, 38, 42, 43, 44 Commercial and industrial loans: Federal Reserve Banks: Commercial banks, 13, 16 Condition statement, 10 Weekly reporting banks, 18, 23 U.S. Govt, securities held, 2, 10, 11, 34, 35 Commercial banks: Federal Reserve credit, 2, 4, 10, 11 Assets and liabilities, 13, 14, 16, 17, 18 Federal Reserve notes, 10 Consumer loans held, by type, 45 Federally sponsored credit agencies, 37, 38 Deposits at, for payment of personal loans, 24 Finance companies: Loans sold outright, 25 Loans, 18, 46, 47 Number, by classes, 14 Paper, 25, 27 Real estate mortgages held, by type of holder and Financial institutions, loans to, 16, 18 property, 42-44 Float, 2 Commercial paper, 23, 25, 27 Flow of funds, 56, 57 Condition statements (See Assets and liabilities) Foreign: Construction, 50, 51 Currency operations, 10 Consumer credit: Deposits in U.S. banks, 3, 10, 17, 21, 72 Instalment credit, 45, 46, 47 Exchange rates, 75 Noninstalment credit, 45 Trade, 59 Consumer price indexes, 50, 53 Foreigners: Consumption expenditures, 54, 55 Claims on, 66, 67, 68, 72, 73, 74 Corporations: Liabilities to, 22, 61, 62, 64, 65, 72, 73, 74 Profits, taxes, and dividends, 41 Security issues, 39, 40 GOLD: Security yields and prices, 28, 29 Certificates, 10 Cost of living (See Consumer price indexes) Reserves of central banks and govts., 60 Currency and coin, 3, 16 Stock, 2, 59 Currency in circulation, 3, 12 Government National Mortgage Assn., 42 Customer credit, stock market, 29, 30 Gross national product, 54, 55 DEBITS to deposit accounts, 11 HOUSING permits, 50 Debt (See specific types of debt or securities) Housing starts, 51 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 83 References are to pages A-2 through A-75 although the prefix "A" is omitted in this index INCOME, national and personal, 54, 55 REAL estate loans: Industrial production index, 48, 49, 50 Banks, by classes, 16, 18, 30, 42 Instalment loans, 45, 46, 47 Mortgage yields, 43, 44 Insurance companies, 31, 34, 35, 42, 44 Type of holder and property Insured commercial banks, 14, 16, 17, 24 mortgaged, 42-^4 Interbank deposits, 14, 20 Reserve position, basic, member banks, 5 Interest rates: Reserve requirements, member banks, 7 Bond and stock yields, 28 Reserves: Business loans of banks, 26 Central banks and govts., 60 Federal Reserve Banks, 6 Commercial banks, 17, 20, 22 Foreign countries, 74, 75 Federal Reserve Banks, 10 Money market rates, 27 Member banks, 3, 4, 13, 17 Mortgage yields, 43, 44 U.S. reserve assets, 59 Prime rate, commercial banks, 26 Residential mortgage loans, 43, 44 Time and savings deposits, maximum rates, 8 Retail credit, 45, 46, 47 International capital transactions of U.S., 61-74 Retail sales, 50 International institutions, 60-64, 66, 67-69, 73 Inventories, 54 SAVING: Investment companies, issues and assets, 40 Flow of funds series, 56, 57 Investments (See also specific types of investments): National income series, 54, 55 Banks, by classes, 14, 16, 19, 30 Savings and loan assns., 31, 35, 42, 44 Commercial banks, 13 Savings deposits (See Time deposits) Federal Reserve Banks, 10, 11 Savings institutions, principal assets, 30, 31 Life insurance companies, 31 Securities (See also U.S. Govt, securities): Savings and loan assns., 31 Federally sponsored agencies, 37, 38 International transactions, 68, 69 LABOR force, 52 New issues, 38, 39, 40 Life insurance companies (See Insurance companies) Yields and prices, 28, 29 Loans (See also specific types of loans): Special Drawing Rights, 2, 10, 58, 59 Banks, by classes, 14, 16, 18, 30 State and local govts.: Commercial banks, 13, 14, 16, 18, 23, 25, 26 Deposits, 17, 20 Federal Reserve Banks, 2, 4, 6, 10, 11 Holdings of U.S. Govt, securities, 34, 35 Insurance companies, 31, 44 New security issues, 38, 39 Insured or guaranteed by U.S., 42, 43, 44 Ownership of securities of, 16, 19, 30 Savings and loan assns., 31 Yields and prices of securities, 28, 29 State member banks, 15, 24 MANUFACTURERS: Stock market credit, 29, 30 Capacity utilization, 50 Stocks (See also Securities): Production index, 49, 50 New issues, 39, 40 Margin requirements, 8 Yields and prices, 28, 29 Member banks: Assets and liabilities, by classes, 14, 16, 17 TAX receipts. Federal, 33 Borrowings at Federal Reserve Banks, 4, 10 Time deposits, 8, 13, 14, 17, 21, 22 Number, by classes, 14 Treasury currency. Treasury cash, 2, 3 Reserve position, basic, 5 Treasury deposits, 3, 10, 32 Reserve requirements, 7 Treasury operating balance, 32 Reserves and related items, 2, 4, 13 Mining, production index, 49 UNEMPLOYMENT, 52 Mobile home shipments, 51 U.S. balance of payments, 58 Money market rates (See Interest rates) U.S. Govt, balances: Money stock and related data, 12 Commercial bank holdings, 17, 20 Mortgages (See Real estate loans and Residential Member bank holdings, 13 mortgage loans) Treasury deposits at Reserve Banks, 3, 10, 32 Mutual funds (See Investment companies) U.S. Govt, securities: Mutual savings banks, 20, 30, 34, 42, 44 Bank holdings, 14, 16, 19, 30, 34, 35 Dealer transactions, positions, and financing, 36 NATIONAL banks, 14, 24 Federal Reserve Bank holdings, 2, 10, 11, 34, 35 National defense expenditures, 33 Foreign and international holdings, 10, 66, 68, 72 National income, 54, 55 International transactions, 66, 68 Nonmember banks, 15, 16, 17, 24 New issues, gross proceeds, 39 Open market transactions, 9 OPEN market transactions, 9 Outstanding, by type of security, 34, 35 Ownership, 34, 35 Yields and prices, 28, 29 PAYROLLS, manufacturing index, 50 Utilities, production index, 49 Personal income, 55 Prices: Consumer and wholesale commodity, 50, 53 VETERANS Administration, 43, 44 Security, 29 Prime rate, commercial banks, 26 WEEKLY reporting banks, 18-22 Production, 48, 49, 50 Profits, corporate, 41 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 84 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories July 1975 •XhmmtyZHigdmOM ii 11 // ALASKA 11 1 f X t 1 © 1 LEGEND — Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities Boundaries of Federal Reserve Branch • Federal Reserve Branch Cities Territories Federal Reserve Bank Facility Q Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Guide to Tabular Presentation SYMBOLS AND ABBREVIATIONS e Estimated N.S.A. Monthly (or quarterly) figures not adjusted c Corrected for seasonal variation IPC Individuals, partnerships, and corporations P Preliminary SMSA Standard metropolitan statistical area r Revised A Assets rp Revised preliminary L Liabilities I, 11, S Sources of funds III, IV Quarters U Uses of funds * Amounts insignificant in terms of the particn.e.c. Not elsewhere classified ular unit (e.g., less than 500,(XX) when A.R. Annual rate 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 direct a negative figure, or (3) an outflow. obligations of the Treasury. "State and local govt." A heavy vertical rule is used in the following in- also includes municipalities, special districts, and other stances: (1) to the right (to the left) of a total when political subdivisions. the components shown to the right (left) of it add to In some of the tables details do not add to totals that total (totals separated by ordinary rules include because 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 characissues of U.S. Govt, agencies (the flow of funds figures teristics of the data. TABLES PUBLISHED QUARTERLY, SEMIANNUALLY, OR ANNUALLY, WITH LATEST BULLETIN REFERENCE Quarterly Issue Page Annually—Continued Issue Page Sales, revenue, profits, and Banks and branches, number, dividends of large manuby class and State Apr. 1975 A-76—A-77 facturing corporations Sept. 1975 A-82 Semiannually Flow of funds: Number of banking offices: Assets and liabilities: Analysis of changes Aug. 1975 A-76 1962-73 Oct. 1974 A-59.14—A-59.28 On, and not on. Federal Reserve Par List Aug. 1975 A-77 Flows: 1965-73 Oct. 1974 A-58—A-59.13 Annually Bank holding companies: Income and expenses: Banking offices and depos- Federal Reserve Banks .. Feb. 1975 A-80—A-81 its of group banks, Dec. Insured commercial banks June 1975 A-80—A-81 31, 1974 June 1975 A-76—A-79 Member banks: Banking and monetary statistics: Calendar year June 1975 A-80—A-89 1974 Feb. 1975 A-84—A-85 Income ratios June 1975 A-90—A-95 Mar. 1975 A-79—A-82 Operating ratios Sept. 1975 A-76—A-81 Apr. 1975 A-78—A-85 May 1975 337 July 1975 A-77 Stock market credit Feb. 1975 A-86—A-87 Statistical Releases LIST PUBLISHED SEMIANNUALLY, WITH LATEST BULLETIN REFERENCE Issue Page Anticipated schedule of release dates for individual releases June 1975 A-101 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis