Federal Reserve Bulletin, 1976-02

FEBRUARY 1976 FEDERAL RESERVE BULLETIN The Economy in 1975 Revision of Money Stock Measures Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A copy of the Federal Reserve BULLETIN is sent to each member bank without charge; member banks desiring additional copies may secure them at a special $10.00 annual rate. The regular subscription price in the United States, its possessions, Canada, and Mexico is $20.00 per annum or $2.00 per copy; elsewhere, $24.00 per annum or $2.50 per copy. Group subscriptions in the United States for 10 or more copies to one address, $1.75 per copy per month, or $18.00 for 12 months. The BULLETIN may be obtained from the Division of Administrative Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551, and remittance should be made payable to the order of the Board of Governors of the Federal Reserve System in a form collectible at par in U.S. currency. (Stamps and coupons are not accepted.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE BULLETIN NUMBER 2 • VOLUME 62 • FEBRUARY 1976 CONTENTS 71 The Economy in 1975 A1 Financial and Business Statistics 82 Revision of Money Stock Measures A1 Contents A2 U.S. Statistics 88 Membership of the Board of Governors A58 International Statistics of the Federal Reserve System A76 Board of Governors and Staff 90 Statements to Congress A78 Open Market Committee and Staff ; 141 Record of Policy Actions Federal Advisory Council of the Federal Open Market Committee A79 Federal Reserve Bapks and Branches 147 Law Department A80 Federal Reserve Board Publications 169 Directory of A82 Index to Statistical Tables Federal Reserve Banks and Branches A84 Map of Federal Reserve System 185 Announcements Inside Back Cover: Guide to Tabular Presentation 187 Industrial Production Statistical Releases: Reference PUBLICATIONS COMMITTEE Lyle E. Gramley Joseph R. Coyne John M. Denkler Ralph C. Bryant Frederic Solomon 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

The Economy in 1975 This article was prepared in the National In- Change in GNP come Section of the Division of Research and Per cent Statistics. In early 1975 the U.S. economy began to recover from the longest and deepest recession since World War II. By the end of the year real gross national product had regained about three-fourths of the recession loss. Although unemployment had declined significantly from its spring peak, the total unemployed at year-end was still extremely large. The rate of inflation had also been reduced substantially, but it remained high by historical standards and cost pressures were continuing strong. Dept. of Commerce data, seasonally adjusted annual rates. Real is in terms of 1972 dollars. The expansion in economic activity from the first-quarter trough to the year-end was about a major factor in bringing on the recession, and equal to the average pace of previous postwar they contributed to its length and severity. recoveries. Moderating inflationary pressures, Businesses were slow to adjust output and emeasing credit conditions, and the fiscal stimulus ployment during 1973, when shortages and of the Tax Reduction Act of 1975 all contributed soaring prices masked the sluggishness of real to the upturn in consumer expenditures, which final demands and profits while encouraging led the recovery in real final purchases in the some speculation in inventories. Moreover, the spring and summer. Total final purchases, in slowdown in early 1974 apparently was thought constant dollars, turned up in the second quarter to be just a temporary adjustment to the oil and continued to expand at an increasing pace embargo. Once-the underlying weaknesses were during the remainder of the year. perceived, however, cutbacks in output and After a modest rise in real GNP in the second employment were made quickly. quarter, when inventory liquidation was unusually deep, the rate of recovery in over-all activity accelerated sharply in the third quarter PERSPECTIVE ON THE as business began to slow the run-off of stocks. RECESSION AND RECOVERY In the late fall economic growth paused briefly as inventory investment stabilized and increases In retrospect at least, signs of an incipient in consumer spending moderated. But the year downturn in economic activity were evident as ended with sizable gains in retail sales, em- far back as 1973 when there was a marked ployment, and industrial production. easing in real economic growth. In part, this The decline in real GNP from the last quarter slowdown was the result of basic materials of 1973 to the first quarter of 1975 exceeded shortages stemming mainly from the worldthe sharpest previous postwar downswing. Se- wide boom in economic activity. However, the vere inflationary pressures, particularly those increasing share of capital spending devoted to associated with the run-up of oil prices, were environmental requirements tended to retard ca- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

72 Federal Reserve Bulletin • February 1976 GNP and final sales reached unprecedented heights, impeding savings flows to thrift institutions and increasing Billions of 1972 dollars the costs of homeownership. Nonresidential fixed investment, in real terms, began to decline in the second quarter of 1974 in response both to slackening consumer demands and to a growing awareness that inflation was distorting calculations of profits. However, business continued to build inventories through mid-1974, apparently still responding to the extreme shortages of the previous year as well as to rapidly rising prices. Attempts were finally made to cut back inventories later in the year, but real final demand dropped so sharply—the steepest decline since World War II—that nonfarm inventories in constant dollars were accumulated at a $9 billion annual rate in the fourth quarter. Auto dealers, in particular, were left with extremely large 1972 1 1973 * 1974 ' 1975 stocks. Over all, real GNP declined at a 7.5 Dept. of Commerce data, seasonally adjusted annual rates. per cent annual rate in the fourth quarter, while pacity growth in the basic materials industries, industrial production declined at a 12.5 per cent and the distorting effects of price controls may annual rate and nonfarm employment was realso have curtailed their output. However, re- duced by 450,000. tardation of growth in real activity in 1973 also In the first quarter of 1975 the production and reflected the weakening of gains in real con- employment adjustments gathered momentum sumer spending as mounting inflation slowed the and real GNP declined even more rapidly—at growth in real disposable incomes. Gains in a 9.2 per cent annual rate—the largest drop in consumer income were further undermined in the postwar period. Inventory liquidation at a late 1973 by sharp cutbacks in output made by $19 billion annual rate—in 1972 dollars—acauto producers and other manufacturers in re- counted for almost all of the decline. Final sponse to declining sales and reduced avail- demand was down slightly, although real conability of petroleum-based products following sumer outlays, especially for autos, increased the oil embargo in October 1973. in response to widespread price concessions. Real output dropped sharply in the first quar- Net exports also showed improvement as imter of 1974 and continued to decline until the ports fell drastically during this period of insecond quarter of 1975. Real disposable income ventory liquidation. also began declining in the first quarter of 1974, The economy turned upward in the second and consumer confidence continued to falter. In quarter, after a total decline in real GNP real terms, consumer spending recovered only amounting to 6.6 per cent, compared with an partially after the oil embargo ended and then average drop of 2.1 per cent in the five earlier declined sharply again in the last quarter of recessions. The largest previous postwar con- 1974. traction had been 3.3 per cent in both the As 1974 progressed, the weakness of underly- 1953-54 and 1957-58 contractions. Characing demands began to be evident in other sectors teristically, the decline in industrial producalso. Housing activity had been falling through- tion—12.5 per cent from September 1974 to out the previous year and after a brief pause April 1975—was much greater than in GNP. early in 1974, starts plummeted again; between Inventories were liquidated at a somewhat the first and fourth quarters of the year they fell greater rate in the second quarter, but final sales by almost 40 per cent as nominal interest rates turned up and real GNP rose at a 3.3 per cent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Economy in 1975 73 annual rate. One of the most important elements sumer spending slowed, but business capital in this upturn was the growth in real disposable spending turned up for the first time in this income and the support it provided for consumer recovery. And in the last month of the year there outlays. These gains were made possible by a were sizable advances in retail sales, employmarked slowing of inflation—from a 12 per cent ment, and industrial production. rate in the second half of 1974 to a 6.5 per By the fourth quarter of 1975 real GNP had cent rate in the first half of 1975—and the fiscal advanced 5 per cent above its first-quarter stimulus provided by the Tax Reduction Act of low—about typical of past cyclical recoveries— 1975, enacted in March. Several other factors but it was still 2 per cent below its 1973 high also contributed to the turnaround, including a and industrial production remained 6 per cent strong net export position and an upturn in below its previous peak. Unemployment totaled housing activity—the result of easing credit 7.9 million persons or 8.5 per cent of the labor conditions and improved flows of savings to force—higher than in any other postwar recesthrift institutions. sion. Despite the substantial slack in the econ- Economic growth accelerated sharply in the omy generally and in labor markets particularly, spring and early summer, with the growth rate wages and prices continued to rise at a vigorous of real GNP reaching a 12 per cent annual rate pace, only modestly below the rates early in in the third quarter. Although final sales im- the year. proved from the second quarter, most of the Despite signs that it may be some time before acceleration resulted from the precipitous slow- business investment rebounds vigorously, there ing in the rate of inventory liquidation. Final are widespread indications in consumer markets demands picked up somewhat further in the and elsewhere that the economy will continue fourth quarter, but over-all economic growth to advance at a fairly rapid pace in 1976. Price eased to about a 5.5 per cent rate as the impact increases will probably also be disconcertingly of the swing from inventory liquidation toward large, reflecting continued upward pressures accumulation tapered off. Growth in real con- from unit labor costs. Production and employment 1967 = 100 J967 = 100 Change, millions of persons Industrial production, F.R. data. Employment and unemployment rate, Dept. of Labor data. All data seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

74 Federal Reserve Bulletin • February 1976 INCOME AND CONSUMPTION Auto sales The consumption sector endured a far larger and Millions of units more prolonged adjustment in the recent recession than in previous declines, largely because continued rapid inflation reduced real income and the value of assets. Rising prices also had an indirect, adverse effect on disposable income through the progressive income tax structure. With nominal personal incomes rising rapidly throughout 1974, many workers moved into higher tax brackets despite the decline in the real value of these incomes. Only a part of the resultant sharp rise in tax receipts was offset by the increase in transfer payments— massive as that was. In total, real disposable income declined by 4 per cent between the peak in the fourth quarter of 1973 and the trough in the first quarter of 1975. 1972 1973 1974 1975 Real disposable income increased sharply in Ward's "Automotive Reports" data. Seasonal adjustment by F.R. Domestic-type autos include U.S. sales of cars prothe second quarter of 1975 as a result of the duced in Canada. Tax Reduction Act of 1975 in conjunction with The saving rate moved unevenly during 1975, a slowing of inflation and a continued increase due in part to the volatile movements in disposin the level of transfer payments. Real disposaable income. But for 1975 as a whole the rate ble income fell temporarily in the third quarter, averaged 8.3 per cent—somewhat above the but then regained upward momentum. level of recent years and far above the 6.5 per cent average rate of the preceding decade and a half. This high saving rate probably reflected Disposable income and saving an attempt by consumers to restore the real value Net change, billions of dollars of wealth and real liquid balances—which had been greatly damaged by inflation—as well as the relative growth of farm and property income, a larger proportion of which is generally saved or reinvested. The massive fiscal stimulus in the second quarter caused real personal consumption expenditures to rise at an annual rate of more than 4 per cent in the second and third quarters. Expenditures for furniture and appliances and nondurable goods—particularly clothing and shoes—proved immediately responsive to the mmmmmmmmmmm rise in income. Real outlays for goods other than Per cent autos shot up 9.5 per cent at an annual rate. SAVING RATE By the third quarter, real consumer purchases had recovered to the level of 2 years earlier. V-" As is typical after a large surge in expenditures, the increase in real personal consumption 99H8HMMHHHI MMHH HGH 1972 1973 1974 1975 spending moderated in the following quarter. Auto sales followed a slightly different pat- Dept. of Commerce data, seasonally adjusted. Real is in terms of 1972 dollars. tern last year. Sales of U.S.-made autos rose Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Economy in 1975 75 in early 1975, from a deeply depressed annual consumer demand in the fourth quarter there rate of 6 million units at the 1974 year-end, was a sizable, unintended accumulation of duas consumers responded to the lure of manufac- rable goods, particularly autos. Redoubling their turers' rebates on overstocked small cars. How- efforts, business firms achieved a massive liquiever, some of this demand was borrowed from dation in the first half of 1975 as producers the future, and the sales pace fell back in the joined retailers and wholesalers in ruthlessly second quarter. Then with inflationary fears cutting inventories. moderating, sales of domestic-type autos picked Although production of durable goods was up again—rising to nearly 8 million units, an- reduced very sharply in the fall and winter of nual rate—in the final quarter. Sales of imported 1974-75, stocks—especially of unsold automocars slowed from 1.7 million units in the first biles—increased as real final demand contracted quarter to 1.3 million in the fourth as this market at the unusually fast rate of nearly 9 per cent was affected by intense domestic competition in the fourth quarter of 1974. In the first quarter and severe inventory shortages at model of 1975 there was a huge run-off of auto invenchangeover time. tories and some liquidation of durable goods other than autos. During this period production was cut further and final demands were satisfied to a significant extent out of inventories. INVENTORY INVESTMENT The quite substantial liquidation of nondura- The enormous size of the swing in inventory ble goods inventories has been a unique feature investment—and the effects that it had on pro- of this recession. Typically, the inventory cycle duction, income, and employment—was un- is dominated by movements in durable goods precedented in the postwar period. There had stocks where producers are less able to adjust been a general build-up of stocks of both non- output rapidly to changed sales patterns. The durable and durable goods in late 1973 and in exceptional role of nondurable goods in this the first half of 1974 in response to earlier strong cycle probably is related to the unusually sharp demands, shortages, and expected price in- movements in final demand for such goods, creases. By the third quarter of 1974, however, many of which have petrochemical bases. To inventory/sales ratios had risen to historically a lesser extent, price uncertainty may have high levels. As a result, businessmen began to played a role as processors shied away from trim their stocks of nondurable goods, particu- holding a number of products, for example larly in the trade sector. With the collapse of petrochemicals, whose prices had risen astoundingly. Ratio of total business inventories By late spring and early summer, demands to GN P final sales were increasing for nondurable goods and the inventory/sales ratio dropped sharply despite Ratio rising production. There were some indications 1972 DOLLARS T P T P T P 7 that the run-off of stocks in the second quarter .27 was excessive. By December, production of 1 1 nondurable consumer goods was 7 per cent above the trough level and that of materials had risen by 12 per cent. .25 In contrast, producers of durable goods continued to reduce their stocks throughout the second half of 1975. The recovery in durable goods production has been somewhat slower .23 than the average postwar experience. Some of this sluggishness appears due to the still cloudy Vv l>tf' I* H i-'t?. *» 1 "Tt. •9H81 i• mm •• i mm t outlook for business equipment production. In '58 '60 '62 '64 '66 '68 70 72 74 76 addition, business firms apparently are remain- Dept. of Commerce data, seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

76 Federal Reserve Bulletin • February 1976 ing cautious toward increases in inventory levels postwar recession. And whereas economic acin view of the 1974 experience. tivity began to recover in the second quarter of As the year closed, stocks of nondurable the year, growth in real spending for business goods remained quite thin relative to sales, and fixed investment did not start until a half-^ear further increases in demand should be reflected later. in new ordering. Durable goods inventories on The major deterrent to substantial, early rethe other hand were still fairly high relative to covery in capital spending was the still desales, and liquidation may continue a bit longer. pressed level of real sales, both at home and Over all, the stage seems set for a moderate abroad, and relatively low rates of capacity accumulation of inventories during 1976 as real utilization throughout 1975. Thus, although final demands strengthen further. there were other developments in 1975 that normally would have had a favorable impact on capital outlays—an increased investment tax credit, a substantial recovery in corporate prof- BUSINESS FIXED INVESTMENT its, and moderating inflation in capital goods Real business fixed investment, which had fallen prices—firms were extremely cautious about sharply in the second half of 1974, continued adding to capacity. weak as the economic recovery got under way. This was the first postwar recession in which However, by the fall of 1975 capital spending the real decline in structures was greater than appeared to have bottomed out, and late in the in equipment. There were several reasons for year it was beginning to support the recovery. this. As usual, the recession brought sharply For 1975 as a whole, capital outlays by business lower corporate profits, which made it difficult were about unchanged from 1974 in current to finance new investment internally. At the dollars but were down almost 12 per cent in same time record high interest rates and low real terms. price/earnings ratios made external financing Compared with previous economic contrac- expensive. Because investment in structures, as tions, the decline in real business fixed invest- compared with equipment, is more sensitive to ment was unusually severe, and the ensuing the cost of borrowing and because equipment recovery has been somewhat slow to develop. became eligible for a temporarily increased tax Real capital outlays declined 18 per cent from credit in 1975, the impact of these financial the first-quarter-1974 peak to its trough during developments on structures was particularly sethe third quarter of 1975—the largest fall in any vere. Utilization and business investment Per cent Percentage change, annual rate Billions of dollars PLANT AND EQUIPMENT EXPENDITURES Materials Total Capacity utilization, F.R. data, seasonally adjusted. Plant and equipment expenditures, Dept. of Commerce data; materials include the primary metals, stone, clay and glass, textiles, paper, chemicals, and petroleum industries. New orders, Dept. of Commerce data, seasonally adjusted; deflation by F.R. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Economy in 1975 77 As in the two previous years, plant and Privately owned housing starts equipment expenditures were relatively stronger Ratio scale, millions of units in the manufacturing sector than elsewhere. Materials producers, despite their reduced operating rates in 1975, have been accounting for a growing share of capital spending for several years. Their strong investment spending reflected both the capacity constraints that were evident before the onset of the recent recession and the need to be in compliance with environmental regulations. According to some estimates, such producers increased capacity by Dept. of Commerce data, seasonally adjusted annual rates. about 4 per cent in 1975. In contrast, both the auto industry (and the related rubber industry) in early 1975. Starts turned up in the spring and producers of electrical machinery showed and by the year-end had advanced more than sharp drops in investment spending. In electric 40 per cent from their low. Factory shipments utilities, capital spending showed a decrease in of new mobile homes for domestic use also 1975 after averaging a 14 per cent annual rate showed some recovery as 1975 progressed, but of growth from 1962 to 1974. Communications for the year as a whole these shipments were and commercial firms also cut back sharply on no greater than they had been in the mid-1960's capital spending in 1975. and were some 60 per cent below their 1972 Evidence available at the end of 1975 sug- high. Expenditures for residential construction, gests that a vigorous recovery is not yet in sight including mobile homes, contributed less to the for business fixed investment. The Commerce over-all improvement in final demands in 1975 Department's year-end survey of plans for new than had been the general experience in previous plant and equipment expenditures indicated a upturns. moderate gain in nominal capital spending in The relatively low level of housing starts in 1976 but a decline in real expenditures from 1975 (1.2 million) reflected continued depressed 1975. Other leading indicators of capital spend- conditions in multifamily construction. Such ing—new orders, construction contracts, and starts amounted to only 270,000 units during capital appropriations—also have yet to show the year—the lowest level since the late 1950's. real strength. On the positive side, the recovery This development was due to a number of in corporate profits, coupled with falling interest factors, including the financial difficulties of rates and the improving stock market, has re- builders of such projects, a heavy overhang of duced the liquidity problems that hindered in- structures under way as the year began, continvestment in 1975. In addition, the extension of ued weakness in consumer demands for condothe income tax cut and the strong Christmas minium ownership, and difficulties in achieving selling season have bolstered confidence. Capi- rent levels sufficient to cover rising costs of tal spending should begin to strengthen as busi- construction and operation. ness begins adding to its capacity in anticipation Single-family starts, on the other hand, inof further economic recovery. creased to a total of nearly 900,000 units for 1975 as a whole and by year-end they were at an annual rate of about 1 million units. They benefited from support from Federal programs HOUSING designed to provide below-market interest rates In the first quarter of 1975, private housing for some buyers. In addition, sales of new starts ended the steepest and most protracted homes for owner occupancy were stimulated to decline since World War II. They had dropped some extent by the lure of special income tax from a peak of 2.4 million units, annual rate, rebates on purchases made before 1976 from toward the end of 1972 to a low of 1 million the overhang of dwellings still in builder inven- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

78 Federal Reserve Bulletin • February 1976 tories early last spring. Also the cost of mort- U.S. foreign transactions gage credit declined somewhat during the year Goods and services and loan availability improved as thrift institu- Billions of dollars tions experienced exceptionally strong inflows throughout 1975. With the number of dwelling units under construction continuing far below their previous highs and with mortgage credit conditions improving, support from residential construction for the general economic recovery may pick up significantly in 1976. 1973 1975 Dept. of Commerce data, seasonally adjusted annual rates. EXPORTS AND IMPORTS exports to oil-exporting countries as well as The nominal value of net exports of goods and non-oil-exporting developing countries despite services on a national income accounts basis the latter's reduced export earnings; and (3) the was $22 billion in 1975, the largest on record. price competitiveness of U.S. goods, which had The increase in the surplus from $3 billion improved over the three previous years. (seasonally adjusted annual rate) in the third Agricultural exports also played a key role quarter of 1974 to $24 billion in the second in supporting net exports. The outlook had been quarter of 1975 helped to moderate the decline for lower volume than in 1974 until the Soviet in GNP. Although the surplus receded some- Union began buying large amounts of wheat and what in the second half of the year, it remained corn due to an impending shortfall in thensurprisingly large and acted as less of a drag harvest. As a result, agricultural export volume on real GNP growth than is usual in the early for 1975 was about 2 per cent above that of phase of a recovery. the previous year. Net service transactions also The most important factor in the strong per- contributed around $8 billion to net exports in formance of net exports in 1975 was a very large 1975. reduction in imports of goods as a result of the U.S. recession. From the fourth quarter of 1974 to the second quarter of 1975, merchandise STATE import volume declined more than 20 per AND LOCAL GOVERNMENT cent. With the sharp recovery of domestic activity, volume recovered about half of this de- Expenditures and employment by State and cline in the third quarter, and it continued to local governments provided considerable grow, but more slowly, in the fourth quarter. strength to the economy during most of the While merchandise imports were extremely 1960's and early 1970's. The latter half of 1974, sensitive to U.S. economic activity, merchan- however, brought increasing difficulties to these dise exports held up rather well in the face of units. Although nominal expenditures rose declining economic activity abroad. The volume sharply, inflation outpaced spending to the point of nonagricultural exports did fall by 9 per cent that real purchases actually declined. Furtherover the first two quarters, but it turned up in more, growth in receipts slowed in 1974. As the second half before the general pick-up was a result, from 1973 to 1974 there was a $6 under way in the rest of the industrial world. billion shift from surplus to deficit in the "op- Factors contributing to this nonagricultural ex- erational" budget, which excludes the net savport performance included (1) somewhat milder ing in social insurance funds. recessions in other major countries, on average, The fiscal difficulties of State and local govthan in the United States; (2) an increase in ernments were accentuated in 1975 as the fi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Economy in 1975 79 nancial problems of New York City and of New $10 billion, in the form of rebates on 1974 York State agencies led to higher borrowing individual income taxes (up to $200) and a costs for many governmental units across the special $50 payment to Federal social security country. The psychological effects of the New beneficiaries. York City crisis, combined with inherent fiscal The duration of unemployment insurance problems, apparently caused State and local coverage was lengthened to 65 weeks, and covgovernments to tighten their budgets. Current- erage was widened to include individuals not dollar purchases of goods and services grew by previously covered. The food stamp program 9 per cent over the four quarters of 1975, down and Federal grants to State and local governfrom the 12.5 per cent increase in the preceding ments for public service employment also were year. Because New York State and all its mu- expanded. However, because of the continuing nicipalities constitute just over 10 per cent of inflation, tax burdens were not automatically the sector's total spending, this slowdown un- reduced to the extent experienced in previous doubtedly reflected a general attitude of caution recessions. Nevertheless, the Federal budget on the part of a large number of governments deficit (NIA basis) reached a peacetime high of outside New York. $102 billion (at annual rates) in the second While current-dollar spending slowed in quarter, when a substantial portion of the pay- 1975, real purchases contributed to the recovery ments under the Tax Reduction Act were made; as cost increases moderated over the year. Real the deficit averaged about $74 billion for the spending on structures was up 2.7 per cent year as a whole. On a high-employment basis, in 1975. Real compensation grew 5 per cent fiscal policy was considerably more stimulative over the year as employment rose by half a in 1975 than in preceding years as the budget million. The latter increase would have been shifted from an $18 billion surplus in 1974 to substantially lower had it not been for the addi- a $9 billion deficit in 1975. tion of 250,000 public-employment-program workers under a Federal grant program. Federal purchases and expenditures The deficit position that had developed earlier during the recession worsened in the first quarter Change, billions of dollars of 1975 but then rapidly improved as some spending cuts took hold and as receipts in- 20 creased due to the recovery. In the second half Expenditures of the year the budget position moved firmly into surplus. 10 III FEDERAL GOVERNMENT _ i ffl] I Real Federal Government purchases of goods PPuurnc hases and services declined slightly in 1975. The major fiscal impacts on the economy were io Federal budget through the Tax Reduction Act of 1975 and Billions of dollars through sharply increased transfer payments. SURPLUS The fiscal stimulus embodied in the tax act was unprecedented. Among other things this legislation provided (1) a cut in personal tax witholding rates and corporate taxes for the remainder of 1975, amounting to about $12 billion, and (2) one-time cash payments, made Dept. of Commerce national income and product data, mostly in May and June and amounting to nearly seasonally adjusted annual rates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

80 Federal Reserve Bulletin • February 1976 EMPLOYMENT Private nonfarm sector Developments in the labor market paralleled Percentage change from previous year those in output in 1975. Nonfarm payroll employment fell 2.5 million, seasonally adjusted, between September 1974 and June 1975. All of this reduction occurred in the private sector. Boosted by an uncharacteristically strong recessionary growth in the labor force, the unemployment rate jumped from per cent in the third quarter of 1974 to nearly 9 per cent in the second quarter of 1975. From June to December 1975, however, almost three-fifths of the earlier job loss was recovered. But labor force growth continued rapid, and the unemployment rate dropped slightly under the 8 per cent mark as the economy entered 1976. (For a more complete discussion of labor market developments, see the January 1976 BULLE- TIN.) Dept. of Labor data, seasonally adjusted. PRICE AND LABOR COSTS Inflationary pressures eased in 1975 following other durable goods. Attempts to liquidate sethe acute acceleration of 1974, but inflation verely swollen business inventories also led to continued to be a serious problem at year-end, price cutting for several industrial materials in with rates of price and wage increases remaining the first part of the year. high. The implicit deflator for GNP—a broad Two important sectors where there has been measure of price performance—increased 6.4 a relatively large deceleration in the rate of price per cent from the end of 1974 to the end of inflation are fuels and power and food. As world 1975, about half the rise of the preceding year. prices of crude oil began to stabilize in early The rate of wage inflation also slowed over the 1974, increases in wholesale prices for fuels and year, but less than prices, as workers attempted power and retail prices for gasoline and oil to recapture some of the income that had been began to slow. Prices of these products, howlost to price inflation during 1973 and 1974. ever, started to pick up again in the spring and The slowdown in price inflation was led by summer of 1975, reflecting, in part, the oil a sharp deceleration in the rate of wholesale import fees imposed in February and June. price increases early in 1975, which began to The advanced levels of world demand for be reflected at the consumer level by the spring U.S. farm products drove farm prices up sharply of the year. Price rises for many commodities in 1973 and 1974. The high level of prices, began to ease, and the consumer price index however, brought forth record plantings in slowed from a 12 per cent increase during 1974 1975, and favorable weather conditions helped to a 7 per cent increase in 1975. to produce a bumper harvest in the United The sharp reduction in aggregate demand States, considerably improving the price picture during 1974 and the first half of 1975 played for food. a major role in reducing inflationary pressures. Increases in unit labor costs moderated sub- The effect on prices of less spending by con- stantially during 1975 and contributed to the sumers and businesses manifested itself most easing of price pressures over the year. In the dramatically in the form of cash rebate programs fourth quarter of 1975 such costs in the private for automobiles and reduced prices of many nonfarm sector were about 3.5 per cent above Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Economy in 1975 81 Prices Ratio scale, index, WHOLESALE PRICES Fuels, related products. j and power Farm products and processed foods and feeds Dept. of Labor data, seasonally adjusted. their level in late 1974, compared with a post- reflecting the sharpest recovery of corporate war record increase of more than 14 per cent profits in the postwar period. Nevertheless, the during the preceding year. The resurgence of profit share is still well below the 14.6 per cent growth in labor productivity in mid-1975, fol- average of the postwar period. lowing declines in seven of the eight previous The current low levels of unutilized producquarters, was the major factor in the deceler- tive resources—both capital and labor—are ation of labor costs as compensation per hour likely to act as a moderating force on price increased 7.7 per cent over the year. pressures during the coming months. Although Prices generally grew at a faster pace than much of the price performance will depend on labor costs in 1975 as businesses attempted to such external forces as price decisions by the widen their recession-narrowed profit margins. Organization of Petroleum Exporting Countries The share of the value of output of nonfinancial and world harvests, domestic productivity gains corporations going to corporate profits (exclud- and labor costs in a year of heavy collective ing inventory profits) rose to 10.5 per cent in bargaining activity will also play an important the third quarter of 1975 from the recent low role in the determination of price changes in of 6.7 per cent in the fourth quarter of 1974, 1976. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

82 Revision of Money Stock Measures In mid-January the Board of Governors released M less than $100 million, while the September 1 its annual revision of money stock measures and benchmark lowered the level of the series about related items.1 This revision included the incor- $300 million. Other benchmark adjustments for poration of new estimates for domestic non- deposits due to foreign commercial banks and member banks, based on call report data for mutual savings banks also lowered the level of June and September 1975, and the regular up- Mi a little. In total, M was lowered about $300 x dating of seasonal adjustment factors. It also incorporated new estimates of the cash-items- TABLE 1 bias adjustment, which had been introduced in Seasonal adjustment factors for M x the money stock series in late 1969. Revised monthly data back to January 1970, Demand deposit Currency component component both before and after seasonal adjustment, for the money stock and related measures are shown Old Revised Old Revised on pages 86 and 87. Monthly and weekly data, Month series series series series seasonally adjusted and unadjusted, for earlier 1975 Jan 1.0350 1.0290 .9935 .9935 years, are available from the Banking Section, Feb .9900 .9880 .9873 .9870 Division of Research and Statistics. Mar .9900 .9900 .9910 .9920 Apr 1.0090 1.0090 .9945 .9945 May .9790 .9790 .9970 .9975 June .9910 .9960 1.0020 1.0025 EFFECTS OF THE BENCHMARKING July .9955 .9985 1.0080 1.0075 Aug .9840 .9845 1.0035 1.0035 Sept .9920 .9920 .9990 .9985 The effects on the narrow money stock (M ) x Oct .9980 .9960 .9990 .9980 of the benchmark adjustments for domestic Nov 1.0050 1.0060 1.0070 1.0070 Dec 1.0310 1.0320 1.0175 1.0185 nonmember banks were small. Domestic nonmember deposits and certain other components Money stock of the money stock were benchmarked to the June and September call reports. The June revi- Billions of dollars sion for nonmember banks lowered the level of NOTE.—Edward R. Fry, Darwin Beck, and Mary F. Weaver of the Board's Division of Research and Statistics prepared this article. JThe money stock and related measures include M 1 (private demand deposits adjusted plus currency); M 2 (Mi plus commercial bank time and savings deposits other than large negotiable certificates of deposit); M 3 (M plus deposits at mutual savings banks, savings 2 capital at savings and loan associations, and credit union shares); M (Af plus large negotiable time CD's out- 4 2 standing at weekly reporting banks); and M (Af plus 5 3 large negotiable CD's outstanding at weekly reporting banks). Monthly and weekly data for these series are published in the BULLETIN and they also appear each week in the Board's H.6 press release. Seasonally adjusted monthly averages of daily figures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Revision of Money Stock Measures 83 TABLE 2 Seasonal adjustment factors for 1976- -Mi and related measures Time deposits Time deposits DDeemmaanndd other than CD's CCeerrttiiffii-- DDeemmaanndd other than CD's Certifi- CCuurr-- ddeeppooss-- ccaatteess ooff PPeerriioodd CCuurr-- ddeeppooss-- cates of rreennccyy iittss Member m N em on b - er ddeeppoossiitt rreennccyy iittss Member m N em on b - er deposit banks banks banks banks .9935 1.0290 .9990 .9950 .9910 May 19 .9970 .9780 1.0085 1.0070 .9900 .9870 .9880 1.0010 1.0020 .9690 26 .9930 .9680 1.0095 1.0074 .9950 .9920 .9900 1.0060 1.0090 .9810 June 2 .9980 .9840 1.0085 1.0062 .9950 .9945 1.0090 1.0080 1.0080 .9710 9 1.0090 .9900 1.0075 1.0060 .9870 .9975 .9790 1.0090 1.0070 .9880 16 1.0045 1.0050 1.0065 1.0040 .9790 1.0025 .9960 1.0060 1.0030 .9790 23 .9995 .9950 1.0040 1.0012 .9720 30 .9955 .9950 1.0040 .9999 .9720 1.0075 .9985 1.0010 .9990 .9900 1.0035 .9845 .9990 1.0010 1.0300 July 7 1.0210 1.0060 1.0025 .9998 .9760 .9985 .9920 .9950 .9980 1.0460 14 1.0110 1.0090 1.0010 .9988 .9820 21 1.0060 .9960 1.0005 .9986 .9900 .9980 .9960 .9950 .9970 1.0350 28 .9965 .9840 1.0000 .9992 1.0000 1.0070 1.0060 .9890 .9920 1.0130 1.0185 1.0320 .9920 .9890 1.0070 Aug. 4 1.0030 .9925 .9997 1.0002 1.0120 11 1.0130 .9890 1.0000 1.0020 1.0190 18 1.0080 .9870 .9990 1.0012 1.0290 1.0090 1.0590 .9975 .9910 .9960 25 .9975 .9740 .9980 1.0010 1.0380 1.0000 1.0450 .9985 .9942 .9940 .9910 1.0270 .9990 .9958 .9900 SSeepptt.. 11 .9940 .9820 .9975 1.0002 1.0450 .9785 .9980 .9997 .9967 .9890 88 1.0120 .9910 .9970 .9994 1.0460 15 1.0020 1.0010 .9950 .9982 1.0460 .9850 1.0000 .9985 .9978 .9810 22 .9960 .9930 .9930 .9969 1.0460 .9950 .9920 1.0005 1.0008 .9750 29 .9860 .9830 .9945 .9970 1.0460 .9900 .9890 1.0000 1.0020 .9670 .9780 .9745 1.0025 1.0040 .9630 Oct. 6 1.0000 .9960 .9945 .9975 1.0450 13 1.0060 .9950 .9965 .9979 1.0390 .9860 .9920 1.0025 1.0055 .9660 20 .9980 1.0000 .9955 .9972 1.0340 .9985 .9880 1.0045 1.0074 .9740 27 .9920 .9860 .9955 .9954 1.0320 .9950 .9940 1.0060 1.0088 .9810 .9900 .9845 1.0060 1.0095 .9870 Nov. 3 .9940 1.0100 .9925 .9932 1.0220 .9850 .9915 1.0085 1.0100 .9880 10 1.0115 1.0020 .9915 .9928 1.0160 17 1.0085 1.0100 .9885 .9919 1.0110 1.0010 1.0110 1.0085 1.0108 .9760 24 1.0080 .9990 .9885 .9916 1.0100 1.0005 1.0160 1.0080 1.0090 .9720 .9920 1.0190 1.0080 1.0068 .9690 Dec. 1 1.0060 1.0120 .9870 .9905 1.0100 .9830 .9940 1.0080 1.0060 .9690 8 1.0200 1.0200 .9890 .9898 1.0100 15 1.0170 1.0320 .9905 .9888 1.0070 .9950 .9900 1.0080 1.0054 .9720 22 1.0215 1.0320 .9925 .9876 1.0060 1.0020 .9800 1.0090 1.0061 .9820 29 1.0185 1.0350 .9950 .9878 1.0070 million in June 1975 and $600 million in Sep- somewhat greater than in recent reviews.2 tember, because of the benchmarking. Changes in seasonal factors were largest for The benchmark adjustments for M were January and June; factors for certain other 2 larger. Nonmember bank time deposits were months were changed slightly, as shown in reduced $500 million in June and an additional Table 1. The January seasonal factor for demand $1.7 billion in September. Thus, M was $800 deposits was lowered relative to surrounding 2 million and $2.0 billion lower in June and September, respectively. 2In preparing for this revision, the Board's stalf investigated several alternative methods of seasonal adjustment of the M series. The various methods pro- SEASONAL FACTOR REVISION t duce widely differing monthly growth rates. The money stock is subject to a variety of transitory influences that The indications in recent years of a changing limit the significance of short-run growth rates, and seasonal pattern in the demand deposit compo- partly in consequence seasonal factors are subject to nent of the money stock were buttressed by the considerable uncertainty. A technical paper comparing the results of alternative procedures is available from configuration of deposit flows in 1975. As a the Banking Section, Division of Research and Statisresult, changes in monthly seasonal factors were tics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

84 Federal Reserve Bulletin • February 1976 TABLE 3 Money stock growth rates: comparison of old and revised Annual rates of growth in per cent Mi M2 M3 Period Old Revised Old Revised Old Revised series series series series series series Based on quarterly-average data 1974 5.2 5.0 7.7 7.7 7.1 7.1 1975 4.5 4.4 8.7 8.2 11.3 11.1 1975—HI.... 4.2 4.0 8.5 8.0 10.9 10.2 H2 4.7 4.8 8.4 8.2 11.1 11.4 Ql . .. - .3 0.6 5.8 5.6 7.8 7.5 Q2 8.6 7.4 11.2 10.2 13.8 12.6 Q3 6.9 7.1 10.4 10.1 13.2 13.3 Q4 2.4 2.5 6.4 6.1 8.7 9.2 Based on monthly-average data 1974 4.8 4.7 7.2 7.2 6.8 6.8 1975 4.2 4.2 8.8 8.3 11.4 11.2 1975—HI.... 6.0 5.6 10.6 9.8 13.0 11.9 H2 2.3 2.7 6.6 6.5 9.3 9.9 Ql .• 0.8 1.4 7.6 6.9 9.9 9.0 Q2 ... 11.2 9.7 13.4 12.5 15.7 14.5 Q3 ... 2.3 3.6 6.3 6.5 9.9 10.7 Q4 ... 2.3 1.9 6.8 6.4 8.5 8.9 1975—Jan. .. -11.8 - 5.1 2.5 4.1 5.6 6.2 Feb. .. 3.4 8.4 7.2 9.9 8.9 Mar... 11.0 9.4 11.6 9.3 13.9 11.7 Apr. . 3.4 3.4 7.3 7.1 11.7 10.8 May .. 11.3 11.4 13.4 13.4 14.9 14.9 June .. 18.7 14.2 19.2 16.5 19.8 17.4 July .. 2.0 3.7 8.2 9.5 12.2 13.2 Aug. . 2.9 5.3 5.9 5.7 9.4 10.3 Sept. . 2.0 1.6 4.8 4.2 7.8 8.5 Oct.. . - 2.4 - 0.8 4.2 5.2 7.4 8.4 Nov. . 12.2 9.4 12.9 10.8 12.4 11.6 Dec... - 2.8 - 2.8 3.2 3.1 5.6 6.5 months, and the June factor was raised. As thrift institution deposits had been seasonally usual, the changes in seasonal factors for cur- adjusted using the Census Bureau X-ll "addirency were minor, and they had no significant tive" method. In this review the Census Bureau effect on the pattern of currency growth. X-ll "multiplicative" method was used.3 This Seasonal factors for commercial bank time change resulted in only minor adjustments in and savings deposits and for thrift institution the historical series, and the largest changes deposits were also reviewed. Changes in sea- were in seasonal factors for recent years. Factors sonal for time and savings deposits at com- in the first half of the year now tend to be higher, mercial banks were relatively minor, affecting and most of the offset to these higher factors the series from 1966 to date, but the factors is concentrated in the third quarter. Impacts of for thrift institutions were changed more exten- these changes on growth rates for M and M 3 5 sively. measures were minor. The method of seasonal adjustment applied to the thrift institution deposits differs from that 3 For a detailed description of the Census Bureau X-ll method, see The X-ll Variant of the Census Method previously utilized, and seasonal factors for this II Seasonal Adjustment Program, Technical Paper No. series were changed back to 1959. In the past 15, U.S. Department of Commerce. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Revision of Money Stock Measures 85 Monthly and weekly seasonal factors for 1976 tained to adjust the figures for these years indifor the currency and deposit components of M cate that the overstatement was generally minor, t and M , as well as for large negotiable certifi- with the largest corrections in 1970 and 1971. 2 cates of deposit, are shown in Table 2. In contrast, the additional data indicate that prior to 1970 the cash-items bias was understated by minor amounts; revisions to correct that bias OTHER ADJUSTMENTS were also folded into the series back to 1966. In addition to the benchmark adjustments and When the money stock has been revised to the changes in seasonal factors, this year's revi- take into account the new benchmarks, the new sion incorporates new estimates of the "cash- seasonal factors, and the changes in the cashitems-bias adjustment." In the construction of items-bias adjustment, the effect, as shown in the money stock, cash items in the process of the chart, is to raise the level of M slightly t collection—which represent checks received but from 1966 to 1969, and to lower it thereafter. not yet collected—are deducted from private The largest impact occurs in 1970 and 1971 demand deposits as reported by banks in order when the level is reduced about $2 billion. In to avoid double counting of deposits. In 1969 the latter half of 1975 the level of M was x and 1970 adjustment had been made in the reduced about $1.0 billion. money stock data to correct for a "cash-items bias" emanating from international financial IMPACT ON GROWTH RATES transactions. In the late 1960's and early 1970's cash items Table 3 shows, in percentage terms, the effect in the process of collection grew very rapidly. of the revisions on annual rates of growth in A large part of this increase was related to the money stock measures for recent periods. The growth of Euro-dollar and other international upper part of the table shows growth rates based financial transactions and to the clearing of such on quarterly-average data; the lower part, transactions through domestic banks. Such growth rates based on monthly-average data. In transfers generally did not create private demand terms of half-years, the revision lowered the deposit liabilities, so there was no counterpart growth rates of M and M in the first half of x 3 build-up in money stock deposits associated 1975 and raised them in the second half. Both with the rapid increase in cash items. Therefore, first- and second-half growth rates were lowered both the level and the growth rate of M were for M because of the large benchmark adjustx 2 understated when total cash items were deducted ment, but this measure also shows relatively from total money stock deposits. The under- larger growth in the second half after revision. statement of Mi was corrected on the basis of Revisions in monthly growth rates were larger data obtained from Edge Act corporations, than usual, primarily because of the changes in agencies and branches of foreign banks, and seasonal adjustment factors. The largest difother foreign-related institutions that measured ferences were in January and June 1975; in these the volume of items cleared through domestic 2 months, respectively, the growth rate of M x banks. was raised 6.7 percentage points and lowered Recently it was discovered that because of 4.5 percentage points. The changes in monthly certain bank accounting practices the data col- growth rate patterns for M and M are very 2 3 lected had overstated the amount of the cash- similar to the pattern of M but the differences u items bias in recent years. Additional data ob- in growth rates are generally much smaller. NOTES TO TABLES 1 Mi includes (1) demand deposits at all commercial banks other Mz includes M« plus the average of the beginning- and end-ofthan those due to domestic commercial banks and the U.S. Govt., month deposits of mutual savings banks, savings capital at savings less cash items in the process of collection and Federal Reserve float; and loan associations, and credit union shares. (2) foreign demand balances at Federal Reserve Banks; (3) currency M\ includes A/2 plus large negotiable CD's. outside Treasury, Federal Reserve Banks, and vaults of all commercial Ms includes Ms plus large negotiable CD's. banks. 2 Negotiable time CD's issued in denominations of $100,000 or M2 includes—in addition to currency and demand deposits—savings more by large weekly reporting banks. deposits, time deposits open account, and time certificates of de- 3 Average of beginning- and end-of-month deposits at mutual posit (CD's) other than negotiable time CD's issued in denominations savings banks, savings capital at savings and loan associations, and of $100,000 or more by large weekly reporting commercial banks. credit union shares. Excludes time deposits of the U.S. Govt, and of domestic commercial 4 At all commercial banks. banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

86 Federal Reserve Bulletin • February 1976 Money stock—Seasonally adjusted In billions of dollars (for footnotes see page 85) Over-all measures1 Related data De jposits at coi mmercial ba nks YYeeaarr aanndd Nonbank mmoonntthh Mi A/o hh MA M& Currency Ti me and savi ngs in th st r i i t f u t - Demand tions3 CD's2 Other Total 1970—Jan 210.4 393.0 607.9 403.5 618.4 46.3 164.2 10.5 182.6 193.1 214.8 Feb 209.7 392.0 606.9 402.7 617.6 46.5 163.2 10.6 182.4 193.0 214.9 Mar 211.0 394.5 610.1 406.0 621.5 46.7 164.3 11.4 183.5 194.9 215.6 Apr 212.5 398.0 614.6 411.0 627.6 47.0 165.5 13.0 185.5 198.5 216.6 May 213.3 400.1 618.0 413.5 631.4 47.5 165.8 13.4 186.8 200.2 217.8 June 213.6 402.4 621.5 415.8 634.9 47.7 166.0 13.4 188.8 202.2 219.1 July 214.2 406.0 626.7 422.5 643.2 47.9 166.3 16.5 191.8 208.3 220.7 Aug 215.8 410.4 633.3 429.3 652.1 48.1 167.7 18.9 194.6 213.5 222.8 Sept 217.5 414.5 639.7 435.4 660.6 48.3 169.2 20.9 197.1 217.9 225.2 Oct 217.8 417.1 644.7 439.5 667.1 48.5 169.3 22.4 199.3 221.7 227.6 Nov 218.6 420.0 650.0 443.8 673.8 48.8 169.9 23.8 201.3 225.2 230.0 Dec 219.6 423.5 656.2 448.8 681.5 49.1 170.5 25.3 204.0 229.2 232.7 1971—Jan 220.6 428.2 663.7 454.8 690.3 49.4 171.2 26.6 207.6 234.2 235.5 Feb 222.5 434.7 673.2 462.4 700.9 49.8 172.7 27.7 212.3 239.9 238.4 Mar 224.1 441.0 683.1 469.2 711.3 50.0 174.1 28.2 216.9 245.1 242.1 Apr 225.9 445.7 691.7 473.6 719.6 50.4 175.4 27.9 219.8 247.7 246.0 May 228.3 450.7 700.4 479.0 728.7 50.7 177.6 28.3 222.4 250.7 249.7 June 229.8 454.8 707.8 483.8 736.9 51.0 178.8 29.1 225.0 254.0 253.0 July 230.9 457.1 713.6 487.1 743.6 51.5 179.4 30.0 226.2 256.2 256.5 Aug 231.9 459.2 719.2 489.7 749.7 51.7 180.2 30.4 227.4 257.8 260.0 Sept 232.5 461.6 725.0 492.5 755.9 51.9 180.5 30.9 229.1 260.0 263.5 Oct 232.7 464.3 731.2 496.7 763.6 52.2 180.5 32.4 231.6 264.0 266.9 Nov 233.3 468.1 738.2 500.8 771.0 52.3 180.9 32.8 234.8 267.6 270.1 Dec 233.8 471.7 745.1 505.0 778.4 52.6 181.3 33.3 237.8 271.2 273.4 1972—Jan 235.4 477.0 753.6 510.7 787.3 52.9 182.5 33.7 241.5 275.2 276.6 Feb 237.3 481.9 762.0 516.3 796.4 53.3 184.1 34.4 244.5 278.9 280.1 Mar 239.7 486.8 770.6 520.6 804.5 53.6 186.2 33.9 247.0 280.9 283.8 Apr 241.4 490.4 777.7 525.1 812.4 53.8 187.6 34.7 249.0 283.7 287.3 May 242.2 493.8 784.3 529.6 820.1 54.1 188.2 35.8 251.6 287.4 290.6 June 243.3 498.0 792.1 534.6 828.8 54.3 188.9 36.7 254.7 291.3 294.2 July 245.4 502.6 801.0 540.0 838.4 54.7 190.7 37.4 257.2 294.6 298.4 Aug 247.4 507.5 810.6 546.1 849.2 54.9 192.5 38.6 260.1 298.7 303.1 Sept 249.4 512.1 819.8 551.5 859.1 55.4 194.0 39.4 262.7 302.1 307.7 Oct 251.0 516.2 828.2 556.5 868.6 55.8 195.2 40.4 265.2 305.6 312.1 Nov 252.5 520.0 836.1 562.3 878.4 56.3 196.1 42.4 267.5 309.8 316.1 Dec 255.3 525.3 844.9 568.9 888.5 56.9 198.4 43.6 270.0 313.6 319.6 1973—Jan 257.3 529.9 852.8 575.1 898.0 57.2 200.2 45.2 272.6 317.8 322.9 Feb 257.8 532.6 858.2 582.1 907.6 57.5 200.2 49.4 274.9 324.3 325.6 Mar 257.6 534.9 862.7 589.3 917.1 57.9 199.7 54.4 277.2 331.6 327.8 Apr 259.0 538.4 868.4 596.1 926.2 58.6 200.5 57.7 279.4 337.1 330.0 May 261.9 543.7 876.4 603.0 935.7 58.8 203.0 59.3 281.9 341.1 332.6 June 264.1 548.2 883.8 608.8 944.4 59.3 204.8 60.6 284.1 344.7 335.6 July 265.0 550.9 888.6 613.4 951.1 59.5 205.5 62.5 285.9 348.4 337.7 Aug 265.6 554.7 893.6 620.0 958.9 59.8 205.8 65.3 289.0 354.4 338.9 Sept 265.3 556.8 897.3 622.8 963.3 60.2 205.0 66.1 291.5 357.6 340.5 Oct 266.6 561.4 904.2 625.8 968.6 60.5 206.0 64.4 294.8 359.2 342.8 Nov 268.9 566.6 912.1 630.1 975.5 61.0 207.9 63.5 297.7 361.2 345.4 Dec 270.5 571.4 919.5 634.9 982.9 61.5 209.0 63.5 300.9 364.4 348.0 1974—Jan 271.3 575.5 925.6 641.9 992.0 62.0 209.3 66.4 304.3 370.7 350.1 Feb 272.6 580.5 932.5 648.7 1,000.7 62.7 210.0 68.2 307.9 376.1 352.0 Mar 274.1 584.3 938.7 652.3 1,006.6 63.2 210.9 68.0 310.2 378.2 354.3 Apr 275.5 588.2 944.0 662.2 1,018.0 63.9 211.6 73.9 312.7 386.7 355.8 May 276.2 590.2 946.6 668.3 1,024.7 64.3 211.9 78.1 314.0 392.1 356.4 June 277.7 594.4 952.0 675.7 1,033.3 64.6 213.1 81.3 316.7 398.0 357.6 July 278.9 597.9 957.0 681.6 1,040.6 64.8 214.1 83.6 319.1 402.7 359.1 Aug 279.5 600.7 961.0 685.3 1,045.6 65.5 214.0 84.6 321.2 405.8 360.3 Sept 279.8 602.5 964.3 687.3 1,049.2 65.9 213.9 84.8 322.7 407.5 361.9 Oct 281.1 607.2 971.1 692.9 1,056.8 66.6 214.6 85.8 326.0 411.8 363.9 Nov 282.5 610.5 976.9 696.4 1,062.8 67.4 215.1 86.0 328.0 414.0 366.4 Dec 283.1 612.4 981.6 702.2 1,071.4 67.8 215.3 89.8 329.3 419.1 369.2 1975—Jan 281.9 614.5 986.7 707.3 1,079.5 68.2 213.7 92.7 332.6 425.4 372.2 Feb 281.9 618.2 994.0 710.2 1,086.1 68.7 213.2 92.1 336.2 428.3 375.9 Mar 284.1 623.0 1,003.7 712.8 1.093.5 69.4 214.7 89.8 339.0 428.7 380.7 Apr 284.9 626.7 1,012.7 715.1 1,101.1 69.5 215.4 88.4 341.8 430.1 386.0 May 287.6 633.7 1,025.3 718.8 1,110.4 70.2 217.4 85.1 346.1 431.2 391.6 June 291.0 642.4 1,040.2 726.5 1,124.3 71.0 220.0 84.1 351.4 435.5 397.8 July 291.9 647.5 1,051.6 729.6 1,133.7 71.3 220.6 82.1 355.5 437.6 404.1 Aug 293.2 650.6 1,060.6 729.3 1,139.3 71.9 221.3 78.8 357.4 436.2 410.0 Sept 293.6 652.9 1,068.1 731.9 1,147.1 72.0 221.6 79.1 359.2 438.3 415.2 Oct 293.4 655.7 1,075.6 736.6 1,156.5 72.6 220.8 80.9 362.3 443.2 420.0 Nov 295.7 661.6 1,086.0 743.4 1,167.7 73.4 222.3 81.8 365.9 447.6 424.4 Dec 295.0 663.3 1,091.9 746.2 1,174.7 73.7 221.3 82.9 368.3 451.2 428.6 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Revision of Money Stock Measures 87 Money stock—Not seasonally adjusted In billions of dollars (for footnotes see page 85) Over-all measures1 Related data Deposits at cor nmercial banks YYY mmm eeeaaa ooo rrr nnn aaa ttthhh nnn ddd MMii MMii MM zz MMii MMss rr CC ee uu nn rr cc -- yy D M em em an - d Domes- Time and savings ii tt nn NN bb tt ii hh ss oo aa oo tt rr nn nn ii nn ii tt ss kk ff -- uu tt 33 -- pp GG UU oo dd oo ss .. ee ii vv SS -- tt .. tt ss .. 44 Total ber tic non- CD's 2 Other Total member 11997700--—Jan.. . 216.3 398.4 613.6 409.0 624.2 46.1 170.2 131.2 37.7 10.6 182.1 192.7 215.2 4.8 Feb... 207.4 389.8 604.5 400.4 615.1 45.9 161.5 124.5 35.7 10.6 182.4 193.0 214.8 7.1 Mar. . 209.0 393.5 609.7 404.9 621.1 46.3 162.7 125.7 35.6 11.4 184.5 195.9 216.2 6.9 Apr... 213.6 400.3 617.8 413.0 630.5 46.6 167.0 128.9 36.7 12.7 186.7 199.3 217.5 5.3 May.. 209.6 397.7 616.0 410.7 629.0 47.3 162.3 125.1 35.8 13.0 188.1 201.1 218.3 6.4 June.. 212.2 401.5 621.7 414.5 634.7 47.7 164.5 127.0 36.0 13.0 189.3 202.3 220.2 6.5 July. . 213.4 405.4 627.2 421.4 643.3 48.3 165.2 127.1 36.5 16.1 191.9 208.0 221.8 6.8 Aug... 213.2 407.7 630.4 427.0 649.6 48.3 164.9 126.8 36.5 19.2 194.6 213.8 222.7 7.1 Sept... 216.1 412.8 637.1 434.1 658.4 48.2 167.8 129.1 37.2 21.4 196.7 218.1 224.3 6.9 Oct.. . 217.6 416.6 643.0 439.7 666.0 48.5 169.1 130.0 37.6 23.1 199.0 222.0 226.4 6.2 Nov... 220.1 419.7 647.7 444.1 672.1 49.2 170.9 131.1 38.2 24.4 199.7 224.1 228.0 5.7 Dec... 225.8 428.1 659.1 453.8 684.7 50.0 175.8 135.0 39.2 25.7 202.4 228.1 230.9 7.3 1971-—Jan.. . 226.2 433.2 668.0 460.0 694.8 49.1 177.0 135.7 39.8 26.8 207.0 233.8 234.8 6.8 Feb... 220.0 432.3 670.7 459.6 698.0 49.1 170.9 131.1 38.3 27.3 212.3 239.6 238.4 8.5 Mar. . 221.9 440.1 683.3 468.1 711.3 49.5 172.4 132.4 38.4 28.0 218.2 246.2 243.2 5.5 Apr... 227.1 448.5 696.3 475.6 723.4 50.1 177.0 135.8 39.7 27.1 221.4 248.5 247.8 5.6 May.. 224.4 448.4 699.4 475.8 726.8 50.5 173.9 133.2 39.1 27.4 224.0 251.4 251.0 8.0 June.. 228.4 454.1 709.0 482.4 737.2 51.0 177.4 135.8 40.0 28.3 225.7 254.0 254.8 5.5 July. . 230.6 456.9 715.0 486.2 744.3 51.9 178.7 136.4 40.7 29.3 226.4 255.6 258.1 7.0 Aug. . 229.2 456.5 716.3 487.5 747.3 51.9 177.3 135.0 40.7 31.0 227.3 258.3 259.8 7.0 Sept. . 231.0 459.7 722.1 491.6 754.0 51.9 179.1 136.0 41.4 31.9 228.7 260.6 262.4 7.7 Oct... 232.4 463.5 728.9 497.0 762.4 52.2 180.2 136.4 42.1 33.5 231.1 264.6 265.4 5.4 Nov. . 234.6 467.1 734.8 500.7 768.4 52.7 181.8 137.3 43.0 33.6 232.6 266.1 267.7 4.0 Dec... 240.4 476.4 747.7 510.2 781.5 53.5 186.9 141.1 44.1 33.8 236.0 269.8 271.3 6.9 1972 —Jan... 240.9 481.8 757.6 515.5 791.3 52.5 188.4 142.3 44.6 33.7 240.9 274.6 275.8 7.4 Feb... 234.6 479.4 759.4 513.1 793.0 52.6 182.1 137.5 43.2 33.6 244.8 278.4 280.0 7.4 Mar. . 237.4 486.1 771.2 519.4 804.5 53.1 184.3 139.4 43.7 33.4 248.7 282.0 285.1 7.9 Apr... 242.8 493.6 783.0 527.3 816.7 53.5 189.3 143.0 45.1 33.7 250/9 284.5 289.4 7.7 May.. 238.1 491.8 784.0 526.7 818.9 53.9 184.2 138.8 44.3 34.9 253.7 288.6 292.2 10.5 June.. 241.9 497.7 794.1 533.5 829.8 54.4 187.5 141.0 45.4 35.8 255.8 291.5 296.4 6.9 July. . 245.3 502.6 803.1 539.4 839.8 55.1 190.3 142.7 46.4 36.8 257.3 294.0 300.4 7.3 Aug. . 244.5 504.5 807.5 544.0 847.1 55.1 189.5 141.7 46.8 39.5 260.0 299.5 303.0 5.3 Sept. . 247.8 509.5 816.1 550.5 857.0 55.3 192.5 143.6 47.9 41.0 261.8 302.7 306.5 6.0 Oct... 250.5 514.7 825.0 5^6.5 866.8 55.7 194.8 145.0 48.8 41.8 264.2 306.0 310.3 6.7 Nov. . 253.9 518.6 831.7 561.7 874.7 56.7 197.1 146.4 49.7 43.1 264.7 307.8 313.1 6.3 Dec... 262.7 530.3 847.4 574.5 891.6 57.9 204.8 152.1 51.4 44.2 267.6 311.8 317.0 7.4 1973 —Jan.. . 263.2 535.2 856.9 580.1 901.8 56.8 206.4 152.4 51.6 44.9 272.0 316.9 321.7 8.1 Feb... 254.8 530.0 855.3 578.1 903.3 56.8 198.0 145.8 49.8 48.1 275.2 323.3 325.2 9.9 Mar. . 255.2 534.3 863.6 587.8 917.0 57.4 197.7 145.3 50.1 53.5 279.1 332.6 329.3 10.4 Apr... 260.5 542.2 874.7 598.2 930.7 58.3 202.3 148.5 51.6 56.0 281.6 337.6 332.5 8.3 May.. 257.5 541.7 876.2 600.1 934.6 58.7 198.8 145.3 51.1 58.4 284.3 342.7 334.5 8.7 June.. 263.1 548.5 886.7 607.8 946.0 59.4 203.7 148.7 52.4 59.3 285.3 344.7 338.2 7.1 July. . 265.2 551.2 891.3 612.9 953.1 60.0 205.2 149.2 53.2 61.8 286.0 347.8 340.2 6.5 Aug. . 262.6 551.5 890.3 619.3 958.2 60.0 202.5 147.4 52.7 67.8 288.9 356.7 338.9 4.1 Sept. . 263.5 553.8 893.0 622.8 962.0 60.1 203.4 147.8 53.3 69.0 290.3 359.3 339.2 5.3 Oct... 265.6 559.4 900.1 626.0 966.8 60.4 205.2 149.2 53.8 - 66.6 293.7 360.3 340.8 6.0 Nov. . 270.4 565.0 907.2 629.3 971.5 61.5 208.9 151.2 55.1 64.3 294.7 359.0 342.2 4.3 Dec... 278.3 576.5 921.8 640.5 985.8 62.7 215.7 156.5 56.3 64.0 298.2 362.2 345.3 6.3 1974—Jan.. . 276.9 580.5 929.3 646.3 995.1 61.6 215.3 155.8 56.6 65.8 303.6 369.4 348.8 8.1 Feb... 269.3 577.6 929.0 643.6 995.1 61.9 207.4 150.4 54.4 66.1 308.3 374.3 351.4 6.6 Mar. . 271.5 583.9 939.7 650.6 1,006.3 62.7 208.8 151.6 54.4 66.7 312.4 379.1 355.8 6.4 Apr... 277.0 592.3 950.8 664.1 1,022.6 63.5 213.5 154.8 56.0 71.8 315.3 387.1 358.5 6.0 May.. 271.6 588.3 946.6 665.5 1,023.8 64.1 207.4 150.2 54.6 77.2 316.7 393.9 358.3 7.6 June.. 277.0 595.3 955.8 674.9 1,035.4 64.8 212.2 152.7 55.9 79.6 318.3 397.9 360.5 6.1 July. . 279.0 598.2 960.1 681.0 1,042.9 65.3 213.7 153.8 56.2 82.8 319.2 402.0 361.8 5.4 Aug. . 276.4 597.5 957.8 684.6 1,044.9 65.7 210.7 151.7 55.8 87.1 321.1 408.2 360.3 4.0 Sept. . 278.0 599.3 959.7 688.1 1,048.5 65.8 212.2 152.7 56.3 88.7 321.3 410.1 360.4 5.5 Oct... 280.1 604.7 966.3 693.5 1,055.1 66.4 213.7 153.7 56.8 88.8 324.6 413.3 361.6 3.7 Nov. . 284.2 608.8 971.7 695.9 1,058.8 67.9 216.4 155.4 57.3 87.1 324.6 411.7 362.9 3.4 Dec... 291.3 617.5 983.8 708.0 1,074.3 69.0 222.2 159.7 58.5 90.5 326.3 416.7 366.3 4.9 1975-—Jan... 287.7 619.5 990.3 711.4 1,082.2 67.8 219.9 158.2 58.2 91.9 331.9 423.8 370.8 4.0 Feb... 278.5 615.2 990.3 704.4 1,079.6 67.8 210.6 151.8 55.7 89.2 336.7 425.9 375.2 3.3 Mar. . 281.4 622.7 1,005.0 710.8 1,093.1 68.8 212.6 153.4 56.0 88.1 341.4 429.4 382.3 3.8 Apr... 286.5 631.1 1,020.0 716.9 1,105.8 69.1 217.4 156.9 57.4 85.8 344.6 430.4 388.9 4.0 May.. 282.9 631.9 1,025.7 716.0 1,109.8 70.0 212.9 153.4 56.6 84.1 349.1 433.2 393.8 4.1 June.. 290.3 643.5 1,044.5 725.8 1,126.8 71.2 219.1 157.2 58.9 82.3 353.2 435.5 401.0 4.2 July. . 292.1 647.8 1,055.0 729.1 1,136.3 71.9 220.3 157.9 59.4 81.3 355.7 436.9 407.2 3.4 Aug. . 290.0 647.2 1,057.1 728.4 1,138.3 72.1 217.8 155.8 59.0 81.1 357.3 438.4 409.9 2.7 Sept. . 291.7 649.5 1,062.8 732.2 1,145.5 71.9 219.9 157.0 59.7 82.7 357.7 440.5 413.3 3.9 Oct... 292.4 653.0 1,070.3 736.8 1,154.0 72.5 219.9 156.6 60.3 83.7 360.7 444.4 417.2 3.4 Nov. . 297.6 659.7 1,080.1 742.5 1,162.9 73.9 223.6 158.9 61.5 82.9 362.1 444.9 420.4 3.5 Dec... 303.4 668.4 1,093.6 751.8 1,177.1 75.0 228.4 162.1 62.9 83.5 365.0 448.4 425.2 4.2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

88 Membership of the Board of Governors of the Federal Reserve System, 1913-76 APPOINTIVE MEMBERS1 Federal Reserve Date of initial Other dates and information relating Name district oath of office to membership2 Charles S. Hamlin Boston Aug. 10, 1914 Reappointed in 1916 and 1926. Served until Feb. 3, 1936.3 Paul M. Warburg New York do Term expired Aug. 9, 1918. Frederic A. Delano Chicago do Resigned July 21, 1918. W. P. G. Harding Atlanta do Term expired Aug. 9, 1922. Adolph C. Miller San Francisco do Reappointed in 1924. Reappointed in 1934 from the Richmond District. Served until Feb. 3, 1936.3 Albert Strauss . New York Oct. 26, 1918 Resigned Mar. 15, 1920. Henry A. Moehlenpah .. . Chicago , Nov. 10, 1919 Term expired Aug. 9, 1920. Edmund Piatt . New York June 8, 1920 Reappointed in 1928. Resigned Sept. 14, 1930. David C. Wills . Cleveland Sept. 29, 1920 Term expired Mar. 4, 1921. John R. Mitchell Minneapolis ... . May 12, 1921 Resigned May 12, 1923. Milo D. Campbell . Chicago Mar. 14, 1923 Died Mar. 22, 1923. Daniel R. Crissinger . Cleveland . May 1, 1923 Resigned Sept. 15, 1927. George R. James .St. Louis May 14, 1923 Reappointed in 1931. Served until Feb. 3, 1936.3 Edward H. Cunningham . . Chicago do Died Nov. 28, 1930. Roy A. Young Minneapolis ... . Oct. 4, 1927 Resigned Aug. 31, 1930. Eugene Meyer . New York Sept. 16, 1930 Resigned May 10, 1933. Wayland W. Magee , Kansas City ... . May 18, 1931 Term expired Jan. 24, 1933. Eugene R. Black ,. Atlanta . May 19, 1933 Resigned Aug. 15, 1934. M. S. Szymczak .. Chicago . June 14, 1933 Reappointed in 1936 and 1948. Resigned May 31, 1961. J. J. Thomas .. Kansas City ... do Served until Feb. 10, 1936.3 Marriner S. Eccles San Francisco . ,. Nov. 15, 1934 Reappointed in 1936, 1940, and 1944. Resigned July 14, 1951. Joseph A. Broderick .. New York Feb. 3, 1936 Resigned Sept. 30, 1937. John K. McKee .. Cleveland do Served until Apr. 4, 1946.3 Ronald Ransom .. Atlanta do Reappointed in 1942. Died Dec. 2, 1947. Ralph W. Morrison ..Dallas Feb. 10, 1936 Resigned July 9, 1936. Chester C. Davis .. Richmond ..June 25, 1936 Reappointed in 1940. Resigned Apr. 15, 1941. Ernest G. Draper New York Mar. 30, 1938 Served until Sept. 1, 1950.3 Rudolph M. Evans Richmond Mar. 14, 1942 Served until Aug. 13, 1954.3 James K. Vardaman, Jr. ..St. Louis Apr. 4, 1946 Resigned Nov. 30, 1958. Lawrence Clayton Boston Feb. 14, 1947 Died Dec. 4, 1949. Thomas B. McCabe Philadelphia Apr. 15, 1948 Resigned Mar. 31, 1951. Edward L. Norton Atlanta Sept. 1, 1950 Resigned Jan. 31, 1952. Oliver S. Powell Minneapolis do Resigned June 30, 1952. Wm. McC. Martin, Jr. ...New York Apr. 2, 1951 Reappointed for term beginning Feb. 1, 1956. Term expired Jan. 31, 1970. A. L. Mills, Jr San Francisco ..Feb. 18, 1952 Reappointed in 1958. Resigned Feb. 28, 1965. J. L. Robertson Kansas City do .Reappointed for term beginning Feb. 1, 1964. Resigned Apr. 30, 1973. For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Membership of the Board of Governors, 1913-76 89 Federal Reserve Date of initial Other dates and information relating Name district oath of office to membership2 Paul E. Miller Minneapolis ... . Aug. 13, 1954 Died Oct. 21, 1954. C. Canby Balderston ... , Philadelphia ... . Aug. 12, 1954 Served through Feb. 28, 1966. Chas. N. Shepardson ... ..Dallas Mar. 17, 1955 Retired Apr. 30, 1967. G. H. King, Jr .. Atlanta . Mar. 25, 1959 Reappointed in 1960. Resigned Sept. 18, 1963. George W. Mitchell .. Chicago . Aug. 31, 1961 Reappointed for term beginning Feb. 1, 1962. Served until Feb. 13, 1976.3 J. Dewey Daane .. Richmond Nov. 29, 1963 Served until Mar. 8, 1974.3 Sherman J. Maisel San Francisco . . Apr. 30, 1965 Served through May 31, 1972. Andrew F. Brimmer , Philadelphia ... .Mar. 9, 1966 Resigned Aug. 31, 1974. William W. Sherrill ..Dallas May 1, 1967 Reappointed for term beginning Feb. 1, 1968. Resigned Nov. 15, 1971. Arthur F. Burns .. New York . Jan. 31, 1970 Term began Feb. 1, 1970. John E. Sheehan .. St. Louis Jan. 4, 1972 Resigned June 1, 1975. Jeffrey M. Bucher San Francisco . . June 5, 1972 Resigned Jan. 2, 1976. Robert C. Holland ,. Kansas City ... . June 11, 1973 Henry C. Wallich .. Boston Mar. 8, 1974 Philip E. Coldwell ..Dallas Oct. 29, 1974 Philip C. Jackson, Jr. .. .. Atlanta July 14, 1975 J. Charles Partee .. Richmond Jan. 5, 1976 Stephen S. Gardner Philadelphia ... . Feb. 13, 1976 CHAIRMEN4 VICE CHAIRMEN4 Charles S. Hamlin ...Aug. 10, 1914-Aug. 9,1916. Frederic A. Delano.. .Aug. 10, 1914-Aug. 9, 1916 W. P. G. Harding ...Aug. 10, 1916-Aug. 9,1922. Paul M. Warburg Aug. 10, 1916-Aug. 9, 1918 Daniel R. Crissinger May 1, 1923-Sept. 15,1927. Albert Strauss Oct. 26, 1918-Mar. 15, 1920 Roy A. Young Oct. 4, 1927-Aug. 31,1930. Edmund Piatt July 23, 1920-Sept. 14, 1930 Eugene Meyer Sept. 16, 1930-May 10.1933. J. J. Thomas Aug. 21, 1934-Feb. 10, 1936 Eugene R. Black May 19, 1933-Aug. 15.1934. Ronald Ransom Aug. 6, 1936-Dec. 2, 1947 Marriner S. Eccles ..Nov. 15, 1934-Jan. 31,1948. C. Canby Balderston Mar. 11, 1955-Feb. 28, 1966 Thomas B. McCabe..Apr. 15, 1948-Mar. 31,1951. J. L. Robertson Mar. 1, 1966-Apr. 30, 1973 Wm. McC. Martin, Jr. Apr. 2, 1951-Jan. 31,1970. George W. Mitchell.. May 1, 1973-Feb. 13, 1976 Arthur F. Burns Feb. 1, 1970- Stephen S. Gardner ..Feb. 13, 1976- EX-OFFICIO MEMBERS1 SECRETARIES OF THE TREASURY COMPTROLLERS OF THE CURRENCY W. G. McAdoo Dec. 23, 1913-Dec. 15, 1918 John Skelton Williams Feb. 2, 1914-Mar. 2, 1921 Carter Glass Dec. 16, 1918-Feb. 1, 1920 Daniel R. Crissinger Mar. 17, 1921-Apr. 30, 1923 David F. Houston ...Feb. 2, 1920-Mar. 3, 1921 Henry M. Dawes ....May 1, 1923-Dec. 17, 1924 Andrew W. Mellon ..Mar. 4, 1921-Feb. 12, 1932 Joseph W. Mcintosh Dec. 20, 1924-Nov. 20, 1928 Ogden L. Mills Feb. 12, 1932-Mar. 4, 1933 J. W. Pole Nov. 21, 1928-Sept. 20, 1932 William H. Woodin Mar. 4, 1933-Dec. 31, 1933 J. F. T. O'Connor ..May 11, 1933-Feb. 1, 1936 Henry Morgenthau, Jr.Jan. 1, 1934-Feb. 1, 1936 1 Under the provisions of the original Federal Reserve Act the of the Currency should continue to serve as members until Feb. Federal Reserve Board was composed of seven members, in- 1, 1936; that the appointive members in office on the date of cluding five appointive members, the Secretary of the Treasury, that Act should continue to serve until Feb. 1, 1936, or until who was ex-officio chairman of the Board, and the Comptroller their successors were appointed and had qualified; and that of the Currency. The original term of office was 10 years, and thereafter the terms of members should be 14 years and that the the five original appointive members had terms of 2, 4, 6, 8, designation of Chairman and Vice Chairman of the Board should and 10 years, respectively. In 1922 the number of appointive be for a term of 4 years. members was increased to six, and in 1933 the term of office 2 Date after words "Resigned" and "Retired" denotes final was increased to 12 years. The Banking Act of 1935, approved day of service. Aug. 23, 1935, changed the name of the Federal Reserve Board 3Successor took office on this date. to the Board of Governors of the Federal Reserve System and 4 Chairman and Vice Chairman were designated Governor and provided that the Board should be composed of seven appointive Vice Governor before Aug. 23, 1935. members; that the Secretary of the Treasury and the Comptroller Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

90 Statements to Congress Statement by Arthur F. Burns, Chairman, I take strong issue with these premises. The Board of Governors of the Federal Reserve first reflects a basic misconception of the Federal System, before the Subcommittee on Financial Reserve. The second, I believe, is simply an Institutions Supervision, Regulation, and In- argument that there should be more political surance of the Committee on Banking, Cur- control over the monetary policy functions of rency, and Housing, U.S. House of Repre- the Federal Reserve. I do not think that such sentatives, January 21, 1976. a radical revision of our longstanding concept of the proper status of a central bank would be I am pleased to have this opportunity to present in the public interest. the views of the Board of Governors on Title It is perfectly true, of course, that the Federal V of the committee's "Discussion Prin- Reserve is, in some of its functions, a "bankers' ciples"—the part concerned with reorganization bank." Indeed, the Congress created it for just of the Federal Reserve System. that reason—that is, to serve as a source of Let me, first of all, congratulate this commit- liquidity for our Nation's banking system and tee, and Chairmen Reuss and St Germain in to hold the reserves of member banks. The particular, for the leadership you have shown charge that this relationship results in "control" in undertaking what could become one of the of the System by bankers, however, is erronehistoric studies in the field of regulation of ous. This premise appears to be based primarily financial institutions. Your committee's study, on the fact that member banks own the stock Financial Institutions and the Nation's Economy of the Federal Reserve Banks and elect two- (FINE), has focused attention on areas that are thirds of the directors of the Reserve Banks. of great importance to the economic health of At a later point, I shall address the proposals our Nation. We at the Board of Governors stand in the Discussion Principles relating to the ready to assist you in any way we can. ownership of Federal Reserve Bank stock and I am here to present the Board's views on the election of Reserve Bank directors. For the proposals in your Discussion Principles that call present, I cannot be more emphatic when I say for changes in the structure of the Federal Re- that the control of the Federal Reserve System serve System. These recommendations are far- resides firmly with the Board of Governors. reaching and, if adopted by the Congress, would The members of the Board, having been fundamentally alter the character of the Federal appointed by the President and confirmed by the Reserve. Consequently, it is important to ex- Senate, take with utmost seriousness their reamine the premises on which these recom- sponsibility to serve the best interests of the mendations are based before turning to an eval- American people. I know it is fashionable to uation of specific suggestions for change. charge Federal regulatory agencies with being The first premise is that the Federal Reserve "captives" of the industries that they regulate; is essentially a "bankers' bank" whose control but people who follow closely the activities of rests largely in the hands of financial and indus- the Federal Reserve Board—particularly those trial interests. The second premise is that the who are aware of the feelings of members of Federal Reserve is not sufficiently "responsive" the banking industry about many actions of the Board—should know that this charge is not to the needs of all elements of our society and applicable to the Federal Reserve. that the System should be revamped to make it more "responsive." The claim that the Federal Reserve is not Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 91 "responsive" to all segments of American so- the implication of the Discussion Principles: If ciety requires careful analysis. I fear that the Congress now sees fit, after more than 60 "responsiveness," as that term is often used, years of experience, to abandon the concept of is no more than a euphemism for susceptibility a truly independent central bank, then the Conto control. Many who claim the System should gress itself must be willing to assume both the be more "responsive" really mean that the burden and the responsibility of formulating Federal Reserve's judgments on monetary pol- monetary policy. icy should be subject to some measure of politi- The Discussion Principles make several specal direction exercised in behalf of particular cific charges against the Federal Reserve that interest groups. Those who hold this view often are apparently intended to support the basic tend to favor more and easier credit and are premise that the System should be more therefore generally opposed to the concept of "responsive." It is argued, for example, that an independent central bank. monetary policy is shaped largely in secret. This There is a clear distinction, however, between charge apparently stems from the fact that disbeing "responsive" to the demands of special cussions on monetary policy are held at closed interest groups and being sensitive to the needs sessions of the Board and of the Federal Open of the various elements of our society. The Market Committee. But this fact does not mean Federal Reserve has been extremely sensitive that the Federal Reserve is unaware of the views to the impact its decisions may have on different and needs of those who are affected by our segments of our society. The Board frequently decisions. During these meetings we consider must make very difficult judgments, however, in detail a broad range of information: the and it is almost inevitable that our decisions will studies by our staff, comments from the Reserve displease some or at times even many of our Banks and their boards of directors, data and people. But this is no reason to initiate funda- views submitted for our consideration by memmental changes in the System. Some of the bers of the Congress and other Government constructive effects of monetary policy take time officials, opinions expressed by academicians, to emerge, and it is therefore important to judge journalists, and representatives of various segmonetary policy over a broad time frame. The ments of the public—all of these are taken into great virtue of an independent monetary author- account by members of the Board. Because of ity is that it is able to make objective and the sensitive nature of our discussions and the informed judgments about these troublesome decisions th$t we must make, it is absolutely matters—free from the transitory pushes and essential that these meetings be held in closed pulls of the political process. session. To do otherwise would be a disservice The Federal Reserve is, of course, a creation to the public interest, for premature disclosure of the Congress. It is clearly within the power of our discussions and decisions could severely of the Congress to alter the legal basis of the disrupt financial markets. Federal Reserve System and, if it so desires, It is Federal Reserve policy to disclose our to assume for itself more direct responsibilities decisions as quickly as possible. To this there for the day-to-day formulation of monetary pol- is only one exception—the lag of 45 days in icy. In considering such changes, however, I publishing the short-run targets of the Federal believe that members of the Congress will want Open Market Committee. The basic purpose of to weigh carefully any action that would impair this lag is to deny sophisticated market watchers the objectivity of the Nation's monetary author- an opportunity to gain undue advantage over an ity and its ability to make the difficult decisions unwary public. Apart from this delay, decisions necessary in formulating monetary policy. on changes in the discount rate, on bank reserve One may differ with the Board's judgments requirements, and on stock market margin reon monetary policy matters, and one may even quirements, also all regulatory rulings, are anbelieve that the Congress erred in conferring nounced promptly by the Board—usually the such independence upon the Federal Reserve. same day that the actions are taken. Also, data But there should be no misunderstanding about on financial operations of the Federal Reserve, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

92 Federal Reserve Bulletin • February 1976 the conditions of member banks, the money present structure fails to pinpoint responsibility supply, interest rates, and other financial vari- for monetary policy. I believe this charge reables, are released regularly and with great flects unfamiliarity with the structure and frequency. The Board submits regular and fre- operation of the System. There is no uncertainty quent reports to the Congress on economic and as to the responsibility for monetary policy financial matters. Indeed, the detail in which judgments within the Federal Reserve. It rests financial data are published is greater than for ultimately with the seven members of the Board any other central bank in the world. of Governors. Under existing law, the Board The Discussion Principles also contend that has exclusive responsibility for changes in recongressional involvement in monetary policy serve requirements, margin requirements, and decisions has been largely peripheral. Whatever banking regulations. Changes in the discount may have been true in the past, this premise rate originate at the Reserve Banks but require is certainly invalid today. In my experience at explicit approval of the Board of Governors, and the Federal Reserve, the Congress has never we examine every proposal for change with been lax in exercising its oversight of the Sys- great care. Open market decisions are made by tem or in providing us with its views. Only last the Federal Open Market Committee (FOMC), year, the Congress revamped its oversight pro- which consists of the seven members of the cedure with the adoption of House Concurrent Board of Governors and five Reserve Bank Resolution 133, which this committee helped Presidents. The structure of the FOMC avoids to draft. This resolution provides for four regu- complete centralization of monetary policy delar appearances by the Federal Reserve each cisions in Washington, but the Board members year before the Banking Committees solely to are plainly in the majority on that body and the discuss monetary policy. We take implementa- Chairman of the Board serves also as Chairman tion of this resolution very seriously. I have of the FOMC. Thus, far from being "incoheralready appeared before the Banking Commit- ent," the operation of the System and the retees on three occasions and expect to testify sponsibility for decision-making within the early next month before this committee in re- System are clearly determined by the Federal sponse to that resolution. I have found that these Reserve Act itself. discussions add an important dimension to the A change in the basic structure of a govern- Board's deliberations on monetary policy. ment agency—such as proposed in the Discus- In addition to these appearances, we are fre- sion Principles—is justified only when some quently asked to testify on a wide range of major defect has been discovered in its strucfinancial subjects before this and other commit- ture. This is not the case with the Federal tees of the Congress, including the newly Reserve. On the contrary, its structure has enformed Senate and House Budget Committees. abled it to serve the country well through the Last year, for example, I testified formally be- years, and there is no need to change it at the fore the Congress on 17 separate occasions, and present time. my colleagues on the Board appeared before The Federal Reserve System, as you know, congressional committees on 23 other occa- was established more than 60 years ago. If a sions. I also have frequent meetings with mem- fresh start were made, the Congress might debers of the Congress to discuss questions of vise a structure similar to what we now have mutual concern, and the amount of corre- or perhaps move in a quite different direction. spondence we have with members of the Con- Before I joined the Boarcf of Governors in early gress—not simply on constituents' inquiries but 1970, I thought I saw all sorts of opportunities on fundamental policy issues—is voluminous. for change in the System. But I soon realized In other words, congressional involvement with that the structure whose basic shape was devised the Federal Reserve is substantial and is taken by Woodrow Wilson, Carter Glass, and Robert very seriously by the Board. Latham Owen worked quite well. Finally, it is claimed that the operation of the In establishing the Federal Reserve, the Con- Federal Reserve is "incoherent" and that its gress deliberately decided that the national in- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 93 terest required that the central bank be insulated The second fundamental change proposed by from political pressures stemming either from the Discussion Principles is to eliminate the the Congress or the White House. The Con- separate status of the Federal Reserve Banks and gress, therefore, charged the Federal Reserve to make them simply regional offices of the with broad responsibility to protect the Nation's Board. The stock of the Federal Reserve Banks money and to foster its effective use. would be retired; their boards of directors would I want to turn now to certain specific sugges- be eliminated; and the Reserve Bank Presidents tions that are set forth in the Discussion Prin- would be appointed by the President, subject ciples for reorganizing the Federal Reserve to Senate confirmation, and they would be paid System. Two features of this reorganization plan the same salary as members of the Board of are fundamental, and I shall devote the greater Governors. The role of the Reserve Banks in part of my remaining testimony to them. monetary policy would then be purely advisory. The first of these proposed changes is to strip The Banks, in turn, would be advised by newly the Federal Reserve of all responsibilities in the established advisory committees. area of bank regulation and supervision. Under Retiring stock of the Federal Reserve Banks the proposed plan, the Federal Reserve would would accomplish little of practical importance. confine its activities mainly to the sphere of While this stock carries certain voting rights, monetary policy. Its regulatory functions, apart it limits the holder to a statutory dividend, the from those involving the payments mechanism, amount of stock a member bank must own is would be transferred to a new body—the Fed- fixed by law, and this stock cannot be transeral Depository Institutions Commission. ferred or encumbered. Thus, it is by no means In testimony before this committee last De- the equivalent of stock in a private corporation. cember, Governor Holland presented the On balance, the Board believes that ownership Board's position on this proposed fundamental of Reserve Bank stock is desirable because of change. It is the Board's judgment that the the incentive it provides to members to take an Federal Reserve, as the Nation's central bank, interest in the operations and efficiency of the must be closely involved in the processes of System. bank regulation and supervision. These pro- The other changes proposed by the Discuscesses inevitably have an impact on general sion Principles would not only weaken the economic and financial conditions. If the Fed- present machinery for developing monetary eral Reserve played no part in this activity, there policy but would also introduce a political is a danger that monetary policies and regulatory dimension into the selection of Federal Reserve policies could be working at cross purposes. For Bank officials. Moreover, they would curb the example, since the growth of loan commitments strong impulses within the System to improve by banks has a significant bearing on the avail- the efficiency of the Federal Reserve Banks and ability of bank credit to business firms, the to keep down their operating costs. Federal Reserve must watch closely the move- The 269 Reserve Bank and branch directors ments of these commitments. Such commit- who now serve the System are highly qualified ments could increase very sharply if bank citizens drawn from many walks of life and from supervisors paid little attention to them, and all parts of the country. Some are bankers, as could force the Federal Reserve to pursue a contemplated by law, others are industrialists, more expansionary monetary policy than it merchants, farmers, attorneys, university preswould otherwise deem appropriate. idents, and professors. They are deeply inter- Now, more than ever, the Federal Reserve's ested in our country and its economic welfare. role in formulating monetary policy and as They devote a great deal of time to the System, lender of last resort interacts with its role as keeping the officials of the Reserve Banks and a bank supervisor and regulator. Each of these the Board informed on a regular, systematic areas of public policy influences the effec- basis about actual and prospective developments tiveness of the other. To separate them will in their businesses, their industries, and their weaken both. communities. I seriously doubt that such devo- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

94 Federal Reserve Bulletin • February 1976 tion and energy would be evoked by mere sibility for policy-making. Removal of the participation in advisory committees such as Presidents from the FOMC could have the effect proposed in the Discussion Principles. Service of making the Federal Reserve more introspecas a director of a Federal Reserve Bank carries tive and less sensitive to public concerns—a with it both prestige and recognition of accom- result opposite to that sought by the authors of plishment, and this has proved to be a signifi- the Discussion Principles. cant incentive in attracting some of America's Let me turn now to a matter that I mentioned finest citizens to the Federal Reserve System. earlier in my testimony—the selection of Fed- This is a resource that should not be abandoned eral Reserve Bank directors. In view of the lightly. concern that has been expressed that the Federal Moreover, many of our directors are highly Reserve is "controlled" by banking and indusexperienced managers, and they have been trial interests, let me offer a suggestion that the willing to put their managerial knowledge and Board views as one way of minimizing this skills at the System's disposal. The benefits are misinterpretation. reflected in the sharp improvement of produc- Under the Federal Reserve Act, six of the tivity in conducting System operations. The nine directors at each Reserve Bank are elected measurable output of the Federal Reserve Banks by the member banks. Three of these directors has approximately doubled in the past 8 years, are typically bankers—the Class A directors— with only a 40 per cent increase in System while the other three—the Class B directors— personnel. In fact, the total number of individ- must at the time of their election be actively uals employed by the System will be a little engaged in commerce, agriculture, or some lower in 1976 than it was in 1974, despite a other industrial pursuit in their district. large increase in the measurable volume of The remaining three directors—the Class C Federal Reserve Bank operations. directors—are appointed by the Board of Gov- The recommendations for selection and com- ernors and are considered to be the public pensation of Reserve Bank Presidents would, directors. The Board appoints the chairman and if followed, significantly diminish the interest deputy chairman of each Reserve Bank from of many of the best qualified persons for these among the Class C directors. In other words, important positions, and they would also inter- as presently constituted under the law, the Reject transitory political considerations into the serve Bank board of directors may be viewed selection process. Reserve Bank presidencies as representing lenders (Class A), borrowers are career positions within the Federal Reserve (Class B), and the public (Class C). System, and the ability to offer salaries some- The Congress may wish to consider whether what comparable to those offered by private responsibility for selecting Class B directors enterprise enables us to attract highly qualified should be shifted to the Board of Governors in people to the Reserve Banks. Washington. At the same time the Congress Finally, removing the Reserve Bank Pres- might wish to specify that the boards of directors idents from membership in the Federal Open encompass a broader range of interests than is Market Committee would reduce regional in- required under existing law. volvement in the shaping of our Nation's mon- This would mean that a majority of the direcetary policy. The Reserve Bank Presidents not tors at each Reserve Bank would be appointed only bring to the FOMC a degree of experience by the Board in Washington and would repreand insight that would be lacking in a purely sent, so to speak, the public. It would be apcentralized policy-making organization but they propriate to allow member banks to continue also are an important source of knowledge and to elect bankers as directors, in light of the informed opinion about regional interests and burden that member banks bear in the impleneeds. There is a clear difference between an mentation of monetary policy and the mainteadvisory role, as contemplated for the Reserve nance of reserve requirements. Even here, Bank Presidents by the Discussion Principles, however, there may be an opportunity for and the role of a participant sharing respon- broadening the selection process. If the recom- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 95 mendation of the Discussion Principles for uni- port, we already do much of what is recomversal reserve requirements is adopted—and the mended in the Discussion Principles, and we Board strongly endorses this recommenda- stand ready to provide further reports that can tion—the selection of Class A directors might be helpful to the Congress. However, the sugbe made by all member institutions that are gestion that the Board be required to adjust its required to maintain reserves with the Federal monetary plans to the fiscal proposals of the Reserve. President is seriously deficient in failing to take Let me now turn briefly to the remaining account of the new fiscal role of the Congress proposals. under the Budget Reform Act. In addition, this The Discussion Principles recommend reduc- suggestion runs the risk of diminishing the tion of the number of Board members from 7 Board's independence by requiring the condito 5 and a reduction in their term of office from tioning of its plans to the President's budget. 14 to 10 years. We believe that retaining a On the audit question, the Board remains seven-member Board not only provides for a opposed to an audit by the General Accounting broader range of significant skills and experi- Office for the reasons presented to the Banking ence but also helps to accomplish in an efficient Committee in earlier testimony. way our ever-increasing workload. As to the In summary, we believe firmly that it is in length of term, we believe that the Congress the public interest to retain the concept of an has wisely recognized that a long term for Board independent monetary authority, and we oppose members would strongly encourage inde- efforts to politicize the functioning of the Fedpendence of thought and decision. We see no eral Reserve System. We also believe that the reason to change that. procedure established by House Concurrent The Board has no basic objection to making Resolution 133 offers an excellent means for the term of the Chairman coterminous with that promoting a continuing discussion of monetary of the President, but we would recommend a policy matters between the Congress and the lag of 6 to 12 months between the inauguration Federal Reserve. As I have noted, this proceof a new President and the expiration of the dure seems to be working well. Chairman's term of office. In this way, a Chair- We see no compelling reasons to legislate man could be selected in a deliberative manner, fundamental changes in the Federal Reserve at apart from the political atmosphere that sur- this time because there is no evidence that the rounds the selection of a new President's Cabi- System has failed to function well with its net. We also believe Senate confirmation of the present structure. However, the Board would Chairman would be appropriate. have no objection to changing the method for Neither would the Board object to amending selection of Class A and Class B directors and the Federal Reserve Act to make the Board providing explicitly for a greater diversity of explicitly responsible for helping to achieve the interests among directors. Nor would the Board objectives of the Employment Act of 1946. We object to charging the Federal Reserve with already accept the Employment Act as a guiding explicit responsibility to further the objectives principle. If that Act were to be amended, of the Employment Act of 1946, or adjusting however, we would suggest that the Congress the term of the Chairman to conform roughly also expressly declare general price stability to to that of the President, or requiring Senate be an objective of national economic policy. confirmation of the Chairman. The Federal Reserve and other Government Although the Board sees no difficulty with agencies have interpreted the Employment Act some of the recommendations in Title V of the to mean that a stable price level is an important Discussion Principles, we also see no clear or objective of public policy, but the Act is less decisive need to adopt any of them. Indeed there clear than it should be on this need. It would are strong reasons, as I have indicated, for be useful to remove any doubts about our na- opposing the key premises of this title. The tional commitment to a stable price level. world's history is littered with the economic As to the matter of an annual economic re- wreckage caused by political domination of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

96 Federal Reserve Bulletin • February 1976 monetary function. Your predecessors in the I would again like to commend this commit- Congress acted wisely in providing a design for tee for the thoughtful and careful approach you the Federal Reserve that insulated it from poli- are taking in your continuing study of Financial tics. The Board urges you not to overturn a Institutions and the Nation's Economy, and to structure that has stood so well the test of time indicate our desire to be as helpful as we possiand experience. bly can in assisting you in your efforts. • Statement by Robert C. Holland, Member, be acted on promptly within a longer-run Board of Governors of the Federal Reserve framework of legislative reform. System, before the Subcommittee on Financial It has been the view of the Board of Gover- Institutions Supervision, Regulation, and In- nors that there should be coordinated changes surance of the Committee on Banking, Cur- in our financial system designed to serve four rency, and Housing, U.S. House of Repre- objectives: (1) increase competition; (2) imsentatives, January 22, 1976. prove the flexibility of financial institutions to respond to changing needs of individuals and I am pleased to appear before this committee businesses while (3) maintaining a base for on behalf of the Board of Governors of the effective monetary policy, and (4) preserving a Federal Reserve System to discuss Title I of the sound and resilient financial system. Although FINE1 "Discussion Principles" relating to de- we may differ in detail, we believe that Title positary institutions. I of the Discussion Principles provides a good In discussing the wide-ranging proposals of framework for the type of comprehensive legis- Title I, I think it might be most helpful to the lation required. committee if I summarize the Board's views, It must be recognized that powerful forces pointedly but rather briefly, and then stand for change are at work within our financial prepared to answer any questions you might system. Pressures of competition, technological have. Some of these views are not supported advance, and customer demand for different and by all members of the Board, but all are sup- expanded services are bringing about many ported by a majority of the Board. changes in the structure and operations of bank When I appeared before your committee last and nonbank institutions. The most effective December to testify on Title IV relating to the role here for the Congress and the regulatory regulatory agencies, I noted that your study agencies is one of channeling and containing wisely recognizes the interrelation of many seg- these developments within prudent limits. ments of the Discussion Principles. The Board For example, institutional changes already believes this interrelation is particularly signifi- under way are blurring the distinction between cant in considering Title I relating to depositary demand deposits and time and savings accounts, institutions, and we support the opening state- as well as the distinction between commercial ment of Title I that "A coordinated approach banks and other savings institutions. The public is needed to strengthen our depository institu- is holding an ever larger share of its immediate tions." liquidity in interest-bearing deposit accounts. However, a coordinated approach does not Commercial banks and thrift institutions are in necessarily mean that all such legislation has direct competition for such balances. to be enacted at the same time. In our view On the other hand, during each period of there are measures, some of which I will refer relatively high market interest rates, there has to in the course of my testimony, that should been a shift of savings funds out of depositary institutions into money market instruments in 1 Financial Institutions and the Nation's Economy. order to maximize their earnings. Whenever Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 97 Regulation Q imposes below-market-rate ceil- Board is concerned that the proposed asset diings, this movement will undoubtedly re-emerge versification could have an adverse impact on as individuals become ever more financially housing finance that might not be offset in timely sophisticated. fashion by other proposals in the Discussion For the sake of simple equity to savers, as Principles. Gradual transition authority would well as practicality and efficiency, removal of assure that diversification would not have a such ceilings is a desirable goal. To be sure, sudden impact on housing finances and would existing rate ceilings could be rendered both permit adjustments to be made to deal with any ineffective and unnecessary by a sufficient de- stresses that might result from the expanded cline in market interest rates. Absent such a powers; by the same token, of course, it would major downward adjustment in market rates, also prolong the transition period during which however, deposit rate ceilings should only be the thrift institutions are gaining competitive removed in stages over a period of time, during vitality. which thrift institutions—and perhaps some Such a gradual implementation would be small commercial banks as well—could diver- consistent with the proposed step-by-step apsify their investment portfolios appropriately. proach to the removal of deposit interest rate ceilings. The Board supports the gradual phasing out of the authority to regulate time deposit interest rates. Because of the uncertainties of ASSET AND LIABILITY POWERS financial conditions in years ahead and because OF THRIFT INSTITUTIONS of the difficulties many institutions could expe- Proposals 2 (Sources of Funds), and 3 (Uses rience in making the needed adjustment to of Funds) in Title I of the FINE Discussion competition to interest rates, we believe it would Principles provide a means for gradually dealing be wise to afford an opportunity for final review with this problem. We are in general agreement prior to the termination of this authority. We with these proposals for broadening the invest- also believe it would be important to retain the ment powers of thrift institutions. Such broader authority to reimpose interest rate ceilings powers would allow them to invest in a mix should a financial emergency arise. of assets on which the return is more responsive The Board believes that the statutory prohibito market interest rates. With more diversified tion against payment of interest on demand asset holdings, thrift institutions in time would deposits should not be lifted forthwith. That be in a better position to pay competitive rates prohibition is so deeply imbedded in the banking to savers at times when market rates were rising, structure that the decision to remove it should and problems of disintermediation would be preceded by careful study of its possible thereby be diminished. To this extent, there consequences and suitable preparation for dealshould be greater stability of flows of funds to ing with the resulting adjustments, and in any thrift institutions, more stable flows of funds to event such removal should be accomplished housing finance, a more equitable return to the gradually. individual saver during periods of high interest The Board also agrees with the Discussion rates, more alternative borrowing sources for Principles' proposal to permit savings and loan consumers, and a broader range of instruments associations and mutual savings banks to offer and loan terms available to consumers. demand deposits and other third-party transfer Although the Board supports expanded con- arrangements, so long as careful attention is sumer lending powers (including the issuance paid to competitive equality, particularly with of credit cards and the establishment of revolv- reference to monetary reserve requirements and ing lines of credit) and authority to invest in all other regulations applicable to deposit accommercial paper, corporate debt, and bankers counts at commercial banks. acceptances for thrift institutions, we believe The Board believes that a comparable expanthat it would be preferable to provide for a sion of the asset and liability powers of credit gradual implementation of these powers. The unions is an appropriate long-range goal. In our Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

98 Federal Reserve Bulletin • February 1976 view, however, this increase in authority for justment, however, we favor the Discussion credit unions should be programmed on a step- Principles' proposed 5-year transition for instiby-step basis so that there can be some assur- tutions that are not subject to reserve requireance of a reasonably smooth and safe adjustment ments of the Federal Reserve at the time of in their operations, and it should be subject to introduction of the legislation. appropriate safeguards. The Board also agrees that all depositary institutions required to meet reserve requirements of the Federal Reserve should have "direct, full and equitable access to Federal RELATIONSHIP TO THE Reserve services, including the discount win- FEDERAL RESERVE SYSTEM dow and wire transfer system." The Board Proposal 5 sets forth a recommendation for recommends that, in broadening access to the reserve requirements that is similar to one made discount window, the Congress also provide for by the Board to the Congress in our letter of liberalization of the present collateral require- June 26 to Chairmen Reuss and St Germain. ments. The law now precludes the use of some We wholeheartedly approve of the Discussion sound assets and collateral at our discount win- Principles' statement that all Federally insured dow except at a penalty interest rate one-half depositary institutions should be required to of 1 per cent above the discount rate. We believe meet reserve requirements on their deposit lia- it would be useful to remove that penalty provibilities and that all reserves should be held at sion and thus eliminate an indirect restriction the Federal Reserve. on the portfolios of users of the discount win- The Board believes that the enactment of this dow. For analogous reasons the Board is opprinciple into law would bolster the effec- posed to the proposal in the Discussion Printiveness of monetary policy by maintaining and ciples that would bar the use of loans to foreign even tightening the relationship between bank borrowers as collateral at the discount window. reserves and the Nation's deposits. The task of All sound assets should be available to help monetary policy is now complicated because serve this important collateralization role. shifts in deposits between member banks and nonmember institutions alter the relationship between reserves under the control of the Fed- COMPETITION eral Reserve and total deposits, which constitute the major share of the Nation's money supply. The Board is in general agreement with the More importantly, withdrawals from Federal philosophy of proposal 1 concerning chartering Reserve membership are gradually reducing the and proposal 9 concerning branching, namely, share of the Nation's total money supply that that there should be greater opportunity for the is directly linked to monetary reserves. Man- formation of new institutions and branches to agement of money and credit would be made provide needed financial services and enhance more effective if required reserves against all competitive vigor. In carrying out its respondeposits were held either in balances at Reserve sibilities under existing law, particularly the Banks or in vault cash, since such reserves Bank Holding Company Act, the Board has would be immobilized and their total more consistently stressed the importance of improvreadily regulated by Federal Reserve actions. ing competition and preventing any undue con- Equity among competing institutions also re- centration of banking resources that would tend quires that all institutions offering similar de- to reduce competition. posit services be subject to similar reserve re- We support the proposal that would permit quirements, particularly with the deposit func- Federal chartering of mutual savings banks. We tions served by the various institutions being also concur in the general principle that new brought closer and closer together. depositary institutions would be chartered "if The Board believes that these changes should capital and other requirements," presumably be enacted promptly. To cushion resulting ad- requirements relating to safety and soundness, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 99 are met. The implication of this proposal is that we would add the requirement that they also sheltering of existing financial institutions from have qualified personnel. new competition should not be grounds for Proposal 4, dealing with disclosure, also is denial of a new charter. We are in agreement directed at improving competition by providing with this approach, so long as the new competi- depositors, borrowers, and investors with more tion is fairly based. We believe, however, there information than they now receive. The Board should be authority to deny a new charter that agrees that adequate disclosure by financial inmight reduce competition, as a de novo charter stitutions should be required in order to assist to a holding company that already accounts for the public, but it believes such disclosure rea major share of the relevant market. quirements should take into account the special The Board believes there are many instances characteristics of depositary institutions. In parin which branching across State lines could be ticular, disclosure should not impose reporting procompetitive. However, the suggestion in burdens disproportionate to the usefulness of the proposal 9 that interstate branching be author- information, and it should guard against misinized if it is not inconsistent with State law terpretation or "scare" effects to which banks would, in itself, probably not produce Federal and other depositary institutions are particularly branching across State lines any time soon. A vulnerable because so many of their liabilities roughly similar provision in the Bank Holding are withdrawable at a moment's notice. Given Company Act has in practice served to confine these consicjerations, we conclude that the debank holding companies to acquisition of banks tails of additional disclosure requirements are within the State of their home office. best developed by the appropriate regulatory We believe Federal legislation to permit agencies, in consultation with individuals and branching across State lines should be confined organizations affected. Indeed, the Securities at present to areas where there is a pressing and Exchange Commission and the Federal bank competitive need or some other overriding pub- regulatory agencies are presently hard at work lic benefit to be gained. Such pressing need on this very task. exists for the Board's proposal to Chairmen Appropriate public disclosure of the general Reuss and St Germain of February 19, 1975, financial condition of depositary institutions is providing for limited bank holding company desirable not only because it furthers competiacquisitions across State lines in order to resolve tion but also because of the market discipline possible large failing bank cases in a manner it imposes on the management of those instituconsistent with preserving competition. We tions. Some reinforcement of existing regulatory strongly urge prompt action on H.R. 4008, discipline on the management of these instituwhich contains this proposal. Also in H.R. 4008 tions is also needed, as we see it. Accordingly, is the Board's requested authority to waive the the Board urges the Congress to give prompt 30-day waiting period for bank holding com- consideration to the joint recommendations of pany acquisitions in emergencies or failing bank the Board, the Federal Deposit Insurance Corsituations. This provision, too, is needed now, poration, and the Comptroller of the Currency and it has the added distinction of having—so submitted to the committee on September 5, far as we know—no expressed opposition to its 1975, all designed to help prevent or correct enactment. problem situations. These recommendations in- The Board supports the objectives of proposal clude provision of civil penalties for several 10 to improve competitive equity and increase violations where only criminal penalties now competition by extending trust powers to quali- exist, broadening the coverage of insider lendfied savings and loan associations, mutual sav- ing limitations, simplifying and making more ings banks, and credit unions. We believe that effective the officer removal authority, and ausuch trust activities should be authorized, how- thorizing, under certain limited circumstances ever, only upon a finding of the regulatory and subject to procedural safeguards, divestiture authority that the institution is sufficiently large or termination of a nonbanking activity by a and strong to support a trust department, and bank holding company. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

100 Federal Reserve Bulletin • February 1976 OTHER PROPOSALS concentration. The Board, on a number of occasions, has reviewed the question of extending The Board supports the principle of proposal bank underwriting privileges to municipal reve- 8 (Taxation) that as a matter of competitive nue bonds of investment-grade quality, and equity depositary institutions with similar asset since 1967 has consistently voiced its belief that and liability powers should be subject to the the public benefits of such action outweigh any same Federal tax treatment. potential risks. In view of recent developments Proposal 11 provides that banks be permitted in the municipal securities markets, however, to engage in the underwriting of State and the Board would wish to make a fresh study municipal revenue bonds, but that the present of the situation before reaffirming its previous prohibitions on underwriting of corporate se- position on this matter. curities be retained. Finally, the Board agrees with proposal 12 Over the past two decades or so there have that the Congress await the report from the been a number of bills introduced in the Con- National Commission on Electronic Funds gress to authorize bank underwriting and dealing Transfers before legislating further in the area in revenue bonds. During this period numerous of new payment mechanisms. arguments have been advanced both for and I wish to thank you, Mr. Chairman, and the against this proposal. The favorable arguments members of your committee for this opportunity generally focus on the benefits expected to ac- to express the Board's views on the proposals crue to governmental units in the form of lower of Title I of the Discussion Principles. As interest costs and improved market efficiency, always, my colleagues on the Board and I stand while the opposing arguments center on poten- ready to be of whatever assistance we can in tial conflicts of interest and risks of market the important work of this committee. • Statement by Philip C. Jackson, Jr., Member, the chief enemy of the mortgage and housing Board of Governors of the Federal Reserve markets in our country. Inflation not only in- System, before the Subcommittee on Financial creases the cost of financing but it also disrupts Institutions Supervision, Regulation, and In- the supply of funds. It not only escalates the surance of the House Committee on Banking, price of homes but it may also reduce the Currency, and Housing, U.S. House of Repre- income, after allowing for other necessary exsentatives, January 22, 1976. penses, which consumers have available to acquire new or better housing accommodations. Thank you for the opportunity to appear on Unless the forces of inflation can be contained, behalf of the Board of Governors to take part it is doubtful that any financial restructuring in the hearings on your committee's consid- could produce a mortgage market that will aperation of possible reforms in the structure and propriately meet the housing needs of the performance of the Nation's financial institu- American public. tions. Our comments on the implications for the The second general point is that in recent residential mortgage and real estate markets of years the private sources of home mortgage Title II of the FINE1 "Discussion Principles" credit have become concentrated in the nonbank will build on the testimony presented earlier thrift institutions. These particular lenders tratoday by Governor Holland on Title I dealing ditionally borrow short and lend long and thus with depositary institutions. are highly vulnerable to the effects of inflation Before going into the details of the Discussion and variations in general credit conditions. In Principles, I would like to make two general 1960 thrift institutions held approximately 52 points. The first is that inflation continues to be per cent of home mortgages outstanding. By June 30, 1975, this proportion had grown to 1 Financial Institutions and the Nation's Economy. 60 per cent. In contrast, life insurance compa- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 101 nies dropped during this same period from 18 event, other types of lenders would be enper cent to 5 per cent. Commercial banks, on couraged to move more funds into mortgages. the other hand, increased their share from 14 This shift would lessen upward mortgage rate per cent to 18 per cent. Federal credit agencies pressures to some degree and help to reduce and mortgage pools grew from 5 per cent in short-run fluctuations in the cost and availability 1960 to 12 per cent in mid-1975. of mortgage credit in the future. This trend was confirmed in 1975 by the Some of the FINE Study proposals in Title volume of new home loans extended. Over the II are designed primarily to moderate the possifirst three quarters of last year, savings and loan ble impact of more competitive pricing on associations and mutual savings banks together mortgage borrowers. As these proposals are accounted for 61 per cent of total long-term considered, it is well to remember that similar home mortgage acquisitions. In comparison, measures are already in effect in other forms. commercial banks supplied 15 per cent, with Of these, the principal one is our system of Federal credit agencies and related mortgage Government mortgage insurance and guaranty pools accounting for nearly all of the balance. through the Federal Housing Administration and No other source of savings capital made a sig- the Veterans Administration. Such programs nificant contribution to the home mortgage mar- make mortgage terms more advantageous for ket. borrowers by pledging the faith and credit of When we consider the problem of inflation the Government in addition to that of the home as well as the concentration of housing credit buyer who is seeking funds. in institutions with volatile inflows of funds, it The Federal Home Loan Bank Board is small wonder that home. buyers have been (FHLBB) loan proposal in Title II is similar to plagued not only by volatility in the price of the Government National Mortgage Association mortgage money but also by a periodic scarcity (GNMA) tandem plan now in operation. To this of money at any price. There are two overriding extent, the proposal would essentially duplicate considerations, then, that should be kept in mind an existing program, which provides belowinsofar as housing finance is concerned. One is market interest rates to home buyers and utilizes the need to further dampen the inflationary a Government-related source of funds. It is not forces in our economy that contribute to such clear from the Discussion Principles whether the erratic fluctuations in both the demand for and proposed new role for the Federal Home Loan the supply of housing credit. The other is to Bank Board would eliminate the authority of broaden and strengthen the sources of funds the Federal home loan banks to make advances available to finance housing at a variety of to thrift institutions in order to cover either investment outlets. takedowns of earlier mortgage commitments, or The expansion of investment powers of the deposit withdrawals, in the event of unexpected nonbank thrift institutions and the removal of reversals in their over-all flows of funds. In our ceilings on deposit rates—as proposed in Title view, such advances would still be needed, at I of the Discussion Principles—would make for least on a transitional basis, so as to provide greater stability in the operations of savings and necessary flexibility to this class of depositary loan associations and savings banks and would institutions. Although the FINE Discussion produce a more even flow of mortgage funds Principles would allow depositary institutions from them. Even though the proposed expansion access to the Federal Reserve discount window, of deposit powers at thrift institutions may well discount borrowings have traditionally taken the encourage a larger share of total savings to be form of very short-term credit designed prifunneled through them, it is uncertain whether marily to cover temporary reserve deficiencies. there might be some decline over the longer run Thus the discount window operation would not in the supply of mortgage funds at institutions duplicate the FHLBB medium-term advance that become more diversified. The result may program now in effect. be that the cost of mortgage credit would rise The proposed mortgage-interest tax credit and relative to yields on other investments. In that the mortgage reserve credit features of the Dis- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

102 Federal Reserve Bulletin • February 1976 cussion Principles would undoubtedly be of in lieu of consumer loans to be used for nonsome help in ameliorating any adverse impacts housing purposes. on consumers of more competitive pricing of —The mortgage reserve credit plan would mortgage money. Yet the degree to which they affect the pricing of qualifying mortgage assets might do so is unclear. A progressive mort- and could accordingly limit their marketability. gage-interest tax credit would probably offer On a given mortgage loan, a reserve credit— only a relatively modest investment incentive particularly when accompanied by a mortgagefor commercial banks and insurance companies. interest tax credit—would produce a different Neither type of credit would encourage pension effective yield at depositary institutions holding funds to invest in mortgages. different proportions of assets in qualifying Moreover, it is uncertain how much of the mortgages relative to their deposits. A yield benefits from these plans would be passed distinction would also exist between institutions through to lower-income consumers. If applied qualifying for the credits and those, such as retroactively, the tax credit and reserve credit pension funds, that do not. To the extent that plans would obviously provide windfall gains these yield differentials would prevail, deposito lenders on mortgages already held in their tary institutions would either have to take lower portfolios—benefits that would apparently not profits or larger losses than they otherwise be transmitted to any lower-income households would be obliged to absorb on the sale of loans that had borrowed before the programs began. to nondepositary purchasers, and would thus be The proposals in Title I would encourage discouraged from broadening the secondary more diversification by financial institutions that market for such loans. are now specialized. In contrast, the incentive —The mortgage reserve credit plan would programs in Title II would encourage speciali- require lenders to identify loans on "low- and zation in one type of asset, typically with long moderate-income housing" held in their portfomaturity and limited marketability. It is even lios. This ongoing identification process would possible that the progressive tax credit proposal be difficult, particularly since qualifying charmight lead to a concentration of low- and mod- acteristics of borrowers, properties, and even erate-income mortgages in a relatively small neighborhoods can change either up or down number of lending institutions. over the life of a given loan. The proposed mortgage reserve credit plan to Of greater importance, a mortgage reserve aid low- and moderate-income housing raises credit would pose a more fundamental problem a number of important additional issues that I for the monetary authorities. The mortgage rewould like to summarize: serve credit plan would weaken the capacity of —The institution of a reserve credit plan the Federal Reserve to control the growth of would set an unwise precedent for extending reserves at depositary institutions in order to similar preferential treatment to holdings of maintain a rate of expansion in the monetary other types of assets deemed to be of pressing aggregates consistent with the needs of our social merit. The list of favored credit instru- economy. Federal Reserve decisions would be ments of this type could become longer as time complicated by the addition of a new element passed, thus diluting the initial advantage en- to the already complex relationship between the joyed by qualifying mortgages, and tending to reserve base and the money stock. This new segment private credit markets even further. element—stemming from the asset side of —A reserve credit on one type of instru- lender balance sheets rather than the liability ment—such as a mortgage—would encourage side—would require the Federal Reserve for the financial institutions to change the form of their first time to predict changes in holdings of lending simply to take advantage of this kind qualifying mortgage assets by a large number of subsidy. To that extent, the mortgage reserve of diverse types of commercial banks, savings credit would not stimulate more housing invest- banks, savings and loan associations, and credit ment. Lenders would have an incentive, for unions. example, to offer loans secured by real estate To the degree that the proposed financial Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 103 market reorganization resulted in higher average Federal assistance to homeownership could be mortgage borrowing costs over the long run, directed at the lower-income portion of our low- and moderate-income households would be population where the need is greatest. Unfortuaffected the most. For these consumers, the cost nately, portions of our present system now apply of shelter, along with other basic necessities, the largest subsidy to consumers most able to usually absorbs a relatively large portion of their pay without public assistance. income. In that case, considering the imperfec- One possibility would be to revise the present tions of both the mortgage-interest tax credit and system of income tax deduction for mortgage the mortgage reserve credit approaches, one or interest and real property taxes so as to allocate more alternative methods of housing assistance tax benefits more heavily toward the lower end may be regarded as desirable for low- and of the income scale. Another possibility would moderate-income groups. be to provide periodic supplements to the in- In addition to the FHA, VA, and GNMA come of lower-income households. Both of mortgage credit programs, an elaborate system these approaches have the advantage of directly of other Federal housing aids is currently in assisting those least able to pay, rather than place. Many of these plans already provide doing so indirectly through incentives to finansome support, directly or indirectly, to lower- cial institutions. income households. Altogether, Federal aid to In conclusion, the Board of Governors behousing takes such varied forms as tax incen- lieves that the restructuring of depositary institives to homeowners, landlords, and builders; tutions proposed in Title I of the FINE Discuscash subsidy programs to produce new and sion Principles may well hold the possibility of substantially rehabilitated housing; secondary greater stability for our specialized depositary mortgage market support; and direct lending. institutions and ultimately for the mortgage and Given the complexities of the present system, housing markets. If the Congress should decide now may be an appropriate time for the Con- that additional support is necessary for low- and gress to evaluate its over-all cost and benefits moderate-income housing over the longer run, and the interrelationships among the various the Board believes that direct aid to qualified forms of subsidy, before proposing any further home buyers and renters is a more efficient use significant change. of public resources than programs designed to Even in the absence of a comprehensive re- reduce the cost of housing credit through subsiview of this sort, there are several ways in which dies to lenders. • Statement by George W. Mitchell, Vice Chair- the growth in international trade and investment. man, Board of Governors of the Federal Re- (U.S. exports and imports combined are estiserve System, before the Subcommittee on Fi- mated to have exceeded 13.6 per cent of U.S. nancial Institutions of the Committee on Bank- gross national product in 1975, compared to ing, Housing, and Urban Affairs, U.S. Senate, approximately 8.4 per cent of U.S. GNP in January 28, 1976. 1971.) That development has been reflected in the expanded operations of U.S. banks abroad. I am pleased to appear before this subcommit- Another aspect of this development has been tee, on behalf of the Board of Governors of the the growing number of foreign banks establish- Federal Reserve System, to discuss the Board's ing offices in this country to conduct both interreasons for recommending the enactment of national and domestic banking activities. In legislation providing for the Federal regulation February 1973 the Board established a System and supervision of foreign bank operations in Steering Committee on International Banking the United States. Regulation composed of some members of the Banking has increasingly become a multina- Board and some Presidents of the Federal Retional business in recent years in keeping with serve Banks; part of that committee's assign- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

104 Federal Reserve Bulletin • February 1976 ment was to review the regulatory policy issues regulation has resulted in illogical differences associated with the influx and rapidly expanding in the regulatory treatment of domestic and activities of foreign banks in the United States. foreign banks. While difficult to quantify, cer- As a result of that review, the Board has con- tain competitive advantages and disadvantages cluded that the scale and nature of foreign bank for foreign banks vis-a-vis domestic banks have operations in this country have become signifi- occurred as a result of these differences. And cant in terms of competition within the banking finally, international banking operations are best industry and of the functioning of money and conducted in a reasonably certain regulatory credit markets and that, therefore, the time has environment that fosters long-range planning come for the establishment of a national policy and development. Federal legislation standon foreign banks operating in the United States ardizing the national treatment of foreign banks and for the creation of a system of Federal in the United States not only would make for regulation, supervision, and examination of a stable regulatory environment in this country those operations. but, since U.S. banks are leaders in international To accomplish these objectives, the Board banking around the world, it would also facilihas submitted to the Congress legislative pro- tate cooperation between national banking auposals for regulating foreign bank operations in thorities, contribute to an emerging pattern by the United States under the title of the "Foreign which foreign banking authorities could be Bank Act of 1975." These legislative proposals guided in the treatment of banking interests were introduced in the Senate at the Board's originating outside their countries, and promote request as S. 958—the subject of today's hear- the development of international standards of ings. I would like to discuss the legislation banking soundness and competition. embodied in S. 958 by first focusing in more detail on the reasons that have led the Board to conclude that such legislation is necessary GROWTH OF at this time and by next describing briefly the FOREIGN BANK OPERATIONS major points of the Board's legislation. I will IN THE UNITED STATES conclude my statement by setting forth additional Board recommendations on other regula- I will confine my comments this morning to tory issues not covered in S. 958 that the Board summarizing what I believe to be the most believes the Congress should consider in enact- important features of the recent growth of ing legislation on foreign bank operations in this foreign bank operations in this country. In this country. regard, I am submitting for the record an appendix prepared by the Board's staff that provides detailed statistical information on the size REASONS FOR FEDERAL and growth of the U.S. activities of foreign REGULATION banks.1 As of September 1975, there were 181 U.S. OF FOREIGN BANK OPERATIONS banking institutions—defined to include agen- There are three basic reasons that have led the cies, branches, subsidiary banks, and New York Board to conclude that it is appropriate at this investment companies—owned by foreign time to move toward a system of Federal regu- banks as compared to 104 in November 1972, lation of foreign bank operations in the United and their total assets have more than doubled States. First, and most tangible, is the rapid rate from $24 billion in November 1972 to $56 of growth that foreign bank operations in this billion in September 1975. If clearing transaccountry have undergone over recent years and tions and transactions with other offices of their their increasing importance to the functioning of domestic money and credit markets as well 1 Available on request from Publications Services, Division of Administrative Services, Board of Goveras to international flows of funds. Second, the nors of the Federal Reserve System, Washington, D.C. present patchwork system of State and Federal 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 105 parent banks are eliminated, their "standard" in substantial international transactions with banking assets—defined as loans, money market offices of their parent banking institutions as assets, securities, and miscellaneous assets— well as with unrelated foreign institutions. For increased from $18 billion in November 1972 example, as of September 1975 their gross to $41 billion in September 1975. claims on foreigners were $16 billion and their The data on the over-all growth of these gross liabilities to foreigners were $25 billion. institutions, while impressive, does not ade- Included in these figures were net advances of quately portray the increasing importance of $8 billion from their related institutions outside their impact on specific U.S. banking activities. the United States, which advances are, in effect, For example, in September 1975 the U.S. of- used to finance their U.S. banking activities. fices of foreign banking organizations held $23 Thus, it should be clear from this summary billion in total commercial and industrial loans, data that the size and growth of these operations, an amount equivalent to about one-fifth of such their impact on important credit and financial loans held by large banks that report weekly markets in the United States, and their influence to the Federal Reserve. As recently as No- on the international payments position of the vember 1972 their share in this important U.S. United States are matters of national import. credit market was only one-eighth. Furthermore, the size and character of these A second important activity of the U.S. of- operations require that they be supervised and fices of foreign banks is their money market regulated in a manner consistent with the supertransactions. In September 1975 U.S. offices of vision and regulation of domestic banks. foreign banks had money market assets of more than $12 billion, more than one-half of which represented loans to and deposits with U.S. CURRENT REGULATION banks. Included in this total are loans and de- OF FOREIGN BANKS posits of $3.1 billion placed with U.S. banks by the U.S. offices of banks from continental Let me turn now to the current regulatory envi- Europe. The U.S. interbank market serves these ronment structuring foreign bank operations in banking institutions as a convenient outlet for the United States and how this has led to certain managing the dollar balances of their parent differences in the regulatory treatment of doorganizations. mestic and foreign banks. I think the central U.S. offices of foreign banks also had sub- point to be made is that foreign banks are now stantial money market liabilities totaling $11.7 almost exclusively subject to State regulation, billion as of September 1975. Of this total, $6.6 with little or no Federal control. billion, or more than one-half, represents inter- If a foreign bank conducts its commercial bank borrowings by U.S. offices of Japanese banking activities in the United States exclubanks, which use the U.S. interbank market as sively through branch and agency forms of an important source of funds to finance their organization, it is currently not subject to any U.S. operations. The U.S. offices of banks from Federal regulation, supervision, or examination. countries other than Japan do not rely on U.S. Since foreign banks conduct the majority of banks as a continuing net source of funds al- their operations through these forms of organithough they utilize borrowings from U.S. banks zation, the present system unaccountably exas a source of liquidity when needed. empts from Federal oversight those operations The important point to note from this brief that have the greatest potential for affecting our discussion of the extensive transactions of the Nation's economy and its major financial mar- U.S. offices of foreign banks in U.S. money kets. markets is that these transactions closely link The principal regulatory advantages for a the U.S. activities of foreign banks with do- foreign bank in operating through branch and mestic U.S. money and credit markets. agency forms of organization are the following: In addition to their U.S. lending and money 1. Branches and agencies are not legally market activities, foreign banking offices engage subject to any of the reserve requirements or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

106 Federal Reserve Bulletin • February 1976 other regulations affecting monetary policy that requires all directors of national banks to be are placed on the operations of their primary citizens has been a factor influencing many competitors—large national and State member foreign banks to organize State subsidiaries. The banks in our major financial markets; lack of any provision in Federal law for the 2. Branches and agencies are not subject to establishment of Federal branches is in sharp any Federal restrictions on multi-State banking contrast to the situation in most foreign counand thus can be established in any State that tries, where foreign banks establish branches permits entry, even if a foreign bank has a State approved by the national government. (As of or Federally chartered subsidiary bank in an- September 1975, there were 751 branches of other State (44 foreign banks have commercial our banks abroad.) U.S. regulatory policy banking operations in more than one State); should encourage foreign banks to opt for na- 3. A foreign bank maintaining only branches tional rather than State subsidiaries and branches and agencies is not subject to the prohibitions because those options would avoid problems of of the Glass-Steagall Act and thus can maintain reciprocity between individual States and those banking operations and at the same time foreign governments and would afford greater have an interest in a securities firm in the United Federal control over the U.S. operations of States (20 foreign banks with commercial bank- foreign banks. ing operations in the United States have interests Finally, the lack of availability of FDIC inin U.S. broker-dealers); surance for deposits and credit balance accounts 4. A foreign bank maintaining only branches at branches and agencies has proven a disadand agencies is not subject to the Bank Holding vantage in competing in retail banking markets Company Act of 1956, as amended, and thus but may give a cost advantage to foreign banks, can engage directly or indirectly in the United because U.S. banks must meet FDIC assess- States in any type of nonbanking activities and ments on similar liabilities. can invest in any U.S. commercial firm, so long The current pattern of State regulation may as it has the power to do so under the laws also, in some cases, lead to anticompetitive and of its home country; and other results not in the national interest. For 5. Branches and agencies are not subject to example, a foreign bank may not be able to enter any Federal bank examination, regulation, or a U.S. banking market because of State law supervision of the type carried out by the restrictions. This situation could in some cases Comptroller of the Currency, the Board, or the prevent a domestic bank from that State from Federal Deposit Insurance Corporation (FDIC). entering a foreign bank's home country if the The current regulatory framework has, how- home country imposes a reciprocity requireever, also imposed certain artificial or outmoded ment. The net effect of such a situation is a restraints on foreign bank entry into the United reduction in U.S. banking competition and a States. For example, foreign banks cannot or- potential impediment to the foreign commerce ganize Edge Act corporation subsidiaries that of the United States. Such situations might also enable large U.S. banks to conduct international involve important foreign policy considerations banking and financing operations in several between the United States and the home cities that serve as centers of international trade country. Clearly, a national policy and national financing. This prohibition, which was origi- regulatory system are needed so questions of nally enacted in 1919 amidst fears of foreign reciprocity, as well as other matters of national domination of U.S. trade financing, no longer interest, can be judged on a national, not local, serves the national interest as our banks have level. since that time developed into strong and The United States is virtually the only country efficient competitors in international and foreign that does not have central bank control over the banking. Thus, that prohibition today can only activities of foreign banks within its borders. function to preclude additional competition in This situation creates a gap in the Federal Resome banking markets. serve's control over domestic monetary condi- The provision in the National Bank Act that tions that will inevitably widen and increase in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 107 importance as foreign banks' activities continue branches and agencies of foreign banks are to grow. treated the same as any U.S. banking organization with similar commercial banking powers (Sections 2-4). As a result, all branches and MAJOR POINTS agencies would have to become insured banks; additional branches and agencies could only be OF BOARD'S PROPOSAL established with Board approval and subject to I would now like to highlight briefly the major Board analysis of financial, managerial, compoints of the Board's proposed legislation. petitive, and convenience and needs consid- In the Board's judgment, two basic policy erations; branches and agencies could not be goals are embodied in the legislation proposed established outside of a foreign bank's State of in S. 958. The first goal is the adoption by the principal banking operations unless a State bank Federal Government of the principle of national headquartered in its State of principal operations treatment, or nondiscrimination, toward the could also establish such offices; the parent operations of foreign banks in this country. foreign bank would in its U.S. activities be Second is the goal of establishing a comprehen- subject to all of the nonbanking prohibitions of sive system of Federal supervision, regulation, the Bank Holding Company Act; and, lastly, and examination of foreign bank operations in the parent foreign bank and its nonbanking the United States in order to implement the subsidiaries would in their U.S. activities be principle of national treatment and to provide subject to the Board's cease-and-desist authority a framework for regulating the U.S. activities for unsafe and unsound practices. of foreign banks in view of their impact on the Any branch, agency, or incorporated subsidi- Nation's money and credit markets. ary bank of a foreign bank with worldwide bank The legislation embodied in S. 958 seeks to assets in excess of $500 million would also be implement the policy of national treatment by required by Section 3(3) of S. 958 to become amending U.S. banking laws to provide foreign a member of the Federal Reserve System and banks with the same opportunities to conduct would thus become subject to the same kind activities in this country as are available to of Federal monetary and Federal bank examinadomestic institutions and by subjecting them to tion, regulatory, and supervisory controls that the same rules and regulations. Thus, the citi- apply to other member banks. In addition, as zenship requirements for directors of national member banks, such branches, agencies, and banks are relaxed in order to give foreign banks subsidiaries would become subject to the prohia real choice in deciding whether to establish bitions of the Glass-Steagall Act and, as insured a national or State subsidiary (Section 12); banks, would become subject to the provisions foreign banks are given the opportunity to es- of the Bank Merger Act, Financial Institutions tablish Federal as well as State branches (Sec- Supervisory Act of 1966, as amended, and other tion 18); the Edge Act is amended to permit provisions of the FDIC Act. foreign banks, with Board approval, to acquire S. 958 creates a comprehensive system of Edge Act corporation subsidiaries (Section 10); Federal regulation of foreign bank operations and it is recommended that the FDIC Act be not only through various amendments to U.S. amended in order to permit branches and agen- banking laws but also through the establishment cies to obtain insurance on their deposit and of a Federal licensing procedure on future entry credit balance accounts in the United States (Section 25). This procedure would give the (Section 17). Federal Government the opportunity to consider The legislation proposed in S. 958 also closes national interest and foreign policy factors in Federal regulatory gaps by amending the defi- foreign bank entry, as well as the banking nition of "bank" in the Bank Holding Company factors that will be considered by the bank Act to include branches and agencies of foreign regulatory agencies. This Federal role in entry banks (Section 2(4)), and by making other will serve to facilitate greater cooperation amendments to that Act designed to ensure that among international bank regulatory authorities Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

108 Federal Reserve Bulletin • February 1976 and will strengthen the ability of the national three times as large in terms of assets as those Government to obtain national treatment for of foreign banks in the United States (as of U.S. banking institutions abroad. September 1975, 126 U.S. banks operated 751 In addition, I would like to emphasize that foreign branches in more than 90 foreign counthe legislation embodied in S. 958 does not tries with total assets of about $135 billion), undertake to supplant State regulation or remove it is obvious that our banking system and its options for State chartering or licensing. Rather, U.S. banking customers would be a net loser it seeks to superimpose Federal controls on in any possible retaliatory efforts. foreign bank operations in those areas where the Aside from such considerations, however, the Congress has already subjected domestic banks Board also strongly believes that a failure to to national regulation, such as the Bank Holding permanently grandfather existing operations Company Act, or where foreign bank activities would be unduly harsh in light of the grandinvolve matters of national interest that are father privileges previously extended U.S. bank clearly the responsibility of the Federal Gov- holding companies. Several bank holding comernment, such as the effect of their operations panies with multi-State banking subsidiaries on national money and credit markets. were given permanent grandfather rights in 1956 and again in 1966 when the test for determining a bank holding company's State of principal banking operations was clarified. In 1970 non- GRANDFATHERING OF banking activities of one-bank holding compa- EXISTING OPERATIONS nies were permanently grandfathered so long as An important policy issue that must be consid- they were commenced on or before June 30, ered in subjecting foreign banks to the Federal 1968, and were engaged in continuously since multi-State banking and nonbanking restrictions that date. Given precedents, foreign banks currently imposed on domestic banking organi- should be afforded similarly liberal grandfather zations is the extent to which the Congress privileges. It must be remembered on this issue should afford foreign banks "grandfather" that foreign banks have established their operaprivileges for existing operations that do not tions in complete conformance with existing currently conform to those domestic standards. laws; branch and agency forms of organization In Sections 3 and 4 of S. 958, the Board has are not devices for avoiding certain Federal recommended permanent grandfathering for all banking laws but rather are well-accepted forms nonconforming banking and nonbanking opera- of banking operations around the world. tions (including securities operations) estab- Furthermore, it would appear that the extent lished by foreign banks on or before the original of permanently grandfathered nonbanking acdate of introduction of the Board's proposal in tivities would be relatively small and that the the Congress—December 3, 1974. Noncon- period of temporary grandfathering provided is forming multi-State banking operations estab- not unreasonably long in light of divestiture lished after that date but before enactment would experience under the Bank Holding Company have to be phased out in 2 years; nonbanking Act. operations commenced in that interval would The Board shares the concern of the Congress have to be phased out over 10 years. that the policies of the Glass-Steagall Act and The Board strongly believes that permanent the Bank Holding Company Act be enforced; grandfathering of long-standing foreign bank however, rather than abolish existing foreignoperations in this country is needed in order to owned bank affiliations that would be prohibited minimize any possible retaliation against U.S. by those Acts, it seems that a better and fairer banks abroad. This opinion is based primarily course of action would be to give the Board on Board members' discussions with foreign the power to terminate such affiliations if, in central and commercial banks and U.S. banks a particular case, the Board found, after notice with significant operations overseas. Since the and opportunity for hearing, that such action overseas operations of U.S. banks are about was warranted. The Congress, in fact, adopted Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 109 this type of procedure in connection with its The Board understands, however, that the New permanent grandfathering of certain of the non- York authorities are currently reviewing their banking interests of one-bank holding compa- policies on chartering investment companies for nies in 1970. The Board has suggested a similar foreign banks. review power over any permanently grand- The Board believes that there is a potential fathered nonbanking interests of foreign banks for avoidance of the objectives of its proposed in Section 4(2) of S. 958. legislation if foreign banks can readily obtain investment company charters in lieu of agency or branch licenses. The Board thus recommends OTHER REGULATORY ISSUES that all future investment companies that would be chartered to engage in a commercial banking INVOLVING FOREIGN BANKS business be subjected to the same scope of In transmitting its proposed legislation to the Federal regulation that has been suggested for Congress, the Board indicated that its proposal agencies and branches in order to close this would not cover foreign bank operations con- potential loophole. ducted through so-called New York investment With respect to domestic banks owned by companies, and would not specifically amend several foreign banks, the Board notes that, in the Bank Holding Company Act in order to addition to European-American, the New York subject the several foreign bank shareholders of banking authorities recently chartered a new the European-American Bank and Trust Com- bank—UBAF Arab-American Bank—that will pany, New York, New York, to the provisions be owned by a group of 11 Arab banks, 5 of that Act. foreign consortium banks controlled by Arab Investment companies organized under Ar- banks, and 4 domestic bank holding companies, ticle XII of the New York banking law have the latter each having only a statutorily permitmany of the same banking and financing powers ted 5 per cent interest. The Board recently as agencies of foreign banks. Seven domesti- considered the question of whether a bank cally owned investment companies appear to be holding company was being formed in the orprimarily engaged in finance company opera- ganization of UBAF and determined that, on tions; four foreign-owned investment companies the basis of certain specific undertakings made are either subsidiaries or affiliates of foreign by each of the shareholders of the bank with banks and appear to conduct the same type of the Board, that a "company" had not been commercial banking operations carried on by formed and that an application was not required agencies. In excluding foreign-owned invest- under the Act. ment companies from the coverage of its pro- The cases of European-American and UBAF, posed legislation, the Board was primarily in- among others, however, demonstrate that the fluenced by the fact that only three such compa- current definitions of "control" and "comnies would have been covered at the time it pany" in the Act do not appear to cover certain submitted its proposal and that the New York multiple ownership situations where indeauthorities had customarily discouraged char- pendent shareholders might act in concert to tering of these entities in lieu of branch or control a bank but do not constitute themselves agency operations. The Board was also con- into a corporation, partnership, association, or cerned that any attempt to cover only the few similar organization. Because this consortium foreign-owned companies would be regarded as form of arrangement might become an attractive a discriminatory action by foreign authorities. vehicle for entry if branches and agencies of The Board notes that since submitting its foreign banks are subjected to Federal regulation legislation, the New York banking authorities under the Bank Holding Company Act, the have chartered an additional investment com- Board recommends that the Congress amend the pany subsidiary of a foreign bank and have Bank Holding Company Act to give the Board received an application to organize another in- jurisdiction over situations where independent vestment company from a private foreign bank. shareholders that do not form themselves into Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

110 Federal Reserve Bulletin • February 1976 a company, as currently defined in the Act, Reserve welcome this study and are glad to nevertheless act in concert to control a bank. provide whatever assistance we may be called Since the scope and impact of any such amend- upon to give. It is our belief, however, that the ment will depend, to a great degree, on the enactment of legislation regulating foreign bank precise legal language chosen, the Board, at operations in the United States should not await your request, will be glad to suggest several or be made contingent upon the resolution of alternative amendments to the Bank Holding more fundamental domestic banking issues, Company Act and to describe the ways in which such as whether U.S. banks should be allowed such amendments would affect the shareholders to engage in multi-State operations or securities involved. It should be noted that any such activities. In our judgment, if foreign bank amendment would apply to domestic as well as regulation is tied to such fundamental domestic foreign companies, and thus the Congress may changes, an undesirable end result will be furalso want to consider such an amendment in ther postponement of the enactment of any legthe context of bank holding company legisla- islation regulating foreign bank operations in the tion. United States. The longer such legislation is delayed the more difficult will be our task in this regard because foreign bank operations will continue to grow, thus making grandfathering CONCLUSION proposals less acceptable and increasing the This Nation's domestic banking system is, of likelihood of retaliatory pressures against our course, currently undergoing a thorough re-ex- banks abroad. The Board thus strongly recomamination by the Congress and we at the Federal mends enactment of S. 958 during 1976. • Statement by Arthur F. Burns, Chairman, has gathered some momentum; in the second Board of Governors of the Federal Reserve half of 1975 the physical volume of our Nation's System, before the Appropriations Committee, total production rose at an annual rate of ap- U.S. House of Representatives, January 28, proximately 9 per cent, which is a rather rapid 1976. rate of increase. Industrial production—that is, the output of our factories, mines, and utilities—grew even I can summarize briefly what I have on my faster. Between April and December 1975, inmind, and what I would like to convey to this dustrial production rose at an annual rate of 12 committee, in three broad propositions. per cent. First, a good recovery of economic activity These gains in production have been wideis now under way. spread. They started in the nondurable goods Second, inflation moderated appreciably dur- fields—in the production of textiles, leather ing the past year, but there is a grave danger products, paper products, and chemicals. After that it may accelerate again. midyear the scope of the expansion in produc- Third, the course of fiscal policy during this tion broadened out and most durable goods year and next will play a decisive role in deter- lines—such as the machinery and equipment mining whether or not our country can win the trades, the metals industry, and the furniture battle against inflation. industry—showed appreciable gains. Let me turn to the first of these propositions. The increases in production led to a material A good economic recovery has been under way strengthening in the demand for labor. Since since April or May of last year. The recovery March of last year, total employment has in- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 111 creased by 1.7 million. The factory workweek As you well know, the stock market has been has lengthened. It is, as of the latest count, IV2 rising briskly, interest rates of late have fallen hours longer on the average than it was last rather sharply, and corporate profits have moved February. And the unemployment rate has de- up with considerable vigor—in fact, with unexclined from approximately 9 per cent last spring pected vigor. Also, the utilization rate of our to about 8 per cent presently. manufacturing industries has been rising. The As 1975 ended the economy was moving up Federal Reserve maintains an index of the rate at a fast clip. In the month of December, indus- of capacity utilization of materials-producing trial production rose 1 per cent; employment industries. That rate was 70 per cent in the first rose by a quarter of a million; retail sales rose quarter of 1975, and by the fourth quarter it by a remarkable 3% per cent. In fact, the rise had risen to 81 per cent. in retail sales toward the end of last year was When the average rate of capacity use is 81 so rapid that inventories of trade firms actually per cent, there will be some industries that are fell. well above that figure and there will be some Let me try now to speculate a little about the firms within these industries that are higher still. future with you. As I see the economy, there In sum, with an ample supply of money is good reason to expect that the expansion in available, with profits improving, and with the production and employment will continue in the rate of utilization of our factories rising, I think months immediately ahead. Certainly, inventory we can reasonably expect that the capital goods restocking will be needed to fill half-empty industries, before very long, will be showing shelves in many of our firms. significant expansion once again. The confidence of consumers is returning. Our financial markets are now in an excellent People around the country are in a better mood position to support further economic recovery. now, and they are spending more freely. Interest rates have declined over the past 6 Our export markets are strong. As you may months in contrast to what usually happens in have read in this morning's paper, we had a the early stages of a recovery. Usually, interest trade surplus in 1975 of $11 billion. Our exports rates begin rising, and they sometimes rise will continue expanding this year, partly be- sharply, at about the same time as economic cause other industrial countries are beginning activity starts to recover. But interest rates now to recover. Also, prices, by and large, have are below their lows of last June; in fact, interest risen less rapidly in our country than abroad, rates on many short-term securities are lower and American business firms are in a stronger now than they have been at any time since the competitive position. fall of 1972. The rise in stock prices also favors The housing industry, as you know, is de- the continuance of economic expansion. This pressed, but there has been some improvement is making it easier for business firms to raise and I think there will be gradual further im- equity capital. It is also making people feel provement. The backlog of unsold homes is richer and is thus helping to rebuild confidence diminishing. Money is certainly in ample supply all around. at our thrift institutions. The inflow of funds It is also important to note that the liquidity to our mortgage lending institutions this January position of our banks, of our thrift institutions, appears to be breaking all records for that and of our business firms has improved very month. materially since the spring and summer of last Business capital spending, so far, has not year. shown any convincing signs of recovery. This The critical question, of course, is how far is not entirely surprising because business in- and how fast the recovery that is now under vestment in fixed capital often lags in the re- way will proceed. In the nature of things, neicovery process. But I think that there are cogent ther I nor anyone else can speak with great reasons for expecting business capital invest- confidence on this question concerning the fument to join the recovery process before very ture. But I can say this much with assurance: long. the strength and the duration of the recovery Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

112 Federal Reserve Bulletin • February 1976 that we are now experiencing will depend in jobs in our country but also of the need to reduce large part on how well this country does in our the rate of inflation—because, unless that hapcontinuing struggle with inflation. pens, we will not have good times in our land. Last year we made significant progress. Con- During the past year, all of the major monesumer prices rose 7 per cent in 1975, compared tary aggregates expanded at a moderate pace. with an increase of 12 per cent during 1974. Thus, between the fourth quarter of 1974 and Wholesale prices rose 4 per cent last year, the fourth quarter of 1975, the narrowly defined compared with 21 per cent during 1974. money supply—namely, currency plus demand But we must not become complacent about deposits, frequently referred to as M x —rose AVi the improvement that has taken place on the per cent. A more broadly defined money supply, inflation front because the progress we made which includes also time and savings deposits was pretty much concentrated in the first half of commercial banks except for large certificates of 1975, when economic activity was weak. In of deposit, rose 8 per cent during that period. the second half of 1975, troublesome signs These increases proved to be sufficient not appeared of a quickening in the pace of infla- only to finance a vigorous recovery in the phystion. Wholesale prices of industrial commodities ical volume of economic activity; they proved rose at a 9 per cent annual rate, which was more sufficient also, I am sorry to say, to finance a than twice the rate of increase in the first half fairly high rate of inflation. Moreover, interest of 1975. That was a disturbing development. rates fell materially, and this indicates that the Also, wage-rate increases remained rapid last moderate rates of expansion in the monetary year. As you well know, they have been running aggregates were fully sufficient, if not more than far above the long-term rate of improvement in sufficient, to take care of the Nation's legitimate productivity. needs. If the rate of inflation quickens this year, as We at the Federal Reserve have the firm may happen, that would pose a threat to the intention of staying with a course of moderation continuance of economic recovery. If the rate in monetary policy. Clearly we need continued of inflation quickens, the restoration of confi- growth in economic activity ; clearly this growth dence that is now under way would probably needs to be financed. We expect to provide soon come to an end. If the rate of inflation sufficient money and credit to finance a satisquickens, interest rates would rise and financial factory rate of expansion, but we do not have markets might become unsettled. If the rate of the slightest intention of throwing caution to the inflation quickens, the flow of funds to our thrift winds and of taking the risk of rekindling inflainstitutions—and thus mortgage credit sup- tion. plies—would tend to dry up, and housing would The principles that are guiding monetary polsuffer grievously once again. Consumer spend- icy at the present time should, in my judgment, ing would also tend to weaken because in our also shape the course of fiscal policy if our times consumers respond to inflation not by country is to regain any chance of lasting prosspending at a faster rate but by saving at a faster perity. rate. This is one of the important lessons of I need hardly remind this committee that since recent times—a lesson that as yet is not under- 1960 we have had a deficit in our Federal budget stood well enough. every year but one. I need hardly remind this In view of what I have said, it seems to me committee that in the 10 fiscal years from 1968 that the task for public policy is eminently clear: through 1977, taking account of the President's we in Government must avoid policies that recently announced budget, the Federal budget release a new wave of inflation. To the extent deficit will have exceeded $20 billion in each that we do so, we will enhance the prospects of 6 years. And I need hardly remind this for a vigorous and durable economic expansion. committee that in the 5 years ending with fiscal Now let me say a word or two about monetary year 1976, the deficit in the unified budget will policy. We at the Federal Reserve have been have cumulated to about $160 billion. And if very mindful not only of the need to expand we take off-budget outlays into account—as we Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 113 should, and as I hope Mr. Lynn soon will—the State, and local levels amounted to something total rises to more than $180 billion. like 38 or 39 per cent of the dollar value of The President has recommended a budget for our Nation's production. That percentage has the coming fiscal year that aims to slow down been growing progressively over the years. The materially the rate of increase in Federal spend- private sector in our economy is shrinking. Let ing. Partly for that reason and partly also be- us not overlook the fact that the private sector cause of expected increases in revenues, the has been the source of strength and vitality of budget deficit is projected to decline from $76 our economy. billion in fiscal 1976 to $43 billion in fiscal I hope that the Congress will, in general, 1977. follow the recommendations in the President's I would certainly like to see faster progress budget message. I am speaking of over-all in reducing the deficit, but I do recognize that totals, not of the details of the budget. the deficit now results in large part from the This committee can serve a vital national fact that economic activity is well below the function. I trust that you will bear carefully in full employment level. mind, as you have in the past, the urgent need The President's recommendation to cut back of this country to follow a course of fiscal on the growth of Federal expenditures and also prudence and that you, Mr. Chairman, and your to cut taxes strikes me as sound. Federal expend- colleagues on this committee, will bring your itures have been growing very rapidly in our great influence to bear on the thinking of the country. According to my calculations, last year Budget Committee and on the various legislative total governmental expenditures at the Federal, committees. • Statement by Philip E. Coldwell, Member, The Board believes that the bank holding Board of Governors of the Federal Reserve company movement, on balance, has been in System, before the Subcommittee on Financial the public interest, if all factors are carefully Institutions Supervision, Regulation, and In- weighed. We recognize that it may be too early surance of the Committee on Banking, Cur- to appraise adequately all the ramifications of rency, and Housing, U.S. House of Repre- the changes in banking structure, the new comsentatives, January 29, 1976. petitiveness in banking and bank-related industries, and the sufficiency of full realization of It is my privilege to present the response of the the public benefits promised by the applicants. Board of Governors to the FINE1 "Discussion There are some questions on the proper degree Principles" embodied in Title III. Before re- of regulatory control and the permissiveness of viewing the principles and responding to each, the holding company form of organization. But however, I would like to present the Board's many of the charges of financial trouble levied current assessment of the bank holding company against the bank holding company movement movement as it has developed since the 1970 have little relevance to the form of organization amendments. It will be recalled that the legisla- and are primarily the result of broader economic tion amending the 1956 Bank Holding Company problems and aggressiveness of bank manage- Act was designed (1) to bring one-bank holding ment policies. companies under the Act, (2) to allow bank In our view the primary and demonstrable holding companies to engage in a broader range benefit from the holding company movement of nonbanking activities closely related to has been the competitive impact in the banking banking, and (3) to assure that public needs and industry. Through de novo and foothold entries conveniences were considered when permitting new and stronger competitors have been introan acquisition. duced into local banking markets. There have 1 Financial Institutions and the Nation's Economy. been 218 de novo banks organized in metro- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

114 Federal Reserve Bulletin • February 1976 politan markets by domestic multibank holding banks and certain nonbanking companies. This companies during the 5 years since the 1970 benefit could be particularly important in solving amendments. Of these, about 23 per cent were the problems of a majority owner of a rural bank opened in markets where the holding company who wishes to sell his bank. was not previously represented by a bank. An- Finally, bank holding companies have imother 45 new banks were opened in nonmetro- proved the financial condition and management politan markets. Of these, about 84 per cent of many of their newly acquired banks. Of represented initial entry by the holding compa- particular importance has been the provision of nies. These data support our judgment that new additional capital. In 397 separate approvals of banking alternatives have been opened to the holding company acquisitions, the Federal Republic with increased competition for existing serve has conditioned its approval on, or banks. reached agreement with the applicant for, an With respect to acquisitions of banks that injection of new capital. Such applicants have have small market shares, empirical studies provided almost $788 million of new capital as show that the market shares of these acquired a result of these acquisition agreements, and banks have increased under holding company bank holding companies, often after urging by control, suggesting an improved competi- the Federal Reserve, have put in an additional tiveness that perhaps includes broader services. $1,154 million in new capital. In total then, There are less certain but creditable indications bank holding companies have injected almost of increased competition in State and regional $2 billion of new capital funds into subsidiaries. banking markets resulting from the growing While a part of this total might have been abilities of bank holding companies to meet the injected without the holding company form or expanding needs of regional and national busi- the requirements of the Federal Reserve, it is nesses. doubtful that the total would have been nearly Competitive benefits are also reflected in the so large. de novo and foothold entries of bank holding The ability of bank holding companies to companies in nonbanking activities. Since 1970 provide management for their new acquisitions bank holding companies have established over has been a significant benefit; particularly when 1,600 nonbank de novo offices, with consumer the acquired bank had unsatisfactory leadership finance, insurance, mortgage banking, and leas- or faced a management succession problem. ing firms accounting for more than 70 per cent Growing bank holding companies are often able of that total. Also holding companies frequently to attract new executive talent, thereby enabling have acquired small or medium-size firms and them to supply management to newly acquired then expanded de novo into new markets. It is or organized banks. Such benefits are very our impression that the new entrants have a difficult to measure, but we believe that the procompetitive effect in the local markets for ability of holding companies to provide mansuch bank-related activities. agement is a substantial public benefit. Beyond the competitive impacts, I believe The Board also recognizes that there are costs that the bank holding company movement has associated with the bank holding company permitted an improved mobilization of funds in movement. Some bank holding companies have the economy by overcoming, to some degree, experienced financial problems, but it is imporcertain restrictions such as branching limitations tant to note that many of these problems have and barriers to the types of activities in which developed in their bank subsidiaries. The mabanks can engage. The reinforcing impact of jority of these problems would probably have bank-credit availability and the strength of materialized even if the banks had not been an broader marketing are difficult to quantify, but affiliate of a holding company. A significant their intangible benefits for the economy are proportion of these bank problems have nonetheless significant. Similarly, the bank stemmed from the recession, but others have holding company organization has provided a resulted from overly aggressive bank lending new vehicle for marketing the stock of small and investment policies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 115 Some other bank holding company problems, nancial and managerial factors, competitive efhowever, have originated in their nonbank sub- fects (including any concentration issues), and sidiaries. For example, some mortgage banking the public benefits expected. We typically reaffiliates have sustained operating losses, and a quire the applicant and its subsidiaries, both few have tried to avoid severe distress by selling bank and nonbank, to be in generally satisassets of doubtful quality to bank subsidiaries. factory financial condition. In a number of Except in rare cases, however, the problems cases, as noted above, we have required addiassociated with nonbank subsidiaries have not tional capital and other corrections as a condihad a major negative impact on bank holding tion for approval. The Federal Reserve closely companies. One reason is that these nonbank scrutinizes those applications involving acquisisubsidiaries are usually a small factor in the tion debt and has denied a number where such holding company system. In fact, total nonbank debt would create undue pressure for increased assets of bank holding companies account for dividends from bank subsidiaries, especially less than 5 per cent of total consolidated holding when the bank needs, or is likely to need, company assets. capital. We expect the parent company to be Another problem area is that some real estate a source of strength to its subsidiaries and not investment trusts (REIT's), advised by a bank a drain on their resources. holding company, often carrying the name of Approval of nonbank acquisitions has simithe holding company or its lead bank, have larly been given following a determination that encountered financial troubles. Although many competitive benefits are likely to flow from the independent and bank-advised REIT's have ex- acquisition and that some significant public perienced similar difficulties, it is probably true benefits will develop such as greater efficiency, that the holding companies were able to pursue lower interest rates, or broader services. We this line of endeavor more freely and with have designed our procedures to promote de greater aggressiveness. Of course, the recession novo entry by making the application and review in economic activities has been a major source process easier and quicker. Moreover, the Fedof these difficulties, but some REIT's became eral Reserve has shown a distinct preference for exposed to a greater extent than other lenders having bank holding companies acquire small in the mortgage market. or intermediate-size firms rather than the largest Use of the bank holding company form of companies. We, of course, have moved careorganization has permitted greater flexibility and fully in reaching decisions as to which industries latitude than the normal single unit bank or even are closely related to banking and where operaa branch bank system. For example, the ability tion by a holding company would be of public of holding companies to "double lever- benefit. Under Regulation Y, the Board so far age"—that is, raising funds through parent debt has determined 12 categories of nonbank activiissues and downstreaming equity capital to bank ties to be permissible for bank holding compasubsidiaries—has allowed the holding company nies and has ruled that 8 types of activities are to increase the capital ratios of bank subsidi- not permissible. aries, while increasing the leverage of the com- Beyond these rather specific requirements, the pany as a whole. Problems can develop from Board has adopted policies concerning bank "double leveraging" if the parent's debt serv- holding company expansion, which over the icing requirements are such that unduly heavy past 2 years have significantly slowed this exdividends are required from the bank. pansion. The Board adopted this "go-slow" The Federal Reserve is charged with regulat- policy because it believed that managerial and ing bank holding companies by approving or financial resources could often be used more denying applications for acquisitions, by over- effectively to strengthen existing operations, seeing their financial conditions, and by insuring particularly in the bank subsidiaries, some of compliance with the Act and its associated reg- which had experienced sharply declining capital ulations. When acting upon proposed acquisi- ratios or large loan losses. tions, we have regularly given attention to fi- Similarly, we have increased our efforts to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

116 Federal Reserve Bulletin • February 1976 improve the supervision of bank holding com- in difficulty is so large that it cannot be acquired pany activities by more intensive monitoring of by any in-State companies without creating bank holding company financial affairs and in- competitive problems. tracompany transactions. From revised and ex- I would now like to state the Board's specific panded financial reports, we will acquire much response to the FINE Discussion Principles as more information on bank holding company reflected in Title III. The first elaborates on a activity. Also a quarterly report on intracom- prior principle that a Federal Depository Instipany transactions will permit the Federal Re- tutions Commission be created and that it have serve to monitor closely any unusual transac- authority for supervision, regulation, and extions or transfers between holding company amination of bank and savings and loan holding affiliates. The Federal Reserve has increased its companies. As reflected in our prior testimony, inspection program for bank holding companies the Board is opposed to the creation of this and nonbank subsidiaries so that developing commission, and, hence, opposes the provision financial problems may be identified as early as that the powers of the commission cover bank possible. Such inspections also allow a check holding company activities. on compliance with the Bank Holding Company The second Discussion Principle in this title Act and with Federal Reserve regulations would subject holding companies to the juriscreated to implement that Act. We have in- diction of the Federal Depository Institutions creased our contacts with the managements of Commission so as to promote healthy competibank holding companies so that we may be tion among depositary institutions and to prebetter informed about the condition of their vent the acquisition of banks or savings and loan companies and where problems may develop. associations that would tend to lessen competi- Moreover, we have been increasing our use of tion in a financial market. The Board strongly agreements or cease and desist orders to bring endorses and has worked toward promoting about the correction of specific problems. healthy competition among depositary institu- After 5 years of experience in enforcing and tions. In its administration of the Bank Holding regulating the 1970 amendments to the Bank Company Act, the Board has repeatedly denied Holding Company Act, the Federal Reserve has proposed acquisitions of banks and nonbank found it desirable to suggest to the Congress companies that would result in anticompetitive certain changes in that Act that would improve effects. Only in those rare cases, such as with our ability to correct problems or deter their the acquisition of a failing bank, where demondevelopment. Specifically, the Board has re- strable public benefits would outweigh relatively quested the Congress to give it the authority to slight anticompetitive effects, has the Board invoke civil penalties for violations of the Bank approved acquisitions of this character. I can Holding Company Act and thus deter the viola- assure you that the Board pays extremely careful tions that are being discovered in our holding attention to the competitive effects of every company inspections. Also, the Board has asked proposed acquisition. for authority to order divestiture of nonbank The third Discussion Principle calls for prosubsidiaries or nonbank activities where they are hibiting the holding company and subsidiaries endangering the bank subsidiaries of a holding from using names in such a way so as to cause company. public confusion. We perceive the purpose of As a method of dealing with situations where this provision as an effort to disassociate deposa bank is in serious financial difficulty, we have itary institutions from the rest of the holding requested modification of the Act to permit company system in the public's mind so that waiver of the 30-day waiting period before an financial trouble elsewhere in the system would acquisition can be consummated. This authority not have an impact on the depositary institutions parallels that in the Bank Merger Act. Similarly, in such a way as to cause a loss of confidence. we have requested a change in the statute that The Board believes that such a prohibition would permit inter-State bank holding company would give the depositary subsidiaries of bank acquisitions where a bank or holding company holding companies a modest degree of protec- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 117 tion, but does not believe such protection would company as a whole or in its bank affiliates. be complete or very effective. The sophisticated In addition, some support of the liabilities of holders of liabilities of depositary institutions nonbank affiliates may be desirable in the norare aware of the organizational links to the rest mal course of business, as in the case where of the holding company system whether the a bank issues a "partial" standby letter of name is identical or even similar. Such investors credit, subject to Section 23A, to facilitate maror depositors can be responsible for wide swings keting of the debt of an affiliate. in deposits of individual institutions during pe- Another Discussion Principle requires the riods of financial stress. In recent experience, Federal Depository Institutions Commission to typically it has been the large uninsured deposi- determine before permitting any action by a tor or creditor who has sought protection by depositary institution with a holding company, withdrawing funds from depositary institutions. a subsidiary, or an affiliated nonfinancial insti- In a practical sense, also, even if the names tution, that such action would not weaken the are not similar, the holding company may still depositary institution in question. The Board feel responsible for the nondepositary unit in assumes that it is the intent of this provision the holding company and thus may attempt to to prevent intraholding company transactions use its depositary affiliates to come to the aid that would adversely affect depositary subsidiof that nonbanking unit in times of adversity— aries. The Board wishes to point out that such subject, of course, to the limitations in Section a proposal, though tending to prevent such ad- 23A of the Federal Reserve Act. There would verse actions, would involve substantial adminbe some cost in forcing all holding companies istrative costs to review each and every transacto change the names of their nonbanking tion. In addition, prior approval of each transaffiliates including the denial to holding compa- action constitutes an unwarranted interference nies of one of the benefits of the holding com- in the management of the company. pany form, which is the strength of the holding As far as banks are concerned, existing laws company name on the nonbanking and banking such as Section 23A of the Federal Reserve Act subsidiaries. Furthermore, the proposal runs already give bank affiliates of the holding comcounter to the view that the public has a right pany some protection from abuse. However, as to know with whom it is doing business. Also, already noted in this testimony, there have been there may be legal implications of forcing such intraholding company transactions that have a name change between the parent and its created problems for bank affiliates. In that nondepositary subsidiaries, which the Congress regard, the Board has taken several steps to should review carefully before adopting this reduce or counter the adverse effects of such principle. transactions. First, the Board has recently The next proposal concerning holding com- stepped up its monitoring program dealing with panies is another attempt to avoid public confu- bank holding company financial developments. sion by requiring that any liabilities issued by Second, as noted above, the Board has begun nondepositary subsidiaries clearly state that the an intracompany transaction report and also liabilities carry no guarantee by any depositary requires almost immediate notice of transactions institution in the holding company system, or involving large amounts or a large proportion by the U.S. Government. The Board believes of a holding company's income or assets. Third, that this proposal is desirable because it would in order to prevent bank affiliates from being tend to clear up any confusion or misun- harmed by unsound financial practices of the derstanding that might exist. While lending its holding company or its nonbank subsidiaries, support to this proposal, the Board nevertheless the Board has requested and received authority believes that there should be recognition of the from the Congress to bring cease-and-desist practical position of many bank holding compa- actions, if necessary, against holding company nies that the debt of any subsidiary ordinarily units. Fourth, the Board has acted to limit should not be allowed to go into default for fear certain transactions by banks with affiliates. The of injuring public confidence in the holding Board has interpreted limitations placed on Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

118 Federal Reserve Bulletin • February 1976 member bank loans to affiliates, under Section theless, we do recognize that such loans could 23A of the Federal Reserve Act, to include be made by a number of separate units and assets purchased from these affiliates. In addi- perhaps in the aggregate might constitute an tion, the Board has amended Regulation H to overconcentration of credit for the company. require member banks to treat standby letters The Board is mindful that the purchase of of credit and ineligible acceptances as loans for assets by a bank from a REIT advised by the purposes of determining limitations on loans to holding company is not presently limited by law affiliates. except to the extent that such a purchase consti- The Board believes that if existing laws and tutes an "unsound" banking practice. Neverprocedures are not sufficient to reasonably pro- theless, we are watching such transactions of tect the bank subsidiaries, it would be preferable State member banks very closely and would not to tighten the laws on intracompany transactions hesitate to take decisive action if a transaction rather than to prohibit such transactions except constituted an unsound banking practice. with prior approval by regulatory authorities. In order to promote disclosure, the next Dis- Currently the regulatory agencies are studying cussion Principle would require the Federal Depossible recommendations for strengthening of pository Institutions Commission to obtain and Section 23A of the Federal Reserve Act. make publicly available by market area on a Turning to the next Discussion Principle, the periodic basis, information concerning loans Board supports the proposals to remove present and other financial transactions between deposilimitations on the amount of loans between tary institutions and the rest of the holding affiliated depositary institutions and to abolish company system, as well as institutions such the requirement that such loans be secured. We as REIT's advised by the holding company believe that within broad limits, it is reasonable system. The question of the degree or type of to allow a statewide holding company system disclosure of holding company financial affairs to transfer funds among its depositary affiliates is one that is currently under considerable study just as a statewide branch-banking system can both by the regulatory agencies and the Securitransfer funds among its branches. Such a pro- ties and Exchange Commission. The Board recvision would be particularly desirable in facili- ognizes that to achieve market discipline of tating Federal funds transactions among deposi- holding companies there will have to be additary affiliates of the holding company. It is tional disclosure of their financial condition, and believed that the restrictions presently placed on it has participated in extensive discussions with such intracompany depositary loans were among the SEC about which data should be developed the principal reasons for the conversion of a and how they are to be presented. large number of holding company affiliates into The final provision in Title III of the Discusstatewide branching networks when the New sion Principles applies to the composition of the York State law was recently changed to permit board of directors of each depositary institution statewide branching. and holding company as well as the important The next of the Discussion Principles would committees of each institution. The provision prohibit transactions other than routine deposit requires that one-third of the members of the transactions between a depositary institution that board of directors and all the important comis a subsidiary of the holding company and any mittees be independent. That is, they should investment company, including REIT's, which have no affiliation with the holding company or it manages or advises. We question whether it any of its nondepositary affiliates. It appears to is necessary to prohibit all transactions between us that the purpose of this provision is to give depositary institutions and an investment com- the depositary institutions greater protection pany both related to a single holding company. from any possible abuse by the rest of the For the depositary institution, the amount of holding company system. We believe that indeloans to a REIT advised by a holding company pendent directors would be of some help. But unit would be limited by existing law, usually it is doubtful that the proposal would offer to 10 per cent of the bank's capital. Never- depositary institutions a significant amount of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 119 protection. The proposal would still leave inde- In conclusion, the Board believes the Banking pendent directors in a minority position. More- Committee is rendering an important service in over, directors are obligated to defend the inter- leading a discussion of what may be the useful est of the stockholders, and a depositary affili- and feasible elements of financial institution ate's stockholder is the holding company, which reform. Our net assessment of the bank holding would or could be the source of the abuse. company movement is presently favorable, but If this FINE proposal were to be adopted, it is clearly too soon to render definitive judghowever, we would urge that small holding ments on all aspects of the movement. We hope companies be exempted. We suggest this be- our review of the development of bank holding cause in smaller towns and for small companies companies and our comments on the FINE Diselsewhere, the available supply of qualified cussion Principles applicable to them, will be directors is often limited. helpful to the committee. • Statement by Arthur F. Burns, Chairman, facturing industries exceeded the number re- Board of Governors of the Federal Reserve leased by a margin of 3 to 1. System, before the Committee on Banking, The rate of utilization of our industrial plant Currency, and Housing, U.S. House of Repre- has also risen. In the major materials industries, sentatives, February 3, 1976. only 70 per cent of available plant capacity was effectively used during the first quarter of 1975; I am glad to meet with this committee and by the final quarter, utilization of capacity in present once again the Federal Reserve's report these industries had climbed to 81 per cent. on monetary policy. Nevertheless, a large part of our labor and Last July, when I gave the first report to the capital resources still remains idle. Unemploycommittee under House Concurrent Resolution ment is still deplorably high, and activity in not 133, our economy was just beginning to emerge a few of our Nation's industries remains defrom the most severe recession of the postwar pressed. Continuance of moderately rapid experiod. Since then, we have experienced a vig- pansion is, therefore, essential to the restoration orous economic recovery. According to prelim- of our economic well-being as a Nation. inary calculations, the physical volume of our Fortunately, conditions in the private econ- Nation's total production rose at an annual rate omy favor a substantial further increase in proof 9 per cent during the second half of 1975. duction and employment this year. Last fall the The rebound of the industrial sector of our pace of advance in economic activity slowed economy has been even stronger. Since its low for a very brief period; but a renewed upswing point last April, the total output of factories, developed toward year-end, and the economy mines, and power plants has increased at a 12 entered 1976 on a strong upward trend. Conper cent annual rate. The advance was initially sumers have been buying more liberally, as is most prominent in the textile, leather, paper, evident from the surge in retail sales late last and chemical industries, but the scope of the year. In December retail sales rose 3% per cent recovery broadened during the fall and winter on a seasonally adjusted basis, and the immonths and now includes a wide range of dura- provement that developed over the Christmas ble and nondurable goods. season appears to have continued thus far this As production rose, the demand for labor year. strengthened. Since last spring, total employ- This marked strengthening of consumer ment across the Nation has risen by IV2 million, spending has resulted in a further liquidation of and the average factory workweek has length- business inventories, so that ratios of inventories ened by IV2 hours. In December the number to sales are now unusually low at most retail of employees added to payrolls by our manu- outlets and also at manufacturers of nondurable Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

120 Federal Reserve Bulletin • February 1976 goods. Businessmen have been pursuing very to a large degree on the vigor of consumer cautious inventory policies; they have been re- markets. Businessmen across our land are still luctant to reorder in volume until they were making plans for the future with great caution. confident that recovery was taking hold. As a While the recent improvement in consumer result, business firms will soon need to rebuild buying has been encouraging, the present more inventories to levels consistent with the im- optimistic mood of consumers could be deproved pace of consumer buying. It should not stroyed by a new burst of inflation. Any resurbe surprising if orders and production advance gence in the pace of inflation this year would rather briskly in the months just ahead. pose a threat to consumer and business confi- Prospects for residential construction also ap- dence, and thus to the further recovery of ecopear to have improved. Prices of new homes nomic activity that is so urgently needed. remain exceedingly high, and this is bound to We as a Nation made notable progress last limit the recovery in homebuilding. Still, the year in reducing the rate of inflation. The rise inventory of unsold units—especially in the in consumer prices came down to 7 per cent, single-family market—has declined, and mort- about half the rate recorded in 1974. The rise gage credit is now readily available in nearly in wholesale prices slowed down even more. all parts of the country. Housing starts have These improvements reflected slack demand in therefore been moving up and further significant product markets and increased competitive gains are likely over the course of 1976. pressures, but they were evidenced mainly in Our export trades, too, will probably register the first half of last year. some improvement this year. The demand for In fact, there has been some worsening in exports held up well in 1975, reflecting in large the rate of inflation since the middle of 1975. measure the strong competitive position that we One troublesome sign has been the acceleration have achieved in world markets during recent in wholesale prices of industrial commodities. years. Economic recovery is now under way in During the second half of 1975, these prices other industrialized countries, and as it gathers increased on the average at an annual rate of momentum the demand for our exports should almost 9 per cent, compared with 3V4 per cent intensify. However, our foreign trade balance in the first half. The advance of consumer prices is likely to narrow this year because our eco- quickened less rapidly—from an annual rate of nomic expansion will lead to an enlarged de- 6.6 per cent in the first half of 1975 to 7.5 per mand for imports—including products, such as cent in the final 6 months. But the rate of petroleum and industrial supplies, that fell off inflation in consumer markets could worsen fursharply during the recession. ther if recent sharp increases in wholesale prices Business capital spending can also be ex- are passed through to the retail level. pected to contribute to economic recovery dur- The trend of wage increases, while undering 1976. This sector of demand has yet to show standable, is also disturbing. Last year wage convincing signs of an upturn, but business rates rose on the average by 8 per cent—far fixed investment often lags behind other major above the long-term rate of growth in produccategories of demand during the early stages of tivity. This year, major collective bargaining a recovery. With rates of capacity utilization on agreements covering almost twice as many the increase, corporate profits moving up workers as in 1975 will need to be negotiated. strongly, the stock and bond markets improving, If wage settlements in major industries exceed and business confidence gaining, we can rea- those of 1975—when wage and benefit increases sonably expect considerable strengthening this for the first year already averaged around 11 year of business plans for buying new equip- per cent—a new explosion of wages, costs, and ment and building new facilities—as normally prices may be touched off. happens in the course of a business cycle ex- Some step-up in the rate of inflation was pansion. perhaps unavoidable during the latter half of last The strength of recovery in business invest- year, in view of the vigor of economic recovery. ment outlays this year, however, will depend As the recovery proceeds, however, it is clearly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 121 the responsibility of government to manage concern was expressed by some economists, as economic policies so that a new wave of infla- well as by some members of the Congress, that tion, which would wreck our chances of lasting the rates of monetary growth we were seeking prosperity, is avoided. would prove inadequate to finance a good eco- Our country is now confronted with a serious nomic expansion. Interest rates would rise dilemma in its search for ways to move the sharply, it was argued, as the demand for money economy toward full employment. Conven- rose with increased aggregate spending, and tional thinking about stabilization policies is shortages of money and credit might soon choke proving inadequate. Stimulative financial poli- off the recovery. cies have considerable merit when unemploy- We at the Federal Reserve did not share this ment is extensive and the price level is stable pessimistic view. We knew from a careful or declining. But such policies do not work well reading of history that the turnover of money if the price level keeps on rising while there balances tends to rise rapidly in the early stages is considerable slack in the economy. Recent of an economic upswing. Consequently, we experience both in our own and other industrial resisted the advice of those who wanted to open countries suggests that once inflation has be- the tap and let money flow out in greater abuncome ingrained in the thinking of a Nation's dance. businessmen and consumers, highly expansion- Subsequent events have borne out our judgist monetary and fiscal policies do not have their ment. Increases in the turnover of money balintended effect. In particular, instead of foster- ances have been even larger than we at the ing larger consumer spending, they tend to lead Federal Reserve had anticipated. Over the past to larger precautionary savings and sluggish two quarters, the velocity of M —that is, the x consumer buying. The only sound fiscal and ratio of GNP to M —increased at an annual rate x monetary policy today is a policy of prudence of over 10 per cent, the largest increase for any and moderation. half year in the past quarter century. Moreover, Over the past year, the Federal Reserve has this rise in velocity was not associated with sought to foster a financial climate conducive higher rates of interest or developing shortages to a satisfactory recovery, but at the same time of credit. On the contrary, conditions in finanto minimize the chances of rekindling inflation- cial markets continued to ease, and are more ary pressures. Last spring, in our first report comfortable now than at any time in the past pursuant to House Concurrent Resolution 133, 2 years. we announced the growth rates of the monetary There is a striking contrast between the and credit aggregates that we would be seeking movement of interest rates during the current over the next year in the furthering of these recovery and their behavior in past cyclical objectives. upswings. Short-term interest rates normally A growth range of 5 to IV2 per cent was begin to move up at about the same time as adopted for M—that is, currency plus demand the upturn in general business activity, although t deposits held by the public. Higher growth the extent of rise varies from one cycle to ranges were specified for the broader monetary another. In the current economic upswing, a aggregates. For M , which also includes time vigorous rebound of activity, a continuing high 2 and savings deposits other than large certificates rate of inflation, and a record volume of Treasof deposit (CD's) at commercial banks, the ury borrowing might well have been expected growth range was initially set at SV2 to IOV2 to exert strong upward pressures on short-term per cent, and subsequently widened by reducing interest rates. However, after some run-up in the lower end of the band to IV2 per cent. For the summer months of last year, short-term rates a still broader monetary composite, M , which turned down again last fall and have since then 3 also includes deposits at thrift institutions, the declined to the lowest level since late 1972. range was initially set at 10 to 12 per cent, and Long-term rates have also moved lower; yields then widened to 9 to 12 per cent. on high-grade new issues of corporations are At the time these ranges were established, now at their lowest level since early 1974. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

122 Federal Reserve Bulletin • February 1976 Conditions in financial markets thus remain learn that the Senate Banking Committee, in its favorable for economic expansion. Interest rates recent "Report on the Conduct of Monetary are generally lower than at the trough of the Policy," agrees with this view. recession. Savings flows to thrift institutions are Since last spring, growth rates of the major still very ample, and commitments of funds to monetary aggregates—though varying widely the mortgage market are still increasing from month to month—have generally been strongly. Mortgage interest rates are therefore within the ranges specified by the Federal Reedging down. serve. Thus, on a seasonally adjusted basis, the Moreover, the stock market has been staging quarterly average level of M rose over the past x a dramatic recovery. The average price of a three quarters at an annual rate of 5.7 per cent; share on the New York Stock Exchange at M rose at a rate of 9 per cent, while M rose 2 3 present is about 60 per cent above its 1974 low. at a rate of 12 per cent. The growth rate of A large measure of financial wealth has thus M x was toward the lower end of the specified been restored to the millions of individuals range, while growth in M 2 was near the midacross our land who have invested in common point of its range. Growth in M 3 , on the other stocks. Besides this, the improvement in the hand, was at the upper end of its range. stock market has made it considerably easier for The growth rates that I have just cited reflect many firms to raise equity funds for new invest- new seasonal adjustment factors, published a ment programs or for restoring their capital few weeks ago, that emerged from an intensive cushions. review by the Federal Reserve staff of the In general, the liquidity position of our Na- process of making seasonal adjustments in our tion's financial institutions and business enter- monetary statistics. This review revealed some prises is now much improved. Corporations facts about the behavior of money supply data issued a record volume of long-term bonds last that I believe this committee should have at its year, and used the proceeds to repay short-term disposal. debts and to acquire liquid assets. Commercial Seasonal adjustment of the money stock, as banks reduced their reliance on volatile funds with other economic time series, involves a and added a large quantity of Federal securities rather large element of judgment. I have atto their asset portfolios. The liquidity position tached to this statement a table1 showing of savings banks and savings and loan associa- monthly, quarterly, and semiannual changes tions has likewise been strengthened. in M x that would be obtained by applying a The market for State and local government variety of plausible seasonal adjustment procesecurities has, of course, been adversely af- dures. The results differ by a wide margin. For fected by the New York City financial crisis. example, in November, the seasonally adjusted Even in this market, however, interest rates are annual rate of change in M x may be estimated now below their 1975 highs, and the volume in a range running from 3 per cent to 13 per of securities issued has remained relatively cent; for December, the range is from —7 per large. The difficulties of New York City, more- cent to +3 per cent. In view of such wide over, have had a constructive influence on the ranges, no one can say with any confidence what financial practices of State and local govern- happened to the seasonally adjusted stock of ments—as well as on other economic units— money in those months. throughout the country. The emphasis on sound These observations on seasonal measurement finance that is now under way enhances the reinforce a judgment that I have frequently chances of achieving a lasting prosperity in our expressed, namely, that many financial obcountry. servers attach a degree of importance to short- These notable accomplishments in financial run movements of money balances that cannot markets indicate, I believe, that the course of moderation in monetary policy pursued by the 1 Available upon request from Publications Services, Division of Administrative Services, Board of Gover- Federal Reserve last year has contributed to nors of the Federal Reserve System, Washington, D.C. economic recovery. The Board was pleased to 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 123 be justified. In any event, it is doubtful whether ships that existed on the average over the postsmall monthly changes in the stock of money war period had continued to hold, growth in balances have any real meaning for economic M at an annual rate of about 8V2 per cent would x activity. The narrowly defined money stock, have been needed during the past six quarters M totals at present nearly $300 billion. to finance the observed rise in nominal GNP l9 Whether that stock increases in any one month at the interest rates that actually prevailed. The to $301 billion or to $302 billion—the dif- actual growth rate of M during those six quarx ference between an annualized growth rate of ters was only about half that large. 4 per cent and one of 8 per cent—is unlikely A number of factors are clearly responsible to have a perceptible impact on the condition for the reduction in the amount of money needed of the real economy. to finance the rise in GNP, but their quantitative Over longer periods, of course, such technical importance is difficult to ascertain. One imporconsiderations as seasonal adjustment create tant consideration is the rise of interest rates to fewer difficulties in interpreting movements of unprecedented levels in 1974. The attractiveness the various measures of money balances. But of high yields on a variety of close substitutes there are other problems of interpretation that for demand deposits led to the development of must be recognized in evaluating monetary pol- new techniques of cash management that have icy. We are living in a world of very rapid continued in usage since then. As a result, change in financial technology. New financial businesses and consumers are now keeping a practices have been spreading through our mar- larger fraction of their transactions and precaukets for the past 20 or 30 years. Of late, more- tionary balances in interest-bearing liquid over, the innovative process has accelerated, assets. and it appears that the amount of money needed Moreover, as I have noted on previous occaduring the past year or two to finance a given sions, numerous financial innovations and regudollar volume of GNP has been substantially latory changes have facilitated the process of smaller than would have been the case earlier. economizing on the sums held in the form of Economists have sought for many years to demand deposits. These developments have inmeasure the public's demand for money by cluded the spread of overdraft facilities in relating this magnitude to the level of the gross banks, increased use by consumers of generalnational product, to interest rates, and to other purpose credit cards, the growth of negotiable measurable factors. These money demand rela- order of deposit (NOW) accounts in New tions play an important role in most econometric Hampshire and Massachusetts, the emergence models of the economy. The Board's staff uses of money market mutual funds, the development such a model as one tool, among others, in of telephonic transfers of funds from savings analyzing economic and financial developments. to checking accounts, and the growing use of While the money demand equation in this model savings deposits to pay utility bills, mortgage has fairly often yielded poor predictions for payments, and other obligations. individual quarters, these errors did not tend to One very recent development that has had a cumulate. In other words, predictions for a considerable impact on the behavior of M was x series of quarters tended to fluctuate around the the regulation issued by the banking agencies actual level of the narrowly defined money last November, which enabled partnerships and stock, rather than to diverge progressively from corporations to open savings accounts at comit. mercial banks in amounts up to $150,000. This Since the third quarter of 1974, however, this regulatory action was of considerable benefit to equation has persistently and increasingly over- small businesses. It also placed commercial predicted the amount of money demanded by banks on a more nearly comparable footing with the public to finance transactions. By the last savings and loan associations, which have long quarter of 1975, the overprediction had cumu- been able to issue such accounts without any lated to $19 billion—about 6 per cent of the limitation on size. A special survey conducted actual level of M. This means that if relation- by the Federal Reserve indicates that by January t Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

124 Federal Reserve Bulletin • February 1976 7 around $2 billion had already been moved into hand, resumption of a more normal relationship these new accounts at commercial banks. Since between the growth of money balances and the the bulk of these funds probably were held growth of GNP is entirely possible. previously as demand balances, this shift of In light of present conditions in the economy deposits has undoubtedly accounted for a sig- and in financial markets, the Federal Open nificant part of the weakness of M in late 1975 Market Committee has projected growth ranges x and early this year. of the monetary aggregates for the year ending The relatively slow rate of growth in money in the fourth quarter of 1976 that differ only balances during recent months has been watched a little from those announced previously. For carefully, and at times with considerable con- M and M , the projected growth ranges remain 2 3 cern, by the Federal Reserve. In view of the at IVi to 10V2 per cent, and 9 to 12 per cent, rather rapid pace of economic expansion, the respectively. The growth range for M has been t relative ease of financial markets, and the ab- widened somewhat, to a 4% to IV2 per cent sence of any evidence of a developing shortage band. The lowering of the bottom end of the of money and credit, we have been inclined to range takes into account, among other factors, view the recent sluggish rate of expansion in the transfer of funds from demand balances to M as reflecting the influence of various factors business savings accounts at commercial x that are reducing the amount of narrowly de- banks—a development that lowers the growth fined money needed to finance economic expan- rate of M but leaves unaffected the growth u sion. However, since we could not be entirely rates of M and M . 2 3 certain of our views, we have taken steps re- The profound uncertainties that at present cently to ensure that the rate of monetary ex- surround monetary developments, particularly pansion does not slow too much or for too long. the behavior of M require a posture of excepu During the past 3 months or so, open market tional vigilance and flexibility by the Federal policies have therefore been somewhat more Reserve in the months ahead. We believe that accommodative in the provision of reserves to the growth ranges we have specified will prove the banking system. This has been reflected in adequate to finance a good expansion of ecoa decline of the Federal funds rate to around nomic activity in 1976. In shaping monetary 43A per cent. Last month, the discount rate was policy, we will probably need to give more lowered from 6 to 5V2 per cent. And on two weight under present circumstances to the beoccasions—in mid-October and again in late havior of broader monetary aggregates than to December—the Board reduced reserve require- movements in M. And we must certainly ret ments. These reductions were aimed principally main alert to the possibility that our longer-run at encouraging a further lengthening of the ma- projected ranges may need to be altered in view turities of time deposits of member banks, but of ongoing changes in the financial world. they also released nearly $700 million of re- As my colleagues and I have frequently emserves and thus enabled banks to support a phasized, the objectives of the Federal Reserve higher level of money balances. are to assure enough money and credit to finance In taking these steps, our objective has been a good expansion of economic activity and at to stay on a course of monetary policy that will the same time protect the value of the dollar. continue to support a good rate of growth in If the attainment of these objectives should, in output and employment, while avoiding ex- our judgment, require a change of the monetary cesses that would aggravate inflation and create growth ranges that I have today specified, this trouble for the future. We recognize, however, committee can be sure that we shall not hesitate that recent developments with regard to econo- to do so. mies in money use make it very difficult to Let me remind the committee, in this conascertain how much growth in money and credit nection, that the growth rates of money and will be needed in 1976 to achieve our objec- credit presently desired by the Federal Reserve tives. Substantial further economies of money cannot be maintained indefinitely without runuse could well be realized this year; on the other ning a serious risk of releasing new inflationary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 125 pressures. As the economy returns to higher ment by pursuing fiscal and monetary policies rates of resource utilization, it will eventually that rekindle inflationary expectations. Under be necessary to reduce the rate of monetary and current conditions, the return to full employcredit expansion. The Federal Reserve does not ment is likely to depend heavily on policies that believe the time for such a step has yet arrived. will serve to reinvigorate the forces of competi- But in view of the strong economic recovery tion and release the great energies of our people. that has been under way since last spring, we This is why structural reforms of our economy must be on our guard. deserve more attention from members of the In closing, let me state once again that our Congress and students of public policy than they Nation cannot achieve the goal of full employ- are as yet receiving. • Statement by Brenton C. Leavitt, Director, Di- the condition of the banks and debtors as it vision of Banking Supervision and Regulation, appeared in the depth of this country's most Board of Governors of the Federal Reserve severe recession since the 1930's. The picture System, before the Commerce, Consumer, and looks much brighter now for both banks and Monetary Affairs Subcommittee of the Commit- their debtors. For the most part, the banks have tee on Government Operations, U.S. House of identified their weaknesses, have instituted cor- Representatives, February 3, 1976. rective action, and have clearly demonstrated the financial capacity and underlying strength I am pleased to respond to the committee's to overcome their difficulties. request for information concerning the adequacy Having noted our belief that prospects are and effectiveness of the examination, supervi- improved and that the problems are manageable, sion, and regulatory functions of the Federal I do not wish to dismiss the difficulties that were Reserve System. In this connection, I note that encountered and to some extent still exist. the committee indicated a particular interest in Clearly, the heavy loan losses that have been these functions as they relate to so-called reported by many major banks are an indication "problem banks" and "problem bank holding that the difficulties were far from slight. The companies." nagging questions that this raises are: why did The term "problem," as it is applied to the these difficulties occur, and who was responsible lists of banks and bank holding companies re- for them? Our staff at the Federal Reserve cently reported in the Nation's press, is an believes the underlying cause of the weaknesses unfortunate one because in most instances it that became apparent in the recent recession implies a more serious situation than exists. can, to a significant extent, be traced to the These lists are maintained internally for pur- general economic and financial excesses of the poses of insuring that closer supervisory atten- early 1970's. These excesses, however, were tion is given those institutions that are ex- by no means confined to the banking system. periencing some areas of weakness or that have This was a period of rapid growth of the econexposure to stress. Such lists are designed to omy and one in which a mood of unbridled aid in this process and normally contain a sum- optimism prevailed. Much of American busimary of the firm's financial condition, a brief ness was staffed and influenced by executives discussion of its weakness or potential diffi- who were born in the 1940's, schooled in the culty, the supervisory follow-up action taken, 1950's and 1960's, and who had never experiand the progress being achieved. enced a severe economic reversal. Mistakes under such circumstances were inevitable. With I wish to emphasize that institutions appearthe advantages of hindsight, it is clear that ing on these lists are rarely in danger of failure. American business should have proceeded in It should be noted that the news stories concertain areas with more caution than it did. cerning these banks and bank holding companies were based on information that dealt with One well publicized area that has resulted in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

126 Federal Reserve Bulletin • February 1976 a number of troubled loans for banks is the real June 1973—a letter was sent by Chairman estate investment trust (REIT) industry. The Burns to about 100 foreign-owned banking institutions in the United States. The letter REIT—designed to provide needed funding for requested cooperation in assuring that the housing and other real estate projects, and ex- rate of bank credit expansion in the United isting because of tax advantages bestowed by States was restrained. the Congress—is an example of the dangers of September 1974—the Board released a too much too soon. The enormous volume of statement on bank lending policies that had funds that were pumped into the construction been received from its Federal Advisory Council. The letter urged that banks disciindustry by the REIT's resulted in overbuilding pline their lending policies so as to exclude in certain areas and ill-conceived projects in loans for speculative purposes. others. These difficulties, together with other Beginning in early 1974 and continuing stresses in the economy that were exacerbated through 1975, the Board began formulating by the energy crisis, were major factors ac- policies concerning bank holding company counting for the increases in the volume of expansion. A so-called "go slow" policy was adopted because it was believed that troubled loans in the portfolios of some of the managerial and financial resources could Nation's banks. That the bankers or the regula- often be used more effectively to strengthen tors, for that matter, should have had the fore- the existing operations, particularly in the bank subsidiaries, some of which had sight to anticipate and thus avoid all of these experienced sharply declining capital ratios. problems is perhaps expecting too much. Nevertheless, the supervisory process was at In 1974 and 1975 the Board, through its statutory powers concerning applications for work during the period of the early 1970's. Let foreign expansion, denied a number of apme summarize for you the broad supervisory plications of major banks stating, in effect, steps that the Federal Reserve took during this that the capital of the organization should be used to support existing business rather period: than more expansion. April 1973—a letter signed by Chairman Moreover, during this time, examiners were Burns was sent to the Chief Executive Of- examining individual banks and discussing with ficer of each State member bank with demanagement any significant problems. When posits exceeding $100 million concerning their loan commitment policy. The letter needed, examination personnel were requesting stated in part that "... The apparent large additions to capital, improvement in liquidity, volume of bank commitments currently outand strengthening of lending policies. Goverstanding and sharply increased takedowns thereunder are indicative of the need for nors of the Federal Reserve were speaking about special attention to this subject at this these problems and urging that remedial steps time. ..." be taken. These actions obtained results. A number of May 1973—a letter signed by Chairman banks' and bank holding companies' manage- Burns was forwarded to all State member banks requesting their cooperation in assur- ments recognized their problems and realigned ing that the rate of credit extension be ap- their lending policies to obtain more sound propriately disciplined. The letter stated in credit decisions; improved, to the extent possipart "Some key segments of the Nation's economy are now growing at an unsustaina- ble, their liquidity positions; added to capital ble pace, thereby adding substantially to by slowing the rate of increase in cash diviinflationary pressures. Since excessive bank dends; added to capital funds by sale of suborloan expansion is a factor in this development, the Federal Reserve last week supple- dinated debt; and, finally, adopted more manmented its previous policy actions by adopt- ageable growth and expansion goals. The iming several regulatory amendments with a pact of the recent recession on the banking view to further curbing such expansion. I am writing to you and to every other member system would have been much more severe than bank today on behalf of the Board to give it was if these actions had not been taken. emphasis to these recent actions and to invite Let me now turn to the more specific areas your personal cooperation in assuring that the rate of credit extension by your bank is of bank and bank holding company supervision. appropriately disciplined. ..." In discussing the Federal Reserve's supervisory Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 127 role, the Committee should bear in mind that managements of these banks respond promptly the System has direct supervisory responsibility to examiner criticisms. for State-chartered banks that are members of Category 3 includes largely those banks havthe Federal Reserve System and Board-related ing a relatively high volume of loans that need responsibilities as set forth in the Bank Holding careful attention. Over the past 2 to 3 years, Company Act. For the purposes of our discus- there has been an increase in the number and sion today, I propose to address banks and bank especially in the size of banks placed in this holding companies separately. category. As I mentioned, I believe the under- Regarding banks, more specifically State lying cause of this increase can, to a significant member banks, the criteria for "flagging" the extent, be traced to the excesses of the early institution for special supervisory attention in- 1970's that became apparent in the recent reclude the quality of the institution's assets, the cession. adequacy of its capital, the strength of its earn- Category 4 includes banks with capital that ings, its liquidity position, and the competency has been impaired and with aggravated defiof its management. These considerations are ciencies present in condition and management. reflected in what is known as a uniform rating These banks usually require prompt and extensystem. A detailed description of the rating sive attention to restore them to satisfactory system is appended hereto.1 It should be noted condition. Only a few State member banks are that there is considerable flexibility in the as- so rated, less than 5 in any recent year. signment of individual ratings, and factors other While there are a number of banks that have than those explicitly enumerated in the attached been flagged for special surveillance, the second description, particularly earnings and liquidity, table illustrates that there has been a significant are considered. turnover in individual banks on the list. Since At the conclusion of each examination of a the beginning of 1970, for example, 75 banks State member bank, the Reserve Bank rates the have been removed from the special surveillance condition of the bank on a scale of 1 to 4 based category while 107 were added. These data on information developed by the examiners. I demonstrate that most banks, upon recognizing have attached a list of ratings of State member and identifying areas of trouble and potential banks examined by the Federal Reserve during trouble, are able to institute corrective action the years 1971 through 1975 to the extent that and overcome their difficulties. This is an indithe reports have been completed. The Board of cation of the resiliency of the banking system. Governors does not review or pass on these We believe that it also illustrates that superviratings although it does receive periodic staff sory efforts on the part of the Federal Reserve reports on the condition of banks in the various are timely and obtain results. Moreover, as categories. Banks determined to be in satis- economic conditions improve, banks should be factory condition in all major respects are given able to improve the condition of their loan a rating of 1. About 66 per cent of the more accounts even more rapidly. than 1,000 State member banks qualify for such Although the Federal Reserve believes that a rating. recent events tend on balance to confirm the Banks with one or more deficiencies in asset appropriateness of its supervisory policies, it quality, level of risk assets, management nevertheless has been conducting a number of strength, or liquidity, may be given a rating of studies to develop even better means for pre- 2 unless their capital position is strong enough venting such situations from occurring and for to offset such deficiencies. Banks in this cate- resolving them as soon as possible. Attention gory include many sound institutions that serve has been focused on a number of issues includtheir communities very well. Ordinarily, the ing the following: the attenuation of bank capital produced by the rapid expansion of bank assets *A11 attached materials are available on request from partly, but not entirely, induced by inflation; Publications Services, Division of Administrative Ser- bank liquidity problems, particularly heavy revices, Board of Governors of the Federal Reserve Sysliance on liability management; a deterioration tem, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

128 Federal Reserve Bulletin • February 1976 in the quality of bank assets; increased risk of bank holding company for special surveillance losses in bond trading departments of banks; and monitoring include: the condition of its and, the improvement and updating of exami- subsidiary banks; the ability of the parent holdnation techniques and procedures. ing company and its nonbank subsidiaries to As a result of these studies and recent banking meet their cash needs; and the asset condition developments, the Board has made several leg- of significant nonbank subsidiaries as well as islative proposals and has proposed changes in the impact of the operations of these entities certain regulations. Steps have also been taken on the over-all profitability of the organization. to strengthen and expedite follow-up proce- The analytical process focuses on the impact dures, and guidelines delineating a graduated of the parent bank holding company and the range of alternative procedures to be imple- nonbank subsidiaries on the subsidiary bank. mented in correcting troublesome cases have Experience has indicated that there are three been adopted. The steps range from early at- potential haz:ards. The first relates to the public's tempts at "moral suasion" to meetings of the identification of the holding company and the bank supervisors with boards of directors, and, nonbank subsidiaries with an affiliated bank and in aggravated cases, the issuance of cease and the adverse impact that failure of a nonbank desist orders. Since 1972, the Board has issued subsidiary may have on the public confidence 17 cease and desist orders. The orders have dealt in the bank. The second arises from the risk with such problems as deficiencies in loan col- that strains in the nonbank subsidiaries and lection policies, excessive dividends, insider holding company may result in the transfer of dealings, unsound securities transactions, and so inferior assets from the nonbank subsidiaries or forth. parent bank holding company into the bank. The Turning briefly to the area of bank holding third results from the excessive dependency of company supervision, I would like to note that the bank holding company upon the subsidiary the difficulties that have been experienced here banks for needed cash flow, generally in the are interrelated with bank problems but are also form of dividends. unique in some respects. Although there have With respect to the second concern, the Board been a number of acquisitions of nonbank enti- recently asked the Presidents of the Reserve ties by bank holding companies since the 1970 Banks to forward a letter to the Chief Executive amendments to the Bank Holding Company Officer of each bank holding company, noting Act, in terms of assets or earnings, holding that the sale of assets from a nonbank subsidiary companies, for the most part, are over- to a bank could be a violation of Section 23(A) whelmingly dominated by their banks. of the Federal Reserve Act. The letter is at- The Board's interest in bank holding compa- tached for the committee's information. nies is twofold. First, since it is responsible for The third potential problem is exacerbated by determining permissible activities, it has a par- the existence of excessive debt in the holding ticular interest in the financial soundness of company, which may cause unduly large divithese new ventures and their impact on the dends to be paid by the bank—to its own detriover-all stability of the banking system. Sec- ment. One method that may contribute to such ondly, the Board also has responsibility for a condition is a technique called "bootstrapgeneral oversight of bank holding companies ping." Briefly, "bootstrapping" is a process and for considering the financial and managerial whereby the holding company, with the proresources of individual holding companies in ceeds of loans that are generally secured by connection with action on applications submit- stock of the subsidiary banks, purchases its own ted. In connection with these various respon- shares, thereby reducing its net worth and insibilities, the Federal Reserve has undertaken creasing its debts. On December 11, 1975, the efforts to monitor the financial condition of bank Board published for comment a proposed holding companies and their nonbank subsidi- amendment to its holding company regulation aries. designed to deal with this specific problem. A copy of that proposed amendment is attached. The primary considerations in "flagging" a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 129 The Board believes that the bank holding of troublesome bank holding company situations. company should serve as a source of strength In addition to the applications process, the for its subsidiary banks. In those few cases staff of the Federal Reserve meets with selected where the operation of the bank holding com- holding company managements to discuss unpany constitutes a threat or potential drain on satisfactory trends and to review progress under the strength of the bank, as I outlined above, corrective programs that are in place. In some that holding company is designated for special five cases where it was deemed warranted, the surveillance. Reserve Bank has entered into agreements in In January 1975, 35 separate bank holding writing with holding companies. Such agreecompanies were included on the Federal Re- ments set forth certain conditions and outline serve's list of bank holding companies receiving corrective measures. In aggravated cases, the more than normal supervisory attention. With Board has also used its authority under the respect to individual companies included in the Financial Institutions Supervisory Act. Since it January 1975 report, improvement in the econ- received such authority in 1974, the Board has omy and management's awareness of their re- taken ten cease and desist actions against bank spective problems as well as the implementation holding companies. of corrective programs have ameliorated many We believe that the present remedies availof the adverse conditions indicated in that re- able to the Federal Reserve are sufficient to port. effect correction in the most troublesome areas. At the present time, the Board's staff is mon- Nevertheless, as a result of a continuous review itoring the condition of 63 bank holding com- of the bank holding company movement and its panies, some of which were included in the effect on the banking system, we fully expect January 1975 report. While the total number of that, from time to time, the Federal Reserve will companies has increased, it should be remem- seek new legislation designed to deal with the bered that improvement relating to certain types changing environment. One item of legislation of loans and to certain regional economies typi- that would be especially helpful would be aucally lags behind recovery in the national econ- thority to assess civil penalties for violations of omy. Therefore, we feel confident that contin- the Bank Holding Company Act. That and other ued improvements in the national economy and legislation was recommended to Senator Mclnvigorous supervision will result in a reduction tyre by Chairman Burns in his letter of Sepin the number of holding companies requiring tember 5, 1975. supervisory attention. In conclusion, let me reiterate that while there In discharging its responsibilities as outlined are banks and bank holding companies in the in the Bank Holding Company Act, the Board United States with some fairly serious asset has at its disposal a number of supervisory tools, problems, we believe that both banks and bank which can be employed to meet specific objec- holding companies have demonstrated the catives. Perhaps the most effective supervisory pacity to correct these difficulties given a reameasure available to the Board is its statutory sonable period of time. Furthermore, we believe authority to permit or deny bank holding com- that supervisory efforts of the Federal Reserve pany acquisitions and expansion. Denial of prevented the development of more serious sitapplications or conditioned approvals have uations and have helped to prompt the remedial proven to be valuable in achieving correction actions now under way. • Additional statements follow. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

130 Federal Reserve Bulletin • February 1976 Statement by Brenton C. Leavitt, Director, Di- instructs the Board that: "In determining vision of Banking Supervision and Regulation, whether a particular activity is a proper incident Board of Governors of the Federal Reserve to banking or managing or controlling banks the System, before the Subcommittee on Antitrust Board shall consider whether its performance and Monopoly of the Committee on the Judici- by an affiliate of a holding company can reaary, U.S. Senate, February 4, 1976. sonably be expected to produce benefits to the public . . . that outweigh possible adverse Mr. Chairman and members of this distin- effects, such as . . . decreased or unfair compeguished committee, it is indeed an honor for tition. . . ." Thus, the Federal Reserve Board me to appear before this committee on behalf has had firsthand experience in applying a statof the Board of Governors of the Federal Re- utory standard which, like Section 3(a) of the serve System. As I understand my function here proposed Competition Improvements Act of today, it is to share with you some experiences 1975, requires the balancing of anticompetitive the Board has had in its regulatory capacity. effects against other public interest consid- Specifically, I will be commenting on a portion erations. of Section 3(a) of the proposed Competition I think it may be helpful to note at this point Improvements Act of 1975. The Board has that although the Board balances positive and submitted its views on all sections of the legis- negative factors in reaching the typical adminlation in a separate report to Senator Eastland. istrative decision under the Bank Holding Com- I do not intend my remarks to be for or against pany Act, the Board has no authority to apply passage of the proposed Act, but hope to be a balancing test to the most extreme anticomof service to the legislative process by sharing petitive situation—that is, where the proposed our experience with statutory frameworks that acquisition would result in monopoly. Section are very similar to one part of Section 3(a) of 3(c) of the Bank Holding Company Act says the Competition Improvements Act. flatly that: Section 3(a) of the proposed Act requires that The Board shall not approve any acquisition ". . . no agency shall take any action . . . or merger or consolidation under this section the result or effect of which may tend to create which would result in a monopoly, or which would be in furtherance of any combination or maintain a situation inconsistent with the or conspiracy to monopolize or to attempt policies or provisions of the antitrust laws unless to monopolize the business of banking in any part of the United States. . . . it finds that . . . the anticompetitive effects are clearly outweighed in the public interest by Thus, if the Board were ever presented with an significant and demonstrable benefits to the acquisition proposal that would result in mogeneral public. . . Since their amendments nopoly or a conspiracy or attempt to monopoin 1966, the Bank Merger Act and the Bank lize, it would not be free to balance these harsh Holding Company Act have mandated the Board anticompetitive effects against positive convenof Governors to operate under a similar stand- ience and needs factors. Generally, the Board ard: "The Board shall not approve any acquisi- understands its role in balancing the issues to tion or merger or consolidation under this sec- mean that significant anticompetitive effects— tion which would ... be in restraint of trade, short of monopoly—must be clearly overcome unless it finds that the anticompetitive effects by substantial and demonstrable public interest of the proposed transaction are clearly out- considerations. weighed in the public interest by the probable During the 10-year period 1966 through effect of the transaction in meeting the conven- 1975, the Board and the 12 Federal Reserve ience and needs of the community to be Banks decided over 2,300 banking cases. Apserved;" In addition, the 1970 amendments to proximately 500 of these cases were decided by the Bank Holding Company Act authorized the the Reserve Banks under authority delegated to Board to pass on certain "nonbank" acquisi- them by the Board beginning in 1972. These tions by bank holding companies. The Bank cases involved the formations of bank holding Holding Company Act, as amended in 1970, companies, the acquisitions of additional banks Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 131 by existing bank holding companies, and certain approved acquisitions has been challenged as mergers between banks. In denying 163 of these violative of antitrust law. On the basis of the applications, it was the Board's judgment that record, it would appear that the "nonbanking" other public interest factors did not outweigh cases were decided in a manner consistent with likely anticompetitive effects or unsound bank- antitrust and public interest standards. ing and financial situations. These denials also The Board also wishes to comment on the served as a useful way of communicating to the nature of the convenience and needs factors and industry the types of cases that would not satisfy public benefits that it has taken into considthe public interest criteria of the statutes. The eration pursuant to its statutory mandates. The Board also believes that, on balance, the public Board believes that such public interest factors interest was served by approval of the large have been substantial, and thus further illustrate number of applications during the 10-year pe- that the balancing-of-interests approach, which riod. As evidence tending to show that these is proposed in Section 3(a) of the Competition approved banking cases did not have net anti- Improvements Act, may be an important adcompetitive effects, it should be noted that only ministrative tool in serving the public interest. 17 of approximately 2,200 cases approved by Some of the specific benefits claimed by apthe System were subsequently challenged by the plicants are: (1) the introduction of new banking Justice Department as violative of antitrust laws. or nonbanking services to a community, (2) Moreover, of the six cases that were tried, none increases in banking hours and banking days, resulted in a judicial determination that the (3) the introduction or upgrading of electronic antitrust laws had been violated. It would appear data processing facilities, (4) the lowering of from these figures that during the 1966-75 pe- service charges or prices on bank and nonbank riod, banking cases were decided by the Board product lines, (5) the upgrading of managerial in a manner consistent with antitrust standards. resources, (6) increases in capital, and (7) the This record was achieved within the framework opening of new offices. These examples are of statutes that mandate a balancing of competi- offered in support of the Board's view that tive and other public interest factors. A similar public interest factors have real substance and balancing approach is proposed in the Competi- are thus appropriate considerations in the regution Improvements Act of 1975. latory process. Moreover, the Board and its staff The Federal Reserve System has also made analyze all claimed public benefits to determine a large number of decisions in "nonbank" their substance and their relevance to the afcases. These cases include bank holding com- fected communities. For a more detailed exampany acquisitions of mortgage banking compa- ination of the nature and importance of public nies, consumer finance companies, and other interest factors in the Board's regulatory process, I offer for the record three papers that "nonbank" companies pursuant to the amended originated within the Federal Reserve System Bank Holding Company Act. As mentioned in past years.1 earlier, the 1970 amendments require the Board to weigh expected public benefits against possible adverse effects, including decreased or un- 1Brenton C. Leavitt, 4 'What the Fed Likes to See fair competition. During the 5-year period 1971 in an Application," speech presented at a conference through 1975, the System approved approxi- on "The Emerging Ground Rules for Bank Expansion," mately 2,100 and denied 45 "nonbank" acqui- sponsored by The Bankers Magazine and Banking Law Journal, Washington, D.C., Dec. 10, 1973; M. lessee sitions. It should be noted at this point that over and S. Seelig, "An Analysis of the Public Benefits Test 1,600 of these "nonbank" cases were approved of the Bank Holding Company Act," Monthly Review by the Reserve Banks under delegated authority of the Federal Reserve Bank of New York (June 1974); and Jeffrey M. Bucher, "Public Interest Factors and and involved the establishment of de novo ofthe Bank Holding Company Act," speech presented to fices rather than the acquisition of going con- the Bank Counsel Seminar of the California Bankers cerns. To the Board's knowledge, none of the Association (Santa Barbara, California, Apr. 26, 1974). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

132 Federal Reserve Bulletin • February 1976 Statement by Robert C. Holland, Member, them, and are making substantial progress. Board of Governors of the Federal Reserve These positive steps, coupled with the improv- System, before the Committee on Banking, ing trend in economic activity and the substan- Housing, and Urban Affairs, U.S. Senate, tial reduction in the rate of inflation that is being February 5, i976. achieved, make the prospects for the future of the economy, and, therefore, the banking system, brighter than has been the case for some I am pleased to appear before this committee time. on behalf of the Board of Governors of the While we believe that the Nation's banks are Federal Reserve System to review the System's generally well able to cope with their loan and performance in supervising the banking institu- asset problems, we do not wish to treat lightly tions under its jurisdiction. I know that the the difficulties that were encountered and that, committee is particularly interested in how to some extent, still exist. The seeds of these banks experiencing financial difficulty are iden- difficulties were sown in the early 1970's when tified and treated by the regulatory agencies. the banking system and the economy were As we are all aware, there have been a growing at unsustainable rates. With the advannumber of unauthorized disclosures and much tage of hindsight, it is clear that there were a comment recently in the press about banks and number of mistakes made during this period. bank holding companies that have been placed Among those mistakes were: the overstimuon the so-called "problem" lists by the super- lation of the construction industry brought about visory authorities. Indeed, such disclosures, to to a significant degree by the proliferation of some extent, prompted these hearings and are real estate investment trusts (REIT's); the failresponsible for my being here before you today. ure to recognize and prepare for the impending The Board, therefore, welcomes this opportu- energy crisis; the inadequacy of fiscal planning nity to assure the committee and the American among many of the Nation's cities and political public that the U.S. banking system remains subdivisions; and, finally, the establishment of sound and that the Federal Reserve has been growth rather than quality goals by some bankresponsive to its supervisory responsibilities ing institutions. It is quite clear that these miswith respect to the more than 1,000 State mem- takes are the underlying cause of the heavy ber banks in our system. volume of troubled loans and investments in the However, before beginning my discussion of portfolios of some of the Nation's banks. To the specific areas in which the committee has suggest that bankers themselves or the bank expressed an interest, I wish to make a few brief supervisors should have had the foresight to comments about the lists of so-called "problem anticipate all of the problems and thus avoid banks" and "problem bank holding compa- them is to expect a great deal, especially in the nies." As many of the representatives from the climate of unbridled optimism that prevailed at regulatory agencies have been quick to point the time. out, the term "problem" as it relates to these By way of caveat, it would be unfair if I did institutions is an unfortunate one in that it im- not point out that some of the growth of the plies to the public a more severe condition than banking system that took place during this peactually exists in most cases. The majority of riod resulted from inflationary pressures. In our banking organizations appearing on the lists environment of double-digit inflation, for exmaintained by the Federal Reserve are institu- ample, many public utilities and others turned tions that have encountered some difficulties and to the banking system when they were unable that have been identified as being in need of to obtain needed funding from internal sources more than the usual degree of supervisory at- or through the capital markets. To their credit, tention and monitoring. But, these institutions many banks, though already feeling the pressure are not in imminent danger of failure. On the of excessive loan demand, met these needs. contrary, most have identified their problems, These actions aside, however, there were clearly have demonstrated the capacity to overcome some excesses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 133 The Federal Reserve did recognize fairly In 1974 and 1975, the Board through its early the hazards of the speed and direction in statutory powers concerning applications for foreign expansion, denied a number of apwhich financial institutions were moving. A plications of major banks stating, in effect, number of supervisory steps designed to slow that the capital of the organization should and focus banking growth were taken. Those be used to support existing business rather than more expansion. steps included: Moreover, during this time examiners were April 1973—a letter signed by Chairman examining individual banks and discussing with Burns was sent to the Chief Executive management any significant problems. When Officer of each State member bank with needed, examination personnel were requesting deposits exceeding $100 million concerning their loan commitment policy. The letter additions to capital, improvement in liquidity, stated in part that "... The apparent large and strengthening of lending policies. Govervolume of bank commitments currently outnors of the Federal Reserve made public adstanding and sharply increased takedowns thereunder are indicative of the need for dresses about these problems and urged that special attention to this subject at this time. remedial steps be taken. These actions obtained results. A number of May 1973— a letter signed by Chairman banks' and bank holding companies' manage- Burns was forwarded to all State member ments recognized their problems and realigned banks requesting their cooperation in assurtheir lending policies to obtain better credit ing that the rate of credit extension be appropriately disciplined. The letter stated in decisions; improved, to the extent possible, part "Some key segments of the Nation's their liquidity positions; added to capital by economy are now growing at an unsustainslowing the rate of increase in cash dividends; able pace, thereby adding substantially to inflationary pressures. Since excessive bank added to capital funds by sale of subordinated loan expansion is a factor in this develop- debt; and, finally, adopted more manageable ment, the Federal Reserve last week supplegrowth and expansion goals. The impact of the mented its previous policy actions by adopting several regulatory amendments with a recent recession on the banking system would view to further curbing such expansion. I have been much more severe than it was, if am writing to you and every other member these actions had not been taken. bank today on behalf of the Board to give emphasis to these recent actions and to invite I would be remiss if I did not point out that your personal cooperation in assuring that the banking system, to its credit, is making good the rate of credit extension by your bank is progress in working its way out of these appropriately disciplined. ..." difficulties without the benefit of massive Gov- June 1973—a letter was sent by Chairman ernment assistance. As you may recall, there Burns to about 100 foreign-owned banking was considerable discussion this past year about institutions in the United States. The letter requested cooperation in assuring that the the need for establishing a Reconstruction Firate of bank credit expansion in the United nance Corporation (RFC) program to provide States is restrained. assistance to troubled firms in a variety of in- September 1974—the Board released a dustries and activities that had borrowed in statement on bank lending policies that had excess of their debt servicing capacities. This been received from its Federal Advisory Council. The letter urged that banks disci- does not seem necessary now since the banks pline their lending policies so as to exclude have demonstrated their capacity to arrange for loans for speculative purposes. orderly workout of loans in many problem cases, and, where this was not possible to ab- Beginning in early 1974 and continuing through 1975, the Board began formulating sorb the necessary losses through earnings policies concerning bank holding company power and still continue as viable, sound instiexpansion. A so-called "go slow" policy tutions. was adopted because it was believed that managerial and financial resources could Let me turn now to the more specific areas often be used more effectively to strengthen in which the committee has expressed an interthe existing operations, particularly in the est. I have submitted, for the record, informabank subsidiaries, some of which had experienced sharply declining capital ratios. tion concerning the details of some of the pro- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

134 Federal Reserve Bulletin • February 1976 cedures, tests, and methodology employed in to offset such deficiencies. Banks in this catethe examination of a bank for which the com- gory include many sound institutions that serve mittee made inquiry. For the purposes of this their communities very well. Ordinarily, the testimony, however, I will touch on the broader managements of these banks respond promptly aspects of bank supervision, will bring the to examiner criticisms. committee up to date on what we are doing to Category 3 includes largely those banks havimprove it, and discuss some of our broad areas ing a relatively high volume of loans that need of concern. careful attention. Over the past 2 to 3 years, In the process of identifying those banks that there has been an increase in the number and are in need of more than the usual degree of especially in the size of banks placed in this supervision or monitoring, consideration is category. As I mentioned, I believe the undergiven to the quality of the bank's assets, the lying cause of this increase can, to a signficant adequacy of its capital, the strength of its earn- extent, be traced to the inflationary excesses of ings, its liquidity position, and the competency the early 1970's that became apparent in the of its management. Although there are bench- recent recession. mark measurements for some of these factors, Category 4 includes banks with capital that as illustrated in the attached description of the has been impaired and with aggravated defiuniform system for rating banks,1 considerable ciencies present in condition and management. judgment by individuals with years of experi- These banks usually require prompt and extenence is brought to bear in the final decision as sive attention to restore them to satisfactory to whether or not a particular institution should condition. Only a few State member banks are be considered as warranting special surveil- so rated, less than five in any recent year. lance. The determination of the need for special While there are a number of banks that have surveillance may be based on the presence of been flagged for special surveillance, there has an existing or a potential problem. been a significant turnover in individual banks At the conclusion of each examination of a on the list. Since the beginning of 1970, for State member bank, the Reserve Bank rates the example, 75 banks have been removed from the condition of the bank on a scale of 1 to 4, based special surveillance category, while 107 were on information developed by the examiners. I added. These data demonstrate that most banks, have attached a list of ratings of State member upon recognizing and identifying areas of troubanks examined by the Federal Reserve during ble and potential trouble, are able to institute the years 1971 through 1975 to the extent the corrective action and overcome their difficulties. reports have been completed. The Board of This is an indication of the resiliency of the Governors does not review or pass on these banking system. We believe that it also illusratings although it does receive periodic staff trates that supervisory efforts on the part of the reports on the condition of banks in the various Federal Reserve are timely and obtain results. categories. Banks determined to be in satis- Moreover, as economic conditions improve, factory condition in all major respects are given banks should be able to improve the condition a rating of 1. About 66 per cent of the more of their loan accounts even more rapidly. than 1,000 State member banks qualify for such We also note the committee's interest in the a rating. foreign activities of U.S. banks. This is an area Banks with one or more deficiencies in asset of increasing importance, as evidenced by the quality, level of risk assets, management fact that assets of foreign branches of U.S. strength, or liquidity, may be given a rating of banks increased from $47 billion in December 2 unless their capital position is strong enough 1970 to more than $166 billion by September 1975. As further evidence of the increased volume of foreign activities by U.S. banks, a few 1A11 attached materials are available on request from of the larger banking institutions of the United Publications Services, Division of Administrative Ser- States reported that upwards of one-half of their vices, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. total income last year represented income from Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 135 foreign activities. Clearly, this is an appropriate at the branches is then compared with that at area of inquiry for the committee. the head offices. This forms another basis for The condition of every overseas branch of a discovering deficiencies in internal reporting and State member bank is reviewed during the an- management systems, which can then be called nual examination of the bank. This review takes to the attention of senior management for cortwo forms: either it is conducted exclusively at rection. the head office based on the reports and infor- When on-site examinations are conducted, an mation there; or, head office records are scruti- area of operations given particularly close atnized in connection with an on-site examination tention is money market and foreign exchange of the foreign branches. Whether conducted at trading. The internal controls in place in this the head office or on-site, the methodology in area are carefully scrutinized so as to insure that reviewing the operations of foreign branches is unauthorized transactions or losses do not go fundamentally the same as that employed for undetected. The records of past transactions are domestic offices. Federal Reserve examiners reviewed to determine that they were within the conduct a careful review of loans and other risk guidelines established by senior management assets to determine their collectibility. Of equal and that exceptions to bank policies were reimportance is a review of audit reports to deter- ported to responsible bank officials. mine the range and effectiveness of the internal The character of overseas branch banking is controls in place at the overseas branches and changing rapidly. As the volume of business has to ascertain the scope and accuracy of the data grown, American banks have found it necessary forwarded to the head office for management to delegate greater credit and operational auand supervisory use. thority to officers in the overseas branches. As Emphasis is still concentrated on scrutiny of a result, information at the head offices on many head office records since, in Federal Reserve borrowers at the branches is no longer so current experience, an understanding of the operations and complete. Because of this and the generally of overseas branches necessarily involves the increased complexity of international operahead office. While credits are on the books of tions, supervisory practices within the Federal overseas branches, they may well have been Reserve System are being reviewed and revised. negotiated and concluded at the head office and While scrutiny of banks' foreign branches from supervision of the credit may be the respon- head office records will continue, it is clearly sibility of the head office. In addition, the senior recognized that more frequent on-site examinalending officers who approve major credits and tions of foreign branches may be required. Some formulate the bank's lending policies are usually will be general in scope; others, confined to located at the head office. The examiners need specific segments of branch operations. to review reports from the overseas offices at In some countries, of course, laws prevent the head office where they can determine how on-site examinations. For the branches in these branch operations mesh into the bank's over-all countries, supervision will necessarily be cenoperations and reporting systems and where they tered on assuring that sufficient information is can determine how head office management obtainable at head offices where it can be reexercises control and supervision over the viewed by examiners. Over the longer run, foreign branches. international cooperation among banking au- Periodically, examiners are sent to the thorities may result in different ways of mitigatprincipal overseas branches of State member ing this problem. banks in order to gain first-hand experience with We have submitted, for the record, a table branch records, the market conditions in which indicating the coverage of on-site examinations they operate, and with local branch manage- of foreign full service branches of State member ment. While at the branch, the examiners also banks in the years 1971—75. Other foreign try to satisfy themselves that the credit, operat- branches were not ignored during these years; ing, and audit reports sent to the head office rather, their activities were reviewed at the are accurate and complete. Information obtained banks' head offices, as explained earlier. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

136 Federal Reserve Bulletin • February 1976 I wish to briefly discuss bank holding compa- vided the vehicle for raising capital needed by nies and the Board's action with respect to its the subsidiary banks; and has resulted in better responsibilities under the Bank Holding Com- management of some banks, particularly smaller pany Act. Although there have been a large institutions. The Board believes that the bank number of acquisitions of nonbank entities by holding company movement, on balance, has bank holding companies since the 1970 amend- been in the public interest if all factors are taken ments to the Bank Holding Company Act, it into account. should be remembered that bank holding com- Finally, I would like to turn to the very pany organizations, for the most part, continue difficult subject of disclosure. Some argue that to be overwhelmingly dominated by their banks. bank examination reports should be in the public The Board, however, recognizes that some of domain, citing fears that financial institutions the bank-related industries, most notably mort- are protected by a cloak of secrecy. This is just gage banking, have resulted in difficulties for not so. The fact is that the banking system is a few holding companies. In response to these one of the most highly regulated industries in and other developments, the Federal Reserve the United States. Disclosure requirements for has stepped up its monitoring and surveillance banks are very extensive. Banks, by statute, are efforts. required to file with the supervisory agencies In discharging its responsibilities as primary and to publish in the local press a quarterly regulator of bank holding companies, the Fed- Report of Condition. It should be noted that eral Reserve has at its disposal a number of supervisory agencies are in the process of exsupervisory tools that can be employed to meet panding the information contained in this and specific objectives, although fewer than the other reports that are available to the public. Congress has provided for dealing with banks. In addition to these sources of information, most These range from "moral suasion" to denial of the large bank holding companies are regisof applications and, in aggravated cases, is- tered with the Securities and Exchange Comsuance of cease and desist orders. mission and are subject to reporting require- We believe that the present remedies avail- ments under the Securities Exchange Act. As able to the Federal Reserve are sufficient to anyone who has leafed through a 10-K report effect correction in the most troublesome areas. is aware, the disclosure requirements are vast. Nevertheless, as a result of continuous review Still more information is available on individual of the bank holding company movement and its banks in the prospectus that is filed whenever effect on the banking system, we fully expect new capital is publicly marketed and in reports that, from time to time, the Federal Reserve will filed with Federal bank regulators under the seek new legislation designed to deal with the securities laws. In addition, the long-term debt changing environment. One item of legislation of many bank holding companies is rated by that would be especially helpful would be au- the rating services and much data and analyses thority to assess civil penalties for violations of are available from market analysts. We favor the Bank Holding Company Act. That and other still more disclosure, but of standard informalegislation was recommended to Senator Mcln- tion of the type revealed by other corporations, tyre by Chairman Burns in his letter of Sep- not confidential examination data. tember 5, 1975. There is no dearth of information concerning In pointing up some of the difficulties that the activities of America's banks. The issue, a few bank holding companies have encoun- therefore, is not one of disclosure, per se, but tered, I do not wish to minimize the strengths is the much more narrow issue of the desirability of many and the contributions that have been of disclosure of supervisory reports. The exammade. The bank holding company movement ination process is one that has evolved over a has resulted in improved competition in certain number of years and many of the practices and sectors; has caused an increase in levels of procedures are time tested. The bank examiner service in some areas thereby better meeting the has free access to all of the bank's records, and convenience and needs of the public; has pro- most bankers, recognizing the confidentiality of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 137 their remarks, discuss very candidly the bank's which I referred in my opening remarks, I most intimate affairs with the examiner. believe it is too early to assess the impact of Disclosure of the examiners' reports would such revelations on those organizations and undoubtedly change the candid relationship be- possibly on public confidence in the banking tween the banker and the examiner and thus system. It would be extremely unfortunate if the change the examination process itself. We reputations of those institutions are tarnished to should carefully consider whether or not we are such an extent as to interfere with their ability prepared to risk these changes, particularly in to effectively complete the corrective actions light of the fact that these processes and proce- that they now have under way. In the long term dures have served both the banking system and these disclosures could prove to be counterthe public well for a number of years. productive to the interests of the banking system With respect to the specific disclosures to and to the Nation's economic recovery. • Statement by Henry C. Wallich, Member, erably in excess of historical precedent for this Board of Governors of the Federal Reserve stage of the business cycle. Families' real in- System, before the Committee on the Budget, comes and savings had been eroded by inflation, U.S. House of Representatives, February 6, and efforts to bolster them helped to increase 1976. the number of persons seeking jobs. The recent gains in economic activity have It is a privilege for me to appear before this been based on expanding demands in most areas committee today. First of all, let me take this of the economy. Increases in employment and occasion to commend the work achieved last reduced tax burdens last year raised real disposyear by the Budget Committees. The imple- able income for the first time since 1973, and mentation of the new Congressional Budget thus supported higher aggregate consumption. Act, I believe, is off to an excellent start. The Most recently, high retail sales during the growing acceptance of your new procedures will Christmas season and continued large consumer help the Congress to consider the Federal budget purchases in January gave evidence of underlyas a whole and to evaluate its economic impli- ing strength in this sector. Housing, as you cations. Your committee is playing a vital part know, has also staged a substantial recovery, in this accomplishment of great importance to especially for single-family units. Activity in the American economy. this sector started from such a low point, how- Over the last 9 months the U.S. economy has ever, that residential construction still is relaagain demonstrated its capacity to recover from tively weak. The continuing high volume of economic adversity. The vigorous pace of the exports, despite reduced economic activity recovery is indicated by the nearly 9 per cent abroad, indicates a new competitiveness for average annual rate of growth in real GNP that American goods and services, and bodes well occurred during the second half of last year. for rising demands from this source in the fu- This is the fastest growth rate in any half-year ture. period since the cyclical upturn in late 1958. Changes in business inventory investment The recent growth in economic activity was strongly interacted with movements in final deaccompanied by a 2.1 million increase in total mands during 1975 and accounted for a large employment from the low point reached last portion of the cyclical swing during the year. March. Nevertheless, the rate of unemployment Data for the fourth quarter indicate that the huge in January remained at the distressingly high inventory liquidation that depressed economic level of 7.8 per cent. In part the slow progress activity in the first half of the year has about in reducing unemployment reflects a 1 Vi per cent run its course. In many lines of nondurable increase in the labor force during 1975, consid- goods, inventory/sales ratios are close to his- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

138 Federal Reserve Bulletin • February 1976 toric lows and inventories of these products are still substantial price advances. Thus wages and generally being replenished. Stocks of durable prices continue to push each other up. goods are still being reduced, but over all the Real wage increases, over time, will tend to prospects are for a return to inventory accumu- match productivity gains. Good increases in lation during 1976. productivity should accompany a sustained re- Investment in plant and equipment, while covery. The resultant pronounced improvement sharply reduced during the recession, showed in real wages should lessen nominal wage deits first increase in real terms last quarter. Such mands. This would permit a winding down of increases are likely to gain momentum as higher the wage-price spiral. levels of economic activity make their impact More generally, prospects for continued deon business sales. I am aware of the very celeration of inflation depend on avoiding recautious investment plans reported for 1976 in newed overheating of the economy. The conthe December Commerce Department survey, sensus view now is that recovery will proceed but I think it most likely that businessmen will at a moderate rate through this year. This will revise their plans upward on the basis of favor- help to avoid the rekindling of inflationary presable sales and profits experiences as has hap- sures. Diminishing inflation will be an essential pened in prior cyclical recoveries. factor in sustaining the expansion over a pro- State and local governments as a group con- longed period. tinued last year to increase moderately their In evaluating the outlook for private spendpurchases of goods and services in real terms. ing, it is relevant to consider the progress that This happened despite the well-known financial has been made in correcting the serious financial difficulties of some individual units. Employ- imbalances carried over from the late 1960's and ment in this sector, moreover, rose 5 per cent early 1970's. These arose as a consequence of from its 1974 average, partly reflecting Federal accelerating inflation and the rising interest rates inducements to public service employment. that inevitably grew out of that pattern of price On the price side, some moderation was behavior. Household wealth in real terms was achieved last year. Nevertheless, progress in reduced, as the purchasing power of fixed dollar reducing inflation has been disappointing, con- claims declined and as common stocks lost sidering the extent of slack in the economy. The value even in terms of current dollars. Business current rate of inflation, broadly viewed, ap- cash flow was impaired because bookkeeping pears to be on the order of 7 per cent a year. profits—reflecting inventory gains and underde- While this represents a very sizable reduction preciation—occasioned higher taxes, without from the 12 per cent inflation rate in late 1974, providing spendable funds to business. The una significant part of the moderation during this balanced financial position of many enterprises period has been due to diminishing pressures limited their ability to finance capital expansion in special areas, such as oil, farm products, and by borrowing, while at the same time it became other raw materials. Moreover, a great deal of more difficult to build equity, whether by selling the reduction in the pace of inflation occurred new shares or by retaining earnings. in the first half of 1975. More recently there To overcome these financial injuries, busihas been a disturbing pick-up in prices of in- nesses and households worked hard last year at dustrial commodities at the wholesale level. rebuilding liquidity and net worth. Household From now on, further reductions in the rate of saving rates remained well above historic levels, inflation will be more difficult to achieve be- while businesses used the funds obtained cause prices will tend to reflect unit labor costs. through heavy borrowings in long-term markets While increases in labor compensation mod- to retire a large amount of short-term debt. They erated somewhat during 1975 to around 8 per also limited their capital expenditures to levels cent, they were still far above the pace of nearly matching internally generated funds. Filong-term productivity gains. This upward nancial institutions, including banks, went pressure on wages has been indicative of an through a similar process of improving their effort to maintain real incomes in the face of liquidity and their capital positions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 139 Over time, successful financial restructuring tures of the beneficiaries by quite the same may accelerate household and business spend- amount. On the other hand, taxes foregone by ing. In order to improve their financial position, the Government are not likely to raise taxpayers' these units may have postponed purchases of spending by a fully equal amount. The effects durables and capital equipment. Once they feel on over-all activity of the proposed matching more comfortable financially, they may well be spending and tax cuts, therefore, are likely to disposed to make up these backlogs. That pos- be small. Given this, the merits of the proposals sibility imparts an underlying strength to the need to be judged on grounds of the support economic outlook. It also poses a risk, however, they would lend to the long-term strength of that spending could accelerate unduly as the our economy rather than on their short-run efeconomy approaches higher levels of capacity fects on economic activity. utilization. This outlook reinforces the case for I now would like to turn to monetary policy. a policy of moderation in the ongoing expan- In the present expansion the aims of monetary sion. policy have been to help provide the needed The main task of over-all fiscal policy in financial support for recovery and to contribute promoting and protecting a sustainable recov- to the rebuilding of liquidity, which was essenery, under the circumstances, is to bring down tial for the resumption of sustained economic the massive current Federal deficit. A fiscal growth. At the same time, monetary policy has posture appropriate to the requirements of such sought to avoid actions that could supply the a recovery will also serve to maintain balance financial tinder for a new burst of inflation. We in financial markets. As recovery progresses, believe that these have been the appropriate these markets will need scope to supply funds policy objectives, and the Board would favor that match the expanding needs of private bor- continuing to steer a middle course that seeks rowers. An excessive deficit would run the risk, to fulfill these principal goals. first of once more generating excessive expan- Since the spring of last year, as you know, sionary pressures and eventually, if interest rates the Federal Reserve has been formulating its should be driven up through competition for policy orientation for a year ahead in terms of funds, bringing the expansion to a premature ranges for broad monetary aggregates and has end. The budget proposed by the President plans been reporting these to the Banking Committees a substantial diminution of the present large of each house. deficit, and thus meets the need to move toward The Federal Reserve has always maintained budgetary balance. In terms of the hypothetical that targets of this nature must be subject to budget that would obtain if the economy were review and administered with flexibility. At the operating at full employment, the present sub- present time, these considerations are more imstantial deficit is expected to shift, in the course portant than usual due to the difficulty that we of fiscal year 1977, to a small surplus. have experienced in recent months in interpret- Apart from these comments on the over-all ing the meaning of the sluggish growth of M. x budget stance, I would also like to react to the The selection of growth rates of monetary agconcept of curtailing budget expenditures and gregates as objectives rests on the presumption cutting taxes by matching amounts. Even of substantial regularities in the holdings of though economists generally maintain that such these assets by the public as related to other simultaneous cutbacks on both sides of the economic conditions. As Chairman Burns debudget tend to be dampening rather than neutral scribed in his recent testimony, some of the with respect to economic activity, this negative relationships—previously reasonably predicteffect is minimized in the budget proposals able—among money supply, GNP, and interest because a substantial portion of the spending rates appear to have changed over the last year. restraints occur in the area of transfer payments Rapidly spreading new financial practices have rather than in that of purchases of goods and led to substantially increased efficiencies in the services. Restraint on Government transfer ex- use of checking accounts and seem to have penditures is not likely to restrain the expendi- permitted a very modest expansion in M x during Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

140 Federal Reserve Bulletin • February 1976 the second half of last year to support a large of economizing on energy usage. Finally and increase in GNP, even while short-term interest most importantly, the need to provide jobs for rates were declining. a growing labor force will require a considerable The proper growth path of the monetary ag- expansion of productive capacity. This need for gregates will need to be appraised carefully as greater capacity was underscored by the bottlethe year progresses. Economies in the use of necks encountered in many industries in 1973 money could spread further this year. But re- and 1974. establishment of more traditional relationships The financial and real resources needed to among the narrowly defined money supply, bring about higher rates of private investment GNP, and interest rates is also conceivable. In in an economy approaching high capacity utiliview of these uncertainties, it seems appropriate zation will have to come from higher rates of to give increased emphasis to the broader mon- saving. It is not certain that private saving will etary aggregates as well as to credit conditions be adequate, particularly if saving rates return in gauging the stance of monetary policy. to more traditional levels. The Federal Govern- In evaluating the current monetary target ment thus may be called upon to play a vital ranges it is important to note that these ranges role in bridging the gap between private saving are well above the long-term monetary require- and desirable levels of investment. ments of a noninflationary economy. They are This could be accomplished if the Federal larger because weight has been given to the Government were to achieve a surplus in its short-run needs for economic recovery and to budget as the economy approaches full employthe financial demands generated by recent in- ment. A budget surplus is a form of Government creases in nominal GNP. saving that would make resources available for A due concern with the long-run outlook use in the private sector. With the Federal requires policy-makers to consider also the im- Government a net supplier of funds to the credit portant decisions that will have to be made with market, rather than a net user, there would be respect to the division of output of our economy downward pressures on interest rates. More between consumption and investment. Specifi- credit would be available to businesses, homecally, I share the concern, voiced by others, that owners, and consumers. The channelling of this insufficient resources may be devoted to pro- increased supply to finance investment would ductive investment in years to come. Further, be facilitated by tax devices such as the deferral I believe that the Congress, as it decides tax of the tax on personal income devoted to equity and spending policies, will have an important acquisitions proposed by the President that role in determining whether and how severe a would encourage the issuance of capital stock capital shortage may develop. by corporations. Several developments would seem to imply Long-range budgetary policy is then seen to enlarged capital needs in coming years. Among take on added importance. As we leave recesthem is the need for reduced pollution and for sion behind us, the full employment status of more investment in industrial health and safety. the budget will be a key determinant of interest Higher energy prices have made investment in rates. It will have a stong impact on the availdomestic energy production more economically ability of capital to meet our needs. As you feasible and have provided many incentives for review the 5-year projection of the budget, I U.S. households and industry to invest in means urge you to keep these long-run needs in mind. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

141 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON DECEMBER 16, 1975 Domestic Policy Directive The information reviewed at this meeting suggested that output of goods and services—which had increased at an annual rate of 13 per cent in the third quarter—was expanding more moderately in the current quarter and that prices were continuing to rise at a relatively fast pace. Staff projections suggested that growth would remain moderate in the first half of 1976 and that the rate of increase in prices would slow somewhat. In November the rise in industrial production slowed further, in part because of declines in output of automobiles and of energy; increases were widespread among other products, but in general they were smaller than in the preceding 5 months. Recovery in nonfarm payroll employment also slowed further. However, the dollar volume of retail sales expanded significantly for the second consecutive month. Residential construction activity rose further, reflecting the uptrend in private housing starts in recent months. The unemployment rate—which had risen 0.3 percentage point to 8.6 per cent in October—fell back to 8.3 per cent in November. Both the October rise and the November decline in the unemployment rate were caused primarily by changes in the civilian labor force. The advance in the index of average hourly earnings for private nonfarm production workers remained rapid in November. Increases in wholesale prices of industrial commodities were pervasive, and the rise in the average for industrial commodities, although below that in October, was still relatively large. Wholesale prices of farm products declined appreciably, following 2 months of large increases, and wholesale prices of processed foods declined slightly. In October, the rise in the consumer price index had accelerated somewhat because of a considerable increase in retail prices of foods following 2 months of little change. Staff projections of real output in the first half of 1976 were similar to those of 4 weeks earlier. They suggested that consumption expenditures would expand at a moderate pace, that residential Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

142 Federal Reserve Bulletin • February 1976 construction and business fixed investment would continue to recover, and that State and local government purchases of goods and services would pick up somewhat from the reduced pace in the second half of 1975. It was also anticipated that business inventory accumulation would be at a moderate rate. However, exports were projected to rise less than imports. The exchange value of the dollar against leading foreign currencies, which had declined somewhat from early October to early November, had risen somewhat since then. The net outflow of bank-reported private capital appeared to have declined in November from the high rate in October. In October both merchandise exports and imports increased somewhat, and the foreign trade surplus remained substantial. Total loans and investments at U.S. commercial banks expanded considerably in November. Banks added to their holdings of both Treasury and other securities and increased their outstanding loans to businesses. As in October, however, the outstanding volume of commercial paper issued by nonfinancial corporations declined, and total short-term business borrowing rose little. During the period from mid-November to mid-December most banks reduced the prime rate applicable to large business borrowers from IV2 to IV4. per cent, and one major bank reduced it to 7 per cent. Mi, which had declined in October after having grown at a slow pace during the preceding 3 months, rose sharply in November. Growth in M and M was substantial, as inflows of consumer-type 2 3 time and savings deposits to banks strengthened and inflows to nonbank thrift institutions remained relatively favorable. Some portion of the inflows of such deposits to banks was attributable to expansion in business accounts following amendments to Federal Reserve regulations, effective November 10, 1975, that permitted corporations, partnerships, and other profitmaking organizations to maintain savings accounts of up to $150,000 at member banks. To a considerable extent the funds placed in these business savings accounts appeared to have been shifted out of demand deposits. System open market operations since the November 18 meeting had been guided by the Committee's decision to seek bank reserve and money market conditions consistent with moderate growth in monetary aggregates over the months ahead. It had been contemplated that operations would be directed toward moving the Federal Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 143 funds rate down from the prevailing level of 5% per cent to about the middle of the AV2 to 5Vi per cent range of tolerance adopted by the Committee, if the data becoming available suggested that the several monetary aggregates were growing at rates close to the midpoints of their ranges of tolerance. However, the available data suggested greater strength in the growth of M after allowance u for the shift in business deposits from demand to savings accounts following the regulatory changes effective November 10. In the 3 weeks after that change business savings accounts at weekly reporting member banks had risen by about $530 million, and it was reasonable to assume that growth had also been substantial at other banks. Had it not been for this shift, the annual rate of growth in M over the November-December period, according to x staff estimates, would have been about IV2 percentage points higher than it appeared to be. Moreover, the available data suggested that growth in M over the 2-month period would be in the upper part 2 of its specified range of tolerance. Accordingly, System operations during the inter-meeting period had been directed toward maintaining the prevailing bank reserve and money market conditions, and the Federal funds rate fluctuated around 5xk per cent. Short-term market interest rates rose somewhat over the intermeeting period, despite the stability in the Federal funds rate. The rise in rates appeared to reflect some concern on the part of market participants that the System would act to firm bank reserve and money market conditions in response to the strong growth in the monetary aggregates in November. Yields on longer-term debt instruments fluctuated in a narrow range during the inter-meeting period despite a large volume of offerings of new securities, including publicly offered issues of foreign private and official institutions as well as issues of domestic borrowers. On December 9 the Treasury announced that before the end of the year it would auction $2.5 billion of 2-year notes and $2.0 billion of 4-year notes, of which $3.0 billion would be for new money. At its October meeting, the Committee had agreed that growth in the monetary aggregates on the average over the period from the third quarter of 1975 to the third quarter of 1976 at rates within the following ranges appeared to be consistent with its broad economic aims: M 5 to IV2 per cent; M , IV2 to 10% per cent; u 2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

144 Federal Reserve Bulletin • February 1976 and M , 9 to 12 per cent. The associated range for growth in the 3 bank credit proxy was 6 to 9 per cent. It was understood that the longer-term 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, as a result of short-run factors, growth rates from month to month might well fall outside the ranges contemplated for annual periods. In the discussion of current policy at this meeting, the Committee took note of a staff analysis suggesting that in the period immediately ahead growth in the demand for money would be constrained by continuation of the shift in business deposits from demand accounts to savings accounts in response to the recent changes in regulations. Because the magnitude and duration of the shift were highly uncertain, however, estimates of the effects on M were x subject to a large margin of error. It was also noted that projections of monetary growth for the month of December were more uncertain than those for other months because many business and financial institutions customarily made adjustments to cash and debt positions for purposes of year-end statements. During the discussion some Committee members expressed confidence in the economic outlook for the quarters immediately ahead, while other members expressed doubt concerning the strength of the recovery. In view of the uncertainties regarding the behavior of the monetary aggregates in the December-January period, many members advocated giving greater weight than usual to money market conditions in conducting open market operations in the period until the next meeting. However, a number of members preferred to continue to base operating decisions primarily on the behavior of the monetary aggregates. There was some sentiment for a slightly more stimulative policy, but most members favored no essential change in policy. At the conclusion of the discussion the Committee decided that operations in the period immediately ahead should be directed toward maintaining the bank reserve and money market conditions now prevailing, provided that monetary aggregates appeared to be growing at about the rates currently expected. The members concluded that growth in M and M over the December-January period x 2 at annual rates within ranges of tolerance of 4 to 7 per cent and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 145 7 to 10 per cent, respectively, would be acceptable.1 It was thought that such growth rates would be likely to involve an annual rate of growth in reserves available to support private nonbank deposits (RPD's) within a range of 4 to 7 per cent. It was contemplated that System operations until the next meeting would be directed toward maintaining the weekly average Federal funds rate at about its current level of 5V4 per cent, unless rates of growth in the monetary aggregates appeared to be deviating significantly from the midpoints of their specified ranges. The members agreed that, in the event the aggregates appeared to be deviating from expectations, the weekly average funds rate might be expected to vary in an orderly fashion within a range of 4 % to 5V2 per cent. 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—which had increased very sharply in the third quarter—is expanding more moderately in the current quarter. In November the rise in industrial production and in nonfarm payroll employment slowed further. The dollar volume of retail sales rose again, however, and residential construction activity expanded, reflecting recent substantial increases in private housing starts. The unemployment rate—which had risen 0.3 percentage points to 8.6 per cent in October—fell back to 8.3 per cent in November, reflecting a sizable decline in the civilian labor force. The increase in average wholesale prices of industrial commodities, although below that in October, was still relatively large; prices of farm products declined appreciably, following 2 months of large increases. The advance in average wage rates in November was again substantial. The exchange value of the dollar against leading foreign currencies has risen somewhat since mid-November. The net outflow of bank-reported private capital appears to have declined from the high rate reported for October. In October the U.S. foreign trade surplus remained substantial. 1The ranges of tolerance over the December-January period were based on preliminary new seasonal factors. The growth rates specified for M and M for 1 2 the 2-month period were, respectively, about 214 percentage points and 1 percentage point higher than those that would have been specified had the old factors been used. It was expected that revised money supply series incorporating new seasonal factors as well as benchmark and certain other statistical adjustments would be published in late January. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

146 Federal Reserve Bulletin • February 1976 Mi—which had declined in October—rose sharply in November. Growth in M and M was substantial, as inflows of consumer-type 2 3 time and savings deposits to banks strengthened while inflows to nonbank thrift institutions remained relatively favorable. Long-term interest rates have fluctuated in a narrow range in recent weeks, while short-term market rates have risen somewhat. In light of the foregoing developments, it is the policy of the Federal Open Market Committee to foster financial conditions that will encourage continued 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 maintain prevailing bank reserve and money market conditions over the period immediately ahead, provided that monetary aggregates appear to be growing at about the rates currently expected. Votes for this action: Messrs. Burns, Volcker, Baughman, Cold well, Eastburn, Holland, Jackson, MacLaury, Mayo, Mitchell, and Wallich. Votes against this action: None. Absent and not voting: Mr. Bucher. Subsequent to the meeting, on January 12, the available data suggested that in the December-January period both M and M x 2 would grow at rates below the lower limits of the ranges of tolerance that had been specified by the Committee. In recent days the Manager had been aiming at a Federal funds rate of 4% per cent, and the rate had been in an area of 4% to 47/s per cent. The significance of the apparent weakness in the aggregates was highly uncertain, because of the effects of the recent introduction of business savings accounts at commercial banks and because the revised seasonal adjustment factors employed were still under review. The problems of seasonal adjustment were particularly acute for the months of December and January. For these technical reasons, and in view of more favorable recent economic statistics—including the latest data on employment and retail sales— Chairman Burns recommended that the Manager be instructed to hold the weekly average Federal funds rate at the approximate level of 4% per cent until the Committee's next meeting. All members of the Committee, with the exceptions of Messrs. Eastburn and MacLaury, concurred in the Chairman's recommendation. Records of policy actions taken by the Federal Open Market Committee at each meeting, in the form in which they will appear in the Board's Annual Report, are released about 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

147 Law Department Statutes, regulations, interpretations, and decisions Truth in Lending courier routes (see 40 FR 25641). The proposal did not apply to access to other System facilities, In October 1975 the Board of Governors pub- such as the wire transfer facilities. lished amendments to Regulation Z designed to The Board is not finally adopting a policy in provide disclosure of closing costs in certain real regard to access and pricing. In the near future estate transactions. These amendments were the Board intends to publish a pricing schedule adopted in order to implement the provisions of based on the fully allocated costs of providing § 121(c) of the Act which were added by § 409 System check and ACH services. In developing of Title IV of Public Law 93-495. On January the pricing schedule, consideration would be given 2, 1976, § 121(c) was repealed by the passage to the burden of required reserves maintained by of Public Law 94-205. Accordingly, the Board has member banks. In the interim, pending the develrescinded the amendments to Regulation Z enacted opment of a final pricing schedule in respect to to implement § 409. so-called ACH transactions, the System will basi- Effective January 21, 1976, §§ 226.2(mm), cally maintain its current policy with regard to the (nn), (oo), (pp), and (qq), and 226.8(r) are re- processing and handling of such transactions and scinded. will, in fact, broaden its services concerning de- Effective January 21, 1976 § 226.8(a) is livery. Such interim policies may be modified at amended by deleting "Except as provided in the time a pricing schedule is adopted. During the paragraph (r) of this section," from the fourth interim period, the Federal Reserve Banks will sentence thereof and by capitalizing the letter "a" handle and process ACH transactions for all in the word "all" immediately following the de- member banks and any nonmember financial orleted matter, so that the fourth sentence of § ganization that is a member of an automated 226.8(a), through the colon, reads "All of the clearing house association and that is sending ACH disclosures shall be made together on either:" data pursuant to association rules. Effective June 30, 1976, section 226.102 is The Federal Reserve will deliver ACH items rescinded. under the following guidelines: (1) Items for beneficiaries maintaining accounts at a financial institution offering demand deposit accounts may be delivered directly to that institu- Interim Policy tion in the same manner that checks are presented. on Access to Federal Reserve (2) Items for beneficiaries maintaining accounts Clearing and Settlement Facilities at a financial organization not offering demand deposit accounts may be delivered directly to that On June 10, 1975, the Board published for institution provided such institution receives sufficomment proposed arrangements for the deposit, cient volume of such items to warrant separate delivery, and settlement of ACH transac- delivery and is located on an existing check courier tions—i.e., those payments contained on magnetic route. tape that would be cleared through Federal Reserve (3) Items may be delivered to a data processing clearing and settlement facilities. The Board pro- service bureau provided the service bureau reposed on June 10 that only financial organizations ceives sufficient volume of such items to warrant with demand deposit powers could deposit mag- separate delivery and is located on an existing netic tapes with the Federal Reserve. The Board check courier route. also proposed that payments would be delivered (4) Any financial organization may pick up directly to financial organizations currently ser- items at the local Federal Reserve office provided viced by Federal Reserve courier services and to that its volume is sufficient to warrant such actions. high volume endpoints located along existing (5) Any financial organization may have items Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

148 Federal Reserve Bulletin • February 1976 delivered to an endpoint that currently receives proposed, in connection with an application1 filed checks directly from the Federal Reserve office pursuant to § 4(c)(8) of the Bank Holding (i.e. the pass-through method). Company Act (12 U.S.C. 1843(c)(8)) and § (6) Items may be mailed to any financial orga- 225.4(b)(2) of the Board's Regulation Y (12 nization by the Federal Reserve regardless of its C.F.R. 225.4(b)(2)), to add to the list of activities location. that it has determined to be closely related to banking or managing or controlling banks (§ 225.4(a) of Regulation Y), the operation of a travel Settlement agency. An oral presentation considering possible rulemaking with respect to the proposal was held Settlement for items cleared under the above on January 14, 1975. arrangement will be made by credit and debit The Board has considered all comments reentries to reserve accounts of member banks of ceived prior to the oral presentation, the record the Federal Reserve System. of the oral presentation, and all comments submit- In providing clearing and settlement services for ted in connection with, and subsequent to, the oral ACH associations, the Board anticipates that these presentation. After considering all relevant aspects services will be made reasonably available on a of the proposal to add the operation of a travel comparable basis to depositary institutions having agency to the list of closely related activities, the need for such services. Board has determined not to adopt this activity The above provisions apply only for the use of as permissible for bank holding companies under Federal Reserve facilities in clearing and settling § 225.4(a) of Regulation Y. payments exchanged on magnetic tape. Use of the Operation of a travel agency requires the offer- Federal Reserve communications system for ing of a broad range of services, including but transmitting large dollar credit items will continue not limited to the sale of travelers checks,2 proto be limited to Federal Reserve member banks curing carrier passage and other travel accommoand Government agencies. Other financial institu- dations by acting as agent for passengers and tions may utilize this system through facilities of carriers, and acting as collection agent for airline, a member bank. railroad, steamship or other companies. In addi- In view of the many changes occurring in the tion, travel agents must have specialized knowlelectronic payments area, Federal Reserve policy edge concerning such diverse matters as passports, will be subject to periodic review. In particular, visas, inoculations and taxing regulations, as well further review would be undertaken as a result of as familiarity with local and regional social custhe study by the National Commission on Elec- toms.3 In effect, a travel agency is "a personalized tronic Fund Transfers. These proposals, if department store of travel."4 adopted, will provide uniform standards for elec- Before the Board may authorize a bank holding tronic transactions handled by the System. In such company to engage in a new activity pursuant to an environment, considerable cost savings to fi- § 4(c)(8) of the Bank Holding Company Act, there nancial institutions, the U.S. Treasury, and the are two major issues that must be resolved. These Federal Reserve may be realized and consumers are whether the activity is closely related to bankcan be afforded greater convenience and security. 1 Application by First Bancorp, Inc., Corsicana, Texas, to Bank Holding Companies retain First Travel Agency, Corsicana, Texas. 2 The sale of travelers checks has been found by the Board Nonbanking Activities of to be a closely related activity (see Board Order of June 14, 1973, approving application of BankAmerica Corporation, San Bank Holding Companies; Francisco, California, to engage de novo in issuance and sale Operation of a Travel Agency of travelers checks). 3 There are certain unique licensing requirements that a travel By notice of proposed rulemaking published in agency must meet in order to be eligible to sell transportation tickets for member carriers of airline associations. Principal the Federal Register on September 19, 1974 (39 among these associations are the Air Traffic Conference (ATC) F.R. 33741), and revised with respect to the date (which appoints, or licenses, travel agents to sell domestic air travel) and the International Air Transport Association (I AT A). and scope of the oral presentation on October 31, 4Arnold Tours, Inc. v. Camp, 338 F. Supp. 721, 723 1974 (39 F.R. 38423), the Board of Governors (1972). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 149 ing or managing or controlling banks, and, if so, previously found to be permissible within the tests whether it is a proper incident thereto. It is in the set forth in the Courier decision. Accordingly, the second of these tests that the weighing of the Board finds that the operation of a travel agency public benefits is of significance. is not closely related to banking or managing or In a recent decision by the United States Court controlling banks. Since the board has found that of Appeals for the District of Columbia, National the operation of a travel agency is not closely Courier Association v. Board,5 that Court com- related, the Board does not reach the further quesmented on the kinds of connections that may tion of the potential public benefits resulting from qualify an activity as 4'closely related to banking." performance of the proposed activity.8 Thus, the The Court stated there were at least three kinds Board has determined not to add the operation of of connections which could qualify an activity as a travel agency to the list of permissible activities closely related: first, that banks generally have in in Regulation Y. fact provided the proposed service; second, that banks generally provide services that are operationally or functionally so similar to the proposed 8 Proponents of and opponents to adding this activity to the permissible list have presented arguments regarding the nature services as to equip them particularly well to of the public benefits involved in approving this activity; provide the proposed services; and third, that however, as discussed above, the Board's finding that the proposed activity is not closely related to banking precludes banks generally provide services that are so inteany weighing of public benefits. grally related to the proposed services as to require their provision in a specialized form. On the basis of the record in this present pro- Order Scheduling Oral Presentation ceeding before the Board, it appears that the only On November 11, 1975, the Board issued a standard under the criteria previously applied by notice of proposed rulemaking to consider whether the Board, and as set forth by the Court of Appeals and under what conditions bank holding compain the Courier decision, that might be regarded nies should be permitted to continue to engage in as being applicable is that relating to whether automobile leasing activities under the provisions banks generally have provided the proposed servof Section 225.4(a)(6)(a) of the Board's Regulaice. However, the character of the services offered tion Y, 12 C.F.R. 225.4(a)(6)(a). The Board inby travel agencies, as it has evolved to the present vited and has received comments from interested day, has departed from that offered over a century parties. In response to requests made by several ago to accommodate people immigrating to the United States.6 At the present time, the number interested parties for an opportunity to present their views orally, and in response to other requests for of banks currently providing travel agency services a delay in the proceeding, the Board has adopted number only about 150 or less than one per cent the following procedures. of all commercial banks in the United States, and they account for less than two per cent of all travel (1) The Board will accept and consider all agencies in the nation. Furthermore, nearly two- statements, position papers and written submisthirds of the travel agencies affiliated with banking sions from any participant that has commented or organizations have been established within the past requested additional time to comment on the rulefifteen years.7 making provided that such statements are submit- It is the Board's view, in light of the above ted to the Office of the Secretary by March 15, and other facts of record, that there exists an 1976. (2) Those participants who notify the Secretary insufficient historical relationship between the by February 20, 1976, and those who have already proposed activity and the general nature of banking notified the Secretary will be scheduled to make activities to meet the closely related test of § an oral presentation before available Board mem- 4(c)(8). Neither does the Board conclude that the bers on Tuesday, March 23, 1976, at the Board's proposed activity is functionally or integrally reoffices, 20th & Constitution Avenue, N.W., lated to other banking activities which have been Washington, D.C. The hearing will be open to the public. 5516 F. 2d 1229, 1237 (1975). (3) Those participants who wish to make an oral 6Arnold Tours, Inc. v. Camp, 412 F. 2d 427, 434 (1972). 7Based on data submitted by the Association of Bank Travel presentation should submit the names and identi- Bureaus. ties of their witnesses by February 20, 1976, and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

150 Federal Reserve Bulletin • February 1976 they should indicate the amount of time (normally Consumer Bankers Association and Orbanco, Inc., not to exceed one hour) they request for oral Portland, Oregon. presentation. A schedule will be provided by The Board believes the procedures outlined March 1, 1976. Parties to the oral hearing should herein will provide all interested parties with a full provide the Board and all other parties with a opportunity to express their views and to submit statement or summary of their oral testimony by relevant evidence concerning the proposed rule- March 15, 1976. making. The Board further believes that the issues (4) Following the oral presentation, the Board to be considered in this proceeding will involve will accept from any party additional material legislative rather than adjudicative facts. For this related to issues raised at the oral presentation, reason and because the Bank Holding Company provided that such material is submitted to the Act does not require a formal trial-type hearing Office of the Secretary by April 23, 1976. in rulemaking proceedings under section 4(c)(8), (5) A preliminary list of parties who will make 12 U.S.C. 1843(c)(8), the Board declines to conan oral presentation includes representatives of the duct a formal hearing, as requested by the National National Automobile Dealers Association, South- Automobile Dealers Association. ern California Rental and Leasing Association, Car The Board also declines to postpone the hearing and Truck Renting and Leasing Association, in this proceeding pending final Congressional Southwest Leasing Corporation, Beverly Hills, action on the Consumer Leasing Act (H.R. 8835 California (on behalf of 17 leasing companies), and S. 1691) as requested by several parties. BANK HOLDING COMPANY AND BANK MERGER ORDERS ISSUED BY THE BOARD OF GOVERNORS Orders Under Section 3 of the Superintendent of Banks of the State of Ohio of Bank Holding Company Act ("Superintendent") in light of the factors set forth in § 3(c) of the Act (12 U.S.C 1842(c)). American Bancorporation, In accordance with § 3(b) of the Act, notice Columbus, Ohio of receipt of the application was duly given to the Superintendent. Within 30 days of his receipt of Order Denying Acquisition of Bank said notice, the Superintendent submitted to the American Bancorporation, Columbus, Ohio, a Board a written statement recommending disapbank holding company within the meaning of the proval of the application. In consideration of the Bank Holding Company Act, has applied for the Superintendent's recommendation, and in compli- Board's approval under § 3(a)(3) of the Act (12 ance with the requirements of the statute,2 the U.S.C. 1842(a)(3)), to acquire 51 per cent or more Board directed that a hearing be held on the of the voting shares of The American Bank of application at the Federal Reserve Bank of Cleve- Central Ohio, Harrisburg, Ohio ("Bank").1 land (38 Federal Register 29650), such hearing to Notice of the application affording opportunity be conducted in accordance with the Board's Rules for interested persons to submit comments and of Practice for Formal Hearings (12 C.F.R. Part views has been given in accordance with § 3(b) 263). The hearing commenced but was continued of the Act (38 Federal Register 27550, 39 Federal by the Administrative Law Judge, on Applicant's Register 6562, 40 Federal Register 52666, 41 unopposed motion, in order that Applicant might Federal Register 14). The time for filing comments prepare and submit to the Board certain amendand views has expired, and the Board has consid- ments to subject application. The amendments ered the application and the comments and views 2Section 3(b) of the Act, 12 U.S.C. 1842(b), provides, in pertinent part, as follows: "If the . . . State supervisory 1 Applicant has withdrawn from the Board's consideration authority so notified by the Board disapproves the application an application filed under § 3(a)(3) of the Bank Holding in writing within said thirty days, the Board shall forthwith Company Act to acquire The Eastern Ohio Bank, Union give written notice of that fact to the applicant. Within three Township, Ohio; and an application filed under § 18(c) of the days after giving such notice to the applicant, the Board shall Bank Merger Act to merge its subsidiary, The Huntsville State notify in writing the applicant and the disapproving authority Bank, Huntsville, Ohio, with The Miami Valley Bank, Quincy, of the date for commencement of a hearing by it on such Ohio. application." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 151 were submitted; and notice of receipt of same, banking market.6 Bank is the seventh largest affording opportunity for interested persons to banking organization represented in the Columbus submit comments and views, was duly given (39 market with .7 per cent of total deposits in com- Federal Register 6562). Thereafter, the Superin- mercial banks in said market.7 Applicant's banking tendent filed with the Administrative Law Judge subsidiary nearest to Bank is located at Adelphi, a motion requesting withdrawal of his disapproval in Ross County, more than 40 miles away. An recommendation but preserving his right to submit insubstantial amount of competition now exists additional written comments on the application. between Bank and Applicant's banking subsidi- Accordingly, the Administrative Law Judge issued aries; and it is not likely that competition between an Order terminating the hearing, subject to review Applicant and Bank will increase in the future in by the Board.3 Since termination of the hearing, view of the distances involved and Ohio's restricboth Applicant and the Superintendent have sub- tive branch banking laws. The Board concludes mitted additional materials and views for the that consummation of the proposed acquisition of record. Applicant has recently amended the appli- Bank would not substantially lessen competition cation a second and third time; and notice of in the Columbus banking market. receipt of these new amendments, affording op- Under the Bank Holding Company Act, the portunity for interested persons to submit com- Board is required to take into consideration the ments and views, has been duly given (40 Federal financial and managerial resources and future Register 52666, 41 Federal Register 14). The prospects of the Applicant and of the bank to be Board has considered all materials and views sub- acquired. In the exercise of that responsibility, the mitted by Applicant and the Superintendent in light Board finds that considerations relating to the of the factors set forth in Section 3(c) of the Act.4 financial and managerial resources and future Applicant, the nineteenth largest banking orga- prospects of Applicant and Bank warrant denial nization in Ohio, controls 6 subsidiary banks with of the application. aggregate deposits of $49.5 million, representing Applicant proposes to immediately acquire 50.9 .16 per cent of total deposits in commercial banks per cent of the outstanding voting shares of Bank in the State.5 Bank (deposits of $16.4 million) in exchange for its own callable series C preferred presently has three offices, all located in the shares, to be issued for this purpose. Applicant southwestern portion of the Columbus, Ohio, will acquire these shares from two persons closely associated with Applicant. These sellers—one a director of Applicant, the other a director's spouse—will realize, when their preferred shares are called, a price equal to that originally paid for the corresponding shares of Bank first acquired 3 The Administrative Law Judge acted pursuant to Part 263.10(d) of the Board's Rules of Practice for Formal Hear- by persons associated with Applicant in 1972.8 ings, 12 C.F.R. 263.10(d). The Superintendent's motion was The call price represents a premium over the book unopposed; and the Administrative Law Judge's Order has not been challenged. Since the Superintendent's motion eliminated the statutory requirement that a hearing be held, and since the Board has before it a substantial record clearly adequate for determination of the issues in this case, the Board has approved the Administrative Law Judge's Order and considers 6The Columbus, Ohio banking market is approximated by the hearing in this case to have been closed on the date of Franklin County, Ohio, and by the following adjacent townthat Order. ships in five contiguous counties: Jefferson, Fairfield, Pleasant, 4In transmitting his Order to the Board, the Administrative and Range Townships in Madison County; Derby, Scioto, and Law Judge stated: "[T]his action will enable the Board to Madison Townships, and a part of Harrison Township, in further process the application as it deems appropriate." It Pickaway County; Bloom and Violet Townships in Fairfield is clear that the Judge and the parties contemplated that the County; Etna, Lima, and Jersey Townships in Licking County; record would not close with termination of the hearing. The and Concord, Liberty, Orange, Genoa, and Harlem Townships Superintendent conditioned his motion upon recognition by the in Delaware County. Board of his right to submit additional materials for the record. 7 On May 31, 1974, the Federal Deposit Insurance Corpora- At Applicant's request, the administrative record on the appli- tion conditionally approved the application of Bank to merge cation has been held open, beyond deadlines previously an- with Citizens Savings and Loan Company, Columbus, Ohio, nounced by the Board's staff, to allow time for submission pursuant to Section 18(c) of the Federal Deposit Insurance Act, of additional materials by Applicant and to give Applicant the 12 U.S.C. 1828(c). The conditional approval granted by the fullest possible opportunity to develop additional facts for the Federal Deposit Insurance Corporation has now lapsed. Acrecord. cordingly, the Board has not considered the effect of such a 5 Comparative banking data are as of June 30, 1975. Appli- merger on the instant application in light of the factors set cant reports total deposits of $48.9 million as of September forth in Section 3(c) of the Act. 30, 1975. 8 See p. 152 for footnote 8. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

152 Federal Reserve Bulletin • February 1976 value of the Bank shares that these sellers will adverse effects upon the financial strength or surrender for their series C preferred shares. soundness of the holding company or any of its However, Applicant's principals paid a premium subsidiaries. . . . The impropriety of such transacin acquiring subject shares of Bank, and it does tions may have more serious effects . . . where not appear that sellers will realize a profit as a the ultimate purchase by the holding company result of their transaction. In addition, Applicant involves the payment of substantial premiums to proposes to reimburse these sellers for the interest the insider. Such arrangements do not comport carrying charges associated with the ownership of with sound banking practice and are inconsistent shares of Bank by persons associated with Appli- with the need to sustain public confidence in the cant through June 30, 1975.9 The series C pre- integrity of the banking system." Third National ferred shares are callable at the option of Appli- Corporation, 1975 Federal Reserve BULLETIN cant. In view of the likelihood that Applicant may 815. call these shares, the Board views this proposed acquisition by an exchange of shares as, in reality, Although the instant record does not establish a cash acquisition. that Applicant has violated the Act by acquiring The Board has repeatedly expressed its concern Bank without Board approval, the Board believes with arrangements by which bank holding com- that Applicant's proposed indemnification of its pany officers or directors acquire bank shares in principals for the costs of holding shares in Bank which their company is interested, thereby acquir- pending Board action on the application threatens ing a personal financial interest in an acquisition to adversely affect Applicant's financial resources proposed by the holding company. See Mid and its prospects for the future. America Bancorp oration, Inc., 1974 Federal Re- The record indicates that Applicant is in need serve BULLETIN 131; The Jacobus Company, 1974 of additional capital for injection into one of its Federal Reserve BULLETIN 130. present subsidiary banks. Additionally, the financial resources and management of Applicant and "Arrangements by which bank holding company certain of its present subsidiaries are in need of directors, officers or employees, or their close improvement. Applicant is endeavoring to raise relatives, have a personal financial interest in an additional capital with the proceeds of an equity acquisition proposed by the holding company will security offering now in progress. It is the Board's be closely scrutinized by the Board to ensure both view, after considering the entire record, that that they do not involve an effort by the company Applicant's resources should be more approto circumvent the requirement that prior approval priately directed toward strengthening its existing by the Board be obtained for such an acquisition, banking subsidiaries rather than toward further and that they do not present the threat of any expansion. Applicant's future prospects cannot be regarded as satisfactory if its resources are used to finance further expansion at this time. 8 Three directors of Applicant acquired approximately 51 per Applicant has offered to inject additional capital cent of the voting shares of Bank in 1972, using proceeds into Bank should the subject application be apof a collateral loan from a bank not affiliated with Applicant. By late 1973, most of these shares had been transferred to proved. However, such additional capital would a fourth director and to the wife of one of the original buyers, be derived from proceeds of Applicant's present in consideration of their assumption of the supporting loan. equity offering, which might otherwise be used 9On the present record, it does not appear that any indemnification agreement was in force when Applicant's directors first to strengthen Applicant's existing subsidiaries. acquired shares of Harrisburg Bank in 1972. Shortly after this The record reflects that resources now available first acquisition, however, Applicant and its three directors to Applicant for these purposes are insufficient to entered into a buy-sell agreement regarding the subject shares that included, as one of its terms, an agreement by Applicant both fulfill this capital commitment and call the to reimburse its directors for interest expense and other costs series C preferred shares that Applicant would incurred in financing the acquisition of such shares. This issue in this transaction. Moreover, the financial agreement was subsequently rescinded, and declared null and void, by the parties. A later agreement, entered into between and managerial problems currently being experi- Applicant and the present holders of these shares on June 18, enced by Applicant are present also to some extent 1974, does not contain an indemnification clause; however, with respect to the operations of Bank. Since a more recent buy-sell agreement, dated December 21, 1975, rescinds all prior agreements and obligates American to issue certain of the principals of Applicant are also callable preferred shares to reimburse sellers for the debt principals of the bank to be acquired and since service expense associated with the holding of subject shares of Bank by principals of Applicant since 1972. both Applicant and Bank have experienced certain Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 153 financial problems under the management of such First Lincoln wood Corp., individuals, the Board is unable to conclude that Lincoln wood, Illinois financial and managerial considerations involved Order Denying in this proposal are such that approval of the Formation of Bank Holding Company instant application would be appropriate. Instead, it appears that financial and managerial consid- First Lincolnwood Corp., Lincolnwood, Illierations weigh against approval of the instant nois, has applied for the Board's approval under application. § 3(a)(1) of the Bank Holding Company Act [12 In the Board's view, a bank holding company U.S.C. § 1842(a)(1)] of formation of a bank seeking to expand its banking interests should be holding company through acquisition of 80 per able to demonstrate clearly the quality of its ficent or more of the voting shares of The First nancial and managerial resources in the operations National Bank of Lincolnwood, Lincolnwood, Ilof its existing subsidiaries. If a bank holding linois ("Bank"). company cannot do so, the Board believes that Notice of the application, affording opportunity it would be inappropriate to permit such an orgafor interested persons to submit comments and nization to expand further its banking interests views, has been given in accordance with § 3(b) until its existing subsidiaries are in acceptable of the Act. The time for filing comments and views condition. Applying this standard to the present has expired, and the Board has considered the application, and on the basis of the entire record application and all comments received, including considered as a whole, the Board is unable to those submitted by the Comptroller of the Curconclude that approval of the instant application rency, in light of the factors set forth in § 3(c) would be consistent with the financial and manaof the Act [12 U.S.C. § 1842(c)]. gerial standards the Board is required to consider Applicant is a non-operating corporation organunder Section 3(c) of the Act, nor would the public ized under the laws of Illinois for the purpose of interest be served by such action. becoming a bank holding company through the The adverse financial and managerial factors acquisition of Bank. With deposits of $65.7 milpresent in this application are not outweighed by lion, Bank holds approximately two-tenths of one any procompetitive effects or by benefits that per cent of the total deposits held by commercial would result in serving the convenience and needs banks in the relevant banking market (approxiof the community. It appears that the banking mated by the Chicago area) and is the 67th largest needs of the Columbus banking market are being of the market's 286 banks.1 Inasmuch as this well served at the present time and that Bank is proposal represents essentially a transfer of Bank's generally competitive with the other banks operatownership from individuals to a corporation owned ing in its market area. Applicant proposes to lower by the same individuals, and Applicant has no Bank's charges for checking account services and present banking subsidiaries, the acquisition of to assist Bank in fulfilling the mortgage loan de- Bank by Applicant would not eliminate any sigmands of Columbus area residents. While the nificant existing competition nor foreclose potenconvenience and needs considerations are not intial competition, increase the concentration of consistent with approval, any public benefits that banking resources, or have any adverse effect upon might result from approval are clearly outweighed competition within the relevant banking market. by the adverse effects specified above. Accord- Accordingly, the Board concludes that competitive ingly, it is the Board's judgment that approval of considerations are consistent with approval of the the application would not be in the public interest application. and that the application should be denied. The Board has indicated on previous occasions On the basis of the record, the application is that a bank holding company should provide a denied for the reasons summarized above. source of financial and managerial strength to its By order of the Board of Governors, effective subsidiary bank(s), and that the Board will exam- January 29, 1976. ine closely the condition of the applicant in each case with this consideration in mind. In connection Voting for this action: Chairman Burns, Governors Mitchell, Holland, Wallich, Coldwell, Jackson, and Partee. (Signed) THEODORE E. ALLISON, 1A11 banking data are as of December 31, 1974, unless [SEAL] Secretary of the Board. otherwise indicated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

154 Federal Reserve Bulletin • February 1976 with this proposal, Applicant will incur acquisition tion is denied for the reasons summarized above. debt of approximately $3.7 million, which debt By order of the Board of Governors, effective Applicant proposes to service over a twelve-year January 9, 1976. period primarily through earnings of Bank. In the Voting for this action: Vice Chairman Mitchell and Board's view, the projected earnings of Applicant Governors Bucher, Holland, Wallich, Cold well, and over the debt-retirement period appear to be Jackson. Absent and not voting: Chairman Burns. somewhat optimistic in view of Bank's previous Board action was taken while Governor Bucher was earnings record and, even if actually realized, a Board member. Board action was taken before Governor Partee bewould not provide Applicant with the financial came a Board member. flexibility necessary to meet its annual debt service requirements while maintaining adequate capital (Signed) THEODORE E. ALLISON, at Bank. Furthermore, although Applicant has [SEAL] Secretary of the Board. stated that Bank plans to augment its capital accounts through the sale of $1.1 million in equity National Detroit Corporation, capital and $1.0 million debt capital within three Detroit, Michigan to six months of approval of this application, the Board is concerned that the financial requirements Order Approving Acquisition of Bank imposed upon Applicant as a result of the acquisition debt, and uncertainty as to the source of funds National Detroit Corporation, Detroit, Michifor Bank's proposed capital injections, could pre- gan, a bank holding company within the meaning vent Applicant from resolving any unforeseen of the Bank Holding Company Act, has applied problems that may arise at Bank. On the basis for the Board's approval under § 3(a)(3) of the of the above banking factors, and other facts of Act (12 U.S.C. 1842(a)(3)) to acquire all of the record, the Board is of the view that it would not voting shares (less directors' qualifying shares) of be in the public interest to approve the formation National Bank of Troy ("Bank"), Troy, Michiof a bank holding company with an initial debt gan, a proposed new bank. structure that could result in the weakening of Notice of the application, affording opportunity Bank's overall financial condition. Accordingly, for interested persons to submit comments and the Board concludes that the considerations relat- views, has been given in accordance with § 3(b) ing to the banking factors weigh against approval of the Act. The time for filing comments and views of the application. has expired, and the Board has considered the As indicated above, the proposed bank holding application and all comments received, including company formation is essentially a restructuring submissions filed by First Citizens Bank, Troy, of the ownership interests of Bank without any Michigan ("Protestant"), in light of the factors significant changes in Bank's operations or the set forth in § 3(c) of the Act (12 U.S.C. 1842(c)). services offered to customers of Bank. Conse- Applicant, the largest banking organization in quently, considerations relating to the convenience Michigan, controls four subsidiary banks with and needs of the community to be served are aggregate deposits of approximately $6.2 billion, consistent with, but do not lend weight toward, representing approximately 18 per cent of the total approval of the application. deposits in commercial banks in Michigan.1 Since On the basis of all of the circumstances con- Bank is a proposed new bank, consummation of cerning this application, the Board concludes that the proposed acquisition would not immediately the banking considerations involved in the pro- increase Applicant's share of commercial bank posal present adverse factors bearing upon the deposits in the State. financial conditions and future prospects of both Bank is to be located in the city of Troy, which Applicant and Bank. Such adverse factors are not is part of the Detroit banking market, the relevant outweighed by any procompetitive effects or by banking market for this proposal.2 Applicant is the benefits to the convenience and needs of the relevant community. Accordingly, it is the Board's judgment that approval of the application would 1 Deposit data are as of December 31, 1974. not be in the public interest and that the application 2The Detroit banking market is approximated by Macomb, should be denied. Oakland, and Wayne Counties, which include the city of Detroit and 88 other incorporated communities that comprise On the basis of the facts of record, the applica- the Detroit metropolitan area. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 155 largest banking organization in the relevant market application, and that competitive considerations and controls 32.6 per cent of the total commercial are consistent with approval of the application. bank deposits in the market. Since Bank is a The financial and managerial resources and fuproposed new bank, Applicant's acquisition of ture prospects of Applicant and its subsidiary Bank would not have any immediate effect on banks are regarded as satisfactory. Bank, as a Applicant's share of commercial bank deposits in proposed new bank, has no financial or operating the Detroit banking market, nor would it eliminate history; however, its prospects as a subsidiary of any existing competition. Applicant appear favorable. Considerations relat- In connection with its consideration of this ap- ing to the banking factors are consistent with plication, the Board has considered the comments approval of the application. The addition of a new submitted by Protestant. Protestant contends, in banking alternative in the rapidly growing Troy part, that to the extent new entry into Troy is area will provide greater convenience to this segdesirable, banking structure in the Detroit area ment of the population in the relevant banking would be much better served by an entrant of market. In addition, affiliation with Applicant will smaller size than Applicant; and conversely, that enable Bank to offer its customers a full compleentry by Applicant would likely raise barriers to ment of banking services, as well as access to entry in Troy to a level where important possi- Applicant's specialized services, expertise, and bilities for deconcentration will be lost. Protestant financial resources. These considerations relating further asserts that Applicant's proposed de novo to the convenience and needs of the community entry into Troy would severely limit the possibility to be served lend some weight toward approval of future outside entry into Troy by preempting of the application. It is the Board's judgment that future demand through the creation of excess ca- consummation of the proposed acquisition would pacity. be in the public interest and that the application The Board has reviewed the facts of record, should be approved. including the past and projected growth of the On the basis of the record, the application is economy and the population of the area, and finds approved for the reasons summarized above. The that the city of Troy is presently a rapidly growing transaction shall not be made (a) before the thirarea, and that the high rate of growth is expected tieth calendar day following the effective date of to continue in the future. In view of the rapid and this Order or (b) later than three months after that substantial growth being experienced by Troy, it date, and (c) National Bank of Troy, Troy, Michdoes not appear that Applicant's entry would either igan, shall be opened for business not later than foreclose the development of future competition six months after the effective date of this Order. or preempt a banking site. Furthermore, Michi- Each of the periods described in (b) and (c) may gan's branch banking laws preclude Applicant's be extended for good cause by the Board, or by entry into Troy through the formation of a branch the Federal Reserve Bank of Chicago, pursuant of an existing subsidiary. Thus, the formation of to delegated authority. a de novo bank is the only viable means of entry By order of the Board of Governors, effective into Troy presently available to Applicant. The January 23, 1976. Board notes that there are presently four banks Voting for this action: Chairman Burns and Goveroperating in Troy, all of which are subsidiaries nors Mitchell, Holland, Wallich, Coldwell, Jackson, of bank holding companies; three of the bank and Partee. holding companies are among the five largest in (Signed) THEODORE E. ALLISON, the State. Moreover, three of the present banks [SEAL] Secretary of the Board. in Troy are home-office banks with branching privileges within the city. Applicant's entry into Troy through the formation of Bank would create Northeast United Bancorp, Inc. of Texas, a fourth bank with branching privileges in Troy. Fort Worth, Texas The Board believes that this additional potential for branching is likely to exert a procompetitive Order Approving Acquisition of Bank influence in the Troy area of the relevant banking market. Accordingly, it is the Board's judgment Northeast United Bancorp, Inc. of Texas, Fort that the arguments raised by Protestant do not Worth, Texas, a bank holding company within the present sufficient grounds to warrant denial of the meaning of the Bank Holding Company Act Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

156 Federal Reserve Bulletin • February 1976 ("Act"), has applied for the Board's approval apart and that there is a large number of banks under § 3(a)(3) of the Act (12 U.S.C. 1842(a)(3)) competing in the market, it does not appear that to acquire 100 per cent of the voting shares (less the effects on existing competition would be sigdirectors' qualifying shares) of First State Bank, nificant. For similar reasons, it appears that the Bedford, Texas ("Bank"). effects on potential competition would not be Notice of the application, affording opportunity serious. Moreover, even after consummation of for interested persons to submit comments and the proposal, Applicant would control 2.5 per cent views, has been given in accordance with § 3(b) of the market's deposits (about one-fourth of the of the Act. The time for filing comments and views deposits held by the market's third largest banking has expired, and the Board has considered the organization, and less than one-tenth of the deapplication and all comments received, including posits held by the first or second largest banking those submitted by First National Bank of Euless, organization in the market), and several inde- Euless, Texas ("Protestant"), in light of the fac- pendent banks in the market would remain availtors set forth in § 3(c) of the Act (12 U.S.C. able for acquisition by holding companies not 1842(c)). represented in the market. Accordingly, the Board Applicant, the 84th largest banking organization concludes that consummation of the proposal in Texas, controls one bank with aggregate depos- would not eliminate any significant existing comits of approximately $42.6 million, representing petition or foreclose the development of significant one-tenth of one per cent of the tot£il deposits in potential competition. commercial banks in the State.1 Applicant's ac- The financial condition and managerial requisition of Bank would increase Applicant's share sources of Applicant and its sole subsidiary are of total State deposits by 0.03 per cent and would considered satisfactory and the future prospects for not result in a significant increase in the concen- each appear favorable. In view of Applicant's tration of banking resources in Texas, nor would commitment to inject $200,000 of equity capital it alter Applicant's ranking among the State's other into Bank following its acquisition, the same conbanking organizations. clusions generally apply with respect to Bank's Bank holds deposits of approximately $14.3 financial condition, managerial resources, and fumillion, representing 0.6 per cent of the total ture prospects. Thus, the banking factors lend deposits in commercial banks operating in the Fort some weight toward approval of the application. Worth banking market,2 and ranks as the 22nd Applicant proposes to increase the rates of interest largest of 48 commercial banks in the market. The paid on Bank's time and savings deposits, increase three largest banking organizations in the market the parking facilities at Bank and, at a later date, control, in the aggregate, more than 70 per cent provide trust services for customers of Bank. of the market's deposits. Applicant is the seventh Therefore, the considerations relating to the conlargest banking organization in the Fort Worth venience and needs of the community to be served banking market. Its sole subsidiary, Northeast lend weight toward approval of the application National Bank of Fort Worth, Fort Worth, Texas and, in the Board's view, outweigh any slight ("Northeast Bank"), holds deposits of $42.6 mil- adverse competitive effects that might result from lion, representing 1.9 per cent of the market's total consummation of the proposal. commercial bank deposits. To the extent that In its consideration of the subject application, Northeast Bank and Bank operate in the Fort the Board has considered the comments submitted Worth banking market, some amount of competi- on behalf of Protestant, a bank located approxition would be eliminated as a result of the con- mately four miles from Bank. Protestant has raised summation of this proposal. However, on the basis two objections to the proposed transaction. First, of the facts of record, including the facts that Protestant asserts that consummation of the pro- Northeast Bank and Bank are located in separate posal would result in "a high concentration of suburbs of Fort Worth seven and one-half miles financial power within a common trade area.'' This assertion is predicated upon Protestant's belief that the Mid-Cities area3 is the relevant geographic 1 All banking data are as of December 31, 1974, and reflect holding company formations and acquisitions approved through November 30, 1975. 3 The Mid-Cities area is approximated by the communities 2The Fort Worth banking market, the relevant geographic in the northeastern portion of Tarrant County between Fort market for purposes of analyzing the competitive effects of Worth and Dallas, Texas; it includes the communities of this proposal, is approximated by the Fort Worth RMA. Bedford, Euless, Hurst, and Richland Hills. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 157 market for the Board's competitive analysis of the none of its loans from the service area of Bank. proposed acquisition. In this regard, the Board has In view of the foregoing, the Board realizes that examined the materials submitted by Protestant in consummation of the subject proposal would result support of its position and, on the basis of its in the elimination of some existing competition. analysis of such material and the other material However, given the present structure of the Fort in the record, the Board has concluded that the Worth banking market and the size of Bank and relevant geographic market involved in the subject Northeast Bank in relation to that market, the proposal is the Fort Worth banking market.4 The Board does not believe that these adverse effects basis for this conclusion rests upon several eco- would be significant. nomic and demographic considerations. The Mid- In several past cases, the Board has denied Cities area is suburban in nature and it is econom- certain applications to acquire banks in large metically and physically integrated with the city of ropolitan markets on the basis that consummation Fort Worth. For example, the Mid-Cities area is of the proposed acquisition would eliminate comlinked to downtown Fort Worth by several major petition within an area smaller than the entire highways and is exposed to all of the major Fort relevant banking market.5 In those cases, the ap- Worth media sources. In addition, census data plicant controlled a substantial share of total dereveal that a significant portion of the working posits within the relevant market. In addition, the population in the Mid-Cities area commutes to Fort applicant, in each of those other cases, had several Worth daily. Although the Mid-Cities area may existing subsidiary banks in close proximity to the represent a distinct group of suburban communi- bank to be acquired and there was a substantial ties, the Board is of the view that there is no overlap between the service areas of the applievidence indicating that the commercial banks in cant's existing subsidiary banks and the service this area are insulated from the competitive forces area of the bank to be acquired. that emanate from the other banks in the Fort The circumstances that warranted denial of the Worth banking market. proposals described above do not appear to exist With respect to the concentration of banking in the subject application. First, Applicant does resources within the relevant banking market, Ap- not hold a substantial share of the market's deposplicant, upon acquisition of Bank, would increase its, and consummation would not result in Appliits share of market deposits by 0.6 per cent to cant holding a substantial share of such deposits. a total of 2.5 per cent, which is a substantially Second, as noted above, there does not appear to smaller percentage of market deposits than is held be a substantial overlap of the service areas of by any of the market's three larger banking orga- Bank and Northeast Bank. Furthermore, there are nizations. In addition, Applicant's share of total two banks, one of which is a subsidiary of the market deposits would be approximately equal to State's third largest banking organization, that the fifth, sixth and seventh largest banking organi- intervene between Bank and Northeast Bank. In zations in the market. Thus, the Board concludes view of the foregoing, it does not appear that that approval of the application would not result approval of the proposal would eliminate any in Applicant having a high concentration of bank- significant competition presently existing between ing resources within the relevant market. Bank and Northeast Bank, nor is it likely that Second, Protestant asserts that due to a substan- significant competition would develop in the foretial overlap of the service areas of Bank and seeable future absent approval of Applicant's pro- Northeast Bank, approval of the proposal would posal. Moreover, the Board is of the view that result in the elimination of existing and future the considerations relating to the convenience and competition between Bank and Northeast Bank. needs of the communities to be served outweigh Although the banks are located in the same bank- any anticompetitive effects that might result from ing market, it appears that Bank derives less than Applicant's acquisition of Bank. Therefore, havfive per cent of its total deposits and less than one per cent of its total loans from the service area of Northeast Bank; and Northeast Bank derives 5For example, see the Board's Order of June 26, 1974, less than four per cent of its total deposits and denying the application by First City Bancorporation, Houston, Texas, to acquire Meyerland Bank, Houston, Texas (60 Fed. Res. BULLETIN 509 (1974)). Applicant's request for reconsideration of this application was denied by the Board on 4See footnote 2 for a description of the market. November 11, 1974. 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158 Federal Reserve Bulletin • February 1976 ing considered the comments of Protestant, it is Applicant, the fifth largest commercial banking the Board's judgment that consummation of the organization in Alabama, controls two banks with proposed transaction would be in the public inter- aggregate deposits of approximately $456.4 milest and that the application should be approved. lion, representing 5.1 percent of the total deposits On the basis of the record, the application is in commercial banks in the State.1 Acquisition of approved for the reasons summarized above. The Bank would increase Applicant's share of State transaction shall not be made (a) before the thir- deposits by .4 of one per cent and would not tieth calendar day following the effective date of significantly increase the concentration of banking this Order or (b) later than three months after the resources in Alabama, although, as discussed effective date of this Order, unless such period below, the proposal would have some adverse is extended for good cause by the Board, or by effects on concentration in the relevant market. the Federal Reserve Bank of Atlanta pursuant to Bank has deposits of approximately $31.7 mildelegated authority. lion, representing 3.4 per cent of the total deposits By order of the Board of Governors, effective in commercial banks in the relevant market, the January 19, 1976. Mobile banking market,2 and thereby ranks as the fifth largest of eight banks operating in the market. Voting for this action: Vice Chairman Mitchell and Applicant's lead bank, Merchants National Bank Governors Holland, Wallich, Coldwell, and Jackson. of Mobile, Mobile, Alabama ("Mobile Bank"), Absent and not voting: Chairman Burns and Governor Bucher. the largest bank operating in the relevant market, Board action was taken while Governor Bucher was has deposits of approximately $361.6 million, a Board Member and before Governor Partee became representing 37.2 per cent of total commerical a Board Member. bank deposits in the market. The three largest (Signed) THEODORE E. ALLISON, banking organizations in the market account for [SEAL] Secretary of the Board. 84.6 per cent of total commercial bank deposits. Thus, consummation of this proposal would increase Applicant's share of total deposits to 40.6 per cent and would further increase concentration Southland Bancorporation, of banking resources in an already concentrated Mobile, Alabama banking market. Although Bank and Mobile Bank are located Order Denying Acquisition of Bank 16 miles apart, competition exists between the two Southland Bancorporation, Mobile, Alabama, a banks as a result of substantial commuting of the bank holding company within the meaning of the labor force between Fairhope and Mobile. Mobile Bank Holding Company Act, has applied for the Bank derives $9.3 million in loans and $7.2 mil- Board's approval under § 3(a)(3) of the Act (12 lion in deposit business from the service area of U.S.C. 1842(a)(3)) to acquire all of the voting Bank. Approval of the application would, thereshares (less directors' qualifying shares) of the fore, eliminate a substantial amount of existing successor by merger to First National Bank of competition between Applicant and Bank, as well Fairhope, Fairhope, Alabama ("Bank"). The as reduce the number of banking alternatives bank into which Bank is to be merged has no operating in the market. Moreover, approval of significance except as a means to facilitate the the proposed transaction would remove a viable acquisition of the voting shares of Bank. Accord- entry vehicle for an Alabama bank holding comingly, the proposed acquisition of shares of the pany not currently represented in the market. Acsuccessor organization is treated herein as the proposed acquisition of the shares of Bank. Notice of the application, affording opportunity for interested persons to submit comments and *A11 banking data are as of June 30, 1975, and reflect bank views, has been given in accordance with § 3(b) holding company formations and acquisitions approved as of November 1, 1975. of the Act. The time for filing comments and views 2The relevant banking market is approximated by Mobile has expired and the Board has considered the County and all of Baldwin County except for the southeastern application and all comments received in light of quarter of the county. Although Mobile and Baldwin Counties are physically separated by Mobile Bay, the above market the factors set forth in § 3(c) of the Act (12 U.S.C. boundaries reflect commuter traffic patterns and the area within 1842 (c)). which actual competition occurs. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 159 cordingly, the Board is of the view that consum- State Street Boston Financial Corporation, mation of the proposal would have significantly Boston, Massachusetts adverse effects on both existing and future competition.3 Order Approving Acquisition of Bank On the basis of the foregoing and other facts State Street Boston Financial Corporation, Bosof record, the Board concludes that competitive ton, Massachusetts, a bank holding company considerations relating to this application weigh within the meaning of the Bank Holding Company sufficiently against approval so that it should not Act, has applied for the Board's approval under be approved unless the anticompetitive effects are § 3(a)(3) of the Act (12 U.S.C. 1842(a)(3)) to outweighed by other positive considerations re- acquire all of the voting shares of Falmouth Bank flected in the record such as the financial and and Trust Company, Falmouth, Massachusetts managerial resources and future prospects of Ap- ("Bank"). plicant and Bank or the convenience and needs Notice of the application, affording opportunity of the communities to be served. for interested persons to submit comments and The financial and managerial resources and views, has been given in accordance with § 3(b) prospects of Applicant, its subsidiaries, and Bank of the Act. The time for filing comments and views are regarded as generally satisfactory and consist- has expired, and the Board has considered the ent with approval of the application, although such application and all comments received in light of considerations do not provide significant weight the factors set forth in § 3(c) of the Act (12 U.S.C. for approval of the application. As a result of this 1842 (c)). proposal, Bank would have increased loan limits Applicant, the fourth largest banking organiand would expand its student loan services. These zation in Massachusetts, presently controls two improved services lend some weight toward ap- subsidiary banks with aggregate deposits of $1.2 proval of the application. The Board finds, how- billion, representing approximately 8.7 per cent ever, that neither the banking factors nor the of the total deposits in commercial banks in the considerations relating to convenience and needs State.1 Applicant's acquisition of Bank would not are sufficient to outweigh the adverse competitive result in a significant increase in the concentration effects of Applicant's proposal. of banking resources in Massachusetts, nor would On the basis of the facts in the record and in it change Applicant's ranking among banking orlight of the factors set forth in section 3(c) of the ganizations in the State. Act, it is the Board's judgment that approval of Bank (approximately $16.9 million in deposits) the proposal would not be in the public interest. is the sixth largest of eight banking organizations Accordingly, the application is denied for the operating in the Cape Cod banking market which reasons summarized above. is the relevant banking market for this proposal,2 By order of the Board of Governors, effective and controls approximately 7.1 per cent of the total January 26, 1976. deposits in commercial banks in the market. By Order dated December 10, 1973, the Federal Re- Voting for this action: Vice Chairman Mitchell and serve Bank of Boston approved Applicant's ac- Governors Wallich, Coldwell, and Partee. Present and abstaining: Governor Holland. Absent and not voting: quisition of Chatham Trust Company ("Chatham Chairman Burns and Governor Jackson. Bank"), Chatham, Massachusetts (deposits of approximately $7.8 million, as of December 31, (Signed) THEODORE E. ALLISON, 1974). Chatham Bank operates in the same bank- [SEAL] Secretary of the Board. ing market as Bank, and although the acquisition of Chatham Bank has not yet been consummated,3 banking data are as of June 30, 1975, unless otherwise indicated. 2The Cape Cod banking market is approximated by Barn- 3The Board denied Applicant's original application to be- stable County. come a bank holding company, 1974 F.R. BULLETIN 669. 3 The time within which Applicant must consummate the That application also involved acquisition of Bank. The acquisition of Chatham Trust Company has been extended by Board's conclusion as to the effects on competition of the the Federal Reserve Bank of Boston pursuant to delegated subject proposal are similar to its findings in its previous denial. authority. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

160 Federal Reserve Bulletin • February 1976 the Board has examined the instant proposal in By order of the Board of Governors, effective light of the competitive factors which would exist January 20, 1976. if the acquisition of Chatham Bank had been Voting for this action: Vice Chairman Mitchell and consummated. Applicant, as a result of consum- Governors Bucher, Holland, and Jackson. Absent and mation of the instant proposal, would become the not voting: Chairman Burns and Governors Wallich and fifth largest banking organization in the Cape Cod Coldwell. banking market, controlling 11 per cent of the total Board action was taken while Governor Bucher was a Board Member and before Governor Partee became deposits in commercial banks in the market. a Board Member. Although Bank and Chatham Bank operate in (Signed) THEODORE E. ALLISON, the same banking market, they are located ap- [SEAL] Secretary of the Board. proximately 40 miles apart. In view of the relatively small size of the two banks, the distance involved, and the existence of numerous interven- Determination with Respect to ing bank offices, it does not appear that consummation of this acquisition would eliminate any Entitlement to Exemption Provided in significant existing competition; nor does it appear § 4(c)(ii) of Bank Holding Company Act likely that, absent this proposal, significant competition would develop between these organi- Orwig and Company, Inc., zations in the future. In addition, de novo entry Kansas City, Missouri by Applicant in the Falmouth area is regarded as By Order dated December 1, 1975 (40 Federal relatively unattractive due to the market's low ratio Register 57246; 1975), the Board approved the of population and deposits per commercial banking application filed by Orwig and Company, Inc., office. Accordingly, the Board concludes that Kansas City, Missouri ("Orwig"), for the Board's competitive considerations are consistent with apapproval under § 3(a)(5) of the Bank Holding proval of this application. Company Act ("Act") to merge with Merchants The financial and managerial resources and fu- Investors, Inc., Kansas City, Missouri ("Merture prospects of Applicant, its subsidiaries, and chants Investors"), under the title and charter of Bank are regarded as satisfactory and consistent Orwig. Because Orwig desires to continue engagwith approval. As part of its proposal, Applicant ing in certain nonbanking activities engaged in by has committed to increase Bank's capital account Merchants Investors, which activities are not by $300,000 upon consummation of the acquisi- presently authorized for bank holding companies, tion, and by an additional $150,000 by July 31, Orwig has requested a Board determination that 1976, thereby increasing Bank's legal lending it is entitled to the benefits of the exemption set limit in addition to improving its capital position. forth in § 4(c)(ii) of the Act. That section provides Bank will also offer trust services and improved that the Act's prohibitions against nonbanking mortgage services as a result of its affiliation with activities of a bank holding company shall not Applicant. Accordingly, the Board regards con- apply to any bank holding company that is "a siderations relating to the convenience and needs company covered in 1970 more than 85 per centum of the community to be served as lending support of the voting stock of which was collectively to approval of the application. It is the Board's owned on June 30, 1968, and continuously therejudgment that the proposed acquisition would be after, directly or indirectly, by or for members of in the public interest and that the application the same family, or their spouses, who are lineal should be approved. descendants of common ancestors." (12 U.S.C. On the basis of the record, the application is § 1843(c)(ii)). In its Order of December 1, 1975, approved for the reasons summarized above. The the Board indicated that the question of Orwig's transaction shall not be made (a) before the thir- entitlement to such exemption was still under tieth calendar day following the effective date of consideration. The Board has considered the rethis Order or (b) later than three months after the quest and, on the basis of the information preeffective date of this Order, unless such period sented, makes the following findings. is extended for good cause by the Board, or by As indicated above, § 4(c)(ii) of the Act prothe Federal Reserve Bank of Boston pursuant to vides a complete exemption from the nonbanking delegated authority. prohibitions of the Act for a bank holding company Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 161 that is a "company covered in 1970" more than successor in interest to its constituent companies 85 per cent of the voting shares of which was so that it may trace its corporate existence back owned on June 30, 1968, and continuously there- to June 30, 1968, and thus satisfy the continuous after, by or for members of the same family. Thus, family ownership requirement of § 4(c)(ii), it does to qualify for a § 4(c)(ii) exemption, a bank not satisfy the requirement of that section that it holding company must satisfy two distinct tests: also be a "company covered in 1970." (1) it must be a "company covered in 1970"; and Section 2(b) of the Act defines the term "com- (2) it must fulfill the continuous family ownership pany covered in 1970" as a "company which requirement. becomes a bank holding company as a result of The Board believes that Orwig does not satisfy the enactment of the Bank Holding Company Act the family ownership test because Orwig was not Amendments of 1970 and which would have been in existence on June 30, 1968. Orwig argues, a bank holding company on June 30, 1968, if those however, that it is a "successor" to a company amendments had been enacted on that date." On that was in existence on that date more than 85 December 31, 1970, Orwig owned approximately per cent of the voting shares of which was owned 28.5 per cent of a company that owned substanon that date by members of the same family, and tially all of the voting shares of Merchants-Produce that it should therefore be viewed as having been Bank, and by virtue of this ownership it became in existence on that date. Specifically, Orwig con- a bank holding company as a result of the enacttends that it was formed on July 24, 1970, as the ment of the 1970 Amendments to the Act. In result of a consolidation of Mawn Investment Co. addition, as of that date Orwig owned approxi- ("Mawn") and three other corporations. mately 24.9 per cent of a company that owned The Board believes, however, that Orwig is not substantially all of the voting shares of University a "successor" to these preexisting corporations, Bank. These holdings were reported to the Board within the meaning of the Act. The term "succes- in Orwig's initial bank holding company regissor" is defined in § 2(e) of the Act as tration statement filed under the Act in 1971. On June 30, 1968, Orwig (if viewed as the successor "any company which acquires directly or indi- in interest to its constituent companies) owned rectly from a bank holding company shares of any about 45 per cent of University Bank, but owned bank, when and if the relationship between such only 16 per cent of Merchants-Produce Bank. company and the bank holding company is such Thus, while Orwig became a bank holding comthat the transaction effects no substantial change pany by reason of its ownership of Merchantsin the control of the bank or beneficial ownership Produce Bank in 1970, it clearly would not have of such shares of such bank." (Emphasis added.) been a bank holding company as to Merchants- Produce Bank on June 30, 1968, if the 1970 On July 24, 1970, the four companies that were Amendments had been enacted on that date. Orwig consolidated to form Orwig owned, directly and offers three arguments in an effort to cure this indirectly, about 47 per cent of the shares of defect in its claim of entitlement to the § 4(c)(ii) University Bank, Kansas City, Missouri, and exemption: about 22 per cent of the shares of Merchants- First, it contends that even though it did not Produce Bank. It is clear, therefore, that the concontrol Merchants-Produce Bank on June 30, stituent companies of Orwig, even if viewed as 1968, it did control University Bank. Therefore, a single entity, did not constitute a "bank holding it claims, it would have been a bank holding company" under the definitions in the Act as it was in effect on the date of the consolidation. Accordingly, since Orwig did not acquire shares of a bank "from a bank holding company," it cannot be viewed as a "successor" to the constituent companies within the definition set forth in 1 While Orwig may be viewed as the legal successor in § 2(e).1 interest to the constituent companies under applicable state corporation law, the Board does not believe that state law is However, even if Orwig were considered a relevant or controlling on the question whether Orwig is entitled to the broad exemption from the prohibitions on nonbanking activities set forth in § 4(c)(ii). That section plainly refers to "a company" whose stock was owned by family members on June 30, 1968, and the Board believes this 1See opposite column for footnote. language should be narrowly construed. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

162 Federal Reserve Bulletin • February 1976 company as to University Bank on June 30, 1968, licity concerning this development put the public had the Act been amended on that date. on notice "that the issue was going to be recon- Second, Orwig contends that while it did not sidered by the Congress." 116 Cong. Rec. 42424 control Merchants-Produce Bank on June 30, (1970) (remarks of Sen. Sparkman). The ranking 1968, by virtue of stock ownership, it exercised minority member of the House Banking Commita "controlling influence" over the management or tee explained that the "grandfather" clause "perpolicies of that bank on that date, and should mits nonbanking activities of one-bank holding therefore be deemed retroactively to have con- companies that existed on or before June 30, 1968, trolled the bank as of that date. to be continued." 116 Cong. Rec. 41953 (1970) Third, Orwig argues that as of December 31, (remarks of Rep. Widnall). It is clear, therefore, 1970, it exercised a "controlling influence" over that Congress was concerned about the disruption the management or policies of University Bank, of holding company relationships that were covand should therefore be deemed retroactively to ered for the first time by the 1970 Amendments have become a bank holding company as to Uni- and that had existed on June 30, 1968. If a versity Bank by reason of the enactment of the company that controlled one bank on June 30, 1970 Amendments. If this contention were ac- 1968, voluntarily relinquished that control position cepted, Orwig would then be a "company covered prior to the enactment of the 1970 Amendments, in 1970" with respect to University Bank because it was plainly not within the scope of Congress' it clearly controlled more than 25 per cent of that concern, even though it may have acquired control bank's voting shares as of June 30, 1968. of a different bank after that date. As to Orwig's first point, it is the Board's view Orwig's second argument, that it exercised a that a company claiming to be a "company cov- "controlling influence" over Merchants-Produce ered in 1970" must have owned more than 25 Bank on June 30, 1968, and therefore should be per cent of the voting shares of the same bank deemed to be a "company covered in 1970" both on June 30, 1968, and December 31, 1970, because it controlled the bank as of that date, and continuously between those dates. In enacting within the meaning of § 2(a)(2)(C) of the Act, the 1970 Amendments to the Act, Congress was is also without merit. As noted above, § 2(b) of concerned about disrupting settled banking rela- the Act defines the term "company covered in tionships that had existed for a period of time prior 1970" as a "company that becomes a bank holdto the enactment of the Amendments to the Act. ing company as a result of the enactment of the June 30, 1968, was originally recommended by Bank Holding Company Act Amendments of 1970 the Administration as the cut-off date for deter- and which would have been a bank holding commining eligibility for grandfather privileges.2 In pany on June 30, 1968, if those amendments had the final version of the legislation, Congress been enacted on that date." (Emphasis added.) adopted June 30, 1968, as the "grandfather" date, Since Orwig did not own as much as 25 per cent "because it was about that time that it became of Merchants-Produce Bank on June 30, 1968, it clear that the major banks of this country were would not have been a bank holding company on going to restructure themselves as subsidiaries or that date had the Amendments been enacted at affiliates of one-bank holding companies," and that time. It could only have become a bank because the controversy engendered by the pub- holding company at some subsequent date after the Board made a "controlling influence" determination under § 2(a)(2)(C). It has long been the Board's view that a company may only be considered a "company covered in 1970" if it automat- 2 Under Secretary of the Treasury Walker testified in early ically became a bank holding company by virtue 1969: of the 1970 Amendments and would automatically ' 'This date is not so far back in time that forced divestitures have become a bank holding company on June would disrupt the operations or threaten the viability of most 30, 1968, had the amendments then been enacted. of the smaller, "traditional" one-bank holding companies. On See Perpetual Corporation—Pierce National Life the other hand, the date is early enough to include the great majority of new companies whose organization has pushed the Insurance Company, 1973 Federal Reserve BULtotal assets involved to such a high level." LETIN 218; Ribso, Inc., 38 Fed Reg. 7029 (1973). Hearings on "Bank Holding Company Act Amendments" Accordingly, Orwig cannot achieve the status of before the House Committee on Banking and Currency, 91st a "company covered in 1970" by virtue of a Cong., 1st Sess. 90 (1969). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 163 retroactive "controlling influence" determina- By order of the Board of Governors, effective tion.3 January 15, 1976. Orwig's third argument, that it exercised a Voting for this action: Vice Chairman Mitchell and "controlling influence" over University Bank as Governors Bucher, Holland, Wallich, and Jackson. of December 31, 1970, must fail for the same Absent and not voting: Chairman Burns and Governor reasons as discussed with respect to its claim of Coldwell. a "controlling influence" over Merchants-Produce Board action was taken while Governor Bucher was Bank as of June 30, 1968.4 In this regard the Board a Board Member and before Governor Partee became a Board Member. notes further that when Orwig registered as a bank holding company in 1971, because of its control (Signed) THEODORE E. ALLISON, of Merchants-Produce Bank, it did not claim to [SEAL] Secretary of the Board. have control over University Bank by virtue of its exercise of a "controlling influence," and in fact it indicated that University Bank was not a subsidiary of Orwig. Thus, its present claim of "controlling influence" is in conflict with the representations it made to the Board in 1971.5 Order Approving Reconsideration Accordingly, on the basis of the information presented and for the reasons summarized herein, Citicorp, the Board has determined that Orwig is not entitled New York, New York to the exemption provided in § 4(c)(ii) of the Act. Citicorp, New York, New York, has requested reconsideration of the Order of November 10, 3 The recent decision of the United States Court of Appeals 1975 (40 Federal Register 53315), whereby the for the Ninth Circuit in Patagonia Corporation v. Board of Board of Governors denied the application of Governors, 517 F.2d 803 (1975) is not relevant to this issue. The issue in Patagonia was whether a bank holding company Citicorp for prior approval of the acquisition of that was admittedly a "company covered in 1970," because West Coast Credit Corporation, Seattle, Washingit controlled more than 25 per cent of the same bank both ton, pursuant to section 4(c)(8) of the Bank Holdon June 30, 1968, and December 31, 1970, was entitled to continue to engage in a nonbanking activity that it ^vas engaged ing Company Act of 1956, as amended (12 U.S.C. in through a "subsidiary" on June 30, 1968. The court held 1843(c)(8)). that in determining whether the nonbank company was a "subsidiary," within the definition in § 2(d)(3) of the Act, The request for reconsideration is filed pursuant the Board must consider whether Patagonia exercised a "con- to section 262.3(g)(5) of the Board's Rules of trolling influence" over that company's management policies. Procedure, which provides that the Board will not The court itself distinguished that issue from the issue involved here and in the Board's Ribso decision, namely, grant any request for reconsideration 4'unless the whether a "controlling influence" determination can be made request presents relevant facts that, for good cause retroactively under § 2(a)(2)(C) with respect to a bank for the shown, were not previously presented to the purpose of determining whether a company is a "company covered in 1970." (517 F.2d at 814). Board, or unless it otherwise appears to the Board 4 As an alternative, Orwig has requested that the Board make that reconsideration would be appropriate." The a "controlling influence" determination under § 2(a)(2)(C) of Board finds that the request for reconsideration the Act that Merchants Investors was in fact a bank holding company with respect to the same bank throughout the period presents relevant facts or issues which appear of June 30, 1968, to December 31, 1970, and thus a "company appropriate in the public interest for the Board to covered in 1970." Merchants is wholly owned by members of the same family that owns Orwig. Orwig argues that, upon consider. Accordingly, the request for reconthe merger of Merchants into Orwig (which transaction was sideration is hereby approved. approved by the Board on December 1, 1975), Orwig would In order to facilitate such consideration, combe a "company covered in 1970" by reason of its being a "successor" to Merchants. Merchants owned approximately ments and views regarding the proposed acquisi- 24 per cent of the voting shares of University Bank on De- tion may be filed with the Board not later than cember 31, 1970, and approximately the same ownership of February 9, 1976. Communications should be ad- University Bank existed on June 30, 1968. Orwig's request that Merchants be determined to be a "company covered in dressed to the Secretary, Board of Governors of 1970" also must fail for the same reasons as discussed above the Federal Reserve System, Washington, D.C. with respect to Orwig's claim of a "controlling influence" over Merchants-Produce Bank as of June 30, 1968. 20551. The application, as supplemented by Ap- 5The registration form instructs registrants that "if the ex- plicant's request for reconsideration, may be istence of control is open to reasonable doubt in any instance" inspected at the offices of the Board of Governors a registrant may disclaim control but must "state the material facts pertinent to the possible existence of control." or at the Federal Reserve Bank of New York. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

164 Federal Reserve Bulletin • February 1976 By order of the Board of Governors, effective cant") for permission of the Board of Governors under the provisions of section 4(c)(5) January 9, 1976. of the Bank Holding Company Act of 1956, Voting for this action: Vice Chairman Mitchell and as amended and section 25 of the Federal Governors Holland and Partee. Voting against this ac- Reserve Act, to hold stock of Tokyo Bantion: Governor Coldwell. Absent and not voting: corp International (Houston), Inc., Houston, Chairman Burns and Governors Wallich and Jackson. Texas ("TBI"). Reference is also made to the agreement dated January 22, 1976, exe- (Signed) THEODORE E. ALLISON, cuted by TBI in accordance with the re- [SEAL] Secretary of the Board. quirements of section 25 of the Federal Reserve Act, by which such corporation agrees to restrict its operations and conduct its business in the manner set forth therein. Decision Under Section 25 After consideration of the application and agreement, the Board of Governors of the of the Federal Reserve Act Federal Reserve System, pursuant to section 4(c)(5) of the Bank Holding Company Act Bank of Tokyo, Ltd. of 1956, as amended and section 25 of the Federal Reserve Act, approves the applica- Tokyo, Japan tion and grants permission to Applicant to The Board of Governors has approved the ap- purchase and hold up to 10,000 shares of plication of Bank of Tokyo, Ltd., Tokyo, Japan, the stock of TBI at a cost of approximately $1,000,000, provided such shares are acto acquire shares of Tokyo Bancorp International, quired within one year from the date of this Houston, Texas ("TBI"), pursuant to section 25 letter. Please advise the Board of Governors, of the Federal Reserve Act, 12 U.S.C. 601, and through the Federal Reserve Bank of Dallas, section 4(c)(5) of the Bank Holding Company Act, the date TBI commences business. 12 U.S.C. 1843(c)(5). TBI has entered into an The foregoing approval is granted subject to the condition that Applicant shall dispose agreement with the Board whereby TBI will not of its stock in TBI as the Board may direct purchase or hold any asset or exercise any power if, in the Board's judgment, TBI shall have in the U.S. or abroad except as would be permis- failed to comply with the terms of its agreesible under Regulation K, 12 CFR 211, applicable ment with the Board or regulations of the to Edge Corporations. In addition, TBI has agreed Board applicable thereto. It should be noted in this regard that the provisions of § 211.3 to comply with the reserve requirements of Reguof Regulation K relating to the organization lation K with respect to its due-to-customer ac- of Edge Act Corporations do not, of course, counts. As a result of its agreement with the apply to Agreement Corporations such as Board, TBI becomes a so-called "Agreement TBI. Accordingly, the citizenship requirements imposed on the directors and stock- Corporation." Agreement Corporations are state holders of Edge Act Corporations under chartered corporations principally engaged in in- section 25(a) of the Federal Reserve Act and ternational and foreign banking. included by implication in § 211.3 of Regu- Board decisions on applications under section lation K do not apply to TBI. In the Board's judgment, it is clear that there are no statu- 25 of the Federal Reserve Act are announced in tory citizenship requirements for directors or the form of a Board letter sent to the Applicant. stockholders of Agreement Corporations There follows the text of the Board's letter to Bank imposed under section 25 of the Federal of Tokyo and the agreement of TBI with the Reserve Act. Board: Very truly yours, January 26, 1976 Mr. Yasushi Watanabe (Signed) Theodore E. Allison, Managing Director and Secretary of the Board. Regional Executive in New York The Bank of Tokyo, Ltd. New York Agency Agreement 100 Broadway In consideration of the granting by the Board New York, New York 10005 of Governors of the Federal Reserve System (hereinafter referred to as the Board of Governors), Dear Mr. Watanabe: under the provisions of Section 4(c)5 of the Bank This refers to the application of The Bank Holding Company Act of 1956, as amended, Secof Tokyo, Ltd., Tokyo, Japan ("Appli- tion 25 the Federal Reserve Act and pursuant to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 165 an application filed with the Board of Governors and restrictions as the Board of Governors by The Bank of Tokyo, Ltd., of permission to may hereafter from time to time prescribe, acquire and hold stock of Tokyo Bancorp Interna- in Regulation K or otherwise. tional (Houston), Inc. (hereinafter referred to as 3. Examinations and Reports: the Corporation), the Corporation, in accordance (a) That at such times as may be fixed by with the provisions of Section 25 of the Federal the Board of Governors the Corporation Reserve Act, hereby undertakes and agrees with shall submit to examination by examthe Board of Governors as follows: iners selected or approved by the Board 1. Compliance with Section 11 of Regulation of Governors; K: (b) That the Corporation shall pay the ex- That the Corporation shall not purchase or penses of all such examinations in the hold any asset, or otherwise exercise any of amount determined by the Board of its power in the United States or abroad in Governors; any manner, which would not be permissible (c) That the Corporation shall do everything under the provisions of Regulation K issued necessary to facilitate such examinations by the Board of Governors. In this regard and shall make available to the examthe due-to-customer accounts, credit bal- iners all information which they may ances in favor of its customers or other require; similar obligations to be maintained by such (d) That the Corporation shall make reports Corporation shall, for purposes of Regula- to the Board of Governors at such times tion K, be treated in all respects, including, and in such form and covering such without limitation, the maintenance of re- matters as the Board of Governors may serve requirements, as if such accounts, bal- prescribe. ances or obligations, as the case may be, This agreement is executed in duplicate. were deposits. 2. Further Limitations and Restrictions: January 22, 1976 That the Corporation shall restrict its operations and conduct its business in such manner Tokyo Bancorp International and under such other or further limitations (Houston), Inc. ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT— By the Board of Governors During January 1976, 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 Alabama Bancorporation, Peoples Bank of Tusca- 1/5/76 41 F.R. 1817 Birmingham, Alabama loosa, Tuscaloosa, 1/12/76 Alabama Ellis Banking Corpora- American Bank of Fort 1/15/76 41 F.R. 3782 tion, Bradenton, Myers, Fort Myers, 1/26/76 Florida Florida The Glencoe Capital Glencoe National Bank, 1/2/76 41 F.R. 1818 Corporation, Glencoe, 111. Glencoe, 111. 1/12/76 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

166 Federal Reserve Bulletin • February 1976 Section 3—Continued Board action Federal (effective Register Applicant Bank(s) date) citation Humboldt Bancshares Humboldt National 1/5/16 41 F.R. 2113 Inc., Humboldt, Kansas Bank, Humboldt, 1/14/76 Kansas Nevada Brick and Tile Nevada National Bank, 1/9/76 41 F.R. 2689 Co., Nevada, Iowa Nevada, Iowa 1/19/76 Northstream Invest- Security State Bank, 1/2/76 41 F.R. 1819 ments, Inc., Geddes, Geddes, South Dakota 1/12/76 South Dakota Section 4 Board action Federal Nonbanking company (effective Register Applicant (or activity) date) citation Ancorp Bancshares, Ancorp Insurance Com- 1/2/76 41 F.R. 1817 Inc., Chattanooga, pany, Phoenix, Arizona 1/12/76 Tennessee Central Banking Sys- Computer Dynamics, Inc., 1/19/76 41 F.R. 3781 tem, Inc., Oakland, Oakland, California 1/26/76 California Sections 3 and 4 Board action Federal Nonbanking company (effective Register Applicant Bank(s) (or activity) date) citation Peoples Bank- Peoples Na- Peoples Credit 1/22/76 41 F.R. 1640 shares, Inc., tional Bank Company of Mora, 1/30/76 Mora, Minnesota of Mora, Minnesota, Inc., Mora, Min- Mora, Minnesota nesota By Federal Reserve Banks During December 1975 or January 1976, applications were approved by the Federal Reserve Banks 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 Northwest Ohio The Liberty State Cleveland 1/16/76 41 F.R. 4075 Bancshares, Inc., Savings Bank, 1/28/76 Toledo, Ohio Liberty Center, Ohio Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 167 Sections 3 and 4 Federal Nonbanking company Reserve Effective Register Applicant Bank(s) (or activity) Bank date citation Dubois Bank- First State First State Agen- Minneapolis 12/19/75 41 F.R. 1330 shares, Inc., Bank of cy, Sauk Centre, 1/7/76 Sauk Centre, Sauk Cen- Minnesota Minnesota tre, Sauk Centre, Minnesota PENDING CASES INVOLVING THE BOARD OF GOVERNORS* Helen C. Hatten, et al. v. Board of Governors, tA.R. Martin-Trigona v. Board of Governors, filed January 1976, U.S.D.C. for the District et al., filed September 1975, U.S.D.C. for of Connecticut. the Northern District of Illinois. International Bank v. Board of Governors, Reserve Enterprises, Inc. v. Arthur F. Burns, filed December 1975, U.S.D.C. for the Dis- et al., filed September 1975, U.S.D.C. for trict of Columbia. the District of Minnesota. Community Bancorporation v. Board of Gov- Logan v. Secretary of State, et al., filed Sepernors, filed December 1975, U.S.C.A. for tember 1975, U.S.D.C. for the District of the Sixth Circuit. Columbia. Robert Farms, Inc. v. Comptroller of the Cur- tEllsworth v. Burns, filed September 1975, rency, et al., filed November 1975, U.S.D.C. for the District of Arizona. U.S.D.C. for the Southern District of Cali- Florida Association of Insurance Agents, Inc., fornia. v. Board of Governors, and National Asso- National Computer Analysts, Inc. v. Decimus ciation of Insurance Agents, Inc. v. Board Corporation, et al., filed November 1975, of Governors, filed August 1975, actions U.S.D.C. for the District of New Jersey. consolidated in U.S.C.A. for the Fifth Cir- Peter E. Blum v. First National Holding Cor- cuit. poration, filed November 1975, U.S.D.C. Henry M. Smith v. National Bank of Boulder, for the Northern District of Georgia. et al., filed June 1975, U.S.D.C. for the Harlan National Co. v. Board of Governors, Northern District of Texas. filed November 1975, U.S.C.A. for the Bank of Boulder v. Board of Governors, et al., Eighth Circuit. filed June 1975, U.S.C.A. for the Tenth Peter E. Blum v. Morgan Guaranty Trust Co., Circuit. et al., filed October 1975, U.S.D.C. for the 1tDavid R. Merrill, et al. v. Federal Open Mar- Northern District of Georgia. ket Committee of the Federal Reserve Sys- A.R. Martin-Trigona v. Board of Governors, tem, filed May 1975, U.S.D.C. for the Diset al., filed September 1975, U.S.D.C. for trict of Columbia. the Northern District of Illinois. Curvin J. Trone v. United States, filed April 1975, U.S.. Court of Claims. *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. f Decisions have been handed down in these cases, subject $The Board of Governors is not named as a party in this to appeals noted. action. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

168 Federal Reserve Bulletin • February 1976 Richard S. Kaye v. Arthur F. Burns, et al., U.S.C.A. for the District of Columbia Cirfiled April 1975, U.S.D.C. for the Southern cuit. District of New York. tGeorge Brice, Jr., et al., v. Board of Gover- Louis J. Roussel v. Board of Governors, filed nors, filed April 1974, U.S.C.A. for the April 1975, U.S.D.C. for the Eastern District Ninth Circuit. of Louisiana. East Lansing State Bank v. Board of Gover- Georgia Association of Insurance Agents, et nors, filed December 1973, U.S.C.A. for the al. v. Board of Governors, filed October Sixth Circuit, 1974, U.S.C.A. for the Fifth Circuit. tConsumers Union of the United States, Inc., Alabama Association of Insurance Agents, et et al., v. Board of Governors, filed Sepal., v. Board of Governors, filed July 1974, tember 1973, U.S.D.C. for the District of U.S.C.A. for the Fifth Circuit, Columbia. tInvestment Company Institute v. Board of Bankers Trust New York Corporation v. Board Governors, dismissed July 1975, U.S.D.C. of Governors, filed May 1973, U.S.C. A. for for the District of Columbia, appeal pending, the Second Circuit. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

169 Directory of Federal Reserve Banks and Branches Following is a list of the directorates of the Federal three groups, each of which consists of banks of Reserve Banks and Branches as at present consti- similar capitalization, and each group elects one tuted. The list shows, in addition to the name of Class A and one Class B director. Class C directors each director, his principal business affiliation, the may not be officers, directors, employees, or class of directorship, and the date when his term stockholders of any bank. One Class C director expires. Each Federal Reserve Bank has nine is designated by the Board of Governors as Chairdirectors; three Class A and three Class B direc- man of the Board of Directors and Federal Reserve tors, who are elected by the stockholding member Agent and another is appointed Deputy Chairman. banks, and three Class C directors, who are ap- Federal Reserve Branches have either five or seven pointed by the Board of Governors of the Federal directors, of whom a majority are appointed by Reserve System. Class A directors are repre- the Board of Directors of the parent Federal Resentative of the stockholding member banks. Class serve Bank; the others are appointed by the Board B directors at the time of their election must be of Governors of the Federal Reserve System. One actively engaged in their district in commerce, of the directors appointed by the Board of Goveragriculture, or some industrial pursuit, and may nors at each Branch is designated annually as not be officers, directors, or employees of any Chairman of the Board in such a manner as the bank. Federal Reserve Bank may prescribe. For the purpose of electing Class A and Class Names followed by footnote 1 (*) are Chairmen B directors, the member banks of each Federal and those by footnote 2 (2) are Deputy Chairmen. Reserve district are classified by the Board of Names in capital letters indicate new appoint- Governors of the Federal Reserve System into ments; all others are reappointments. DISTRICT 1—FEDERAL RESERVE BANK OF BOSTON Term expires CLASS A.- Dec. 31 FRANCIS N. SOUTHWORTH Chairman of the Board, President, Concord National Bank, Concord, N.H. 1976 JAMES F. ENGLISH, JR. Chairman, The Connecticut Bank and Trust Co., Hartford, Conn. 1977 JOHN D. ROBINSON President, Firstbank, N.A., Farmington, Me. 1978 CLASS B: G. WILLIAM MILLER President, Textron Inc., Providence, R.I. 1976 WESTON P. FIGGINS Chairman of the Board, Wm. Filene's Sons Company, Boston, Mass. 1977 ALFRED W. VAN SINDEREN President, The Southern New England Telephone Company, New Haven, Conn. 1978 CLASS C.- KENNETH I. GUSCOTT President, Ken Guscott Associates, Boston, Mass. 1976 ROBERT M. SOLOW2 Institute Professor, Massachusetts Institute of Technology, Cambridge, Mass. 1977 LOUIS W. CABOT1 Chairman of the Board, Cabot Corporation, Boston, Mass. 1978 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

170 Federal Reserve Bulletin • February 1976 DISTRICT 2—FEDERAL RESERVE BANK OF NEW YORK Term expires CLASS A.- Dec. 31 DAVID ROCKEFELLER Chairman of the Board, The Chase Manhattan Bank, N.A. New York, N.Y. 1976 STUART MCCARTY President, First-City National Bank of Binghamton, N.Y. 1977 HARRY J. TAW President, First National Bank of Cortland, N.Y. 1978 CLASS B.- MAURICE F. GRANVILLE Chairman of the Board, Texaco Inc., New York, N.Y. 1976 WILLIAM S. SNEATH President, Union Carbide Corporation, New York, N.Y. 1977 JACK B. JACKSON President, J.C. Penney Co., Inc., New York, N.Y. 1978 CLASS C.- ALAN PLFER President, Carnegie Corporation of New York, N.Y. 1976 ROBERT H. KNIGHT2 Partner, Shearman and Sterling, Attorneys, New York, N.Y. 1977 FRANK R. MILLIKEN1 President, Kennecott Copper Corporation, New York, N.Y. 1978 BUFFALO BRANCH APPOINTED BY FEDERAL RESERVE BANK: J. WALLACE ELY Chairman of the Board, New York State Corporation, Rochester, N.Y. 1976 DANIEL G. RANSOM President, The Wm. Hengerer Co., Buffalo, N.Y. 1976 CHARLES A. MARKS President, Alden State Bank, Alden, N.Y. 1977 AVERY H. FONDA President, Liberty National Bank and Trust Company, Buffalo, N.Y. 1978 APPOINTED BY BOARD OF GOVERNORS: RUPERT WARREN1 Former President, Trico Products Corporation, Buffalo, N.Y. 1976 PAUL A. MILLER President, Rochester Institute of Technology, Rochester, N.Y. 1977 DONALD R. NESBITT Owner-Operator, Silver Creek Farms, Albion, N.Y. 1978 DISTRICT 3—FEDERAL RESERVE BANK OF PHILADELPHIA CLASS A.- THOMAS L. MILLER President, Upper Dauphin National Bank, Millersburg, Pa. 1976 WILLIAM B. EAGLESON Chairman of the Board, President, Girard Bank, Bala Cynwyd, Pa. 1977 JAMES PATCHELL President and Chief Executive Officer, National Bank and Trust Company of Gloucester County, Woodbury, N.J. 1978 CLASS B.- WILLIAM S. MASLAND President, C.H. Masland & Sons, Carlisle, Pa. 1976 C. GRAHAM BERWIND, JR. Chairman and President, Berwind Corporation, Philadelphia, Pa. 1977 HAROLD A. SHAUB President and Chief Executive Officer, Campbell Soup Co., Camden, N.J. 1978 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directory of Federal Reserve Banks and Branches 171 DISTRICT 3—FEDERAL RESERVE BANK OF PHILADELPHIA—Continued Term expires CLASS C.- Dec. 31 JOHN R. COLEMAN1 President, Haverford College, Haverford, Pa. 1976 WERNER C. BROWN President, Hercules, Inc., Wilmington, Del. 1977 JOHN W. ECKMAN2 President, Rorer-Amchem, Inc., Fort Washington, Pa. 1978 DISTRICT 4—FEDERAL RESERVE BANK OF CLEVELAND CLASS A.- EDWARD W. BARKER Chairman of the Board, First National Bank of Middletown, Ohio 1976 MERLE E. GILLIAND Chairman of the Board, Chief Executive Officer, Pittsburgh National Bank, Pittsburgh, Pa. 1977 RICHARD P. RAISH President, First National Bank of Bellevue, Ohio 1978 CLASS B.- CHARLES Y. LAZARUS Chairman of the Board, The F. & R. Lazarus Co., Columbus, Ohio 1976 DONALD E. NOBLE Chairman of the Board, Chief Executive Officer, Rubbermaid Inc., Wooster, Ohio 1977 RENE C. MCPHERSON Chairman of the Board, Chief Executive Officer, Dana Corporation, Toledo, Ohio 1978 CLASS C: ROBERT E. KIRBY2 Chairman and Chief Executive Officer, Westinghouse Electric Corporation, Pittsburgh, Pa. 1976 HORACE A. SHEPARD1 Chairman of the Board, Chief Executive Officer, TRW Inc., Cleveland, Ohio 1977 OTIS A. SINGLETARY President, University of Kentucky, Lexington, Ky. 1978 CINCINNATI BRANCH APPOINTED BY FEDERAL RESERVE BANK: JOSEPH F. RIPPE President, The Provident Bank, Cincinnati, Ohio 1976 JOE D. BLOUNT President, National Bank of Cynthiana, Ky. 1977 ROBERT A. KERR Chairman of the Board and President, Winters National Bank and Trust Co., Dayton, Ohio 1978 LAWRENCE C. HAWKINS Vice President, University of Cincinnati, Ohio 1978 APPOINTED BY BOARD OF GOVERNORS: CLAIR F. VOUGH Chairman, Productivity Research International, Inc., Lexington, Ky. 1976 LAWRENCE H. ROGERS II1 President, Taft Broadcasting Company, Cincinnati, Ohio 1977 MARTIN B. FRIEDMAN President, Formica Corporation, Cincinnati, Ohio 1978 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

172 Federal Reserve Bulletin • February 1976 DISTRICT 4—FEDERAL RESERVE BANK OF CLEVELAND—Continued PITTSBURGH BRANCH Term expires APPOINTED BY FEDERAL RESERVE BANK: Dec. 31 MALCOLM E. LAMBING, JR. President, Chief Executive Officer, The First National Bank of Pennsylvania, Erie, Pa. 1976 RICHARD D. EDWARDS President, Union National Bank, Pittsburgh, Pa. 1977 R. BURT GOOKIN Vice Chairman and Chief Executive Officer, H.J. Heinz Co., Pittsburgh, Pa. 1978 WILLIAM E. MIDKIFF, III Chairman of the Board and Chief Executive Officer, First National Bank and Trust Company in Steubenville, Ohio 1978 APPOINTED BY BOARD OF GOVERNORS: G. JACKSON TANKERSLEY1 President, Consolidated Natural Gas Company, Pittsburgh, Pa. 1976 ARNOLD R. WEBER Dean, Graduate School of Industrial Administration, Provost, Carnegie-Mellon University, Pittsburgh, Pa. 1977 W. H. KNOELL President, Cyclops Corporation, Pittsburgh, Pa. 1978 DISTRICT 5—FEDERAL RESERVE BANK OF RICHMOND CLASS A.- PLATO P. PEARSON, JR. Chairman and President, The Citizens National Bank, Gastonia, N.C. 1976 JAMES A. HARDISON Chairman and President, The First National Bank of Anson County, Wadesboro, N.C. 1977 J. OWEN COLE Chairman of the Board and President, First National Bank of Maryland, Baltimore, Md. 1978 CLASS B.- ANDREW L. CLARK President, Andy Clark Ford, Inc., Princeton, W. Va. 1976 HENRY CLAY HOFHEIMER, II Chairman of the Board, Virginia Real Estate Investment Trust, Norfolk, Va. 1977 OSBY L. WEIR Retired General Manager, Metropolitan Washington-Baltimore Area, Sears Roebuck and Company, Bethesda, Md. 1978 CLASS C: E. ANGUS POWELL1 President, Chesterfield Land & Timber Corp., Midlothian, Va. 1976 E. CRAIG WALL, SR.2 Chairman of the Board, Canal Industries, Inc., Conway, S.C. 1977 MACEO A. SLOAN Senior Vice President, North Carolina Mutual Life Insurance Co., Durham, N.C. 1978 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directory of Federal Reserve Banks and Branches 173 DISTRICT 5—FEDERAL RESERVE BANK OF RICHMOND—Continued BALTIMORE BRANCH Term expires APPOINTED BY FEDERAL RESERVE BANK: Dec. 31 J. STEVENSON PECK Chairman of the Board, Union Trust Company of Maryland, Baltimore, Md. 1976 LACY I. RICE, JR. President, The Old National Bank of Martinsburg, W.Va., and President, Suburban National Bank of Martinsburg, W.Va. 1976 J. PIERRE BERNARD Chairman of the Board, The Annapolis Banking and Trust Company, Annapolis, Md. 1977 CATHERINE B. DOEHLER Senior Vice President, Chesapeake Financial Corporation, Baltimore, Md. 1978 APPOINTED BY BOARD OF GOVERNORS: I. E. KILLIAN Manager, Eastern Region, Exxon Company, U.S.A., Baltimore, Md. 1976 JAMES G. HARLOW1 President, West Virginia University, Morgantown, W.Va. 1977 DAVID W. BARTON, JR. President, The Barton-Gillet Company, Baltimore, Md. 1978 CHARLOTTE BRANCH APPOINTED BY FEDERAL RESERVE BANK: THOMAS L. BENSON President, The Conway National Bank, Conway, S.C. 1976 W. B. APPLE, JR. President and Trust Officer, First National Bank of Reidsville, N.C. 1976 JOHN T. FIELDER President, J.B. Ivey and Company, Charlotte, N.C. 1977 WILLIAM W. BRUNER Chairman of the Board, President, First National Bank of South Carolina, Columbia, S.C. 1978 APPOINTED BY BOARD OF GOVERNORS: CHARLES W. DEBELL1 General Manager, North Carolina Works, Western Electric Company, Inc., Winston-Salem, N.C. 1976 CHARLES F. BENBOW Senior Vice President, R.J. Reynolds Industries, Inc., Winston-Salem, N.C. 1977 ROBERT C. EDWARDS President, Clemson University, Clemson, S.C. 1978 DISTRICT 6—FEDERAL RESERVE BANK OF ATLANTA CLASS A.- JOHN T. OLIVER, JR. President, First National Bank of Jasper, Ala. 1976 JACK P. KEITH President, First National Bank of West Point, Ga. 1977 SAM I. YARNELL Chairman, American National Bank and Trust Company, Chattanooga, Tenn. 1978 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

174 Federal Reserve Bulletin • February 1976 DISTRICT 6—FEDERAL RESERVE BANK OF ATLANTA—Continued Term expires CLASS B.- Dec. 31 ROBERT T. HORNBECK Manager, Tennessee Operations, Aluminum Company of America, Alcoa, Tenn. 1976 ULYSSES V. GOODWYN Executive Vice President, Southern Natural Resources, Inc., Birmingham, Ala. 1977 GEORGE W. JENKINS Chairman, Publix Super Markets, Inc., Lakeland, Fla. 1978 CLASS C: CLIFFORD M. KIRTLAND, JR.2 President, Cox Broadcasting Corporation, Atlanta, Ga. 1976 H. G. PATTILLO1 Chairman of the Board, Pattillo Construction Company, Inc., Decatur, Ga. 1977 FRED ADAMS, JR. President, Cal-Maine Foods, Inc., Jackson, Miss. 1978 BIRMINGHAM BRANCH APPOINTED BY FEDERAL RESERVE BANK: CLARENCE L. TURNIPSEED President, First National Bank, Brewton, Ala. 1976 JOHN MAPLES, JR. Executive Vice President, Union Bank & Trust Company, Montgomery, Ala. 1976 D.C. WADSWORTH, JR. President, American National Bank of Gadsden, Ala. 1977 ROBERT H. WOODROW, JR. Chairman of the Board and Chief Executive Officer, First National Bank of Birmingham, Ala. 1978 APPOINTED BY BOARD OF GOVERNORS: WILLIAM H. MARTIN, III Executive Vice President, Martin Industries, Sheffield, Ala. 1976 HAROLD B. BLACH, JR.1 President, J. Blach & Sons, Inc., Birmingham, Ala. 1977 FRANK P. SAMFORD, JR. Chairman of the Board, Liberty National Life Insurance Co., Birmingham, Ala. 1978 JACKSONVILLE BRANCH APPOINTED BY FEDERAL RESERVE BANK: MACDONNELL TYRE Chairman, Sun First National Bank of Orlando, Fla. 1976 RICHARD A. COOPER Chairman of the Board, First National Bank of New Port Richey, Fla. 1976 CHAUNCEY W. LEVER Chairman, Florida National Banks of Florida, Inc., Jacksonville, Fla. 1977 JOHN T. CANNON, III President, Barnett Bank of Cocoa, N.A., Cocoa, Fla. 1978 APPOINTED BY BOARD OF GOVERNORS EGBERT R. BEALL1 President, Beall's Department Stores, Bradenton, Fla. 1976 GERT H. W. SCHMIDT President, TeLeVision 12 of Jacksonville, Fla. 1977 JAMES E. LYONS President, Lyons Industrial Corporation, Winter Haven, Fla. 1978 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directory of Federal Reserve Banks and Branches 175 DISTRICT 6—FEDERAL RESERVE BANK OF ATLANTA—Continued Term expires MIAMI BRANCH Dec. 31 APPOINTED BY FEDERAL RESERVE BANK: MICHAEL J. FRANCO Chairman, City National Bank of Miami, Fla. 1976 HARRY HOOD BASSETT Chairman of the Board, Southeast Banking Corporation, Miami, Fla. 1977 THOMAS F. FLEMING, JR. Chairman of the Board, First Bancshares of Florida, Inc., Boca Raton, Fla. 1978 JEAN MCARTHUR DAVIS President, McArthur Dairy, Inc., Miami, Fla. 1978 APPOINTED BY BOARD OF GOVERNORS: CASTLE W. JORDAN1 President, Aegis Corporation, Coral Gables, Fla. 1976 DAVID G. ROBINSON President, Edison Community College, Fort Myers, Fla. 1977 ALVARO LUIS CARTA President, Gulf + Western Americas Corporation, Vero Beach, Fla. 1978 NASHVILLE BRANCH APPOINTED BY FEDERAL RESERVE BANK: T. SCOTT FILLEBROWN, JR. Vice Chairman, First American National Bank of Nashville, Tenn. 1976 FRED R. LAWSON President, Blount National Bank of Maryville, Tenn. 1976 W. M. JOHNSON President, First National Bank, Sparta, Tenn. 1977 JOHN W. ANDERSEN President and Chief Executive Officer, First National Bank of Sullivan County, Kingsport, Tenn. 1978 APPOINTED BY BOARD OF GOVERNORS: JAMES W. LONG1 President, Robertson County Farm Bureau, Springfield, Tenn. 1976 JAMES R. LAWSON Fisk University, Nashville, Tenn. 1977 JOHN C. BOLINGER Management Consultant, Knoxville, Tenn. 1978 NEW ORLEANS BRANCH APPOINTED BY FEDERAL RESERVE BANK MARTIN C. MILER Chairman of the Board and President, The Hibernia National Bank, New Orleans, La. 1976 CHARLES W. MCCOY Chairman of the Board, President, Louisiana National Bank, Baton Rouge, La. 1976 R. B. LAMPTON President, First National Bank of Jackson, Miss. 1977 WILMORE W. WHITMORE President and Chief Executive Officer, First National Bank of Houma, La. 1978 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

176 Federal Reserve Bulletin • February 1976 DISTRICT 6—FEDERAL RESERVE BANK OF ATLANTA—Continued NEW ORLEANS BRANCH—Continued Term expires APPOINTED BY BOARD OF GOVERNORS: Dec. 31 HETTIE D. EAVES Executive Vice President, Avondale Shipyards, Inc., New Orleans, La. 1976 GEORGE C. CORTRIGHT President, George C. Cortright Co., Rolling Fork, Miss. 1977 EDWIN J. CAPLAN1 President, Caplan's Men's Shops, Inc., Alexandria, La. 1978 DISTRICT 7—FEDERAL RESERVE BANK OF CHICAGO CLASS A: JAY J. DELAY President, Huron Valley National Bank, Ann Arbor, Mich. 1976 JOHN F. SPIES President, Iowa Trust and Savings Bank, Emmetsburg, Iowa 1977 A. ROBERT ABBOUD Chairman of the Board, First National Bank of Chicago, 111. 1978 CLASS B: PAUL V. FARVER President, Rolscreen Company, Pella, Iowa 1976 JOHN T. HACKETT Executive Vice President, Cummins Engine Company, Inc., Columbus, Ind. 1977 OSCAR G. MAYER Chairman of the Executive Committee, Oscar Mayer & Co., Inc., Madison, Wis. 1978 CLASS C: ROBERT H. STROTZ2 President, Northwestern University, Evanston, 111. 1976 LEO H. SCHOENHOFEN Chairman of the Board, Marcor Inc., Chicago, 111. 1977 PETER B. CLARK1 Chairman of the Board, President, The Evening News Association, Detroit, Mich. 1978 DETROIT BRANCH APPOINTED BY FEDERAL RESERVE BANK: ROBERT M. SURDAM Chairman of the Board, National Detroit Corporation, Detroit, Mich. 1976 HAROLD A. ELGAS President, Gaylord State Bank, Gaylord, Mich. 1977 JOSEPH B. FOSTER President, Ann Arbor Bank, Ann Arbor, Mich. 1978 CHARLES R.MONTGOMERY President, Consolidated Gas Company, Detroit, Mich. 1978 APPOINTED BY BOARD OF GOVERNORS: JORDAN B. TATTER President and Chief Executive Officer, Southern Michigan Cold Storage Co., Benton Harbor, Mich. 1976 TOM KILLEFER1 Executive Vice President and General Counsel, Chrysler Corporation, Detroit, Mich. 1977 HERBERT H. DOW Secretary, Dow Chemical Company, Midland, Mich. 1978 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directory of Federal Reserve Banks and Branches 177 DISTRICT 8—FEDERAL RESERVE BANK OF ST. LOUIS Term expires CLASS A: Dec. 31 RAYMOND C. BURROUGHS President, The City National Bank of Murphysboro, 111. 1976 DONALD N. BRANDIN Chairman of the Board and President, The Boatmen's National Bank of St. Louis, Mo. 1977 WILLIAM E. WEIGEL Executive Vice President, First National Bank & Trust Co., Centralia, 111. 1978 CLASS B.- FRED I. BROWN, JR. President, Arkansas Foundry Company, Little Rock, Ark. 1976 RALPH C. BAIN Senior Vice President and General Manager, Arkla Industries, Inc., Evansville, Ind. 1977 TOM K. SMITH Group Vice President, Monsanto Company, St. Louis, Mo. 1978 CLASS C.- HARRY M. YOUNG, JR. Melrose Farm, Herndon, Ky. 1976 EDWARD J. SCHNUCK1 Chairman of the Board, Schnuck Markets, Inc., Bridgeton, Mo. 1977 Vacancy 1978 LITTLE ROCK BRANCH APPOINTED BY FEDERAL RESERVE BANK: HERBERT H. MCADAMS, II Chairman of the Board, Chief Executive Officer, Union National Bank of Little Rock, Ark. 1976 THOMAS E. HAYS, JR. President and Chief Executive Officer, First National Bank of Hope, Ark. 1977 THOMAS G. VINSON Executive Vice President, The Citizens Bank, Batesville, Ark. 1978 FIELD WASSON President, The First National Bank, Siloam Springs, Ark. 1978 APPOINTED BY BOARD OF GOVERNORS: ROLAND R. REMMEL Chairman of the Board, Southland Building Products Co., Little Rock, Ark. 1976 RONALD W. BAILEY1 Executive Vice President and General Manager, Producers Rice Mill, Inc., Stuttgart, Ark. 1977 GEORGE L. KELLEY President, Pickens-Bond Construction Company, Little Rock, Ark. 1978 LOUISVILLE BRANCH APPOINTED BY FEDERAL RESERVE BANK: HAROLD E. JACKSON President, The Scott County State Bank, Scottsburg, Ind. 1976 J. DAVID GRISSOM President and Chief Operating Officer, Citizens Fidelity Corporation, Louisville, Ky. 1977 TOM G. Voss President, The Seymour National Bank, Seymour, Ind. 1978 FRED B. ONEY President, The First National Bank of Carrollton, Ky. 1978 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

178 Federal Reserve Bulletin • February 1976 DISTRICT 8—FEDERAL RESERVE BANK OF ST. LOUIS—Continued Term LOUISVILLE BRANCH—Continued expires APPOINTED BY BOARD OF GOVERNORS: Dec. 31 WILLIAM H. STROUBE1 Associate Dean, College of Science and Technology, Western Kentucky University, Bowling Green, Ky. 1976 JAMES C. HENDERSHOT President, Reliance Universal, Inc., Louisville, Ky. 1977 JAMES H. DAVIS Chairman of the Board, Chief Executive Officer, Porter Paint Co., Louisville, Ky. 1978 MEMPHIS BRANCH APPOINTED BY FEDERAL RESERVE BANK: WILLIAM M. CAMPBELL Chairman of the Board, Chief Executive Officer, First National Bank of Eastern Arkansas, Forrest City, Ark. 1976 CHARLES S. YOUNGBLOOD President and Chief Executive Officer, First Columbus National Bank, Columbus, Miss. 1977 WILLIAM W. MITCHELL Chairman and Chief Executive Officer, First National Bank of Memphis, Tenn. 1978 STALLINGS LIPFORD President, First-Citizens National Bank, Dyersburg, Tenn. 1978 APPOINTED BY BOARD OF GOVERNORS: ROBERT E. HEALY1 Partner-in-Charge of the Mid-South Area, Price Waterhouse & Co., Memphis, Tenn. 1976 FRANK A. JONES, JR. President, Cook Industries, Inc., Memphis, Tenn. 1977 JEANNE L. HOLLEY Associate Professor of Business Education, University of Mississippi, University, Miss. 1978 DISTRICT 9—FEDERAL RESERVE BANK OF MINNEAPOLIS CLASS A.- CHARLES T. UNDLIN President, First National Bank of the Black Hills, Rapid City, S. Dak. 1976 WILLIAM E. RYAN President, Citizens State Bank, Ontonagon, Mich. 1977 JOHN S. ROUZIE President, First National Bank of Bowman, N. Dak. 1978 CLASS B.- WARREN B. JONES Secretary-Treasurer, General Manager, Two Dot Land & Livestock Co., Harlowton, Mont. 1976 DONALD P. HELGESON Secretary-Treasurer, Jack Frost, Inc., St. Cloud, Minn. 1977 RUSSELL G. CLEARY Chairman, President and Chief Executive Officer, G. Heileman Brewing Company, LaCrosse, Wis. 1978 CLASS C.- HOWARD R. SWEARER President, Carleton College, Northfield, Minn. 1976 STEPHEN F. KEATING2 Chairman of the Board, Honeywell, Inc., Minneapolis, Minn. 1977 JAMES P. MCFARLAND1 Chairman of the Board, Chief Executive Officer, General Mills, Inc., Minneapolis, Minn. 1978 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directory of Federal Reserve Banks and Branches 179 DISTRICT 9—FEDERAL RESERVE BANK OF MINNEAPOLIS—Continued HELENA BRANCH Term expires APPOINTED BY FEDERAL RESERVE BANK: De°' 31 JOHN REICHEL President, First National Bank, Great Falls, Mont. 1976 GEORGE IF. SELOVER President and General Manager, Selover Buick-Jeep, Inc., Billings, Mont. 1976 DONALD OLSSON President, Ronan State Bank, Ronan, Mont. 1977 APPOINTED BY BOARD OF GOVERNORS: JAMES C. GARLINGTON1 Senior Partner, Garlington, Lohn & Robinson, Attorneys, Missoula, Mont. 1976 REGINALD M. DAVIES Owner-Operator, S Bar B Ranch, Chinook, Mont. 1977 DISTRICT 10—FEDERAL RESERVE BANK OF KANSAS CITY CLASS A: PHILIP HAMM President, First National Bank & Trust Company, El Dorado, Kans. 1976 CRAIQ BACHMAN President, First National Bank of Centralia, Kans. 1977 JAMES M. KEMPER, JR. Chairman and President, Commerce Bancshares, Inc., Kansas City, Mo. 1978 CLASS B.- DONALD J. HALL President, Hallmark Cards, Inc., Kansas City, Mo. 1976 FRANK C. LOVE Of Counsel, Crowe, Dunlevy, Thweatt, Swinford, Johnson and Burdick, Oklahoma City, Okla. 1977 ALAN R. SLEEPER Livestock and Ranching, Alden, Kans. 1978 CLASS C.- ROBERT T. PERSON1 Chairman of the Board, President, Public Service Co. of Colorado, Denver, Colo. 1976 JOSEPH H. WILLIAMS President, The Williams Companies, Tulsa, Okla. 1977 HAROLD W. ANDERSEN2 President, Omaha World-Herald Company, Omaha, Nebr. 1978 DENVER BRANCH APPOINTED BY FEDERAL RESERVE BANK: DALE R. HINMAN Chairman of the Board, The Greeley National Bank, Greeley, Colo. 1976 WILLIAM H. VERNON Chairman of the Board, Chief Executive Officer, Santa Fe National Bank, Santa Fe, N. Mex. 1976 FELIX BUCHENROTH, JR. President, The Jackson State Bank, Jackson, Wyo. 1977 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

180 Federal Reserve Bulletin • February 1976 DISTRICT 10—FEDERAL RESERVE BANK OF KANSAS CITY—Continued Term expires DENVER BRANCH—Continued Dec. 31 APPOINTED BY BOARD OF GOVERNORS: EDWARD R. LUCERO President and Chairman, Colorado Economic Development Association, Denver, Colo. 1976 MAURICE B. MITCHELL1 Chancellor, University of Denver, Colo. 1977 OKLAHOMA CITY BRANCH APPOINTED BY FEDERAL RESERVE BANK: HUGH C. JONES Executive Vice President, The Bank of Woodward, Okla. 1976 V. M. THOMPSON, JR. President, Utica National Bank and Trust Co., Tulsa, Okla. 1976 J. A. MAURER Chairman of the Board, The Security National Bank and Trust Company, Duncan, Okla. 1977 APPOINTED BY BOARD OF GOVERNORS: HARLEY CUSTER General Manager, National Livestock Commission Association, Oklahoma City, Okla. 1976 JAMES G. HARLOW, JR.1 President, Oklahoma Gas and Electric Co., Oklahoma City, Okla. 1977 OMAHA BRANCH APPOINTED BY FEDERAL RESERVE BANK: F. PHILLIPS GILTNER President, First National Bank of Omaha, Nebr. 1976 GLENN YAUSSI Vice Chairman of the Board, National Bank of Commerce Trust & Savings, Lincoln, Nebr. 1977 ROY G. DINSDALE Chairman of the Board, Farmers National Bank of Central City, Nebr. 1977 APPOINTED BY BOARD OF GOVERNORS: EDWARD F. OWEN President, Paxton & Vierling Steel Company, Omaha, Nebr. 1976 DURWARD B. VARNER1 President, University of Nebraska, Lincoln, Nebr. 1977 DISTRICT 11—FEDERAL RESERVE BANK OF DALLAS CLASS A: GENE D. ADAMS President, The First National Bank of Seymour, Tex. 1976 FRANK JUNELL Chairman of the Board, The Central National Bank of San Angelo, Tex. 1977 ROBERT H. STEWART, III Chairman of the Board, First International Bancshares, Dallas, Tex. 1978 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directory of Federal Reserve Banks and Branches 181 DISTRICT 11—FEDERAL RESERVE BANK OF DALLAS—Continued Term expires CLASS B.- Dec. 31 STEWART ORTON President, Foley's Inc., Houston, Tex. 1976 GERALD D. HINES Owner, Gerald D. Hines Interests, Houston, Tex. 1977 THOMAS W. HERRICK Cattle and Investments, Amarillo, Tex. 1978 CLASS C: JOHN LAWRENCE1 Chairman of the Board, Dresser Industries, Inc., Dallas, Tex. 1976 IRVING A. MATHEWS Chairman of the Board and Chief Executive Officer, Frost Bros., Inc., San Antonio, Tex. 1977 CHARLES T. BEAIRD2 Chairman of the Board, Beaird-Poulan Division, Emerson Electric Co., Shreveport, La. 1978 EL PASO BRANCH APPOINTED BY FEDERAL RESERVE BANK: C. J. KELLY Chairman of the Board, The First National Bank of Midland, Tex. 1976 WAYNE STEWART President, First National Bank in Alamogordo, N. Mex. 1977 REED H. CHITTIM President, First National Bank of Lea Countv, Hobbs, N. Mex. , 1978 ARNOLD B. PEINADO, JR. President, Peinado, Peinado & Navarro, Consulting Structural Engineers, El Paso, Tex. 1978 APPOINTED BY BOARD OF GOVERNORS: HERBERT M. SCHWARTZ President, Popular Dry Goods Co., Inc., El Paso, Tex. 1976 GAGE HOLLAND Owner, Gage Holland Ranch, Alpine, Tex. 1977 J. LUTHER DAVIS1 Chairman of the Board, President, Tucson Gas & Electric Company, Tucson, Ariz. 1978 HOUSTON BRANCH APPOINTED BY FEDERAL RESERVE BANK: PAGE K. STUBBLEFIELD President, Victoria Bank & Trust Company, Victoria, Tex. 1976 SETH W. DORBANDT Chairman and President, First National Bank in Conroe, Tex. 1977 BOOKMAN PETERS President, The City National Bank of Bryan, Tex. 1978 NAT S. ROGERS President, First City National Bank of Houston, Tex. 1978 APPOINTED BY BOARD OF GOVERNORS: THOMAS J. BARLOW1 President and Chief Executive Officer, Anderson Clayton & Co., Houston, Tex. 1976 GENE M. WOODFIN President, Chairman, and Chief Executive Officer, Marathon Manufacturing Company, Houston, Tex. 1977 ALVIN I. THOMAS President, Prairie View A & M University, Prairie View, Tex. 1978 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

182 Federal Reserve Bulletin • February 1976 DISTRICT 11—FEDERAL RESERVE BANK OF DALLAS—Continued SAN ANTONIO BRANCH Term expires APPOINTED BY FEDERAL RESERVE BANK: Dec. 31 BEN R. Low President, First National Bank of Kerrville, Tex. 1976 LEON STONE President, The Austin National Bank, Austin, Tex. 1977 RICHARD W. CALVERT President, National Bank of Commerce of San Antonio, Tex. 1978 JOHN H. HOLCOMB Owner-Manager, Progreso Haciendas Company, Holcomb Farms, Progreso, Tex. 1978 APPOINTED BY BOARD OF GOVERNORS: MARGARET SCARBROUGH WILSON1 Chairman of the Board and Chief Executive Officer, Scarbroughs Stores, Austin, Tex. 1976 MARSHALL BOYKIN, III Senior Partner, Wood, Boykin & Wolter, Lawyers, Corpus Christi, Tex. 1977 PETE J. MORALES, JR. President and General Manager, Morales Feed Lots, Inc., Devine, Tex. 1978 DISTRICT 12—FEDERAL RESERVE BANK OF SAN FRANCISCO CLASS A: A. W. CLAUSEN President, Chief Executive Officer, Bank of America NT & SA, San Francisco, Calif. 1976 CARL E. SCHROEDER Chairman and Chief Executive Officer, The First National Bank of Orange County, Orange, Calif. 1977 RONALD S. HANSON President, The First National Bank of Logan, Utah 1978 CLASS B.- CLAIR L. PECK Chairman of the Board, C. L. Peck Contractor, Los Angeles, Calif. 1976 CHARLES R. DAHL President and Chief Executive Officer, Crown Zellerbach Corporation, San Francisco, Calif. 1977 MALCOLM T. STAMPER President, The Boeing Company, Seattle, Wash. 1978 CLASS C: O. MEREDITH WILSON1 Retired President, Center for Advanced Study in the Behavioral Sciences, Stanford, Calif. 1976 CORNELL C. MAIER President and Chief Executive Officer, Kaiser Aluminum & Chemical Corporation, Oakland, Calif. 1977 JOSEPH F. ALIBRANDI2 President and Chief Executive Officer, Whittaker Corp., Los Angeles, Calif. 1978 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directory of Federal Reserve Banks and Branches 183 DISTRICT 12—FEDERAL RESERVE BANK OF SAN FRANCISCO— Continued Term LOS ANGELES BRANCH expires APPOINTED BY FEDERAL RESERVE BANK Dec. 31 LINUS E. SOUTHWICK President, Valley National Bank, Glendale, Calif. 1976 ROBERT A. BARLEY President, United California Bank, Los Angeles, Calif. 1976 RAYBURN S. DEZEMBER Chairman and President, American National Bank, Bakersfield, Calif. 1977 W. GORDON FERGUSON President, National Bank of Whittier, Calif. 1978 APPOINTED BY BOARD OF GOVERNORS: ARMANDO M. RODRIGUEZ President, East Los Angeles College, Los Angeles, Calif. 1976 JOSEPH R. VAUGHAN1 President, Knudsen Corporation, Los Angeles, Calif. 1977 HARVEY A. PROCTOR Chairman of the Board, Southern California Gas Company, Los Angeles, Calif. 1978 PORTLAND BRANCH APPOINTED B Y FEDERAL RESER VE BANK: FRANK L. SERVOSS President, Crater National Bank, Medford, Oreg. 1976 JAMES H. STANARD Executive Vice President, First National Bank of Mc- Minnville, Oreg. 1976 KEN SMITH General Manager, The Confederated Tribes of the Warm Springs Reservation, Warm Springs, Oreg. 1977 APPOINTED BY BOARD OF GOVERNORS: JOHN R. HOWARD President, Lewis and Clark College, Portland, Oreg. 1976 LORAN L. STEWART1 President, Bohemia Inc., Eugene, Oreg. 1977 SALT LAKE CITY BRANCH APPOINTED BY FEDERAL RESERVE BANK: ROY W. SIMMONS President, Zions First National Bank, Salt Lake City, Utah 1976 DAVID P. GARDNER President, University of Utah, Salt Lake City, Utah 1976 MARY S. JENSEN Chairman of the Board, Idaho State Bank, Glenns Ferry, Idaho 1977 APPOINTED BY BOARD OF GOVERNORS: SAM BENNION1 President, V-l Oil Company, Idaho Falls, Idaho 1976 THEODORE C. JACOBSEN Partner, Jacobsen Construction Company, Inc., Salt Lake City, Utah 1977 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

184 Federal Reserve Bulletin • February 1976 DISTRICT 12—FEDERAL RESERVE BANK OF SAN FRANCISCO— Continued SEATTLE BRANCH Term expires APPOINTED BY FEDERAL RESERVE BANK: Dec. 31 HARRY S. GOODFELLOW Chairman of the Board and Chief Executive Officer, Old National Bank of Washington, Spokane, Wash. 1976 RUFUS C. SMITH Chairman of the Board, The First National Bank of Enumclaw, Wash. 1977 Vacancy 1976 APPOINTED BY BOARD OF GOVERNORS: LLOYD E. COONEY1 President and General Manager, KIRO-Radio & Television, Seattle, Wash. 1976 THOMAS T. HIRAI President and Director, Quality Growers Company, Woodinville, Wash. 1977 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

185 Announcements APPOINTMENT OF POLICY STATEMENT ON MR. GARDNER AS A MEMBER FOREIGN JOINT VENTURES OF THE BOARD OF GOVERNORS The Board of Governors on February 12, 1976, issued a statement of policy concerning the partic- President Ford on January 15, 1976, announced ipation in foreign joint ventures by U.S. banking his intention to appoint Stephen S. Gardner as a organizations. The policy is designed to deal with member of the Board of Governors of the Federal possible future risks entailed in becoming a share- Reserve System. Mr. Gardner's appointment was holder in a foreign joint venture. subsequently confirmed by the Senate on January The policy statement is similar to that issued 29, and his oath of office was administered on for comment by the Board on December 23. Some February 13. changes were made in the statement in light of The text of the White House announcement public comments that were received since that follows: time. The President has announced his intention to nominate Stephen S. Gardner, of Wawa, As a matter of policy, the Board will take the Pennsylvania, to be a member of the Board following factors, among others, into account in of Governors of the Federal Reserve System considering whether to approve an application to for a term of fourteen years beginning Febinvest in a foreign joint venture: ruary 1, 1976. He will succeed George W. Mitchell whose term expires January 31, 1. The possibility that the venture might need 1976. Upon confirmation by the Senate, the additional financial support. President will designate Mr. Gardner as Vice 2. The possibility that the additional support Chairman of the Board of Governors. might be significantly larger than the original eq- Mr. Gardner was born on December 26, uity investment in the joint venture. 1921, in Wakefield, Massachusetts. He was The policy statement is not intended to prohibit educated at Boston University, Harvard or discourage joint ventures abroad. Its objective College, and received his M.B.A. from is to clarify for all parties the probable dimensions Harvard Graduate School of Business Administration in 1949. of the risks involved in such ventures. In 1949, Mr. Gardner joined the Girard REGULATION Z: Trust Bank in Philadelphia, Pennsylvania, and became President in 1966, serving until Amendments and Interpretations 1971, when he became Chairman of the Board. He was named to his current position The Board of Governors of the Federal Reserve as Deputy Secretary of the Treasury on July System announced on January 27, 1976, regula- 31, 1974. tory amendments to carry out recent legislative Mr. Gardner is married to the former Connie revisions in the Real Estate Settlement Procedures Andonegui and they have five children. They Act (RESPA) and the Truth in Lending Act. reside in the District of Columbia. The amendments to Regulation Z will: CHANGE IN DISCOUNT RATE 1. Eliminate the need to make Truth in Lending disclosures together with RESPA disclosures. The Board of Governors has announced the ap- 2. Eliminate the requirement for disclosure of proval of action by directors of the Federal Reserve closing costs in certain real estate transactions not Bank of St. Louis reducing the discount rate of covered by RESPA. This rescinds a regulatory that Bank from 6 per cent to 5V2 per cent, effective amendment announced by the Board on October January 23. At that time the rate was 5V2 per cent 24, 1975, and scheduled to have gone into effect at all Federal Reserve Banks. on January 31. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

186 Federal Reserve Bulletin • February 1976 The Board on February 3, 1976, issued two Banking of the South at Louisiana State Univerinterpretations to the Fair Credit Billing section sity, joined the staff of the Federal Reserve Bank of its Regulation Z. of St. Louis, Memphis Branch, in 1960 and was The interpretations relate to: appointed Vice President of the Bank in 1971. He 1. The timing of the semiannual statement also served as Secretary of the Conference of creditors must send to their customers explaining Presidents of the Federal Reserve System in 1971. the procedures for correcting billing errors. This interpretation also permits a creditor to omit any STATISTICAL RELEASE: portion of the semiannual notice that does not Automobile Credit apply to a particular credit plan. 2. Modification of semiannual statements sent The Board of Governors has consolidated three in States that have their own substantially similar statistical releases on automobile credit and terms fair credit billing acts. into a single release, issued monthly. In addition to data on volume of credit extended for new and CHANGES IN BOARD STAFF used cars, average notes, and number financed, the new release shows finance company data on The Board has announced a reorganization of its maturities, loan-to-value ratios, and finance rates staff management functions, effective January 20, and figures for maturities on new-car loans at 1976. commercial banks. The Office of Managing Director for Research To be placed on the mailing list for this release, and Economic Policy has been eliminated and an entitled "G. 26, Automobile Credit," direct re- Office of Staff Director for Monetary Policy quests to Publications Services, Division of Adcreated. Stephen H. Axilrod, Adviser to the ministrative Services, Board of Governors of the Board, has been appointed the Staff Director for Federal Reserve System, Washington, D.C. Monetary Policy and Arthur L. Broida, Assistant 20551. Historical data are available on request to the Board, Deputy Staff Director. from the Mortgage and Consumer Finance Sec- The Office of Managing Director for Operations tion, Division of Research and Statistics, at the has been redesignated the Office of Staff Director Board. for Management and John M. Denkler, Managing Director for Operations, named Staff Director. ADMISSION OF STATE BANKS Robert J. Lawrence, Deputy Managing Director TO MEMBERSHIP IN SYSTEM for Operations, has been designated Deputy Staff Director for Management. The following banks were admitted to membership The Board has also announced the temporary in the Federal Reserve System during the period appointment of Joseph P. Garbarini, Vice Pres- January 16, 1976, through February 15, 1976: ident, Federal Reserve Bank of St. Louis, as an Assistant Secretary of the Board, replacing Robert Missouri E. Smith III, who has returned to the Federal Kansas City Baltimore Bank and Reserve Bank of Dallas. Trust Company Mr. Garbarini, who holds a B.S. from Christian Montana Brothers College and has attended the School of Helena Northwestern Union Trust Co. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

187 Industrial Production Released for publication February 13 January. Total electricity output and use for industrial purposes increased further in December Industrial production increased by an estimated 0.7 by 2.4 per cent with use for non-nuclear purposes per cent in January following revised increases of rising 1 per cent, as shown by new data introduced 0.6 per cent and 0.9 per cent in November and in the January 1976 BULLETIN. December, respectively. The January increase reflected continued gains in all major components Seasonally adjusted, ratio scale, 1967=100 of the index. At 119.3 per cent of the 1967 average, the total has risen 8.5 per cent since the April 1975 low. Among consumer goods, durables apparently increased further, as production of home goods expanded and auto assemblies were only slightly reduced. Auto production is currently scheduled to increase to an 8.0 million rate in February, from a 7.6 million unit annual rate in January. Output of nondurable consumer goods, which was revised upward in December, continued to expand in January. Business equipment production is estimated to have increased 0.7 per cent in January, following a December rise of 0.8 per cent. Production of durable goods materials apparently increased almost 1 per cent in January from a December level, which was revised downward substantially. Gains in output of nondurable goods materials continued in January but at a somewhat slower rate than earlier. 1970 1972 1974 1976 1970 1972 1974 1976 F.R. indexes, seasonally adjusted. Latest figures: January. Production of energy materials changed little in *Auto sales and stocks include imports. Seasonally adjusted 1967 = 100 PPeerr cceenntt cchhaannggeess ffrroomm—— IIInnnddduuussstttrrriiiaaalll ppprrroooddduuuccctttiiiooonnn 1975 1976 Oct. Nov. Dec.p Jan.e Month Year Q3 to ago ago Q4 Total 116.7 117.4 118.5 119.3 .7 4.9 3.0 Products, total 116.9 117.8 119.9 120.6 .6 4.5 1.9 Final products 117.0 117.8 119.8 120.6 .7 5.0 1.7 Consumer goods 127.0 128.6 130.8 132.1 1.0 10.0 2.2 Durable goods 118.3 119.0 120.5 121.5 .8 16.8 2.1 Nondurable goods 130.5 132.5 135.1 136.1 .7 7.8 2.5 Business equipment 115.7 116.4 117.3 118.1 .7 -3.4 1.5 Intermediate products 117.0 117.8 120.4 121.1 .6 3.0 2.6 Construction products 112.5 112.5 113.2 114.0 .7 -1.5 2.6 Materials 116.5 116.5 116.4 117.3 .8 6.2 4.9 pPreliminary. e Estimated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 1 Financial and Business Statistics CONTENTS INSIDE BACK COVER A32 Federal finance A34 U.S. Government securities Guide to Tabular Presentation A37 Federally sponsored credit agencies Statistical Releases: Reference A38 Security issues A41 Business finance U.S. STATISTICS A42 Real estate credit A2 Member bank reserves, Reserve Bank A45 Consumer credit credit, and related items A48 Industrial production A5 Federal funds—Money market banks A50 Business activity A6 Reserve Bank interest rates A50 Construction Al Reserve requirements A52 Labor force, employment, and A8 Maximum interest rates; margin unemployment requirements A9 Open market account A53 Consumer prices A10 Federal Reserve Banks A53 Wholesale prices All Bank debits A54 National product and income A12 Money stock A56 Flow of funds A13 Bank reserves; bank credit A14 Commercial banks, by classes INTERNATIONAL STATISTICS A18 Weekly reporting banks A58 U.S. balance of payments A23 Business loans of banks A59 Foreign trade A24 Demand deposit ownership A59 U.S. reserve assets A25 Loan sales by banks A60 Gold reserves of central banks and A25 Open market paper governments A26 Interest rates A61 International capital transactions A29 Security markets of the United States A29 Stock market credit A74 Open market rates A30 Savings institutions A75 Central bank rates A75 Foreign exchange rates A82 INDEX TO STATISTICAL TABLES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 2 BANK RESERVES AND RELATED ITEMS • FEBRUARY 1976 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, securities1 Special ury Drawing cur- Gold Rights rency Held Other stock certificate out- Bought under Loans Float3 F.R. Totals stand- Total out- repur- assets4 ing right2 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 1960—Dec 27,248 27,170 78 94 1,665 29,060 17,954 5,396 1969—Dc 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—De c 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 J Ju u l n y e 8 88 8 , ,9 1 1 66 2 8 8 7 7 , , 6 8 1 8 8 2 1,2 2 9 8 4 4 2 2 6 7 1 1 2 1 ,0 ,9 4 1 6 1 3 3 , , 0 1 9 0 8 0 9 9 5 4 , , 1 1 1 4 9 4 1111,,662200 5 5 0 0 0 0 9 9 , ,5 61 36 6 Aug 86,829 86,348 481 211 1 ,691 2,953 92,395 11,604 500 9,721 Sept 89,191 87,531 1,660 396 1,823 3,060 95,277 11,599 500 r9,797 Oct 90,476 89,547 929 191 1,945 3,521 96,931 11,599 500 9,877 Nov 90,934 89,560 1,374 61 2.480 3,481 97,817 11,599 500 10,010 Dec 92,108 91,225 883 127 3,029 3,534 99,651 11,599 500 10,094 1976—Jan.?5 92,998 91,524 1,474 79 2,709 3,505 100,197 11,599 500 10,177 Week ending— 1975—Nov. 5 92,251 89,755 2,496 67 2,213 3,714 99,245 11,599 500 9,909 12 87,911 87,449 462 39 2,265 3,752 94,725 11,599 500 9,955 19 90,116 89,465 651 58 2,867 3,474 97,311 11,599 500 10,049 26 92,992 90,992 2,000 73 2,295 3,116 99,393 11,599 500 10,061 Dec. 3 91,961 90,887 1,074 66 2,661 3,279 98,850 11,599 500 10,102 10 89,531 89,009 522 28 2,347 3,486 96,170 11,599 500 10,081 17 90,625 90,625 44 2,626 3,557 97,585 11,599 500 10,087 24 94,134 92,580 1,554 219 3,144 3,356 101,720 11,599 500 10,099 31 94,468 92,978 1,490 253 4,634 3,466 103,807 11,599 500 10,118 1976—Jan. 7*> 94,151 92,462 1,689 71 3,474 3,501 102,243 11,599 500 10,119 14 p 90,940 90,940 44 2,854 3,414 97,994 11,599 500 10,139 21 v 91,705 91,070 635 152 2,411 3,373 98,391 11,599 500 10,157 94,040 91,480 2,560 58 2,411 3,622 101,098 11,599 500 10,246 28* End of month 91,209 91,209 45 3,070 3,252 98,303 11,599 500 10,138 1975—No v 94,124 92,789 1,335 211 3,688 3,312 102,461 11,599 500 10,218 Dec 96,588 91,850 4,738 64 1,624 3,676 103,182 11,599 500 10,250 1976—Jan. * Wednesday 85,676 85,022 654 52 2,639 3,723 93,066 11,599 500 9,916 90,976 87,737 3,239 70 3,430 3,803 99,159 11,599 500 10,033 1975—Nov. 5 91,967 90,372 1,595 91 3,086 3,082 99,163 11,599 500 10,056 12 96,041 90,956 5,085 184 2,247 3,221 102,816 11,599 500 10,068 19 26 90,231 89,597 634 66 2,811 3,370 97,416 11,599 500 10,077 Dec. 3 88,758 88,758 31 3,273 4,302 97,088 11,599 500 10,087 10 89,885 89,885 66 3,635 3,631 97,943 11,599 500 10,087 17 94,459 92,777 1,682 1,263 4,856 3,366 104,914 11,599 500 10,099 24 94,124 92,789 1,335 211 3,688 3,312 102,461 11,599 500 10,218 31 1976—Jan. 7 p 91,872 90,810 41 3,710 3,443 100,020 11,599 500 10,138 14 P 91,507 91,507 1,062 47 3,402 3,362 99,053 11,599 500 10,142 21 P 92,068 92,068 841 2,887 3,395 99,927 11,599 500 10,243 28 f 98,334 91,833 138 2,539 3,668 105,845 11,599 500 10,250 '6,5ii' 1 Includes Federal agency issues held under repurchase agreements liabilities and capital" are shown separately; formerly, they were netted beginning Dec. 1, 1966, and Federal agency issues bought outright be- together and reported as "Other F.R. accounts." ginning Sept. 29, 1971. 5 Includes industrial loans and acceptances until Aug. 21, 1959, when 2 Includes, beginning 1969, securities loaned—fully guaranteed by U.S. industrial loan program was discontinued. For holdings of acceptances Govt, securities pledged with F.R. Banks, and excludes (if any), securities on Wed. and end-of-month dates, see p. A-10. See also note 3. sold and scheduled to be bought back under matched sale-purchase 6 Includes certain deposits of domestic nonmember banks and foreign transactions. owned banking institutions held with member banks and redeposited in 3 Beginning 1960 reflects a minor change in concept; see Feb. 1961 BULLETIN, p, 164. Notes continued on opposite page. 4 Beginning Apr. 16, 1969, "Other F.R. assets" and "Other F.R. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEBRUARY 1976 • 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 Cur- Treas- reserves Other reserves rency ury with f.R. Banks Other F.R. Period or date in cash F.R. liacir- hold- ac- bilities c t u io l n a- ings Treas- For- Other 3,6 counts4 cap an it d a l* W F. i R th . r C en u c r- y Total 8 ury eign Banks and coin 7 Averages of daily figures 7,609 2,402 616 739 248 11,473 11,473 1939—Dec. 10,985 2,189 592 1,531 292 12,812 12,812 1941—Dec. 28,452 2,269 625 1,247 493 16,027 16,027 1945—Dec. 27,806 1,290 615 920 353 739 17,391 17,391 1950—Dec. 33,019 408 522 250 495 1,029 16,688 2,595 19,283 1960—Dec. 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. 78,951 220 1,741 357 874 3.266 29,767 7,174 36,941 1974—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. 79JQ2 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 r8 8 1 1, ,5 82 0 2 7 r3 3 6 6 2 8 3,4 8 1 1 5 8 2 3 7 0 4 8 6 7 6 9 0 8 3 3 , , 0 16 9 9 6 2 2 7 7 , , 1 2 8 1 3 5 7 7 , , 2 4 9 3 9 1 3 3 4 4 , ,4 6 8 4 2 6 A Se u p g t . . 82,215 387 4,940 271 632 3,208 27,254 7,313 34,567 Oct. 83,740 415 4,333 297 649 3,276 27,215 7,356 34,571 Nov. 85,810 452 3,955 259 906 3,247 27,215 7,773 934,989 Dec. 84,625 496 5,903 287 916 3,225 27,020 8,442 935,588 1976—Jan.* Week ending— S2,404 412 6,755 288 652 3,382 27,362 7,524 34,886 1975—Nov. 5 83,457 427 2,868 273 583 3,109 26,061 7,693 33,754 12 84,021 410 3,321 315 566 3,202 27,624 7,117 34,741 19 84,145 432 5,010 277 635 3,385 27,670 7,014 34,684 26 84,742 460 4,124 305 877 3,297 27,245 7,572 34,817 Dec. 3 85,253 462 1 ,865 243 921 3,044 26.594 7,825 34,419 10 85,686 449 1 ,943 244 979 3,158 27,312 7,827 35,139 17 86,125 445 5,533 254 866 3 ,3"5"5" 27,345 7,491 34,836 24 86,569 448 6,777 293 891 3 ,477 27,569 8,036 935,611 31 8 86 5 , , 0 1 1 4 1 0 4 4 9 7 6 8 5 3 , , 9 4 3 1 9 4 2 3 7 3 8 8 1 , 9 1 0 8 3 5 3 3 , , 0 16 5 7 9 2 27 6 , , 5 7 1 7 1 3 7 8 , , 9 9 1 1 0 0 9 9 3 3 5 5 , , 5 8 3 1 1 3 1976—Jan. 1 l 4 vp 84,288 519 4,040 304 922 3,219 27,354 8,735 936,220 21 p 83,652 450 8,385 230 772 3,359 26.595 8,349 935,075 28? End of month 84,545 463 4,919 347 888 3,403 25,971 7,572 33,543 1975—Nov. 86,547 483 7,285 353 1 ,090 2,968 26,052 8,036 934,094 Dec. 83,294 450 10,075 294 651 3,459 27,308 8,121 935,560 1976—Jan. p Wednesday 83,001 426 3,066 355 692 3,063 24,478 7,524 32,002 84,147 421 2,577 222 642 3,115 30,167 7,693 37,860 1975—Nov. 5 84,228 424 4,175 244 566 3,325 28,356 7,117 35,473 12 84,630 442 4,327 324 978 3,455 30,827 7,014 37,841 19 26 85,146 478 2,289 229 796 3,011 27,643 7,572 35,215 Dec. 3 85,773 460 1,032 238 ,846 3,093 26,832 7,825 34,657 10 86,033 438 4,007 226 897 3,214 25,314 7,827 33,141 17 86,608 434 6,491 253 925 3,471 28,930 7,491 36,421 24 86,547 483 7,285 353 ,090 2,968 26,052 8,036 934,094 31 85,712 487 2,246 244 909 3,068 29,590 7,910 937,610 1976—Jan. 7* 84,950 502 4,217 235 969 3,166 27,254 8,910 936,294 14 p 84,130 518 4,682 248 943 3,254 28,494 8,735 937,360 21 P 83,673 450 10,360 209 627 3,427 29,448 8,349 937,928 28p full with F.R. Banks in connection with voluntary participation by non- 8 Beginning week ended Nov. 15, 1972, includes $450 million of reserve member institutions in the F.R. System's program of credit restraint. deficiencies on which F.R. Banks are allowed to waive penalties for tran- As of Dec. 12, 1974, the amount of voluntary nonmember and foreign- sition period associated with bank adaptation to Regulation J as amended agency and branch deposits at F.R. Banks associated with marginal re- effective Nov. 9, 1972. For 1973, allowable deficiencies included are (beserves are no longer reported. Deposits voluntarily held by agencies and ginning with first statement week of quarter): Ql, $279 million; Q2, $172 branches of foreign banks operating in the United States as reserves and million; Q3, $112 million; Q4, $84 million. For 1974, Ql, $67 million, Euro-dollar liabilities are reported. Q2, $58 million. Transition period ended after 1974, Q2. 7 Part allowed as reserves Dec. 1, 1959—Nov. 23, 1960; a]) allowed 9 Beginning with week ending Nov. 19, 1975, adjusted to include thereafter. Beginning Jan. 1963, figures are estimated except weekly waivers of penalties for reserve deficiencies in accordance with Regulaaverages. Beginning Sept. 12, 1968, amount is based on close-of-business tion D change effective Nov. 19, 1975. figures for reserve period 2 weeks previous to report date. 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 • FEBRUARY 1976 RESERVES AND BORROWINGS OF MEMBER BANKS (In millions of dollars) All member banks Large banks2 All other banks Period Reserves Borrowings New York City City of Chicago Other Total Re- Excess1 Total Sea- Borrow- Borrow- Excess Borrow- Excess Borrowheld 1 quired sonal ings ings ings ings 1939—Dec 11,473 6,462 5,011 3 2,611 540 1,188 671 3 1941—Dec 12,812 9,422 3,390 5 989 295 1,303 1 804 4 1945—Dec 16,027 14,536 1,491 334 48 192 14 418 96 1,011 46 1950—Dec 17,391 16,364 1,027 142 125 58 8 232 50 663 29 1960—Dec 19,283 18,527 756 87 29 19 4 100 20 623 40 1965—Dec 22,719 22,267 452 454 41 111 15 67 228 330 92 1967—De c 25,260 24,915 345 238 18 40 50 105 267 80 1968—De c 27,221 26,766 455 765 100 230 15 90 270 250 180 1969—De c 28,031 27,774 257 1,086 56 259 18 6 479 177 321 1970—De c 29,265 28,993 272 321 34 25 7 42 264 189 28 1971—De c 31,329 31,164 165 107 25 35 1 -35 22 174 42 1972—De c 31,353 31,134 219 1,049 -20 301 13 55 -42 429 -160 264 1973—De c 35,068 34,806 262 1,298 41 -23 74 43 28 28 761 133 435 1974—De c 36,941 36,602 339 703 32 132 80 5 18 39 323 163 282 1975—Ja n 37,492 37,556 -64 390 13 -119 156 -16 16 -91 87 162 131 A M Fe p a b r r 3 3 3 5 5 4 , , , 5 1 7 6 7 3 5 9 4 3 3 3 5 5 4 , , , 0 3 5 1 3 1 4 3 3 2 2 1 6 3 2 6 2 0 1 1 1 0 4 1 6 0 7 1 7 7 0 5 3 3 3 1 2 2 2 3 5 2 7 -2 2 1 3 0 7 1 1 1 4 0 0 - 4 5 4 1 6 2 2 3 9 8 8 1 1 1 1 3 4 5 7 3 4 7 3 6 1 3 May. 34,492 34,493 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 J A S u e u l p y g t 3 3 3 4 4 4 , , , 6 6 4 5 4 8 5 6 2 3 3 3 4 4 4 , , , 4 2 6 6 4 8 5 7 7 - 2 1 3 1 9 2 7 9 22 3 16 9 1 6 1 6 3 1 8 1 7 - - 2 1 2 1 8 7 5 6 1 4 8 4 -2 2 4 7 5 23 2 1 -11 2 9 8 3 8 1 5 6 4 1 2 1 1 1 1 3 3 3 2 2 2 1 1 1 4 2 8 5 2 5 Oct 34,567 34,411 156 191 65 42 31 -23 3 32 134 128 Nov 34,571 34,281 290 61 28 50 7 34 42 5 164 49 34,989 34,727 262 127 13 64 63 -18 89 26 127 38 Dec 35,588 35,361 227 79 -41 -13 17 -116 13 147 40 1976—Jan.P. . .. Week ending— 1975—Jan. 1 . 37,588 37,011 577 561 24 83 61 223 218 301 260 8. 37,312 37,175 137 311 18 55 36 -27 -26 107 135 168 2 15 2 . . , 3 3 8 8 , , 2 2 6 0 5 7 3 3 8 8 , , 2 0 4 7 9 9 - 1 4 8 2 6 6 5 0 9 9 4 1 12 2 -13 2 0 9 3 3 2 1 8 7 1 1 69 -8 4 9 5 1 1 0 3 8 0 1 1 1 7 1 6 1 1 1 3 5 6 29., 37,240 37,066 174 142 10 71 -13 -24 33 140 109 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 -55 2 127 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 6 16 137 54 23.. 34,898 34,695 203 382 19 107 151 9 -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 2 1 0 3 . .. . 3 3 4 4 , ,6 1 2 6 9 3 3 3 4 4 , , 1 4 4 1 7 8 21 1 1 6 2 1 0 7 4 9 3 3 5 7 -4 -4 6 47 -22 1 9 -4 7 5 3 7 1 7 8 1 1 2 2 9 3 1 12 0 7 8 27.. 34,470 34,174 296 272 40 127 -7 48 87 128 170 Sept. 3 ., 34,529 34,228 301 222 50 28 24 81 58 168 164 1107..,. 3 3 4 4 , , 0 5 9 5 8 2 3 34 4 , , 2 1 8 0 5 4 2 - 6 6 7 3 3 8 2 5 7 5 6 3 0 -4 7 5 9 -3 1 1 9 -6 1 6 7 1 3 7 4 4 1 1 3 5 6 2 1 1 3 4 6 2 24.. 34,617 34,584 33 395 64 -66 -2 28 115 73 201 Oct. 1 . 35,444 34,982 462 581 73 149 2 147 304 164 277 1 8 5 . . , 3 3 4 4 , ,6 2 5 6 4 0 3 34 4 , , 3 2 5 8 8 4 - 2 2 9 4 6 2 1 3 7 9 2 7 6 4 5 - - 8 9 3 39 -136 3 -5 9 2 4 5 1 1 2 1 17 2 8 7 1 1 8 2 8 1 2 29 2 . . , , 3 3 4 4 , , 5 7 7 1 6 5 3 3 4 4 , , 5 43 7 7 7 2 - 7 1 8 23 9 2 4 6 6 3 0 1 -8 0 2 97 -18 1 5 -3 3 5 3 22 7 1 6 2 0 8 1 8 1 7 3 Nov. 5. 34,886 34,082 804 67 41 355 18 240 191 67 12. 33,754 33,791 -37 39 26 -119 -6 -71 4 159 35 19. 34,741 34,567 174 58 26 34 -1 7 11 134 47 26. 34,684 34,500 184 73 26 3 20 55 3 106 54 Dec. 3. 34,817 34,504 313 66 21 119 16 -18 61 6 151 44 10. 34,419 34,276 143 28 14 -56 26 37 1 136 27 2 1 4 7 . . 3 3 5 4 , , 1 8 3 3 9 6 3 3 4 4 , ,6 9 2 0 5 6 2 2 3 1 3 1 21 4 9 4 1 1 3 2 111 7 140 - - 1 5 2 75 6 4 1 2 1 1 1 3 2 4 8 3 3 3 7 31 . 335,611 35,197 414 253 13 57 140 20 129 57 208 56 1976—Jan. 1 7 4 * P > 3 3 3 3 5 5 , , 5 8 3 1 1 3 3 3 5 5 , ,6 2 2 3 7 2 2 1 9 8 9 6 7 4 1 4 1 9 0 -1 -2 4 2 4 -16 1 -28 6 4 8 1 2 4 2 1 2 1 1 1 4 5 2 7 21 P 336,220 35,986 234 152 9 -147 17 77 60 18 136 29 28 P 335,075 34,902 173 58 9 38 -152 15 69 33 1 Beginning with week ending Nov. 15, 1972, includes $450 million of for July 1972, p. 626. Categories shown here as "Large" and "All other" reserve deficiencies on which F.R. Banks are allowed to waive penalties parallel the previous "Reserve city" and "Country" categories, respectively for a transition period in connection with bank adaptation to Regulation J (hence the series are continuous over time). as amended effective Nov. 9, 1972. Beginning 1973, allowable deficiencies 3 Beginning with week ending Nov. 19, 1975, adjusted to include waivers included are (beginning with first statement week of quarter): Ql, $279 of penalties for reserve deficiencies in accordance with Regulation D million; Q2, $172 million; Q3, $112 million; Q4, $84 million. Beginning change effective Nov. 19, 1975. 1974, Ql, $67 million; Q2, $58 million. Transition period ended after second quarter, 1974. For weeks for which figures are preliminary, figures NOTE.—Monthly and weekly data are averages of daily figures within by class of bank do not add to the total because adjusted data by class are the month or week, respectively. not available. Borrowings at F.R. Banks: Based on closing figures. 2 Beginning Nov. 9, 1972, designation of banks as reserve city banks Effective Apr. 19, 1973, the Board's Regulation A, which governs lendfor reserve-requirement purposes has been based on size of bank (net ing by F.R. Banks, was revised to assist smaller member banks to meet Digitized for FRdAeSmEanRd deposits of more than $400 million), as described in the BULLETIN the seasonal borrowing needs of their communities. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEBRUARY 1976 • 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— Ne d t e s f u ic r i p t lu ( s - , ) or Gross transactions Net transactions Reporting banks and Total Borweek ending— Fxcess Net Per cent two-way Pur- Loans row- Net re- Bor- inter- of Pur- trans- chases Sales to ings loans serves 1 rowings bank Amount avg. chases Sales actions2 of net of net dealers 3 from at F.R. Federal required buying selling dealers4 Banks funds reserves banks banks trans. Total—46 banks 1975—Dec. 3 102 16 13,121 -13,035 83.4 18,808 5,687 4,964 13,844 723 3,507 381 3,126 10 200 15,748 -15,548 100.3 20,128 4,380 4,161 15,967 218 3,918 300 3,619 17 137 14,329 -14,192 88.7 18,973 4,644 4,205 14,768 439 3,509 400 3,109 24 168 168 12,217 -12,218 78.5 17,708 5,491 4,681 13,027 810 3,601 495 3,105 31 r 171 174 11,054 '"-11,057 69.2 17,683 6,629 5,306 12,378 1,324 3,610 665 2,946 1976—Jan. 7 120 6 11,696 -11,583 71 .3 19,175 7,478 5,623 13,552 1 ,856 3,293 574 2,720 14 15 16,144 -16,130 97.4 22,350 6,206 4,877 17,473 1,329 3,099 376 2,723 2 28 1 - 8 1 5 10 1 5 0 1 12 4 , , 1 0 1 3 2 9 - - 1 1 4 2 , , 1 0 4 3 5 8 7 8 6 4 . . 5 7 1 1 8 9 , ,6 3 5 6 7 3 5 6 , , 6 2 1 5 7 0 4 5 , , 9 2 4 9 3 0 1 1 3 4 , , 0 7 7 1 2 4 9 67 6 5 0 2 2 , , 9 2 8 9 9 8 4 3 7 2 6 2 2 1 , , 6 8 6 2 7 2 8 in New York City 1975—Dec. 3 106 16 3,500 -3,409 54.6 4,451 952 815 3,637 137 1,700 133 1,567 10 29 3,978 -3,948 63.5 4,854 876 876 3,978 1,587 119 1,468 17 113 3,292 -3,179 49.5 4,278 986 828 3,450 158 1,840 147 1,693 24 83 140 1,981 -2,039 32.9 3,443 1,462 1,190 2,253 272 1,912 185 1,726 31 44 140 1,938 -2,034 31.4 3,563 1,625 1,123 2,440 502 1,891 372 1,519 1976—Jan. 7 25 3,130 -3,106 45.9 4,775 1 ,645 1,141 3,634 504 1,536 180 1,356 14 51 5,574 -5,523 79.8 6,277 704 583 5,694 121 1,655 103 1,552 21 -23 28 3,382 -3,433 49.6 4,261 879 695 3,566 184 1,384 78 1,307 28 18 10 2,632 -2,625 41 .3 3,914 1 ,282 997 2,917 285 1 ,072 87 985 38 outside New York City 1975—Dec. 3 -4 9,621 -9,625 102.5 14,357 4,736 4,149 10,207 586 1,806 248 1,558 1 1 7 0 1 2 7 4 1 1 11 1 , , 7 0 7 3 1 7 - - 1 1 1 1 , , 0 6 1 0 3 0 1 1 1 2 4 5 . . 9 0 1 1 5 4 , , 2 6 7 9 4 6 3 3 , ,6 5 5 0 9 4 3 3 , , 3 2 7 8 8 6 1 1 1 1 , , 9 3 8 1 9 8 2 28 18 1 2 1 , , 3 6 3 7 1 0 2 1 5 8 3 0 2 1 , , 1 4 5 1 1 6 2 3 4 1 m8i5 2 3 8 4 1 9 0 , , 1 2 1 3 6 6 r 1 — 0 9 ,1 ,0 7 2 9 3 1 r9 0 5 8 . . 1 7 1 1 4 4 , , 2 1 6 2 6 1 4 5 , , 0 0 2 0 9 5 4 3 , ,4 1 9 8 1 3 1 9 0 , , 9 7 3 7 8 5 5 8 3 2 8 2 1 1 , ,6 7 8 1 9 9 2 3 9 1 3 0 1 1 , , 3 4 7 2 9 7 1976—Jan. 7 94 6 8,566 -8,478 89.5 14,399 5,833 4,481 9,918 1,352 1 ,757 394 1 ,363 14 -36 10,571 -10,607 110.0 16,072 5,502 4,294 11,778 1,208 1 ,444 274 1 ,170 21 22 77 10,657 -10,712 109.6 15,396 4,739 4,248 11 ,148 491 1,605 245 1,360 28 67 9,480 -9,413 100.5 14,449 4,969 4,294 10,155 675 1,226 389 837 5 in City of Chicago 1975—Dec. 3 -7 4,199 -4,205 257.9 4,940 741 715 4,225 664 664 10 33 4,877 -4,844 299.9 5,618 740 732 4,885 674 674 17 -1 4,619 -4,620 268.4 5,291 672 667 4,624 660 660 24 -5 4,381 -4,386 274.9 5,192 811 811 4,381 635 635 31 28 4,162 -4,133 246.8 5,094 932 913 4,182 594 594 1976—Jan. 7 -3 4,428 -4,431 267.6 5,273 845 828 4,445 566 566 14 -8 5,433 -5,441 321 .0 6,326 893 863 5,464 589 589 21 -6 77 5,065 -5,149 297.5 6,109 1 ,044 1 ,025 5,084 571 571 27 4,455 -4,428 276.4 5,692 1,238 1,213 4,479 449 449 28 33 others 3 5,422 -5,420 69.8 9,417 3,994 3,434 5,983 560 1,142 248 894 1975—Dec. 3 137 6,893 -6,756 88.2 9,657 2,763 2,553 7,104 210 1,658 180 ,477 10 25 6,418 -6,393 81.3 9,404 2.987 2,711 6,693 276 1,010 253 756 17 90 28 5,856 -5,793 74.6 9,074 3,218 2,680 6,394 538 1,054 310 744 24 r99 34 4,954 r —4,889 62.5 9,026 4,073 3,270 5,756 802 1,125 293 832 31 1976—Jan. 7 98 6 4,138 -4,046 51 .8 9,126 4.988 3,653 5,473 1,335 1,191 394 797 14 -28 5,137 -5,165 65.0 9,746 4,609 3,432 6,315 1 ,177 855 274 582 21 28 5,592 -5,564 69.1 9,287 3,695 3,223 6,064 472 1,033 245 789 28 40 5,026 -4,985 64.2 8,757 3,731 3,081 5,676 651 777 389 388 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 • FEBRUARY 1976 CURRENT RATES (Per cent per annum) Loans to member banks— Under Sec. 10(b)2 Loans to all others under Under Sees. 13 and 13ai last par. Sec. 134 Federal Reserve Bank Regular rate Special rate3 Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous 1/31/76 date rate 1/31/76 date rate 1/31/76 date3 rate 1/31/76 date rate Boston 51/2 1/19/76 6 6 1/19/76 61/2 61/2 1/19/76 7 8% 1/19/76 9 New York 51/2 1/19/76 6 6 1/19/76 61/2 61/2 1/19/76 7 81/2 1/19/76 9 Philadelphia 5% 1/19/76 6 6 1/19/76 61/2 6V4 1/19/76 7 81/2 1/19/76 9 Cleveland 51/2 1/19/76 6 6 1/19/76 61/2 61/2 1/19/76 7 8% 1/19/76 9 Richmond 51/2 1/19/76 6 6 1/19/76 61/2 61/2 1/19/76 7 81/2 1/19/76 9 A Ch tl i a c n a t g a o 5 5V V 4 i 1 1/ / 1 1 9 9 / / 7 7 6 6 6 6 6 6 1 1/ / 1 1 9 9 / / 7 7 6 6 6 6 % 1/ 2 6 6 1 % /2 1 1 / / 1 1 9 9 / / 7 7 6 6 7 7 8 81 1/ /2 2 1 1 / / 1 1 9 9 / / 7 7 6 6 9 9 St. Louis 5% 1/23/76 6 6 1/23/76 6% 6 V4 1/23/76 7 81/2 1/23/76 9 Minneapolis 5% 1/19/76 6 6 1/19/76 61/2 61/2 1/19/76 7 8811//22 1/19/76 9 Kansas City 5% 1/19/76 6 6 1/19/76 61/2 61/2 1/19/76 7 8811//22 1/19/76 9 Dallas 51/2 1/19/V6 6 6 1/19/76 61/2 6% 1/19/76 7 81/2 1/19/76 9 51/2 1/19/76 6 6 1/19/76 61/2 61/2 1/19/76 7 8% 1/19/76 9 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 1 3 rate. agency thereof. SUMMARY OF EARLIER CHANGES (Per cent per annum) Range F.R. Range F.R. Range Effective or level)— Bank Effective (or level)— Bank Effective (or level)date All F.R. of date All F.R. of date All F.R. Banks N.Y. Banks N.Y. Banks In effect Dec. 31, 1955 21/2 21/2 1964—Nov. 24. 3%-4 4 1971—Nov. 11 434-5 5 30. 4 4 19 434 434 1956— A A u p g r. . 2 2 1 4 3 0 2 2 2 1 3 3 / / 4 4 2 - - - 3 3 3 2 2 3 3 3 / / 4 4 1965—Dec. 1 6 3 . . 4 41 - / 4 2 I /2 4 4 1 1 / / 2 2 Dec. 2 1 1 4 3 7 4 4 1 1 / / 4 2 2 1 - - / 4 4 2 3 3 / 4 4 4 4 4 1 1 3 / / / 2 2 4 31 3 3 1967—Apr. 7. 4 -41/2 4 1973—Jan. 15 5 5 1957— N Au o g v . . 2 1 9 3 5 3 3 31 - - 3 3 /2 1 1 / / 2 2 3 3 3 1 /2 Nov. 2 2 1 0 7 4 . . . 4 4 41 - / 4 2 i /2 4 4 4 1 1 / / 2 2 A M Fe p a b r r . . . 2 2 2 6 3 5 5 1/ 5 2 1 - - 5 / 5 2 1 3 / 4 2 5 5 5 1 1 1 / / / 2 2 2 1958— D A J M M a e p n a a c r y . r . . . 2 2 2 1 1 2 7 2 9 1 8 4 3 2 2 2 2 1 3 1 3 1 3 / / 2 4 3 4 ^ 1 4 4 1 3 - - - - - / 2 3 3 2 4 3 4 1 3 / 4 4 2 2 2 2 3 3 1 1 3 1 1 1 3 3 / / / / 4 4 4 4 4 4 1968— A A D M p u e a c r g r . . . . 2 2 2 1 1 1 3 1 0 6 2 9 6 8 5 0 . . . . . . . . 4 5 5 5 1 1 i/ / 5 / 5 5 5 4 4 2 1 1 1 - - - - / 5 / / 5 5 5 2 4 2 1 1 i / / / 2 2 2 4 5 5 5 5 5 5 5 1 1 1 1 1 1 1 / / / / / / / 2 2 2 4 2 2 2 J J M A u u u a n ly g y e . 1 1 1 2 1 4 1 2 4 3 8 5 '.'.'.'.'.'.'.'.'.'.'. 6 5 7 3 6 6 5 7 7 4 1 3 - * - - 6 7 / 6 / 4 2 4 1 1 f /2 c 6 6 6 6 7 7 7 5 1 1 1 1 3 / / / / 4 2 2 2 2 Aug. 15 134-2 13/4 1969—Apr. 4. 51/2-6 6 1974—Apr. 25 7V4-8 8 Sept. 12 13/4-2 2 8. 6 6 30 8 8 23 2 2 Dec. 9 734-8 734 O N c o t v . . 24 7 2 21 - / 2 2 1 /2 2 2 i/i 1970—Nov. 1 1 1 3 , , 5 53 V /4 4 -6 - 6 5 6 3 4 1 6 73/4 73/4 16, 5Va 534 1975—Jan. 6 714-734 734 1959—Mar. 6 2Vi-3 3 Dec. 1, 51/2-53/4 53/4 10 71/4-734 71/4 May 2 1 9 6 3 3 -31/2 3 3 % 1 4 1, . 5^ 5 - 1 5 / 3 2 /4 5 5 1 1 / / 2 2 Feb. 2 5 4 63 7 4 1 - / 7 4 1 4 7 6 1 3 / 4 4 June 12 31/2 31/2 7 63/4 634 Sept. 11 31/2-4 4 1971—Jan. 8, 5^-51/2 51/4 Mar. 10 614-634 61/4 18 4 4 15. 51/4 5y 4 14 61/4 61/4 1 1 9 9 6 6 0 3 — — S J A Ju u e u l n p y g e t . . 1 1 1 1 9 2 3 7 0 4 3 3 3 3 1 1 / / 3 3 2 2 1 - - - - 3 / 3 4 4 2 1 i / / 2 2 4 3 3 3 3 3 1 1 V / / 2 2 i J F u e l b y . 2 2 2 1 1 1 1 2 3 9 6 9 3 9 , , . 5 4 5 4 3 3 / 4 5 5 4 4 - 3 - - - 5 5 5 5 4 1 1 / 4 4 5 5 5 5 5 5 4 1 ! / 4 4 I 1 n 9 7 e 6 ff — ec M J t a , a n J y . a n. 2 1 1 2 3 6 3 9 3 1, 1976 6 5 V 6 2 5 4 > 1 - -6 / 6 % 2 1 /4 6 6 5 5 5 % 1 1 / / 2 i 26 31/2 3% 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

FEBRUARY 1976 • 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) Effective date i Reserve city Other Savings 0-5 Over 5 0-5 Over 5 0-5 Over 5 In effect Jan. 1, 1963. 16^/2 1966—July 14,21. Sept. 8,15. 1967—Mar. 2.... 31/2 3 % Mar. 16... 3 3 1968—Jan. 11,18. 16% 17 12 12% 1969—Apr. 17. . . 17 171/2 12i/ 2 13 1970—Oct. 1 Beginning Nov. 9, 1972 Net demand2,4 Time 3 Other time EEEEffffffffeeeeccccttttiiiivvvveeee ddddaaaatttteeee 0-5, maturing in— Over 55, maturing in— 000---222 222---111000 111000---111000000 111000000--- OOOvvveeerrr SSSaaavvviiinnngggsss 444000000 444000000 180 180 30-179 days to 4 years 30-179 days to 4 years days 4 years or more days 4 years or more 1972—Nov. 9 8 10 12 666 III666III///222 17% 7 3 73 7 5 Nov. 16 111333 1973—July 19 IIOOII//22 112211//22 111333%%% 11118888 1974 Dec. 12 11117777%%%% 66 33 1975—Feb. 13 mm 1100 1122 1133 11116666%%%% Oct. 30 1 88 11 333 88 11 1976 Jan. 8 33 88 22%% 888222%%% In effect Jan. 31, 1976 71/2 10 12 13 16% 3 33 88 22%% 8 1 6 888 222%%% 8 1 Present legal limits: Minimum Maximum Net demand deposits, reserve city banks 10 22 Net demand deposits, other banks 7 14 Time deposits 3 10 1 When two dates are shown, the first applies to the change at reserve member bank will maintain reserves related to the size of its net demand city banks and trie 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 piinus 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) SincQ 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 16% per cent requirement applied for one week, only to former 3 Effective Jan. 5, 1967, time deposits such as Christmas and vacation reserve city banks. For other banks, the 13 per cent requirement was club accounts became subject to same requirements as savings deposits. continued in this deposit interval. Beginning Nov. 10, 1975, profitmaking businesses may maintain savings 7 See columns above for earliest effective date of this rate. deposits of $150,000 or less at member banks. For details of 1975 action, 8 The average of reserves on savings and other time deposits must be see Regulations D and Q, and also BULLETINS for Oct., p. 708, and Nov., at least 3 per cent, the minimum specified by law. For details, see Regup. 769. lation D. Notes 2(b) and 2(c) above are also relevant to time deposits. 4 Effective Nov. 9, 1972, a new criterion was adopted to designate re- NOTE.—Required reserves must be held in the form of deposits with serve cities, and on the same date requirements for reserves against net F.R. Banks or vault cash. demand deposits of member banks were restructured to provide that each Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 8 MAXIMUM INTEREST RATES; MARGIN REQUIREMENTS • FEBRUARY 1976 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, of deposit 1966 1966 1968 1970 of deposit 1973 1973 1974 1974 Savings deposits 41/2 Savings deposits Other time deposits:1 Other time deposits (multiple- Multiple maturity:2 and single-maturity):1, 2 30-89 days 4 41/2 Less than $100,000: 9 1 0 - 2 d a y y e s a r to s 1 year. 5 5 V i 9 3 0 0 - d 8 a 9 y s d a t y o s 1 year 5 5^ 2 5 5 5 */ 2 55 1/2 Singl 2 e - y m ea a r t s u r o it r y : m ore.. 5 5V4 2 1 V -2 i V y 2 e a y r e s a r o s r more 6 6 V2 6 6 V2 6 6 y 2 6 Less than $100,000: Minimum denomination 6I/2 30 days to 1 year. 5 of $1,000:4 2 1 y 2 e a y rs e a o r r s more. . 51/2 4 6 -6 y e y a e rs a r o s r more (5) 1V4 1V4 1V4 $1 9 6 3 0 1 0 0 0 8 0 0 - , - - 0 1 8 5 0 d 9 9 7 0 a 9 d d y o s a d a r y y a t s s y o m s 1 o r y e e : ar 5Vi 5V 2 6 5 5 61 V V /4 4 I ( ( ( ( 3 3 3 3 ) ) ) ) $1 G 00 o , v 0 e 0 r 0 n m or e m nt o al r e u nits ( ( 6 3 ) ) ( ( 6 3 ) ) m (3) 7 m ( 33/ ) 4 1 year or more... 5Vi 6V4 (3) 1 For exceptions with respect to certain foreign time deposits, see 5 per cent of its total time and savings deposits. Sales in excess of that BULLETIN for Feb. 1968, p. 167. amount were subject to the 6*4 per cent ceiling that applies to time de- 2 Multiple-maturity time deposits include deposits that are automati- posits maturing in 2l/i years or more. cally renewable at maturity without action by the depositor and deposits Effective Nov. 1, 1973, a ceiling rate of 7^ per cent was imposed on that are payable after written notice of withdrawal. certificates maturing in 4 years or more with minimum denominations 3 Maximum rates on all single-maturity time deposits in denominations of $1,000. There is no limiation on the amount of these certificates that of $100,000 or more have been suspended. Rates that were effective banks may issue. Jan. 21, 1970, and the dates when they were suspended are: 6 Prior to Nov. 27, 1974, no distinction was made between the time deposits of governmental units and of other holders, insofar as Regula- 6 3 0 0 - - 8 5 9 9 d d a a y y s s 6 6 Y V 2 4 p p e e r r c c e e n n t t 1 f June 24, 1970 t g i o o v n e Q rn m ce e i n li t n al g s u o n n i ts r a w te e s re p a p y e a r b m le i tt w e e d r e t o c o h n o c l e d r n s e a d v . in E g f s f ec d t e iv p e o s N it o s v. a n 2 d 7 , c 1 o 9 u 7 l 4 d , 90-179 days 61/4 per cent] receive interest rates on time deposits with denominations under $100,000 180 days to 1 year 7 per cent [ May 16, 1973 irrespective of maturity, as high as the maximum rate permitted on such 1 year or more ll/i per cent] deposits at any Federally insured depositary institution. Rates on multiple-maturity time deposits in denominations of $100,000 NOTE.—Maximum rates that may be paid by member banks are estabor more were suspended July 16, 1973, when the distinction between lished by the Board of Governors under provisions of Regulation Q; single- and multiple-maturing deposits was eliminated. however, a member bank may not pay a rate in excess of the maximum 4 Effective Dec. 4, 1975, the $1,000 minimum denomination does not rate payable by State banks or trust companies on like deposits under apply to time deposits representing funds contributed to an Individual the laws of the State in which the member bank is located. Beginning Retirement Account established pursuant to 26 U.S.C. (I.R.C. 1954) §408. Feb. 1, 1936, maximum rates that may be paid by nonmember insured 5 Between July 1 and Oct. 31, 1973, there was no ceiling for certificates commercial banks, as established by the FDIC, have been the same as maturing in 4 years or more with minimum denominations of $1,000. those in effect for member banks. The amount of such certificates that a bank could issue was limited to 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 ((TT)) T U G T U G 1937—Nov. 1945—Feb. 4 40 50 1945—Feb. 5 July 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 I960—July 27 90 90 1960—July 28 1962—July 9 70 70 1962—July 10 1963—Nov. 5 50 50 1963—Nov. 6 1968—Mar. 10 70 70 1968—Mar. 11 June 7 70 50 70 June 8 1970—May 5 80 60 80 1970—May 6 1971—Dec. 65 50 65 1971—Dec. 6 1972—Nov. 22 55 50 55 1972—Nov. 24 1974—Jan. 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

FEBRUARY 1976 • 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 bills1 Others within 1 year2 1-5 years 5-10 years Over 10 years PPPeeerrriiioooddd 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 1111111111111111111111111111,,,,,,,,,,,,,,000000000000007777777777777744444444444444 5555555555555555555,,,,,,,,,,,,,,,,,,,222222222222222222211111111111111111114444444444444444444 22222222222222222222,,,,,,,,,,,,,,,,,,,,111111111111111111116666666666666666666600000000000000000000 999999999999999999 --------33333333,,,,,,,,444444448888888833333333 888888888888444444444444888888888888 55555555,,,,,,,,444444443333333300000000 222222222222444444444444999999999999 -------1111111,,,,,,,888888844444445555555 999999999999333333333333 -------111111100000002222222 1971 88888888888888,,,,,,,,,,,,,,888888888888889999999999999966666666666666 3333333333333333333,,,,,,,,,,,,,,,,,,,666666666666666666644444444444444444442222222222222222222 11111111111111111111,,,,,,,,,,,,,,,,,,,,000000000000000000006666666666666666666644444444444444444444 111111111,,,,,,,,,000000000333333333666666666 --------66666666,,,,,,,,444444446666666622222222 111111111111,,,,,,,,,,,,333333333333333333333333888888888888 44444444,,,,,,,,666666667777777722222222 999999999999333333333333333333333333 666666688888885555555 333333333333111111111111111111111111 111111155555550000000 1972 88888888888888,,,,,,,,,,,,,,555555555555552222222222222222222222222222 6666666666666666666,,,,,,,,,,,,,,,,,,,444444444444444444466666666666666666667777777777777777777 22222222222222222222,,,,,,,,,,,,,,,,,,,,555555555555555555554444444444444444444455555555555555555555 111111111222222222555555555 22222222,,,,,,,,999999993333333333333333 777777777777888888888888999999999999 --------11111111,,,,,,,,444444440000000055555555 555555555555333333333333999999999999 -------2222222,,,,,,,000000099999994444444 111111111111666666666666777777777777 222222255555550000000 1973 1111111111111155555555555555,,,,,,,,,,,,,,555555555555551111111111111177777777777777 4444444444444444444,,,,,,,,,,,,,,,,,,,888888888888888888888888888888888888880000000000000000000 33333333333333333333,,,,,,,,,,,,,,,,,,,,444444444444444444440000000000000000000055555555555555555555 111111111,,,,,,,,,333333333999999999666666666 --------111111114444444400000000 555555555555777777777777999999999999 --------22222222,,,,,,,,000000002222222288888888 555555555555000000000000000000000000 888888899999995555555 111111111111222222222222999999999999 88888887777777 1974 1111111111111111111111111111,,,,,,,,,,,,,,666666666666666666666666666600000000000000 5555555555555555555,,,,,,,,,,,,,,,,,,,888888888888888888833333333333333333330000000000000000000 44444444444444444444,,,,,,,,,,,,,,,,,,,,555555555555555555555555555555555555555500000000000000000000 444444444555555555000000000 --------11111111........333333331111111144444444 777777777777999999999999777777777777 --------666666669999999977777777 444444444444333333333333444444444444 1111111,,,,,,,666666677777775555555 111111111111999999999999666666666666 222222200000005555555 1975 1111111111111111111111111111,,,,,,,,,,,,,,555555555555556666666666666622222222222222 5555555555555555555,,,,,,,,,,,,,,,,,,,555555555555555555599999999999999999999999999999999999999 66666666666666666666,,,,,,,,,,,,,,,,,,,,444444444444444444443333333333333333333311111111111111111111 333333333,,,,,,,,,888888888888888888666666666 --------33333333........555555555555555533333333 222222222222,,,,,,,,,,,,888888888888666666666666333333333333 44444444,,,,,,,,222222227777777755555555 111111111111,,,,,,,,,,,,555555555555111111111111000000000000 -------4444444,,,,,,,666666699999997777777 111111111111,,,,,,,,,,,,000000000000777777777777000000000000 888888844444448888888 11997744——DDeecc.... .... 999999999999997777777777777733333333333333 444444444444444444422222222222222222226666666666666666666 66666666666666666666 888888888555555555 111111112222222266666666 111111111111222222222222333333333333 --------111111112222222266666666 555555555555333333333333 222222222222000000000000 11 JJaann 333333333333334444444444444411111111111111 999999999999999999944444444444444444445555555555555555555 666666666666666666660000000000000000000000000000000000000000 111111111444444444 333333333333000000000000555555555555 666666666666111111111111 222222222222666666666666 MMMMMM FFFFFFeeeeee aaaaaa bbbbbb rrrrrr........................ 77777777777777 33333333333333 66666666666666 55555555555555 00000000000000 77777777777777 4444444444444444444 1111111111111111111 6666666666666666666 5555555555555555555 0000000000000000000 6666666666666666666 9 4 9 4 9 4 9 4 9 4 9 4 9 4 9 4 9 4 9 4 9 4 9 4 9 4 9 4 9 4 9 4 9 4 9 4 9 4 9 488888888888888888888 00000000000000000000 77777777777777777777 00000000000000000000 11111,,,,,555557777799999 ---111 222 ,,, ,,, 444 444 333 999 777 444 333333333333 111111111111 666666666666 222222222222 111111111111 999999999999 ---222,,,888 111 333 999 666 444 444444444444 111111111111 555555555555 111111111111 000000000000 333333333333 224499 222222222222 777777777777 111111111111 444444444444 222222222222 115500 AAAAAApppppprrrrrr............ ............ 22222222222222,,,,,,,,,,,,,,111111111111111111111111111199999999999999 333333333333333333311111111111111111118888888888888888888 555555555555555555550000000000000000000066666666666666666666 111114444488888 444444444444888888888888555555555555 222222222222777777777777444444444444 111111111111666666666666444444444444 MMMMMMaaaaaayyyyyy...... ............ 999999999999990000000000000033333333333333 333333333333333333355555555555555555554444444444444444444 444444444444444444440000000000000000000077777777777777777777 5555500000 ---333,,,111333111 666,,,666333555 --33,,880011 229988 JJJJJJuuuuuunnnnnneeeeee.................. 444444444444442222222222222211111111111111 111111111111111111166666666666666666661111111111111111111 666666666666666666661111111111111111111122222222222222222222 2222200000 666999111 448888 ---555222999 118800 110099 JJJuuulllyyy 1111111111111111111,,,,,,,,,,,,,,,,,,,555555555555555555500000000000000000005555555555555555555 888888888888888888880000000000000000000000000000000000000000 AAAuuuggg 333333111111222222 222222222222222222288888888888888888882222222222222222222 444444444444444444440000000000000000000000000000000000000000 22,,000022 ------222222,,,,,,111111444444444444 111555000 111111,,,,,,222222999999999999 666444 --ii ,,444444 444777 330000 SSSeeepppttt............ 222222,,,,,,111111111111888888 222222222222222222220000000000000000000000000000000000000000 222222777777888888 555666222 ------222222777777888888 111333777 111222444 111111,,,,,,222222666666333333 777777777777777777766666666666666666666666666666666666666 444444444444444444440000000000000000000000000000000000000000 444444888888 ------444444888888 NNNooovvv......... ... 999999888888333333 666666666666666666655555555555555555552222222222222222222 999999999999999999991111111111111111111199999999999999999999 444333 ------222222666666555555 222666777 ------111111333333555555 111555555 330000 222444444 110000 DDDeeeccc 111111,,,,,,999999888888444444 222222222222222222220000000000000000000000000000000000000000 333111 222222888888 111111888 ------222222888888 777888 777111 Matched sale-purchase Repurchase Federal agency obligations Bankers Total outright1 transactions agreements Net acceptances, (U.S. Govt, (U.S. Govt, change net securities) securities) in U.S. Outright Repur- Period Govt. chase securi- agree- Repur- 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 -6 197 1 12,515 3,642 2,019 16,205 16,205 44,741 43,519 8,076 485 101 22 181 197 2 10,142 6,467 2,862 23,319 23,319 31,103 32,228 -312 1,197 370 -88 -9 -145 197 3 18,121 4,880 4,592 45,780 45,780 74,755 74,795 8,610 865 239 29 -2 -36 197 4 13,537 5,830 4,682 64,229 62,801 71,333 70,947 1,984 3,087 322 469 511 420 197 5 20,892 5,599 9,559 151,205 152,132 140,311 139,538 7,434 1,616 246 -392 163 -35 1974—Dec.. 1,254 426 8,855 7,962 11,470 11,895 -498 360 142 188 201 1975—Jan.. 746 945 600 9,237 10,367 9,260 8,748 844 14 -409 Feb.. 673 460 900 7,167 6,634 11,267 10,305 -258 376 81 246 Mar. 3,362 156 1,788 15,933 16,763 5,011 6,928 332 210 2 -347 Apr.. 3,189 318 506 12,375 12,216 12,774 8,551 6,42.8 2 883 May. 953 354 407 2,996 3,044 19,489 21,952 -2,224 97 -567 June. 1,217 161 450 12,914 13,026 15,219 16,810 -873 6 -255 July. 1,505 800 15,532 15,139 5,977 6,146 -2,866 2 -61 Aug.. 2,574 282 2,389 14,234 13,730 8,146 6,881 663 353 40 90 Sept.. 2,940 200 19,931 19,835 16,664 14,857 4,451 394 1 203 Oct.. 1,263 766 400 15,886 16,113 13,699 13,838 186 284 -124 Nov. 1,693 652 919 14,442 15,207 14,342 17,275 -2,047 1 -169 Dec.. 2,281 200 10,559 10,058 8,464 7,247 22,,779977 111188 - 1 . 1, 1 ©— < >K i/L NO 1 -*.cf-ot — iuot hL iVJK >U — ON — *t -136 39 -323 496 -375 -121 - 1 . 1, 1 ©— < >K i/L NO 1 -*.cf-ot — iuot hL iVJK >U — ON — *t Net change 3 4,982 8,866 272 9,227 6,149 8,539 393 387 309 -136 7,829 -3,207 -1,317 -2,926 156 1 ,222 94 5,155 50 445 -300 -2,537 385 3,315 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 directly from the Federal Reserve, as follows: June 1971, 955; Sept. 1972, NOTE.—Sales, redemptions, and negative figures reduce System hold- 38; Aug. 1973, 351; Sept. 1973, 836; Nov. 1974, 131; Mar. 1975, 1,560; ings; all other figures increase such holdings. Details may not add to Aug. 1975, 1,989. totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 10 FEDERAL RESERVE BANKS • FEBRUARY 1976 CONSOLIDATED STATEMENT OF CONDITION OF ALL FEDERAL RESERVE BANKS (In millions of dollars) Wednesday End of month Item 1976 1975 1976 1975 Jan. 28 Jan. 21 Jan. 14 Jan. 7 Dec. 31 Jan. 31 Dec. 31 Assets Gold certificate account 11,599 11 ,599 11 ,599 11 .599 11 .599 11,599 11,599 Special Drawing Rights certificate account. 500 500 500 500 500 500 500 Cash 394 379 386 375 347 405 347 Loans: Member bank borrowings 138 841 47 41 211 64 211 Other Acceptances: Bought outright 741 742 741 747 741 Held under repurchase agreements. 415 212 385 483 385 Federal agency obligations: Bought outright 6,312 6,312 6,072 6,072 6,072 6,312 6,072 Held under repurchase agreements. 393 177 118 305 118 U.S. Govt, securities: Bought outright: Bills 35,690 35,925 35,925 35,228 37,207 Certificates—Special. Other.. Notes 44,236 44,236 43,989 43,989 43,989 44,236 43,989 Bonds 5,595 5,595 5,521 5,521 5,521 5,595 5,521 Total bought outright 185,521 185,756 185,435 184,738 186,717 185,538 186,717 Held under repurchase agreements. 6,118 885 1,217 4,433 1,217 Total U.S. Govt, securities. 91,639 85,756 85,435 85,623 87,934 89,971 87,934 Total loans and securities 99,638 93,645 92,289 92,867 95,461 97,882 95,461 Cash items in process of collection... P7,488 P8,526 P9,127 ?>9,570 9,183 p5 ,872 9,183 Bank premises 325 324 322 321 319 325 319 Operating equipment 13 14 13 13 13 13 13 Other assets: Denominated in foreign currencies. 331 81 100 60 80 333 80 All other 2,999 2,976 2,927 3,049 2,900 3,005 2,900 Total assets. P123,287 18,044 p\ 17,263 18,354 120,402 p119,934 120,402 Liabilities F.R. notes 74,267 74,784 75,697 76,437 77,159 73,899 77,159 De M po e s m it b s: e r bank reserves p29,448 v28,494 p27,254 P29,590 26,052 p27,308 26,052 U.S. Treasury—General account. 10,360 4,682 4,217 2,246 7,285 10,075 7,285 Foreign 209 248 235 244 353 294 353 Other: All other2 943 969 909 1,090 1,090 Total deposits. p40,644 p34,367 p32,675 P32,989 34,780 P38,328 34,780 Deferred availability cash items 4,949 5,639 5,725 5,860 5,495 4,248 5,495 Other liabilities and accrued dividends. 1,121 1,059 1,075 1,098 1,110 1 ,098 1,110 Total liabilities »120,98l pl15,849 15,172 P\16,384 118,544 118,544 Capital accounts Capital paid in 934 932 932 929 929 935 929 Surplus 928 928 928 928 929 928 929 Other capital accounts. 444 335 231 113 498 Total liabilities and capital accounts. ^123,287 Pl18,044 P\17,263 p118,354 120,402 p119,934 120,402 Contingent liability on acceptances purchased for foreign correspondents Marketable U.S. Govt, securities held in custody for foreign and international accounts 44,145 44,659 42,852 42,096 41,871 43,124 41,871 Federal Reserve Notes—Federal Reserve Agents' Accounts F.R. notes outstanding (issued to Bank) 81,328 81,557 81,778 81,871 81,877 81,228 81,877 74,538 Collateral held against notes outstanding: Gold certificate account 11,596 11,596 11,596 11,596 11,596 11,596 11,596 3,207 Special Drawing Rights certificate account. 302 302 302 302 302 302 302 93 Acceptances 425 U.S. Govt, securities 71,710 71,710 71,710 71,710 71,510 71,710 71,510 72,492 Total collateral. 83,608 83,608 83,608 83,608 83,408 83,608 83,408 76,217 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

FEBRUARY 1976 • 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 IIIttteeemmm 1976 1975 1976 1975 Jan. 28 Jan. 21 Jan.14 Jan. 7 Dec. 31 Jan. 31 Dec. 31 Jan. 31 113388 841 4477 4411 222299 6644 222299 110011 113333 841 3388 3344 222222 4488 222222 9911 16 90 days 55 99 77 77 1166 77 1100 1,156 736 735 954 1 ,126 1 ,230 1 ,126 966 493 64 58 282 470 558 470 457 463 447 451 425 409 467 409 397 200 225 226 247 247 205 247 112 U.S. Govt, securities—Total 91,639 85.756 85,435 85,623 87,934 89,971 87,934 81,344 8,761 3.841 3,971 5,624 6,205 7,552 6,205 6,324 16 90 days 20,655 19.659 19,390 18,271 19,245 20,302 19,245 18,535 91 days to 1 year 21 ,159 21,192 21,293 20,947 21,703 21,053 21,703 21 ,182 30,383 30,383 30,273 30,273 30,273 30,383 30,273 23,440 6,526 6.526 6,426 6,426 6,426 6,526 6,426 9,673 4,155 4.155 4,082 4,082 4,082 4,155 4,082 2,190 6,705 6.312 6,072 6,249 6,190 6,617 6,190 4,790 Within 15 days1 412 19 39 215 134 324 134 153 16 90 days 183 183 183 184 184 183 184 260 870 870 851 851 873 870 873 573 3,302 3,302 3,149 3,149 3,149 3,302 3,149 2,313 5-10 years 1 ,300 1 ,300 I ,254 1 ,254 1 ,254 1 ,300 I ,254 990 Over 10 years 638 638 596 596 596 638 596 501 1 Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements. BANK DEBITS AND DEPOSIT TURNOVER (Seasonally adjusted annual rates) Debits to demand deposit accounts1 Turnover of demand deposits (billions of dollars) Period 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 others2 N.Y.) SMSA's 1974—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.'" 21,853.9 10,157.8 4,868.4 11,696.0 6,827.7 127.1 321.8 125.4 83.3 67.3 Feb.r 22,950.1 10,918.0 4,992.8 12,032.1 7,039.3 133.1 343.2 126.2 85.5 69.6 Mar.r 22,180.1 10,241.1 4,899.9 11,939.0 7,039.0 124.8 320.4 117.0 81.9 67.8 Apr.r 22,705.1 10,810.3 4,770.6 11,895.4 7,124.9 122.5 330.3 114.3 81.8 68.8 Mayr 22,738.6 10,826.1 4,852.6 11,912.5 7,059.9 128.9 333.9 120.1 82.8 68.2 June r 22,503.5 10,612.2 4,755.2 11,891.3 7,134.6 124.4 328.6 115.7 81.6 66.7 July 22,827.9 10,709.5 4,841.1 12,118.3 7,277.2 126.2 331.0 115.7 81.6 68.2 Aug 23,269.4 10,628.8 5,125.1 12,640.5 7,515.4 130.4 335.0 124.4 86.2 71.2 Sept 23,181.9 10,585.0 5,153.0 12,596.9 7,443.8 128.8 330.7 123.8 85.1 70.0 Oct.r 24,137.1 11,801.5 4,921.3 12,335.6 7,414.3 134.0 364.0 118.7 83.5 69.8 Nov.r 24,067.7 11,529.9 4,937.3 12,537.8 7,600.5 134.0 360.8 119.5 84.9 71.5 Dec 23,614.1 10,970.9 4,948.4 12,643.2 7,694.8 131.2 351.8 118.7 85.0 71.8 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 the July 1972 BULLETIN. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 12 MONEY STOCK • FEBRUARY 1976 MEASURES OF THE MONEY STOCK (In billions of dollars) Seasonally adjusted Not seasonally adjusted Period Mi Mi Mz M4 Ms Mi M2 Mz Mi Ms Composition of measures is described in the NOTE below. 1972--Dec 255.3 525.3 844.9 568.9 888.5 262.7 530.3 847.4 574.5 891 .6 1973--Dec 270.5 571 .4 919.5 634.9 982.9 278.3 576.5 921 .8 640.5 985.8 1974--Dec 283.1 612.4 981.6 702.2 1,071.4 291 .3 617.5 983.8 708.0 1,074.3 1975-—Jan 281.9 614.5 986.7 707.3 1,079.5 287.7 619.5 990.3 711 .4 1,082.2 Feb 281 .9 618.2 994.0 710.2 1,086.1 278.5 615.2 990.3 704.4 1,079.6 Mar 284.1 623.0 1,003.7 712.8 1,093.5 281 .4 622.7 1,005.0 710.8 1,093.1 Apr 284.9 626.7 1,012.7 715.1 1,101.1 286.5 631.1 1,020.0 716.9 1,105.8 May 287.6 633.7 1,025.3 718.8 1,110.4 282.9 631 .9 1,025.7 716.0 1,109.8 June 291 .0 642.4 1,040.2 726.5 1,124.3 290.3 643.5 1,044.5 725.8 1,126.8 July 291 .9 647.5 1,051.6 729.6 1,133.7 292.1 647.8 1,055.0 729.1 1,136.3 Aug 293.2 650.6 1,060.6 729.3 1,139.3 290.0 647.2 1,057.1 728.4 1 ,138.3 Sept 293.6 652.9 1,068.1 731 .9 1,147.1 291 .7 649.5 1,062.8 732.2 1,145.5 Oct 293.4 655.7 1,075.6 736.6 1,156.5 292.4 653.0 1 ,070.3 736.8 1,154.0 Nov 295.7 661 .6 1,086.0 743.4 1,167.7 297.6 659.7 1,080.1 742.5 1,162.9 Dec 295.0 663.3 1,091.9 746.2 1,174.7 303.4 668.4 1,093.6 751 .8 1,177.1 NOTE.—Composition of the money stock measures is as follows: Mz: Mi plus mutual savings bank deposits, savings and loan shares, and credit union shares (nonbank thrift). Mi: Averages of daily figures for (1) demand deposits of commercial Mi: Mi plus large negotiable CD's. banks other than domestic interbank and U.S. Govt., less cash items in Ms: Mz 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, Mi, Mz, Mi and Mb, see Banks; and (3) currency outside the Treasury, F.R. Banks, and vaults of "Revision of Money Stock Measures" on pp. 82-87 of the Feb. 1976 commercial banks. BULLETIN. M%: Averages of daily figures for Mi plus savings deposits, time de- Latest monthly and weekly figures are available from the Board's, H.6 posits open account, and time certificates other than negotiable CD's of release. Back data are available from the Banking Section, Division of $100,000 of large weekly reporting banks. Research and Statistics. COMPONENTS OF MONEY STOCK MEASURES AND RELATED ITEMS (In billions of dollars) Seasonally adjusted Not seasonally adjusted Commercial banks Commercial banks Time and savings NNNooonnn--- Demand deposits Time and savings NNNooonnn--- UUUU....SSSS.... deposits bbbaaannnkkk deposits bbbaaannnkkk GGGGoooovvvvtttt,,,, CCCuuurrr--- DDee-- ttthhhrrriiifffttt CCCuuurrr--- ttthhhrrriiifffttt ddddeeee---rrreeennn--- mmaanndd iiinnnssstttiii--- rrreeennn--- iiinnnssstttiii--- ppppoooossss---cccyyy ddee-- tttuuu--- cccyyy Do- tttuuu--- iiiittttssss 3333 ppooss-- tttiiiooonnnsss222 mes- tttiiiooonnnsss222 iittss CD's1 Other Total Total Mem- tic CD's1 Other Total ber nonmember 1972—Dec. 56.9 198.4 43.6 270.0 313.6 319.6 57.9 204.8 152.1 51 .4 44.2 267.6 311 .8 317.0 7.4 1973—Dec. 61 .5 209.0 63.5 300.9 364.4 348.0 62.7 215.7 156.5 56.3 64.0 298.2 362.2 345.3 6.3 1974—Dec. 67.8 215.3 89.8 329.3 419.1 369.2 69.0 222.2 159.7 58.5 90.5 326.3 416.7 366.3 4.9 1975—Jan.. 68.2 213.7 92.7 332.6 425.4 372.2 67.8 219.9 158.2 58.2 91.9 331 .9 423.8 370.8 4.0 Feb. 68.7 213.2 92.1 336.2 428.3 375.9 67.8 210.6 151 .8 55.8 89.2 336.7 425.9 375.2 3.3 Mar. 69.4 214.7 89.8 339.0 428.7 380.7 68.8 212.6 153.4 56.0 88.1 341 .4 429.4 383.3 3.8 Apr. 69.5 215.4 88.4 341 .8 430.1 386.0 69.1 217.4 156.9 57.4 85.8 344.6 430.4 388.9 4.0 May 70.2 217.4 85.1 346.1 431 .2 391.6 70.0 212.9 153.4 56.6 84.1 349.1 433.2 393.8 4.1 June 71.0 220.0 84.1 351 .4 435.5 397.8 71.2 219.1 157.2 58.9 82.3 353.2 435.5 401 .0 4.2 July. 71.3 220.6 82.1 355.5 437.6 404.1 71.9 220.3 157.9 59.4 81.3 355.7 436.9 407.2 3.4 Aug. 71 .9 221 .3 78.8 357.4 436.2 410.0 72.1 217.8 155.8 59.0 81.1 357.3 438.4 409.9 2.7 Sept. 72.0 221 .6 79.1 359.2 438.3 415.2 71 .9 219.9 157.0 59.7 82.7 357.7 440.5 413.3 3.9 Oct.. 72.6 220.8 80.9 362.3 443.2 420.0 72.5 219.9 156.6 60.3 83.7 360.7 444.4 417.2 3.4 Nov. 73.4 222.3 81.8 365.9 447.6 424.4 73.9 223.6 158.9 61 .5 82.9 362.1 444.9 420.4 3.5 Dec. 73.7 221.3 82.9 368.3 451.2 428.6 75.0 228.4 162.1 62.9 83.5 365.0 448.4 425.2 4.2 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

FEBRUARY 1976 • BANK RESERVES; BANK CREDIT A 13 AGGREGATE RESERVES AND MEMBER BANK DEPOSITS (In billions of dollars) Member bank reserves, S.A.1 Deposits subject to reserve requirements ,3 TToottaall mmeemmbbeerr bbaannkk ddeeppoossiittss pplluuss nnoonnddeeppoossiitt S.A. N.S.A. iitteemmss44 PPPPeeeerrrriiiioooodddd NNNooonnn--- TTToootttaaalll bbbooo rrr--- RRReee--- AAAvvvaaaiiilll--- Demand Demand rrrooowwweeeddd qqquuuiiirrreeeddd aaabbbllleee222 TTiimmee TTiimmee TToottaall aanndd TToottaall aanndd SS..AA.. NN..SS..AA.. ssaavviinnggss Private U.S. ssaavviinnggss Private U.S. Govt. Govt. 1972—Dec 31.52 30.47 31.24 29.05 402.3 241.7 154.4 6.2 406.8 240.7 160.1 6.1 406.6 411.2 1973—Dec 35.15 33.85 34.85 32.86 442.8 279.7 158.1 5.0 447.5 278.5 164.0 5.0 449.4 454.0 1974—Dec 36.87 36.14 36.61 34.51 486.9 322.9 160.6 3.4 491.8 321.7 166.6 3.5 495.3 500.1 1975—Jan 37.08 36.68 36.93 34.39 490.1 328.2 159.3 2.6 495.1 327.2 165.0 2.9 497.7 502.6 Feb 35.64 35.50 35.45 33.62 490.9 329.1 159.9 1.9 487.0 326.5 158.0 2.4 497.4 493.5 Mar 34.98 34.87 34.78 32.99 493.4 329.2 161.7 2.5 491.6 328.9 159.8 2.8 499.9 498.1 Apr 35.13 35.02 34.97 33.02 494.1 329.7 161.7 2.7 495.4 329.1 163.2 3.1 500.8 502.2 May 34.69 34.62 34.54 32.75 493.7 328.6 162.6 2.5 491.8 329.8 159.0 3.0 501.2 499.2 June.... 34.78 34.56 34.58 32.86 499.5 330.5 165.8 3.2 497.5 330.2 164.2 3.1 506.5 504.5 July.... 34.94 34.64 34.75 32.81 498.3 330.8 164.9 2.6 497.2 330.2 164.5 2.5 505.1 504.0 Aug.. . . 34.58 34.37 34.38 32.68 496.3 328.4 165.1 2.8 494.8 330.5 162.3 2.0 503.3 501.8 Sept... . 34.68 34.29 34.49 32.71 498.4 329.8 165.6 3.0 499.1 332.2 164.0 2.9 505.5 506.1 Oct 34.61 34.42 34.40 32.64 500.1 333.1 164.0 3.0 500.4 334.7 163.3 2.5 508.0 508.3 Nov... . 34.66 34.60 34.37 32.45 505.9 336.1 165.9 3.9 503.6 334.3 166.7 2.6 514.1 511.9 Dec 35.01 34.88 34.75 32.55 506.0 338.7 164.4 3.0 510.9 337.2 170.7 3.1 514.4 519.3 1 Averages of daily figures. Member bank reserve series reflects actual 3 Averages of daily figures. Deposits subject to reserve requirements reserve requirement percentages with no adjustment to eliminate the include total time and savings deposits and net demand deposits as defined effect of changes in Regulations D and M. Required reserves were in- by Regulation D. Private demand deposits include all demand deposits creased by $660 million effective Apr. 16, 1969, and $400 million effective except those due to the U.S. Govt., less cash items in process of collection Oct. 16, 1969; were reduced by $500 million (net) effective Oct. 1, 1970. and demand balances due from domestic commercial banks. Required reserves were reduced by approximately $2.5 billion, effective 4 "Total member bank deposits" subject to reserve requirements, plus Nov. 9, 1972; by $1.0 billion, effective Nov. 15; and increased by $300 Euro-dollar borrowings, loans sold to bank-related institutions, and million effective Nov. 22. certain other nondeposit items. This series for deposits is referred to as 2 Reserves available to support private nonbank deposits are defined "the adjusted bank credit proxy." as (1) required reserves for (a) private demand deposits, (b) total time NOTE.—Due to changes in Regulations M and D, member bank reserves and savings deposits, and (c) nondeposit sources subject to reserve re- include reserves held against nondeposit funds beginning Oct. 16, 1969. quirements, and (2) excess reserves. This series excludes required reserves Revised back data may be obtained from the Banking Section, Division for net interbank and U.S. Govt, demand deposits. of Research and Statistics, Board of Governors of the Federal Reserve System, Washington, 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 DDDDaaaatttteeee llloooaaannnsss Commercial llloooaaannnsss Commercial aaannnddd and industrial3 aaannnddd and industrial3 iiinnnvvveeesssttt--- PPlluuss UU..SS.. iiinnnvvveeesssttt--- PPlluuss UU..SS.. mmmeeennntttsss 111 TToottaall11 ll ss oo oo aa ll nn dd ss 22 Total l P o l a u n s s TT uu rree rryy aa ss-- OOtthheerr44 mmmeeennntttsss111 TToottaall11 ss lloo oo aa lldd nn 22 ss Total l P o l a u n s s TTrr uu ee rr aa yy ss-- OOtthheerr44 sold2 sold2 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 1974-—Dec. 31 5 6. . 687.1 498.2 503.0 182.6 185.3 48.8 140.1 705.6 510.7 515.5 186.8 189.6 54.5 140.5 1975--Feb. 26 692.6 498.9 503.4 182.5 185.2 53.2 140.5 686.8 492.8 497.3 180.7 183.4 54.6 139.5 Mar. 26 697.0 498.3 503.0 180.9 183.7 58.5 140.2 692.5 492.3 496.9 180.5 183.3 59.3 140.9 Apr. 30 699.1 495.0 499.6 180.5 183.2 64.0 140.1 698. 1 493.1 497.7 181.1 183.8 63.3 141.7 May 28 702.0 492.8 497.5 179.1 181.9 68.2 141.0 698.3 491.6 496.3 178.7 181.5 65.0 141.7 June 30 705.0 489.9 494.6 176.3 179.2 72.4 142.7 709.3 497.2 501.9 179.0 181.9 68.2 143.9 July 30*.... 706.4 489.6 494.1 177.6 180.4 73.4 143.4 704.9 491.7 496.2 177.5 180.3 69.6 143.6 Aug. 27 p.... 710.4 490.7 495.2 177.5 180.3 75.6 144.1 705.6 489.7 494.2 176.0 178.8 72.1 143.8 Sept. 2 4. 711.6 490.4 494.9 176.4 179.2 77.1 144.1 711.5 491.7 496.2 176.8 179.6 75.4 144.3 Oct. 2 9. 715.0 494.1 498.8 177.9 180.8 75.1 145.8 713.3 492.4 497.1 176.6 179.5 76.1 144.8 Nov. 26p.... 721.3 498.0 502.7 178.9 181.7 76.3 147.0 720.9 496.0 500.7 177.8 180.6 79.6 145.3 Dec. 31*. . . 717.2 494.7 499.1 177.7 180.3 77.9 144.6 734.4 505.1 509.5 181.1 183.7 84.2 145. 1 1976-—Jan. 28P. ... 720.5 495.4 499.7 178.1 180.6 80.2 144.9 719.5 490.6 494.9 176.0 178.5 84.9 144.0 1 Adjusted to exclude domestic commercial interbank loans. 6 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. 1959— about $400 million as of June 30, 1972. June 1973, see Nov. 1973 BULLETIN, 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 securities," and $600 million in "Total loans and investments." or wholly estimated except when June 30 and Dec. 31 are call dates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 14 COMMERCIAL BANKS • FEBRUARY 1976 PRINCIPAL ASSETS AND LIABILITIES AND NUMBER, BY CLASS OF BANK (Amounts in millions of dollars) Loans and investments Total Deposits assets— Total Classification by Securities lia- Interbank3 Other Total Num- FRS membership Cash bilities Bor- capital ber and FDIC assets3 and row- ac- of insurance Total Loans capital Total3 Demand ings counts banks l U.S. Other ac- De- Treas- 2 counts4 mand Time Times ury U.S. Other Govt. Last-Wednesday-of-month series6 All commercial banks: 1941—Dec. 31.. 50,746 21,714 21,808 225 26,551 79,104 71,283 10,982 44,349 15,952 23 1947—Dec. 31 7. 116,284 38,057 69,221 006 37,502 155,377 144,103 12,792 240 1,343 94,367 35,360 65 I960—Dec. 31.. 199,509 117,642 61,003 864 52,150 257,552 229,843 17,079 1,799 5,945 133,379 71,641 163 1970—Dec. 318. 461,194 313,334 61,742 118 93,643 576,242 480,940 30,608 1,975 7,938 209,335 231,084 19,375 1971—Dec. 31.. 516,564 346,930 64,930 704 99,832 640,255 537,946 32,205 2,908 10,169 220,375 272,289 25,912 1972—Dec. 31.. 598,808 414,696 67,028 084 113,128 739,033 616,037 33,854 4,194 10,875 252,223 314,891 38,083 1973—Dec. 31.. 683,799 494,947 58,277 574 118,276 835,224 681,847 36,839 6,773 9,865 263,367 365,002 58,994 1974—Dec. 31.. 744,107 549,183 54,451 473 128,042 919,552 747,903 43,483 11,496 4,807 267,506 420,611 58.369 1975—Jan. 29.. 724,820 532,230 53,500 090 101,670 875,020 702,170 29,980 II,740 4,520 233,880 422,050 61,460 Feb. 26.. 725,480 531,390 54,550139 540 103,880 879,080 702,500 29,930 10,440 2,630 234,610 424,890 64,290 Mar. 26.. 731,690 531,440 59,330140 920 105,850 889,370 712,520 30,410 11,680 3,950 236,900 429,580 63.370 Apr. 30.. 731,100 526,120 63,280141 700 114,140 899,110 723,060 33,140; 11,880 7,910 242,580 427,550 61,340 May 28.. 733,690 527,030 65,000' " 660 114,400 901,280 725,590 32,510, 11,200 2,950 246,410 432,520 61,700 June 30.. 747,551 535,493 68,191 868 128,716 930,719 754,324 42,582!I II,209 3,117 264,027 433,389 62,420 July 30*. 738,850 525,640 69,620 590 106,780 900,210 724,350 33,160 10,830 2,230 243,470 434,660 61,800 Aug. 27p. 740,590 524,700 72,060 830 104,030 898,940 723,090 31,510 10,570 2,850 242,290 435,870 59,770 Sept. 24*. 742,300 522,580 75,440 280 105,160 903,440 724,490 31,280 10,990 3,220 240,080 438,920 60,790 Oct. 29*. 745,150 524,260 76,050 840 109,140 911,930 733,730 31,830 11,210 2,700 247,030 440,960 60,310 Nov. 26*. 754,780 529,890 79,550 340 121,370 934,450 749,140 34,470 11,160 3,600 256,970 442,940 66,360 Dec. 31*. 771,380 542,090 84,220 ,070 128,270 958,410 781,770 41,660 11,830 3,170 278,280 446,830 58,100 1976—Jan. 28*. 753,420 524,510 84,930 143,980 111,050 921,760 738,930 32,000 11,160 3,880 245,230 446,660 66,780 Members of F.R. System: 1941—Dec. 31. 43,521 18,021 19,539 ,961 23,113 68,121 61,717 10,385 140 1,709 37,136 12,347 4 1947—Dec. 31. 97,846 32,628 57,914 ,304 32,845 132,060 122,528 12,353 50 1 ,176 80,609 28,340 54 1960—Dec. 31. 165,619 99,933 49,106 ,579 45,756 216,577 193,029 16,437 1,639 5,287 112,393 57,273 130 1970—Dec. 318 365,940 253,936 45,399 ,604 81,500 465,644 384,596 29,142 1,733 6,460 168,032 179,229 18,578 1971—Dec. 31. 405,087 277,717 47,633 738 86,189 511,353 425,380 30,612 2,549 8,427 174,385 209,406 25,046 1972—Dec. 31. 465,788 329,548 48,715 524 96,566 585,125 482,124 31,958 3,561 9,024 197,817 239,763 36,357 1973—Dec. 31. 528,124 391,032 41,494 598 100,098 655,898 526,837 34,782 5,843 8,273 202,564 275,374 55,611 1974—Dec. 31. 568,532 429,537 38,921 073 106,995 715,615 575,563 41,062 10,052 3,183 204,203 317,064 52,850 1975—Jan. 29. 550,220 414,419 37,549 252 86,350 676,898 536,256 28,311 10,299 3,247 177,701 316,698 56,105 Feb. 26. 549,144 412,076 38,628 440 88,430 678,970 535,250 28,157 8,991 1,989 178,596 317,517 58,868 Mar. 26. 552,957 411,446 42,544 967 89,685 685,906 542,076 28,564 10,231 2,794 180,214 320,273 58,030 Apr. 30. 550,756 406,676 45,142 938 96,694 692,147 549,824 31,102 10,433 6,212 184,693 317,384 55,738 May 28. 551,264 405,803 46,918 543 96,455 691,485 549,996 30,191 9,751 2,178 187,439 320,437 56,140 June 30. 562,667 412,939 49,610 118 107,152 716,364 573,382 39,847 9,576 2,166 201,197 320,596 56,334 July 30. 553,545 403,742 50,050 753 89,898 688,756 547,222 30,980 9,198 1 ,541 184,595 320,908 56,094 Aug. 27. 554,007 402,281 51,899 827 87,208 686,266 545,021 29,335 8,932 2,099 183,283 321,372 54,175 Sept. 24. 555,096 400,695 54,355 046 88,004 689,717 546,360 29,150 9,360 2,343 181,340 324,167 54,929 Oct. 29. 556,383 401,492 54,546 345 91,397 695,312 552,649 29,568 9,578 1 ,952 186,851 324,700 54,250 Nov. 26 ' 564,055 405,825 57,477 753 102,106 714,149 564,856 32,064 9,527 2,708 194,502 326,055 60,162 Dec. 31* 577,678 416,039 61,238 401 107,211 733,267 591,358 38,595 10,197 2,226 211,418 328,922 52,756 1976—Jan. 28*. 563,470 402,067 61,713 99,690 93,794 705,135 556,297 29,712 9,529 2,911 185,779 328,366 61,022 52,067 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 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 1960—Dec. 31.. 198,011 117,092 60,468 20,451 51,836 255,669 228,401 16,921 1,667 5,932 132,533 71,348 149 20i628 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 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 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 1974—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 1975—June 30.. 736,164 526,272 67,833 142,060 125,181 914,781 746,348 41,244 10,252 3,106 261,903 416,962 59,310 Sept. 30.. 740,882 521,673 73,382 140,627 117,774 911,981 741,758 37,652 9,876 3,606 252,945 425,382 58,325 National member: 1941—Dec. 31.. 27,571 11,725 12,039 3,806 14,977 43,433 39,458 6,786 M 23,262 8,322 4 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 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 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 1972—Dec. 31.. 350,743 247,041 37,185 66,516 67,390 434,810 359,319 19,096 ,155 6,646 146,800 184,622 26,706 1973—Dec. 31.. 398,236 293.555 30,962 73,718 70,711 489,470 395,767 20,357 ,876 5,955 152,705 212,874 39,696 1974—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 1975—June 30.. 428,167 312.229 37,606 78,331 75,686 536,836 431,646 21,096 6,804 1,723 152,576 242,492 41,954 Sept. 30.. 428,507 307.230 40,872 76,929 72,216 534,415 427,421 20,250 6,795 1,963 146,382 245,783 42,073 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEBRUARY 1976 • COMMERCIAL BANKS A 15 PRINCIPAL ASSETS AND LIABILITIES AND NUMBER, BY CLASS OF BANK—Continued (Amounts in millions of dollars) Loans and investments Deposits Total assets— CCllaassssiiffiiccaattiioonn bbyy Securities Total Interbank3 Other TToottaall Num- FFRRSS mmeemmbbeerrsshhiipp Cash lia- Bor- ccaappiittaall ber aanndd FFDDIICC assets 3 bilities row- aacc-- of iinnssuurraannccee Total Loans U.S. and Total3 Demand ings ccoouunnttss banks l Treas- Other capital De- Time ury 2 ac- mand Time 5 counts4 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.... 115,426 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—Dec. 31.... 140,373 108,346 9,846 22,181 30,473 181,683 144,799 17,565 3,301 746 49,807 73,380 13,247 12,425 1,074 1975—June 30. . . 134,759 100,968 12,004 21,787 31,466 179.787 141,995 18,751 2,771 443 48,621 65,654 14,380 12,773 1,064 1975—Sept. 30. . . 135,003 99,854 12,234 21,240 28,842 176,267 139,276 16,125 2,427 490 46,416 67,958 13,211 13,009 1,057 Nonmember: 1941—Dec. 31.... 5,lie 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 I960—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 1,199 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 1,920 12,862 8,229 1974—Dec. 31.... 165,709 111,300 15,211 39,199 18,380 190,435 165,827 1 ,525 642 1 ,616 61,240 100,804 3,138 14,799 8,436 1975—June 30. . . 173,238 113,074 18,223 41,942 18,029 198,157 172,707 1,397 676 940 60,706 108,816 2,976 15,730 8,526 1975—Sept. 30. . . 177,371 114,589 20,275 42,457 16,717 201,299 175,060 1,277 655 1 ,153 60,147 111,641 3,041 16,224 8,562 Noninsured nonmember: 1941—Dec. 31.... 1,457 455 761 241 763 2,283 1,872 329 1,291 253 13 329 852 1947—Dec. 317... 2,009 474 1,280 255 576 2,643 2,251 177 185 18 1,392 478 4 325 783 I960—Dec. 31.... 1,498 550 535 413 314 1,883 1,443 159 132 13 846 293 14 358 352 1970—Dec. 318... 3,079 2,132 304 642 934 4,365 2,570 375 101 40 1,298 756 226 532 184 1971—Dec. 31.... 3,147 2,224 239 684 1,551 5,130 2,923 380 116 19 1,273 1,134 283 480 181 1972—Dec. 31.... 4,865 3,731 349 785 1,794 7,073 3,775 488 81 55 1,530 1,620 527 491 206 1973—Dec. 31.... 6,192 4,927 316 949 2,010 8,650 4,996 591 344 9 1,836 2,215 1,463 524 207 1974—Dec. 31.... 9,981 8,461 319 1 ,201 2,667 13,616 6,627 897 803 8 2,062 2,857 2,382 611 249 1975—June 30. . . 11,725 9,559 358 1,808 3,534 16,277 8,314 1,338 957 11 2,124 3,320 3,110 570 253 Total nonmember: 1941—Dec. 31.... 7,233 3,696 2,270 1,266 3,431 10,992 9,573 457 5,504 3,613 18 1,288 7,662 1947—Dec. 31.... 18,454 5,432 11,318 1,703 4,659 23,334 21,591 439 190 167 13,758 7,036 12 1,596 7,261 1960—Dec. 31.... 33,910 17,719 11,904 4,287 6,396 40,997 36,834 643 160 657 20,986 14,388 33 3,590 7,300 1970—Dec. 318... 95,478 59,621 16,342 19,514 12,143 110,822 96,568 1,466 243 1,478 41,303 52,078 796 8,858 7,919 1971—Dec. 31.... 111,674 69,411 17,297 24,966 13,643 129,100 112,764 1,592 359 1,742 45,990 63,081 866 9,932 8,056 1972—Dec. 31.... 133,198 85,325 18,313 29,559 16,562 154,085 134,091 1,895 633 1,850 54,406 75,305 1,726 11,429 8,223 1973—Dec. 31... . 155,830 104,070 16,783 34,976 18,177 179,480 155,165 2,057 930 1,592 60,802 89,784 3,383 13,386 8,436 1974—Dec. 31 .... 175,690 119,761 15,530 40,400 21,047 204,051 172,454 2,422 1,445 1 ,624 63,302 103,661 5,520 15,410 8,685 1975—June 30. . . 184,963 122,633 18,581 43,750 21,563 214,434 181,021 2,735 1,633 951 62,830 112,136 6,086 16,300 8,779 1 Loans to farmers directly guaranteed by CCC were reclassified as 9 Member bank data for Oct. exclude assets of $3.6 billion of one large securities and Export-Import Bank portfolio fund participations were bank. 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 (including "Total loans" include Federal funds sold, and beginning with June 1967 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; nondeposit trust companies; and U.S. branches of foreign banks. 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, June 30, 6 For the last-Wednesday-of-the-month series, figures for call dates 1975, respectively, member banks exclude and noninsured nonmember are shown for June and December as soon as they became available. banks include 1, 2, 3, and 4 noninsured trust companies that are member 7 Beginning with Dec. 31, 1947, the series was revised; for description, of the Federal Reserve System. see note 4, p. 587, May 1964 BULLETIN. Comparability of figures for classes of banks in 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 • FEBRUARY 1976 ASSETS BY CLASS OF BANK, JUNE 30, 1975 (Assets and liabilities are shown in millions of dollars.) Member banks1 All Insured LLaarrggee bbaannkkss Account commercial commercial Nonbanks banks member Total New City of Other All other banks1 York Chicago large City Cash bank balances, items in process 128,716 125.181 107,152 29,694 4,419 38,925 34,114 21,564 Currency and coin 10.102 10,079 7,546 569 121 2,520 4,335 2,556 Reserves with F.R. Banks 26.890 26,890 26,890 5,656 1,800 10,084 9,350 Demand balances with banks in United States 34.278 31,788 19,722 6,940 165 3,710 8,906 ' i4 j 556 Other balances with banks in United States 5,727 5,276 3,647 94 115 1,153 2,284 2,080 Balances with banks in foreign countries 2,296 1,833 1,738 438 78 938 285 558 Cash items in process of collection 49,422 49,315 47,610 15.997 2,139 20,518 8,955 1,813 Total securities held—Book value 212,058 209,893 149,728 16,808 5,879 49,992 77,049 62,330 U.S. Treasury 68.191 67,833 49,610 7,368 2,189 17,061 22,992 18,581 Other U.S. Govt, agencies 33,882 33,490 21,213 1,754 570 6,348 12,540 12,669 States and political subdivisions 101,472 101,091 73,762 7,030 2,828 25,087 38,817 27,711 All other securities 8,513 7,479 5,144 657 291 1,496 2,699 3,370 Trade-account securities 6.198 6,188 6,136 2,468 556 2,896 217 62 U.S. Treasury 2,945 2,934 2,909 1,399 344 1,078 88 35 Other U.S. Govt, agencies 941 941 934 239 27 633 35 7 States and political subdivisions 1,907 1,907 1,893 736 117 952 89 14 All other 406 406 400 95 68 233 5 6 Bank investment portfolios 205,860 203,705 143,592 14,340 5,323 47,096 76,832 62,268 U.S. Treasury 65,246 64,899 46,701 5,969 1,845 15,983 22,904 18,545 Other U.S. Govt, agencies 32,941 32,549 20,279 1,515 544 5,715 12,505 12,662 States and political subdivisions 99,566 99,184 71,869 6,294 2,711 24,135 38,729 27,697 All other 8,108 7,073 4,743 562 224 1,264 2,694 3,364 Federal funds sold and securities resale agreements... 38,841 37,383 28,951 1,747 1,263 14,807 11,133 9,891 Commercial banks 34,083 32,625 24,296 852 1,041 11,800 10,604 9,787 Brokers and dealers 3,054 3,054 2,977 108 203 2,195 471 77 Others 1,704 1,704 1,677 787 19 812 59 27 Other loans 496,990 488,888 384,247 75,339 22,512 142,424 143,973 112,742 Real estate loans 131,445 131,246 94,442 7,951 1,332 35,526 49,633 37,003 Secured by farmland 6,105 6,090 2,676 5 2 327 2,342 3,428 Secured by residential 81.360 81,233 59,898 4,265 894 23,532 31,207 21,462 1- to 4-family residences 74,612 74,489 54,377 3,150 839 20,932 29,456 20,235 FHA insured 5,626 5,610 4,875 233 55 2,632 1,955 752 VA guaranteed 3,167 3,147 2,713 181 20 1,418 1,094 454 Other 65,818 65,732 46,790 2,736 764 16,882 26,407 19,029 Multifamily 6,748 6,744 5,521 1,115 55 2,600 1,751 1,227 FHA insured 762 761 706 136 25 331 214 56 Other 5,986 5,983 4,815 978 30 2,269 1,537 1,171 Secured by other properties 43,981 43,923 31,868 3,681 436 11,667 16,084 12,113 Loans to domestic and foreign banks 11,155 8,644 8,075 3,543 504 3,252 776 3,080 Loans to other financial institutions 32,413 32,164 30,964 11,756 4,720 12,175 2,314 1,449 Loans on securities to brokers and dealers 5,534 5,447 5,373 3,931 659 649 134 161 Other loans for purch./carry securities 3,836 3,818 3,177 516 277 1,497 887 658 Loans to farmers 19,071 19,054 10,768 88 190 2,554 7,935 8,304 Commercial and industrial loans 178,993 174,436 147,242 39,616 12,517 55,802 39,307 31,751 Loans to individuals 101,816 101,512 72,806 4,942 1,540 25,865 40,458 29,010 Instalment loans 79,246 79,033 56,275 3,062 804 20,229 32,180 22,971 Passenger automobilies 32,128 32,026 21,423 421 151 6,621 14,230 10,706 Residential-repair/modernize 5,627 5,611 4,077 202 49 1,717 2,109 1,550 Credit cards and related plans 10,835 10,835 9,551 1,015 399 5,320 2,818 1,284 Charge-account credit cards 8,240 8,240 7,389 742 369 4,181 2,096 851 Check and revolving credit plans 2,595 2,594 2,162 273 29 1,139 722 433 Other retail consumer goods 15,273 15,242 10,661 160 104 3,765 6,632 4,611 Mobile homes 8,807 8,801 6,340 100 48 2,276 3,916 2,467 Other 6,466 6,441 4,321 60 56 1,489 2,716 2,144 Other instalment loans 15,383 15,318 10,563 1,265 101 2,807 6,390 4,820 Single-payment loans to individuals 22,570 22,479 16,531 1,880 736 5,636 8,278 6,039 All other loans 12,726 12,568 11,400 2,995 773 5,103 2,529 1,326 Total loans and securities 747,889 736,164 562,926 93,894 29,654 207,223 232,155 184,963 Fixed assets Buildings, furniture, real estate 16,254 16,175 12,183 1,263 500 4,894 5,526 4,071 Investments in subsidiaries not consolidated 1,820 1,798 1,777 797 146 754 81 42 Customer acceptances outstanding 9,462 9,223 8,993 4,795 427 3,438 332 469 Other assets 26,917 26,239 23,592 8,889 1,122 9,756 3,825 3,325 Total assets 931,057 914,781 716,623 139,333 36,268 264,990 ' 276,032 214,434 Number of banks 14,573 14,320 5,794 12 9 155 5,618 8,779 1 Member banks exclude and nonmember banks include 4 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

FEBRUARY 1976 • COMMERCIAL BANKS A 17 LIABILITIES AND CAPITAL BY CLASS OF BANK, JUNE 30, 1975 (Assets and liabilities are shown in millions of dollars.) Member banks1 All Insured Large banks Non- AAccccoouunntt commercial commercial member banks banks Total All other banks1 New City of Other York Chicago large City 309,726 306,253 243,210 57,475 9,911 85,372 90,453 66,516 1,279 1,151 1,057 483 1 210 362 223 Other individuals, partnerships, and corporations. . 232,079 231,121 177,344 29,687 7,668 65,847 74,142 54,735 U.S. Government 3,117 3,106 2,166 118 42 725 1,280 951 States and political subdivisions 18,217 18,079 13,074 758 186 3,883 8,247 5,143 Foreign governments, central banks, etc 1,555 1,310 1,280 1,088 18 167 6 275 Commercial banks in United States 34,345 34,019 32,823 16,986 1,593 10,482 3,762 1,522 Banks in foreign countries 6,957 6,074 5,967 4,662 152 1,058 95 990 Certified and officers' checks, etc 12,176 11,393 9,499 3,691 250 2,999 2,558 2,677 Time and savings deposits 444,936 440,096 330,431 46,693 16,362 119,708 147,669 114,505 Savings deposits 151,744 151,463 109,037 6,995 2,385 38,455 61,202 42,708 338 335 259 74 186 79 Mutual savings banks 648 627 611 287 17 265 42 37 Other individuals, partnerships, and corporations.. 219,489 216,619 163,751 25,801 • 10,371 59,106 68,473 55,738 U.S. Government 492 492 360 10 1 184 165 132 States and political subdivisions 48,219 48,052 34,739 1,421 1,324 15,062 16,932 13,480 Foreign governments, central banks, etc 13,445 12,882 12,710 7,956 1,374 3,337 43 735 Commercial banks in United States 8,449 8,334 7,716 3,205 842 3,048 621 733 Banks in foreign countries 2,111 1,291 1,248 1,018 48 178 5 863 754,662 746,348 573,641 104,167 26,272 205,080 238,122 181,021 Federal funds purchased and securities sold under agreements to repurchase 56,529 54,835 52,184 13,367 5,845 25,865 7,106 4,345 Other liabilities for borrowed money 5,891 4,475 4,150 1,362 26 2,370 392 1,741 Mortgage indebtedness 763 761 550 64 4 313 169 213 10,060 9,814 9,583 5,375 430 3,447 332 477 Other liabilities 27,627 23,645 18,960 3,535 929 7,789 6,706 8,667 Total liabilities 855,533 839,879 659,069 127,870 33,507 244,864 252,827 196,464 Minority interest in consolidated subsidiaries ....... 5 4 j 1 4 Total reserves on loans/securities 8,963 8,912 7,297 1,685 525 2,761 2,325 1,666 8,659 8,614 7,110 1,685 525 2,682 2,218 1,549 Other reserves on loans 121 119 69 1 17 50 53 Reserves on securities 182 179 119 61 57 64 Total capital accounts 66,557 65,986 50,257 9,777 2,236 17,365 20,878 16,300 Capital notes and debentures 4,347 4,287 3,467 782 81 1,656 948 880 62,210 61,699 46,790 8,995 2,155 15,710 19,930 15,421 Preferred stock 50 42 24 10 13 27 Common stock 15,176 15,077 11,187 2,163 568 3,614 4,842 3,989 25,968 25,816 19,500 3,667 1,143 6,976 7,713 6,468 Undivided profits 20,053 19,859 15,441 3,166 399 4,845 7,031 4,613 Other capital reserves 996633 990055 663388 4444 226644 330 324 Total liabilities, reserves, minority interest, capital 931,057 914,781 716,623 139,333 36,268 264,990 227766,,003322 221144,,443344 Demand deposits adjusted 3 222,842 219,813 160,611 24,373 6,136 53,646 76,456 62,231 Average total deposits (past 15 days) 734,017 726,164 555,860 96,313 25,508 199,612 234,427 178,157 Average total loans (past 15 days) 506,945 497,466 385,936 74,863 22,484 143,273 145,316 121,009 Selected ratios: Percentage of total assets CCaasshh aanndd bbaallaanncceess wwiitthh ootthheerr bbaannkkss 13.8 13.7 15.0 2211..33 1122..22 1144..77 1122..44 1100..11 22.8 22.9 20.9 12.1 16.2 18.9 27.9 29.1 Total securities held Trading account securities • ... .7 .7 ..99 1.8 1.5 1.1 . 1 IIS Treacnrv .3 .3 .4 1.0 .9 .4 Qtsitf^c anH nnlitirfll 5iihHiuKir>nQ .2 .2 .3 .5 .3 .4 All Ath^r traHino arrnnnt cpniritipQ . . . 1 .2 .2 .3 .3 Bank investment portfolios 22.1 22.3 20.0 10.3 14.7 17.8 27.8 29.0 U.S. Treasury . ... 7.0 7.1 6.5 4.3 5.1 6.0 8.3 8.6 10.7 10.8 10.0 4.5 7.5 9.1 14.0 12.9 All other portfolio securities 4.4 4.3 3.5 1.5 2.1 2.6 5.5 7.5 Other loans and Federal funds sold 57.6 57.5 57.7 55.3 65.6 59.3 56.2 57.2 5.8 5.8 6.5 11.3 6.1 7.1 3.5 3.7 80.3 80.5 78.6 67.4 81.8 78.2 84.1 86.3 Reserves for loans and securities 1.0 1.0 1.0 1.2 1.4 1.0 ..88 .8 6.7 6.7 6.5 6.5 5.9 5.9 77..22 7.2 7.1 7.2 7.0 7.0 6.2 6.6 7.6 7.6 Number of banks 14,573 14,320 5,794 12 9 155 5,618 8,779 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 18 WEEKLY REPORTING BANKS • FEBRUARY 1976 ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKSA (In millions of dollars) Loans Federal funds sold, etc.1 Other To brokers For purchasing and dealers or carrying securities To nonbank Total involving— financial loans institutions Wednesday and To brokers To invest- To Com- and dealers others ments com- To mer- Agri- Total mer- US. Other others cial cul- Real cial Treas- se- and tural Pers. estate banks ury curi- indus- U.S. U.S and se- ties trial Treas- Other Treas- Other sales Other curi- ury sees. ury sees. finance ties sees. sees. COS., etc. Large banks— Total 1975 Jan. 8 407,598 19,532 14,947 2,352 1,459 774 300,373 130,8'6 3,637 2,353 3,477 2,521 10,340 21,370 60,246 15 402,853 18,672 14,691 1,863 1,260 858 297,282 129,635 3,586 1,226 3,602 2,476 10,272 21,358 60,257 22 395,791 17,430 14,384 1,272 840 934 293,235 128,446 3,565 550 2,950 2,438 9,992 21,030 60,220 29 393,512 17,342 13,847 1,595 987 913 292,146 127,429 3,528 898 3,380 2,453 9,785 20,806 60,261 Dec. 3 397,103 18,391 14,428 2,287 922 754 280,443 119,311 3.545 1 ,221 4,619 2,290 8,560 18,750 59,482 10 398,980 18,874 14,398 2,754 819 903 280,184 119,543 3.546 1 ,184 4,522 2,297 8,608 18,635 59,492 17 402,384 18,764 14,603 2,078 1,023 1,060 282,792 120,116 3,593 1 ,451 5,466 2,300 8,680 18,591 59,453 24 401,519 18,678 14,914 1,943 844 977 282,907 120,455 3,580 1,497 4,727 2,300 8,493 18?382 59,400 31 404,053 19,809 15,987 1,974 901 947 283,899 120,661 3,640 1,059 5,498 2,306 8,628 18,552 59,530 1976 Jan. 7 402,782 20,264 16,283 2,687 677 617 281,549 119,529 3,688 1,649 4,311 2,328 8,259 18,321 59,850 1 4 401,058 20,597 17,445 1,700 781 671 279,147 118,653 3,631 977 4,243 2,259 8,294 18,082 59,842 21 394,724 18,035 14,878 1,650 567 940 277,309 118,028 3,631 813 3,885 2,272 8,209 17,995 59,836 28 393,321 18,421 15,765 1,496 513 647 275,113 117,095 3,645 551 3,340 2,266 8,151 17,818 59,747 New York City 1975 Jan. 2 2 1 9 2 8 5 9 9 9 8 0 4 3 9 , , , , 2 6 1 4 1 6 8 0 1 9 8 8 2 2 1 1 , , , , 0 5 9 4 6 0 7 0 7 7 6 6 2 1 1 1 , , , 4 , 3 7 8 0 2 7 1 2 2 4 4 1 6 9 2 0 2 3 8 8 38 1 9 4 6 1 5 2 8 0 7 7 7 7 3 3 5 7 , , , , 6 4 9 3 8 7 8 2 1 9 6 3 4 4 3 3 0 0 9 9 , , , , 3 4 8 8 7 9 9 1 7 6 4 2 1 1 1 12 2 2 2 1 5 6 6 1 1 , , 7 4 9 0 5 8 8 8 4 2 0 5 2 2 2 1 , , , , 2 2 3 8 3 7 6 4 1 7 9 8 5 5 5 4 0 0 9 3 7 2 9 4 3 3 3 3 , , , , 5 5 4 2 9 3 2 8 1 6 8 8 8 8 8 8 , , , , 2 2 3 1 0 8 9 3 7 2 2 0 7 7 7 7, . . , 5 5 5 5 3 1 0 0 1 4 8 9 Dec. 3 87,748 951 714 135 102 69,236 36,426 86 1,122 2,824 398 2,928 7,088 7,890 1 1 7 0 8 8 9 8, , 0 5 3 2 1 8 1 1 , , 6 4 1 8 7 2 1 1 ,3 ,1 7 1 9 4 1 6 3 5 1 2 1 3 7 7 3 6 7 9 0 , , 0 3 6 6 7 4 3 3 6 6 , , 6 6 1 6 1 0 1 8 0 6 0 1 1 , , 0 3 9 0 6 6 2 3 , , 7 5 0 7 8 5 3 3 9 9 9 8 2 2 , , 9 9 6 8 7 2 7 6 , , 0 9 5 4 5 6 7 7 , , 8 9 8 0 8 7 24 89,784 2,396 2,121 96 179 70,246 36,762 85 1 ,372 3,074 396 2,845 6,886 7,906 31 90,010 2,603 2,170 91 332 70,085 36,710 90 999 3,427 394 2,860 6,857 7,890 1976 Jan. 7 92,527 838 617 133 73,326 37,538 107 ,439 2,599 453 2,790 6,987 9,533 1 4 91,908 1,637 1,405 125 92 71,745 36,867 103 898 2,519 394 2,861 6,961 9,507 2 2 1 8 9 8 0 9 , , 5 9 0 9 1 3 2 1 , , 1 8 0 3 8 9 1 1 , , 3 7 6 7 5 7 1 7 5 4 7 4 1 0 7 0 4 7 6 1 9 , , 0 7 2 7 3 3 3 36 6 , , 2 5 2 7 3 3 1 10 0 1 0 7 4 5 9 5 0 2 2 , , 0 4 2 8 6 9 3 3 9 8 0 9 2 2, , 7 7 0 3 2 4 6 6 , , 9 9 9 4 6 6 9 9 , , 4 4 9 5 8 6 Outside New York City 1975 Jan. 1 8 5 3 3 1 0 3 9 , , 3 4 8 4 7 5 1 16 8 , ,1 1 2 6 6 6 1 1 3 2 , , 6 2 2 8 5 9 2 1 , ,8 3 0 24 1 1 1 , , 4 2 2 6 1 0 7 8 5 1 6 6 2 22 2 1 3 , ,0 29 50 6 8 8 9 9 , , 9 23 2 9 2 3 3 , , 5 4 1 6 1 0 3 14 7 1 3 1 1 , , 2 2 0 5 0 3 1 1 , , 9 9 8 6 7 9 6 6, ,8 68 04 1 1 1 3 3 , ,0 0 2 8 8 8 5 5 2 2 , , 7 7 4 3 9 2 22 305,603 15,363 12,570 1,179 840 774 219,554 88,634 3,440 68 1,082 1,936 6,564 12,823 52,689 29 303,843 15,365 12,073 1,487 987 818 218,667 87,952 3,407 144 1,149 1,954 6,497 12,614 52,752 Dec. 3 309,355 17,440 13,714 2,152 922 652 211,207 82,885 3.459 99 1 ,795 1,892 5,632 11,662 51,592 10 310,949 17,392 13,284 2,623 819 666 211,117 82,932 3.460 88 1,814 1,898 5,641 11,580 51,604 17 312,856 17,147 13,224 2,013 1,023 887 212,428 83,456 3,493 145 1,891 1,902 5,698 11,645 51,546 24 311,735 16,282 12,793 1,847 844 798 212,661 83,693 3,495 125 1,653 1,904 5,648 11,496 51,494 31 314,043 17,206 13,817 1,883 891 615 213,814 83,951 3,550 60 2,071 1,912 5,768 11,695 51,640 1976 Jan. 7 310,255 19,426 15,( 2,599 677 484 208,223 81,991 3,581 210 1,712 1.875 5,469 11,334 50,317 14 309,150 18,960 16,040 1.575 766 579 207,402 81,786 3,528 79 1,724 1,865 5,433 11,121 50,335 21 304,223 16,196 13,513 1.576 567 540 206,286 81,455 3,530 58 1,396 1,883 5,475 10,999 50,338 28 303,328 16,313 13,988 1,339 513 473 205,340 80,872 3,545 61 1,314 1.876 5,446 10,872 50,291 • Effective with changes in New York State branch banking laws, reported data for "Outside New York City" (total assets, by about $4.0 beginning Jan. 1, 1976, three large New York City banks are now reporting billion). combined totals for previously affiliated banks that have been converted Historical data (from Jan. 1972) on a basis comparable to 1976 data to branches. will be available from the Public Information Department of the Federal The principal effects of these changes were to increase the reported data Reserve Bank of New York on request. for New York City (total assets, by about $5.5 billion) and to decrease the For other notes see p. A-22. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEBRUARY 1976 • WEEKLY REPORTING BANKS A 19 ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKS A—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 subdivisions instal- govts.2 other Total Bills Total For- ment eign Within 1 to After 1 yr. 5 yrs. 5 yrs. Tax Certif. war- All of rants 3 other partici- All pation4 other5 Large banks— Total 1975 6,171 34,854 1.555 19,642 25,087 4,780 3,701 12,966 3,640 62,606 6,763 40,817 2,450 12,576 Jan. 8 6,048 34,778 1,457 19,402 24,512 4,412 3,733 12,842 3,525 62,387 6,737 40,586 2,496 12,568 15 5,790 34,683 1,428 18,918 23,689 3,759 3.710 12,723 3,497 61,437 6,436 40,110 2,470 12,421 22 5,492 34,653 1,457 18,782 23,011 3,392 3,614 12,568 3,437 61,013 $,324 40,005 2,477 12,207 29 5,831 34,709 1,488 18,259 37,859 11,279 6,663 16,971 2,946 60,410 6,806 39,533 2,340 11,731 Dec. 3 5,937 34,792 1,568 17,814 39,010 12,638 6,602 16,779 2,991 60,912 7,164 39,768 2,318 11,662 10 5.944 34,933 1,606 18,492 40,306 14,273 6,543 16,581 2,909 60,522 6,775 39,660 2,316 11,771 17 5,966 35,083 1,551 19,206 39,520 13,609 6,629 16,382 2,900 60,414 6,611 39,596 2,324 11,883 24 5.945 35,095 1.556 19,137 40,178 13,714 6.711 16,959 2,794 60,167 6,539 39,491 2,290 11,847 31 1976 5,625 35,474 1,650 18,723 40,630 13,445 6,762 17,664 2,759 60,339 6,550 39,709 2,317 11,763 Jan. 7 5,487 35,460 1,616 18,524 41,362 14,159 6,903 17,524 2,776 59,952 6,364 39,621 2,278 11,689 14 5,404 35,377 1,741 18,121 39,963 13,249 6,748 17,314 2,652 59,417 6,194 39,407 2,251 11,565 21 5,214 35,364 1,774 18,117 40,508 13,023 6,785 17,506 3,194 59,279 6,102 39,425 2,241 11,51' 28 New York City 1975 3,032 2,636 842 4,050 5,068 800 335 2,692 1,241 10,414 2,023 5,467 522 2,402 Jan. 8 2,950 2,654 840 4,104 4,700 592 327 2,584 1,197 10,216 1,979 5,383 557 2,297 15 2,836 2,649 793 3,884 4,607 641 303 2,480 1,183 9,833 1,855 5,183 538 2,257 22 2,622 2,648 733 3,837 4,503 602 284 2,450 1,167 9,710 1,772 5,176 539 2,223 29 2,464 2,619 551 3,970 8,451 2,745 977 3,995 734 9,110 1,341 5,390 475 1,904 Dec. 3 2,505 2,629 580 3,723 8,213 2,695 860 3,851 807 9,269 1,404 5,512 479 1,874 10 2,532 2,627 595 3,893 8,514 3,281 832 3,651 750 9,033 1,281 5,421 475 1,856 17 2,543 2,646 600 4,313 8,175 2,913 856 3,645 761 8,967 1,194 5,398 480 1,895 24 2,541 2,598 597 4,282 8,492 3,100 840 3,836 716 8,830 1,168 5,377 478 1,807 31 1976 2,405 3,806 635 4,232 8,784 2,701 1,073 4,222 788 9,579 1,371 6,191 204 1,813 Jan. 7 2,402 3,828 589 4.053 9,054 2,984 1,119 4,164 787 9,472 1,306 6,173 209 1,784 14 2,426 3,805 637 3,909 8,304 2,425 1,011 4,109 759 9,335 1,229 6,118 206 1,782 21 2,250 3,798 628 4.054 8,830 2,586 1,029 4,135 1,080 9,282 1,179 6,157 205 1,741 28 Outside New York City 1975 3,139 32,218 713 15,592 20,019 3,980 3,366 10,274 2,399 52,192 4,740 35,350 1,928 10,174 Jan. 8 3,098 32,124 617 15,298 19,812 3,820 3.406 10,258 2,328 52,171 4,758 35,203 1,939 10,271 15 2,954 32,034 635 15,034 19,082 3,118 3.407 10,243 2,314 51,604 4,581 34,927 1,932 10,164 22 2,870 32,005 724 14,945 18,508 2,790 3,330 10,118 2,270 51,303 4,552 34,829 1,938 9,984 29 3,367 32,090 937 14,289 29,408 8,534 5,686 12,976 2,212 51,300 5,465 34,143 1,865 9,827 Dec. 3 3,432 32,163 988 14,091 30,797 9,943 5,742 12,928 2,184 51,643 5,760 34,256 1,839 9,788 10 3,412 32,306 1,011 14,599 31,792 10,992 5,711 12,930 2,159 51,489 5,494 34,239 1,841 9,915 17 3,423 32,437 951 14,893 31,345 10,696 5,773 12,737 2,139 51,447 5,417 34,198 1,844 9,988 24 3,404 32,497 959 14,855 31,686 10,614 5,871 13,123 2,078 51,337 5,371 34,114 1,812 10,040 31 1976 3,220 31,668 1,015 14,491 31,846 10,744 5,689 13,442 1,971 50,760 5,179 33,518 2,113 9,950 Jan. 7 3,085 31,632 1,027 14,471 32,308 11,175 5,784 13,360 1,989 50,480 5,058 33,448 2,069 9,905 14 2,978 31,572 1,104 14,212 31,659 10,824 5,737 13,205 1,893 50,082 4,965 33,289 2,045 9,783 21 2,964 31,566 1,146 14,063 31,678 10,437 5,756 13,371 2,114 49,997 4,923 33,268 2,036 9,770 28 For notes see p. A-l 8 and A-22. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 20 WEEKLY REPORTING BANKS • FEBRUARY 1976 ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKS A-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 States interbank of F.R. coin mestic ies not liabil- and collec- Banks banks consol- tites polit- Fortion idated Total ical U.S. eign 6 IPC sub- Govt. Com- Mutual govts., divi- mer- sav- etc. 2 sions cial ings Large banks— Total 1975 Jan. 8 32,438 21,304 5,042 12,079 1,661 31,907 512,029 164,446 117,693 6,409 1,571 24,797 834 1,415 15 34,809 25,141 4,910 11,745 1,694 32,129 513,281 165,874 118,990 6,474 1,656 23,843 745 1,369 22 30,355 29,437 4,884 10,844 1,686 32,674 505,671 155,438 112,595 6,108 2,601 21,054 677 1,315 29 28,271 23,492 4,888 10,774 1,666 32,897 495,500 152,838 110,564 5,999 2,007 20,630 635 1,316 Dec. 3 36,107 21,071 5,068 12,408 1,853 37,715 511,325 167.015 121,317 5,860 2,425 24,163 728 1,208 10 31,970 20,859 5,356 13,551 1,827 38,574 511,117 164,838 120,771 6,058 1,518 23,731 680 1,151 17 37,380 19,317 5,403 13,465 1,823 37,470 517,242 171,910 124,551 6,242 3,053 24,514 634 1,144 24 36,815 22,095 5,003 12,853 1,904 38,367 518,556 168,253 123,657 6,630 1,489 23,535 642 1,230 31 41,342 19,587 5,497 15,249 1,919 39,740 527,387 184,174 132,245 6,967 1,386 29,322 893 1,563 1976 Jan. 7 35,740 23,061 5,537 14,291 1,927 39,669 523,007 173,781 124,484 6,486 2,865 26,624 863 1,410 1 4 35,063 21,175 5,553 13,188 1,922 40,433 518,392 168,445 124,486 6,087 1,433 23,575 770 1,053 21 34,174 22,202 5,363 12,446 1,966 38,931 509,806 164,974 119,615 6,137 2,879 23,039 742 1,128 28 31,596 22,955 5,328 13,277 1,920 39,566 507,963 159,736 116,777 6,085 2,037 22,304 682 990 New York City 1975 Jan. 8 10,970 6,357 576 4,813 756 11,145 128,828 46,839 26,020 322 155 12,073 463 1,092 1 5 12,906 7,653 568 5.264 758 11,341 131,898 48,942 26,696 410 252 12,347 416 1,112 22 11,156 9,385 544 4,605 757 11,495 128,130 44,411 25,238 287 489 10,308 375 1,102 29 10,963 6,189 550 4,626 764 11,783 124,544 44,729 25,164 338 332 10,226 355 1,109 Dec. 3 11,366 6,975 629 5,096 818 11,555 124,187 45,389 26,023 211 488 10,885 359 980 10 9,938 5,916 625 6,071 819 12,287 123,687 44,914 25,734 263 234 11,300 344 960 17 12,766 5,348 661 5,406 817 11,067 125,593 47,759 27,632 299 267 11,677 296 936 24 12,049 5,897 594 4,945 819 11,458 125,546 45,808 26,911 470 183 10,778 320 1,002 31 13,628 3,151 674 6,813 845 12,340 127,461 52,710 29,733 586 109 14,089 482 1,308 1976 Jan. 7 12,007 8,367 867 5,838 849 13,070 133,525 50,246 28,531 510 553 13,109 507 1,149 1 4 12,388 7,028 858 5,687 846 13,624 132,339 48,951 29,432 562 153 11,423 444 838 21 12,516 6,271 829 5,272 846 12,277 128,512 48,519 28,104 619 545 11,323 410 905 28 12,191 6,583 811 5,867 844 12,629 128,918 47,731 28,244 584 335 11,383 370 773 Outside New York City 1975 Jan. 8 21,468 14,947 4,466 7,266 905 20,762 383,201 117,607 91,673 6,087 1,416 12,724 371 323 1 5 21,903 17,488 4,342 6,481 936 20,788 381,383 116,932 92,294 6,064 1,404 11,496 329 257 22 19,199 20,052 4,340 6,239 929 21,179 377,541 111,027 87,357 5,821 2,112 10,746 302 213 29 17,308 17,303 4,338 6,148 902 21,114 370,956 108,109 85,400 5,661 1,675 10,404 280 207 Dec. 3 24,741 14,096 4,439 7,312 1,035 26,160 387,138 121,626 95,294 5,649 1,937 13,278 369 228 10 22,032 14,943 4,731 7,480 1,008 26,287 387,430 119,924 95,037 5,795 1,284 12,431 336 191 17 24,614 13,969 4,742 8,059 1,006 26,403 391,649 124,151 96,919 5,943 2,786 12,837 338 208 24 24,766 16,198 4,409 7,908 1,085 26,909 393,010 122,445 96,746 6,160 1,306 12,757 322 228 31 27,714 16,436 4,823 8,436 1,074 27,400 399,926 131,464 102,512 6,381 1,277 15,233 411 255 1976 Jan. 7 23,733 14,694 4,670 8,453 1,078 26,599 389,482 123,535 95,953 5,976 2,312 13,515 356 261 14 22,675 14,147 4,695 7,501 1,076 26,809 386,053 119,494 95,054 5,525 1,280 12,152 326 215 21 21,658 15,931 4,534 7,174 1,120 26,654 381,294 116,455 91,511 5,518 2,334 11,716 332 223 28 19,405 16,372 4,517 7,410 1,076 26,937 379,045 112,005 88,533 5,501 1,702 10,921 312 217 For notes see p. A-l 8 and A-22. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEBRUARY 1976 • WEEKLY REPORTING BANKS A 21 ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKSA—Continued (In millions of dollars) Deposits (cont.) Borrowings Reserves from— for— Demand (cont.) Time and savings Federal Other Total IPC funds liabili- Secur- capital Certi- States pur- ties, ities Wednesday fied and Do- chased etc. 8 and polit- mes- For- etc. 7 F.R. offi- Total 6 ical tic eign Banks Other cers' Sav- Other sub- inter- govts. ^ checks ings divi- bank sions Large banks— Total 1975 6,330 228,213 58,672 122,069 25,633 ,239 11,541 51,J 17 4,051 23,844 5,269 34,238 Jan. 8 7,262 227,145 58,606 121,434 25,249 ,174 11,498 48,885 2,771 4,124 24,908 5,305 34,208 15 6,120 227,222 58,658 120,898 25,307 ,630 11,646 52,805 2,271 4,100 24,221 5,429 34,112 22 6,487 226,719 58,740 120,978 25,106 ,241 11,581 48,421 46 4,005 23,762 5,448 34,201 29 6,413 225,877 67,550 116,064 21,487 ,146 11,400 48,467 26 4,203 23,416 5,820 36,430 Dec. 3 5,868 226,082 67,749 116,119 21,577 ,212 11,194 49.308 1 4,367 24,154 5,878 36,418 10 6,998 226,181 67,838 115,550 21,951 ,271 11,270 47,821 22 4,411 24,701 5,830 36,295 17 6,039 227,406 67,947 116,009 22,343 ,441 11,216 50.309 1,214 4,472 24,705 5,720 36,395 24 6,202 227,729 68,445 115,961 22,228 ,502 11,164 44,074 143 4,332 24,727 5,582 36,544 31 1976 6,237 226,840 69,891 113,928 22,524 8,071 11,044 52,383 3,966 23,678 5,479 36,809 Jan. 7 6,247 226,521 70,627 113,220 22,668 7,918 10,539 53,813 6 3,718 23,592 5,445 36,781 14 6,408 225,389 71,670 111,619 22,484 7,826 10,315 49,716 799 3,413 23,106 5,430 36,908 21 6,110 225,345 72,442 111,138 22,348 7,J 10,138 53,770 77 3,530 23,053 5,417 36,961 28 New York City 1975 2,726 49,187 5,082 29,402 1,651 4,409 7.167 12,750 1,385 8,261 1,487 8,919 Jan. 8 3,616 48,636 5,090 28,966 1,599 4,314 7,120 11,341 1,440 1,566 9,580 1,485 8,908 15 2,921 48,216 5,095 28,680 1,536 4,302 7,075 13,712 1,445 1,562 8,384 1,524 8,876 22 3,420 48,060 5,101 28,567 1,524 4,181 7.168 11,653 1,526 8,160 1,520 8,896 29 2,956 44,315 5,860 25,869 1,070 3,166 7,561 12,506 2,291 8,146 1,679 9,860 Dec. 3 2,467 43,872 5,883 25,617 1,077 3,096 7,397 12,344 2,453 8,505 1,717 9,881 10 3,404 43,441 5,918 25,330 980 3,118 7,212 11,049 2,534 9,256 1,690 9,863 17 2,616 43,617 5,927 25,471 951 3,147 7,163 11,985 983 2,616 8,984 1,684 9,868 24 2,491 43,140 5,981 25,142 847 3,136 7,061 8,591 2,583 8,905 1,613 9,918 31 1976 2,547 46,104 7,988 25,518 1,447 3,036 7,159 14,297 2,054 8,806 1,693 10,324 Jan. 7 2,735 45,811 8,079 25,277 1,390 3,043 7,022 14,710 1,904 8,943 1,691 10,328 14 3,109 45,041 8,191 24,612 1,369 3,059 6,869 12,165 195 1,682 8,924 1,628 10,357 21 2,672 44,719 8,320 24,378 1,329 3,094 6,660 13,732 70 1,838 8,818 1,630 10,379 28 Outside New York City 1975 3,604 179,026 53,590 92,667 23,982 3,830 4,374 39,139 17 2,666 15,583 3,782 25,319 Jan. 8 3,646 178,509 53,516 92,468 23,650 3,860 4,378 37,544 ,331 2,558 15,328 3,820 25,300 15 3,199 179,006 53,563 92,218 23,771 4,328 4,571 39,093 826 2,538 15,837 3,905 25.236 22 3,067 178,659 53,639 92,411 23,582 4,060 4,413 36,768 46 2,479 15,602 3,928 25,305 29 3,457 181,562 61,690 90,195 20,417 4,980 3,839 35,961 26 1,912 15,270 4,141 26,570 Dec. 3 3,401 182,210 61,866 90,502 20,500 5,116 3,797 36,964 1 1,914 15,649 4,161 26,537 10 3,594 182.740 61,920 90,220 20,971 5,153 4,058 36,772 22 1,877 15,445 4,140 26,432 17 3,423 183^789 62,020 90,538 21,392 5,294 4,053 38,324 231 1,856 15,721 4,036 26,527 24 3,711 184,589 62,464 90,819 21,381 5,366 4,103 35,483 143 1,749 15,822 3,969 26,626 31 1976 3,690 180,736 61,903 88,410 21,077 5,035 3,885 38,086 1,912 14,872 3.786 26,485 Jan. 7 3,512 180,710 62,548 87,943 21,278 4,875 3,517 39,103 6 1,814 14,649 3,754 26,453 14 3,299 180,348 63,479 87,007 21,115 4,767 3,446 37,551 604 1,731 14,182 3,802 26,551 21 3,438 180,626 64,122 86,760 21,019 4,714 3,478 40,038 7 1,692 14,235 3.787 26,582 28 For notes see p. A-18 and A-22. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 22 WEEKLY REPORTING BANKS • FEBRUARY 1976 ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKSA—Continued (In millions of dollars) Memoranda Large negotiable Savings ownership categories time CD's All other large Total included in time time deposits12 Gross Wednesday Total loans De- and savings deposits11 Individ- Part- liabililoans and mand uals ner- Do- ties of (gross) invest- deposits and ships mestic banks ad- ments ad- non- and govern- All to justed 9 (gross) justed 10 Issued Issued Issued Issued profit cor- mental other14 their ad- Total to to Total to to orga- pora- units foreign justed 9 IPC's others IPC's others niza- tions for branches tions profit13 Large banks— Total 1975 Jan. 8 301,652 389,345 105,640 92,483 64,160 28,323 37,752 20,670 17,082 58,673 2,821 15 298,164 385,063 105,566 91,626 63,396 28,230 37,721 20,635 17,086 58,611 3,451 22 293,140 378,266 101,428 91,620 62,908 28,712 37,821 20,713 17,108 58,656 2,170 29 292,501 376,525 101,930 91,265 62,692 28,573 37,533 20,867 16,666 58,741 2,061 Dec. 3 282,104 380,373 104,320 83,597 56,615 26,982 32,557 18,336 14,221 66,686 548 243 2,911 10 282,484 382,406 107,619 83,623 56,687 26,936 32,446 18,251 14,195 66,708 674 288 3,298 17 284,858 385,686 106,963 83,316 56,224 27,092 32,718 18,051 14,667 66,725 765 274 5,162 24 284,474 384,408 106,414 83,545 56,389 27,156 33,366 18,115 15,251 66,775 859 251 4,136 31 285,499 385,844 112,124 83,088 56,037 27,051 33,382 18,245 15,137 67,225 905 252 4,066 1976 Jan. 7 283,461 384,430 108,552 80,060 53,767 26,293 33,774 18,181 15,593 68,508 986 336 3,401 1 4 280,298 381,612 108,374 78,753 53,012 25,741 33,982 17,995 15,987 69,005 1,141 417 3,350 21 278,548 377,928 104,882 77,010 51,582 25,428 33,932 18,291 15,641 69,779 1,347 484 3,449 28 275,812 375,599 103,799 75,866 50,984 24,882 32,552 17,159 15,393 70,301 1 ,516 563 3,118 New York City 1975 Jan. 8 75,808 91,290 23,641 32,161 21,497 10,664 9,466 5,644 3,822 5,082 1,268 1 5 74,565 89,481 23,437 31,524 21,014 10,510 9,547 5,675 3,872 5,090 2,124 22 72,390 86,830 22,458 31,218 20,827 10,391 9,408 5,560 3,848 5,095 1,323 29 72,134 86,347 23,208 31 ,106 20,703 10,403 9,386 5,582 3,804 5,101 1,080 Dec. 3 68,621 86,182 22,650 29,267 18,977 10,290 6,914 4,637 2,277 5,777 2,161 10 68,631 86,113 23,442 28,872 18,738 10,134 6,839 4,623 2,216 5,772 2,311 17 69,776 87,323 23,049 28,375 18,382 9,993 6,814 4,628 2,186 5,817 4,072 24 69,719 86,861 22,798 28,556 18,604 9,952 6,730 4,478 2,252 5,826 3,218 31 69,695 87,017 24,884 27,957 18,146 9,81' 6,779 4,590 2,189 5,879 3,169 1976 Jan. 7 72,761 91,124 24,577 27,175 17,414 9,761 7,557 4,910 2,647 7,832 63 2,507 1 4 71,232 89,758 24,987 26,729 17,118 9,611 7,586 4,783 2,803 7,851 120 2,672 21 70,805 88,444 24,135 26,073 16,588 9,485 7,985 5,285 2,700 7,940 126 2,598 28 69,413 87,525 23,822 25,864 16,458 9,406 6,971 4,394 2,577 8,036 144 2,309 Outside New York City 1975 Jan. 8 255,844 298,055 81,999 60,322 42,663 17,659 28,286 15,026 13,260 53,591 1,553 1 5 223,599 295,582 82,129 60,102 42,382 17,720 28,174 14,960 13,214 53,521 1,327 22 220,750 291,436 78,970 60,402 42,081 18,321 28,413 15,153 13,260 53,561 847 29 220,367 290,178 78,722 60,159 41,989 18,170 28,147 15,285 12,862 53,640 981 Dec. 3 213,483 294,191 81,670 54,330 37,638 16,692 25,643 13,699 11,944 60,909 531 219 750 10 213,853 296,293 84,177 54,751 37,949 16,802 25,607 13,628 11,979 60,936 651 247 987 17 215,082 298,363 83,914 54,941 37,842 17,099 25,904 13,423 12,481 60,908 737 241 1,090 24 214,755 297,547 83,616 54,989 37,785 17,204 26,636 13,637 12,999 60,949 827 223 918 31 215,804 298,827 87,240 55,131 37,891 17,240 26,603 13,655 12,948 61,346 870 226 897 1976 Jan. 7 210,700 293,306 83,975 52,885 36,353 16,532 26,217 13,271 12,946 60,676 936 273 894 14 209,066 291,854 83,387 52,024 35,894 16,130 26,396 13,212 13,184 61,154 1,079 297 678 21 207,743 289,484 80,747 50,937 34,994 15,943 25,947 13,006 12,941 61,839 1,264 358 851 28 206,399 288,074 79,977 50,002 34,526 15,476 25,581 12,765 12,816 62,265 1,417 419 809 • See p. A-l 8. 1° All demand deposits except U.S. Govt, and domestic commercial 1 Includes securities purchased under agreements to resell. banks, less cash items in process of collection. 2 Includes official institutions and so forth. 11 Certificates of deposit issued in denominations of $100,000 or more. 3 Includes short-term notes and bills. 12 All other time deposits issued in denominations of $100,000 or more 4 Federal agencies only. (not included in large negotiable CD's). 5 Includes corporate stocks. 13 Other than commercial banks. 6 Includes U.S. Govt, and foreign bank deposits, not shown separately. 14 Domestic and foreign commercial banks, and official international 7 Includes securities sold under agreements to repurchase. organizations. 8 Includes minority interest in consolidated subsidiaries. 9 Exclusive of loans and Federal funds transactions with domestic commercial banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEBRUARY 1976 • BUSINESS LOANS OF BANKS A 23 COMMERCIAL AND INDUSTRIAL LOANS OF LARGE COMMERCIAL BANKS (In millions of dollars) Outstanding Net change during— Industry 1976 1975 1975 1975 1975 Jan. Jan. Jan. Jan. Dec. 2nd 1st 28 21 14 6 31 Jan. Dec. IV III half half Durable goods manufacturing: Primary metals 2,043 2,040| 2,065 2,069 2,072 -29 75 62 -13 -23 49 18 Machinery 5,545 5,596 5,636 5,686 5,757 -212 -221 -783 -887 -642] -1,670 -1,314 Transportation equipment 3,188 3,227 3,204| 3,097 3,056 132 -216 1221 -2561 -198 -296 —454| -302 Other fabricated metal products... 2,016 2,017 2,005 2,015 1,974 42 -130 -168 -472 -277 -211 —749 -188 Other durable goods 3,605' 3,614 3,610| 3,593 3,453 152 -151 -155 -514 —174| -316 —688 -718 Nondurable goods manufacturing: Food, liquor, and tobacco 3,556 3,584 3,597 3,702 3,784| -228 245 170 459 13 -519 472 -1,609 Textiles, apparel, and leather 2,6841 2,690 2,706 2,730 2,691 -7 -185 — 80| -477 -55 -148 -532 -287 Petroleum refining 2,353 2,306 2,327 2,415 2,365 -12 -144 -51 -231 1 283 -113 228 Chemicals and rubber 2,592 2,584 2,617 2,653 2,691 -99 40 -169 -178 -253 -321 -431 -260 Other nondurable goods 1,889 1,890 1,877 1,890 1,805 84 -60 -73 —270| -148 10 -418 -283 Mining, including crude petroleum and natural gas 5,992| 5,974 5,935 5,940 5,953 $39 691 -39 789 285 109 1,074 -158 Trade: Commodity dealers 1,615 1,699 1,660| 1,587 1,581 37 170 339 137 -3281 476 -972 Other wholesale 5,438 5,463 5,479 5,495 5,444 -70| -67 -98 -78 -534 -176 -1,108 Retail 5,752| 5,658 5,686 5,6701 5,791 -39 -593 13 -208 -310 -212 -518 -398 Transportation 5,953 6,001 6,0201 5,969 6,074 -121 155 —46| 133 -122 -142] 11 -323 Communication 1,876 1,928 1,951 2,095 1,984 -108 -1 -34 -49 -111 17 -1601 -355 Other public utilities 6,696 6,932 6,951 7,000 6,995 -299 64| 35 31 -231 -404] -200 -1,423 Construction 5,053 5,079 5,107 5,124 5,134 -81 -116 -145 — 370| -57 -77 -427, -622 Services 10,748 10,747 10,7601 10,815 10,820| -72 263 59] 281 -295 — 388| -14 -1,120 A Ba ll n o k t e h rs e r a d c o c m ep e t s a t n ic c e l s o a .. n . s . 9 3 , , 6 68 1 5 8 9 3 , , 7 85 0 5 9 1 3 0 , , 8 0 7 0 1 2 ' 9 4 , , 8 5 9 24 7 | 1 4 0 , , 9 3 4 8 5 7 -1 - , 7 2 6 6 9 0 | 9 8 2 6 8 6 1,3 1 9 9 5 0 | 2,8 6 5 1 5 2 -17 1 0 5 -6 2 5 8 2,6 6 8 2 5 7 1 -3 5 7 9 2 9 Foreign commercial and industrial loans 5,425 5,4091 5,417 5,504 5,288 137 154 871 222 535 233 757] 294 Total classified loans 97,322] 98,002 98,483! 99,470 100,044 -2,722 1,707 1,068| 1,877 -2,276 -3,9461 -399 -10,673 Comm. paper included in total classified loans 401 437 -561 254 -33 44 240 Total commercial and industrial loans of large commercial banks 117,095 118,028 118,653 119,529 121,017 -3,922 1,861 961 2,011 -2,879 -3,845 -868 -10,081 For notes see table below. 'TERM" COMMERCIAL AND INDUSTRIAL LOANS OF LARGE COMMERCIAL BANKS (In millions of dollars) Outstanding Net change during- Industry 1976 1975 1975 Jan. Dec. Nov. Oct. Sept. Aug. July June May 2nd 28 31 26 29 24 27 30 25 28 IV III half Durable goods manufacturing: Primary metals 1,341 1,372 1,381 1,320| 1,338 1,286 1,269 1,288 1,280 34, 50 4 74 85 Machinery 3,117 3,313 3,451 3,538 3,737 3,825 3,864 3,977 4,269 —424| -240] -94 -74] -664 Transportation equipment 1,686 1,615 1,727 1,624] 1,693 1,722] 1,725 1,740 1,726 -78 -47 68 -1 -117 Other fabricated metal products 1,041 1,024| 1,087 1,175 1,268 1,228 1,196 1,222 1,245 -244] 46] —90| 115 -187 Other durable goods 1,874] 1.8231 1,905 1,950] 2,012 2,042 2,058 2,090 2,122 -189 -78 —161 -140] -272 Nondurable goods manufacturing: Food, liquor, and tobacco 1,547 1,578 1,544] 1,451 1,471 1,461 1,440| 1,514] 1,616 107 -43] —47 -202! 58 Textiles, apparel, and leather 1,032 995 1,072 1,074| 1,103 1,077] 1,116 1,095 1,075 -108 -63 I3j -103 Petroleum refining 1,859 1,831 1,860| 1,914| 1,967] 1,889 1,828 1,709 1,611 -136 258 226 -35 123 Chemicals and rubber.... 1,588 1,622 1,549 1,605 1,665 1,645 1,678 1,762 1,784 -43 -97 -84 -32] -140 Other nondurable goods. 925 955 995 1,056 1,023 1,085 1,143 1,114 -168 -87 13 -105 -255 Mining, including crude petroleum and natural gas, 4,528 4,484] 3,867 3,896] 3,847 3,754 3,801 3,734] 3,646 637 113 197 -164] 703 Trade: Commodity dealers. 196 172 168 162 150 148 152] 148 140 22 2 -2 -5 24 Other wholesale..,. 1.290 1,276 1,308 1,403 1,319 1,371 1,344 1,329 1,344 -43 -10 -121 -42] -62 Retail 2,007 1,996| 2.115 2,150 2,153 2,139 2,111 2,136 2,143 -157 17 -147 -31 -150 Transportation 4.291 4,390 4,324 4,420 4,391 4,405 4,399 4,425 4,424 -1 -_34| -99 -26] 10 Communication 1,101 1,081 1,112 1,122 1,132 1,149 1,136 1,133 1,159 -51 -2 53 -56 Other public utilities 3,995 3,979] 3,942 4,027 3,966 3,902 4,018 4,045 4,047 13 -79 11 71 -60 Construction 2,258 2,181 2,207 2,267 2,359 2,367 2,360 2,314 2,291 -178] 45 117 -97 -149 Services 5,038 5,135 5,082 5,097 5,122 5,010 5,155 5,140 5,246| 13 -18 -290] -102 -31 All other domestic loans ... 3,396 3,299 3.116 3,054 3,244 3,257 3,232 3,258 3,186 55 -14 176 -142 49 Foreign commercial and industrial loans 2,999 2,921 2,851 2,834 2,763 2,695 2,676 2,594 2,547 158 169 66 71 304 Total loans. 47,109 46,975 46,623 47,078 47,756 47,395 47,643 47,796 48,015 -781 -40 -322 -1,081 -890 NOTE.—About 160 weekly reporting banks are included in this series; Commercial and industrial "term" loans are all outstanding loans with these banks classify by industry, commercial and industrial loans amount- an original maturity of more than 1 year and all outstanding loans granted ing to about 90 per cent of such loans held by all weekly reporting banks under a formal agreement—revolving credit or standby—on which the and about 70 per cent of those held by all commercial banks. original maturity of the commitment was in excess of 1 year. For description of series see article "Revised Series on Commercial and Industrial Loans by Industry," Feb. 1967 BULLETIN, p. 209. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 24 DEMAND DEPOSIT OWNERSHIP • FEBRUARY 1976 GROSS DEMAND DEPOSITS OF INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS1 (In billions of dollars) Type of holdei Total Class of bank, and quarter or month deposits, F b i u n s a i n n c e i s a s l No b n u f s i i n n a e n s c s ial Consumer Foreign o A th l e l r IPC All 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 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 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 June 19.4 115.1 74.8 2.3 10.6 222.2 Sept 19.0 118.7 76.5 2.2 10.6 227.0 Dec.3® 20.1 125.1 78.0 2.4 11.3 236.9 Weekly reporting banks: 1971—Dec 14.4 58.6 24.6 1.2 5.9 104.8 1972—Dec 14.7 64.4 27.1 1.4 6.6 114.3 1973—Dec 14.9 66.2 28.0 2.2 6.8 118.1 1974—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 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 Aug 14.4 64.6 29.1 2.0 5.9 116.1 Sept 14.7 65.5 29.6 2.1 6.2 118.1 Oct 15.1 66.7 29.0 2.2 6.3 119.3 15.4 68.1 29.4 2.2 6.4 121.6 Dec.* 15.6 69.9 29.9 2.3 6.6 124.4 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, Dec, 31, June 30, Sept. 30, Class of Dec. 31, Dec, 31, June 30, bank 1973 1974 1975 1975 bank 1973 1974 1975 All commercial.... 507 389 338 All member—Cont. Insured 503 387 335 323 Other large banks 1 58 69 74 National member 288 236 223 222 All other member i 294 206 186 State member.... 64 39 36 35 All nonmember 155 115 79 All member 352 275 260 257 Insured 152 112 76 Noninsured 3 3 3 i 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-l 8-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-l 3. But they are included in the figures for "Time deposits" and "Loans" for call dates as shown on pp. A-l4-A-l 7. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEBRUARY 1976 • 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 institutions1 By type of loan Total Commercial Real and estate industrial 1975—Oct. 1.. 4,541 2,814 198 8.. 4,655 2,825 199 15.. 4,674 2,867 199 22.. 4.741 2,908 198 29.. 4.742 2,930 198 Nov. 5.. 4,771 2,893 197 12.. 4,716 2,869 205 19.. 4,740 2,877 205 26.. 4,701 2,846 205 Dec. 3.. 4,677 2,800 201 1 To bank's own foreign branches, nonconsolidated non- 10.. 4,441 2.597 207 n b o a t n k a a b ff a i n li k a ) t , e s a n o d f t n h o e n c b o a n n s k o , li t d h a e te b d a n n k o 's n b h a o n ld k in s g u b c s o i m di p a a ri n e y s ( o if f 2 1 4 7 . . . . r4 4 , , 4 4 8 1 6 6 2 2 , , 5 6 7 5 5 0 2 2 0 0 7 4 the holding company. 31.. 4,375 2,530 206 NOTE.—Series changed on Aug. 28, 1974. For a comparison 1976—Jan. 7.. 4,424 2,618 205 of the old and new data for that date, see p. 741 of the Oct. 14.. 4,369 2,617 205 1974 BULLETIN. Revised figures received since Oct. 1974 21.. 4,355 2.598 205 that affect that comparison are shown in note 2 to this table 28.. 4,292 2,522 208 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— companies1 Non- All finan- Accepting banks F.R. Banks I issuers cial Total Im- Ex- Dealer- Di- com- Dealer-1 Di- Others ports ports placed 2 rectly- panies' placed rectly- For- into from placed 3 placed Total Own Bills Own eign United United bills bought acct. corr.6 States States 13,645 2,332! 10,556 757 3,603 1,198 983 215 193 191 2,022 997 829 17,085 2,790 12,184| 2,111 4,317 1,906 1,447 459 164 156 2,090 1,086] 989 21,1731 4,427 13,972 2,774 4,428 1,544 1,344 200 58 109 2,717 1,423 952 32,600 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 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 32,1261 5,297 20,582 6,247 524 1,449] 7,889 3,480 2,689 791 261 254 3,894 2,834 1,546 34,721' 5,655 22,098 6,968 1,226 i,4r' 6,898 2,706 2,006 700 106 179 3,907 2,531 1,909 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 51,954 4,860 32,562 14,532 1,875 6,769 17,553 3,789 3,290 499 611 1,756 11,398 3,810| 3,709 49,144 4,611 31,839 12,694 1,800 6,518 18,484 4,226 4,685 542 999 1,109 12,150] 4,023 4,067 51,675 5,029 31,998 14,648 1,799 6,774 18,602 4,357 3,903 454 966 560 12,718 4,120] 4,3141 52,403 5,167) 32,5041 14,732] 1,778 7,305; 18,579 4,864 4,370 494 993 325 12,398 3,974 4,210 50,811 5,342 31,205 14,264 1,673 7,256 18,730 4.773 4,085 688 665 263 13,029 3,845 4,296 51,605 5,461 32,126 14,018 1,601 6,984 18,727 4,485 3,900 585 1,185 235] 13,034 3,690| 4,206 51,297 5,889 32,801 12,607 1,529 7,075' 18,108 4,450 3,892 558 865 234] 12,559 3,665 4,186[ 48,742 5,604 31,093 12,045 1,547 7,2071 17,740 4.774 4,224 550 682 319 11,965 3,466| 4,080 49,331 6,018 31,241 12,072] 1,635 7,016 16,930 4,778 4,275 503 685 329 11,138 3,474| 3,865 49,783 5,645 32,145| 11,993 1,493 7,365 16,456 4,546 3,988 558 840 304] r10,766| 3,305 3,806 48,246 5,574 30,485 12,187 1,514 7,306 16,790 5,002 4,190 812 948 302] 10,538 3,313 3,783 50,437 6,360 32,351 11,726 1,590 7,157 17,304 5,013 4,288 924 1,047 284 10,760 3,467 3,947] 49,557 6,389 32,0481 11,1201 1,671 7,019 17,875 6,497 5,684 813 727 279 10,372 3,545 3,* 1 Financial companies are institutions engaged primarily in activities 4 Nonfinancial companies include public utilities and firms engaged such as, but not limited to, commercial, 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 F.R. BANK INTEREST RATES • FEBRUARY 1976 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, 101/4 1975—July 18, , 71/4 1974--Oct. 11.68 19 10 Va 15, 10 28, , 71/2 Nov. 10.83 25 IO1/2 20, 9% Dec. 10.50 May 2 ioy 4 28, m Aug. 12 7% 1975-—Jan. 10.05 6 11 Feb. 3, 9 9 V A Sept. 15 8 Feb. 8.96 1 1 7 0 1 m 1 / V 2 A 2 1 1 4 8 0 , , , m 81/2 Oct. 27 73/4 A M M p a a r y r . . 7 7 7 . . . 9 5 4 3 0 0 June 26 113/4 Nov. 5 77%% June 7.07 Mar. 5, 81/4 July 7.15 July 5 12 10, 8 Dec. 2 m Aug. 7.66 Oct. 7 11% 2 1 4 8, , 7 71 % /2 1976—Jan. 12 1 S O e c p t. t . 7 7 . . 8 9 8 6 21 11% 21 66%% Nov. 7.53 28 11% May 20 71/4 Dec. 7.26 Nov. 4 11 June 9 7 1976-—Jan. 7.00 14 10% 25 10% NOTE.—Beginning Nov. 1971, several banks adopted a floating prime Effective Apr. 16, 1973, with the adoption of a two-tier or "dual prime rate keyed to money market variables. 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) All sizes -9 10-99 100-499 500-999 1,000 and over Center Nov. Aug. Nov. Aug. Nov. Aug. Nov. Aug. Nov. Aug. Nov. Aug. 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 Short-term 35 centers 8.29 8.22 9.56 9.42 9.15 9.02 8.62 8.48 8.38 8.29 8.04 8.00 New York City 7.99 8.00 9.34 9.28 8.98 8.89 8.52 8.44 8.17 7.93 7.87 7.93 7 Other Northeast 8.53 8.43 10.01 9.83 9.36 9.33 8.83 8.71 8.61 8.67 8.15 8.01 8 North Central 8.15 8.12 9.13 9.01 8.97 8.79 8.51 8.39 8.27 8.25 7.91 7.94 7 Southeast 8.70 8.41 9.68 9.58 9.39 9.21 8.74 8.57 8.62 8.32 8.36 7.94 8 Southwest 8.37 8.28 9.38 9.21 8.94 8.76 8.44 8.27 8.18 8.32 8.15 8.06 4 West Coast 8.67 8.45 9.73 9.67 9.29 9.21 8.77 8.51 8.76 8.28 8.56 8.37 Revolving credit 35 centers 8.26 8.17 9.93 9.73 9.15 9.06 8. ,59 8.45 8.41 8.68 8.20 8.07 New York City 8.08 8.37 9.01 8.91 8.90 8.94 8. ,54 8.41 8.44 8.30 8.03 8.37 7 Other Northeast 8.63 8.09 10.38 10.11 8.91 9.01 8. ,09 8.01 8.19 8.78 8.72 7.98 8 North Central 8.62 8.27 10.11 9.70 9.57 9.58 9. ,34 8.81 8.65 8.56 8.49 8.12 7 Southeast 9.50 7.82 10.12 10.07 9.53 9.47 8. ,74 8.35 8.30 7.50 10.12 7.50 8 Southwest 8.51 8.41 9.18 9.36 9.15 8.88 8. ,62 8.46 8.49 8.11 8.42 8.49 4 West Coast 8.15 8.02 9.71 9.27 8.99 8.84 8. ,34 8.39 8.32 9.10 8.09 7.83 Long-term 35 centers 8.88 8.89 9.76 9.45 9.18 9.47 9.11 9.01 9.16 8.54 8.79 8.89 New York City 8.44 8.77 7.37 8.80 9.09 8.53 9.13 8.86 9.46 8.01 8.32 8.80 7 Other Northeast 9.10 8.96 9.84 9.35 9.39 10.09 9.02 9.56 8.02 9.28 9.33 8.60 8 North Central 9.03 9.45 9.71 9.71 8.55 9.24 8.94 8.50 9.90 8.23 8.97 9.81 7 Southeast 8.87 8.91 7.82 8.87 8.84 9.66 9.06 9.54 9.36 8.04 8.54 8.30 8 Southwest 8.88 8.41 11.60 9.69 9.44 9.38 9.39 8.67 8.97 8.62 8.65 8.18 4 West Coast 9.27 8.57 9.90 9.60 9.90 9.24 9.32 9.28 9.49 8.47 9.21 8.47 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEBRUARY 1976 • INTEREST RATES A 27 MONEY MARKET RATES (Per cent per annum) U.S. Government securities 5 Prime Finance commercial CO. Prime Fed- Period paper1 paper bankers' eral 3-month bills^ 6-month bills 6 9- to 12-month issues placed accept- funds 3- to 5directly, ances, rate4 year 90-119 4 to 6 3 to 6 90 days 3 Rate Market Rate Market 1-year issues 7 ddaayyss months months2 on new yield on new yield bill (mar- Other7 issue issue ket yield) 6 1967 5.10 4.89 4.75 4.22 4.321 4.29 4.630 4.61 4.71 4.84 5.07 1968 5.90 5.69 5.75 5.66 5.339 5.34 5.470 5.47 5.46 5.62 5.59 1969 7.83 7.16 7.61 8.21 6.677 6.67 6.853 6.86 6.79 7.06 6.85 1970 7.72 7.23 7.31 7.17 6.458 6.39 6.562 6.51 6.49 6.90 7.37 1971 5.11 4.91 4.85 4.66 4.348 4.33 4.511 4.52 4.67 4.75 5.77 1972 4.66 4.69 4.52 4.47 4.44 4.071 4.07 4.466 4.49 4.77 4.86 5.85 1973 8.20 8.15 7.40 8.08 8.74 7.041 7.03 7.178 7.20 7.01 7.30 6.92 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 1975 6.26 6.33 6.16 6.30 5.82 5.838 5.80 6.122 6.11 6.30 6.70 7.55 1975—Jan 7.39 7.30 n. 35 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 r6.02 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 Oct 6.35 6.48 6.43 6.28 5.82 6.081 5.96 6.385 6.25 6.48 6.89 7.80 Nov 5.78 5.91 5.79 5.79 5.22 5.468 5.48 5.751 5.80 6.07 6.40 7.51 Dec 5.88 5.97 5.86 5.72 5.20 5.504 5.44 5.933 5.85 6.16 6.51 7.50 1976—Jan 5.15 5.27 5.16 5.08 4.87 4.961 4.87 5.238 5.14 5.44 5.71 7.18 Week ending— 1975—Oct. 4 . 6.85 6.93 6.70 6.79 6.36 6.547 6.46 6.980 6.91 7.16 7.61 8.21 11 6.70 6.88 6.75 6.59 6.06 6.239 6.23 6.571 6.53 6.74 7.20 7.97 18 6.44 6.59 6.56 6.38 5.82 6.045 6.01 6.243 6.25 6.51 6.88 7.87 25 6.08 6.23 6.23 6.04 5.73 5.887 5.73 6.156 6.06 6.29 6.66 7.67 Nov. 1 5.88 6.00 6.00 5.83 5.65 5.685 5.58 5.974 5.82 6.02 6.42 7.50 8 ... 5.88 6.03 6.00 5.79 5.17 5.602 5.50 5.792 5.71 5.89 6.30 7.41 15 5.75 5.88 5.63 5.77 5.24 5.279 5.37 5.483 5.65/ 5.96 6.27 7.38 22 5.75 5.88 5.78 5.79 5.24 5.471 5.49 5.796 5.85 6.17 6.47 7.60 29 5.75 5.88 5.78 5.80 5.28 5.520 5.54 5.933 5.98 6.24 6.54 7.62 Dec. 6 5.85 5.98 5.88 5.80 5.25 5.550 5.57 5.995 6.04 6.30 6.65 7.59 13 ... 5.98 6.03 5.95 5.81 5.26 5.633 5.60 6.144 6.06 6.43 6.79 7.67 20 5.95 6.03 5.95 5.72 5.17 5.491 5.44 5.914 5.85 6.20 6.54 7.50 27 5.84 5.94 5.75 5.65 5.18 5.340 5.28 5.678 5.60 5.91 6.25 7.37 1976—Jan. 3 5.69 5.81 5.69 5.52 5.18 5.208 5.19 5.507 5.49 5.77 6.11 7.28 10 5.33 5.40 5.33 5.25 5.12 5.226 5.07 5.521 5.32 5.58 5.91 7.20 17 5.10 5.23 5.13 5.04 4.76 4.826 4.84 5.066 5.11 5.41 5.68 7.14 24 5.10 5.23 5.10 5.01 4.81 4.783 4.78 5.046 5.06 5.37 5.65 7.18 31 5.00 5.13 5.00 4.94 4.80 4.763 4.72 5.052 5.00 5.32 5.53 7.16 1 Averages of the most representative daily offering rate quoted by rates. Prior to this date, the daily effective rate was the rate considered dealers. most representative of the day's transactions, usually the one at which 2 Averages of the most representative daily offering rate published by most transactions occurred. finance companies, for varying maturities in the 90-179 day range. 5 Except for new bill issues, yields are averages computed from daily 3 Beginning Aug. 15, 1974, the rate is the average of the midpoint of closing bid prices. the range of daily dealer closing rates offered for domestic issues; prior 6 Bills quoted on bank-discount-rate basis. data are averages of the most representative daily offering rate quoted by 7 Selected note and bond issues. dealers. 4 Seven-day averages of daily effective rates for week ending Wednesday. Since July 19, 1973, the daily effective Federal funds rate is an average of NOTE.—Figures for Treasury bills are the revised series described on p. the rates on a given day weighted by the volume of transactions at these A-35 of the Oct. 1972 BULLETIN. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 28 F.R. BANK INTEREST RATES • FEBRUARY 1976 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 i Aaa Baa New ce R n e t - ly Aaa Baa In tr d i u al s - R ro a a i d l- P u u ti b li l t i y c Pre- Com- Comissue offered ferred mon mon Seasoned issues 1970...... 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 1971 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 1972 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 1974 6.99 6.19 5.89 6.53 9.33 9.34 8.98 8.57 9.50 8.78 8.98 9.27 8.23 4.47 11.60 1975 6.98 7.05 6.42 7.62 9.40 9.41 9.46 8.83 10.39 9.25 9.39 9.88 8.38 4.31 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 10.10 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 8.28 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 •9.06' Oct . 7.29 7.40 6.67 8.01 9.45 9.43 9.51 8.86 10.37 9.32 9.40 9.94 8.58 4.22 Nov.. 7.21 7.41 6.64 8.08 9.20 9.26 9.44 8.78 10.33 9.27 9.36 9.83 8.50 4.07 Dec.. 7.17 7.29 6.50 7.96 9.36 9.21 9.45 8.79 10.35 9.26 9.37 9.87 8.57 4.14 1976—Jan 6.94 7.08 6.22 7.81 8.70 8.79 9.33 8.60 10.24 9.16 9.32 9.68 8.16 3.80 Week ending— 1975—Dec. 6.. 7.23 7.30 6.52 7.97 9.46 9.34 9.47 8.83 10.35 9.30 9.36 9.87 8.69 4.20 13.. 7.26 7.31 6.53 7.98 9.37 9.25 9.49 8.86 10.37 9.30 9.37 9.91 8.74 4.17 20.. 7.17 7.28 6.49 7.95 9.24 9.19 9.46 8.81 10.36 9.26 9.38 9.89 8.46 4.12 27.. 7.09 7.28 6.49 7.95 9.13 9.42 8.72 10.33 9.22 9.36 9.84 8.49 4.11 1976—Jan. 3.. 7.05 7.26 6.45 7.92 9.10 9.40 8.66 10.33 9.21 9.36 9.79 8.48 4.08 10.. 6.96 7.12 6.25 7.84 8.94 9.37 8.63 10.31 9.18 9.34 9.75 8.42 3.91 17.. 6.90 7.10 6.25 7.83 8.64 8.68 9.34 8.60 10.26 9.17 9.33 9.71 8.22 3.78 24.. 6.93 7.02 6.15 7.78 8.62 8.69 9.31 8.58 10.20 9.15 9.32 9.64 7.97 3.74 31.. 6.94 6.90 6.00 7.68 8.66 8.68 9.28 8.57 10.16 9.13 9.30 9.59 8.04 3.75 Number of issues2.. , 15 20 5 5 121 20 30 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

FEBRUARY 1976 • 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) ccchhhaaannngggeee tttoootttaaalll iiinnndddeeexxx ( G t l U e o o r . n m v S g t . ) , - S l a o t n c a d a te l p A C o A r o a r A t - e Total In tr d i u al s - R ro a a i d l- P u u ti b li l t i y c Total In tr d i u al s - T p t o r i a o r n t n a s - - Utility na F n i- ce 111 ((( 999 AAA 111 333 777 000 111 uuu 333 000 ,,, ggg ))) === ... 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 1975 57.44 68.9 56.2 85.17 96.15 37.48 41.21 45.73 51.88 30.73 31.45 46.62 83.15 18,568 2,150 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 r21,286 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 Oct 55.23 66.1 56.0 88.57 99.29 36.92 42.59 46.87 52.26 30.79 31 .87 44.36 83.46 15,893 1,629 Nov 55.77 66.2 56.3 90.07 100.86 37.81 43.77 47.64 52.91 32.15 32.83 47.48 85.60 16,795 1,613 Dec 56.03 67.4 56.1 88.74 94.89 37.07 43.25 46.78 63.70 31 .61 32.75 43.86 82.50 15,859 1,977 1976-—Jan 57.75 69.7 57.03 96.86 108.45 41.42 46.99 51.31 56.72 35.77 35.23 48.83 91.47 32,794 3,070 Week ending— 11997766--—Jan. 3 56.95 68.1 56.5 90.25 100.97 r38.12 '"44.35 47.65 52.76 32.94 33.41 45.17 83.22 15,085 r2,423 10 57.59 69.1 56.9 93.92 105.05 40.06 46.20 49.71 55.12 34.49 34.45 47.63 87.74 28,388 2,764 17 58.02 69.5 57.3 96.53 108.07 41.39 46.87 51.13 56.80 35.60 35.08 48.77 90.98 31,940 2,850 24 57.79 70.2 57.1 98.53 110.37 42.42 47.49 52.20 56.86 36.73 35.68 49.32 93.19 32,334 3,398 31 57.76 69.9 56.8 99.65 111.68 42.35 47.81 52.56 58.82 36.72 36.00 50.23 95.38 36,454 3,668 For notes see opposite page. STOCK MARKET CUSTOMER FINANCING (In millions of dollars) Margin credit at brokers and banks 1 Regulated : Unregulated 3 Free credit balances at brokers 4 End of period By source By type Margin stock Convertible Subscription Nonmargin bonds issues stock credit at banks Brokers Banks Brokers Banks Brokers Banks Margin Cash accts. accts. 1974—Dec.. 4,836 3,980 856 3,840 815 137 30 2,064 '410 rl ,425 1975—Jan... 4,934 4,086 848 3,950 806 134 29 1,919 410 1,450 Feb.. 5,099 4,269 830 4,130 783 136 34 1,897 480 1,610 Mar.. 5,164 4,320 844 4,180 800 134 30 1,882 515 1,770 Apr.. 5,327 4,503 824 4,360 781 138 30 1,885 505 1,790 May. 5,666 4,847 819 4,700 779 140 27 1,883 520 1 ,705 June. 5,140 4,990 146 520 1,790 July.. 5,446 5,300 143 555 1,710 Aug.. 5,365 5,220 142 515 1,500 Sept.. 5,399 5,250 145 470 1,455 Oct.. 5,448 5,300 144 545 1,495 Nov.. 5,519 5,370 146 490 1,470 Dec.. 5,540 5,390 147 475 1,525 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 • FEBRUARY 1976 EQUITY STATUS OF MARGIN ACCOUNT DEBT SPECIAL MISCELLANEOUS ACCOUNT BALANCES AT BROKERS AT BROKERS, BY EQUITY STATUS OF ACCOUNTS (Per cent of total debt, except as noted) (Per cent of total, except as noted) TToottaall Equity class (per cent) Equity class of accounts (( dd mm eebb iill tt -- Net in debit status Total EEnndd ooff lliioonnss End of period credit balance ppeerriioodd dd oo oo ff ll -- m 80 o r o e r 70-79 60-69 50-59 40-49 Un 4 d 0 er status 60 o r p e m r o c r e e n t 6 L 0 e p ss e r th c a e n n t of ( m d i o l l l l i a o r n s s ) llaarrss)) ii 1974—Dec. 41.1 32.4 26.5 7,013 1974—Dec.. 3,840 4.3 4.6 8.8 13.9 23.0 45.4 1975—Jan.. 41.1 39.3 19.8 7,185 1975— Jan. . 3,950 5.6 7.3 13.5 24.6 28.1 21.2 Feb. 42.2 40.1 17.8 7,303 Feb.. 4,130 5.9 7.2 14.6 25.4 28.5 18.4 Mar. 44.4 40.1 15.5 7,277 Mar.. 4,180 6.5 8.0 15.3 27.6 25.8 16.9 Apr. 45.2 41.1 13.7 7,505 Apr.. 4,360 7.1 8.7 16.1 28.7 23.5 15.9 May 44.5 43.2 12.3 7,601 May. 4,700 7.0 9.1 16.7 31.5 21 .0 13.4 June 45.9 43.1 11.0 7,875 June. 4,990 7.4 9.9 18.3 32.7 20.4 11.4 July. 45.6 41.1 13.1 7,772 July.. 5,300 6.0 8.3 13.9 23.6 30.4 17.9 Aug. 43.5 40.6 16.0 7,494 Aug.. 5,220 5.5 6.8 11.3 20.7 31.0 24.7 Sept. 45.3 38.9 15.8 7,515 Sept.. 5,250 5.1 7.3 10.6 19.6 31.0 26.5 Oct., 44.4 40.1 15.5 7,362 Oct... 5,300 5.5 6.7 11.2 21.8 29.7 25.2 Nov. 45.3 40.2 14.5 7,425 Nov.. 5,370 5.2 6.7 12.2 23.2 28.6 24.0 Dec. 43.8 40.8 15.4 7,290 Dec.. 5,390 5.3 6.9 11.6 22.3 28.8 25.0 NOTE.—Special miscellaneous accounts contain credit balances that i 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 Total Mortgage loan assets— commitments 2 Total Other General classified by maturity End of period M ga o g r e t- Other G U o . v S t . . S l a o t n c a d a te l C r a o a n r t d p e o- Cash O as t s h e e t r s lia a t b i n e i d s l i- De i p ts o s- lia ti b e i s l i- reserve (in months) govt. other1 general reserve accts. 3 or 3-6 6-9 Over 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 4,539 197 3 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 3,261 197 4 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—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 Aug... 76,310 4,405 4,187 1,451 27,104 1,730 3,067 118,254 106,745 3,255 8,254 981 431 237 573 2,222 Sept.. 76,429 4,487 4,279 1,495 27,033 1,783 3,136 118,643 107,560 2,778 8,304 1,011 372 256 499 2,138 Oct... 76,655 4,481 4,368 1,523 27,106 1,805 3,152 119,089 107,812 2,950 8,328 950 368 275 394 1,987 Nov. 76,855 4,550 4,601 1,551 27,421 1,872 3,223 120,073 108,480 3,215 8,378 972 323 222 379 1,896 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 State 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

FEBRUARY 1976 • SAVINGS INSTITUTIONS A 31 LIFE INSURANCE COMPANIES (In millions of dollars) Government securities Business securities End of period a T s o s t e a t l s U S n ta i t t e e s d Sta lo te c a a l n d Foreign Total Bonds Stocks M ga o g r e t s - e R st e a a t l e P lo o a li n c s y O as t s h e e t r s 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—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 25,399 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 Aug. 280,482 13,022 4,895 4,039 4,088 130,659 103,496 27,163 88,327 9,112 23,919 15,443 Sept. 281,847 13,150 4,914 4,122 4,114 131,524 104,529 26,995 88,445 9,210 24,048 15,470 Oct.. 284,829 13,793 5,505 4,148 4,140 133,237 105,473 27,764 88,655 9,356 24,171 15,617 Nov. 286,975 14,129 5,762 4,210 4,157 134,495 106,385 28,110 88,850 9,464 24,271 15,766 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 comassets— mitments End of period M ga o g r e t s - I s n m i e t v i c e e e u s n s r t 1 t - - Cash Other lia T b o il t i a t l i es S c a a v p i i n ta g l s w N or e t t h 2 m ro B o w n o e r e - d y 3 Loans Other ou a p t t s e e t r a n i n d o d d i o 4 n f g 197 1 174,250 18,185 2,857 10,731 206,023 174,197 13,592 8,992 5,029 4,213 7,328 197 2 206,182 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 1974r 249,293 23,240 22,991 295,524 242,959 18,436 24,780 3,244 6,105 7,454 1974—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 Apr.., 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.. 267,717 31,694 27,127 326,538 273,504 19,495 19,237 4,995 9,307 12,673 Sept.. 270,600 30,786 27,745 329,131 277,201 19,414 20,052 5,128 7,336 12,585 Oct... 273,596 31,652 28,145 333,393 279,465 19,663 20,327 5,207 8,731 11,748 Nov.. 275,919 32,498 28,610 337,027 281,711 19,919 20,434 5,164 9,799 11,365 Dec.f 278,704 30,920 28,785 338,409 286,040 19,821 20,724 5,185 6,639 10,663 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 • FEBRUARY 1976 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 Less: Equals: sury ing, (-) securi- securi- Special Total operat- Other net 2 ties ties notes i ing S i p ss 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 6,255 197 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,^40 3,009 -3,417 889 -2,077 197 5 280,997 324,601 -43,604 58,953 -1,069 8,112 -1,081 50,853 -1,570 1,891 -6,928 Half year: 1974—Jan.-June 140,676 138,032 2,647 5,162 426 8,297 295 -3,004 -1,215 1,089 231 July-Dec., 139,607 rl 53,147 -13,540 18,429 -689 2,840 150 r14,751 -3,228 557 -3,881 1975-Jan.-June. 141,190 171,202 -30,012 40,524 -423 5,272 ,231 36,059 1,658 1,643 -2,746 July-Dec., 139,453 184,545 -45,092 43,460 -39 -4,739 ,186 49,347 866 -980 -4,368 Month: 1974—Dec. r 24,944 27,398 -2,454 7,300 -53 2,276 -90 5,062 2,874 289 555 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 -2,981 July r20,197 r31,249 -11,052 5,051 -23 -2,427 -346 7,800 -3,390 -1,373 -1,511 Aug r23,584 r30,634 -7,050 9,472 6 2,384 -94 7,189 -630 -263 -1,032 Sept 28,615 29,044 -429 r5,935 9 -2,151 -367 8,463 6,961 446 -627 Oct 19,316 32,425 -13,109 8,352 -5 -3,656 260 11,743 -203 -348 815 Nov 21,745 29,401 -7,656 4,800 -3 -749 -390 5,936 -3,844 392 -1,732 Dec 25,995 31,792 -5,797 9,850 -24 1,860 -249 8,215 1,971 166 -281 Selected balances Treasury operating balance Borrowing from the public. End Memo: of Less: Debt of period B F a . n R k . s acc l T a o o n a a u d x n n ts d t O a e r p t i h o e e s s r i 3 - Total se P c d u u e b r b i l t t i i c e s s A ec g u e r n it c i y e s Sp I G e n c o v i v a e l t s , tm ac e c n o ts u n o ts f S n L p o e e t c e s s s ia : i l E T q o u t a a l l s: s c p p o G r o N r i n o v p o s v a s w o t . t — e . r - e 4 d issues 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 7,634 139 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 1,475 343 7,591 533,188 10,943 123,033 24,192 (5) 396,906 76,092 Calendar year: 197 3 2,543 7,760 70 10,374 469,898 11,586 106,624 24,978 825 349,058 59,857 197 4 3,113 r2,745 70 '5,928 492,664 11,367 117,761 25,423 (5) 360,847 76,459 197 5 7,286 1,159 7 8,452 576,649 10,904 118,294 23,006 446,253 Month: 1974—De c 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 2,885 410 220 3,515 499.710 11,037 116,812 23,886 369,049 75,964 Mar.... 4,271 2,142 220 6,633 509,659 11,042 115,596 24,807 380,298 76,392 Apr 8,364 5,415 521 14,299 516,740 11,004 115,606 24,355 387,783 77,124 May.... 7,040 984 521 8,545 528,158 10,998 118,902 23,915 396,339 75,140 June.... 5,773 1,475 343 7,591 533,188 10,943 123,033 24,192 396,906 76,092 July.... 2,776 878 444 4,098 538,240 10,920 120,606 23,847 404,707 77,173 Aug 2,349 1,214 -141 3,423 547.711 10,926 122,990 23,752 411,895 76,659 Sept 8,074 2,162 529 10,765 553,647 10,935 120,839 23,385 420,358 77,026 Oct 8,517 1 ,251 559 10,327 561,999 10,931 117,183 23,645 432,102 78,016 Nov... . 4,919 1,558 9 6,485 566,799 10,928 116,434 23,255 438,037 78,451 Dec 7,286 1,159 7 8,452 576,649 10,904 118,294 23,006 446,253 1 Represents non-interest-bearing public debt securities issued to the taries" (deposits in certain commercial depositaries that have been con- International Monetary Fund and international lending organizations. verted from a time to a demand basis to permit greater flexibility in New obligations to these agencies are handled by letters of credit. Treasury cash management). 2 Includes accrued interest payable on public debt securities until June 4 Includes debt of Federal home loan banks, Federal land banks, R.F.K. 1973 and total accrued interest payable to the public thereafter; deposit Stadium Fund, FNMA (beginning Sept. 1968), and Federal intermediate funds; miscellaneous liability (includes checks outstanding) and asset credit banks and banks for cooperatives (both beginning Dec. 1968). accounts; seigniorage; increment on gold; fiscal 1974 conversion of in- 5 Beginning July 1974, public debt securities excludes $825 million of terest receipts of Govt, accounts to an accrual basis; gold holdings, gold notes issued to International Monetary Fund to conform with Office of certificates and other liabilities, and gold balance beginning Jan. 1974; Management and Budget's presentation of the budget. and net gain/loss for U.S. currency valuation adjustment beginning June 1975. 3 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

FEBRUARY 1976 • 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 contribution2 Un- Other taxes toms and re- With- tion with- Re- Net re- Re- empl. net Net gift ceipts4 held Cam- held funds total ceipts funds insur. re- total paign Pay- Self- ceipts3 Fundi roll empl. taxes Fiscal year: 197 2 208,649 83,200 25,679 14,143 94,737 34,926 2,760 44,( 2,032 4,357 3,437 53,914 15,477 3,287 5,436 3,633 197 3 232,225 98,093 27,017 21,866 103,246 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 "112,092 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 5,369 197 5 280,997 122,071 34,328 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: 1974—Jan.-June 140,676 59,100 28 24,60522,953 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. '139,607 '61,378 7,098 1,016 67,461 18,247 2,016 34,418 254 2,914 2,187 39,774 8,761 1,958 2,284 '3,140 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 July-Dec. 139,453 59,549 7,649 1,362 65,835 18,810 2,735 35,443 268 2,861 2,314 40,886 8,759 1,927 2,573 3,397 Month: 1974—De c '24,944 '10,429 461 90 r10,801 6,458 190 4,982 14 89 356 5,441 1,489 307 341 '298 1975—Ja n 25,020 10,253 5,366 132 15,487 1,745 557 4,802 223 245 402 5,673 1,351 307 385 629 Feb 19,975 10,964 1,046 4,264 7,747 1,275 496 7,670 225 732 352 8,979 1,277 260 399 535 Mar 20,134 9,624 2,661 8,152 4,134 7,228 649 6,268 208 21 373 6,870 1,160 295 356 741 Apr 31,451 9,558 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 4,541 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 1,514 313 503 615 Aug 23,584 10,246 488 331 10,403 1,045 425 8,085 1,257 372 9,713 1,394 302 430 743 Sept 28,615 9,182 4,809 382 13,609 6,277 264 5,555 251 75 400 6,280 1,430 312 431 539 Nov 21,745 10,195 283 124 10,354 1,072 399 6,900 716 377 7,994 rl ,476 '310 '428 511 Dec 25,995 10,738 571 109 11,200 6,884 354 5,043 110 395 5,565 1,482 347 386 485 Budget outlays Gen- Nat- Educa- Gen- Reveral ural Com- tion, eral enue Undis- Na- sci- Agri- re- Com- mun. training, Health Govt., shar. trib. Period Total tional Intl. ence, cul- sources, merce and employ- and Vet- Inter- law and offde- affairs space, ture envir., and region, ment, wel- erans est en- fiscal setting fense and and transp. devel- and fare force., assist- retech. energy opment social and ance ceipts 5 serv. justice Fiscal year: 197 3 246,526 75,072 2,956 '4,030 4,855 '5,947 '9,930 '5,529 11,874 91,790 12,013 22,813 4,813 67,222 -12,318 197 4 268,392 78,569 3,593 '3,977 2,230 '6,571 13,096 '4,911 rl 1,598 106,505 13,386 28,072 5,789 6,746 -16,651 1975' 324,601 86,585 4,358 3,989 1,660 9,537 16,010 4,431 15,248 136,252 16,597 30,974 6,031 7,005 -14,075 1976'7.... 373,535 92,759 5,665 4,311 2,875 11,796 17,801 5,802 18,900 160,646 19,035 34,835 6,949 7,169 -15,208 TQ78 97,971 25,028 1,334 1,157 742 3,289 4,819 1,529 4,403 41,033 4,362 9,769 1,875 2,046 —3,589 19777 394,237 101,129 6,824 4,507 1,729 13,772 16,498 5,532 16,615 171,508 17,196 41,297 6,859 7,351 -18,840 Mo 1 n 9 t 7 h 5 : — Mar. 27,986 7,435 503 379 347 723 1,415 c19 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 2,716 416 1,524 -1,053 May 28,186 8,000 408 384 42 679 995 383 1,647 11,968 1,468 2,607 479 -873 June 30,296 7,854 557 256 179 788 1,289 453 1,684 14,158 1,412 2,521 759 -14 -1,601 July. '31,249 7,307 531 476 270 821 2,256 402 1,237 13,092 1,367 2,637 '321 1,625 -1,094 Aug. '30,634 8,229 448 402 117 770 2,165 568 1,690 12,431 1,447 2,672 553 213 -1,071 Sept. 29,044 6,923 47 398 507 844 1,899 '440 '1,571 12,738 1,334 2,859 548 4 -1,068 Oct.. 32,425 8,192 362 398 312 740 1 ,965 462 896 13,575 1,518 2,957 492 1,592 -1,035 Nov. 29,401 7,533 419 405 196 786 1,203 315 1,653 12,612 1,624 2,996 531 15 -887 Dec. 31,792 7,981 290 409 175 814 1,994 433 1,515 13,721 1,704 2,820 1,154 -1,221 1 Collections of these receipts, totaling $2,427 million for fiscal y«ar 1977. Figures for outlay categories exclude special allowances for con- 1973, were included as part of nonwithheld income taxes prior to Feb. tingencies and civilian agency pay raises totaling $200 million for fiscal 1974. year 1976, $175 million for the transition quarter (TQ), and $2,260 million 2 Old-age, disability, and hospital insurance, and Railroad Retirement for fiscal year 1977, and therefore do not add to totals. accounts. 8 Effective in calendar year 1976, the fiscal year for the U.S. Govt, is 3 Supplementary medical insurance premiums and Federal employee being changed from July 1-June 30 to Oct. 1-Sept. 30. The period July 1retirement contributions. Sept. 30 of 1976, data for which are shown separately from fiscal year 4 Deposits of earnings by F. R. Banks and other miscellaneous receipts. 1976 and fiscal year 1977 totals, will be a transition quarter. 5 Consists of interest received by trust funds, rents and royalties on the Outer Continental Shelf, and Govt, contributions for employee retirement. 6 Contains retroactive payments of $2,617 million for fiscal 1972. NOTE.—Half years may not add to fiscal year totals due to revisions in 7 Estimates presented in Budget of the U.S. Government, Fiscal Year 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 • FEBRUARY 1976 GROSS PUBLIC DEBT, BY TYPE OF SECURITY (In billions of dollars) Public issues (interest-bearing) Total End of period p g u r b o l s ic s Marketable Con- Nonmarketable Special debt i Total Bills C c e a r t t e i s fi - Notes Bonds 2 b v i o b e n r le d t- s Total 3 F is o s r u e e i s g n 4 S b a o a v n n i d d n s g 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 1974—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 Oct.. 562.0 443.6 350.9 147.1 166.3 37.6 2.3 90.5 21.2 67.2 117.4 Nov. 566.8 447.5 355.9 151.1 166.1 36.7 2.3 89.3 21.3 67.6 116.7 Dec. 576.6 457.1 363.2 157.5 167.1 38.6 2.3 91.7 21.6 67.9 118.5 1976—Jan.. 584.4 463.8 369.3 159.6 171.1 38.6 2.3 92.2 21 .6 68.2 118.1 1 Includes non-interest-bearing debt (of which $614 million on Jan. 31, 4 Nonmarketable certificates of indebtedness, notes, and bonds in the 1976, was not subject to statutory debt limitation). Treasury foreign series and foreign-currency-series issues. 2 Includes Treasury bonds and minor amounts of Panama Canal and 5 Held only by U.S. Govt, agencies and trust funds and the Federal postal savings bonds. home loan banks. 3 Includes (not shown separately): depositary bonds, retirement plan bonds, 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 n r d i o o d f p T g d u r o e b o t b l s a t i s l c ag G t U e a r o n n u . v S d c s t . i t , e s B F a . n R k . s Total m C b e a o r n c m k i - a s l M s b a a v u n i t n u k g a s s l p I c a n a o n s n m c u i e e r - - s r c O a o t t r i h p o e o n r - s g S l a o o t n v c a d a t te s l . Savi I n n g d s i v idu O al t s h er n F a i o t n a i r o t n e e d n i r g a - n l 1 t i O m o n r t v 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—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 27.4 July 538.2 142.5 81.9 313.8 71.4 3.7 7.3 16.2 31.3 65.9 21.8 66.7 29.5 Aug 547.2 144.8 82.5 320.4 75.4 3.9 7.4 16.0 31.2 66.2 22.6 67.3 30.5 Sept 553.6 142.3 87.0 324.4 78.4 4.0 7.6 15.0 32.2 66.5 23.0 65.5 32.3 Oct 562.0 138.8 87.2 336.0 80.5 4.2 7.9 17.5 33.8 66.8 23.2 66.9 35.2 Nov.? 566.8 137.7 85.1 343.9 82.6 4.4 8.8 20.0 33.9 67.1 23.5 66.1 37.5 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

FEBRUARY 1976 • U.S. GOVERNMENT SECURITIES A 35 OWNERSHIP OF MARKETABLE SECURITIES, BY MATURITY (Par value, in millions of dollars) \ Vithin 1 yeai 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 Nov. 30 355,879 192,797 151,139 41,658 111,795 26,439 14,302 10;546 Dec. 31 366,191 199,692 157,483 42,209 112,270 26,436 14,264 10,530 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 Nov. 30 19,582 2,866 237 2,629 7; 095 3,320 4,233 2,068 Dec. 31 19,347 2,769 207 2,562 7,058 3,283 4,233 2,053 Federal Reserve Banks: 1972 Dec. 31 69,906 37,750 29,745 8,005 24,497 6,109 1,414 113366 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—Nov. 30 85,137 44,596 35,924 8,672 30,183 6,348 1,479 2,532 Dec. 31 87,934 46,845 38,018 8,827 30,518 6,463 1,507 2,601 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 Nov. 30 251,160 145,335 114,978 30,357 74,517 16,771 8,590 5,946 Dec. 31 255,860 150,078 119,258 30,820 74,694 16,690 8,524 5,876 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 Nov. 30 63,309 27,778 15,335 12,443 30,245 4,368 599 318 Dec. 31 64,398 29,875 17,481 12,394 29,629 4,071 552 271 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 Nov. 30 3,183 876 458 418 1,499 451 234 124 Dec. 31 3,300 983 554 429 1,524 448 232 112 Insurance companies: 1972 Dec. 31 5,220 799 448 351 1,190 976 11,,559933 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 Nov. 30 7,105 1,827 1,317 510 2,235 1,487 1,155 401 Dec. 31 7,565 2,024 1,513 511 2,359 1,592 1,154 436 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 Nov. 30 9,258 7,090 5,866 1,224 1,854 188 84 41 Dec. 31 9,365 7,105 5,829 1,276 1,967 175 61 57 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 Nov. 30 2,874 938 552 386 1,554 263 96 23 Dec. 31 2,793 914 518 396 1,558 216 82 22 State and local governments: 1972 -Dec. 31 10,904 6,159 5,203 956 2.033 816 11,,229988 559988 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—Nov. 30 9,381 5,459 4,686 773 1,807 736 817 561 Dec. 31 9,285 5,288 4,566 722 1,761 782 896 558 All others: 1972 Dec. 31 101,249 61,014 55,506 5,508 23,171 8,906 55,,229900 22,,886688 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—Nov. 30 156,049 101,367 86,765 14,602 35,323 9,278 5,604 4,477 Dec. 31 159,154 103,889 88,797 15,092 35,894 9,405 5,546 4,420 NOTE.—Direct public issues only. Based on Treasury Survey of banks, and 729 insurance companies combined, each about 90 per cent; Ownership. (2) 459 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) 5,547 commercial banks, 471 mutual savings Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 36 U.S. GOVERNMENT SECURITIES • FEBRUARY 1976 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 other1 dealers brokers banks 1974—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 ,415 929 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 1,851 845 Sept 5,566 4.032 1,315 128 91 931 1,405 1,198 2,033 787 Oct 8,714 5,929 2,332 309 144 1,271 r2,675 1,839 2,929 rl,250 Nov 7,594 5,519 1,353 534 189 1,070 2,176 1,875 2,474 1,217 Dec 7,587 5,920 1,270 278 120 1,190 2,217 1,977 2,202 1,059 Week ending— 1975—Dec. 3 5,977 4,691 930 273 83 994 1,543 1,628 1,812 855 10 6,196 4,945 893 292 66 962 1,847 1,517 1,871 794 17 8,722 7,267 1,015 265 174 1,587 2,728 2,126 2,280 913 24 7,513 5,480 1,584 292 158 1,064 2,135 2,075 2,239 1,539 31 r 8,371 6,299 1,754 225 93 1,169 2,378 2,317 2,507 1,033 1976—Jan. 7 10,345 8,034 1,918 263 130 1,285 3,745 2,463 2,853 1,268 14 10,889 8,250 1,988 579 132 1,512 3,626 2,542 3,209 1,879 21 9,133 6,269 1,953 776 136 1,081 2,981 2,097 2,973 1,574 28 7,919 5,794 1,426 605 95 1,192 2,350 1,674 2,704 1,048 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 i t e l u s l r i- W y i e t 1 a h r i n y 1 ea -5 rs y 5 e - a 1 rs 0 y O e 1 v a 0 e r r s aa ss GG ee gg tt cc ee oo iiee uu nn vv ss rr cc tt ii ,, yy -- Period sou A r l c l es Y N C o i e t r w y k w E h ls e e r - e C t o io rp n o s1 r a- o A th l e l r 1974—Dec 4,821 3,100 974 553 175 1,803 1974—De c 6,904 2,061 1,619 691 2,534 1975—Jan 4,634 2,689 1,236 600 113 1,578 1975—Ja n 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 Aug 6,167 1,009 1,148 1,120 2,890 Sept 5,718 5,214 410 56 39 529 Sept 6,576 1,160 1,640 972 2,804 Oct 7,322 6,019 1,091 111 102 498 Oct 6,940 1,658 1,792 817 2,673 Nov 6,752 5,011 640 594 506 953 Nov 7,215 1,958 1,393 991 2,873 Dec 6,061 5,274 322 218 247 984 Dec 7,107 2,001 1,304 1,086 2,716 Week ending— Week ending— 1975—Nov. 5 7,741 5,392 878 914 557 839 1975—Nov. 5. 7,235 1 ,897 1,249 792 3,298 12 6,689 4,506 735 776 672 906 12. 6,589 2,031 1,413 956 2,189 19, . . 6,847 5,105 664 570 507 887 19. 6,977 1,720 1 ,517 1,107 2,634 26 6,340 5,107 505 410 319 1,070 26. 7,573 1 ,786 1,390 1,051 3,347 Dec. 3, , , 6,181 5,225 372 320 263 1,060 Dec. 7,824 2,462 1,380 982 3,001 10 5,689 5,101 94 231 264 912 7,163 1,976 1,277 1,161 2,749 17 6,700 6,256 71 134 240 842 7,931 2,148 1,707 1,226 2,851 24 , 5,964 4,992 521 212 240 1,049 6,695 1,986 1,113 1,091 2,506 31 5,785 4,635 666 245 239 1,125 6,423 1,802 1,073 954 2,594 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

FEBRUARY 1976 • FEDERALLY SPONSORED CREDIT AGENCIES A 37 OUTSTANDING ISSUES OF FEDERALLY SPONSORED CREDIT AGENCIES, DECEMBER 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: 6/21/74 - 2/25/76 8.70 400 Debentures: 7/1/75 - 1/5/76 5.65 434 8/25/71 -2/25/76 7.38 300 3/11/71 - 3/10/76 5.65 500 8/4/75-2/2/76 6.80 552 8/27/73 -2/25/76 8.75 300 6/12/73 - 3/10/76 7.13 400 9/2/75 - 3/1/76 7.40 526 8/26/74 -2/25/76 9.20 600 6/10/71 -6/10/76 6.70 250 10/1/75 -4/1/76 7.50 458 6/22/73 -- 5/25/76 7.20 600 2/10/72 - 6/10/76 5.85 450 11/3/75 -5/3/76 6.75 600 11/27/73 - 5/25/76 7.45 300 9/10/74 - 6/10/76 10.00 700 12/1/75 - 6/1/76 6.00 459 7/25/73 -- 8/25/76 7.80 500 11/10/71 - 9/10/76 6.13 300 10/1/73 - 4/4/77 7.70 200 9/25/74 -•8/25/76 9.55 700 6/12/72 -9/10/76 5.85 500 10/1/75 - 10/2/78 8.55 215 10/25/74 - 11/26/76 8.60 600 12/10/74 - 9/10/76 7.50 200 12P/74 - 10/1/79 8.00 201 7/25/74 - 11/26/76 9.55 500 7/12/71 - 12/10/76 7.45 300 10/25/73 - 2/25/77 7.20 500 12/11/72 - 12/10/76 6.25 500 11/25/74 -2/25/77 8.05 500 6/10/74- 12/10/76 8.45 600 Federal intermediate 6/21/74 -• 5/25/77 8.70 500 3/13/62 - 2/10/77 4.50 198 credit banks 6/25/71 -- 5/25/77 6.95 200 9/11/72 - 3/10/77 6.30 500 Bonds: 4/12/73 -- 8/25/77 7.15 300 3/11/74 - 3/10/77 7.05 400 3/1/73 - 1/5/76 6.65 261 5/28/74 --8/25/77 8.80 600 9/10/75 -3/10/77 8.30 450 4/1/75 - 1/5/76 6.05 1 ,079 2/26/73 -- 11/25/77 6.75 300 12/10/70 - 6/10/77 6.38 250 5/1/75 - 2/2/76 6.60 909 11/27/73 - 11/25/77 7.45 300 5/10/71 - 6/10/77 6.50 150 6/2/75 - 3/1/76 6.15 840 8/26/74 -- 11/25/77 9.15 700 12/10/73 - 6/10/77 7.20 500 7/1/75 -4/1/76 5.80 739 11/25/75 -2/27/78 7.25 800 9/10/71 -9/12/77 6.88 300 8/4/75 -5/3/76 7.00 888 9/25/74 -2/27/78 9.38 400 9/10/73 -9/12/77 7.85 400 9/2/75-6/1/76 7.60 770 9/21/73 -5/25/78 7.60 500 12/10/75 -9/12/77 7.38 450 10/1/75 - 7/1/76 7.70 469 8/26/74- 11/27/78 9.10 500 7/10/73 - 12/12/77 7.25 500 11/3/75 -8/2/76 6.90 640 6/21/74 - 2/26/79 8.65 600 10/1/73 - 12/12/77 7.55 500 12/1/75 -9/1/76 6.20 714 9/25/74 - 2/26/79 9.45 600 6/10/74-3/10/78 8.45 650 7/2/73 - 1/3/77 7. 10 236 10/25/74 - 5/25/79 8.65 500 3/10/75-3/10/78 6.70 350 7/I/74 _ 4/4/77 8.70 321 5/28/74 -5/2^/79 8.75 400 6/12/73 - 6/12/78 7.15 600 1/2/74 - 1/3/78 7.10 406 7/25/74 -8/27/79 9.50 500 6/10/75 -6/12/78 7.45 400 1/2/75 - 1/2/79 7.40 410 11/25/74 - 11/26/79 8.15 500 3/11/74 - 9/11/78 7.15 550 7/1/75 - 1/2/80 7.40 531 12/23/74 - 11/26/79 7.50 500 10/12/71 - 12/11/78 6.75 300 3/25/70 -- 2/25/80 7.75 350 7/10/74- 12/11/78 8.95 450 2/25/74 -- 2/25/80 7.05 300 12/10/73 - 3/12/79 7.25 500 Federal land banks 10/15/70 - 10/15/80 7.80 200 9/10/73 - 6/11/79 7.85 300 Bonds: 11/25/75 - 11/25/80 7.75 600 9/10/74 - 6/11/79 9.80 600 4/20/72 - 1/20/76 6.25 300 10/27/71 - 11/27/81 6.60 200 6/12/72 -9/10/79 6.40 300 7/22/74 - 1/20/76 9.20 650 10/25/74 - 11/25/81 8.65 400 12/10/74 -9/10/79 7.80 700 2/21/66 - 2/24/76 5.00 123 8/25/75 -- 2/25/82 8.63 500 10/10/75 - 10/10/79 8.50 400 1/22/73 - 4/20/76 6.25 373 4/12/73 -• 5/25/83 7.30 183 12/10/71 - 12/10/79 6.55 350 4/22/74-4/20/76 8.25 400 2/25/75 -• 1 1/25/83 7.38 400 6/10/75 - 12/10/79 7.75 650 7/20/66 - 7/20/76 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 11/25/75 -11/25/85 8.10 400 3/10/75-3/10/80 7.25 750 4/23/73 - 10/20/76 7.15 450 10/25/73 - 11 /26/93 7.38 400 4/1/75 -4/10/80 7.63 300 4/21/75 - 1/20/77 7.45 750 6/10/74-6/10/80 8.50 600 7/21/75 -10/20/76 7.20 650 Federal Home Loan 2/16/73 - 7/31/80 5.19 1 4/22/74-4/20/77 8.25 565 Mortgage Corporation 2/16/73 - 7/31/80 3.18 9 7/20/73 - 7/20/77 7.50 550 Bonds: 10/1/73 -9/10/80 7.50 400 10/20/71 - 10/20/77 , , , 6.35 300 7 5 5 5 1 / / / / 1 1 1 1 2 / 5 1 1 9 1 / / / / 9 7 7 7 7 1 2 3 2 /7 - - - - 0 - 8 5 2 8 / / / / 1 2 2 2 2 1 6 6 5 5 / / / / / 2 9 9 7 7 6 7 7 6 7 /95... 6 8 7 7 7 . . . . . 1 6 7 1 0 5 0 5 5 5 4 3 1 1 1 0 5 5 5 4 0 0 0 0 0 6 9 1 1 1 / 2 / / 2 2 1 1 / / 9 1 6 1 0 / 0 / 1 / 7 7 / / 7 2 7 3 7 5 5 2 - - - 9 - - 1 1 /1 / 1 0 1 2 0 2 / 2 9 3 / / / / 1 0 1 8 8 0 / 0 0 1 8 / / 0 8 8 0 0 4 6 8 6 8 . . . . . 1 4 6 7 0 5 6 0 5 0 6 6 3 1 5 5 0 5 0 0 0 6 5 2 7 5 1 1 / / / / 0 2 2 2 2 / 0 0 0 / 2 6 / / / 6 1 7 6 7 5 3 2 /7 - - - 4 - 4 - 4 / 2 / 7 1 2 2 / / / 0 2 0 2 2 / / 0 0 3 7 7 / / / 8 8 7 7 7 8 8 3 -78.... 4 7 6 8 5 . . . . . 1 6 4 7 1 3 0 0 0 3 7 2 5 1 1 6 1 4 4 5 9 3 6 8 0 Ce 2 1 r / 1 t 2 i / f 5 2 i / c 5 7 a / 5 7 t e 5 - s : - 3 9 / / 1 1 5 5 /0 / 5 0 5 8 8. . 7 2 5 0 2 3 0 0 0 0 4 3 3 / / / 1 1 2 8 2 1 / / / 7 7 7 3 3 3 - - - 3 3 5 / / / 1 1 1 0 0 /8 / / 1 8 8 1 1 4 6 7 . . . 5 5 0 9 0 5 3 2 5 1 6 0 8 7 2 1 / / 0 2 2 / 2 0 2 / / 3 7 6 / 4 7 7 3 - - - 7 1 / / 1 2 2 0 0 2 / / / 1 7 7 9 8 9 / 78 9 7 5 . . . 1 0 3 5 0 5 2 3 5 8 5 5 5 0 0 Federal National Mortgage 3/21/73-5/1/81 5.77 1 1/21/74 - 1/22/79 7.10 300 Association— 1/21/71 - 6/10/81 7.25 250 9/15P2 -4/23/79 6.85 235 Secondary market 9/10/71 -9/10/81 7.25 250 10/20/75 -4/23/79 8.55 650 operations 9/10/74-9/10/81 9.70 300 2/20/74 - 7/23/79 7.15 389 Discount notes 2,168 3/11/74-12/10/81 7.30 250 10/23/72 - 10/23/79 , . . 6.80 400 Capital debentures: 7/10/74 - 3/10/82 8.88 300 1/22/73 - 1/21/80 6.70 300 9/30/71 - 10/1/96 4.38 248 6/28/72 -5/1/82 5.84 58 7/20/73 - 7/21/80 7.50 250 10/2/72 - 10/1/97 7.40 250 2/10/71 - 6/10/82 6.65 250 10/21/74- 10/20/80 .., 8.70 400 9/11/72 - 9/10/82 6.80 200 2/23/71 -4/20/81 6.70 224 Mortgage-backed bonds: 10/10/75 - 10/11/82 8.60 300 7/22/74 - 7/20/81 9.10 265 3/14/73 - 1/15/81 3.58 53 12/10/73 - 12/10/82 7.35 300 1 /20/75 - 1 /20/82 7.80 400 3/14/73 - 1/15/81 5.48 4 3/11/71 -6/10/83 6.75 200 4/20/72 - 4/20/82 6.90 200 6/21/73 - 7/1/82 5.85 71 6/12/73 - 6/10/83 7.30 300 4/21/75 -4/20/82 8.15 300 6/21/73 - 7/1/82 5.92 35 11/10/71 -9/12/83 6.75 250 4/23/73 - 10/20/82 7.30 239 3/1/73 - 8/31/84 5.50 10 6/10/75 - 12/12/83 8.00 300 7/21/75 - 1/20/83 8.20 464 3/1/73 - 10/31/85 5.49 21 12/10/75 - 12/12/83 8.40 300 10/23/73 - 10/20/83 .... 7.30 300 3/1/73 - 3/1/86 5.74 80 4/12/71 -6/11/84 6.25 200 6/23/75 - 7/22/85 8.10 391 9/29/70 - 10/1/90 8.63 200 7/10/75 -7/10/84 8.20 300 10/20/75 - 10/21/85 .... 8.80 435 12/10/74-9/10/84 7.95 300 12/10/71 - 12/10/84 6.90 250 3/10/75-3/11/85 7.65 500 3/10/72 - 3/10/92 7.00 200 6/12/72-6/10/92 7.05 200 12/11/72 - 12/10/97-82. . 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 • FEBRUARY 1976 MAJOR BALANCE SHEET ITEMS OF SELECTED FEDERALLY SPONSORED CREDIT AGENCIES (In millions of dollars) Federal home loan banks FFeeddeerraall NNaattiioonnaall MMoorrttggaaggee AAssssnn.. Banks FFeeddeerraall Federal ((sseeccoonnddaarryy mmaarrkkeett for iinntteerrmmeeddiiaattee land Assets Liabilities and capital ooppeerraattiioonnss)) cooperatives ccrreeddiitt bbaannkkss banks 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 mem- posits notes posits loans notes atives counts loans bers (A) (L) (A) (L) (A) (L) (A) 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 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 7,979 2,225 129 6,971 1,548 1,756 19,791 19,238 2,298 1,944 6,094 5,804 9,107 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 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 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 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 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 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 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 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 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 16,945 4,680 89 18,736 2,281 2,660 30,881 28,718 3,738 3,004 10,176 9,715 15,851 17,482 4,247 114 18,720 2,275 2,679 31,157 28,933 3,847 3,109 10,100 9,657 16,044 17,578 4,368 70 18,766 2,291 2,685 31,466 29,373 4,087 3,453 9,933 9,505 16,247 17,606 4,439 87 18,874 2,527 2,690 31,647 29,919 4,041 3,664 8,784 9,319 16,380 17,845 4,376 108 18,873 2,701 2,705 31,916 29,963 3,979 3,643 9,947 9,211 16,564 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 amount deliv- Special ered 3 Total G o e b a n l l e i- r- R n e u v e e - HAA1 G l U o o a . v S n t s . , State di s a s t n t a r d t i . c t Other2 Total c E at d i u o - n b R r a i o d n a g d d e s s i U ti t e i s l- 4 H in o g u s s - V a a e n i t d e s ' r gations auth. 24,963 15,220 8888888888888888,,,,,,,,,,,,,,,,666666666666666688888888888888881111111111111111 1,000 5,999 8,714 10,246 24,495 5,278 2,642 5,214 2,068 23,653 13,305 9999999999999999,,,,,,,,,,,,,,,,333333333333333333333333333333332222222222222222 959 4,991 9,496 9,165 19,959 4,981 1,689 4,638 1,910 23,969 12,257 11111111111111110000000000000000,,,,,,,,,,,,,,,,666666666666666633333333333333332222222222222222 1,022 4,212 9,505 10,249 22,397 4,311 1,458 5,654 2,639 24,315 13,563 11111111111111110000000000000000,,,,,,,,,,,,,,,,222222222222222211111111111111112222222222222222 461 4,784 8,638 10,817 23,508 4,730 768 5,634 1,064 30,607 16,020 11111111111111114444444444444444,,,,,,,,,,,,,,,,555555555555555511111111111111111111111111111111 7,438 12,441 10,660 29,495 4,689 1,277 7,209 647 2,487 1,110 1111111111111111,,,,,,,,,,,,,,,,333333333333333377777777777777774444444444444444 689 1,005 789 2,403 698 4 866 9 1,500 761 777777777777777711111111111111117777777777777777 222 558 700 1,475 297 64 424 53 2,367 1,364 999999999999999999999999999999997777777777777777 372 702 1,293 2,332 710 49 644 172 2,392 1,723 666666666666666666666666666666664444444444444444 877 629 880 2,353 478 209 425 105 2,137 1,284 888888888888888855555555555555551111111111111111 376 717 1,048 2,083 471 94 474 35 2 2, , 9 4 0 1 5 3 1 1 , , 5 8 0 8 1 5 1111111111111111,,,,,,,,,,,,,,,,0000000000000000 9999999999999999 1111111111111111 0000000000000000 5555555555555555 5555555555555555 3 81 68 1 1,1 8 9 8 7 0 1,1 8 6 8 1 9 2 2 , , 3 7 1 8 6 4 4 4 0 1 5 9 21 6 1 1 7 55 3 9 4 2 3 5 8 3,066 1,772 1111111111111111,,,,,,,,,,,,,,,,222222222222222299999999999999992222222222222222 938 1,137 989 2,840 430 164 821 28 3,586 1,371 2222222222222222,,,,,,,,,,,,,,,,222222222222222200000000000000009999999999999999 1,577 1,063 941 3,554 400 123 879 37 2,786 1,058 1111111111111111,,,,,,,,,,,,,,,,777777777777777722222222222222225555555555555555 376 1,665 747 2,561 379 55 626 67 2,171 907 1111111111111111,,,,,,,,,,,,,,,,222222222222222255555555555555552222222222222222 357 1,185 614 2,123 279 134 447 48 2,337 1,120 1111111111111111,,,,,,,,,,,,,,,,222222222222222200000000000000003333333333333333 482 979 855 2,241 212 60 487 44 2 2 , , 3 0 8 6 5 2 1,0 9 4 9 0 5 1111111111111111 1111111111111111 ,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,3333333333333333 0000000000000000 4444444444444444 5555555555555555 1111111111111111 7777777777777777 4 43 7 4 0 1 1 , , 0 2 4 4 3 4 6 5 6 7 7 6 2 1 , , 3 9 1 9 8 0 2 2 8 1 7 9 2 8 9 8 4 6 9 1 5 8 2 2 8 0 1 Only bonds sold pursuant to 1949 Housing Act, which are secured 4 Water, sewer, and other utilities. by contract requiring the Housing Assistance Administration to make 5 Includes urban redevelopment loans. annual contributions to the local authority. 2 Municipalities, counties, townships, school districts. NOTE.—Security Industries Assn. data; par amounts of long-term issues 3 Excludes U.S. Govt, loans. Based on date of delivery to purchaser based on date of sale unless otherwise indicated. and payment to issuer, which occurs after date of sale. Components may not add to totals due to rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEBRUARY 1976 • SECURITY ISSUES A 39 TOTAL NEW ISSUES (In millions of dollars) Gross proceeds, all issues1 Noncorporate Corporate PPPPeeeerrrriiiioooodddd Bonds Stock TTToootttaaalll GG UU oo .. vv SS tt .. .. 22 aagg GG UU ee oo nn .. vv SS cc tt .. yy .. 33 aa (( nn UU SS dd tt .. aa SS lloo tt .. ee cc )) 44 aa ll OOtthheerrss TToottaall Total P o u f b fe li r c e l d y P p ri l v a a c t e e d l y Preferred Common 197 1 105,233 17,235 16,283 24,370 2,165 444444444444444444444444444444,,,,,,,,,,,,,,,999999999999999111111111111111444444444444444 333333333333333111111111111111 ,,,,,,,,,,,,,,,999999999999999999999999999999999999999999999 222222222222222444444444444444,,,,,,,,,,,,,,,777777777777777999999999999999000000000000000 777777777777777,,,,,,,,,,,,,,,222222222222222000000000000000999999999999999 333333333333333,,,,,,,,,,,,,,,666666666666666777777777777777999999999999999 999999999999999,,,,,,,,,,,,,,,222222222222222333333333333333666666666666666 197 2 96,522 17,080 12,825 23,070 1,589 444444444444444000000000000000,,,,,,,,,,,,,,,777777777777777888888888888888777777777777777 222222222222222777777777777777,,,,,,,,,,,,,,,777777777777777222222222222222777777777777777 111111111111111888888888888888,,,,,,,,,,,,,,,333333333333333444444444444444777777777777777 999999999999999,,,,,,,,,,,,,,,333333333333333777777777777777888888888888888 333333333333333,,,,,,,,,,,,,,,333333333333333777777777777777333333333333333 999999999999999,,,,,,,,,,,,,,,666666666666666888888888888888999999999999999 197 3 100,417 19,057 23,883 22,700 1,385 333333333333333333333333333333,,,,,,,,,,,,,,,333333333333333999999999999999111111111111111 222222222222222222222222222222,,,,,,,,,,,,,,,222222222222222666666666666666888888888888888 111111111111111333333333333333,,,,,,,,,,,,,,,666666666666666444444444444444999999999999999 888888888888888,,,,,,,,,,,,,,,666666666666666222222222222222000000000000000 333333333333333,,,,,,,,,,,,,,,333333333333333777777777777777222222222222222 777777777777777,,,,,,,,,,,,,,,777777777777777555555555555555000000000000000 197 4 333333333333333777777777777777,,,,,,,,,,,,,,,888888888888888333333333333333777777777777777 333333333333333111111111111111,,,,,,,,,,,,,,,555555555555555555555555555555111111111111111 222222222222222555555555555555,,,,,,,,,,,,,,,333333333333333333333333333333777777777777777 666666666666666,,,,,,,,,,,,,,,222222222222222111111111111111444444444444444 222222222222222,,,,,,,,,,,,,,,222222222222222555555555555555333333333333333 444444444444444,,,,,,,,,,,,,,,000000000000000333333333333333333333333333333 1974—Oct 444444444444444,,,,,,,,,,,,,,,666666666666666000000000000000999999999999999 333333333333333,,,,,,,,,,,,,,,777777777777777777777777777777888888888888888 333333333333333,,,,,,,,,,,,,,,444444444444444222222222222222333333333333333 333333333333333555555555555555555555555555555 111111111111111999999999999999666666666666666 666666666666666333333333333333555555555555555 Nov 333333333333333,,,,,,,,,,,,,,,777777777777777444444444444444666666666666666 333333333333333,,,,,,,,,,,,,,,333333333333333444444444444444666666666666666 333333333333333,,,,,,,,,,,,,,,000000000000000111111111111111666666666666666 333333333333333333333333333333000000000000000 999999999999999333333333333333 333333333333333000000000000000777777777777777 Dec 333333333333333,,,,,,,,,,,,,,,555555555555555000000000000000555555555555555 333333333333333,,,,,,,,,,,,,,,000000000000000555555555555555222222222222222 222222222222222,,,,,,,,,,,,,,,111111111111111777777777777777222222222222222 888888888888888888888888888888000000000000000 111111111111111555555555555555222222222222222 333333333333333000000000000000111111111111111 1975—Jan 555555555555555,,,,,,,,,,,,,,,333333333333333666666666666666444444444444444 444444444444444,,,,,,,,,,,,,,,777777777777777999999999999999111111111111111 333333333333333...............666666666666666555555555555555777777777777777 111111111111111,,,,,,,,,,,,,,,111111111111111333333333333333444444444444444 222222222222222333333333333333555555555555555 333333333333333333333333333333888888888888888 Feb 444444444444444,,,,,,,,,,,,,,,555555555555555222222222222222888888888888888 333333333333333,,,,,,,,,,,,,,,999999999999999000000000000000666666666666666 333333333333333,,,,,,,,,,,,,,,222222222222222000000000000000111111111111111 777777777777777000000000000000555555555555555 111111111111111777777777777777333333333333333 444444444444444444444444444444999999999999999 Mar 555555555555555,,,,,,,,,,,,,,,333333333333333777777777777777888888888888888 444444444444444,,,,,,,,,,,,,,,444444444444444888888888888888111111111111111 333333333333333,,,,,,,,,,,,,,,999999999999999777777777777777111111111111111 555555555555555111111111111111000000000000000 222222222222222555555555555555333333333333333 666666666666666444444444444444444444444444444 Apr 444444444444444,,,,,,,,,,,,,,,222222222222222999999999999999333333333333333 333333333333333,,,,,,,,,,,,,,,111111111111111999999999999999333333333333333 222222222222222,,,,,,,,,,,,,,,777777777777777777777777777777111111111111111 444444444444444222222222222222222222222222222 333333333333333444444444444444999999999999999 777777777777777555555555555555111111111111111 May 555555555555555,,,,,,,,,,,,,,,666666666666666222222222222222888888888888888 444444444444444,,,,,,,,,,,,,,,222222222222222999999999999999888888888888888 333333333333333,,,,,,,,,,,,,,,777777777777777999999999999999666666666666666 555555555555555000000000000000222222222222222 333333333333333444444444444444666666666666666 999999999999999888888888888888444444444444444 June 555555555555555,,,,,,,,,,,,,,,666666666666666111111111111111888888888888888 444444444444444,,,,,,,,,,,,,,,666666666666666111111111111111333333333333333 333333333333333,,,,,,,,,,,,,,,999999999999999444444444444444333333333333333 666666666666666777777777777777000000000000000 222222222222222333333333333333000000000000000 777777777777777777777777777777555555555555555 July 444444444444444,,,,,,,,,,,,,,,333333333333333888888888888888888888888888888 333333333333333,,,,,,,,,,,,,,,777777777777777333333333333333111111111111111 222222222222222...............666666666666666555555555555555888888888888888 111111111111111,,,,,,,,,,,,,,,000000000000000777777777777777333333333333333 111111111111111999999999999999888888888888888 444444444444444555555555555555999999999999999 Aug 222222222222222,,,,,,,,,,,,,,,333333333333333999999999999999999999999999999 111111111111111,,,,,,,,,,,,,,,888888888888888333333333333333666666666666666 111111111111111,,,,,,,,,,,,,,,333333333333333555555555555555666666666666666 444444444444444888888888888888000000000000000 111111111111111222222222222222999999999999999 444444444444444333333333333333444444444444444 Sept 222222222222222,,,,,,,,,,,,,,,888888888888888333333333333333000000000000000 111111111111111,,,,,,,,,,,,,,,999999999999999999999999999999444444444444444 111111111111111,,,,,,,,,,,,,,,444444444444444111111111111111444444444444444 555555555555555888888888888888000000000000000 333333333333333000000000000000888888888888888 555555555555555222222222222222888888888888888 Oct 444444444444444,,,,,,,,,,,,,,,555555555555555777777777777777333333333333333 333333333333333,,,,,,,,,,,,,,,000000000000000222222222222222666666666666666 222222222222222,,,,,,,,,,,,,,,333333333333333888888888888888999999999999999 666666666666666333333333333333777777777777777 333333333333333333333333333333222222222222222 111111111111111,,,,,,,,,,,,,,,222222222222222111111111111111555555555555555 Gross proceeds, major groups of corporate issuers Period Manufacturing C m om is m ce e l r l c a i n a e l o a u n s d Transportation Public utility Communication a R nd e a f l i n e a s n ta c t i e a l Bonds Stocks Bonds Stocks Bonds Stocks Bonds Stocks Bonds Stocks Bonds 197 1 9,551 2,102 2,158 2,370 2,006 434 7,576 4,201 4,222 1,596 6,484 197 2 4,796 1,812 2,669 2,878 1,767 187 6,398 4,967 3,680 1,127 8,415 197 3 4,329 643 1,283 1,559 1,881 43 5,585 4,661 3,535 1,369 5,661 197 4 9,890 543 1,851 956 983 22 8,872 3,964 3,710 222 6,241 1974—Oct., 725 3 102 29 306 1,414 695 439 36 791 Nov. 1,697 2 116 100 336 739 225 62 31 397 Dec. 1,456 196 180 23 14 435 194 150 25 817 1975—Jan.. 1,901 3 179 58 84 764 507 933 5 931 Feb.. 1,631 44 65 60 75 1,471 486 126 1 539 Mar. 2,368 271 74 83 828 679 317 614 Apr. 1,498 233 293 211 97 794 586 354 61 156 May 2,266 214 242 141 415 845 704 153 260 379 June 2,195 123 384 194 231 838 640 362 603 July. 1,116 64 229 231 338 713 324 254 16 1,081 Aug. 610 101 141 70 17 719 305 93 19 255 Sept. 583 106 57 37 151 720 541 249 48 234 Oct., 731 142 321 152 625 550 676 371 555 427 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 • FEBRUARY 1976 NET CHANGE IN OUTSTANDING CORPORATE SECURITIES (In millions of dollars) Derivation of change, all issuers1 All securities Bonds and notes Common and preferred stocks New issues Retirements Net change New issues Retirements Net change New issues Retirements Net change 46,687 9,507 37,180 31,917 8,190 23,728 14,769 1,318 13,452 42,306 10,224 32,082 27,065 8,003 19,062 15,242 2,222 13,018 33,559 11,804 21,754 21,501 8,810 12,691 12,057 2,993 9,064 39,334 9,935 29,399 31,554 6,255 25,098 7,980 3,678 4,302 8,452 2,985 5,467 6,611 1,225 5,386 1,841 1,759 82 12,272 2,871 9,401 10,086 2,004 8,082 2,186 866 1,319 15,211 2,088 13,123 i 12,759 1 ,587 11,172 2,452 501 1 ,951 15,602 3,211 12,390 11,460 2,336 9,124 4,142 875 3,266 9,079 2,576 6,503 ! 6,654 2,111 4,543 2,425 465 1,960 Type of issues Manu- Commercial Transpor- Public Communi- Real estate facturing and other 2 tation 3 utility cation and financial 1 Period 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—1II 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 Ill 1,442 412 221 108 147 53 1,395 1,043 472 97 866 247 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) YYeeaarr Month Sales 1 Redemp- Net Total 2 Cash Other Sales 1 Redemp- Net Total 2 Cash tions sales position 3 tions sales position 3 1963 2,460 1,504 952 25,214 1,341 23,873 1974--Dec.. . 736 411 325 35,777 5,637 1964 3,404 1,875 1,528 29,116 1,329 27,787 1965 4,359 1,962 2,395 35,220 1.803 33,417 1975-—Jan... 1,067 428 639 37,407 3,889 Feb... 889 470 419 39,330 4,006 1966 4,671 2,005 2,665 34,829 2,971 31,858 Mar. . 847 623 224 40,449 3,870 1967 4,670 2,745 1,927 44,701 2,566 42,135 Apr.. . 808 791 17 42,353 3,841 11996688 6,820 3,841 2,979 52,677 3,187 49,490 May.. 677 735 -58 43,832 3,879 June.. r703 811 -108 45,538 3,640 1969 6,717 3,661 3,056 48,291 3,846 44,445 July... 763 981 -239 42,896 3,591 1970 4,624 2,987 1,637 47,618 3,649 43,969 Aug... 753 788 -35 41,672 3,660 11997711 5,145 4,751 394 55,045 3,038 52,007 Sept... 760 874 -114 40,234 3,664 Oct. . . 914 995 -81 41,860 3,601 1972 4,892 6,563 -1,671 59,831 3,035 56,796 Nov.r. 786 911 -125 42,460 3,733 1973 4,358 5,651 -1,261 46,518 4,002 42,516 Dec.. . 1,040 1 ,093 -53 42,179 3,748 1974 5,346 3,937 1 ,409 35,777 5,637 30,140 1975 10,057 9,571 486 42,179 3,748 38,431 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 offering 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

FEBRUARY 1976 • BUSINESS FINANCE A 41 CORPORATE PROFITS, TAXES, AND DIVIDENDS (In billions of dollars) Corporate Corporate Year P b t r e a o f x o f e i r s t e s c ta o I x n m e - e s P t a r a f o x t f e e i s r t s d C d e i a n v s d i h - s tr U p i r b n o u d f t i i e s ts - d co c a n a l t s l i p o o u i n w t m a - l p - Quarter P b t r e a o f x f o e i r s t e s c ta o I x n m e - e s P t a r a f o x t f e e i s r t s d C d e i a n v s d i h - s t U r p i r n b o d u f i t i s e ts - d co c a t n a i l s l o p o u n i w t m a - l p ances 1 ances 1 1968 r 85.6 39.3 46.2 21.9 24.2 44.4 1973—IV... 119.1 48.6 70.5 29.5 40.9 75.6 1969' 83.5 39.7 43.8 22.6 21.2 49.4 1970' 71.5 34.5 37.0 22.9 14.1 55.1 1974—1. ... 128.3 49.4 78.9 30.0 48.9 77.5 1971r 82.0 37.7 44.3 23.0 21.3 60.6 II. . . 129.6 52.6 77.1 30.9 46.2 80.1 1972r 96.2 41.5 54.7 24.6 30.0 65.3 III... 146.7 59.3 87.4 31.7 55.7 83.4 1973 r 117.0 48.3 68.7 27.8 40.7 71.8 IV... 123.9 49.2 74.7 31.7 43.0 87.2 1974r 132.1 52.6 79.5 31.1 48.4 82.0 1975—I. ... 97.1 37.2 59.9 32.1 27.8 89.1 II. . . 108.2 41.2 66.9 32.6 34.3 91.6 III... 129.5 50.4 79.1 33.5 45.6 95.5 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. End of period wwwooorrrkkkiiinnnggg UU..SS.. receivable payable AAccccrruueedd cccaaapppiiitttaaalll TToottaall CCaasshh ss GG eecc oo uu 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 ov .S t, . i Other G U o . v S t . . 1 Other ttaaxxeess 187.4 492.3 50.2 7.7 4.2 201.9 193.3 35.0 304.9 6.6 204.7 10.0 83.6 203.6 529.6 53.3 11.0 3.5 217.6 200.4 43.8 326.0 4.9 215.6 13.1 92.4 221.3 573.5 57.5 9.3 3.4 240.0 215.2 48.1 352.2 4.0 230.4 15.1 102.6 235.4 608.2 59.0 10.0 2.9 255.4 230.1 50.8 372.7 4.5 241.7 15.0 111.6 239.5 625.3 58.9 9.7 3.0 264.4 238.0 51.3 385.8 4.4 250.2 16.5 114.7 242.3 643.2 61.6 11.0 3.5 266.1 246.7 54.4 401 .0 4.3 261.6 18.1 117.0 250.1 666.2 59.4 12.1 3.2 276.2 258.4 56.9 416.1 4.5 266.5 20.6 124.5 253.9 685.4 58.8 10.7 3.4 289.8 269.2 53.5 431 .5 4.7 278.5 19.0 129.1 259.5 708.6 60.3 11.0 3.5 295.5 282.1 56.1 449.1 5.1 287.0 22.7 134.3 261 .5 712.2 62.7 11.7 3.5 289.7 288.0 56.6 450.6 5.2 287.5 23.2 134.8 260.4 698.4 60.6 12.1 3.2 281 .9 285.2 55.4 438.0 5.3 271.2 21 .8 139.8 269.0 703.2 63.7 12.7 3.3 284.8 281.4 57.3 434.2 5.8 270.1 17.7 140.6 271.8 716.5 65.6 14.3 3.3 294.7 279.6 59.0 444.7 6.2 273.4 19.4 145.6 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 Durable du N r o a n b - le MMiinniinngg R ro a a i d l- Air Other Electric and Ga o s t her nn CC ii oo cc mm aattii mm oo uu nn -- ss OOtthheerr ii T A T A ((SS oo ..RR AA ttaa .. .. ll )) 81.21 14.15 15.84 2.16 1.67 1.88 1.38 12.86 2.44 10.77 18.05 88.44 15.64 15.72 2.45 1.80 2.46 1.46 14.48 2.52 11.89 20.07 99.74 19.25 18.76 2.74 1.96 2.41 1.66 15.94 2.76 12.85 21.40 112.40 22.62 23.39 3.18 2.54 2.00 2.12 17.63 2.92 13.96 22.05 28.48 5.84 5.59 .71 .56 .60 .47 4.54 .82 3.53 5.83 103.74 24.10 4.74 4.75 .68 .50 .47 .34 3.85 .52 3.19 5.05 107.27 28.16 5.59 5.69 .78 .64 .61 .49 4.56 .75 3.60 5.46 111.40 28.23 5.65 5.96 .80 .64 .43 .58 4.42 .78 3.39 5.57 113.99 31.92 6.64 6.99 .91 .78 .48 .71 4.80 .87 3.78 5.97 116.22 25.82 5.10 5.74 .91 .59 .44 .62 3.84 .58 3.11 4.88 114.57 28.43 5.59 6.55 .97 .71 .47 .77 4.15 .79 3.22 5.19 112.46 27.79 5.16 6.51 .94 .62 .50 .85 4.16 .91 3.14 5.00 112.16 31 .45 6.20 7.46 1.00 .61 .43 .65 4.88 1.00 9.21 114.80 26.54 4.94 6.04 .96 .60 .29 .65 4.46 .69 7.90 118.16 1 Includes trade, service construction, finance, and insurance. NOTE.—Dept. of Commerce estimates for corporate and noncorporate 2 Anticipated by business. 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 • FEBRUARY 1976 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 ALL HOLDERS. 499,758 564,825 634,954 '678,622 '688,654 '695,354 '709,555 '725,396 1- to 4-family 307,241 345,349 384,613 '407,421 '411,520 '414,663 '424,197 '434,976 Multifamily 67,341 76,690 85,421 '90,007 '91,872 '92,451 '93,070 '94,254 Commercial 92,318 107,349 125,572 138,002 140,965 142,701 145,353 '148,182 Farm 32,858 35,437 39,348 43,192 44,297 45,539 46,935 '47,984 PRIVATE FINANCIAL INSTITUTIONS.. 394,239 450,000 505,400 537,430 542.552 546,689 558,179 '569,499 1- to 4-family 253,581 288,018 320,420 338,166 340,007 342,313 350,198 '358,275 Multifamily 52,472 59,398 64,750 67,486 68,161 68,095 68,453 '68,931 Commercial 78,330 92,063 108,735 119,465 121,948 123,684 126,634 '129,263 Farm 9,856 10,521 11.495 12,313 12,436 12,597 12,894 '13,030 Commercial banks1 82,515 99.314 119,068 130,582 132,105 131,903 133,012 134,025 1- to 4-family 48,020 57,004 67,998 73,987 74,758 74,696 75,356 75,979 Multifamily 3,984 5,778 6,932 7,496 7,619 7,176 6,816 6,701 Commercial 26,306 31,751 38,696 43,092 43,679 43,924 44,598 45,032 Farm 4,205 4,781 5,442 6,007 6,049 6,107 6,242 6,313 Mutual savings banks 61,978 67,556 73,230 74,809 74,920 75,157 75,796 76,429 1- to 4-family. 38,641 41,650 44,246 44,604 44,670 44,795 45,175 45,552 Multifamily 14,386 15,490 16,843 17.208 17,234 17,291 17,433 17,579 Commercial 8,901 10,354 12,084 12,938 12,956 12,996 13,112 13,221 Farm 50 62 57 59 60 75 76 77 Savings and loan associations 174,250 206,182 231, 733 247,612 249,293 252,442 261,336 '270,600 1- to 4-family 142,275 167,049 187,750 200,343 201.553 204,099 211,290 '218,780 Multifamily 17,355 20,783 22,524 23,573 23,683 23,831 24,409 '24,895 Commercial 14,620 18,350 21,459 23,696 24,057 24,512 25,637 '26,925 Life insurance companies 75,496 76,948 81,369 84,427 86,234 87,187 88,035 '88,445 1- to 4-family 24,645 22.315 20,426 19,232 19,026 18,723 18,377 '17,964 Multifamily 16,747 17,347 18,451 19.209 19,625 19,797 19,795 '19,756 Commercial 28,503 31,608 36.496 39,739 41,256 42,252 43,287 '44,085 Farm 5,601 5,678 5,996 6,247 6,327 6,415 6,576 '6,640 FEDERAL AND RELATED AGENCIES.. 39,357 45,790 55,664 '67,852 '72,382 '75,995 '79,954 '84,525 1- to 4-family 26,453 30,147 35,454 '43,116 '45,674 '47,511 '50,260 '53,162 Multifamily 4,555 6,086 8,489 '10,739 '11,979 '12,924 '13,285 '14,291 Commercial Farm 8,338 9,557 11,721 13,997 14,729 15,560 16,409 17,072 Government National Mortgage Association 5,323 5,113 4,029 4,052 4,848 5,584 5,612 6,537 1- to 4-family 2,770 2,490 1,330 1,337 1,600 1,843 1,852 2,157 Multifamily 2,542 2,623 2,699 2,715 3,248 3,741 3,760 4,380 Commercial 11 Farmers Home Administration 819 837 1,200 1,500 1,600 ,700 1,800 1,900 1- to 4-family 398 387 550 688 734 780 826 872 Farm 421 450 650 812 866 920 974 1,028 Federal Housing and Veterans Administrations 3,389 3,338 3,476 ' 3,788 '4,015 r4,047 r4,297 ' 4,681 1- to 4-family 2,517 2,199 2,013 '1,965 '2,009 '1,879 '1,915 '1,951 Multifamily 872 1,139 1,463 '1,823 '2,006 '2,168 '2,382 '2,730 Federal National Mortgage Association... 17,791 19,791 24,175 28,641 29,578 29,754 30,015 31,055 1- to 4-family 16,681 17,697 20,370 23,258 23,778 23,743 23,988 25,049 Multifamily 1,110 2,094 3,805 5,383 5,800 6,011 6,027 6,006 Federal land banks (farm only) 7,917 9,107 11,071 13,185 13,863 14,640 15,435 16,044 Federal Home Loan Mortgage Corporation, 964 1,789 2,604 3,713 4,586 4,608 4,944 5,033 1- to 4-family 934 1,754 2,446 3,414 4,217 4,231 4,543 4,632 Multifamily , 30 35 158 299 369 377 401 401 GNMA Pools 3,154 5,815 9,109 12,973 13,892 15,662 17,851 19,275 1- to 4-family 3,153 5,620 8,745 12,454 13,336 15,035 17,136 18,501 Multifamily 1 195 364 519 556 627 715 774 INDIVIDUALS AND OTHERS 2 66,162 69,035 73,890 73,340 73,720 '72,670 '71,422 '71,372 1- to 4-family 27,207 27,184 28,739 26,139 25,839 24,839 23,739 '23,539 Multifamily 10,314 11,206 12,182 11,782 11,732 '11,432 '11,332 '11,032 Commercial 13,977 15,286 16,837 18,537 19,017 19,017 18,719 '18,919 Farm 14,664 15,359 16,132 16,882 17,132 17,382 17,632 17,882 1 Includes loans held by nondeposit trust companies but not bank trust NOTE.—Based on data from various institutional and Govt, sources, departments. with some quarters estimated in part by Federal Reserve in conjunction 2 Includes some U S. agencies for which amounts are small or separate with the Federal Home Loan Bank Board and the Dept. of Commerce. data are not readily available. Separation of nonfarm mortgage debt by type of property, where not reported directly, and interpolations and extrapolations where required, estimated mainly by Federal Reserve. Multifamily debt refers to loans on structures of 5 more units. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEBRUARY 1976 • REAL ESTATE CREDIT A 43 FEDERAL NATIONAL MORTGAGE ASSOCIATION AND FEDERAL HOME LOAN MORTGAGE CORPORATION- SECONDARY MORTGAGE MARKET ACTIVITY (In millions of dollars) FHLMC Mortgage Mortgage Mortgage Mortgage Mortgage Mortgage holdings transactions commitments holdings transactions commitments (during period) (during period) Total i F su H in re A - d - a g n V u t A e a e r - - d c P ha u s r e - s Sales d p M u er r a 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 i v o e o n n n a - - l c P ha u s r e - s Sales d p M e u r r a i i d o n e d g 17,791 12,681 5,110 3,574 336 9,828 6,497 968 821 147 778 64 19,791 14,624 5,112 3,699 211 8,797 8,124 1,789 1,503 286 1,298 408 1,606 24,175 16,852 6,352 6,127 71 8,914 7.889 2,604 1,743 861 1,334 409 1,629 29,578 19,189 8,310 6,953 5 10,765 7,960 4,586 1,904 2,682 2,191 52 4,553 29,578 19,189 8,310 278 231 7,960 4,586 1,904 2,682 266 16 34 29,670 19,231 8,318 208 146 7,285 4,744 1,900 2,845 199 26 26 29,718 19,256 8,313 169 137 6,672 4,533 1,893 2,640 113 309 21 29,754 19,277 8,304 151 639 6,636 4,608 1,887 2,722 113 19 52 29,815 19,282 8,337 211 913 6.890 4,634 1 ,890 2,744 121 71 297 29,858 19,251 8,395 247 621 6,615 4,773 1,920 2,854 203 38 42 30,015 19,282 8,498 326 557 6,549 4,944 1,936 3,008 210 5 28 30,351 19,385 8,693 538 575 6,119 5,015 1 ,943 3,072 161 63 139 30,777 19,507 8,942 594 814 5,888 4,942 1,863 3,080 98 145 132 31,055 19,560 9,122 488 575 5,399 5,033 1,852 3,181 148 31 79 31,373 19,641 9,309 508 282 4,685 5,119 1,843 3,276 176 59 45 31,552 19,648 9,430 372 332 4,385 4,971 1,834 3,137 104 225 50 31,824 19,732 9,573 451 517 4,126 i Includes conventional loans not shown separately. For FHLMC: Holdings and transactions cover participations as well as NOTE.—Data from FNMA and FHLMC, respectively. whole loans. Holdings include loans used to back bond issues guranteed For FNMA: Holdings include loans used to back bond issues guaranteed by GNMA. Commitments cover the conventional and Govt.-underby GNMA. Commitments include some multifamily and nonprofit written loan programs. hospital loan commitments in addition to 1- to 4-family loan commitments accepted in FNMA's free market auction system, and through the FNMA- GNMA Tandem Plans. TERMS AND YIELDS ON NEW HOME MORTGAGES Conventional mortgages FFFHHHAAA--- Terms i Yields (per cent) in iiinnnsssuuurrreeeddd Drimarv market llloooaaannnsss———YYYiiieeelllddd PPPeeerrriiioooddd iiinnn ppprrriiivvvaaattteee C ra o te n t ( r p a e c r t F c e h e a s rg a e n s d Maturity Loa r n a / t p io r ice pr P ic u e r c ( h th a o se u s. am Lo o a u n n t FHLBB HUD ssseee mmm ccc aaa ooo rrr nnn kkk ddd eee aaa ttt rrr 555 yyy cent) (per cent)2 (years) (per cent) of dollars) (thous. of series 3 series4 dollars) 1971 7.60 .87 26.2 74.3 36.3 26.5 7.74 7.75 7.70 1972 7.45 .88 27.2 76.8 37.3 28.1 7.60 7.64 7.53 1973 7.78 1.11 26.3 77.3 37.1 28.1 7.95 8.30 8.19 1974 8.71 1.30 26.3 75.8 40.1 29.8 8.92 9.22 9.55 1974—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 Apr.... 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 8.63 1.56 26.7 77.0 44.6 33.7 8.89 9.15 9.32 Sept 8.70 1.46 26.7 75.9 45.6 34.1 8.94 9.25 9.74 Oct 8.75 1.59 27.3 77.5 43.9 33.2 9.01 9.25 9.53 Nov.r 8.74 1.65 27.6 76.5 46.4 34.8 9.01 9.20 9.41 Dec.? 8.76 1.57 27.7 76.8 46.0 34.7 9.01 9.15 9.32 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 • FEBRUARY 1976 FEDERAL NATIONAL MORTGAGE ASSOCIATION AUCTIONS OF COMMITMENTS TO BUY HOME MORTGAGES Date of auction Item 1975 Aug. 25 Sept. 8 Sept. 22 Oct. 6 Oct. 20 Nov. 3 Nov. 17 Dec. 1 Dec. 15 Dec. 29 Jan. 12 Jan. 26 Amounts (millions of dollars): Govt.-underwritten loans Offered 1 643.1 530.1 293.6 198.5 43.2 69.8 293.1 255.9 287.1 95.3 58.4 103.9 Accepted 223.0 197.7 142.0 143.0 23.2 41.7 180.6 138.5 158.8 52.7 31.5 57.7 Conventional loans Offered i 98.5 96.9 68.8 27.5 9.7 19.6 68.6 73.9 69.7 41.8 42.7 33.4 Accepted 31.0 43.9 35.2 23.5 9.2 15.2 34.6 40.5 31.2 11.8 32.1 24.7 Average yield (per cent) on shortterm commitments 2 Govt.-underwritten loans 9.50 9.70 9.86 9.95 9.65 9.32 9.33 9.32 9.31 9.29 9.13 9.07 Conventional loans 9.55 9.75 9.92 10.02 9.81 9.54 9.40 9.38 9.36 9.35 9.28 9.22 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 F.NMA 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) Mar. 31, June 30, Sept. 30, Dec. 31, Mar. 31, June 30, Sept. 30, Holder 1974 1974 1974 1974 1975 1975 1975 All holders 136.7 137.8 138.6 140.3 142.0 143.0 144.9 FH A 85.0 84.9 84.1 84.1 84.3 85.0 85.1 Co V m A m ercial banks 55 11 11 11 .. .. 77 11 5 1 2 1 . . 9 0 5 1 4 0 . . 5 7 5 1 6 0 . . 2 4 5 1 7 0 . . 7 5 5 r9 8 . . 6 0 5 9 9 . . 7 8 FH A 7.8 7.6 7.4 7.2 7.2 r6.4 6.4 VA 3.3 3.4 3.3 3.2 3.3 '3.2 3.3 Mutual savings banks 28.2 27.9 27.8 27.5 r27.2 r27.2 27.0 FH A 15.3 15.1 15.0 14.8 r14.7 '14.7 14.5 VA 1122..99 12.8 12.8 12.7 r12.5 r12.5 12.5 FH A }} 2299..88 }} 2299..77 }} 2299..99 }} 2299..99 }} 2299..99 }} 3300..22 3300..44 VA Life insurance cos. 13.3 1133..11 12.9 12.7 12.5 12.2 12.1 FHA 9.0 88..88 8.7 8.6 8.4 8.2 8.1 VA 4.3 4.3 4.2 4.2 4.1 4.0 4.0 Others 5544..33 56.1 57.4 59.9 61.6 62.2 65.7 FHA . 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 aammoouunntt PPeerriioodd oo NN ff uu ll mm ooaa bb nn ee ss rr (( cc mm oo (( ii mm dd ll oo ll mm ii ll oo ll ii aa nn tt rr ss tt ss ee )) dd oo ff ( o t f a h m o L d u o o o s a l u a l n n a n t r d s s ) ( C p i o n e r r n t e a t r c t r e e e a s n c t t t ) (y M rs a . t / u m r o it s y . ) (p t L o e r r - a o v t a c i a e n o l n - u t e ) C ( a p t p e i r o i t n a c l e i r n z a t a t ) e - co D r v a e e t r i b o a t ge P co er n 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--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 11997755--—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 July 53 178.6 3,370 10.19 20/7 74.6 10.9 1.31 11.3 Aug 44 106.5 2,420 10.26 21/2 72.7 10.8 1.32 11.4 Sept 57 123.8 2,172 10.24 22/8 73.6 10.7 1.37 11.1 See NOTE on preceding page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEBRUARY 1976 • CONSUMER CREDIT A 45 INSTALMENT CREDIT-TOTAL OUTSTANDING, AND NET CHANGE (In millions of dollars) 1975 Holder, and type of credit 1973 1974 1975 June July Aug. Sept. Oct. Nov. Dec. Amounts outstanding (end of period) TOTAL 148,273 158,101 161,819 154,283 155,419 156,765 157,720 158,390 159,200 161,819 By holder: Commercial banks 71,871 75,846 75,710 73,687 74,232 74,701 75,024 75,286 75,174 75,710 Finance companies 37,243 38,925 38,932 37,828 38,177 38,340 38,375 38,411 38,642 38,932 Credit unions 19,609 22,116 25,354 23,186 23,507 24,043 24,510 24,706 24,934 25,354 Retailers1 16,395 17,933 18,328 16,079 15,963 16,172 16,232 16,444 16,860 18,328 Others2 3,155 3,281 3,495 3,503 3,540 3,509 3,579 3,543 3,590 3,495 By type of credit: Automobile, total 51,274 52,209 53,629 51,453 52,088 52,545 52,852 53,286 53,479 53,629 Commercial banks 31,502 30,994 30,198 29,633 29,923 30,000 30,031 30,259 30,235 30,198 Finance companies 11,927 12,435 13,364 12,571 12,793 12,982 13,066 13,203 13,325 13,364 Credit unions 7,456 8,414 9,653 8,823 8,945 9,149 9,329 9,403 9,491 9,653 Others 389 366 414 426 427 414 426 421 428 414 Mobile homes: Commercial banks 8,340 8,972 8,420 8,639 8,606 8,583 8,566 8,519 8,502 8,420 Finance companies 3,378 3,570 3,504 3,508 3,503 3,498 3,499 3,498 3,519 3,504 Home improvement, total.. 7,453 8,398 8,301 8,202 8,272 8,329 8,372 8,374 8,361 8,301 Commercial banks 4,083 4,694 4,813 4,632 4,695 4,757 4,797 4,824 4,827 4,813 Revolving credit: Bank credit cards 6,838 8,281 9,078 8,015 8,088 8,259 8,414 8,450 8,500 9,078 Bank check credit 2,254 2,797 2,883 2,741 2,765 2,793 2,826 2,834 2,822 2,883 All other 68,736 73,874 76,004 71,727 72,096 72,757 73,192 73,430 74,018 76,004 Commercial banks, total. 18,854 20,108 20,318 20,029 20,154 20,308 20,390 20,401 20,289 20,318 Personal loans 12,873 13,771 14,035 13,659 13,731 13,856 13,935 14,005 13,943 14,035 Finance companies, total 21,021 21,927 21,465 20,942 21,103 21,119 21,104 21,037 21,158 21,465 Personal loans 16,587 17,176 17,179 16,654 16,845 16,868 16,858 16,822 16,942 17,179 Credit unions 11,564 13,037 14,937 13,665 13,855 14,170 14,443 14,559 14,692 14,937 Retailers 16,395 17,933 18,328 16,079 15,963 16,172 16,232 16,444 16,860 18,328 Others 902 869 956 1,012 1,021 988 1,022 989 1,019 956 Net change (during period)3 TOTAL 20,826 9,824 3,719 208 886 637 759 830 805 894 By holder: Commercial banks 11,002 3,971 -134 -39 302 209 295 309 233 310 Finance companies 5,155 1,682 7 9 197 21 95 36 157 34 O C Re r t e h ta d e i i r l t s e r u s n ions 2 1 , , 6 6 3 9 3 4 6 2 1 2 1 , , 5 5 1 0 3 2 7 8 6 3,2 2 3 3 9 1 7 5 4 -1 2 0 7 6 2 3 7 - 3 1 1 8 4 6 6 - 2 1 6 9 8 5 1 1 -1 4 0 2 4 7 8 9 - 2 2 2 5 5 9 5 8 27 6 8 0 1 4 - 4 1 4 7 2 4 1 5 By type of credit: Automobile, total 6,980 935 1,420 2 383 213 385 389 404 540 Commercial banks 4,196 -508 -796 -139 135 8 117 164 163 260 Finance companies 1,753 508 929 58 127 126 91 103 144 89 Credit unions 1,024 958 1 ,239 76 122 86 154 122 91 184 Other 7 -23 48 7 -1 -7 23 5 6 Mobile homes: Commercial banks 1,933 634 -553 -49 -32 -24 -17 -62 -6 -61 Finance companies 462 192 -66 -2 -17 -11 -10 -7 26 -10 Home improvement, total. . 1,196 946 -100 10 38 -4 19 -6 38 23 Commercial banks 483 612 114 6 31 24 27 23 42 41 Revolving credit: Bank credit cards 1,428 1,442 798 102 69 113 106 78 29 -49 Bank check credit 479 543 86 -12 15 12 14 17 2 13 All other 8,344 5,141 2,133 156 430 338 262 420 312 440 C F C R O i o r e t n P P e h m t a a e d e e n i m r r i r l t s s s c e e o o e r u r n s n n c c a a i i o l l a o m l n l l o o s p b a a a a n n n n s s i k e s s , , t t o o t t a a l l . . . 2 2 1 1 1 1 , , , , , , 4 5 4 5 6 6 1 7 9 9 7 2 3 2 9 1 1 5 0 2 2 1 1 1 , , , - 2 4 5 9 9 5 3 5 7 3 0 0 8 3 7 3 8 6 0 9 1 - , 4 9 2 2 3 - 6 0 6 3 1 9 8 2 0 5 3 5 7 -1 - - 1 2 2 0 5 4 8 3 1 1 2 3 6 1 7 - 1 1 1 1 6 6 8 1 8 3 4 0 1 5 5 4 1 - - - 1 1 4 3 5 7 4 8 8 9 8 8 6 8 1 9 -1 2 0 4 6 4 5 4 1 7 5 0 9 9 8 3 - - 2 1 1 2 - 2 5 7 8 2 1 7 8 8 9 7 9 1 -6 2 8 7 3 1 0 4 3 3 2 5 - 2 1 1 1 6 - 7 2 2 4 0 4 1 4 3 5 7 9 1 Excludes 30-day charge credit held by retailers, oil and gas companies, 3 Figures for all months are seasonally adjusted and equal extensions and travel and entertainment companies. minus liquidations (repayments, charge-offs, and other credits). 2 Mutual savings banks, savings and loan associations, and auto dealers. NOTE.—Tables contain a few minor changes in monthly figures shown in January Bulletin due to rounding techniques. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 46 CONSUMER CREDIT • FEBRUARY 1976 INSTALMENT CREDIT EXTENSIONS AND REPAYMENTS (In millions of dollars) 1975 Holder, and type of credit 1973 1974 1975 June July Aug. Sept. Oct. Nov. Dec. Extensions1 164,527 166,170 166,833 13,620 14,322 14,427 14,555 14,832 14,877 15,295 By holder: Commercial banks 72,216 72,602 73,186 5,940 6,311 6,362 6,529 6,518 6,599 6,796 Finance companies 43,221 41,809 39,543 3,316 3,423 3,387 3,459 3,412 3,712 3,530 Credit unions 21,143 22,403 24,151 1,900 2,098 2,056 2,156 2,187 1,995 2,381 Retailers2 25,440 27,034 27,369 2,199 2,208 2,479 2,164 2,531 2,302 2,431 Others3 2,507 2,322 2,584 264 282 144 247 183 268 158 By type of credit: Automobile, total 46,486 43,431 46,530 3,753 4,124 4,032 4,235 4,189 4,218 4,405 Commercial banks 29,368 26,407 26,693 2,132 2,371 2,355 2,436 2,434 2,460 2,591 Finance companies 9,685 8,851 9,651 787 868 805 865 836 831 897 Credit unions 7,009 7,788 9,702 789 847 840 873 878 885 875 Others 424 385 484 45 38 31 61 41 42 42 Mobile homes: Commercial banks 4,437 3,486 2,349 185 227 211 222 198 233 203 Finance companies 1,673 1,627 1,018 85 81 82 83 81 97 88 Home improvement, total... 4,828 4,854 4,333 379 395 363 388 392 409 418 Commercial banks 2,489 2,790 2,515 204 222 219 224 238 243 253 Revolving credit: Bank credit cards 13,862 17,098 19,567 1,606 1,618 1,689 1,737 1,698 1,752 1,719 Bank check credit 3,373 4,228 4,214 327 346 353 350 357 348 412 All other 89,864 91,455 88,818 7,285 7,531 7,697 7,539 7,915 7,819 8,051 Commercial banks, total.. 18,683 18,602 17,844 1,485 1,527 1 ,535 1 ,560 1,593 1,562 1,619 Personal loans 12,927 13,177 12,623 1,049 1,026 1,083 1,105 1,144 1,076 1,178 Finance companies, total. 31,032 30,764 28,654 2,418 2,454 2,482 2,489 2,474 2,771 2,527 Personal loans 18,915 18,827 18,406 1,596 1,621 1,653 1,624 1,613 1,674 1,513 Credit unions 13,768 14,228 13,992 1,066 1,210 1 ,169 1,238 1,269 1,074 1,461 Retailers 25,440 27,034 27,369 2,199 2,208 2,479 2,164 2,531 2,302 2,431 Others 941 827 959 117 132 32 89 48 111 14 Repayments1 TOTAL 143,701 156,346 163,113 13,412 13,436 13,790 13,795 14,002 14,072 14,401 By holder: Commercial banks 61,214 68,631 73,320 5,979 6,009 6,153 6,234 6,209 6,367 6,486 Finance companies 38,066 40,127 39,536 3,307 3,227 3,366 3,364 3,376 3,555 3,496 Credit unions 18,447 19,896 20,914 1 ,628 1,782 1,764 1,728 1,932 1,725 1,910 Retailers2 23,808 25,496 26,974 2,301 2,222 2,298 2,271 2,273 2,218 2,306 Others3 2,166 2,196 2,370 198 196 208 198 212 208 202 By type of credit: Automobile, total 39,506 42,496 45,110 3,751 3,741 3,818 3,849 3,800 3,814 3,865 Commercial banks 25,172 26,915 27,489 2,271 2,236 2,347 2,319 2,271 2,297 2,331 Finance companies 7,932 8,343 8,722 729 740 679 773 733 687 808 Credit unions 5,985 6,830 8,463 713 725 755 719 756 794 691 Others 417 408 436 38 39 38 38 40 37 36 Mobile homes:. Commercial banks 2,504 2,852 2,902 234 259 235 239 260 239 264 Finance companies 1,211 1,435 1,084 87 98 93 94 88 72 98 Home improvement, total... 3,632 3,908 4,434 368 357 367 369 398 371 395 Commercial banks 2,006 2,178 2,400 198 191 195 197 214 202 212 Revolving credit: Bank credit cards 12,434 15,656 18,769 1,504 1,548 1,576 1,631 1,619 1,723 1,768 Bank check credit 2,894 3,685 4,128 340 331 341 336 340 346 399 All other 81,520 86,314 86,689 7,129 7,102 7,359 7,277 7,496 7,507 7,611 Commercial banks, total.. 16,204 17,345 17,635 1,432 1,443 1,459 1,512 1,504 1,560 1,512 Personal loans 11,436 12,277 12,361 1,012 995 1,035 1,060 1,025 1,082 1,029 Finance companies, total. 28,512 29,858 29,116 2,439 2,339 2,540 2,440 2,501 2,751 2,531 Personal loans 17,240 18,238 18,403 1,617 1,460 1,691 1,565 1 ,620 1,659 1,490 Credit unions 12,177 12,755 12,092 885 1,025 981 978 1,142 901 1 ,187 Retailers 23,808 25,496 26,974 2,301 2,222 2,298 2,271 2,273 2,218 2,306 Others 819 860 872 72 72 81 76 76 77 75 1 Monthly figures are seasonally adjusted. 3 Mutual savings banks, savings and loan associations, and auto dealers. 2 Excludes 30-day charge credit held by retailers, oil and gas companies, and travel and entertainment companies. NOTE.—Tables contain a few minor changes in monthly figures shown in January Bulletin due to rounding techniques. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEBRUARY 1976 • CONSUMER CREDIT A 47 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 1974—Jan.. 10.55 11.09 12.78 12.96 17.25 12.39 16.56 '13.27 18.90 '20.64 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 i 3 * i 5" 18.69 '20.53' 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 '13.08 18.90 '20.54 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 '13.22 '19.25 '2O!74 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 '13.43 '19.31 '20.87 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 i 3.60 19.49 "'iiiii' 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 ioioo' '20!82 Apr. 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 '20.72 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 " i 3!78 * i 9! 87 '2O!93 Aug. 11 .31 11 .80 13.05 13.37 17.14 13.10 17.70 Sept. 11.33 11.99 13.06 13.41 17.14 13.18 17.73 13.78 19.69 '21 .16 Oct.. 11.24 12.05 13.00 13.38 17.11 13.15 17.79 Nov. 11.24 11 .76 12.96 13.40 17.06 13.17 17.82 i 3! 43 i 9! 66 '2i.09' Dec. 11.25 11.83 13.11 13.46 17.13 NOTE.—Rates are reported on an annual percentage rate basis as specified maturities; finance company rates are weighted averages for specified in Regulation Z (Truth in Lending) of the Board of Governors. purchased contracts (except personal loans). For back figures and descrip- Commercial bank rates are "most common" rates for direct loans with tion of the data, see BULLETIN for Sept. 1973. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 48 INDUSTRIAL PRODUCTION: S.A. • FEBRUARY 1976 MARKET GROUPINGS (Seasonally adjusted, 1967 = 100) 1967 pro- 1974 1975 1976 por- aver- Grouping tion age Jan. Feb. Mar. Apr. May June July Aug. Sept.r Oct.r Nov. Dec.*> Total index 100.0 124.8 113.7 111 .2 110.0 109.9 110.1 111.1 112.2 114.2 116.2 116.7 117.4 Products, total 62.21 123.1 115.4 113.7! 112.4 112.9 113.4 114.2 115.3 115.8 116.9 116 \ 9 117.8 Final products 48.95 121.7 114.9 113.3 112.2 112.6 113.7 114.5 115.7 115.9 116.9 117.0 117.8 Consumer goods 28.53 128.8 120.li 118.8 118.2 119.6 121 .2 123.3 125.5 125.7 126.8 127.0 128.6 Equipment 20.42 111.7 107.8 105.3 103.9 103.0 102.9 102.2 102.2 102.3 102. 102.6 102.8 Intermediate products 13.26 128.3 117.6 115.2! 112.7 113.4 112.4 112. 114.3 115.4 116.6 117.0 117.8 Materials 37.79 127.4 110.5 107.4 105.9 105.2 104.9 106.0 106.8 111.5 115.1 116.5 116.5 Consumer goods Durable consumer goods 7.86 127.9 104.0 101.0 103.1 107.8 110.5 113.2 115.9 116.1 118.3 118.3 119.0 Automotive products 2.84 110.0 80.3 78.2 86.8 93.6 97.6 103.4 106.9 105.9 106.7 108.9 109.7 Autos 1.87 94.9 62.6 58.9 73.1 82.4 86.3 93.2 97.7 96 97.9 101.2 100.0 Auto parts and allied goods.. . .97 139.0 114.4 115.5 113.2 115.2 119.3 122.8 124.8 123.2 123.5 123.9 128.4 Home goods 5.02 138.0 117.5 114.0 112.3 115.9 117.8 118.8 121 .0 121.9 125.0 123.6 124.2 Appliances, TV, and radios. .. 1.41 132.0 94.4 89.0 85.0 96.7 102.4 103.5 104.7 106.5 108.4 105.4 104.6 Appliances and A/C .92 148.8 108.0 104.8 99. 114.2 118.4 118.3 118.9 122.2 124.1 123.4 122.8 TV and home audio .49 Carpeting and furniture 1.08 153.5 135.1 132.3 127.9 127.8 128.6 131.1 135.5 136.0 137.6 137.9 139.3 Misc. home goods 2.53 134.7 123.0 120.1 121.0 121.4 121 .7 122.1 124.0 124.5 129.0 127.4 128. Nondurable consumer goods 20.67 129.2 126.3 125.5 124.1 124.0 125.3 127.2 129.0 129.4 130.1 130.5 132.5 Clothing 4.32 109.0 95.0 94 90.9 89.2 94.4 97.7 101.6 102.0 101.5 104.5 106. Consumer staples 16.34 134.5 134.5 133.6 132.7 133.3 133.5 134.9 136.3 136.6 137.8 137.3 139.6 Consumer foods and tobacco.. 8.37 125.4 123.3 123.2 120.7 122.7 122.4 124.1 125.5 125. 126.4 127.2 129.9 Nonfood staples 7.98 144.0 146.4 144.5 145.3 144.3 145.3 146.4 147.7 148.0 149.9 148.1 149.7 Consumer chemical products 2.64 158.4 160.6 157.1 158.2 157.6 158.4 159.2 161.2 160.4 161.6 161 .7 165.8 Consumer paper products... 1.91 125.2 122.0 121 .9 120.9 118.4 122.8 123.3 124.1 126.7 127.7 126.4 125.5 Consumer fuel and lighting . 3.43 143.8 149.2 147.2 149.0 148.6 147.8 149.4 150.4 150.3 153.2 149.5 150.7 Residential utilities 2.25 153.7 159.9 159.7 163.1 161 .9 160.9 161 .3 160.5 161.1 164. 160.1 161.5 Equipment Business equipment 12.74 129.4 122.3 119.3 117.0 115.4 115.0 113.9 113.9 114.9 115.6 115.7 116.4 Industrial equipment 6.77 128.7 122.9 120.4 118.8 116.4 115.3 114.0 113.3 113.4 114.5 115.4 116.2 Building and mining equip.. . . 1.45 136.0 138.4 137.0 137.7 132.3 131 .7 127.7 126.9 128.3 129.7 133.1 136.5 Manufacturing equipment.... 3.85 121.7 111 .8 109.4 106.6 105.6 105.0 104.3 105.5 105.1 104.5 104.0 103.5 Power equipment 1.47 139.9 136.6 132.1 131.8 128.9 126.2 125.8 120.3 120.8 125.7 127.9 129.3 Commercial, transit, farm equip.. 5.97 130.3 121 .6 118.0 115. 114.2 114.7 113.9 114.6 116.5 116.9 116.2 116.7 Commercial equipment 3.30 141.1 135.2 130.4 127.1 123.2 121 .5 120.7 123.0 123.4 122.6 123.3 123.3 Transit equipment 2.00 109.6 91 .8 91 .5 88.! 92.2 98.6 98.0 98.0 101.5 105.0 100.4 101 .7 Farm equipment .67 138.7 143.8 135.9 130.2 135.7 129.0 127.3 122.9 127.7 124.3 128.0 128.6 Defense and space equipment 7.68 82.3 83.8 82.4 82.1 82.4 82.7 82.9 82.6 81.4 81.6 81.1 80.2 Military products 5.15 81.2 81.5 80.7 80.3 80.7 82.0 82.0 82.1 80.6 80.7 80.2 78.6 Intermediate products Construction products 5.93 129.6 115.7 112.1 109. 110.1 107.6 106.8 108.0 109.3 112.0 112.5 112.5 7.34 127.3 119.2 118.4 115.6 116.1 116.2 117.5 119.3 120.3 120.3 120.7 122.2 Misc. intermediate products Materials 20.91 127.3 110.3 107.0 104.7 101.6 100.2 99.8 100.3 106.1 108.7 110.1 110.5 Durable goods materials 4.75 112.1 83.7 82.1 84.7 86.0 87.7 90.8 92. 101.7 103.0 102.4 102.8 Consumer durable parts 5.41 123.8 116.9 112.0 108.7 104.6 102.1 97.3 96.8 100.7 102.4 105.2 106.5 Equipment parts 10.75 135.9 118.8 115.4 111.4 106.9 104.7 105.1 105.3 111.0 114.5 116.3 116.0 Durable materials n.e.c Nondurable goods materials 13.99 128.5 109.2 105.7 105.3 107.9 109.5 112.3 114.0 118.2 123.4 125.0 124.6 Textile, paper, and chem. mat.. . , 8.58 139.8 112.9 108.5 106.2 110.4 113.2 117.0 118.9 126.0 133.9 136.1 136.1 Nondurable materials n.e.c 5.41 110.6 103.3 101.1 103.9 104.0 103.7 105.1 106.2 106.0 106.7 107.3 106.4 Fuel and power, industrial 2.89 122.6 117.8 118.2 118.0 117.5 118.0 119.5 121.1 118.4 121.3 120.6 120.3 Supplementary groups Home goods and clothing 9.34 124.6 107.1 105.0 102.3 103.6 106.9 109.1 112.0 112.8 114.2 114.7 115.8 Containers 1.82 139.4 126.1 119.9 122.3 124.2 124.3 128.4 132. 133.5 142.7 137.6 132.6 Gross value of products in market structure (In billions of 1963 dollars) Products, total 286.3 416.4 410.1 405.1 409.6 408.6 414.5 416.1 418.1 426.1 425.8 429.4 436.9 Final products 221.4 322.3 317.7 315.3 319.0 319.41 325.0 325.2 326.3 332.9 333.7 336.6, 340.7 Consumer goods 156.3 216.4 213.7 213.2 217.6 217.8; 223.6 224.9 225.4 230.8 231.7 234.7 238.3 Equipment 65.3 105.9 103.9 102.2 101 .4 101.5 101.3 100.5 100.9 102.3 101.7 101.9 102.3 Intermediate products 64.9 94.3 92.3 90.0 90.5 89.21 89.6 91.1 92.9 92.9 93.0 93.6 95.8 For NOTE see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEBRUARY 1976 • INDUSTRIAL PRODUCTION: S.A. A 49 INDUSTRY GROUPINGS (Seasonally adjusted, 1967 = 100) 1 p 9 ro 6 - 7 1974 1975 1976 Grouping p ti o o r n - age Jan. Feb. Mar. Apr. May June July Aug. Sept.r Oct.r Nov. Dec.® Jan.® 88.55 124.4 111.7 109.2 107.7 107.9 108.2 109.5 110.6 112.8 114.7 115.8 116.4 117.4 118.2 52.33 120.7 108.2 104.8 103.5 103.3 102.5 103.2 103.5 105.4 107.0 107.6 107.8 108.6 109.4 36.22 129.7 117.0 115.6 113.7 114.8 116.1 118.6 120.8 123.4 125.7 127.2 129.0 130.6 131.0 11.45 127.3 127.0 127.3 128.8 128.1 126.5 126.8 127.4 127.0 127.8 127.0 127.4 126.0 127.1 6.37 109.3 107.0 108.6 108.9 108.5 105.9 106.3 106.4 105.0 105.3 106.4 106.0 103.3 104.7 Utilities 55..0088 114499..99 115533..00 150.9 115544..00 153.1 152.3 152.6 153.7 154.6 156.1 152.9 154.2 155.0 155.7 Durable manufactures 12.55 127.5 112.4 107.7 105.1 103.2 99.8 100.8 100.7 104.1 106.1 105.9 107.0 105.1 107.1 6.61 124.1 107.2 102.1 98.1 95.0 89.9 91 .8 92.8 96.5 97.2 97.0 98.1 94.5 96.3 4.23 119.9 110.6 105.0 103.1 99.4 90.1 88.7 87.0 90.4 91.3 93.2 96.0 92.1 95.4 5.94 131.4 118.2 113.7 112.9 112.4 100.9 110.9 109.7 112.7 116.1 115.9 117.1 117.0 119.1 32.44 116.3 105.4 102.4 101.5 101.9 101.7 102.3 102.4 103.7 105.0 105.8 106.2 107.5 107.6 17.39 128.1 119.6 115.6 112.2 110.8 109.0 108.2 108.4 110.0 111 .7 112.9 114.1 115.7 116.5 9.17 133.8 126.7 123.C 119.3 116.9 113.7 112.3 112.9 115.1 116.7 117.7 119.1 119.8 120.4 8.22 125.2 111 .5 106.6 104.3 104.0 103.8 103.8 103.4 104.4 106.1 107.6 108.7 111 .0 112.1 9.29 96.9 78.9 77.1 81.0 84.7 87.6 90.5 91 .0 92.9 94.3 94.7 94.1 95.4 94.2 4.56 113.2 78.2 77.6 85.4 93.1 95.0 100.0 103.2 107.2 110.1 111 .0 109.4 110.2 109.3 Aerospace and misc. trans, eq... 4.73 81.1 79.5 76.6 76.7 76.6 80.4 81 .3 79.3 79.1 79.2 79.0 79.4 81.0 79.7 2.07 143.9 139.1 134.2 130.6 131.1 129.7 130.9 132.4 132.1 134.5 134.5 137.0 138.2 140.0 3.69 86.1 86.2 86.9 86.7 86.7 86.7 87.7 86.4 84.3 84.2 83.9 81 .7 82.5 82.1 4.44 123.6 109.6 104.6 102.6 104.8 105.9 107.0 108.3 110.6 113.1 114.4 112.0 115.5 117.5 Lumber and products 1.65 120.1 99.9 99.6 99.8 104.1 108.0 110.3 112.0 114.5 115.5 116.8 115.0 118.3 CCllaayy,, ggllaassss,, aanndd ssttoonnee pprroodduuccttss 22..7799 112255..77 111155..33 110077..88 110044..22 110055..44 110044..77 110055..11 110066..22 110088..33 111111 ..77 111133..00 111100..33 111133..99 Furniture and miscellaneous 2.90 136.1 120.0 119.6 118.7 117.6 119.7 120.1 121.2 123.1 124.3 124.6 122.8 123.9 125.5 Furniture and fixtures 1.38 126.9 110.6 110.6 106.7 105.6 109.6 107.9 109.4 109.6 110.6 110.8 110.7 111.2 M iscellaneous manufactures 11..5522 114444..44 112288..99 112288..00 129.7 112288..55 112299..00 131.1 131 .8 135.3 136.7 137.2 133.7 135.2 Nondurable manufactures 7 ex tiles apparel and leather 6.90 108.9 88.9 89.6 87.5 90.4 93.2 94.9 97.4 100.2 104.0 106.0 108.2 109.5 109.4 Textile mill products .. •. 2.69 122.7 95.6 93.3 96.8 100.4 103.8 106.9 110.7 115.0 121.2 123.2 124.7 126.9 A nnor/=» 1 nroHnrt? 33..3333 105.4 94.0 92.6 86.4 88.2 90.9 91.5 92.9 95.8 96.1 98.0 101 .3 Leather and products .. ..8888 77.3 66.1 66.7 63.5 68.0 70.0 71.2 73.5 71.7 81 .2 83.8 83.5 81.4 Paper and printing 7.92 121.0 108.2 106.6 104.2 102.4 103.9 107.3 107.3 110.8 113.9 114.8 114.7 117.5 118.7 Paper and products 3.18 134.0 114.3 109.5 104.5 105.8 105.8 109.5 111 .7 116.4 124.0 127.0 127.3 129.8 Printing and publishing 4.74 112.3 104.1 104.7 104.0 100.2 102.6 105.9 104.4 107.1 107.1 106.5 106.2 109.2 110.8 Chemicals, petroleum, and rubber.... 1111..9922 151.7 136.5 132.4 130.2 131.0 132.5 136.2 140.2 143.6 146.2 148.5 150.3 152.8 152.5 Chemicals and products 77..8866 154.3 139.0 134.6 133.6 132.8 135.7 138.2 143.4 146.3 148.8 152.5 154.1 156.7 158.0 Petroleum products 11..8800 124.0 126.8 123.7 120.1 120.2 118.5 122.4 124.6 126.7 127.1 126.5 128.2 129.4 124.7 1? nhhpr anrl nlactiPQ nrnHnf^tQ 22..2266 164.4 135.4 132.0 126.8 133.5 132.7 140.1 141.6 147.8 152.0 153.1 154.4 157.7 Foods and tobacco 99..4488 124.8 120.0 121.3 120.0 122.4 122.4 123.5 124.8 125.2 126.0 126.3 129.2 129.2 130.4 Foods 8.81 126.2 121.2 122.3 121.3 122.9 123.8 125.1 126.3 126.7 127.4 127.3 130.4 130.2 131.6 Tnhn^pn nrnHnpfc ..6677 110066..44 104.7 108.4 102.6 115.9 103.8 110022..22 104.8 105.7 109.3 111 .9 113.7 Mining Me MM ta ee l ttaall s to aa mm nn n ii e HH nn ii PP nn a gg QQ n d rrtt llii e a mm rt ii h nn pp m rr^^ in llcc e rals 1. ... ... 2 777 555 6 666 111 1 1 1 11 1 00 22 7 99 99 . .. 2 .. 11 22 1 1 1 1 0 3 9 9 3 . . . 1 0 8 1 1 1 1 3 0 6 1 6 . . 2 1 .1 11 1 11 11 0 22 33 5 55 ..44 . .. 1 44 1 1 1 1 2 0 3 5 4 . . 3 . 7 8 1 1 1 0 0 1 6 0 4 .2 . . 4 8 1 1 9 0 1 1 0 5 . . 5 3 6 1 1 1 0 0 1 5 1 0 .0 . . 4 3 1 1 9 0 1 7 8 9 . . 2 . 9 2 1 1 9 0 1 7 9 8 . . 2 . 5 5 1 1 1 0 0 1 8 0 9 .0 . . 0 8 1 1 1 1 2 0 0 2 1 . . 0 . 1 7 1 1 1 0 2 0 8 1 0 . . 9 . 1 5 110.3 Co O C al o i l a l a o n il d a g n a d s extraction gas.................. 4 555... . . 111 4 6 111 2 9 1 1 10 0 0 7 5 7 . . . 3 1 7 1 1 1 0 0 1 3 2 1 . . 9 . 9 3 1 1 10 0 1 6 7 5 . . . 8 5 0 1 1 1 0 0 1 7 6 7 .7 . . 1 4 1 1 1 0 0 1 7 6 2 . . 4 . 6 2 1 1 1 0 0 1 5 4 3 . . 8 . 5 6 1 1 1 0 0 2 7 5 0 . . 6 . 5 4 1 1 1 0 0 2 6 4 0 .7 . . 5 6 1 1 1 0 0 0 4 5 4 .4 . . 7 2 1 1 1 0 0 1 4 3 3 .8 . . 4 6 1 1 1 0 0 1 6 4 4 .1 . . 8 6 1 1 1 0 0 1 5 9 2 .0 . . 9 8 1 1 10 0 0 1 1 6 . . 9 . 2 4 1 1 10 0 0 3 2 7 . . . 3 7 3 Utilities Electric •••••••••••• 3.90 159.5 162.5 161.1 165.4 164.1 163.0 163.3 164.7 165.8 167.8 163.4 165.4 11..1177 111177..99 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 • FEBRUARY 1976 SELECTED BUSINESS INDEXES (1967= 100, except as noted) Industrial production Manu- Prices4 facturing2 IInn-- Ca- Market dduussttrryy pacity Nonagutiliza- Con- ricul- Periotl1 Products tion struc- tural Total Whole- TToottaall in mfg. tion em- Em- Pay- retail Con- sale Total Final Mate- Manu- o ( u 1 t 9 p 6 u 7 t t c ra o c n t - s m p e l n o t y — - p m lo en y t - rolls sales3 sumer m c o o d m i - ty Inter- rials factur- = 100) Total i Con- Equip- mediate ing Total sumer ment goods 11995555 555555888888......555555 55556666....6666 55554444....9999 55559999....5555 48.9 62.6 61.5 58.2 90.0 76.9 92.9 61.1 59 80.2 87.8 11995566 666666111111......111111 55559999....7777 55558888....2222 66661111....7777 555333...777 65.3 63.1 60.5 88.2 79.6 93.9 64.6 61 81.4 90.7 111999555777 666666111111......999999 66661111....1111 55559999....9999 66663333....2222 555555...999 65.3 63.1 61.2 84.5 80.3 92.2 65.4 64 84.3 93.3 111999555888 555555777777......999999 55558888....6666 55557777....1111 66662222....6666 555000...000 63.9 56.8 56.9 75.1 78.0 83.9 60.3 64 86.6 94.6 111999555999... 666666444444......888888 6644..44 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. 666666666666......222222 6666..22 64.8 71.3 56.4 71.0 66.4 65.4 80.1 68.6 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 70.2 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 78.1 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 86.1 86.1 87.8 76.0 79 91.7 94.5 1111111999999966666664444444 81.7 81.2 79.6 86.8 70.1 87.3 82.6 81.2 85.5 89.4 s 88.6 89.3 80.1 83 92.9 94.7 1111111999999966666665555555....... 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 90 94.5 96.6 1111111999999966666666666666....... 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 1111111999999966666667777777....... 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 1111111999999966666668888888....... 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 1111111999999966666669999999....... 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 1111111999999977777770000000 106.6 106.0 104.5 110.3 96.3 111.7 107.7 105.2 78.3 123.1 107.7 98.1 114.1 119 116.3 110.4 1971 106.8 106.4 104.7 115.7 89.4 112.6 107.4 105.2 75.0 145.4 108.1 94.2 116.7 130 121.2 113.9 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 83.0 179.7 116.8 103.2 149.2 160 133.1 134.7 1974 124.8 123.1 121 .7 128.8 111 .7 128.3 127.4 124.4 78.9 168.6 119.1 102.1 157.1 171 147.7 160.1 111999777444---—Dec 117.3 118.7 118.2 123.4 110.7 120.5 114.8 116.1 575.7 176.0 118.0 96.5 153.2 171 155.4 171.5 | 111999777555---—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 A M Fe p a b r r 1 1 1 1 0 1 1 9 0 . . . 9 0 2 1 1 1 1 1 1 3 2 2 . . . 7 4 9 1 1 1 1 1 1 2 3 2 . . . 2 3 6 1 1 1 1 1 1 8 8 9 . . . 8 2 6 1 1 1 0 0 0 3 5 3 . . . 9 3 0 1 1 1 1 1 1 2 5 3 . . . 7 2 4 1 1 1 0 0 0 5 7 5 . . . 9 4 2 1 1 1 0 0 0 7 9 7 . . . 7 2 9 | 1 68.2 1 1 1 3 5 8 9 3 9 . . . 0 0 0 1 1 1 1 1 1 6 6 6 . . . 1 1 6 9 9 8 1 0 9 . . . 3 9 2 1 1 1 4 4 4 3 3 4 . . . 5 7 3 1 1 1 7 7 7 9 6 9 1 1 1 5 5 5 7 8 7 . . . 2 6 8 1 1 17 7 7 1 2 0 . . . 1 4 3 May 110.1 113.4 113.7 121 .2 102.9 112.4 104.9 108.2 I 67.0 182.0 116.2 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 112.2 115.3 115.7 125.5 102.2 114.3 106.8 110.6 | 165.0 116.4 89.7 148.7 190 162.3 175.7 A S O e u c p g t t . r 1 1 1 1 1 1 4 6 6 . . . 2 7 2 1 1 1 1 1 1 5 6 6. . . 9 8 9 1 1 1 1 1 1 5 6 7 . . . 9 9 0 1 1 1 2 2 2 5 6 7 . . . 7 8 0 1 1 1 0 0 0 2 2 2. . . 8 3 6 1 1 1 1 1 1 5 6 7 . . . 4 6 0 1 1 1 1 1 1 1 6 5 . . . 5 1 5 1 1 1 1 1 1 2 5 4 . . . 8 8 7 ] [ j '68.9 '1 2 1 6 0 5 6 8 7 . . . 0 0 0 1 1 1 1 1 1 6 7 7 . . . 9 8 4 9 9 9 2 0 2 . . . 9 0 5 1 1 1 5 5 5 4 8 7 . . . 2 4 0 1 1 1 9 9 8 1 2 9 1 1 1 6 6 6 2 4 3 . . . 8 6 6 1 1 1 7 7 7 6 8 7 . . . 7 9 7 Nov.r.... 117.4 117.8 117.8 128.6 102.8 117.8 116.5 116.4 70.8 148.0 117.8 92.4 158.9 192 165.6 178.2 Dec.' 118.5 119.9 119.8 130.8 103.6 120.4 116.4 117.4 137.0 118.1 '93.0 162.2 198 166.3 178.7 11997766-- Jan 111199..33 112200..66 112200..66 113322..11 110044..33 112211 ..11 111177..33 111188..22 118.6 9933..88 116644..77 119977 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 4th 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 / > PRIVATE HOUSING PERMITS (In millions of do », except as noted) 1974 1975 Type of ownership and 1973 1974 type of construction Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Total construction contracts 1 99,304 93,076 7,304 5,100 4,955 6,574 9,598 9,143 9,324 9,044 10,037 7,692 7,767 5,573 5,431 By type of ownership: Public 26,563 32,209 2,496 2,254 2,031 2,182 2,768 2,875 3,891 3,784 3,040 2,725 2,544 1,597 1,724 Private i 72,741 60,867 4,809 2,846 2,924 4,393 6,830 6,268 5,432 5,260 6,997 4,967 5,223 3,976 3,708 By type of construction: Residential building 1 45,696 34,174 1,715 1,562 1 ,583 2.316 3,029 3,073 3,116 3,093 2,784 2,966 3,189 2,404 2,233 Nonresidential building 31,534 33,859 2,451 2,233 2,199 2; 402 2,987 2,877 3,169 3,165 2,666 2,526 2,629 1 ,859 1,865 Nonbuilding 22,074 25,042 3,139 1,305 1,172 1,856 3,582 3,193 3,040 2,786 4,587 2,200 1,949 1,309 1,334 Private housing units authorized... 1,820 1,074 837 689 701 677 837 912 949 1,042 995 1,095 1,079 '1,085 1,058 (In thousands, S.A., A.R.) 1 Because of improved procedures for collecting data for 1 -family homes, NOTE.—Dollar value of construction contracts as reported by the some totals are not strictly comparable 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

FEBRUARY 1976 • CONSTRUCTION A 51 VALUE OF NEW CONSTRUCTION ACTIVITY (In millions of dollars) Private Public 2 Nonresidential Conser- Total d R e e n s ti i- al Total In tr d i u al s - B m u C i e l o r d c m i i n - a g l s b O in u t g i h s l e d r 1 - M ta i r l y i- H w ig ay h - d v e m v a a t e e n i l o n d o n t p - Other 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 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 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 94,167 66,071 31,864 34,207 6,538 9,754 5,125 12,790 28,096 718 9,981 1,908 15,489 109,950 80,079 43,267 36.812 5,423 11,619 5,437 14,333 29,871 901 10,658 2,095 16,217 124,077 93,893 54,288 39,605 4.676 13,462 5,898 15,569 30,184 1,087 10,429 2,172 16,496 135,456 102,894 57,623 45,271 6,243 15,453 5,888 17,687 32,562 1,170 10,559 2,313 18,520 135,246 96,836 55,212 41,624 7,843 16,050 5,895 11,836 38,426 1,188 12,093 2,781 22,364 130,595 89,841 42,876 46,965 7,842 12,794 5,580 20,749 40,754 1,395 134,047 92,529 41,060 51,469 9,006 15,842 5,571 21.050 41,518 1,169 11,973 3,358 25,018 132,274 91,169 39,556 51,613 8,412 15,646 5,903 21,652 41,105 1,223 12,356 2,842 24,684 128,862 89,023 38,523 50,500 8,724 14,971 5,883 20,922 39,839 1,319 11,993 3,329 23,198 125,501 85,687 37,999 47,688 7,869 13,032 5,363 21,424 39,814 1,337 11,377 3,024 24,076 121,027 84,742 37,574 47,168 7,500 12,765 5,636 21,267 36,285 1,473 10,963 2,769 21,080 121,698 84,252 38,531 45,721 8,197 12,109 5,268 20,147 37,446 1,180 12,227 3,132 20,907 126,884 84,982 40,431 44.551 7.677 11,756 5,415 19,703 41,902 1,120 12,251 3,529 25,002 128,776 88,143 43,330 44.813 7,714 11,978 5,319 19,802 40,633 1,309 132.101 90,590 45,354 45.236 7,621 12,586 5,611 19,418 41,511 1,383 137.102 92,524 45,972 46.552 7,889 12,431 5,843 20,389 44,578 1,662 135,636 93,250 46,492 46,758 7,470 12,506 5,589 21,193 42,386 1,493 136,545 95,762 47,529 48.237 7,750 12,634 5,771 22,082 40,783 1,657 138,581 95,531 48,465 47,066 7,483 12,190 5,523 21,870 43,050 1,616 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- shipfamily more Total family more Total family more ments family family family For sale Sold (end of period) 196 6 1,165 779 386 217 461 196 196 7 1,292 844 448 240 487 190 196 8 1,508 899 608 1,320 859 461 318 490 218 196 9 1,467 811 656 1,399 807 591 885 350 535 413 448 228 197 0 1,434 813 621 1,418 802 617 922 381 541 401 485 227 197 1 2,052 1,151 901 1,706 1,014 692 1,254 505 749 497 656 294 197 2 2,357 1,309 1,047 1,971 1,143 828 1,586 640 947 576 718 416 197 3 2,045 1,132 913 2,014 1,174 840 1,599 583 1,016 567 620 456 197 4 1,338 450 1,692 931 760 1,189 516 673 '329 501 407 1974—Dec... 682 198 1,606 852 754 1, 225 r543 683 195 382 400 1975—Jan.. . 999 739 260 1,535 964 571 '1,188 r529 660 185 404 404 Feb... 1,000 733 267 1,320 770 550 rl, 156 r525 631 219 411 409 Mar.. 985 775 210 1,305 734 571 1,118 r521 598 199 463 396 Apr... 980 762 218 1,211 756 455 rl ,087 '515 573 194 570 388 May.. 1,130 887 243 1,276 832 444 1,060 '513 546 224 586 383 June.. 1,094 884 210 1,165 785 380 1,045 '517 '528 210 556 378 July.. 1,235 935 300 1,269 901 368 1,039 '521 '518 225 553 383 Aug.. 1,269 987 282 1,267 881 386 1.036 '528 '507 235 576 379 Sept.. 1,269 931 338 1,291 969 322 1.037 '532 '505 215 574 383 Oct.'. 1,452 1,103 349 1,115 734 381 1,065 560 505 229 604 386 Nov.. 1,354 1,028 326 1,416 997 419 1,058 559 499 232 660 377 Dec.*, 1,309 972 337 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 • FEBRUARY 1976 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT (In thousands of persons, except as noted) Civilian labor force (S.A.) Period i p T n o ( s o N t p t i a u . t S l u l a . t n A i t o o i . o n ) n n a - l la ( b N N o . r o S t . f A i o n r . ) c e TT l ( l ( ff aa SS oo oo bb .. rr tt AA oo cc aa ee rr ll .. )) Total Employed1 Unem- U ( n pe e m r r m a e t c p n e e 2 t l n o t y ; - Total In c u n l o t n u a ra g l r i- In ployed S.A.) 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 85,935 82,443 3,492 5,076 5.6 1974—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 Oct.. 154,256 58,825 95,607 93,443 85,441 82,019 3,422 8,002 8.6 Nov. 154,476 59,533 95,134 92,979 85,278 81,986 3,292 7,701 8.3 Dec. 154,700 59,812 95,436 93,279 85,511 82,270 3,241 7,768 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) Period Total M t a u n r u in f g a c- Mining c C o o n t n i s o t t r n r a u c c t - Tr t a i p o n u n s b p l a o i n c r d t a- Finance Service G m ov e e n r t nutilities 196 9 70,442 20,167 619 3,525 4,435 14,704 3,562 11,228 12,202 197 0 70,920 19,349 623 3,536 4,504 15,040 3,687 11,621 12,561 197 1 71,216 18,572 603 3,639 4,457 15,352 3,802 11,903 12,887 197 2 73,711 19,090 622 3,831 4,517 15,975 3,943 12,392 13,340 197 3 76,896 20,068 644 4,015 4,644 16,674 4,091 13,021 13,739 197 4 78,413 20.046 694 3,957 4,696 17,017 4,208 13,617 14,177 SEASONALLY ADJUSTED 1974—De c 77,723 19,190 686 3,770 4,659 16,935 4,229 13,833 14,421 1975—Ja n 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 77,023 18,254 749 3,415 4.466 17,016 4,218 14,054 14,855 Sept 77,310 18,417 752 3,432 4.467 17,045 4,239 14,113 14,845 Oct 77,555 18,493 774 3.402 4,476 17,043 4,246 14,157 14,964 Nov.33 77,558 18,471 767 3.403 4,501 17,020 4,248 14,189 14,959 Dec p 77,798 18,551 772 3,389 4,481 17,096 4,259 14,251 14,999 NOT SEASONALLY ADJUSTED 1974—De c 78,462 19,209 681 3,695 4,659 17,608 4,208 13,764 14,638 1975—Ja n 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 76,900 18,450 763 3,688 4.493 16,959 4,273 14,162 14,112 Sept 77,614 18,694 758 3,659 4,503 17,084 4,243 14,113 14,560 Oct 78,193 18,687 763 3,620 4,503 17,136 4,238 14,185 15,061 Nov.? 78,324 18,625 764 3,515 4,515 17,323 4,235 14,175 15,172 Dec.p 78,529 18,567 766 3,321 4,481 17,753 4,238 14,180 15,223 NOTE.—Bureau of Labor Statistics; data include all full- 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

FEBRUARY 1976 • PRICES A 53 CONSUMER PRICES (1967 = 100) Housing Health and recreation Period it A em ll s Food Total H ow s o h n m i e p e r - - F c a o o u n i a e d l l l t e r G a i l n c e a d i c s t - y o n F i t p a n i i u n e s o g d h r r n s - a - - A up p a k p n e a d e r p el T p t o r i a r o n t n a s - - Total M c ic a e a r d e l - s P c o a e n r r a e - l r R e t a i c e i n n o r a g d e n d a - - g O s a i o e c t n o h r e d v d s e - 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 40.5 81.4 44.8 44.2 37.0 41.2 47.7 49.2 1945 53.9 50.7 59.1 58.8 48.0 79.6 61.5 47.8 42.1 55.1 62.4 56.9 1960 88.7 88.0 90.2 91.7 86.3 89.2 98.6 93.8 89.6 89.6 85.1 79.1 90.1 87.3 87.8 196 5 94.5 94.4 94.9 96.9 92.7 94.6 99.4 95.3 93.7 95.9 93.4 89.5 95.2 95.9 94.2 196 6 97.2 99.1 97.2 98.2 96.3 97.0 99.6 97.0 96.1 97.2 96.1 93.4 97.1 97.5 97.2 196 7 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 196 8 104.2 103.6 104.2 102.4 105.7 103.1 100.9 104.4 105.4 103.2 105.0 106.1 104.2 104.7 104.6 196 9 109.8 108.9 110.8 105.7 116.0 105.6 102.8 109.0 111.5 107.2 110.3 113.4 109.3 108.7 109.1 197 0 116.3 114.9 118.9 110.1 128.5 110.1 107.3 113.4 116.1 112.7 116.2 120.6 113.2 113.4 116.0 197 1 121.3 118.4 124.3 115.2 133.7 117.5 114.7 118.1 119.8 118.6 122.2 128.4 116.8 119.3 120.9 197 2 125.3 123.5 129.2 119.2 140.1 118.5 120.5 121.0 122.3 119.9 126.1 132.5 119.8 122.8 125.5 197 3 133.1 141.4 135.0 124.3 146.7 136.0 126.4 124.9 126.8 123.8 130.2 137.7 125.2 125.9 129.0 197 4 147.7 161.7 150.6 '130.6 163.2 214.6 145.8 140.5 136.2 137.7 140.3 150.5 131.3 133.8 137.2 197 5 161 .2 175.4 166.8 137.3 181.7 235.3 169.6 158.1 142.3 150.6 153.5 168.6 150.7 144.4 147.4 1974—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.C 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 Sept. 163.6 177.8 168.9 138.4 183.9 238.7 174.0 160.1 143.5 155.4 155.4 172.2 152.1 146.0 148.0 Oct.. 164.6 179.0 169.8 139.3 184.8 243.3 174.2 160.9 144.6 156.1 156.3 173.5 152.9 146.6 148.5 Nov. 165.6 179.8 171.3 139.9 186.8 246.5 176.8 161.6 145.5 157.4 156.5 173.3 153.6 147.0 148.9 Dec. 166.3 180.7 172.2 140.6 187.8 248.7 179.0 162.0 145.2 157.6 157.5 174.7 154.6 147.5 149.8 NOTE.—Bureau of Labor Statistics index for city wage earners and clerical workers. WHOLESALE PRICES: SUMMARY (1967 = 100, except as noted) Industrial commodities PPrroo-- PPeerriioodd mm cc tt oo AA oo iiee mm dd ll ss ll ii -- -- pp FF uu rr aa cc oo rr tt mm dd ss -- cc ff ff ee aa oo ee ss nn ee oo ss dd dd ee dd ss dd ss Total t T e il e t e c x s . - , H e i t d c e . s, F e u t e c. l , C ic e h a t e c l m s . , - R b e u t e c r b . , - L b e u t e c m r . , - P e a t p c e . r, M e a t l e c s t , . - e c M a q e h n r u i a y d n i - p - - F t u e u t r r c n e . , i - N t e m m a r o l a i e l n n l i - s - c - T e p m t q r o i a e u o r n n t n i a p s t - - 1 n c M e e o l i l s u a - s 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 99.9 105.3 125.3 104.0 108.5 106.5 104.9 107.7 100.8 105.2 1970 110.4 111.0 112.0 110.0 107.2 110.1 105.9 102.2 108.6 113.1 108.2 116.1 111.4 107.5 113.3 104.5 109.9 1971 , 113.9 112.9 114.3 114.0 108.6 114.0 114.2 104.2 109.2 127.0 110.1 119.0 115.5 109.9 122.4 110.3 112.8 1972 119.1 125.0 120.8 117.9 113.6 131.3 118.6 104.2 109.3 144.3 113.4 123.5 117.9 111.4 126.1 113.8 114.6 1973 134.7 176.3 148.1 125.9 123.8 143.1 134.3 110.0 112.4 177.2 122.1 132.8 121.7 115.2 130.2 115.1 119.7 1974 160.1 187.7 170.9 153.8 139.1 145.1 208.3 146.8 136.2 183.6 151.7 111.9 139.4 121.9 153.2 125.5 133.1 1974--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 171.8 179.7 186.4 167.5 137.5 142.1 232.2 176.0 149.6 164.7 169.8 185.5 156.6 138.8 168.5 131.1 145.5 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 Apr 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 May 173.2 184.5 179.0 170.3 135.2 147.7 238.8 ! 82.1 148.9 183.0 169.8 185.1 160.4 138.6 173.1 139.9 147.5 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 Oct 178.9 197.3 186.2 174.7 141.3 152.4 256.5 182.3 151.5 179.1 170.9 187.2 164.1 141.1 177.1 146.6 147.6 Nov 178.2 191 .7 182.6 175.4 '43.2 154.4 257.0 182.9 151 .8 178.3 171 .3 187.0 165.3 141 .5 177.7 147.2 148.6 Dec 178.7 193.8 181.0 176.1 144.0 154.6 258.0 183.4 151.9 183.1 173.1 187.1 165.8 142.0 178.0 147.5 151.1 1 Dec. 1968 = 100. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 54 NATIONAL PRODUCT AND INCOME • FEBRUARY 1976 GROSS NATIONAL PRODUCT (In billions of dollars) 1974 1975 Item 1950 1970 1972 1973 1974 1975^ IV III Gross national product. 286.2 982.4 1,171.1 1,306.3 1,406.9 1,499.0 1,441.3 1,433.6 1,460.6 1.528.5 1,573.2 Final purchases 279.4 978.6 1,161.7 1,288.8 1,397.2 1,513.2 1,430.9 1,458.4 1,490.2 1.530.6 1,573.4 Personal consumption expenditures. 192.0 618.8 733.0 808.5 885.9 963.2 908.4 926.4 950.3 977.4 Durable goods 30.8 84.9 111.2 122.9 121.9 127.7 117.3 118.9 123.8 131. Nondurable goods 98.2 264.7 299.3 334.4 375.7 410.0 387.1 394.1 404.8 416.4 Services 63.0 269.1 322.4 351.3 388.3 425.5 404.0 413.4 421.6 429.2 Gross private domestic investment 53.8 140.8 188.3 220.5 212.2 183.3 210.3 168.7 161.4 194.9 Fixed investment 47.0 137.0 178.8 203.0 202.5 197.5 199.8 193.5 191.1 197.1 Nonresidential 27.1 100.5 116.8 136.5 147.9 148.7 151.1 149.3 146.1 146.7 Structures 9.3 37.7 42.5 49.0 54.4 52.6 50.1 54.9 51. 51.2 Producers' durable equipment. 17.8 62.8 74.3 87.5 93.5 96.1 95.0 94.4 95.0 95.6 Residential structures 19.9 36.6 62.0 66.5 54.6 48.8 48.7 44.2 45.0 50.4 Nonfarm 18.7 35.1 60.3 64.7 52.2 46.9 46.3 42.6 43.1 48.2 Change in business inventories 6.8 3.8 9.4 17.5 9.7 -14.2 10.4 -24.8 -29.6 -2. Nonfarm 6.0 3.7 14.1 11.6 -16. 13.7 -23.3 -29.6 -5.7 Net exports of goods and services. 1.9 3.9 -3.3 7.4 7.7 21.5 8.2 17.3 24.2 22.1 Exports 13.9 62.5 72.7 101.5 144.2 147.3 153.6 148.2 140.7 148.5 Imports 12.0 58.5 75.9 94.2 136.5 125. 145.3 130.9 116.4 126.4 Government purchases of goods and services. 38.5 218.9 253.1 269.9 301.1 330.9 314.4 321.2 324.7 334.1 Fed N e a ra ti l o nal defense 1 1 8 4 . . 7 0 9 7 5 3 . . 6 5 1 7 02 3 . . 1 5 10 7 2 3 . . 0 4 11 1 1 1 .7 A 12 8 3 4 . . 1 0 11 8 8 0 . . 2 5 11 8 9 1 . . 4 4 11 8 9 2 . . 2 1 12 8 4 4 . . 2 9 Other 4.7 22.1 28.6 28.6 34.3 39.2 37.7 38.0 37.1 39.3 State local 19.8 123.2 151.0 168.0 189.4 207 196.3 201.9 205.5 209.9 Gross national product in 1972 dollars 533.5 1,075.3 1,171.1 1,233.4 1,210.7 1,186.4 1,186.8 1,158.6 1,168.1 1,201.5 1,217.4 NOTE.—Dept. of Commerce estimates. Quarterly data are seasonally adjusted totals at annual rates. For back data and explanation of series, see the Survey of Current Business, Jan. 1976. NATIONAL INCOME (In billions of dollars) 1974 1975 Item 1950 1970 1972 1973 1974 1975^ IV National income 236.2 798.4 951.9 1,067.3 1,141.1 1,209.5 1,161.3 1,155.2 1,180.8 1,232.5 Compensation of employees 154.8 609.2 715.1 797.7 873.0 921.4 898.1 897.1 905.4 928.2 Wages and salaries 147.0 546.5 633.8 700.9 763.1 801.6 783.6 781.0 787.6 Private 124.4 430.5 496.2 552.3 603.0 627.2 617.7 611.7 615.0 Military 5.3 20.7 22.0 22.1 22.3 23.0 23.0 22.9 22. Government civilian 17.4 95.3 115.6 126.5 137.7 151.3 143.0 146.4 149.7 Supplements to wages and salaries 7.8 62.7 81.4 96.8 110.0 119.8 114.4 116.1 117.8 Employer contributions for social insurance 4.2 30.7 39.4 49.3 55.5 58.5 56.9 57.1 57.5 Other labor income 3.7 32.0 42.0 47.5 54.5 61.3 57.6 59.0 60.3 Proprietors' income with inventory valuation and capital consumption adjustments 38.4 65.1 76.1 91.7 85.1 83.3 83.6 79.6 78.6 Business and professional 24.9 51.2 58.1 59.3 59.5 58.7 59.0 58.6 58.5 Farm 13.5 13.9 18.0 32.4 25.6 24.6 24.6 21.0 20.1 Rental income of persons with capital consumption adjustment 7.1 18.6 21.5 21.3 21.0 21.1 20.9 20.8 20.5 Corporate profits and inventory valuation adjustment and without capital consumption adjustment 37.6 66.4 89.6 98.6 93.6 108.3 86.1 83.4 101.6 Profits before tax 42.6 71.5 96.2 117.0 132.1 119.8 123.9 97.1 108.2 Profits tax liability 17.9 34.5 41.5 48.2 52.6 47.0 49.2 37.5 41.6 Profits after tax 24.7 37.0 54.6 79.5 72.8 74.7 59.6 66.6 Dividends 8.8 22.9 24.6 27.8 31.1 32 31.7 32. 32.6 Undistributed profits 15.9 14.1 30.0 40.9 48.4 43.0 27.5 34.0 40.0 Inventory valuation adjustment -5.0 -5.1 -6.6 -18.4 -38.5 -37.7 -13.7 -6.6 -11.5 Net interest 2.3 37.5 47.0 56.3 70.7 76.7 78.7 79.7 81.6 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

FEBRUARY 1976 • 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 1950 1970 1972 1973 1974 1975* IV III IV P Gross national product 286.2 982.4 1,171.1 1,306.3 1,406.9 1,499.0 1,441.3 1,433.6 1,460.6 1,528.5 1,573.2 Less: Capital consumption allowances with capital consumption adjustment 23.9 90.8 105.4 117.1 134.0 152.5 142.1 145.4 149.5 154.7 160.5 Indirect business tax and nontax liability 23.4 94.0 111.0 120.2 127.3 137.2 129.5 131.6 135.2 140.0 141.8 Business transfer payments 4.0 4.7 5.2 5.8 6.3 6.0 6.2 6.3 6.4 6.5 Statistical discrepancy 2.0 -2. 1.7 .4 -.6 -4.6 2.9 -3.2 -8.9 -3.2 Plus: Subsidies less current surplus of government enterprises 2.7 3.6 3.7 .7 1.9 .4 1.6 2.2 1.9 Equals: National income 236.2 798.4 951.9 1,067.3 1,141.1 1,209.5 1,161.3 1,155.2 1,180.8 1,232.5 Less: Corporate profits with inventory valuation and capital consumption adjustments 33.7 67.9 92. 100.2 91.3 102.1 82.0 78.9 96.6 113.1 Net interest 2.3 37.5 47.0 56.3 70.7 81.6 76.7 78.7 79.7 82.2 85.7 Contributions for social insurance 7.1 58.7 73.6 91.5 102.9 108.3 105.0 106.0 106.6 108.9 111.7 Wage accruals less disbursements -.5 Plus: Government transfer payments to persons. 14.4 75.9 99.4 113.5 134.5 168.7 145.5 157.7 169.4 172.4 175.2 Personal interest income 8.9 64.3 74.6 88.4 106.5 120.7 114.0 116.0 117.6 121.2 127.8 Dividends 22.9 24.6 27.8 31.1 32.8 31.7 32.1 32.6 33.5 33.1 Business transfer payments 4.0 4.7 5.2 5.8 6.3 6.0 6.2 6.3 6.4 6.5 Equals: Personal income 226.1 801.3 942.5 ,054.3 1,154.7 ,264.0 ,194.8 ,203.6 ,223.8 ,261.7 ,294.8 Less: Personal tax and nontax payments. 20.6 115.3 141.2 151.2 171.2 169.2 178.9 179.6 142.1 174.6 180.4 Equals: Disposable persqpal income 205.5 685.9 801.3 903.1 983.6 ,076.8 ,015.9 ,024.0 ,081.7 ,087.1 ,114.4 Less: Personal outlays 194.7 635.4 751.9 830.4 909.5 987.2 932.4 950.4 974.2 ,001.3 ,023.1 Personal consumption expenditures 192.0 618.8 733.0 808.5 885.9 963.2 908.4 926.4 950.3 977.4 998.7 Interest paid by consumer to business 2.3 15.5 17.9 20.6 22.6 23 23.0 23.0 22.8 23.0 23.5 Personal transfer payments to foreigners (Net) .4 1.1 1.0 1.2 1.0 1.0 1.0 1.0 .9 1.0 Equals: Personal saving 10.8 50.6 49.4 72.7 74.0 89.6 83.6 73.6 107.5 85.9 91.3 Disposable personal ipcome in (1972) dollars. 361.9 741.6 801.3 856.0 843.5 857.0 837.6 831.6 869.8 858.2 868.4 NOTE.—Dept. of Commerce estimates. Quarterly data seasonally adjusted totals at annual rates. See also NOTE to table at top of opposite page. PERSONAL INCOME (In billions of dollars) 1974 1975 Item 1974 1975*> Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Total personal income 1154.7 1246.0 1200.4 1202.6 1203.2 1205.0 1209.0 1217.2 1245.2 1244.0 1262.4 1278.7 1287.4 1295.9 1301.1 Wage and salary disbursements 763.6 801.6 782.0 782.1 779.1 781.7 782.7 787.4 792.7 797.4 808.8 815.6 824.1 831.2 836.3 Commodity-producing industries... 273.7 273.5 273.7 271.7 266.1 265.9 265.8 267.0 268.8 270.9 275.6 279.5 281.7 283.2 286.2 Manufacturing only 211.2 211.1 210.8 207.8 204.3 204.4 204.9 205.6 207.2 208.8 213.2 216.6 218.7 219.7 222.6 Distributive industries 184.3 195.1 189.8 189.9 190.2 190.7 190.9 191.7 192.9 193.9 197.7 198.2 200.2 202.4 202.8 Service industries 145.0 158.6 151.3 152.4 153.5 154.6 154.5 156.1 157.4 158.2 160.3 161.5 163.1 165.3 166.0 Government 160.6 174.4 167.2 168.1 169.3 170.5 171.5 172.6 173.6 174.4 175.2 176.4 179.0 180.3 181.2 Other labor income 54.5 61.3 58.1 58.6 59.0 59.4 59.8 60.3 60.8 61.4 62.0 62.6 63.2 63.8 64.4 Proprietors' income with inventory valuation and capital consumption adjustments 85.1 83.3 84.3 82.8 79.5 76.5 77.0 78.7 80.3 84.5 88.0 91.5 89.4 87.1 84.5 Business and professional 59.5 58.7 58.8 58.8 58.5 58.6 58.5 58.6 58.6 58.7 58.7 58.8 58.9 58.8 58.7 Farm 25.6 24.6 25.5 24.0 21.0 17.9 18.5 20.1 21.7 25.8 29.3 32.7 30.5 28.3 25.8 Rental income of persons with capital consumption adjustment 21.0 21.1 20.9 20.9 20.8 20.8 20.7 20.5 20.2 20.5 21.0 21.3 21.8 22.0 22.2 Dividends 31.1 32.8 31.0 .32.1 32.1 32.1 32.4 32.6 32.9 33.2 33.5 33.9 33.8 33.8 31.7 Personal interest income 106.5 120.7 116.0 115.9 116.0 116.1 116.6 117.5 118.6 119.7 121.2 122.9 125.1 127.9 130.4 Transfer payments 140.4 175.0 156.3 159.0 165.4 167.2 168.6 169.3 189.0 176.8 178.1 181.3 180.6 181.4 183.1 Less: Personal contributions for social insurance 47.4 49.8 48.1 48.9 48.8 48.9 48.9 49.1 49.3 49.5 50.0 50.4 50.7 51.2 51.6 Nonagricultural income 1119.1 1210.2 1164.3 1167.6 1171.3 1176.2 1179.7 1186.2 1212.5 1207.2 1222.1 1234.8 1245.6 1256.3 1263.6 Agricultural income 35.6 35.6 36.1 35.0 31.9 28.8 29.3 31.0 32.7 36.8 40.3 43.9 41.8 39.6 37.5 NOTE.—Dept. of Commerce estimates. Monthly data 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 • FEBRUARY 1976 SUMMARY OF FUNDS RAISED IN U.S. CREDIT MARKETS (Seasonally adjusted annual rates; in billions of dollars) 1974 1975 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 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 -2.4 --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 39.6 43.3 31.7 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 7.8 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 11.5 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.C 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.T 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 31 32 Debt instruments 1.8 4.0 2.7 3.2 2.7 4.6 4.7 7.7 15.7 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 7.1 7.0 7.1 -.4 35 36 U.S. Government loans 1.3 2.6 2.2 2.1 1.3 1.8 1.8 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 ! 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 21A 8.0 2 3 U.S. Government securities 5.1 -.6 3.2 9.1 8.2 3.8 6.2 19.6 21.4 16.8 26.0 6.9 3 4 Loans from U.S. Government -.2 -.1 .2 -.3 .7 1 .4 1.1 4 5 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 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 10 Bank loans n.e.c -1 .0 -2.0 2.5 2.3 -.5 3.0 6.8 13.5 7.5 8.9 6.2 -8.8 10 11 Open-market paper and RP's 3.3 1 .9 3.6 10.7 -5.0 1.8 4.9 9.8 -.1 5.8 -6.0 5.3 11 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 16 Commercial banks -.1 .1 1.2 1 .4 -3.1 2.5 4.0 4.5 -1.9 2.6 -6.4 5.8 16 17 Bank affiliates 4.2 -1 .9 -.4 ..77 2.2 2.4 4 1 .7 .9 1177 18 Foreign banking agencies .1 * .1 .2 .1 1.6 ..88 5.1 2.9 2.7 3.1 -.9 1188 19 Savings and loan associations .1 -1.7 1.1 4.1 1 .8 —. l 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 8.3 1.6 4.2 9.3 9.4 3.9 3.6 4.2 -3.4 21 22 REITS .7 1.3 2.7 33..00 6 1 6 3 1.0 2 8 — 9 -1 3 22 23 Open-end investment companies 3.7 3.0 5.8 4.8 2.6 11..11 -.7 -1 .6 1 .0 -!8 2]8 2.9 23 Total credit market funds raised, all sectors, by type j 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 13.6 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 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 1122 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

FEBRUARY 1976 • 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 1966 1967 1968 1969 1970 1971 1972 1973 1974 HI H2 HI ! 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 1122..22 15.7 28.1 4411..77 1188..33 3333..22 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 44..99 22..99 22..88 33..22 22..66 33..00 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 n Total net advances 59.8 68.1 87.2 81.1 72.6 98.1 146. ,7 166.5 149.1 115599..22 113388..55 151.5 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 115555..77 110066..99 115.0 19 20 Commercial banks 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 1133..77 39.3 3311..88 2277..00 3366..44 2288..99 3322 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 Private 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 ! 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 4 Acquisitions by financial institutions 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 5 Other net purchases -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. branches, 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 • FEBRUARY 1976 1. U.S. BALANCE OF PAYMENTS SUMMARY (In millions of dollars. Quarterly figures are seasonally adjusted unless shown in italics.) 1974 1975 Credits (+), debits (-) 1972 1973 1974 III IV Merchandise trade balance 1. -6,409 955 -5,277 -2,315 -1,380 1,830 3,378 Exports 49,388 71,379 98,309 25,034 26,593 27,188 25,692 Imports -55,797 -70,424 -103,568 -27,349 -27,973 -25,358 -22,314 - Military transactions, net -3,621 -2,317 -2,158 -513 -498 -349 -405 Travel and transportation, net. -3,024 -2,862 -2,692 -721 -741 -572 -393 Investment income, net 2 4,321 5,179 10,121 2,354 2,559 1,176 1,392 U.S. direct investments abroad 2 6,416 8,841 17,679 4,700 4,080 2,156 2,171 Other U.S. investments abroad 3,746 5,157 8,389 2,354 2,358 2,148 2,075 Foreign investments in the United States 2 . -5,841 -8,819 -15,946 -4,700 -3,879 -3,128 -2,854 Other services, net 2 2,803 3,222 3,830 960 1,049 1,093 1,043 Balance on goods and services • -5,930 4,177 3,825 -235 989 3,178 5,015 Not seasonally adjusted... -2,871 2,348 4,230 5,234 Remittances, pensions, and other transfers.... -1,606 -1,903 -1,721 -457 -439 -448 -462 Balance on goods, services, and remittances. -7,537 2,274 2,104 Not seasonally adjusted -3,-34609 2 550 2,730 4,553 U.S. Government grants (excluding military). -2,173 -1,938 4-5,461 1,904 3,812 4,762 Balance on current account... -9,710 335 4-3,357 -1,500 -649 -727 -721 Not seasonally adjusted., -4,104 1,-29899 23,,007053 33,,987332 U.S. Government capital flows excluding nonscheduled repayments, net 5 -1,706 -2,933 4408 -985 -1,015 -821 Nonscheduled repayments of U.S. Government assets 137 289 U.S. Government nonliquid liabilities to other than foreign official reserve agencies 234 1,154 710 278 125 541 467 Long-term private capital flows, net -69 177 -8,463 -2,157 -5,570 -2,199 -2,431 U.S. direct investments abroad -3,530 -4,968 -7,455 -1,828 -3,310 -1,041 -2,304 Foreign direct investments in the United States 6 380 2,656 2,224 -1 -653 340 679 Foreign securities -618 -759 -1,990 -304 -726 -2,021 -1,001 U.S. securities other than Treasury issues « 4,507 4,055 672 204 -663 653 678 Other, reported by U.S. banks -1,158 -706 -1,166 48 -285 -437 -648 Other, reported by U.S. nonbanking concerns 351 -101 -748 -276 67 307 165 Balance on current account and long-term capital 5. -11,113 -977 -10,702 -3,574 -6,529 -670 1,047 Not seasonally adjusted -6,097 -4,616 -134 1,116 Nonliquid short-term private capital flows, net -1,542 -4,238 -12,936 -1,458 -2,305 1,929 -970 Claims reported by U.S. banks -1,457 -3,886 -12,173 -1,614 -2,406 1,733 -1,008 C Li l a a b im il s it i r e e s p r o e r p te o d r te b d y b U y . S U . . n S o . n n b o a n n b k a i n n k g in c g o n c c o e n r c n er s n .. s . . , -3 2 0 2 6 1 -1,1 8 8 3 3 1 -2 1 , , 6 8 0 4 3 0 -2 4 7 3 6 2 -1 2 3 3 7 8 - 2 5 5 4 0 -1 2 6 0 7 5 Allocations of Special Drawing Rights (SDR's) 710 Errors and omissions, net -1,884 -2,436 4,698 1,135 1,236 2,067 843 Net liquidity balance -13,829 -7,651 -18,940 -3,897 -7,598 3,326 920 Not seasonally adjusted.. -5,538 -6,475 4,471 774 Liquid private capital flows, net 3,475 2,343 10,543 4,014 2,730 -6,587 -2,634 Liquid claims -1,247 -1,951 -6,267 -249 -2,101 -4,744 -2,287 Reported by U.S. banks -742 -1,161 -6,134 -753 -1,732 -5,062 -2,413 Reported by U.S. nonbanking concerns.. -505 -790 -133 504 -369 318 126 Liquid liabilities— 4,722 4,294 16,810 4,263 4,831 -1,843 -347 Foreign commercial banks 3,717 3,028 12,621 3,178 2,730 -2,818 175 International and regional organizations.. 103 377 1,319 215 1,308 871 -666 Other foreigners 902 889 2,870 870 793 104 144 Official reserve transactions balance, financed by changes in—. -10,354 -5,308 -8,397 117 -4,868 -3,261 -1,714 Not seasonally adjusted -1,684 -4,070 —2,214 -1,290 Liquid liabilities to foreign official agencies 9,734 4,456 8,503 Other readily marketable liabilities to foreign official agen- 751 3,886 2,751 1,423 399 1,118 673 Nonliquid liabilities to foreign official reserve agencies re- 136 630 841 321 ported by U.S. Govt 189 -475 655 215 -6 U.S. official reserve assets, net 32 209 -1,434 -1,003 137 -325 -29 Gold 547 SDR's -703 -172 -123 -20 -4 -16 Convertible currencies 35 233 3 -152 241 -14 -6 Gold tranche position in IMF 153 -33 -1,265 -728 -84 -307 -7 Memoranda: Transfers under military grant programs (excluded from lines 2, 4, and 14) 4,492 2,809 1,811 352 490 787 ,244 Reinvested earnings of foreign incorporated affiliates of U.S. firms (excluded from lines 7 and 20) 4,521 8,124 7,508 Reinvested earnings of U.S. incorporated affiliates of foreign firms (excluded from lines 9 and 21) 548 945 1,554 Balances excluding allocations of SDR's: Net liquidity, not seasonally adjusted -14,539 -7,651 -18,940 -5,538 -6,475 4,471 774 Official reserve transactions, N.S.A -11,064 -5,308 -8,397 -1,684 -4,070 -2,214 -1,290 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEBRUARY 1976 • FOREIGN TRADE; U.S. RESERVE ASSETS A 59 2. MERCHANDISE EXPORTS AND IMPORTS (Seasonally adjusted; in millions of dollars) Exports i Imports 2 Trade balance 1972 1973 1974 1975r 1972 1973 19743 1975 1972 1973 19743 1975 Month: Jan... 4,074 4,955 7,150 9,412 4,436 244 6,498 9,617 -361 -289 +652 -205 Feb.. . 3,824 5,070 7,549 8,787 4,473 483 7,318 7,880 -649 -413 +231 +908 Mar... 3,869 5,311 7,625 8,693 4,515 414 7,742 7,285 -647 -103 -117 + 1,408 Apr... 3,820 5,494 8,108 8,574 4,417 360 8,025 8,022 -596 + 133 + 83 + 552 May.. 3,882 5,561 7,652 8,144 4,486 703 8,265 7,103 -604 -142 -612 + 1,041 June.. 3,971 5,728 8,317 8,692 4,468 775 8,577 6,962 -497 -47 -260 + 1,730 July... 4,074 5,865 8,307 8,884 4,565 5; 829 8,922 7,913 -491 + 37 -615 +971 Aug... 4,191 6,042 8,379 8,970 4,726 6,011 9,267 7,967 -535 + 32 -888 + 1,003 Sept... 4,176 6,420 8,399 9,157 4,612 5,644 8,696 8,189 -436 +776 -297 +968 Oct... 4,312 6,585 8,673 9,288 4,738 5,996 8,773 8,212 -426 +589 -100 + 1,076 Nov... 4,468 6,879 8,973 9,409 5,148 6,684 8,973 8,299 -680 + 195 +1,110 Dec... 4,553 6,949 8,862 9,325 5,002 6,291 9,257 8,746 -449 +658 -395 + 579 Quarter: I 11,767 15,336 22,325 26,892 13,424 16,140 21,558 24,782 -1,657 -804 +767 +2,111 I I 11,673 16,783 24,077 25,409 13,370 16,839 24,867 22,087 -1,697 -56 -790 + 3,322 III.... 12,442 18,327 25,085 27,010 13,903 17,483 26,885 24,068 -1,461 +844 -1,800 +2,942 IV.... 13,333 20,413 26,508 28,022 14,888 18,972 27,003 25,258 -1,555 + 1,441 -495 +2,765 Year4.. 49,199 70,823 97,908 107,191 55,583 69,476 100,251 96,140 -6,384 + 1,347 -2,343 + 11,050 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 nndd ee aarr oo ff Total Tot G al o 2 ld st T o r c e k a 1 s ury v c fo e u C r r r o t e r i n e i b g - n l n e - p R o I e s M s i i n e t F r io v n e SDR's3 E m n o d n t o h f Total Tot G al o 2 ld s T to re ck a sury v c fo e u C c r r r o i t e r e i n e i b s g - n l n e - p R o e I s M s i e t F r io v n e SDR's 3 1961... 18,753 16,947 16,889 116 1,690 1975— 1962... 17,220 16,057 15,978 99 1,064 Jan 15,948 11,635 11,635 2 1,908 2,403 1963... 16,843 15,596 15,513 212 1,035 Feb 16,132 11,621 11,621 2 2,065 2,444 1964... 16,672 15,471 15,388 432 769 Mar 16,256 11,620 11,620 19 2,194 2,423 Apr 16,183 11,620 11,620 2 2,168 2,393 1965... 15,450 13,806 13,733 781 863 May 16,280 11,620 11,620 4 2,218 2,438 1966... 14,882 13,235 13,159 1,321 326 June.... 16,242 11,620 11,620 25 2,179 2,418 1967... 14,830 12,065 11,982 2,345 420 July 16,084 11,618 11,618 2 2,135 2,329 1968... 15,710 10,892 10,367 3,528 1,290 Aug 16,117 11,599 11,599 28 2,169 2,321 1969... 416,964 11,859 10,367 42,78l 2,324 Sept 16,291 11,599 11,599 247 2,144 2,301 Oct 16,569 11,599 11,599 413 2,192 2,365 1970... 14,487 11,072 10,732 629 1,935 851 Nov 16,592 11,599 11,599 423 2,234 2,336 1971... 512,167 10,206 10,132 5 276 585 1,100 Dec 16,226 11,599 11,599 80 2,212 2,335 19726. . 13,151 10,487 10,410 241 465 1,958 19737 . . 14,378 11,652 11,567 552 2,166 1976— 1974.. . 15,883 11,652 11,652 1,852 2,374 Jan 816,622 ,599 11,599 82,314 82,376 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 Jan. amounted to $2,449 million reserve position in IMF, $2,283 5 Includes $28 million increase in dollar value of foreign currencies million, and total U.S. reserves assets, $2,389. revalued to reflect market exchange rates as of Dec. 31, 1971. NOTE.—See Table 20 for gold held under earmark at F.R. Banks for 6 Total reserve assets include an increase of $1,016 million resulting foreign and international accounts. Gold under earmark is not included from change in par value of the U.S. dollar on May 8, 1972; of which, in the gold stock of the United States. NOTES TO TABLE 1 ON OPPOSITE PAGE: 1 Adjusted to balance of payments basis; among other adjustments, 4 Includes under U.S. Government grants $2 billion equivalent, repexcludes military transactions and includes imports into the U.S. Virgin resenting the refinancing of economic assistance loans to India; a cor- Islands. 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 some transactions of foreign official agencies. ment income and included in "Other services." 7 Includes changes in long-term liabilities reported by banks in the 3 Differs from the definition of "net exports of goods and services" in United States and in investments by foreign official agencies in debt the national income and product (GNP) account. The GNP definition securities of U.S. Federally sponsored agencies and U.S. corporations. excludes special military sales to Israel from exports and excludes U.S. Govt, interest payments from imports. NOTE.—Data are from U.S. Department of Commerce, Bureau of Economic 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 • FEBRUARY 1976 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 world1 Fund world 1970. 41,275 4,339 11,072 25,865 191 140 239 714 1,470 791 82 64 85 1971. 41,160 4,732 10,206 26,220 192 90 259 729 1,544 792 80 64 85 1972. 44,890 5,830 10,487 28,575 208 152 281 792 1,638 834 87 69 92 1973. 49,850 6,478 11,652 31,720 231 169 311 881 1,781 927 97 77 103 1974. 49,790 6,478 11,652 31,660 231 169 312 882 1,781 927 97 76 103 1975— F Ja e n b . . . . . . 6 6 , ,4 4 7 7 8 8 1 1 1 1 , , 6 6 2 35 1 2 23 3 1 1 1 1 6 6 9 9 3 3 1 1 2 2 8 88 8 2 2 1 1 , , 7 7 8 8 1 1 9 9 2 2 7 7 9 9 7 7 7 7 6 6 1 1 0 0 3 3 M Ap a r r . . . . 49,760 6 6 , , 4 4 7 7 8 8 1 1 1 1 , ,6 6 2 20 0 31,660 2 2 3 3 1 1 1 1 6 6 9 9 3 3 1 1 2 2 8 8 8 8 2 2 1 1 ,7 ,7 8 8 1 1 9 9 2 2 7 7 9 9 7 7 7 7 6 6 1 1 0 0 3 3 May. 6,478 11,620 231 169 312 882 1,781 927 97 76 103 June. 49,755 6,478 11,620 31,655 231 169 312 882 1,781 927 97 76 103 July.. 6,478 11,618 231 169 312 882 1,781 927 97 76 103 A Se u p g t . . . . p49\740 6 6 , ,4 4 7 7 8 8 1 1 1 1 , , 5 5 9 9 9 9 J'M j 660 2 23 3 1 1 1 1 6 6 9 9 3 31 1 2 2 8 8 8 8 2 2 1 1 , , 7 7 8 8 1 1 9 9 2 2 7 7 9 9 7 7 7 7 6 6 1 10 0 3 3 Oct... 6,478 11,599 231 169 312 882 1,781 927 97 76 Nov.. 6,478 11,599 231 312 882 1,781 927 97 76 Dec.P 6,478 11,599 223311 331122 888822 11,,778811 992277 7766 End of France Ger- Greece India Iran Iraq Italy Japan Kuwait Leb- Libya Mexi- Netherperiod many anon lands 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 87 322 85 184 1,909 1 1 9 9 7 7 2 3 4 3 . , 2 8 6 2 1 6 4 4 , , 4 9 5 6 9 6 1 14 3 8 3 2 2 6 9 4 3 1 1 4 5 2 9 1 17 5 3 6 3 3, , 4 1 8 3 3 0 8 89 0 1 1 1 9 2 4 0 3 38 5 8 0 1 9 0 3 3 1 1 8 9 8 6 2 2 , , 0 2 5 9 9 4 197 4 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 3,483 891 154 389 103 154 2,294 July.. 4,262 4,966 150 293 158 173 3,483 891 154 389 103 154 2,294 Aug.. 4,262 4,966 150 293 158 173 3,483 891 154 389 103 154 2,294 Sept.. 4,262 4,966 150 293 158 173 3,483 891 160 389 103 154 2,294 Oct... 4,262 4,966 150 293 158 173 3,483 891 160 103 2,294 Nov.. 4,262 4,966 150 158 173 3,483 891 160 103 2,294 Dec.f 4,262 4,966 158 3,483 891 160 103 2,294 United Bank End of Paki- Portu- Saudi South Spain Sweden Switzer- Thai- TTuurrkkeeyy King- Uru- Vene- for Intl. period stan gal Arabia Africa land land dom gguuaayy 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 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 99 151 886 148 472 260 May 67 1,175 129 742 602 244 3,513 99 151 886 148 472 239 June 67 1,175 129 734 602 244 3,513 99 151 886 148 472 262 July 67 1,175 129 742 602 244 3,513 99 151 886 135 472 264 Aug 67 1,175 129 744 602 244 3,513 99 151 886 135 472 264 Sept 67 1,175 129 762 602 244 3,513 99 151 886 135 472 254 Oct 67 1,175 754 602 244 3,513 99 151 113355 472 256 Nov 67 11 ,,117755 752 660022 244 3,513 99 115511 472 259 Dec.f 6677 774499 224444 33,,551133 9999 447722 224466 i Includes reported or estimated gold holdings of international and The figures included for the Bank for International Settlements are regional organizations, central banks and govts, of countries listed in the Bank's gold assets net of gold deposit liabilities. This procedure this table, and also of a number not shown separately here, and gold to be avoids the overstatement of total world gold reserves since most of the distributed by the Tripartite Commission for the Restitution of Monetary gold deposited with the BIS is included in the gold reserves of individual Gold; excludes holdings of the U.S.S.R., other Eastern European coun- countries. tries, and People's Republic of China. 2 Net gold assets of BIS, i.e., gold assets minus gold deposit liabilities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEBRUARY 1976 • 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 Liquid Liquid Official institutions2 Liquid liabilities to other liabililiabili- foreigners ties to ties to non- End IMF Liquid moneof arising Short- liabili- Short- tary period from term Market- Non- Other ties term Market- intl. gold liabili- able market- readily to com- liabili- able and retrans- ties re- U.S. able U.S. market- mercial ties re- U.S. gional actions 1 Total ported Treas. Treas. able banks Total ported Treas. organiby bonds bonds liabili- abroad 6 by bonds zations 8 banks and and ties5 banks and in notes3 notes4 in notes3,7 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 19649 / \ 2 2 9 9 , , 3 3 1 6 3 4 8 8 0 0 0 0 1 1 5 5 , , 7 7 9 8 0 6 1 1 3 3 , , 2 2 2 2 4 0 1 1 , , 1 1 2 2 5 5 1 1 , , 2 2 8 8 3 3 1 1 5 5 8 8 7 7 , , 2 3 7 0 1 3 3 3, , 7 7 5 3 3 0 3 3 , , 3 3 5 7 4 7 3 3 7 7 6 6 1 1 , , 7 7 2 2 2 2 1965 29,568 834 15,825 13,066 1,105 1,534 120 7,419 4,059 3,587 472 1,431 J31,144 1,011 14,840 12,484 860 583 913 10,116 4.271 3.743 528 906 19669 \31,019 1,011 14,895 12,539 860 583 913 9,936 4.272 3.744 528 905 19679 J 1 3 3 5 5 , , 8 6 1 6 9 7 1 1 , , 0 0 3 3 3 3 1 1 8 8 , , 2 1 0 9 1 4 1 14 4 , , 0 0 2 3 7 4 9 9 0 0 8 8 1 1 , , 4 4 5 5 2 2 1 1 , , 8 8 0 0 7 7 1 1 1 1 , , 2 0 0 8 9 5 4 4 , , 6 6 7 8 8 5 4 4 , , 1 1 2 2 0 7 5 5 5 5 8 8 6 6 9 7 1 7 19689 J 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 60 6 9 5 7 7 2 2 5 2 19699 '0 1 /4 4 5 5 , , 7 9 5 1 5 4 1 1 , , 1 0 0 1 9 9 10 1 1 5 5 , , 9 9 9 7 8 5 1 1 1 1 , , 0 0 5 7 4 7 3 3 4 4 6 6 io 3 3 , , 0 0 7 7 0 0 1 1 , , 5 5 0 0 5 5 2 2 3 3 , , 6 6 3 4 8 5 4 4, , 5 4 8 6 9 4 4 3 , , 0 9 6 3 4 9 5 5 2 2 5 5 6 6 5 6 9 3 (47,009 566 23,786 19,333 306 3,452 695 17,137 4,676 4,029 647 844 1970—Dec. . 146,960 566 23,775 19,333 295 3,452 695 17,169 4,604 4,039 565 846 J67,681 544 51,209 39,679 1,955 9,431 144 10,262 4,138 3,691 447 1,528 1971—Dec. ii 167,808 544 50,651 39,018 1,955 9,534 144 10,949 4,141 3,694 447 1,523 1972—Dec... 82,862 61,526 40,000 5,236 15,747 543 14,666 5,043 4,618 425 1,627 1973—Dec... 1292,456 1266,827 1243,923 5,701 1215,530 1,673 17,694 5,932 5,502 430 2,003 1974—Dec.9. / 1 1 1 1 1 9 9 , , 0 0 9 1 7 0 7 7 6 6 , , 6 6 6 5 5 8 5 5 3 3 , , 0 0 5 6 7 4 5 5 , , 0 05 5 9 9 1 1 6 6 , , 1 1 9 9 6 6 2 2 , , 3 3 4 4 6 6 3 3 0 0 , , 3 0 1 7 4 9 8 8 , , 8 9 0 4 3 3 8 8 , , 3 44 0 5 5 4 4 9 9 8 8 3 3 , , 3 3 2 2 2 2 1975—Jan.... 118,036 75,960 51,832 5,177 16,324 2,627 29.135 8,752 8,244 508 4,189 Feb.. . 119,332 78,689 54,310 5,279 16,324 2,776 27,297 9,093 8,483 610 4.253 Mar... 119,854 79,210 53,696 6,003 16,324 3,187 27,404 9,047 8.411 636 4,193 Apr.. . 120,810 79,085 53,521 5,941 16,365 3,258 28,794 8,843 8,188 655 4,088 May. . 122,078 79,799 52,395 6,064 17,925 3,415 28,910 9,115 8,492 623 4.254 June'. 121,872 80,533 51,879 6,119 19,027 3,508 28.136 9,192 8,538 654 4,011 July... 122,268 79,705 50,318 6,160 19,474 3,753 29,157 9,122 8.412 710 4,284 Aug... 123,629 79,259 49,917 6,276 19,324 3,742 30,364 9,651 8,980 671 4,355 Sept.'. 123,117 77,921 48,075 6,452 19,524 3,870 30,310 9,904 9,203 701 4,982 Oct.. . 123,228 79,798 49,602 6,624 19,524 4,048 28,467 10,021 9,283 738 4,942 Nov... 126,261 79,222 49,129 6,454 19,584 4,055 32,210 10,234 9,527 707 4,595 Dec.. . 125,448 79,521 48,989 6,500 19,834 4,198 29,493 10,762 10,033 729 5,672 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 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 through Dec. 1972. tain accounts previously classified as official institutions are included 3 Derived by applying reported transactions to benchmark data; with banks; a number of reporting 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. cor- 12 Includes $162 million increase in dollar value of foreign currency porations. liabilities revalued to reflect market exchange rates, as follows: short- 6 Includes short-term liabilities payable in dollars to commercial banks term liabilities, $15 million; and nonmarketable U.S. Treasury notes, abroad and short-term liabilities payable in foreign currencies to commer- $147 million. cial banks abroad and to other foreigners. 7 Includes marketable U.S. Treasury bonds and notes held by commer- NOTE.—Based on Treasury Dept. data and on data reported to the cial banks abroad. Treasury Dept. by banks and brokers in the United States. Table excludes 8 Principally the International Bank for Reconstruction and Develop- IMF holdings of dollars, and U.S. Treasury letters of credit and nonment and the Inter-American and Asian Development Banks. negotiable, non-interest-bearing special U.S. notes held by other inter- 9 Data on the 2 lines shown for this date differ because of changes national and regional organizations. in reporting coverage. Figures on first line are comparable with those Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 62 INTL. CAPITAL TRANSACTIONS OF THE U.S. • FEBRUARY 1976 6. U.S. LIABILITIES TO OFFICIAL INSTITUTIONS OF FOREIGN COUNTRIES, BY AREA (Amounts outstanding; in millions of dollars) Total Western Latin Other foreign Europe1 American countries2 End of period countries Canada republics 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 17,577 777 2,963 197 3 66,827 45,730 3,853 2,544 10,887 788 3,025 1974—Dec.3. / \ 7 7 6 6 , , 6 6 5 6 8 5 4 4 4 4 , , 1 1 8 8 5 5 3 3 , , 6 6 6 6 2 2 4 4 , , 4 4 1 1 9 9 1 18 8 , ,6 6 0 1 4 1 3 3 . , 1 1 6 6 1 1 2 2 , , 6 6 2 2 7 7 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 Apr... 79,085 45,063 3,251 4,506 20,062 3,493 2,710 May. . 79,799 45,310 3,101 4,600 20,423 3,448 2,917 June.. 80,533 45,276 3,008 4,723 20,457 3,800 3,269 July.. 79,705 44,241 2,966 4,748 21,299 3,319 3,132 Aug... 79,259 44,068 2,929 4,924 20,972 3,392 2,974 Sept... 77,921 43,359 3,011 4,830 20,819 3,137 2,763 Oct.. . 79,798 44,867 3,049 4,254 22,008 3,018 2,602 Nov.* 79,222 44,602 3,223 4,056 21,776 2,951 2,614 Dec.2'. 79,521 45,139 3,137 4,448 21,961 2,983 1,853 1 Includes Bank for International Settlements, and European Funds institutions of foreign countries, as reported by banks in the United States; through 1972. 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 in- 3 See note 9 to Table 5. vestments by foreign official reserve agencies in debt securities of U.S. Federally sponsored agencies and U.S. corporations. NOTE.—Data represent short- and long-term liabilities to the official 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 IMF Payable in dollars gold Deposits Payable invest- U.S. End of period in ment5 Treasury Total i Deposits U.S. Other foreign bills and Treasury short- cur- certifibills and term rencies Demand Time2 cates Demand Time2 certifi- liab.4 cates 3 55,428 55,036 6,459 4,217 33,025 11,335 392 400 1,367 73 192 210 60,696 60,200 8,290 5,603 31,850 14,457 496 1,412 86 202 326 69,074 68,477 11,310 6,882 31,886 18,399 597 1 ,955 101 83 296 /94,847 94,081 14,068 10,106 35,662 34,246 766 3,171 139 111 497 \94,760 93,994 14,064 10,010 35,662 34,258 766 3,171 139 111 497 93,132 92,412 12,284 10,053 38,108 31,966 721 3,921 123 111 1,234 94,065 93,332 12,135 10,202 40,428 30,567 733 3,976 118 102 1,260 93,006 92,325 12,319 10,043 40,094 29,869 682 3,496 189 116 777 94,103 93,362 11,691 10,390 40.424 30,857 742 3,601 99 126 781 93,651 92,986 11,925 10,374 40,628 30,059 665 3,853 115 133 1,994 '92,490 r91,906 12,595 10,536 38,265 r30,458 584 3,453 106 133 996 92,002 91,442 12,215 10,372 38,553 30,301 560 4,115 146 134 2,518 93,515 92,953 12,215 10,804 38,518 31,416 562 4,253 110 148 3,156 92,483 91,929 13,422 10,518 36,642 31,346 554 4,895 107 127 3,008 91,935 91,300 12,160 10,583 37,749 30,807 635 4,582 132 151 2,397 95,337 94,697 12,815 10,354 37,297 34,231 640 4,471 145 156 1,605 93,801 93,202 13,714 10,658 37,436 31,394 599 5,285 139 187 2,547 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEBRUARY 1976 • 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 institutions9 Payable in dollars Payable in dollars Payable End of period in Total Deposits U.S. Other foreign Deposits U.S. Other Treasury short- cur- Treasury shortbills and term rencies bills and term Demand Time2 certifi- liab.4 Demand Time2 certifi- liab.7 cates3 cates3 197 2 59,284 8,204 5,401 31,523 13,659 496 40,000 1,591 2,880 31,453 3,905 197 3 67,119 11,209 6,799 31,590 16,925 597 43,923 2,125 3,911 31,511 6,248 1974—Dec. 8 \ ( 9 9 1 1 , , 5 6 8 7 9 6 1 1 3 3 , , 9 9 2 2 5 8 9 9 , , 8 99 9 5 9 3 3 5 5 , , 1 1 6 6 5 5 3 3 1 1 , , 8 82 3 2 4 7 7 6 6 6 6 5 5 3 3 , , 0 0 5 6 7 4 2 2 , , 9 9 5 5 1 1 4 4 , , 2 1 5 6 7 7 3 3 4 4 , , 6 6 5 5 6 6 1 11 1 , ,0 1 6 63 6 1975—Jan... 89,211 12,161 9,942 36,874 29,513 721 51,832 2,185 4,201 36,531 8,916 Feb.. 90,090 12,016 10,100 39,169 28,072 733 54,310 2,058 4,206 38,840 9,206 Mar.. 89,511 12,130 9,927 39,316 27,456 682 53,696 2,323 4,203 39,015 8,154 Apr.. 90,503 11,592 10,264 39,643 28,263 742 53,521 2,147 4,193 39,316 7,864 May. 89,797 11,811 10,241 38,634 28,448 665 52,395 2,175 4,331 38,372 7,517 June. 88,553 12,490 10,403 37,269 27,807 584 51,879 2,564 4,321 36,994 8,000 July.. 87,887 12,070 10,238 36,035 28,984 560 50,318 2.492 4,098 35,803 7,925 Aug.. 89,261 12,104 10,656 35,362 30,576 562 49,917 2.493 4,239 35,055 8,130 Sept.. 87,588 13,315 10,391 33,634 29,694 554 48,075 2,452 3,987 33,284 8,352 Oct.. . 87,352 12,027 10,434 35,359 28,897 635 49,602 2,448 3,948 34,983 8,223 NOV.P 90,866 12,670 10,198 35,692 31,669 637 49,129 2,242 3,655 35,247 7,985 Dec.2> 88,515 13,576 10,472 34,889 28,989 591 48,989 2,644 3,438 34,204 8,703 To banksio To other foreigners Payable in dollars End of period Total Deposits U.S. Other Deposits U.S. Other Treasury short- Treasury short- Total bills and term Total bills and term Demand certifi- liab.4 Demand Time2 certifi- liab.7 cates cates 197 2 19,284 14,340 4,658 405 5 9,272 4,618 1,955 2,116 65 481 197 3 23,196 17,224 6,941 529 11 9,743 5,502 2,143 2,359 68 933 1974—Dec. 8 /38,619 29,676 8,248 1,942 232 19,254 8,304 2,729 3,796 277 1,502 \38,525 29,441 8,244 1,936 232 19,029 8,445 2,729 3,796 277 1,643 1975—Jan... 37,379 28,414 7,351 1,982 172 18,909 8,244 2,625 3,760 171 1,61 Feb.. . 35,780 26,564 7,138 2,033 155 17,238 8,483 2,820 3,861 174 1,628 Mar.. 35,815 26,722 7,067 1,808 101 17,747 8.411 2,740 3,916 200 1,555 Apr.. , 36,982 28,052 6,889 2,102 120 18,941 8,189 2,556 3,969 207 1.457 May. . 37,403 28,245 6,852 1,821 105 19,466 8,493 2,784 4,089 156 1,465 June., 36,674 27,553 7,067 1,949 99 18,438 8,537 2,859 4,133 176 1,369 July. . 37,569 28,596 6,882 2,033 80 19,601 8.412 2,696 4,107 152 1.458 Aug.., 39,344 29,803 6,907 1,824 77 20,994 8,980 2,705 4,592 230 1,452 Sept.., 39,512 29,756 7,982 1,799 78 19,897 9,203 2,881 4,605 272 1,445 Oct... 37,750 27,832 6,811 1,777 100 19,143 9,282 2,769 4,708 276 1,530 Nov.2* 41,737 31,574 7,589 1,694 135 22,156 9,527 2,839 4,850 311 1,528 Dec.P 39,526 28,902 7,683 2,136 335 18,747 10,034 3,249 4,898 349 1,538 1 Data exclude IMF holdings of dollars. 8 Data on the 2 lines shown for this date differ because of changes in 2 Excludes negotiable time certificates of deposit, which are included reporting coverage. Figures on the first line are comparable in coverage in "Other short-term liabilities." with those shown for the preceding date; figures on the second line are 3 Includes nonmarketable certificates of indebtedness and Treasury comparable with those shown for the following date. bills issued to official institutions of foreign countries. 9 Foreign central banks and foreign central govts, and their agencies, 4 Includes liabilities of U.S. banks to their foreign branches, liabilities Bank for International Settlements, and European Fund through Dec. of U.S. agencies and branches of foreign banks to their head offices and 1972. foreign branches, bankers' acceptances, commercial paper, and negotiable 10 Excludes central banks, which are included in "Official institutions." time certificates of deposit. 5 U.S. Treasury bills and certificates obtained from proceeds of sales of NOTE.—"Short term" obligations are those payable on demand or having gold by the IMF to the United States to acquire income-earning assets. an original maturity of 1 year or less. For data on long-term liabilities Upon termination of investment, the same quantity of gold was reac- reported by banks, see Table 9. Data exclude International Monetary Fund quired by the IMF. holdings of dollars; these obligations to the IMF constitute contingent 6 Principally the International Bank for Reconstruction and Develop- liabilities, since they represent essentially the amount of dollars available ment and the Inter-American and Asian Development Banks. for drawings from the IMF by other member countries. Data exclude also Includes difference between cost value and face value of securities in U.S. Treasury letters of credit and nonnegotiable, noninterest-bearing IMF gold investment account. special U.S. notes held by the Inter-American Development Bank and 7 Principally bankers' acceptances, commercial paper, and negotiable the International Development Association. time certificates of deposit. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 64 INTL. CAPITAL TRANSACTIONS OF THE U.S. • FEBRUARY 1976 8. SHORT-TERM LIABILITIES TO FOREIGNERS REPORTED BY BANKS IN THE UNITED STATES, BY COUNTRY (End of period. Amounts outstanding; in millions of dollars) 1974 1975 AArreeaa aanndd ccoouunnttrryy Dec.1 Mar. Apr. May June July Aug. Sept. Oct. Nov.? Dec.f Europe: Austria 607 607 599 629 627 627 661 667 688 606 635 700 Belgium-Luxembourg 2,506 2,506 2,539 2,810 2,875 3,070 2,982 2,891 2,865 2,918 2,938 2,917 Denmark 369 369 370 340 323 355 325 308 311 327 361 332 Finland 266 266 202 212 181 365 361 406 391 367 380 385 France 4,287 4,287 4,226 4,600 4,982 5,403 5,515 5,493 5,950 6,608 7,172 7,733 Germany 9,420 9,429 11,240 10,229 8,203 6,460 5,440 5,277 4,797 5,047 4,841 4,407 Greece 248 248 192 202 273 254 299 307 361 331 313 284 Italy 2,617 2,617 2,449 2,498 2,157 2,298 1,426 1,056 1,426 1,398 1,071 1,141 Netherlands 3,234 3,234 3,414 3,302 3,351 3,535 3,539 3,301 3,059 3,199 3,301 3,148 Norway 1,040 1,040 843 827 846 945 1,118 1,052 982 886 970 996 Portugal 310 310 288 247 267 264 279 268 207 236 190 194 Spain 382 382 358 361 341 362 392 288 459 414 402 426 Sweden 1 ,138 1,138 1,209 1,477 1,697 1,847 2,010 2,203 2,195 2,252 2,241 2,272 Switzerland 9,986 10,137 8,938 8,817 8,615 8,445 7,941 8,350 8,104 8,205 8,029 8,555 Turkey 152 152 243 103 87 124 106 134 116 128 120 118 United Kingdom 7,559 7,584 7,039 7,053 6,994 6,417 6,461 8,342 6,261 6,722 7,202 6,884 Yugoslavia 183 183 158 122 126 83 106 104 128 138 175 126 Other Western Europe2 4,073 4,073 2,641 2,516 2,511 2,527 2,535 2,266 2,408 2,428 2,370 2,930 U.S.S.R 82 82 35 34 61 62 29 50 39 42 38 40 Other Eastern Europe 206 206 218 123 148 370 181 160 272 153 128 200 Total r48,667 48,852 47,200 46,502 44,666 43,817 41,706 42,924 41,020 42,405 42,878 43,788 Canada 3,517 3,520 3,448 3,946 3,951 3,617 3,921 3,637 3,944 3,567 4,091 3,074 Latin America: Argentina 886 886 822 886 964 989 1,061 1,054 984 1,135 1,142 1,147 Bahamas 1,448 1,054 1,248 1,946 2,288 1,691 1,991 2,187 1,503 2,221 2,989 1,833 Brazil 1,034 1,034 1,065 1,077 984 1,081 853 921 1,016 1,083 1,083 1,207 Chile 276 276 258 278 260 289 301 280 293 270 266 317 Colombia 305 305 326 313 307 400 376 367 379 366 387 414 Mexico 1,770 1,770 1,668 1,727 1,876 1,819 1,794 1,811 1,862 1,956 2,183 2,077 Panama 488 510 528 695 579 549 657 645 752 765 840 1,104 Peru 272 272 225 217 206 219 228 208 245 247 249 244 Uruguay 147 165 177 183 168 155 190 160 208 168 175 172 Venezuela 33,,441133 33,,441133 33,,550011 3,559 33,,886666 33,,772266 33,,996644 44,,224422 44,,224477 3,531 33,,118888 33,,228833 Other Latin American republics 1,316 11,,331166 1,348 11,,440011 11,,335533 11,,550066 11,,441100 1,364 1,462 1,399 11,,336611 11,,449944 Netherlands Antilles and Surinam 158 158 143 113 123 134 104 105 119 113 118 '129 Other Latin America 526 596 507 761 905 998 1,496 1,513 1,904 1,046 2,148 '1,448 Total 12,038 11,754 11,817 13,158 13,881 13,557 14,425 14,858 14,973 14,305 16,131 14,869 Asia: China, People's Rep. of (China Mainland) 50 50 62 63 56 65 50 55 94 104 93 123 China, Republic of (Taiwan).. 818 818 1,037 1,038 999 1,071 1,015 1,054 1,058 1,061 1,051 1,025 Hong Kong 530 530 528 543 596 598 540 577 741 684 683 623 India 261 261 183 127 168 145 133 214 214 194 181 126 Indonesia 1,221 1,221 497 582 279 365 527 289 234 612 418 369 Israel 386 389 511 493 538 472 369 343 322 364 342 '386 Japan 10,897 10,897 11,390 10,993 11,109 11,223 11,669 11,218 11,128 9,940 10,776 10,142 Korea 384 384 311 345 341 361 366 374 342 400 386 390 Philippines 747 747 745 660 662 697 632 669 604 580 593 698 Thailand 333 333 455 446. 342 370 284 255 207 194 193 252 Middle East oil-exporting countries 3 4,633 4,633 3,673 3,922 4,315 3,850 4,447 4,819 5,101 5,784 5,987 6,285 Other 813 820 978 905 861 906 767 919 970 926 885 910 Total 21,073 21,082 20,371 20,114 20,265 20,122 20,800 20,785 21,015 20,844 21,589 21,330 Africa: Egypt 103 103 92 112 113 514 253 295 183 185 255 342 South Africa 130 130 191 159 179 141 132 147 254 177 108 168 Oil-exporting countries4 2,814 2,814 3,041 3,070 3,009 2,965 2,785 2,873 2,649 2,447 2,372 2,238 Other 504 504 524 526 594 572 558 553 560 575 643 622 Total 3,551 3,551 3,848 3,867 3,895 4,192 3,727 3,866 3,646 3,385 3,377 3,370 Other countries: Australia 2,742 2,742 2,761 2,856 3,069 3,185 3,231 3,114 2,912 22,,776666 2,712 1,971 All other 89 89 66 60 71 64 77 75 78 8800 87 114 Total 2,831 2,831 2,828 2,916 3,140 3,249 3,308 3,189 2,989 2,846 2,800 2,085 Total foreign countries 91,676 91,589 89,511 90,503 89,797 88,553 87,887 89,261 87,588 87,352 90,866 88,515 International and regional: International5 2,900 2,900 3,222 3,291 3,600 r3,688 3,844 3,950 '4,615 4,303 4,217 5,062 Latin American regional 202 202 229 220 169 155 181 215 186 190 193 187 Other regional6 69 69 44 90 84 94 90 88 94 90 61 37 Total 3,171 3,171 3,496 3,601 3,853 '3,937 4,115 4,254 '4,895 4,583 4,471 5,285 Grand total 94,847 94,760 93,006 94,103 93,651 '92,490 92,002 93,515 '92,483 91,935 95,337 93,801 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEBRUARY 1976 • 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 data7 1973 1974 1975 1973 1974 1975 Area and country AArreeaa aanndd ccoouunnttrryy Apr. Dec. Apr. Dec. Apr. Apr. Dec. Apr. Dec. Apr. Other Western Europe: Other Asia—Cont.: Cyprus 9 19 10 7 17 Cambodia 3 2 4 4 Iceland 12 8 11 21 20 4 6 6 22 30 Ireland, Rep. of 22 62 53 29 29 Laos 3 3 3 3 5 Lebanon 55 62 68 r126 180 Other Latin American republics: Malaysia 59 58 40 63 92 Bolivia 65 68 102 96 93 93 105 108 91 118 Costa Rica 75 86 88 117 120 Singapore 53 141 165 r245 215 Dominican Republic 104 118 137 127 214 Sri Lanka (Ceylon) 6 13 13 14 13 Ecuador 109 92 90 122 157 Vietnam 98 88 98 126 70 El Salvador 86 90 129 129 144 Guatemala 127 156 245 214 255 Haiti 25 21 28 35 34 Honduras 64 56 71 88 92 Other Africa: Jamaica 32 39 52 69 62 Ethiopia (incl. Eritrea) 75 79 118 95 76 Nicaragua 79 99 119 127 125 Ghana 28 20 22 18 13 Paraguay 26 29 40 46 38 19 23 20 31 32 Trinidad and Tobago 1177 1177 2211 110077 Liberia 3311 42 2299 39 33 Southern Rhodesia 2 2 3 Other Latin America: 3 3 2 4 14 Bermuda 127 242 201 107 100 Tanzania 16 12 12 11 21 British West Indies 100 109 354 r449 r627 11 7 17 19 23 Uganda 19 6 11 13 Other Asia: 37 22 66 22 18 Afghanistan 19 22 11 18 19 Burma 17 12 42 65 All other: New Zealand 34 39 33 47 36 1 Data in the 2 columns shown for this date differ because of changes 4 Comprises Algeria, Gabon, Libya, and Nigeria. in reporting coverage. Figures in the first column are comparable in 5 Data exclude holdings of dollars of the International Monetary Fund. coverage with those for the preceding date; figures in the second column 6 Asian, African, and European regional organizations, except BIS, are comparable with those shown for the following date. which is included in "Europe." 2 Includes Bank for International Settlements. 7 Represent a partial breakdown of the amounts shown in the other 3 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, categories (except "Other Eastern Europe"). and United Arab Emirates (Trucial States). 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- Banksi foreign- Ger- King- Total Latin Middle Other other tions ers many dom Europe America East 2 Asia3 countries 1972 11,,001188 558800 443399 9933 225599 8877 116655 6633 226600 113366 3333 1100 1973 11,,446622 776611 770000 331100 229911 110000 115599 6666 447700 113322 8833 1166 1974—Dec 1,285 822 464 124 261 79 146 43 227 115 r94 r8 20 1975—Jan 1,406 846 560 223 266 71 144 58 218 118 189 11 21 Feb 1,441 776 666 336 264 66 14} 57 211 119 304 9 21 Mar 1,548 800 748 426 255 67 131 57 202 120 394 9 21 Apr 1,414 626 788 466 253 68 129 57 205 121 429 10 22 May 1,450 585 865 548 248 69 123 57 201 121 514 5 22 June 1,411 518 893 576 247 70 126 59 197 121 544 6 23 July 1,399 438 960 641 242 77 121 61 201 121 609 7 24 Aug 1,352 378 974 651 243 81 120 61 202 123 619 6 23 Sept 1,484 401 1,083 763 241 79 118 61 201 121 731 7 23 Oct 1,385 311 1,074 748 241 83 118 61 206 126 712 6 24 Nov.? 1,391 297 1,093 749 261 83 115 61 206 147 712 6 24 Dec.? 1,513 415 1,096 781 215 100 90 61 182 140 744 8 24 1 Excludes central banks, which are included with "Official institutions." Kuwait, Omari, 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. • FEBRUARY 1976 10. ESTIMATED FOREIGN HOLDINGS OF MARKETABLE U.S. TREASURY BONPS AND NOTES (End of period; in millions of dollars) 1974 1975 AArreeaa aanndd ccoouunnttrryy Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov.f Dec.? Europe: 10 11 12 14 14 14 14 14 14 14 14 13 13 Germany 9 9 9 208 209 209 209 209 210 217 216 216 215 251 252 252 252 252 251 252 252 278 275 275 275 276 30 31 30 29 32 34 37 37 41 44 54 58 55 United Kingdom 493 529 578 599 611 564 522 536 520 501 441 414 363 Other Western Europe r88 r80 r74 r7 9 r95 r97 97 98 102 114 152 152 117 Eastern Europe 5 5 5 5 5 5 5 5 5 5 5 4 4 Total 885 916 959 1,186 1,217 1,174 1,135 1,151 1,169 1,170 1,157 1,134 1 ,044 713 697 584 588 460 412 412 408 406 404 399 400 393 Latin America: Latin American republics 12 11 11 11 11 11 13 13 13 13 13 33 33 Netherlands Antilles and Surinam . . 83 82 142 130 125 118 134 178 149 149 158 160 161 Other Latin America 5 6 6 5 4 4 5 5 5 5 6 6 6 Total 100 99 159 147 140 133 152 196 167 168 177 199 200 Asia: Japan 3,498 3,498 3,496 3,496 3,496 3,496 3,496 3,496 3,496 3,502 3,520 3,269 3,271 Other Asia 212 325 541 1,071 1,121 1,291 1,397 1,418 1,498 1,648 1,798 1 ,849 2,000 Total 3,709 3,822 4,037 4,567 4,617 4,787 4,893 4,914 4,994 5,149 5,319 5,118 5,271 Africa 151 151 151 151 161 181 181 201 211 261 311 311 321 All other Total foreign countries 5,557 5,685 5,889 6,639 6,596 6,687 6,773 6,870 6,945 7,153 7,362 7,161 7,229 International and regional: International 97 215 226 627 419 342 29 128 6666 52 324 94 357 Latin American regional 53 53 51 71 69 57 44 40 35 35 35 29 29 Total 150 268 277 699 488 399 74 169 101 87 359 124 386 Grand total 5,708 5,953 6,167 7,337 7,084 7,087 6,847 7,039 7,048 7,240 7,721 7,285 7,615 NOTE.—Data represent estimated official and private holdings of mar- year, and are based on a benchmark survey of holdings as of Jan. 31,1971, ketable U.S. Treasury securities with an original maturity of more than 1 and monthly transactions reports (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— Accept- Foreign End of period Total Collec- ances govt, setions made Deposits curities, Total Official out- for acct. Other Total with for- coml. Other Total institu- Banks1 Others 2 stand- of for- eigners and fitions ing eigners nance paper 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 \15,676 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—Dec 39,030 37,835 11,301 381 7,342 3,579 5,637 11,237 9,659 1,195 668 289 238 1975—Jan 39,074 37,800 10,207 361 6,289 3,557 5,565 11,062 10,966 1,274 719 351 204 Feb 39,863 38,689 10,288 379 6,384 3,525 5,346 11,127 11,927 1,175 609 336 229 Mar 42,274 41,127 9,606 310 5,659 3,637 5,418 11,341 14,762 1,147 626 290 231 Apr 42,748 41,646 10,637 362 6,494 3,780 5,342 11,441 14,226 1,102 619 241 242 May 45,831 44,775 11,839 366 7,622 3,852 5,537 10,959 16,440 1,056 478 301 277 June 45,705 44,492 11,344 494 6,793 4,057 5,345 10,639 17,165 1,212 591 335 286 July 45,537 44,362 11,700 572 6,835 4,292 5,383 10,204 17,076 1,175 608 296 271 Aug 45,439 44,291 13,082 626 7,960 4,497 5,314 9,977 15,917 1,148 610 240 298 Sept 45,564 44,433 12,706 572 7,520 4,614 5,314 10,071 16,342 1,130 576 236 319 Oct 47,697 46,380 12,632 622 7,483 4,517 5,465 10,134 18,160 1,306 734 231 341 NOV.P 48,051 46,770 13,056 670 7,913 4,473 5,361 10,610 17,743 1,261 625 340 316 Dc.F 49,684 48,397 13,387 592 7,790 5,005 5,467 11,124 18,420 1,287 611 301 376 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

FEBRUARY 1976 • 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) 1974 1975 AArreeaa aanndd ccoouunnttrryy Dec. Mar. Apr. May June July Aug. Sept. Oct. Nov.*' Dec.f Europe: 21 22 16 19 17 16 28 20 19 32 15 384 550 674 647 600 620 598 536 554 457 351 46 41 53 49 64 62 60 46 50 54 49 122 137 147 137 133 143 143 130 127 133 128 673 896 859 726 584 666 741 906 1,329 1,190 1,403 589 387 399 389 428 482 448 443 495 659 427 64 46 54 37 37 46 50 54 56 91 49 Italy .... * 345 287 334 329 339 363 336 363 437 413 370 348 187 157 221 218 288' 338 313 264 285 300 119 104 114 126 98 91 106 102 102 92 71 20 32 26 25 25 27 22 18 15 19 16 196 150 234 251 235 257 214 245 256 261 249 180 72 101 132 115 155 185 182 152 182 167 335 230 227 277 252 254 290 214 274 314 232 Turkey 15 19 37 30 40 26 43 56 54 121 86 22,,557700 2,984 3,261 3,712 3,476 3,458 4,067 3,724 3,792 3,882 4,574 2222 16 28 39 31 36 40 37 34 55 38 22 24 31 25 22 22 62 23 22 24 27 U.S.S.R 46 34 51 83 77 80 79 106 144 165 103 Other Eastern Europe 131 110 113 117 118 130 110 110 96 103 114 Total 6,245 6,327 6,918 7,373 6,910 7,222 7,960 7,630 8,275 8,534 8,769 2,776 2,919 2,896 3,081 2,837 2,651 2,340 2,626 2,728 2,739 2,808 Latin America: 720 869 958 1,007 1,111 1,105 11,,111155 1 ,219 11,,334444 1,229 1,203 3,398 5,926 5,714 7,723 8,658 7,813 66,,662277 6,432 77,,225500 6,856 7,331 Brazil 1,415 1,266 1,299 11,,227722 1,184 1,390 1,505 1,491 1,536 1,782 2,227 Chile 290 395 433 442222 429 472 435 405 351 381 360 Colombia. 713 695 710 702 687 666 667 684 662 649 689 1,972 2,120 2,245 2,383 2,548 2,676 22,,776622 2,705 2,623 2,549 2,773 Panama 503 546 524 671 527 581 557788 721 903 866 1,032 Peru 518 555 606 590 623 626 646 624 599 565 588 Uruguay 63 104 116 100 85 90 73 54 52 56 51 Venezuela 704 736 757 745 791 902 956 1,109 1,050 980 1,086 Otl^fij" Latin American republics 852 902 954 960 953 1,043 992 998 1,028 956 972 Netherlands Antilles and Surinam 62 39 36 44 83 62 54 57 72 59 62 Other l^atin America 11,,115566 11,,660033 1,744 2,240 11,,884433 1,692 2,104 1,700 2,202 22,,552200 11,,886688 Total 12,366 15,758 16,096 18,859 19,521 19,118 18,516 18,199 19,673 19,448 20,243 Asia: China, People's Rep. of (China Mainland) 4 19 11 12 9 13 13 11 11 11 22 China, Republic of (Taiwan) 500 500 448 434 483 463 503 600 601 681 735 223 291 210 288 315 201 190 231 257 258 258 14 17 21 17 20 23 38 21 17 16 21 157 145 134 119 115 113 88 91 86 92 103 255 322 299 287 312 362 358 398 389 387 491 Japan 12,514 11,605 10,887 10,603 10,245 10,308 10,292 10,400 10,253 10,429 10,760 Korea 955 1,356 1,503 1,415 1,523 1,462 1,502 1,515 1,555 1,505 1,556 Philippines 372 353 398 455 478 481 410 340 338 347 377 Thailand 458 406 413 374 441 461 494 474 501 499 493 Middle East oil-exporting countries1 330 369 563 411 418 527 493 624 446 506 524 Other 441 477 444 554 489 541 572 651 702 660 685 Total 16,222 15,860 15,330 14,969 14,848 14,955 14,954 15,357 15,156 15,391 16,023 Africa: 111 122 142 138 149 134 141 125 127 130 104 South Africa 329 413 458 475 498 489 492 504 513 540 545 Oil-exporting countries 2 115 108 95 128 120 144 134 190 207 215 231 Other 300 232 278 276 302 296 347 343 379 409 351 Total 855 875 973 1,018 10,68 1,064 11,14 1,162 1,227 1,294 1,231 Other countries: 466 436 428 440 428 446 466 509 532 554 535 All other 99 99 107 89 81 80 88 80 105 91 73 Total 565 535 535 528 509 526 554 589 638 645 608 3399,,003300 4422,,227744 4422,,774477 45,829 4455,,669944 45,536 45,436 4455,,556622 47,696 4488,,005500 4499,,668833 Ir»tf»r«ntir»n{i1 find rpcinnal............... 11 11 2 1 3 Grand total 3399,,003300 4422,,227744 4422,,774488 4455,,883311 4455,,770055 45,537 4455,,443399 4455,,556644 4477,,669977 4488,,005511 4499,,668844 1 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, SaucJ; 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 Comprises Algeria, Gabon, Libya, and Nigeria. their own account or for account of their customers in the United States; and foreign currency balances held abroad by banks and bankers and NOTE.—Short-term claims are principally the following items payable their customers in the United States. Excludes foreign currencies held on demand or with a contractual maturity of not more than 1 year: loans by U.S. monetary authorities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 68 INTL. CAPITAL TRANSACTIONS OF THE U.S. • FEBRUARY 1976 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 Canada Latin JJaappaann East3 Asia4 other long- curren- America coun- Official Other term cies tries2 Total institu- Banks 1 foreign- claims tions ers2 1972 555,,,000666333 4,588 844 430 333,,,333111444 435 40 853 406 2,020 353 918 514 1973 555,,,999999666 55,,444466 1 ,160 591 333,,,666999444 478 72 1,272 490 2,116 251 11,,333311 536 1974—Dec 777,,,111777111 66,,448822 1 ,333 931 444,,,222111999 609 80 1,907 501 2,602 258 384 997777 542 1975—Jan , 7,284 6,631 1,370 972 4,289 583 69 1,992 490 2,603 248 373 1,019 560 Feb 7,480 6,799 1,378 1,035 4,386 611 69 2,096 500 2,675 248 388 972 601 Mar 7,569 6,900 1,399 1,063 4,438 598 70 2,126 500 2,695 247 385 1,024 592 Apr 7,598 6,915 1 ,239 1,110 4,566 605 78 2,188 505 2,786 242 247 1,002 630 May. ... 7,885 7,194 1 ,282 1,192 4,720 610 81 2,325 491 2,851 254 242 1,042 679 June.... 7,930 7,118 1 ,269 1,204 4,645 719 92 2,285 461 2,841 264 241 1,135 684 July 8,221 7,339 1,286 1,290 4,763 792 90 2,344 471 2,985 270 241 1,204 707 Aug 8,257 7,386 1,276 1,336 4,774 787 85 2,387 438 3,003 259 237 1,204 728 Sept 8,539 7,637 1,345 1,364 4,929 809 93 2,426 508 3,132 265 237 1,195 775 Oct.®. . . 8,860 7,907 1,266 1,516 5,125 840 114 2,534 595 3,168 292 222 1,214 835 Nov.®... 9,071 8,050 1,279 1,564 5,206 903 118 2,529 569 3,281 293 249 1,219 931 Dec.®... 9,405 8,367 1,360 1,709 5,298 921 116 2,663 542 3,456 312 220 1,245 967 1 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 1 U.S. corporate Foreign bonds3 Foreign stocks 3 securities 2,3 Net purchases or sales ( —) Period Pur- Net pur- Pur- Net pur- Pur- Net pur- Intl. FFoorreeiiggnn chases Sales chases or chases Sales chases Sales Sales chases or Total and ssaalleess (( ——)) ssaalleess (( ——)) ssaalleess (( —— jj rreeggiioonnaall Total4 Official Other 1973 305 -165 470 465 6 18,574 13,810 4,764 1 ,474 2,467 -993 1,729 1 ,554 176 1974 -472 101 -573 -642 69 16,183 14,677 1,506 1,045 3,284 -2,240 1 ,907 1,721 185 1975—Jan.-Dec.f 1,908 236 1,672 1,441 230 20,309 15,202 5,107 2,388 8,717 -6,329 1,538 1,719 -182 1974—Dec 156 -15 171 153 17 1,101 1,246 -145 101 524 -423 117 87 30 1975—Jan 245 118 127 118 9 1,246 913 333 131 1,207 -1,076 147 156 -9 Feb 214 9 205 102 102 1,699 1,445 254 118 554 -436 134 173 -39 Mar 1,171 421 749 724 25 1,760 1,155 604 197 647 -450 148 159 -11 Apr -254 -210 -43 -62 20 1,640 1,397 243 167 341 -174 155 141 14 May 3 -89 92 123 -31 1,846 1,679 167 172 345 -173 145 157 -12 June -240 -326 86 56 31 1,754 1,332 422 215 855 -640 129 143 -15 July 192 95 96 41 56 2,251 1,278 973 315 1,011 -696 109 119 -10 Aug 9 -67 77 117 -40 1,421 1,338 82 158 353 -195 89 256 -167 Sept 192 -14 206 175 31 1,257 1,124 133 194 287 -93 91 79 11 Oct 481 272 209 173 37 2,023 1,362 662 195 678 -484 137 161 -24 Nov.p -435 -235 -201 -171 -30 1,605 1,231 374 248 991 -743 107 78 29 Dec 330 262 68 47 21 1,808 947 860 282 1,449 -1,167 148 97 51 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.-Dec.® 1,698 170 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 organizations. 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 July 1 '26' Aug. 80 10 Sept. 150 50 Oct. 150 50 Nov.? 51 Dec.p 101 "io* Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEBRUARY 1976 • 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 chases Sales chases or France many lands land King- Europe Canada America East1 Asia2 Other ^ sales (—) dom Latin 197 3 12,767 9,978 2,790 439 2 339 686 366 2,104 99 4 577 5 7,634 7,095 540 203 39 330 36 -377 281 -6 -33 288 10 197 4 15.036 10,600 4,435 262 250 359 897 569 2,464 356 -7 1,440 140 39 1975—J an.-Dec.* 450 429 21 13 13 20 -10 -76 -30 14 10 27 * 1974—Dec.. 1975—Jan.. . 748 554 193 36 17 8 42 -8 111 12 -15 86 -3 2 Feb.. . 1 ,420 891 529 21 25 14 115 147 331 20 13 153 -4 15 M ar.. 1 ,152 913 240 12 15 40 39 38 150 15 -5 85 -6 * Apr.. 1 ,318 1 ,058 259 -15 23 26 44 54 136 -5 2 119 2 5 May. , 1 .527 1 ,149 378 -6 4 27 100 59 193 36 1 113 36 -2 June. , 1 ,321 1 ,063 258 32 1 19 71 36 152 21 8 87 9 -19 July.. 1,669. 1 ,080 589 55 31 80 139 75 396 20 13 153 2 6 Aug.. 1 ,153 712 441 52 52 47 83 38 302 21 -6 82 26 16 Sept.. 882 642 240 10 7 22 64 7 123 20 -15 72 32 8 Oct.. . 1 ,407 1 ,042 365 16 -7 17 36 48 142 59 7 130 21 6 Nov.* 1,114 809 304 22 40 -5 42 44 132 36 — l 122 12 4 Dec.*, 1 ,325 686 639 28 40 64 123 32 297 102 -9 238 13 -2 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 many lands land Kingdom Europe Canada Latin East1 Asia2 Africa countries regional America 197 3 1 ,948 201 -19 307 275 1,204 49 44 588 52 993 96 183 96 329 672 50 43 632 -456 197 4 672 82 80 -42 -993 1975—Jan.-Dec. 1974—De c -166 1 64 66 93 -337 1975— F Ja e n b -2 1 7 4 5 0 -4 2 6 3 -9 5 1 9 -8 9 7 4 15 3 1 5 1 1 - -2 1 4 20 1 Mar 365 1 -1 10 23 32 -4 341 -19 10 J A M u p a n r y e -2 - 1 1 1 6 6 2 4 9 3 1 --261 8 35 7 5 - - 9 8 3 1 9 2 - - 1 7 0 5 2 0 8 3 *1 6 8 8 5 1 0 --111 1 -2 - 1 6 3 8 8 July 384 27 6 35 80 183 1 179 4 -17 Aug -358 13 -18 -6 -69 -73 1 -1 1 -292 S O e c p t t -1 2 0 9 7 6 -13 1 25 2 -7 1 2 12 8 1 9 -1 5 9 1 11 5 20 8 9 2 - - 7 4 - - 1 1 6 1 2 Nov.*. . . 69 39 -17 9 -41 -25 6 75 4 11 Dec.* 221 2 3 56 74 6 130 -12 16 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 Period Total and foreign Eu- Canada Amer- Asia Af- coun- Credit Debit re- coun- rrooppee ica rica tries End of balances balances gional tries period (due to (due from foreigners) foreigners) 1973 -818 139 -957 -141 -569 -120 -168 3 37 1974 -2,054 -60 -1,995 -546 -1,529 -93 144 7 22 1973—Mar.. 310 364 June.. 316 243 1975— Sept.. 290 255 Jan.-Dec.*.... -6,459 -2,192 -4,267 -47 -3,155 -306 -619 15 -154 Dec... 333 231 1974—Dec.. .. -393 -95 -298 -27 -190 -25 -67 12 * 1974—Mar.. 383 225 June.. 354 241 1975—Jan -1,085 -572 -514 -41 -405 -28 -60 20 * Sept.. 298 178 Feb -475 -147 -328 19 -159 -97 -94 2 * Dec... 293 194 Mar -462 -106 -356 -66 -175 -3 -112 -2 1 Apr.. . . -160 -57 -103 -57 -6 17 -59 * 2 1975—Mar.., 349 209 May. . . -185 31 -216 39 -168 * -88 -2 2 June*. 380 233 June. .. -655 * -655 -22 -478 * -30 2 -127 Sept.* 258 343 July.... -706 -475 -231 -26 -116 -25 -69 * 4 Aug.. .. -362 -21 -341 24 -204 -164 1 1 2 Sept.... -82 18 -100 -19 -131 25 24 — 1 1 NOTE.—Data represent the money credit balances and Oct.* .. -508 5 -513 48 -460 -48 -56 -3 6 money debit balances appearing on the books of reporting Nov.*.. 714 -62 -652 -27 -584 6 3 -2 -48 brokers and dealers in the United States, in accounts of Dec.*. . 1,116 -839 -277 80 -287 9 -78 1 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. • FEBRUARY 1976 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- 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 1973—Dec... 121,866 5,091 1,886 3,205 111,974 19,177 56,368 2,693 33,736 1974—Nov... 150,274 7,751 5,159 2,592 136,442 28,366 58,727 4,019 45,330 Dec... 151,905 6,898 4,464 2,434 138,713 27,559 60,283 4,077 46,795 1975—Jan... 151,140 7,029 4,360 2,669 138,143 27,894 58,863 4,152 47,234 Feb.. . 151,662 5,486 2,882 2,604 140,345 28,969 58,794 4,246 48,335 Mar... 155.204 5,326 2,638 2,r~ 143,750 28,330 61,611 4,407 49,402 Apr... 155,616 5,831 3,052 2,779 143,949 29,195 60,292 4,353 50,109 May.. 156,909 7,726 4,889 2,837 143,101 27,581 60,330 4,494 50,697 June.. 162,342 5,538 2,342 3,196 150,516 30,870 63,710 4,836 51,101 July. . 160,703 5,918 2,788 3,129 148,225 30,153 62,438 4,796 50,839 Aug... 165,835 9,100 6,048 3,052 150,197 31,283 62,455 4,892 51,567 Sept... 166,075 6,572 3,267 3,305 153,171 31,506 65,011 4,861 51,793 Oct.. . 169,424 7,917 4,891 3,026 155,014 32,674 64,186 5,226 52,928 Nov.®. 172,502 8,690 5,764 2,926 157,034 34,325 64,392 5,502 52,815 Payable in U.S. dollars. 1972—Dec... 52,636 4,419 2,091 2,327 47,444 7,869 26,251 1,059 12,264 1973—Dec... 79,445 4,599 1,848 2,751 73,018 12,799 39,527 1,777 18,915 1974—Nov... 105,066 7,445 5,105 2,340 94,581 20,623 43,741 3,192 27,026 Dec... 105,969 6,602 4,428 2,174 96,210 19,688 45,067 3,289 28,166 1975—Jan.. . 105,776 6,706 4,318 2,387 95,989 20,448 43,151 3,370 29,020 Feb... 104,360 5,141 2,839 2,302 96,327 20,827 42,672 3,431 29,397 Mar... 107,519 5,012 2,607 2,405 99,637 19,836 46,118 3,604 30,079 Apr... 108,399 5,466 3,009 2,456 100,231 20,993 45,172 3,599 30,467 May. . 111,638 7,316 4,825 2,491 101,384 21,281 45,403 3,685 31,016 June.. 117,296 5,112 2,280 2,832 109,181 24,529 49,132 3,949 31,571 July. . 117,268 5,511 2,737 2,774 108,281 24,180 48,572 3,929 31,600 Aug... 121,478 8,776 5,995 2,782 109,425 25,071 48,063 4,148 32,143 Sept... 123,119 6,236 3,210 3,025 113,926 25,444 51,470 4,040 32,971 Oct.. . 125,840 7,500 4,817 2,682 115,163 26,554 50,006 4,363 34,240 Nov.®. 129.205 8,336 5,712 2,624 117,589 27,899 51,006 4,644 34,041 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 1973—Dec... 61,732 1,789 738 1,051 57,761 8,773 34.442 735 13,811 1974—Nov... 69,137 3,387 2,568 818 63,571 13,122 32,128 753 17,567 Dec... 69,804 3,248 2,472 776 64,111 12,724 32,701 788 17,898 1975—Jan.. . 68,451 2,633 1,902 731 63,527 12,873 32,057 854 17,743 Feb.. . 67,038 1,818 1,023 796 63,250 13,246 31,641 848 17,515 Mar... 69,654 1,798 982 817 65,693 12,806 34,260 929 17,699 Apr... 69,248 2,017 1 ,126 891 65,330 13.314 33,079 919 18,018 May.. 68,707 2,535 1,689 845 64,269 12,491 32.443 920 18,415 June.. 70,751 1,834 641 1,192 66,868 13,765 34,634 948 17,522 J A u u l g y . . . . . , 7 7 0 2 , .4 3 5 8 5 2 3 1 , , 7 9 9 04 5 2,8(0 7 1 1 . , 0 0 9 9 7 7 6 6 6 6 , , 2 4 7 2 7 8 1 1 4 5 , , 4 2 1 1 4 3 3 3 3 2 , , 4 9 3 9 1 8 9 94 2 8 3 1 1 7 7 , , 5 2 0 6 9 8 Sept... 72,120 2,042 1,076 967 67,923 15,249 34,759 825 17,091 Oct.. . 72,742 2,681 1,699 982 67,631 16,555 32,806 830 17,440 Nov.®. 73,924 3,112 2,137 975 68,494 17,549 33,189 852 16,904 Payable in U.S. dollars. 1972—Dec... 30,257 2,146 1,131 1,015 27,664 4,326 17,331 543 5,464 1973—Dec... 40,323 1,642 730 912 37,816 6,509 23,389 510 7,409 1974—Nov... 48,710 3,277 2,546 730 44,198 10,796 22,936 615 9,852 Dec... 49,21 3,146 2,468 678 44,693 10,265 23,716 610 10,102 1975—Jan... 47,769 2,542 1,892 650 43,959 10,421 22,610 661 10,268 Feb... 46,019 1,697 1,017 680 43,244 10,615 21,918 657 10,055 Mar... 48,939 1,687 974 713 46,039 10,373 24,874 736 10,057 Apr... 48,797 1,885 1,109 776 45,923 10,995 23,990 721 10,217 May.. 48,506 2,404 1,671 733 45,180 10,656 23,320 698 10,506 June.. 51,365 1,669 623 1,045 48,713 12,054 25,761 721 10,178 July.. 51,665 1,742 793 949 48,787 12,664 25,143 713 10,267 Aug... 53.456 3,661 2,681 980 48,763 13.315 24,540 740 10,168 Sept... 54,256 1,910 1,054 856 51,369 13,488 27,008 596 10,277 Oct.. . 54,192 2,552 1,687 865 50,494 14,654 24,691 592 10,557 Nov.®. 56,221 2,988 2,123 865 52,145 15,555 25,600 638 10,353 IN BAHAMAS AND CAYMANS * Total, all currencies 1972—Dec... 12,642 1,486 214 1,272 10,986 725 5,507 431 4,322 1973—Dec... 23,771 2,210 317 1,893 21,041 1,928 9,895 1,151 8,068 1974—Nov... 32,313 3,299 1,816 1,484 28,130 3,829 11,371 1,993 10,937 Dec... 31,733 2,463 1,081 1,382 28,455 3,478 11,354 2,022 11,601 1975—Jan.. . 33,131 223 1,594 1,629 29,070 3,644 11,194 2,027 12,206 Feb... 33,534 563 1,072 1,491 30,137 3,855 11,474 2,060 12,748 Mar... 33,793 405 839 1,567 30,671 3,568 11,634 2,393 13,077 Apr... 35,666 586 1,006 1,581 32,359 4.320 12,229 2,419 13,392 May.. 38,198 125 2,468 1,657 33,215 4,270 13,181 2,531 13,233 June. . 39,646 633 987 1,645 36,182 5,831 13,747 2,772 13,832 July.. 39,614 786 1,134 1,652 35,678 5,015 14,065 2,747 13,851 Aug.. 41,624 115 2,580 1,535 36,556 5,222 14,117 2,891 14,326 Sept.. 41,601 188 1 ,289 1,899 37,481 5,220 14,604 3,020 14,637 Oct... 44,166 ;988 2,295 1,692 39,226 5,604 15,414 3,308 14,901 Nov.p, 244,606 544 2,931 1,613 39,109 5.321 15,211 3,432 15,144 For notes see p. A-74. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEBRUARY 1976 • 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 Other Offi- Non- Other Month-end Location and currency form Total Parent Other Total branches Other cial bank bank of parent banks insti- forbank tutions eigners IN ALL FOREIGN COUNTRIES 3,501 997 2,504 72,121 11,121 41,218 8,351 11,432 2,580 . 1972—Dec. ... Total, all currencies 5,610 1,642 3,968 111,615 18.213 65,389 10,330 17,683 4,641 . 1973—Dec. 11,901 6,249 5,652 131,619 27,717 63,596 19,979 6,755 . 1974—Nov. 11,982 5,809 6,173 132,990 26,941 65,675 20,185 6,933 Dec. 11,831 6,356 5,476 132,775 27,019 64,147 21,683 ,533 . 1975—Jan. 12,561 6,607 5,954 132,594 28,185 63,402 21,951 ,507 Feb. 15,407 8,849 6,557 133,540 28.214 63,419 22,577 ,257 Mar. 14,935 8,703 6,233 134,594 29,192 62,287 23,236 ,088 Apr. 16,861 10,366 6,494 133,806 26,725 64.700 22,223 ,243 May 18,618 12,204 6,414 137,189 30,412 64.955 21,106 ,535 June 17,704 11,542 6,162 136,808 30,233 65.956 20,371 ,191 July 17,183 10,021 7,162 142,327 30,582 70,161 21,093 ,326 Aug. 18,824 10,848 7,976 141,102 30,314 70,756 19,744 6,149 Sept. 19,644 11,191 8,453 143,609 31,781 70,333 20,627 6,172 Oct. 20,640 11,104 9,536 145,121 33,185 70,411 21,187 6,740 Nov." 3,050 847 2,202 50,406 7,955 29,229 6,781 1,422 . 1972—Dec. . Payable in U.S. dollars 5,027 1,477 3,550 73,189 12,554 43,641 7,491 2,158 , 1973—Dec. 11,215 6,023 5,192 92,233 20,242 43,147 16,789 3,979 . 1974—Nov. 11,437 5,641 5,795 92,503 19,330 43,656 17,444 3,951 Dec. 11,368 6,204 5,164 93,044 19,999 42,854 18,343 3,778 . 1975—Jan. 12,063 6,460 5,603 90,426 20,109 40.701 18,708 3,636 Feb. 14,795 8,660 6,135 91,338 19,880 41,216 19,303 3,368 Mar. 14,277 8,517 5,760 92,715 20,683 40,999 19,909 3,414 Apr. 16,256 10,189 6,067 94,452 20,521 43,863 |8,928 3,397 May 17,998 12,008 5,990 97,828 23,969 44,202 17,968 3,560 June 17,090 11,335 5,755 99,013 24,112 45,897 17,393 3,216 July 16,538 9,840 6,698 103,987 24,435 49,418 18,080 3,381 Aug. 18,193 10,645 7,548 104,062 24,477 50,682 16,777 3,187 Sept. 18,967 10,987 7,980 105,569 25,824 49,704 17,476 3,363 Oct. 19,943 10,913 9,030 108,264 27,051 50,291 18,407 3,863 Nov." IN UNITED KINGDOM 1,453 113 1,340 41,020 2.961 24,596 6,433 030 994 .1972—Dec. .. .Total, all currencies 2,431 136 2,295 57.311 3,944 34,979 8,140 248 1,990 .1973—Dec. 4,376 889 3,487 62,397 5.071 30,352 15,454 521 2,363 . 1974—Nov. 3,978 510 3,468 63,409 4,762 32,040 15,258 349 2,418 Dec. 3.804 873 2,931 62,360 4,567 30,266 16,419 108 2,287 .1975—Jan. 4,376 913 3,462 60,546 4,693 29,207 16,517 127 2,117 Feb. 5,095 1,224 3,871 62,363 4,630 29,990 17,305 438 2,196 Mar. 4,596 1,342 3,254 62,625 5,394 28,666 17,812 753 2,026 Apr. 4,772 1,337 3,435 61,772 5,325 28,957 16,726 764 2,164 May 4,668 1,451 3,217 63,857 7,030 30,030 15,524 274 2,226 June 4,679 1,718 2,961 63,501 6,475 30,636 15,312 077 2,203 July 5,251 1,904 3,348 65,012 6,260 32,097 15,617 038 2,194 Aug. 5,612 1,833 3,779 64,462 6,396 33,130 14,486 450 2,046 Sept. 5.486 1,766 3,720 65,119 6,746 32,334 14,909 130 2,138 Oct. 6,270 2,028 4,242 65,493 6,470 33,340 15,180 502 2,161 Nov." 1,272 72 1,200 29,002 2,008 17,379 5,329 287 535 .1972—Dec. .Payable in U.S. dollars 2,173 113 2,060 36,646 2,519 22,051 5,923 152 870 .1973—Dec. 4,037 865 3.172 44,256 3,557 20,200 12,808 691 1,375 . 1974—Nov. 3,744 484 3,261 44,594 3,256 20,526 13,225 587 1,328 Dec. 3,599 854 2,744 43,578 3,172 19,061 13,736 609 1,313 .1975—Jan. 4,164 895 3,269 41,350 3,266 17,673 13,932 479 1,184 Feb. 4.805 1,189 3,616 43,546 3.072 19,128 14,688 658 1,183 Mar. 4,297 1.313 2,984 43,758 3,886 17,997 15,158 717 1,122 Apr. 4.487 1.314 3.173 43,784 4,220 18.640 14,135 789 1,208 May 4,369 1,412 2,957 46.312 5.962 20,039 13,083 228 1,167 June 4,421 1,684 2,737 46,217 5,478 20,775 12,915 049 M July 4,975 1,873 3,103 47,912 5,288 22,087 13,249 287 1,129 Aug. 5,389 1,808 3,581 48,314 5,456 23,645 12,182 031 980 Sept. 5,276 1,735 3,541 48,079 5,708 22,452 12,500 419 1,123 Oct. 6,062 2,009 4,053 49,411 5,478 23.641 12,999 293 1,223 Nov." IN BAHAMAS AND CAYMANS i 1,220 312 908 11,260 1,818 7,875 230 338 163 1972—Dec. .. .Total, all currencies 1,573 307 1,266 21,747 5,508 14,071 492 676 451 1973—Dec. 4 4 , , 8 4 1 2 5 6 2 2 , , 6 6 9 3 9 6 2 1 , , 1 7 8 27 0 2 2 7 6 , , 1 1 0 4 7 0 8 7 , , 5 7 3 0 8 2 1 1 4 4 , , 0 13 5 2 0 2 2 , , 2 3 9 7 6 7 0 1 1 41 1 7 7 7 7 8 9 1974— D N e o c v . . 5,036 2,926 2,11 27,343 8,269 14,259 2,595 220 752 1975—Jan. 5,243 3,281 1,962 27,498 8,975 13,550 2,711 262 793 Feb. 7,228 5,081 2,147 25,875 8,498 12,614 2,520 243 690 Mar. 7,420 5,083 2,337 27,536 8,756 13,694 2,769 318 711 Apr. 9,090 6,766 2,324 28,309 6,872 16,018 2,977 441 799 May 10,866 8,322 2,544 27,987 8,075 14,482 3,036 393 793 June 9,991 7,407 2,584 28,933 8,401 15,539 2,500 492 690 July 8,800 5,715 3,085 31,913 9,128 17,317 2,860 607 911 Aug. 9,928 6,490 3,439 30,861 8,918 16,834 2,570 540 812 Sept. 10,833 7,056 3,778 32,372 9,725 17,296 2,775 577 961 Oct. 11,187 6,710 4,477 32,269 10,554 16,001 3,230 484 ,150 Nov." For notes see p. A-74. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 72 INTL. CAPITAL TRANSACTIONS OF THE U.S. • FEBRUARY 1976 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 ir i custody E p n e d ri o o d f Deposits U se . c S u . r T it r i e e a s1 s . Ear g m o a ld rk ed EE ppee nn rr dd ii oo oo dd ff TToottaall Deposits i S n t h e v o r e m r s t t - - Deposits i S n t h e v o r e m r s t t - - UU KK dd nn ii oo ii nn mm tt gg ee -- dd CCaannaaddaa ments 1 ments 1 1972 325 50,934 215,530 1973 251 52,070 217,068 1,507 1,078 127 234 68 580 443 1974 418 55,600 16,838 1975—Jan.... 391 58,001 16,837 1972 2 / \ 1 2 , , 9 3 6 7 5 4 1 1 , , 4 9 4 1 6 0 1 5 6 5 9 3 3 4 0 0 7 4 6 2 8 9 7 1 0 1 2 4 5 8 3 5 6 Feb... 409 60,864 16,818 1973 3,162 2,588 37 427 109 1,118 770 Mar... 402 60,729 16,818 Apr.... 270 60,618 16,818 1974—Nov 2,998 2,380 15 326 277 1,285 941 May. . 310 61,539 16,818 Dec 3,311 2,582 56 412 261 1,350 951 June... 373 61,406 16,803 July... 369 60,999 16,803 1975—Jan 3,275 2,521 50 359 345 1,145 1,117 Aug... 342 60,120 16,803 Feb 3,376 2,515 52 403 406 1,088 1,136 Sept... 324 58,420 16,795 Mar 3,283 2,434 67 395 388 1,064 1,134 Oct.... 297 60,307 16,751 Apr 3,368 2,458 48 314 550 1,065 1,279 Nov... 346 60,512 16,745 May 3,188 2,220 47 393 527 908 1,240 Dec.. . 352 60,019 16,745 June 3,138 2,241 95 369 433 974 1,128 July 3,221 2,278 118 420 405 904 1,109 1976—Jan.... 294 61,796 16,669 Aug 3,438 2,334 129 453 522 1,017 1,309 Sept 3,602 2,522 125 456 499 1,104 1,252 1 Marketable U.S. Treasury bills, certificates of in- N O o c v t. . ? 3* 3 3 , ,4 5 1 4 1 3 2 2 , ,5 5 8 7 1 1 2 1 6 7 6 9 4 4 4 1 2 0 2 24 6 1 4 1 1 , , 0 1 9 7 8 8 1 1 , , 2 1 9 2 1 7 debtedness, notes, and bonds and nonmarketable U.S. Treasury securities payable in dollars and in foreign currencies. 1 Negotiable and other readily transferable foreign obligations payable on demand 2 The value of earmarked gold increased because of the or having a contractual maturity of not more than 1 year from the date on which the changes in par value of the U.S. dollar in May 1972, and obligation was incurred by the foreigner. in Oct. 1973. 2 Data on the 2 lines for this date differ because of changes in reporting coverage. Figures on the first line are comparable in coverage with those shown for the preceding NOTE.—Excludes deposits and U.S. Treasury securities date; figures on the second line are comparable with those shown for the following date. held for international and regional organizations. Earmarked gold is gold held for foreign and international NOTE.—Data represent the liquid assets abroad of large nonbanking concerns in accounts and is not included in the gold stock of the the United States. They are a portion of the total claims on foreigners reported by United States. 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 End of period Payable Payable Payable Total in in TToottaall in dollars foreign dollars Deposits with currencies banks abroad Other in reporter's name 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 —_ i / 3,119 2,635 484 5,721 5,074 410 237 \ 3,397 2,928 469 6,304 5,645 393 267 1973—Mar 3,308 2,836 472 7,019 6,150 456 414 June 3,283 2,760 523 7,292 6,451 493 349 Sept 3,567 2,919 648 7,627 6,701 528 399 Dec 3,964 3,257 707 8,463 7,553 485 425 1974—Mar 4,373 3,564 809 10,458 9,525 400 533 June 5,101 4,158 943 11,022 10,104 420 498 Sept 5,567 4,634 933 10,681 9,720 419 543 Dec 5,769 4,855 914 11,233 10,190 455 587 1975—Mar 5,734 4,868 866 10,878 9,744 441 692 June r 5,746 4,922 824 10,827 9,546 466 815 Sept.p 5,804 4,967 837 11,845 10,505 507 832 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

FEBRUARY 1976 • 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 Sept. Dec. Mar. June Sept.* Sept. Dec. Mar. June Sept.* Europe: 18 20 26 22 18 15 26 15 13 15 Belgium-Luxembourg 501 516 474 338 332 114 128 137 132 131 Denmark 22 24 23 14 8 25 42 35 22 24 12 16 16 12 14 91 120 77 87 114 France 157 202 151 138 149 461 430 328 287 311 240 313 350 291 275 326 339 276 346 319 Greece 28 39 25 27 21 69 65 59 69 56 Italy 129 125 109 110 156 413 397 309 300 380 Netherlands 120 117 121 141 153 144 148 157 135 139 Norway 10 9 9 8 13 32 36 35 41 48 Portugal 20 19 13 13 13 69 81 42 32 39 Spain 46 56 54 59 74 414 369 359 324 315 Sweden 40 38 32 30 47 97 89 66 74 100 Switzerland 106 140 157 168 167 154 136 86 113 220 Turkey 20 8 12 14 22 24 26 33 28 31 United Kingdom 1,408 1,222 1,110 1,006 895 1,763 1,853 1,642 1,542 1,769 Yugoslavia 17 40 52 45 60 23 22 33 32 24 Other Western Europe 7 5 5 4 5 20 21 23 16 19 Eastern Europe 80 70 54 49 38 90 142 114 153 170 Total 2,981 2,979 2,794 2,487 2,461 4,344 4,469 3,825 3,748 4,225 Canada 296 298 258 274 286 1,571 1,610 1,860 1,950 2,104 Latin America: Argentina 28 36 31 30 28 59 69 76 65 53 Bahamas 325 281 299 267 190 518 594 615 631 685 Brazil 160 118 121 127 116 419 461 376 347 384 Chile 14 22 23 15 13 124 106 69 57 41 Colombia 13 14 11 11 14 49 51 51 47 46 Cuba * * * * * 1 1 1 * 1 Mexico 64 63 72 74 84 287 297 325 305 299 Panama 21 28 18 27 19 114 132 110 128 103 Peru 15 14 18 16 19 40 44 46 50 48 Uruguay 2 2 3 3 2 6 5 15 5 5 Venezuela 53 49 39 44 54 190 190 180 166 151 Other L.A. republics 63 83 65 67 75 182 193 195 179 163 Neth. Antilles and Surinam 8 24 48 54 72 14 20 16 13 13 Other Latin America 50 81 114 125 115 169 147 196 159 192 Total 818 816 862 859 801 2,169 2,308 2,271 2,152 2,183 Asia : China, People's Republic of (China Mainland) 23 17 8 6 2 8 17 19 32 45 China, Rep. of (Taiwan) 72 93 102 100 101 127 137 121 125 355 Hong Kong 18 19 19 30 29 64 63 83 85 84 India 10 7 10 21 21 37 37 32 39 48 Indonesia 38 60 63 87 105 81 85 110 142 129 Israel 40 50 62 62 45 53 44 46 60 63 Japan 352 348 327 273 278 1,158 1,218 1,307 1,226 1,234 Korea 66 75 47 43 63 123 201 165 178 207 Philippines 28 25 19 17 14 108 93 82 91 91 Thailand 10 10 9 6 8 23 24 30 25 21 Other Asia 431 536 645 845 908 311 387 398 470 535 Total 1,087 1,239 1,312 1,491 1,575 2,093 2,307 2,392 2,472 2,814 Africa: Egypt 6 3 5 34 34 16 15 24 15 16 South Africa 35 43 54 65 79 90 101 104 104 79 Zaire 17 18 17 9 9 13 24 18 17 22 Other Africa 114 129 142 215 220 205 234 242 227 273 Total 172 193 217 323 341 325 374 387 364 391 Other countries: Australia 57 56 60 37 52 134 116 97 101 80 All other 32 30 31 18 21 44 49 45 39 50 Total 89 86 91 55 73 178 165 141 139 128 International and regional 112255 115588 220011 225577 226677 j * 11 11 Grand total 5,567 5,769 5,734 5,746 5,804 10,681 11,233 10,878 10,827 11,845 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. • FEBRUARY 1976 24.LONG-TERM LIABILITIES TO AND CLAIMS ON FOREIGNERS REPORTED BY NONBANKING CONCERNS (Amounts outstanding; in millions of dollars) Claims EEEnnnddd ooofff pppeeerrriiioooddd TTToootttaaalll Country or area llliiiaaabbbiiillliiitttiiieeesss TToottaall K U in n g i d te o d m E O u t r h o e p r e Canada Brazil Mexico A O L m a t e h t r i e i n r c a Japan O A t s h i e a r Africa o A th ll e r 1971—Sept 2,939 3,019 135 672 765 178 60 597 133 319 85 75 Dec 1 f 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 Dec 1 J 3,540 3,312 163 715 775 184 60 658 156 406 87 109 \ 3,600 3,284 191 745 759 187 64 703 133 378 86 38 1973—Mar 3,777 3,421 156 802 775 165 63 796 123 393 105 45 June 3,779 3,472 180 805 782 146 65 825 124 390 108 48 Sept 3,993 3,632 216 822 800 147 73 832 134 449 108 51 Dec 3,878 3,693 290 761 854 145 79 824 122 450 115 53 1974—Mar 3,827 3,814 369 737 888 194 81 800 118 448 119 61 June 3,524 3,809 363 696 907 184 138 742 117 477 122 61 Sept 3,356 3,932 370 702 943 181 145 776 114 523 118 59 Dec 3,707 4,114 364 640 977 187 143 1 ,018 107 505 121 54 1975—Mar 3,954 4,128 340 652 1,020 182 160 961 102 527 130 54 June r4,068 r4,063 299 r632 rl ,018 rl 82 154 939 98 536 138 68 Sept 4,014 4,206 362 618 1 ,037 177 222 895 95 586 146 67 1 Data on the 2 lines shown for this data 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 months1 money 2 bills, 3 months money deposit money3 60-90 money 5 3 months mmoonneeyy rate 3 months rates days4 1973 5.43 5.27 10.45 9.40 8.27 7.96 8.92 6.40 10.18 4.07 4.94 5.09 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 1975 7.36 7.34 10.57 10.16 10.13 7.23 7.89 3.51 4.23 4.41 3.65 6.25 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 Apr 6.59 6.68 9.41 9.26 7.50 7.09 8.34 3.38 4.62 5.16 4.13 6.50 May 6.89 6.88 10.00 9.47 7.81 6.25 7.56 3.38 5.32 3.64 1 .98 6.50 June 6.96 6.88 9.72 9.43 7.00 6.25 7.31 3.38 4.91 2.76 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 2.89 1.51 6.00 Sept 8.37 7.74 10.43 10.36 9.40 6.50 6.91 3.38 4.25 2.60 .94 5.50 Oct 8.28 7.92 11.38 11.42 9.88 6.93 6.53 3.13 3.27 4.22 4.35 5.50 Nov 8.44 8.29 11.21 11.10 11.34 7.00 6.74 3.13 3.36 4.67 4.19 5.50 Dec 8.59 8.66 10.88 10.82 9.61 7.00 6.42 3.13 3.84 4.88 4.34 5.50 1976—Jan 88..5599 88..7755 99..8877 66..3388 33..5588 44..5522 33..7766 55..0000 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 $41,250 million and $41,550 million, respectively, on Nov. 30, 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

FEBRUARY 1976 • 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 January 31, 1976 Rate as of January 31, 1976 Country Country Per Month Per Month cent effective cent effective Argentina 18.0 Feb. 1972 Italy 6.0 Sept. 1975 Austria 5.0 Jan. 1976 Japan 6.5 Oct. 1975 Belgium 6.0 Aug. 1975 Mexico 4.5 June 1942 Brazil 18.0 Feb. 1972 Netherlands.... 4.5 Sept. 1975 Canada 9.0 Sept. 1975 Norway 5.0 Oct. 1975 Denmark 7.5 Aug. 1975 Sweden 5.5 Jan. 1976 France 8.0 Sept. 1975 Switzerland 2.5 Jan. 1976 Germany, Fed. Rep. of 3.5 Sept. 1975 United Kingdom 10.0 Jan. 1976 Venezuela 5.0 Oct. 1970 NOTE.—Rates shown are mainly those at which the central bank either Japan—Penalty rates (exceeding the basic rate shown) for borrowings discounts or makes advances against eligible commercial paper and/or from the central bank in excess of an individual bank's quota; govt, securities for commercial banks or brokers. For countries with United Kingdom—The Bank's minimum lending rate, which is the more than one rate applicable to such discounts or advances, the rate average rate of discount for Treasury bills established at the most recent shown is the one at which it is understood the central bank transacts tender plus one-half per cent rounded to the nearest one-quarter per cent the largest proportion of its credit operations. Other rates for some of above; these countries follow: Venezuela—2 per cent for rediscounts of certain agricultural paper, 4Vi Argentina—3 and 5 per cent for certain rural and industrial paper, de- per cent for advances against government bonds, and 5l/i per cent for pending on type of transaction; rediscounts of certain industrial paper and on advances against promissory Brazil—8 per cent for secured paper and 4 per cent for certain agricultural notes or securities of first-class Venezuelan companies. paper; 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) 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 1975 130.77 5.7467 2.7253 98.297 17.437 23.354 40.729 11.926 222.16 .15328 .33705 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 Oct 126.26 5.4586 2.5662 97.557 16.601 22.694 38.737 11.244 205.68 .14745 .33076 Nov 126.26 5.4535 2.5618 98.631 16.564 22.684 38.619 11.238 204.84 .14721 .33053 Dec 125.38 5.3986 2.5311 98.627 16.253 22.428 38.144 11.134 202.21 .14645 .32715 1976-—Jan 125.65 5.4300 2.5443 99.359 16.231 22.339 38.425 11.178 202.86 .14245 .32826 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) 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 1975, 41.753 8.0000 39.632 121.16 19.180 3.9286 136.47 1.7424 24.141 38.743 222.16 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 Oct 38.931 8.0000 37.658 104.74 18.089 3.7359 114.84 1.6883 22.769 37.555 205.68 Nov 38.929 8.0000 37.638 104.75 18.116 3.7318 114.69 1.6869 22.788 37.683 204.84 Dec 38.670 8.0000 37.234 103.77 17.988 3.6836 114.75 1.6765 22.685 37.970 202.21 1976-—Jan 38.696 8.0000 37.429 104.06 17.992 3.6562 114.80 1.6751 22.831 38.418 202.86 NOTE.—Averages of certified noon buying rates in New York for cable transfers. For description 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

<1 ON Board of Governors of the Federal Reserve System ARTHUR F. BURNS, Chairman STEPHEN S. GARDNER, Vice Chairman ROBERT C. HOLLAND HENRY C. WALLICH PHILIP E. COLDWELL PHILIP C. JACKSON, JR. J. CHARLES PARTEE OFFICE OF STAFF DIRECTOR OFFICE OF BOARD MEMBERS OFFICE OF STAFF DIRECTOR FOR FOR MANAGEMENT MONETARY POLICY THOMAS J. O'CONNELL, Counsel to the JOHN M. DENKLER, Staff Director Chairman STEPHEN H. AXILROD, Staff Director ROBERT J. LAWRENCE, Deputy Staff ROBERT SOLOMON, Adviser to the Board ARTHUR L. BROIDA, Deputy Staff Director Director JOSEPH R. COYNE, Assistant to the Board STANLEY J. SIGEL, Assistant to the Board GORDON B. GRIMWOOD, Assistant Director KENNETH A. GUENTHER, Assistant to the Board MURRAY ALTMANN, Special Assistant to the and Program Director for JAY PAUL BRENNEMAN, Special Assistant to the Board Contingency Planning Board NORM AND R. V. BERNARD, Special Assistant to WILLIAM W. LAYTON, Director of Equal FRANK O'BRIEN, JR., Special Assistant to the the Board Employment Opportunity Board BRENTON C. LEAVITT, Program Director for DONALD J. WINN, Special Assistant to the Banking Structure Board DIVISION OF RESEARCH AND STATISTICS PETER E. BARN A, Program Director for Bank Holding Company Analysis LYLE E. GRAMLEY, Director JAMES L. KICHLINE, Associate Director JOSEPH S. ZEISEL, Associate Director EDWARD C. ETTIN, Adviser JOHN H. KALCHBRENNER, Adviser LEGAL DIVISION PETER M. KEIR, Adviser JAMES B. ECKERT, Associate Adviser JOHN D. HAWKE, JR., General Counsel JOHN J. MINGO, Associate Adviser BALDWIN B. TUTTLE, Deputy General ELEANOR J. STOCKWELL, Associate Adviser Counsel HELMUT F. WENDEL, Associate Adviser DIVISION OF FEDERAL RESERVE BANK ROBERT E. MANNION, Assistant General JAMES R. WETZEL, Associate Adviser OPERATIONS Counsel JARED J. ENZLER, Assistant Adviser JAMES R. KUDLINSKI, Director ALLEN L. RAIKEN, Assistant General Counsel ROBERT M. FISHER, Assistant Adviser WALTER A. ALTHAUSEN, Assistant Director GARY M. WELSH, Assistant General Counsel J. CORTLAND G. PERET, Assistant Adviser BRIAN M. CAREY, Assistant Director CHARLES R. MCNEILL, Assistant to the STEPHEN P. TAYLOR, Assistant Adviser HARRY A. GUINTER, Assistant Director General Counsel 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 TRALPH 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 JERAULD C. KLUCKMAN, Assistant Director REED J. IRVINE, Adviser P. D. RING, Assistant Director ROBERT S. PLOTKIN, Assistant Director IHELEN 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 * JOSEPH P. GARBARINI, Assistant Secretary WARREN N. MINAMI, Assistant Director GRIFFITH L. GARWOOD, Assistant Secretary ROBERT J. ZEMEL, Assistant Director fOn leave of absence. 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 JOHN N. LYON, Assistant Director OFFICE OF THE CONTROLLER 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 *On loan from the Federal Reserve Bank of St. Louis. DONALD E. ANDERSON, Assistant Director JOHN D. SMITH, Assistant Director > -J 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 STEPHEN S. GARDNER ROBERT P. MAYO PHILIP E. COLDWELL ROBERT C. HOLLAND J. CHARLES PARTEE DAVID P. EASTBURN PHILIP C. JACKSON, JR. HENRY C. WALLICH BRUCE K. MACLAURY ARTHUR L. BROIDA, Secretary ROBERT SOLOMON, Economist MURRAY ALTMANN, Deputy Secretary (International Finance) NORMAND R. V. BERNARD, Assistant EDWARD G. BOEHNE, Associate Economist Secretary *RALPH C. BRYANT, Associate Economist THOMAS J. O'CONNELL, General Counsel RICHARD G. DAVIS, Associate Economist EDWARD G. GUY, Deputy General Counsel RALPH T. GREEN, Associate Economist STEPHEN H. AXILROD, Economist JOHN KAREKEN, Associate Economist (Domestic Finance) JOHN E. REYNOLDS, Associate Economist LYLE E. GRAMLEY, Economist KARL O. SCHELD, Associate Economist (Domestic Business) 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 ELLMORE C. PATTERSON, SECOND FEDERAL RESERVE DISTRICT, President WILLIAM F. MURRAY, SEVENTH FEDERAL RESERVE DISTRICT, Vice President RICHARD D. HILL, FIRST FEDERAL EDWIN S. JONES, EIGHTH FEDERAL RESERVE DISTRICT RESERVE DISTRICT JAMES F. BODINE, THIRD FEDERAL GEORGE H. DIXON, NINTH FEDERAL RESERVE DISTRICT RESERVE DISTRICT M. BROCK WEIR, FOURTH FEDERAL EUGENE H. ADAMS, TENTH FEDERAL RESERVE DISTRICT RESERVE DISTRICT JOHN H. LUMPKIN, FIFTH FEDERAL BEN F. LOVE, ELEVENTH FEDERAL RESERVE DISTRICT RESERVE DISTRICT LAWRENCE A. MERRIGAN, SIXTH GILBERT F. BRADLEY, TWELFTH FEDERAL RESERVE DISTRICT 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 Frank R. Milliken Paul A. Volcker Robert H. Knight Richard A. Debs Buffalo 14240 Rupert Warren Ronald B. Gray PHILADELPHIA 19105 John R. Coleman David P. Eastburn John W. Eckman Mark H. Willes CLEVELAND* 44101 Horace A. Shepard Willis J. Winn Robert E. Kirby Walter H. MacDonald Cincinnati 45201 Lawrence H. Rogers, II Robert E. Showalter Pittsburgh 15230 G. Jackson Tankersley Robert D. Duggan RICHMOND* 23261 E. Angus Powell Robert P. Black E. Craig Wall, Sr. George C. Rankin Baltimore 21203 James G. Harlow Jimmie R. Monhollon Charlotte 28230 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 Harold B. Blach, Jr. Hiram J. Honea Jacksonville 32203 Egbert R. Beall Edward C. Rainey Miami 33152 Castle W. Jordan W. M. Davis Nashville 37203 James W. Long Jeffrey J. Wells New Orleans 70161 Edwin J. Caplan George C. Guynn CHICAGO* 60690 Peter B. Clark Robert P. Mayo Robert H. Strotz Daniel M. Doyle Detroit 48231 Tom Killefer William C. Conrad ST. LOUIS 63166 Edward J. Schnuck Darryl R. Francis Vacancy Eugene A. Leonard Little Rock 72203 Ronald W. Bailey John F. Breen Louisville 40201 William H. Stroube Donald L. Henry Memphis 38101 Robert E. Healy L. Terry Britt MINNEAPOLIS 55480 James P. McFarland Bruce K. MacLaury Stephen F. Keating Clement A. Van Nice Helena 59601 James C. Garlington John D. Johnson KANSAS CITY 64198 Robert T. Person George H. Clay Harold W. Andersen John T. Boy sen Denver 80217 Maurice B. Mitchell J. David Hamilton Oklahoma City . 73125 James G. Harlow, Jr. William G. Evans Omaha 68102 Durward B. Varner Robert D. Hamilton DALLAS 75222 John Lawrence Ernest T. Baughman Charles T. Beaird T. W. Plant El Paso 79999 J. Luther Davis Fredric W. Reed Houston 77001 Thomas J. Barlow James L. Cauthen San Antonio 78295 Margaret Scarbrough Wilson Carl H. Moore SAN FRANCISCO .. ..94120 O. Meredith Wilson John J. Balles Joseph F. Alibrandi John B. Williams Los Angeles 90051 Joseph R. Vaughan Richard C. Dunn Portland 97208 Loran L. Stewart Angelo S. Carella Salt Lake City 84110 Sam Bennion A. Grant Holman Seattle 98124 Lloyd E. Cooney James J. Curran * 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 92 pp. $.65. Sec. 16 (New). Consumer Credit. FUNCTIONS. 1974. 125 pp. $1.00each; 10 or more 1965. 103 pp. $.65. to one address, $.75 each. THE FEDERAL FUNDS MARKET. 1959. Ill pp. $1.00 each; 10 or more to one address, $.85 each. ANNUAL REPORT TRADING IN FEDERAL FUNDS. 1965. 116 pp. $1.00 FEDERAL RESERVE BULLETIN. Monthly. $20.00 per each; 10 or more to one address, $.85 each. year or $2.00 each in the United States, its posses- INDUSTRIAL PRODUCTION—1971 EDITION. 1972. 383 sions, Canada, and Mexico; 10 or more of same pp. $4.00 each; 10 or more to one address, $3.50 issue to one address, $18.00 per year or $1.75 each. each. Elsewhere, $24.00 per year or $2.50 each. THE PERFORMANCE OF BANK HOLDING COMPANIES. FEDERAL RESERVE CHART BOOK ON FINANCIAL AND 1967. 29 pp. $.25 each; 10 or more to one address, BUSINESS STATISTICS. Monthly. Subscription in- $.20 each. cludes one issue of Historical Chart Book. $12.00 BANK CREDIT-CARD AND CHECK-CREDIT PLANS. 1968. per year or $1.25 each in the United States, its 102 pp. $1.00 each; 10 or more to one address, possessions, Canada, and Mexico; 10 or more of $.85 each. same issue to one address, $1.00 each. Elsewhere, SURVEY OF FINANCIAL CHARACTERISTICS OF CON- $15.00 per year or $1.50 each. SUMERS. 1966. 166 pp. $1.00 each; 10 or more HISTORICAL CHART BOOK. Issued annually in Sept. to one address, $.85 each. Subscription to monthly chart book includes one SURVEY OF CHANGES IN FAMILY FINANCES. 1968. 321 issue. $1.25 each in the United States, its posses- pp. $1.00 each; 10 or more to one address, $.85 sions, Canada, and Mexico; 10 or more to one each. address, $1.00 each. Elsewhere, $1.50 each. REPORT OF THE JOINT TREASURY-FEDERAL RESERVE CAPITAL MARKET DEVELOPMENTS. Weekly. $15.00 per STUDY OF THE U.S. GOVERNMENT SECURITIES year or $.40 each in the United States, its posses- MARKET. 1969. 48 pp. $.25 each; 10 or more to sions, Canada, and Mexico; 10 or more of same one address, $.20 each. issue 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- SELECTED INTEREST AND EXCHANGE RATES—WEEKLY IES—PART 1. 1970. 86 pp. $.50 each; 10 or more SERIES OF CHARTS. Weekly. $15.00 per year or to one address, $.40 each. PART 2. 1971. 153 pp. $.40 each in the United States, its possessions, and PART 3. 1973. 131 pp. Each volume $1.00; Canada, and Mexico; 10 or more of same issue 10 or more to one address, $.85 each. to one address, $13.50 per year or $.35 each. OPEN MARKET POLICIES AND OPERATING PROCE- Elsewhere, $20.00 per year or $.50 each. DURES—STAFF STUDIES. 1971. 218 pp. $2.00 THE FEDERAL RESERVE ACT, as amended through De- each; 10 or more to one address, $1.75 each. cember 1971, with an appendix containing provi- REAPPRAISAL OF THE FEDERAL RESERVE DISCOUNT sions of certain other statutes affecting the Federal MECHANISM. Vol. 1. 1971. 276 pp. Vol. 2. 1971. Reserve System. 252 pp. $1.25. 173 pp. Vol. 3. 1972. 220 pp. Each volume $3.00; REGULATIONS OF THE BOARD OF GOVERNORS OF THE 10 or more to one address, $2.50 each. FEDERAL RESERVE SYSTEM THE ECONOMETRICS OF PRICE DETERMINATION CON- PUBLISHED INTERPRETATIONS OF THE BOARD OF GOV- FERENCE, October 30-31, 1970, Washington, D.C. ERNORS, as of June 30, 1975. $2.50. Oct. 1972. 397 pp. Cloth ed. $5.00 each; 10 or SUPPLEMENT TO BANKING AND MONETARY STATISTICS. more to one address, $4.50 each. Paper ed. $4.00 Sec. 1. Banks and the Monetary System. 1962. each; 10 or more to one address, $3.60 each. 35 pp. $.35. Sec. 2. Member Banks. 1967. 59 FEDERAL RESERVE STAFF STUDY: WAYS TO MODERATE pp. $.50. Sec. 5. Bank Debits. 1966. 36 pp. $.35. FLUCTUATIONS IN HOUSING CONSTRUCTION, Dec. Sec. 6. Bank Income. 1966. 29 pp. $.35. Sec. 1972. 487 pp. $4.00 each; 10 or more to one 9. Federal Reserve Banks. 1965. 36 pp. $.35. Sec. address, $3.60 each. 10. Member Bank Reserves and Related Items. LENDING FUNCTIONS OF THE FEDERAL RESERVE 1962. 64 pp. $.50. Sec. 11. Currency. 1963. 11 BANKS. 1973. 271 pp. $3.50 each; 10 or more pp. $.35. Sec. 12. Money Rates and Securities to one address, $3.00 each. Markets. 1966. 182 pp. $.65. Sec. 14. Gold. 1962. INTRODUCTION TO FLOW OF FUNDS. 1975. 64 pp. $.50 24 pp. $.35. Sec. 15. International Finance. 1962. each; 10 or more to one address, $.40 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Board Publications A 81 IMPROVED FUND AVAILABILITY AT RURAL BANKS (Re- RECENT ACTIVITIES OF FOREIGN BRANCHES OF U.S. port and study papers of the Committee on Rural BANKS. 10/72. Banking Problems). June 1975. 133 pp. $1.00; 10 REVISION OF CONSUMER CREDIT STATISTICS. 10/72. or more to one address, $.85 each. ONE-BANK HOLDING COMPANIES BEFORE THE 1970 AMENDMENTS. 12/72. STAFF ECONOMIC STUDIES YIELDS ON RECENTLY OFFERED CORPORATE BONDS. 5/73. Studies and papers on economic and financial subjects CAPACITY UTILIZATION IN MAJOR MATERIALS INDUSthat are of general interest in the field of economic TRIES. 8/73. research. CREDIT-CARD AND CHECK-CREDIT PLANS AT COMMER- CIAL BANKS. 9/73. RATES ON CONSUMER INSTALMENT LOANS. 9/73. SUMMARIES ONLY PRINTED IN THE BULLETIN (Limited supply of mimeographed copies of full NEW SERIES FOR LARGE MANUFACTURING CORPORAtext available upon request for single copies) TIONS. 10/73. 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 Study by Clayton Gehman. 12/73. THE PERFORMANCE OF INDIVIDUAL BANK HOLDING COMPANIES, by Arthur G. Fraas. Aug. 1975. CAPACITY UTILIZATION FOR MAJOR MATERIALS: RE- 27 pp. VISED MEASURES. 4/74. NUMERICAL SPECIFICATIONS OF FINANCIAL VARIABLES AND THEIR ROLE IN MONETARY POLICY. 5/74. PRINTED IN FULL IN THE BULLETIN 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- REPRINTS BER BANK DEPOSITS. 12/74. U.S. INTERNATIONAL TRANSACTIONS IN 1974. 4/75. (Except for Staff Papers, Staff Economic Studies, and MONETARY POLICY IN A CHANGING FINANCIAL ENVIsome leading articles, most of the articles reprinted do RONMENT: OPEN MARKET OPERATIONS IN 1974. not exceed 12 pages.) 4/75. SEASONAL FACTORS AFFECTING BANK RESERVES. 2/58. THE STRUCTURE OF MARGIN CREDIT. 4/75. MEASURES OF MEMBER BANK RESERVES. 7/63. CHANGES IN BANK LENDING PRACTICES, 1974. 4/75. RESEARCH ON BANKING STRUCTURE AND PERFORM- NEW STATISTICAL SERIES ON LOAN COMMITMENTS AT ANCE, Staff Economic Study by Tynan Smith. SELECTED LARGE COMMERCIAL BANKS. 4/75. 4/66. RECENT TRENDS IN FEDERAL BUDGET POLICY. 7/75. A REVISED INDEX OF MANUFACTURING CAPACITY, BANKING AND MONETARY STATISTICS, 1974. Selected Staff Economic Study by Frank de Leeuw with series of banking and monetary statistics for 1974 Frank E. Hopkins and Michael D. Sherman. 11/66. only. 2/75, 3/75, 4/75 and 7/75. U.S. INTERNATIONAL TRANSACTIONS: TRENDS IN CHANGES IN TIME AND SAVINGS DEPOSITS AT COM- 1960-67. 4/68. MERCIAL BANKS. January-April 1975. 10/75. MEASURES OF SECURITY CREDIT. 12/70. RECENT DEVELOPMENTS IN INTERNATIONAL FINANCIAL MONETARY AGGREGATES AND MONEY MARKET CON- MARKETS. 10/75. DITIONS IN OPEN MARKET POLICY. 2/71. MINNIE: A SMALL VERSION OF THE REVISED MEASURES OF MANUFACTURING CAPACITY MIT—PENN—SSRC ECONOMETRIC MODEL, Staff UTILIZATION, lp/71. Economic Study by Douglas Battenberg, Jared J. REVISION OF BANK CREDIT SERIES. 12/71. Enzler and Arthur M. Havenner. 11/75. ASSETS AND LIABILITIES OF FOREIGN BRANCHES OF AN ASSESSMENT OF BANK HOLDING COMPANIES, Staff U.S. BANKS. 2/72. Economic Study by Robert J. Lawrence and BANK DEBITS, DEPOSITS, AND DEPOSIT TURNOVER— Samuel H. Talley. 1/76. REVISED SERIES. 7/72. INDUSTRIAL ELECTRIC POWER USE. 1/76. YIELDS ON NEWLY ISSUED CORPORATE BONDS. 9/72. REVISION OF MONEY STOCK MEASURES. 2/76. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 82 Federal Reserve Bulletin • February 1976 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 Banks, by classes, 14, 17, 20, 21, 30 BANK credit proxy, 13 Federal Reserve Banks, 10, 72 Bankers balances, 16, 17, 20 Subject to reserve requirements, 13 (See also Foreigners) Discount rates at Federal Reserve Banks (See Interest Banks for cooperatives, 38 rates) Bonds (See also U.S. Govt, securities): Discounts and advances by Reserve Banks (See Loans) New issues, 38, 39, 40 Dividends, corporate, 41 Yields and prices, 28, 29 Branch banks: EMPLOYMENT, 50, 52 Assets, foreign branches of U.S. banks, 70 Liabilities of U.S. banks to their foreign branches FARM mortgage loans, 42 and foreign branches of U.S. banks, 22, 71 Federal agency obligations, 9, 10, 11 Brokerage balances, 69 Federal finance: Business expenditures on new plant and equipment, 41 Receipts and outlays, 32, 33 Business indexes, 50 Treasury operating balance, 32 Business loans (See Commercial and industrial loans) Federal funds, 5, 16, 18, 21, 27 Federal home loan banks, 37, 38 Federal Home Loan Mortgage Corporation, 37, 42, 43 CAPACITY utilization, 50 Federal Housing Administration, 42, 43, 44 Capital accounts: Federal intermediate credit banks, 37, 38 Banks, by classes, 14, 17, 22 Federal land banks, 37, 38, 42 Federal Reserve Banks, 10 Federal National Mortgage Assn., 37, 38, 42, 43, 44 Centred banks, 60, 75 Federal Reserve Banks: Certificates of deposit, 22 Condition statement, 10 Commercial and industrial loans: U.S. Govt, securities held, 2, 10, 11, 34, 35 Commercial banks, 13, 16 Federal Reserve credit, 2, 4, 10, 11 Weekly reporting banks, 18, 23 Federal Reserve notes, 10 Commercial banks: Federally sponsored credit agencies, 37, 38 Assets and liabilities, 13, 14, 16, 17, 18 Finance companies: Consumer loans held, by type, 45, 46, 47 Loans, 18, 45, 46, 47 Deposits at, for payment of personal loans, 24 Paper, 25, 27 Loans sold outright, 25 Financial institutions, loans to, 16, 18 Number, by classes, 14 Float, 2 Real estate mortgages held, by type of holder and Flow of funds, 56, 57 property, 42^44 Foreign: Commercial paper, 23, 25, 27 Currency operations, 10 Condition statements (See Assets and liabilities) Deposits in U.S. banks, 3, 10, 17, 21, 72 Construction, 50, 51 Exchange rates, 75 Consumer instalment credit, 45, 46, 47 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 ; 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—44 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 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 PAYROLLS, manufacturing index, 50 Yields and prices, 28, 29 Personal income, 55 Utilities, production index, 49 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 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, II, S Sources of funds U Uses of funds III, IV Quarters * Amounts insignificant in terms of the particn.e.c. Not elsewhere classified ular unit (e.g., less than 500,000 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. 4"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 44U.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 Dec. 1975 A-76 Semiannually Flow of funds: Banking offices: Assets and liabilities: Number in the 1962-73 Oct. 1974 A-59.14—A-59.28 United States Aug. 1975 A-76 Number of par and nonpar Aug. 1975 A-77 Flows: 1965-73 Oct. 1974 A-58—A-5^.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-8 A—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 Dec. 1975 A-83 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis