Federal Reserve Bulletin, 1976-04

APRIL 1976 FEDERAL RESERVE Changing Patterns in U .S. International Transactions Revised Series for M em ber Bank Deposits and Aggregate Reserves Bank Holding Com pany Financial Developments in 1975 Changes in Bank Lending Practices, 1975 . Changes in Time and Savings Deposits, July-O ctober 1975 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 N U M B E R 4 □ V O L U M E 62 □ A P R IL 1976 CONTENTS 283 Changing Patterns in A1 Financial and Business Statistics U.S. International Transactions A1 Contents 294 Revised Series: Member Bank A2 U.S. Statistics Deposits and Aggregate Reserves A58 International Statistics 300 Staff Economic Studies: Summary A76 Board of Governors and Staff 302 Bank Holding Company A78 Open Market Committee and Staff ; Financial Developments in 1975 Federal Advisory Council 307 Changes in Bank Lending Practices, 1975 A79 Federal Reserve Banks and Branches 313 Changes in Time and Savings Deposits A80 Federal Reserve Board Publications at Commercial Banks, July-October 1975 A82 Index to Statistical Tables 320 Statements to Congress A84 Map of Federal Reserve System 357 Record of Policy Actions Inside Back Cover: of the Federal Open Market Committee Guide to Tabular Presentation and Statistical Releases 364 Law Department 397 Announcements 399 Industrial Production 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 Digitized for FRAthSeE aRr t work is provided by Mack R. Rowe. Editorial support is furnished by the Economic Editing Unit headed by Elizabeth B. Sette. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Changing Patterns in U. S. International Transactions This article was prepared in the U.S. Interna- CHART 1 tional Transactions Section of the Division of U.S. and foreign International Finance. industrial production and real GNP 1972=100 U.S. international transactions in 1975 were affected pervasively by the deepest worldwide recession since the 1930’s—with merchandise flows and capital movements reflecting both the relative depths of recessions and the timing of upturns in the United States and abroad. These cyclical factors were superimposed upon the important effects of several other major devel­ opments. (1) The voliipie of fuel imports, ad­ justed for the influences of the U.S. recession and upturn, apparently has responded slightly to the steep rise in petroleum prices since mid- 1973, but most of the expected long-run re­ sponse has not yet been observed. (2) U.S. export volumes have been stimulated, and im­ port volumes contracted, by changes in the price competitiveness of the United States, which was substantially improved by the large net depre­ ciation of the dollar between 1970 and mid-1975 Indexes of foreign industrial production and real GNP are before being eroded somewhat by the dollar’s weighted averages for Canada, France, Germany, Italy, Japan, subsequent appreciation. And (3) the sharp rise and the United Kingdom, with weights proportional to U.S. exports to these respective countries in 1973. Data are from since 1973 in the foreign-exchange earnings of national sources. U.S. industrial production is the Federal Reserve index; U.S. the Organization of Petroleum Exporting Coun­ real GNP is based on Dept, of Commerce data. tries (OPEC) has stimulated U.S. exports and altered the composition of U.S. capital flows. The most striking feature of U.S. interna­ than import prices, which actually declined tional transactions last year was the large swing when the dollar appreciated during the second in the merchandise trade balance, from a deficit half of last year. In recent months, however, of $5 billion in 1974 to a surplus of $9 billion the economic recovery in the United States has in 1975 (Table 1). In large part this swing proceeded more rapidly than recoveries abroad, reflected the fact that economic activity—as and imports have grown faster than exports, measured by either real gross national product causing the trade balance to swing at least or industrial production—declined earlier and temporarily into deficit during January and Feb­ more deeply in the United States than in its ruary. major trading partners (Chart 1). Consequently, The U.S. current account—comprised of the volume of U.S. trade declined earlier and merchandise and service transactions and uni­ much more sharply on the import side than on lateral transfers—showed a surplus of $12.6 the export side. This difference was magnified billion last year. Net investment income in value terms as U.S. export prices rose more dropped from $10.1 billion in 1974 to $6.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

284 Federal Reserve Bulletin □ April 1976 billion in 1975, largely because earnings on a large reduction in net inflows from OPEC overseas petroleum investments declined from official accounts, a sizable increase in new their extraordinarily high level in 1974. Defense foreign bond issues in the United States, and expenditures abroad last year exceeded the value a big jump in foreign purchases of U.S. cor­ of military sales abroad by $0.8 billion. porate stocks. The net increase in capital out­ The swing in the current account from a slight flows for the year as a whole accompanied a deficit in 1974 to a large surplus last year was decline in U.S. interest rates relative to interest mirrored by an equally large adjustment in pri­ rates abroad, which in turn reflected interna­ vate and official capital flows. Most of the tional differences in the policy stances adopted change occurred in net foreign lending by U.S. to combat recession and inflation. In the third banks vis-a-vis private foreigners, which regis­ quarter, net private capital flows turned inward tered a net outflow of nearly $10 billion last temporarily, accompanying a sharp appreciation year, compared with a net outflow of $2.7 of the dollar and a shift to a net decline (outflow) billion in 1974. Other major adjustments were in liabilities to foreign official agencies. TABLE 1 U.S. international transactions, 1973-75 In billions of dollars; seasonally adjusted quarterly data. 1975 Item 1973 1974 1975 Ql Q2 Q3 Q4 Merchandise exports ................................ 71.4 98.3 107.2 27.1 25.8 26.6 27.7 Merchandise imports ............................... 70.4 103.6 98.1 25.6 22.6 24.5 25.5 Trade balance......................................... 1.0 -5.3 9.0 1.5 3.3 2:1 2.2 Military transactions, net .......................... -2.3 -2.2 -.8 -.4 -.4 -.1 * Investment income, net ........................... 5.2 10.1 6.0 1.2 1.4 1.8 1.7 Other service transactions, net .................. .3 1.1 2.2 .5 .7 .6 .4 Official and private unilateral transfers1 ....... -3.8 -4.0 -3.9 -1.0 -1.1 -.9 -1.0 Balance on current account1 .................. .3 -.2 12.6 1.9 3.9 3.5 3.3 U.S. Government capital flows1 ............... -1.5 -2.0 -2.4 -.7 -.5 -.6 -.7 Private capital, net ................................ -1.7 -10.9 -17.2 -6.9 -5.6 1.1 -5.8 Reported by banks, net ......................... -1.5 -2.7 -9.9 -5.6 -4.0 3.2 -3.5 Claims on foreigners, increase (—) ...... -6.0 -19.5 -13.1 -3.7 -3.8 -.8 -4.8 Liabilities to foreigners, increase (■+•) ... 4.5 16.8 3.2 -1.9 -.2 4.0 1.3 Securities transactions, net2 .................... 3.3 -1.3 -2.4 -1.4 -.3 .1 -.8 U.S. purchases (—) of foreign securities -.8 -2.0 -6.3 -2.0 -1.0 -.9 -2.3 Of which: new bond issues ............. (-1.4) (-2.4) (-7.2) (-2.1) (-1.2) (-1.3) (-2.6) Foreign purchases (+) of U.S. securities2 4.1 .7 3.9 .7 .7 1.0 1.5 Of which: stocks2 .......................... (2.8) (.5) (4.5) (10) (.9) (1.3) (1-3) Direct investment flows, net2 ................. -2.3 -5.2 -3.8 -.7 -1.6 -.7 -.8 U.S. investments abroad .................... -5.0 -7.5 -5.8 -1.0 -2.3 -.7 -1.8 Foreign investment in U.S.2 ............... 2.7 2.2 1.9 .3 .7 -.1 1.0 Other corporate flows, net ..................... -1.2 -1.6 -1.1 .8 .3 -1.4 -.7 Liabilities to foreign official agencies, increase (+) ...................................... 5.1 9.8 3.1 3.5 1.8 -4.7 2.4 Of which: to OPEC countries3 .......... .4 10.0 4.2 .3 1.0 1.7 1.3 to other countries ............ 4.7 -.2 -1.1 3.2 .8 -6.3 1.2 U.S. official reserve assets, increase (—) ... .2 -1.4 -.6 -.3 * -.3 .1 Statistical discrepancy, inflow (+) ........... -2.4 4.7 4.6 2.5 .4 .9 .7 'Data for 1974 and 1975 exclude certain special transactions with India, Israel, and Vietnam, which are recorded in Department of Commerce statistics as unilateral transfers matched by completely offsetting U.S. Government capital flows. 2Includes certain official transactions. 3Not seasonally adjusted. * Absolute value less than $50 million. Source.—U.S. Dept, of Commerce, Bureau of Economic Analysis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Changing Patterns in U.S. International Transactions 285 TABLE 2 U.S. merchandise trade Balance of payments basis; quarterly data at seasonally adjusted annual rates 1974 1975 Item 1974 1975 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Billions of dollars Export values ..................... 98.3 107.2 89.9 96.9 100.1 106.4 108.2 103.4 106.4 110.8 Agricultural ..................... 22.4 22.3 23.2 23.0 21.0 22.4 24.3 19.6 22.3 23.0 Nonagricultural ................. 75.9 84.9 66.6 73.9 79.1 84.0 83.9 83.8 84.1 87.7 Import values ..................... 103.6 98.1 90.3 102.7 109.4 111.9 102.2 90.3 97.9 102.1 Fuel ............................... 27.4 28.3 18.9 30.1 31.0 29.5 27.6 26.4 30.0 29.4 Nonfuel .......................... 76.2 69.8 71.4 72.6 78.4 82.4 74.7 63.8 68.0 72.7 Balance .............................. -5.3 9.0 -.5 -5.8 -9.3 -5.5 6.0 13.1 8.4 8.7 1974=100 « r | volumes Agricultural exports ........... 100.0 101.8 106.3 104.9 96.0 92.4 101.8 89.7 104.9 110.3 Nonagricultural exports ...... 100.0 95.7 95.9 101.1 99.3 100.7 95.8 94.6 95.0 97.5 Fuel imports .................... 100.0 100.0 83.6 104.7 107.3 103.3 96.7 93.4 106.9 102.9 Nonfuel imports ................ 100.0 83.2 106.4 99.0 99.1 99.1 87.9 73.9 82.4 88.6 Unit values Agricultural exports ........... 100.0 97.9 97.4 97.8 97.8 108.1 106.4 97.4 94.8 93.1 Nonagricultural exports ...... 100.0 116.9 91.6 96.3 104.9 109.9 115.4 116.7 116.7 118.6 Fuel imports .................... 100.0 103.5 82.6 105.0 105.4 104.2 104.0 103.1 102.1 104.4 Nonfuel imports ................ 100.0 110.1 88.1 96.3 103.8 109.1 111.5 113.4 108.3 107.7 Source.—U.S. Dept of Commerce, Bureau of Economic Analysis and Bureau of the Census. dropped sharply in the first half of last year. NONFUEL IMPORTS: Charting Automotive imports also declined sharply, but the course of the U.S. recession earlier. After reaching its trough, the volume As 1975 began, real GNP and industrial pro­ of nonfuel imports rebounded sharply, climbing duction were still receding in the United States. The turnaround in industrial production came CHART 2 in the second quarter, when real GNP also began to rise sharply (Chart 1). Not surprisingly, the U.S. imports of volume of imports followed a similar pattern; major nonfuel commodity groups volumes of both fuel and nonfuel imports reached their troughs in the second quarter (Table 2). The decline in U.S. economic activity, as measured by industrial production, was roughly 13 per cent from peak to trough (1973 Q4 to 1975 Q2), while the decline in activity as measured by real GNP was 7 per cent (1973 Q4 to 1975 Ql). In sharp contrast, the volume of nonfuel imports plunged 31 per cent from peak to trough (1974 Ql to 1975 Q2). Every major category of nonfuel imports showed proportionately greater peak-to-trough declines in volume terms than either U.S. industrial Dept, of Commerce data. Shaded area marks the period of production or real GNP (Chart 2). Imports of decline in the Federal Reserve index of U.S. industrial pro­ nonfuel industrial supplies and consumer goods duction. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

286 Federal Reserve Bulletin □ April 1976 CHART 3 year, in part because of the appreciation of the dollar during that period. Imports of food and Imports and the inventory cycle nonfuel industrial supplies showed the sharpest 1972= 100 Billions of 1972 dollars price declines, following a drop in primary commodity prices on world markets. Import unit values for manufactured goods also declined, as the decline in the dollar cost of foreign currencies outweighed increases in the foreigncurrency export prices of major U.S. trading partners. During the second half of 1975, the dollar appreciated by 8.8 per cent against a weighted average of the currencies of the other Group of Ten countries and Switzerland. (All discussions of dollar exchange rates in this ar­ ticle refer to this series. Weights are shares of each country in the total 1972 trade of the Group of Ten countries plus Switzerland. Shares are calculated as the sum of each country’s exports and imports (f.o.b.) divided by total 1972 trade of the 11 countries.) 1973 1974 1975 FUEL IMPORTS: Dept, of Commerce data for imports and inventory changes, A gradual with inventory changes at annual rates. Federal Reserve indus­ trial production index. response to large price increases The steep rise since mid-1973 in the price 20 per cent between 1975 Q2 and 1975 Q4, charged for crude petroleum by OPEC coun­ while industrial production increased by 7 per tries, and the large associated increases in prices cent. paid for refined petroleum products by U.S. The relatively greater percentage swings in consumers, is expected to substantially reduce import volumes, particularly during the domestic petroleum consumption relative to do­ downswing, reflect the sensitivity of imports to mestic production in the long run, and thereby the major inventory adjustment that occurred to substantially slow the growth of petroleum during the U.S. recession. Nonfarm business imports. Relative to the general price level, inventories in the United States, including in­ domestic prices of refined petroleum products ventories of imported goods, were built up con­ have risen about 60 per cent since early 1973. siderably during 1973 and 1974 and then liqui­ Various studies based on a period during dated rapidly during 1975, accentuating the de- ^ which energy prices in general were falling cline in import volumes. Particularly affected slowly relative to the over-all price level suggest were imports of nonfuel industrial supplies that the price elasticity of energy consumption (Chart 3), which in value terms accounted for in the United States ranges between —0.1 and almost half of the drop in total nonfuel imports —0.2. If this historical response to small relative during the first half of last year. price declines also governs the long-run re­ The average price of nonfuel imports, as sponse of domestic oil consumption to the large measured by a unit value index, rose 10 per increase in the relative price of refined petro­ cent in 1975, much less than the 27 per cent leum products, domestic petroleum consump­ increase from 1973 to 1974. Unit values rose * tion should eventually fall 6 to 12 per cent below throughout 1974 and then at a slower rate during the levels that would have occurred in the ab­ the first half of 1975. Import prices actually sence of the OPEC price increases. declined 5 per cent in the second half of last To date, the apparent adjustment of domestic Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Changing Patterns in U.S. International Transactions 287 petroleum consumption to higher prices has 1974 Q2 (Table 2) when industrial production been considerably less than the full expected and real GNP in six major foreign industrial adjustment. Domestic petroleum consumption countries were near their highs. (For definitions fell by 5.4 per cent between the first half of see notes to Chart 1.) Similarly, the trough in 1973 and the first half of 1975, but based on nonagricultural export volume came in 1975 past relationships, three-fifths to nine-tenths of Q2, near the troughs in foreign industrial pro­ this decline can be attributed to a 5.3 per cent duction and real GNP. Peak to trough, nonagri­ decline in real GNP during the same period. cultural exports fell almost 7 per cent in volume, The remaining 0.6 to 2.2 per cent decline in with combined exports to Canada, the European oil consumption is much less than the full 6 Economic Community (6), Japan, and the to 12 per cent decline expected to result from United Kingdom declining by about twice this higher prices, a fact which suggests that the percentage while combined exports to develop­ response of consumption to the increase in pe­ ing countries and other areas increased slightly. troleum prices is occurring very gradually. All major groups of nonagricultural exports Two major factors can explain the apparently declined in volume during some stage of the small short-term response to higher prices. First, recession in foreign economic activity (Chart 4). while price increases have induced a shift to Exports of industrial supplies and consumer energy-conserving appliances, to small cars with high miles-per-gallon ratings, and to en­ ergy-conserving design modifications of private and commercial buildings, these conservation CHART4 efforts have only affected the energy require­ U.S. exports of major ments of newly purchased consumer durable nonagricultural commodity groups goods and business plant and equipment; most Billions of 1972 dollars consumer and business durable goods in use today predate the OPEC price hikes. Second, the reduction in oil consumption through in­ creased production of substitute fuels, mainly coal, has been proceeding slowly, in part be­ cause the recession has delayed capital expen­ ditures by both consumers and producers. In the years ahead, as stocks of consumer and business durable goods gradually become more energy-conserving, and as increased supplies of coal and other oil substitutes become available, domestic demand for petroleum products should show more of its full expected response to the OPEC price hikes. The outlook for petroleum imports also depends on domestic oil produc­ tion, however, which has fallen substantially since 1973 in spite of sharply higher prices. NONAGRICULTURAL EXPORTS: Evidence of increased price competitiveness As 1975 began, the volume of U.S. nonagricul­ 1973__________1974__________1975 tural exports was still declining, paralleling the Dept, of Commerce data. Shaded area marks the period of recessions in major U.S. trading partners. The decline in the foreign industrial production index, as defined volume of nonagricultural exports peaked in in the note to Chart 1. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

288 Federal Reserve Bulletin □ April 1976 TABLE 3 nonagricultural exports, dropped sharply in 1975 Ql, but held steady during the remainder Machinery export prices for the of the year. United States, Germany, and Japan1 The most striking feature of Chart 4 is the Dollar-equivalent indexes, 1970=100 strong rise in the volume of capital goods ex­ Period U.S.2 Germany Japan Relative ports during 1973 and 1974—an increase that price3 was not substantially eroded in 1975. This de­ 1970 100 100 100 100 velopment followed a significant improvement 1971 101.0 113.0 104.4 91.7 1972 101.6 128.7 112.1 82.7 in the price competitiveness of the United States in response to both the net depreciation of the 1973 105.8 162.9 130.4 69.9 1974 119.0 184.3 150.2 69.1 dollar since 1970 and the better performance of 1975 139.7 212.6 150.9 74.2 the United States, relative to major competitors, 1975 in holding down unit labor costs. Ql ..... 135.8 220.1 153.8 69.6 Q2 ..... 138.5 221.2 153.1 70.6 Export price indexes for machinery—which Q3 ..... 140.8 205.6 149.8 76.9 Q4 ..... 143.7 203.3 147.0 79.5 in 1975 represented 81 per cent of U.S. capital goods exports and 27 per cent of total U.S. 1 Based on transactions price data, rather than export unit values. The U.S. index is constructed from data published by exports—are shown in Table 3 for the United the Bureau of Labor Statistics. The German and Japanese States, Germany, and Japan. These three coun­ indexes are available from national sources in local currency units, which have been converted into dollars at current ex­ tries, respectively, accounted for 20, 24, and change rates. 11 per cent of the value of world machinery 2U.S. data for 1970-74 are based on June prices, which are the only data available prior to 1974. exports in 1973. Between 1970 and 1975, Ger­ 3Ratio of U.S. price index to a weighted average of German man and Japanese export prices (in dollars) rose and Japanese price indexes. Weights in the latter are propor­ tional to German and Japanese machinery export volumes in by 113 and 51 per cent, respectively, compared each period except 1975 Q4, for which weights are based on with an increase of 40 per cent for the United data for 1975 Q3. States. As a result, the price of U.S. machinery exports fell 26 per cent relative to a weighted goods both turned down in 1974 Q3, continued average of German and Japanese export prices. their declines through the first half of 1975, and Most of this improvement in U.S. price com­ then turned up in the second half of last year. petitiveness occurred between 1970 and 1973, Automotive exports fell in 1974 Q4 and 1975 however, reflecting the sharp depreciation of the Ql—mainly because of a decline in shipments dollar against the mark and the yen during that to Canada—before picking up sharply in 1975 period. The ratio of machinery export prices in Q2 and flattening out in the second half. Capital the United States to those in Germany and Japan goods exports, the largest component of U.S. remained fairly constant between 1973 and the TABLE 4 Machinery export volumes for the United States, Germany, and Japan Billions of 1970 dollars1 Percentage shares Year U.S. Germany Japan Total U.S. Germany Japan 1970 11.37 10.57 4.39 26.33 43.2 40.1 16.7 1971 11.46 10.69 5.12 27.27 42.0 39.2 18.8 1972 13.04 11.33 6.08 30.45 42.8 37.2 20.0 1973 16.19 12.63 6.97 35.79 45.2 35.3 19.5 1974 19.91 14.17 7.86 41.94 47.5 33.8 18.7 19752 20.03 12.88 8.00 40.91 49.0 31.4 19.6 Constructed by deflating export value data (from national sources) by local-currency price indexes for machinery exports (from sources noted in Table 3). 2Data for the first three quarters at annual rates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Changing Patterns in U.S. International Transactions 289 first half of 1975, and then rose when the dollar TABLE 5 appreciated in the second half of last year. U.S. agricultural exports The impact of these relative price movements Balance of payments basis; seasonally adjusted annual rates on U.S. machinery exports is reflected in the changing U.S. share of the export volumes of Volume Value Period (billions of Unit value (billions of the three countries combined (Table 4). Be­ 1967 dollars) (1967 = 100) dollars) tween 1970 and the first three quarters of 1975, 1972 the U.S. share rose from 43 to 49 per cent, HI .......... 7.9 111.4 8.8 H2 .......... 8.6 119.2 10.2 while Japan’s share rose from 17 to 20 per cent 1973 and Germany’s share fell from 40 to 31 per cent. HI .......... 10.6 148.2 15.7 H2 .......... 10.4 195.6 20.3 1974 HI .......... 10.2 227.5 23.1 H2 .......... 9.1 239.8 21.7 1975 AGRICULTURAL EXPORTS HI .......... 9.2 237.4 21.9 H2 .......... 10.3 219.0 22.6 Unlike other major components of U.S. trade, Source.—U.S. Dept, of Commerce, Bureau of Economic Analysis and Bureau of the Census. which are highly sensitive to levels of income and economic activity at home or abroad, agri­ cultural exports are affected predominantly by coupled with doubts then prevailing about the worldwide weather patterns and other influences size of the 1975-76 U.S. feedgrain crop, began on world crop supplies. Good U.S. harvests in to drive up domestic prices of wheat and soy­ the 1972-73 and 1973-74 crop years, coupled beans. in 1972-73 with poor Soviet grain and Asian In late July widespread concern about the rice harvests and a disastrous decline in the effect of Soviet grain purchases on U.S. con­ Peruvian anchovy catch, led to unusually large sumer prices led President Ford to impose an U.S. export volumes in 1973 and the first half embargo on further grain sales to the Soviet of 1974. Poor U.S. feedgrain crops and better Union. Negotiations in September and October Asian crops in 1974-75 led to lower U.S. export resulted in a 5-year U.S.-Soviet grain agree­ volumes in the second half of 1974 and the first ment. At the same time, with knowledge that half of 1975. In the second half of last year the 1975-76 U.S. feedgrain crop was going to U.S. export volumes were again boosted by the be large after all, the President lifted the ban coincidence of good U.S. crops with a disas­ on further grain sales to the Soviet Union from trous Soviet harvest. the 1974-75 crop. Through the first quarter of The unit value of agricultural exports tended this year, however, no major additional sales to fluctuate inversely with movements in export have been negotiated, perhaps because Soviet volume during the 1973-75 period (Table 5). harbors have been crowded by deliveries of These fluctuations, however, were superim­ grain already purchased. For calendar year posed upon a 50 per cent rise in unit value 1975, U.S. grain exports to the Soviet Union between the first half of 1973 and the first half totaled 7.5 million metric tons (mmt.), valued of 1974. There is little prospect this year of any at $1.1 billion, which represented roughly 5 per substantial reversal of this jump, since carryover cent of total U.S. agricultural exports. stocks are small in the United States and even The U.S.-Soviet grain agreement calls for smaller elsewhere, particularly in the Soviet minimum Soviet purchases of 6 to 8 mmt. of Union. U.S. grain annually for a 5-year period, starting The steady quarter-to-quarter decline in ex­ in October 1976, provided that U.S. grain sup­ port unit values during 1975 (Table 2) conceals plies exceed a minimum of 225 mmt. The Soviet midyear increases in cash prices for major grain Union may make additional purchases after crops in principal U.S. marketing centers. By consultation with the U.S. Government. During early summer the disastrous effects of the Soviet the last 5 years, Soviet grain purchases from drought had become apparent; and large grain the United States have averaged 6.6 mmt., purchases by the Soviet Union in early July, varying from a low of 0.5 mmt. in 1971 to a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

290 Federal Reserve Bulletin □ April 1976 high of 14.3 mmt. in 1973. By narrowing the foreign central banks intervened to moderate the range of variation, the U.S.-Soviet agreement depreciation of the dollar, with the extent of net may somewhat reduce the sensitivity of grain intervention roughly indicated by the $3.2 billion prices and export volume to unanticipated increase in U.S. liabilities to foreign official changes in world crop supplies. agencies (other than OPEC) in the first quarter. In the second quarter the dollar appreciated slightly, as U.S. interest rates began to firm relative to those abroad while the current-ac- CAPITAL TRANSACTIONS AND count surplus continued to rise. A sharp appre­ EXCHANGE-RATE MOVEMENTS ciation of the dollar began in June, and by the The scale of net private and official capital end of September the value of the dollar stood transactions in the U.S. international accounts 11.9 per cent above its March low, despite a is by definition the mirror image of the balance reduction in liabilities to foreign official agen­ on current transactions. To the extent that the cies (other than OPEC) of $6.3 billion in the current-account balance is largely predeter­ third quarter. During the fourth quarter the value mined in the short run by the levels of U.S. of the dollar fluctuated in a narrow range, and foreign economic activity, the scale of net despite a relative decline in U.S. interest rates, private and official capital transactions is also as liabilities to foreign official agencies (other largely predetermined. Of course, interest rates than OPEC) rose by $1.2 billion. For the year and other financial market conditions, including as a whole, the dollar showed a net appreciation exchange-rate expectations, respond jointly to of 5.7 per cent, and liabilities to foreign official the demand for current-account financing, agencies (other than OPEC) declined by $1.1 thereby assuring the appropriate scale of net billion. capital transactions. Many different combina­ The remainder of last year’s current-account tions of financial conditions, and many different surplus was balanced by a net outflow of private compositions of capital transactions, are con­ capital minus a net inflow from transactions with sistent with any over-all scale of net capital official OPEC agencies (Table 1). Recorded net flows. The particular combination of financial outflows on capital account, however, exceed conditions that emerges—along with the com­ recorded net inflows on current account by a position of capital transactions and the actual statistical discrepancy of $4.6 billion. Major exchange-rate movements that are induced—is components of capital transactions during 1975 influenced considerably by both the scale of included $9.9 billion of net lending by banks official exchange transactions and the stance of to private foreigners and a record $7.2 billion domestic and foreign stabilization policies, par­ of new foreign bond issues in the United States. ticularly monetary policies. The increase in official liabilities to OPEC- In 1975 the shift of the U.S. current account surplus countries fell from $10.0 billion in 1974 to a record surplus entailed an adjustment of to $4.2 billion last year, while foreign purchases the capital account toward large outflows on of U.S. corporate stock (including those identi­ balance. In the early part of the year, credit fied with OPEC purchasers) rose from $0.5 market conditions in the United States relative billion to $4.5 billion. to those abroad were conducive to providing the The $9.9 billion net outflow of bank loans necessary capital adjustment without an abrupt to private foreigners was distributed unevenly appreciation of the dollar; in fact, the dollar throughout the year, reflecting swings in interest depreciated even though the current-account differentials associated with the relative balance shifted into surplus during the first strengths of credit demands in the United States quarter. This depreciation continued until early and abroad. Domestic demand for U.S. bank March, when the value of the dollar (as defined credit was particularly weak in the first half of previously) stood 9.2 per cent below its peak 1975, as the rapid liquidation of business in­ in September 1974. The Federal Reserve and ventories that accompanied the U.S. recession Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Changing Patterns in U.S. International Transactions 291 contributed to a sharp drop in financing require­ TABLE 6 ments. While financing requirements in the New foreign bond issues United States were reduced, however, foreign in the United States demand for credit remained strong. Developing countries (other than OPEC) were a major In billions of dollars source of credit demand, as the recessions in International Period Total Canada and regional Other industrial countries and the higher costs of oil organizations and other imports left them with a combined 1974 2.4 1.7 .6 goods and services deficit in excess of $30 Ql ..... .7 .6 .1 Q2 ..... .5 .4 .1 billion by most estimates. Demand for external Q3 .4 .3 .1 Q4 ..... .8 .5 .3 credit by developed countries was not so great last year as it had been in 1974, but several 1975p ..... 7.2 3.2 1.7 2.2 Ql ..... 2.1 .7 .5 .9 industrial countries were still running large cur­ Q2 ..... 1.2 .7 .5 Q3 ..... 1.3 .5 ^5 .3 rent deficits. Q4 ..... 2.6 1.3 .7 .5 The weakening domestic demand for credit p Preliminary. during the first half of 1975 was accompanied Source.—U.S. Dept, of Commerce, Bureau of Economic Analysis. by a steep decline in U.S. short-term interest rates—for example, the rate payable on 90-day certificates of deposit fell from 8.94 per cent 1973 to 1974, again doubled to more than $3 at the end of 1974 to a low of 5.25 per cent billion last year. This dramatic expansion of in June. Although interest rates in foreign Canadian borrowing, which helped to finance countries were also generally declining, the cost Canada’s record current-account deficit, was of funds in the U.S. market dropped more than encouraged by relatively high Canadian interest the cost of funds abroad. In response, U.S. rates, particularly during the fourth quarter. banks reduced their liabilities to foreigners, which had increased by a very large amount in 1974, while continuing to expand their foreign assets nearly as fast as the peak rate attained TRANSACTIONS following the elimination of U.S. capital con­ WITH OPEC COUNTRIES trols in 1974. The situation changed markedly in the third quarter. As interest costs rose in In the past 2 years the foreign exchange earnings the United States, banks began again to bring of OPEC countries have skyrocketed, turning in funds from abroad, and the rate of foreign them into major merchandise importers and im­ lending abated. During the fourth quarter, as portant participants in financial markets. As a U.S. interest rates again eased relative to foreign result of the sharp increase in oil prices since rates, the capital outflow through banks re­ mid-1973, oil revenues of the 13 OPEC coun­ sumed. tries jumped from an average of $12.5 billion While banks’ international transactions in (on a cash basis) in 1971-72 to an average of 1975 were somewhat scaled down from the about $100 billion in 1974-75. Inclusive of hectic pace of 1974, activity in securities mar­ other export revenues and income on interna­ kets increased. New foreign bond issues offered tional investments, OPEC’s gross foreign ex­ in the U.S. market reached a record high of change earnings amounted to more than $105 $7.2 billion, three times the amount offered in billion in 1974 and about $115 billion in 1975. 1974 (Table 6). One-third of the surge reflected These earnings are likely to rise further this year a $1.7 billion rise in borrowings by international with the economic expansion in oil-consuming and regional organizations to finance their in­ countries. In comparison, the combined export creased commitments, primarily to non-OPEC earnings of all developing countries other than developing countries. Canadian bond offerings members of OPEC amounted to about $90 bil­ in the United States, which had doubled from lion in 1975. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

292 Federal Reserve Bulletin □ April 1976 The dramatic growth of foreign exchange of OPEC investments toward longer-term earnings has led the OPEC countries to sharply assets, a trend that is likely to continue. increase their spending. In 1974 OPEC imports The United States has received a significant of goods and services increased by roughly 70 share of surplus OPEC earnings. In 1974 almost per cent, from $28 billion in 1973 to more than 20 per cent of OPEC’s investible surplus was $48 billion. In 1975 OPEC imports increased placed in the United States (more than $11 by another 60 per cent to more than $75 billion. billion), but in 1975 the U.S. share dropped to Because of labor shortages and other bottlenecks about 16 per cent ($6 billion). More than 80 in some OPEC countries, and financial and per cent of OPEC investments in the United institutional constraints in other OPEC coun­ States during 1974 were in short-term assets— tries, the growth of total OPEC imports has mainly Treasury bills and bank deposits. In slowed significantly since the third quarter of contrast, virtually the entire increase in OPEC 1975. claims on U.S. residents during 1975 took the OPEC merchandise imports from the United form of longer-term assets, including purchases States (excluding military items) reached $10.7 of $1.9 billion in Treasury bonds and notes. billion in 1975, about one-fifth of OPEC imports Identified OPEC purchases of U.S. stocks from all areas and more than 10 per cent of jumped from $0.2 billion in 1974 to $1.5 billion total U.S. exports. OPEC imports of U.S. ma­ in 1975, one-third of total foreign purchases of chinery and transport equipment alone reached U.S. stocks last year. In addition, $1.4 billion $5.7 billion last year, almost 13 per cent of U.S. in OPEC purchases of U.S. corporate and Fed­ exports of capital goods. Total U.S. merchan­ eral agency bonds were identified last year. dise exports to OPEC countries increased by $4 billion in 1975 (compared with a $3 billion RECENT DEVELOPMENTS increase in 1974), accounting for about 45 per AND OUTLOOK cent of the recession-dampened growth of U.S. exports last year. In addition, U.S. military In January and February of this year the U.S. sales to OPEC countries jumped from about merchandise trade balance swung at least tem­ $0.25 billion in 1973 to $0.8 billion in 1975, porarily into deficit, in part reflecting a sharp when they represented roughly 20 per cent of response of import volumes to the pick-up in total U.S. military sales to foreign countries. domestic economic activity. In foreign ex­ The aggregate OPEC investible surplus— change markets, abrupt depreciations of several OPEC’s current-account surplus less dis­ major currencies—both the British pound and bursements of grant aid—reached almost $60 the French franc in early March, and the Italian billion in 1974 and then dropped sharply to lira on several occasions during the first quar­ around $35 billion or $40 billion in 1975 as ter—resulted in a 3 per cent appreciation of the spending on development projects increased. dollar between the end of 1975 and the end of Under current projections of spending and earn­ March, when the dollar reached its highest level ings, OPEC’s aggregate investible surplus is since early 1973. expected to show little change in the next 2 With economic activity more firmly estab­ years. In 1974 virtually every OPEC country lished on a rising path in the United States than was in surplus on current account, although in most major U.S. trading partners, the U.S. more than 60 per cent of OPEC’s total investible trade balance is likely to decline sharply this surplus accrued to only four countries—Saudi year, and the current-account surplus should Arabia, Kuwait, the United Arab Emirates, and also decline. This expected cyclical decline in Qatar. In 1975, nine-tenths of the surplus ac­ the current-account surplus will be superim­ crued to these four countries. This growing posed upon several more gradual shifts. As concentration of the OPEC surplus has been discussed above, the noncyclical component of accompanied by a shift in the maturity structure fuel imports should begin to decelerate noticea­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Changing Patterns in U.S. International Transactions 293 bly as efforts to conserve on domestic energy a reduction in net outflows through banks. New consumption take hold, and as domestic coal issues of foreign bonds have remained so strong production expands. The improvement since in the first quarter—an estimated $2.8 billion 1970 of the price competitiveness of the United —that even with some tapering off later they States, due largely to the net depreciation of should wind up the year nearly equal to or in the dollar, may continue to provide a lagged excess of their 1975 level. The United States stimulus for export expansion and import sub­ should continue to receive a substantial share stitution; on the other hand, this stimulus may of surplus OPEC earnings, with these inflows be offset somewhat by the effects of reversals likely to be invested primarily in long-term in the U.S. relative price position (vis-a-vis assets. some major competitors) that have resulted from As recovery from recession proceeds, the the appreciation of the dollar since mid-1975. industrialized countries are likely to register an U.S. exports to the growing OPEC market increase in their combined current-account defi­ should continue to rise, but the rate of increase cit vis-a-vis the developing countries. With the will decline as OPEC development outlays current-account surplus of OPEC countries slow. likely to show little change during the next Unless liabilities to foreign official agencies several years, the combined current-account increase substantially this year, the reduction in deficit of other developing countries should be the current-account surplus is likely to be asso­ reduced, though it will remain considerably ciated with a decline in net private capital out­ above the range that prevailed prior to the jump flows. This decline should show up mainly as in oil prices. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

294 Revised Series for Member Bank Deposits and Aggregate Reserves The seasonally adjusted series for member bank The deposit series are broken down by major deposits and for aggregate reserves have been deposit components—total time and savings, revised. The revisions incorporate changes in “private” demand, and U.S. Government de­ seasonal factors for each series based on the mand. The series for private demand deposits latest annual review of seasonal factors. In ad­ covers all demand deposits except those due to dition, in the current review some procedural the U.S. Government, less cash items in process changes were adopted for the seasonal adjust­ of collection and demand balances due from ments of two of the deposit series and for the domestic commercial banks. Consequently, this reserve aggregates. Revised monthly data back series is not really limited to private deposits; to 1970 for the deposit and reserve series are it also includes deposits of States and political shown on page 298.1 subdivisions, foreign governments, and foreign official institutions. Seasonal adjustments formerly were com­ puted for total member bank deposits, private SEASONAL ADJUSTMENT demand deposits excluding net interbank de­ OF MEMBER BANK DEPOSITS posits, net interbank demand deposits, negotia­ The seasonally adjusted series for member bank ble time certificates of deposit (CD’s), and other deposits cover all deposits subject to reserve time and savings deposits.2 The seasonally ad­ requirements—that is, the total of time, savings, justed series for U.S. Government demand de­ and net demand deposits as defined in the posits formerly was derived by subtracting other Board’s Regulation D. These data are available seasonally adjusted components from the total promptly from member banks on a daily- deposit series. In this revision, the procedure average basis, and they are the basis for calcu­ was changed to provide for direct adjustment lation of required reserves and related reserve of U.S. Government deposits and for deriving aggregates. They are the most important source the seasonally adjusted total member bank de­ of current data used in constructing various posit series by summing the component series. measures of the money stock, such as those The revised procedure was applied to data for described in the revision published in the Feb­ the period 1965-75. ruary Bulletin. Also, the combination of total This change was adopted to minimize distor­ member bank deposits and certain nondeposit tions in the U.S. Government deposit series as liabilities is used as a proxy for measurement the Treasury shifted balances from commercial of daily-average bank credit. Member bank de­ banks to its accounts at Federal Reserve Banks. posits alone are referred to as the credit proxy Since late 1974 average U.S. Government bal­ whereas the adjusted credit proxy is the sum ances at commercial banks have been reduced of member bank deposits and nondeposit liabil­ substantially, and much of the seasonal fluctua­ ities. tion in these balances now is reflected in flows through accounts at the Federal Reserve Banks. Note.—Edward R. Fry and Stephen Zeller of the The multiplicative seasonal factors now used for Board’s Division of Research and Statistics prepared this article. Monthly- and weekly-average data are available 2 Data for these detailed breakdowns of deposits are back to 1959 on request from the Board’s Banking available on request from the Board’s Banking Section, Section, Division of Research and Statistics. Division of Research and Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Member Bank Deposits and Aggregate Reserves 295 T A B L E 1 1975 seasonal factors for member bank deposits In per cent Deposits subject to reserve requirements Demand Month Total1 Time and savings Private Total1 interbank Other U.S. Govt. Total1 CD’s Other Jan. 101.0 103.6 106.4 103.4 110.0 99.7 99.1 99.9 Feb. 99.2 98.8 98.0 98.9 130.0 99.2 96.9 100.1 Mar. 99.6 98.8 95.0 99.1 115.0 99.9 98.1 100.6 Apr. 100.3 100.9 98.6 101.1 118.0 99.8 97.1 100.8 May 99.6 97.8 94.1 98.0 120.0 100.4 98.8 100.9 June 99.6 99.0 96.4 99.2 97.0 99.9 97.9 100.6 July 99.8 99.8 101.0 99.7 94.0 99.8 99.0 100.1 Aug. 99.7 98.3 100.0 98.2 70.0 100.6 103.0 99.9 Sept. 100.1 99.0 99.3 99.0 96.0 100.7 104.6 99.5 Oct. 100.1 99.6 100.4 99.5 82.0 100.5 103.5 99.5 Nov. 99.6 100.5 103.4 100.3 66.0 99.5 101.3 98.9 Dec. 101.0 103.9 107.4 103.6 102.0 99.6 100.7 99.2 1 Seasonal factors for total deposits, total private demand, and total time and savings are implied factors derived by dividing not-seasonally-adjusted data by the seasonally adjusted series. adjusting U.S. Government deposits at com­ growth of the adjusted bank credit proxy series mercial banks result in smaller fluctuations in were in the first and second quarters in recent this series in the most recent period—taking years. First-quarter growth in 1975, based on account of the lower balances maintained in quarterly-average figures, was raised 1.7 per­ these accounts. centage points to an annual rate of 5.8 per cent, Table 1 provides monthly seasonal factors for while second-quarter growth was reduced 1.6 the member bank deposit series. For total de­ percentage points to 3.6 per cent. The revision posits, private demand deposits, and time and had little effect on quarterly-average growth savings deposits aggregates—for all of which rates in the second half of 1975. These changes data are published regularly in the B ulletin— reflected primarily smaller declines in U.S. the factors shown were derived from sums of Government demand deposits in the first quarter the seasonally adjusted components. Seasonal after the revision and smaller increases in the factors for the component series reflect direct second quarter. adjustment of the components.3 Data for these components are not published in the B ulletin, but they are available in the Board’s H.3 statis­ SEASONAL ADJUSTMENT tical release. Separate seasonal factors are not OF THE RESERVE AGGREGATES shown for the adjusted bank credit proxy series, which is derived by adding to the seasonally With the revision in the seasonally adjusted adjusted series on total member bank deposits member bank deposit aggregates, described three series that are not seasonally adjusted: above, a new method of seasonally adjusting namely, Euro-dollar borrowings, loans sold to the reserves against these deposits has been bank-related institutions, and certain other introduced. The seasonally adjusted levels of nondeposit items. total reserves, as published by the Board in the The principal effects of these revisions on Bulletin and in the weeldy H.3 statistical release, are still derived by adding to seasonally 3 Seasonal factors were derived by use of a Census adjusted reserves required against deposits the X-ll multiplicative method with the results modified amounts of reserves required to be held against judgmentally in some instances. This review covered the period from 1965-75, with no revisions prior to nondeposit funds and the amounts of excess 1965. reserves. Because there is no seasonal move- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

296 Federal Reserve Bulletin □ April 1976 ment in the latter two reserve categories, these same time they will be linked in a way that components, as in the past, have been added incorporates the structure of reserve require­ on a not-seasonally-adjusted basis. Nonbor­ ments. rowed reserves, as before, are derived from total Stated explicitly, seasonally adjusted required reserves by subtracting member bank borrow­ reserves against deposits are now computed as ings, also on a not-seasonally-adjusted basis. the sum of two items—(1) seasonally adjusted What is different in the new series is the method net demand deposits and (2) seasonally adjusted of seasonally adjusting required reserves against total time and savings deposits—each of which member bank deposits. is multiplied by an appropriate seasonally ad­ Until this revision, required reserves were justed average reserve ratio. Seasonally adjusted seasonally adjusted by dividing the weekly level total reserves are derived by adding reserves of reserves required against member bank against nondeposit funds and excess reserves, deposits by the implied seasonal factor for both on a not-seasonally-adjusted basis, to sea­ member bank deposits (credit proxy) for the sonally adjusted required reserves against mem­ period 2 weeks earlier.4 This procedure failed ber bank deposits. Seasonally adjusted figures to capture all the seasonal movement in the for nonborrowed reserves are then obtained by reserves required against deposits because de­ subtracting borrowings from the Federal Re­ posits and reserves are related by average re­ serve, also on a not-seasonally-adjusted basis, serve ratios that, by themselves, exhibit some from the total reserves series. Reserves available seasonality. to support private nonbank deposits (RPD’s) are Readers will note that the implied seasonal derived by a method similar to that used for factor for the credit proxy is just a weighted total reserves, except that a seasonally adjusted average of the seasonal factors against the de­ average reserve ratio is applied to private de­ posit components of the credit proxy, with the mand deposits (excluding interbank) instead of weights depending on the levels of deposits in to net demand deposits. All of these series are each of these categories.5 The reserves required derived first on a weekly basis; the monthly against these deposits, on the other hand, are seasonally adjusted levels are simply pro-rata computed by multiplying each deposit category averages of the weekly seasonally adjusted by an appropriate average reserve ratio. These levels. average reserve ratios depend not only on the The effects of using the old and the new structure of reserve requirement ratios—as de­ methods of seasonal adjustment are highlighted termined by the Board of Governors—but also by the pattern of total reserves as shown in the on shifts in these deposits among banks of different sizes. In the construction of a seasonal factor for Total reserves required reserves, then, the weighting of the Billions of dollars seasonal factors should reflect not only the level of deposits but also the average reserve ratio in effect against these deposits. In this way, seasonally adjusted required reserves will be linked to seasonally adjusted member bank de­ posits as they are in the old series, but at the 4 This is strictly a function of lagged reserve account­ ing; required reserves this week are based on average deposits 2 weeks ago. Prior to the adoption of lagged accounting, in September 1968, required reserves were calculated against current deposits and seasonally ad­ justed required reserves were computed contempora­ neously in the earlier period. 5See the Appendix for a derivation of these weights. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Member Bank Deposits and Aggregate Reserves 297 chart. Until the change in Regulation D in large “spike” that has appeared in January of November 1972, at which time reserve require­ each year since 1972. Hence a new method of ments against net demand deposits became more seasonal adjustment was developed to address graduated, the two series followed each other this problem. In the revised series shown in the quite closely. After that the large increases in chart, total reserves exhibit a much smoother net demand deposits that occurred in connection pattern. with the year-end holidays had a significant While not shown graphically, the same sea­ effect on the average reserve ratio against these sonal “spike” was evidenced in the old series deposits. By using the credit proxy seasonal for nonborrowed reserves. As with total re­ factor alone, as exemplified by the old series serves, the revised series has eliminated this in the chart, it was not possible to eliminate the “spike” from the seasonally adjusted data. APPENDIX: Derivation of required reserves seasonal factor. Let the credit proxy (member bank deposits) be The revised series for seasonally adjusted re­ broken down into two categories: (1) net demand quired reserves is computed as deposits (ND) and (2) total time and savings de­ posits (TT).6 Then the credit proxy seasonally rND ND rTT TT RR' + ■ (3) adjusted may be written as SF\ sfnd SFrT SFtt CP ND TT CPSA = (1) where RRSA is seasonally adjusted required re­ SFcp SFnd SFtt serves, rND and rTT are the average reserve ratios against ND and TT, and the seasonal factors for where CP denotes the credit proxy, SFCP its im­ these average reserve ratios are denoted by SFrND plied seasonal factor, and SFND and SFTT the and SFrTT. The implied seasonal factor for re­ seasonal factors used to seasonally adjust net de­ quired reserves becomes mand deposits and total time and savings deposits, respectively. We can express the credit proxy 1 (rND/SFrND)NP ___1__ seasonal factor as SFRl rNDND -b rttTT SFnd 1 ND 1 TT 1 + (2.1) (ttt/SF^tt)TT 1 SFCP ND + TT SFND ND + TT SFtt rNDND + rTT IT SFt1 (4.1) or, more compactly, as which is of the form 1 1 1 = Wi + VV2 ■ (2.2) (4.2) SFCp SFnd SFTt SFk sfn SFt where the weights, vvx and w2, sum to unity While this equation is similar in form to Equation 2.2, the weights do not sum exactly to unity in 6For simplicity, we have assumed that net demand any given week. When averaged over the entire deposits is seasonally adjusted directly and not, as is year, however, they will. actually the case, as the sum of its three subcomponents: private demand deposits, U.S. Government demand deposits, and net interbank deposits. Thus, in practice, we assume that lagged accounting, when in effect, is the algebra is slightly more complicated. In addition, correctly reflected in the deposit data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

298 Federal Reserve Bulletin □ April 1976 Member bank deposits and aggregate reserves In billions of dollars (for footnotes see opposite page) Member bank reserves, S.A.1 Deposits subject to reserve requirements3 Total member bank deposits plus nondeposit S.A. N.S.A. items4 Period Non­ Total bor­ Re­ Avail­ Demand Demand rowed quired able2 Time Time Total and Total and S.A. N.S.A. savings Private U.S. savings Private U.S. Govt. Govt. 1970—Jan.... 27.74 26.78 27.57 25.42 286.6 149.1 132.8 4.7 291 .2 148.9 138.4 3.9 306.2 310.8 Feb.... 27.71 26.63 27.51 25.42 285.0 148.9 131.1 5.0 285.1 148.8 130.2 6.1 305.1 305.2 Mar_ 27.64 26.74 27.48 25.36 288.0 150.2 132.7 5.1 288.0 151 .0 131 .2 5.8 307.6 307.6 Apr.... 28.06 27.21 27.91 25.65 292.4 153.3 134.2 4.9 293.7 153.8 135.4 4.5 311 .8 313.0 May... 27.90 26.94 27.75 25.84 293.0 154.3 134.3 4.3 290.8 154.9 130.5 5.4 313.3 311 .1 June... 27.96 27.08 27.77 25.90 294.5 155.6 133.2 5.6 292.7 155.7 131 .5 5.4 315.3 313.5 July. .. 28.22 26.86 28.05 26.01 301.1 161 .1 134.3 5.7 299.4 160.9 132.7 5.8 321 .3 319.5 Aug. . . 28.80 27.96 28.62 26.43 306.9 165.8 134.9 6.2 303.9 166.0 132.0 5.9 325.9 322.9 Sept... 29.14 28.54 28.90 26.91 310.0 169.7 134.7 5.6 309.3 169.8 133.7 5.8 326.7 326.0 Oct.... 28.74 28.28 28.54 26.56 313.1 172.8 134.8 5.4 313.3 173.2 135.1 5.1 327.5 327.8 Nov... 28.78 28.37 28.55 26.65 316.5 175.6 135.0 5.9 315.4 174.9 136.0 4.6 329.6 328.5 Dec.... 29.11 28.77 28.86 26.81 320.8 178.8 135.9 6.2 325.2 178.1 141 .1 6.0 332.9 337.2 1971—Jan.. .. 29.24 28.88 29.01 26.96 325.1 183.0 136.5 5.6 330.7 182.8 142.2 5.6 336.1 341 .7 Feb.... 29.63 29.30 29.38 27.25 331 .2 187.6 138.0 5.6 330.9 187.1 136.8 7.0 340.8 340.6 Mar... 29.81 29.49 29.61 27.50 334.8 191.5 139.3 3.9 334.6 192.3 137.8 4.5 342.9 342.7 Apr-- 29.88 29.73 29.72 27.72 338.6 193.3 140.3 5.0 339.8 193.6 141 .5 4.7 344.7 345.9 May... 30.30 30.02 30.08 28.00 343.1 195.5 142.2 5.5 340.9 195.8 138.4 6.7 348.4 346.1 June... 30.51 30.02 30.31 28.25 345.1 198.0 142.6 4.5 343.1 197.8 140.9 4.4 350.7 348.8 July. .. 30.61 29.79 30.43 28.35 348.6 199.5 143.5 5.6 346.7 198.9 142.1 5.7 353.8 352.0 Aug. . . 30.94 30.13 30.75 28.53 350.6 200.4 143.6 6.5 347.1 200.8 140.6 5.8 355.5 352.0 Sept... 31.14 30.65 30.95 28.51 351 .3 202.0 143.1 6.2 350.9 202.7 141 .9 6.3 356.4 356.1 Oct--- 30.91 30.55 30.75 28.49 352.6 205.1 142.7 4.8 353.0 205.9 142.7 4.3 358.4 358.8 Nov... 31 .09 30.70 30.85 28.72 355.6 207.8 143.2 4.7 354.4 206.8 144.3 3.2 361 .9 360.6 Dec_ 31.24 31 .12 31 .06 28.78 360.1 210.5 143.7 5.8 364.6 209.7 149.2 5.7 365.0 369.5 1972—Jan.. .. 31 .56 31.54 31.35 29.03 362.7 213.7 143.2 5.7 368.6 213.4 149.2 6.0 367.5 373.5 Feb.... 31.72 31 .69 31.57 29.26 366.2 216.5 144.9 4.8 365.7 215.9 143.7 6.1 370.7 370.1 Mar... 32.06 31.96 31.87 29.56 370.4 217.5 147.2 5.7 370.2 218.1 145.5 6.6 374.9 374.6 Apr_ 32.44 32.32 32.29 29.79 373.4 219.5 147.6 6.3 375.3 219.8 149.0 6.5 377.6 379.5 May... 32.72 32.61 32.58 29.89 378.4 222.3 148.9 7.2 377.0 223.1 145.1 8.8 382.6 381 .2 June... 33.02 32.92 32.81 30.18 380.4 225.1 149.5 5.9 378.6 225.2 147.8 5.7 384.6 382.8 July. .. 33.11 32.87 32.91 30.37 385.1 227.5 151 .4 6.2 383.2 227.1 150.1 6.1 389.2 387.4 Aug. . . 33.51 33.12 33.32 30.62 388.4 230.5 152.1 5.7 384.5 231 .3 149.0 4.3 392.7 388.9 Sept... 33.57 33.03 33.36 31.01 390.0 233.0 152.2 4.8 389.6 233.8 150.9 4.9 394.1 393.7 Oct__ 33.87 33.31 33.65 31.09 394.2 235.5 152.7 6.0 394.1 236.2 152.5 5.4 398.4 398.2 Nov... 32.07 31 .46 31 .72 29.66 399.2 239.1 152.6 7.5 396.4 237.6 153.7 5.1 403.3 400.6 Dec.... 31 .44 30.39 31 .16 29.00 402.3 241 .7 154.4 6.2 406.8 240.7 160.1 6.1 406.6 411 .2 1973—Jan.. .. 31.60 30.44 31 .34 29.36 404.0 244.3 153.6 6.1 410.4 243.8 160.0 6.6 408.5 414.9 Feb.... 31.55 29.96 31 .35 29.36 409.9 249.7 154.0 6.2 409.0 248.5 152.4 8.1 414.4 413.5 Mar... 32.01 30.19 31 .80 29.59 416.7 255.9 153.3 7.4 416.3 256.2 151 .6 8.5 421 .4 421 .1 Apr.... 32.21 30.50 31 .99 29.82 420.2 260.6 153.5 6.1 422.3 260.5 154.9 6.8 425.2 427.3 May... 32.28 30.44 32.14 30.03 424.5 263.6 155.1 5.9 423.0 264.5 151 .4 7.0 429.7 428.2 June... 32.66 30.81 32.44 30.43 428.4 266.2 156.3 5.8 426.3 265.9 154.8 5.6 433.3 431 .3 July. .. 33.43 31 .48 33.15 31 .19 431.7 269.0 157.4 5.2 429.9 268.5 156.2 5.1 437.6 435.7 Aug. 34.12 31.96 33.95 31 .95 435.7 274.3 157.0 4.3 433.7 276.6 154.0 3.1 442.4 440.4 Sept... 34.39 32.54 34.16 32.33 437.3 277.0 156.1 4.2 437.7 279.0 154.7 4.1 443.9 444.4 Oct__ 35.05 33.57 34.80 32.77 439.8 277.4 156.5 5.8 439.7 278.8 156.1 4.8 446.3 446.2 Nov... 35.04 33.64 34.81 32.71 440.3 278.2 157.3 4.8 438.2 276.6 158.3 3.2 446.7 444.6 Dec.... 34.98 33.69 34.68 32.78 442.8 279.7 158.1 5.0 447.5 278.5 164.0 5.0 449.4 454.0 1974—Jan.. .. 35.18 34.13 35.02 32.67 447.4 283.9 157.6 5.9 453.0 283.1 163.4 6.5 453.9 459.5 Feb.... 35.10 33.91 34.92 32.80 449.6 287.6 158.1 3.9 447.1 285.7 156.3 5.1 456.5 454.0 Mar... 35.16 33.84 35.02 33.03 451 .6 288.6 158.7 4.3 450.4 288.6 156.9 4.9 459.1 457.9 Apr_ 35.82 34.09 35.64 33.51 460.7 296.6 160.0 4.1 462.5 296.2 161.5 4.9 468.7 470.6 May... 36.45 33.86 36.29 34.08 466.2 301 .9 159.2 5.1 464.7 303.0 155.6 6.0 475.0 473.5 June... 37.00 34.00 36.81 34.55 472.2 306.8 160.6 4.8 470.0 306.4 158.9 4.7 480.6 478.4 July. .. 37.30 34.00 37.14 34.85 475.7 310.7 160.6 4.4 474.3 310.1 160.0 4.1 484.9 483.5 Aug. . . 37.49 34.16 37.30 35.21 476.9 313.0 159.8 4.1 475.1 315.3 157.0 2.9 485.9 484.2 Sept... 37.44 34.16 37.26 35.21 478.5 314.4 159.7 4.4 479.7 317.2 158.3 4.1 487.1 488.2 Oct__ 36.92 35.11 36.80 34.77 479.8 316.8 159.7 3.3 480.5 318.6 159.1 2.8 487.6 488.3 Nov... 36.94 35.69 36.74 34.77 483.1 318.8 160.6 3.7 481 .2 317.4 161 .4 2.4 490.7 488.8 Dec.... 36.63 35.90 36.37 34.42 486.9 322.9 160.6 3.4 491 .8 321 .7 166.6 3.4 495.3 500.1 1975—Jan.... 36.37 35.97 36.22 34.23 490.1 328.2 159.3 2.6 495.1 327.2 165.0 2.9 497.7 502.6 Feb.... 35.49 35.34 35.30 33.50 490.9 329.1 159.9 1 .9 487.0 326.5 158.0 2.4 497.4 493.5 Mar... 34.99 34.88 34.79 32.94 493.4 329.2 161.7 2.5 491 .6 328.9 159.8 2.8 499.9 498.0 Apr.... 35.08 34.97 34.92 33.00 494.1 329.7 161.7 2.7 495.4 329.1 163.2 3.2 500.8 502.2 May... 34.74 34.67 34.58 32.77 493.7 328.6 162.6 2.5 491 .8 329.8 159.0 3.1 501 .2 499.2 June... 35.07 34.85 34.87 32.90 499.5 330.5 165.8 3.2 497.5 330.2 164.2 3.0 506.5 504.5 July... 34.98 34.68 34.79 32.89 498.3 330.8 164.9 2.6 497.2 330.2 164.5 2.5 505.1 504.0 Aug... 34.88 34.67 34.69 32.76 496.3 328.4 165.1 2.8 494.8 330.5 162.3 2.0 503.3 501.8 Sept... 34.99 34.59 34.80 32.77 498.4 329.8 165.6 3.0 499.1 332.2 164.0 2.9 505.5 506.1 Oct__ 34.79 34.60 34.58 32.61 500.1 333.1 164.0 3.0 500.4 334.7 163.3 2.5 508.0 508.3 Nov... 34.73 34.67 34.44 32.43 505.9 336.1 165.9 3.9 503.6 334.3 166.7 2.5 514.1 511.9 Dec.... 34.75 34.62 34.49 32.44 506.0 338.7 164.4 3.0 510.9 337.2 170.7 3.1 514.4 519.3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Member Bank Deposits and Aggregate Reserves 299 NOTES TO TABLE 1 Averages of daily figures. Member bank reserve series reflect actual include total time and savings deposits and net demand deposits as defined reserve requirement percentages with no adjustment to eliminate the by Regulation D. Private demand deposits include all demand deposits effect of changes in Regulations D and M. except those due to the U.S. Govt., less cash items in process of collection Reserves available to support private nonbank deposits are defined and demand balances due from domestic commercial banks. as 2(1) required reserves for (a) private demand deposits, (b) total time 4 “Total member bank deposits” subject to reserve requirements, plus and savings deposits, and (c) nondeposit sources subject to reserve re­ Euro-dollar borrowings, loans sold to bank-related institutions, and quirements, and (2) excess reserves. This series excludes required reserves certain other nondeposit items. This series for deposits is referred to as for net interbank and U.S. Govt, demand deposits. “the adjusted bank credit proxy.” 3 Averages of daily figures. Deposits subject to reserve requirements S.A. = seasonally adjusted; N.S.A. = not seasonally adjusted. Notes relating to changes in series over the 1970-75 period for the table point. This action increased required reserves approximately $760 million on page 298 are as follows : and RPD’s approximately $670 million. 7. Effective Oct. 4, 1973, the marginal reserve requirement against 1. Effective Oct. 1, 1970, the reserve requirement of all member banks certain time deposits was increased from 8 per cent to 11 per cent. This against time deposits (other than savings deposits) in excess of $5 million action increased required reserves and RPD’s approximately $465 million. was reduced from 6 per cent to 5 per cent. At the same time, a 5 per cent 8. Effective Dec. 27, 1973, the marginal reserve requirement against reserve requirement was imposed against funds obtained by member certain time deposits was reduced from 11 per cent to 8 per cent. This banks through the issuance of commercial paper by their affiliates. This action reduced required reserves and RPD’s approximately $360 million. action reduced required reserves and RPD’s approximately $500 million 9. Effective Sept. 19, 1974, the marginal reserve requirement against (net). time deposits in denominations greater than $100,000 and with more 2. Effective Jan 7, 1971, the reserve percentage required to be main­ than 4 months’ maturity was eliminated. This action reduced required tained against certain foreign borrowings, primarily Euro-dollars, by reserves and RPD’s approximately $510 million. member banks and the sale of assets to their foreign branches was raised 10. Effective December 12, 1974, the reserve requirement against all from 10 per cent to 20 per cent. This action had little effect on required time deposits with an original maturity of 6 months or longer was reduced reserves and RPD’s. from 5 per cent to 3 per cent; the reserve requirement against all time de­ 3. Effective Nov. 9, 1972, Regulations D and J were revised to (I) posits with an original maturity of 6 months was increased from 5 to 6 adopt a system of reserve requirements against demand deposits of all per cent; and the reserve requirement against net demand deposits over member banks based on the amount of such deposits held by a member $400 million was reduced from 18 per cent to 17-Vi per cent. In addition, bank, and (2) require banks—member and nonmember—to pay cash the 3 per cent marginal reserve requirement on large CD’s with an initial items presented by a Federal Reserve Bank on the day of presentation in maturity of less than 4 months was removed. This action reduced required funds available to the Reserve Bank on that day. These changes reduced reserves approximately $710 million and RPD’s approximately $650 required reserves approximately $2.5 billion, effective Nov. 9; and $1.0 million. billion, effective Nov. 16, and increased required reserves $300 million, 11. Effective February 13, 1975, reserve requirements against all cate­ effective Nov. 23. On the same dates RPD’s were reduced $2.3 billion gories of net demand deposits up to $400 million were reduced Vi of a and $785 million and increased $235 million, respectively. percentage point, and the reserve requirement against net demand deposits 4. Effective June 21, 1973, the Board amended its Regulation D to of more than $400 million was reduced 1 percentage point. This action establish a marginal reserve requirement of 8 per cent against certain reduced required reserves approximately $1,065 million and RPD’s time deposits and to subject to the 8 per cent reserve requirement certain approximately $980 million. deposits exempt from the rate limitations of the Board’s Regulation Q. 12. Effective May 22, 1975, the reserve requirement against foreign In addition, reserves against certain foreign branch deposits were reduced borrowings of member banks, primarily Euro-dollar, was reduced from from 10 per cent to 8 per cent. These changes had little effect on required 8 per cent to 4 per cent. This action reduced required reserves approxi­ reserves or RPD’s. mately $80 million. 5. Effective July 12, 1973, reserve requirements were imposed against 13. Effective October 30, 1975, the reserve requirement against member finance bills. This action increased required reserves and RPD’s approxi­ bank time deposits with an original maturity of 4 years or more was mately $90 million. reduced from 3 per cent to 1 per cent. This action reduced required 6. Effective July 19, 1973, the reserve requirement against all net reserves by $360 million. demand deposits, except the first $2 million, was increased y2 percentage Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

300 S ta ff Econom ic Studies The research staffs of the Board of Governors In all cases the analyses and conclusions set of the Federal Reserve System and of the Fed­ forth are those of the authors and do not neces­ eral Reserve Banks undertake studies that cover sarily indicate concurrence by the Board of a wide range of economic and financial sub­ Governors, by the Federal Reserve Banks, or jects, and other staff members prepare papers by the members of their staffs. related to such subjects. In some instances the Single copies of the full text of each of the Federal Reserve System finances similar studies studies or papers summarized in the B ulletin by members of the academic profession. are available in mimeographed form. The list From time to time the results of studies that of Federal Reserve Board publications at the are of general interest to the economics profes­ back of each B ulletin includes a separate sion and to others are summarized—or they may section entitled “Staff Economic Studies” that be printed in full—in this section of the Federal enumerates the studies for which copies are Reserve B ulletin. currently available in that form. STUDY SUMMARY THE GROWTH OF MULTIBANK HOLDING COMPANIES: 1956-73 Gregory E. Boczar— Staff, Board of Governors Prepared as a staff paper in 1975 Multibank holding companies are becoming 1970, and rapid growth from 1971 through more and more significant in this country’s 1973. The shift from slow to moderate growth banking system. Such companies have grown was due in part to an upsurge of MBHC activity rapidly since 1965—in geographic distribution, in New York State, while the change from in amount of deposits, and in number of offices. moderate to rapid growth was clearly caused by Furthermore, their share of U.S. bank deposits the 1970 Amendments to the Bank Holding and offices has increased more than threefold. Company Act. The accelerated growth of This study provides a consistent data series MBHC’s over the 1956-73 period reflected pri­ on multibank holding companies (MBHC’s) marily external growth—that is, formations of from 1956 through 1973. The data are used to new MBHC’s and acquisitions by existing describe and analyze the aggregate growth of MBHC’s. Finally, the aggregate data indicated MBHC’s as well as their growth in individual that MBHC-affiliated offices commonly had States, with emphasis on the 8 years from year- larger than average amounts of deposits. end 1965 to year-end 1973. The growth patterns in the 15 States with the The aggregate data on MBHC’s revealed most MBHC activity were found to be consist­ three distinct growth phases: slow growth from ent with the national growth phases. A scrutiny 1956 through 1965, moderate growth through of the branching laws of the most active States Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Study Summary 301 showed that substantial MBHC activity almost Most States with no growth contained only always occurred in States that restrict branching. grandfathered affiliates—banks affiliated with A review of MBHC activity in all States that MBHC’s prior to the Bank Holding Company had MBHC-affiliated banks suggested the exist­ Act of 1956. An examination of these States ence of three growth patterns: horizontal, or no indicated that MBHC affiliates may grow faster growth; vertical, or very rapid growth; and than independent banks in the long run. In the ascending, or steady growth. In 1973, the vertical growth States, changes in laws or the breakdown of these growth patterns was as actions of highly visible banks or MBHC’s follows: horizontal in 19 States, vertical in 11 apparently provoked the take-off of activity. No States, and ascending in 6 States. Two States single factor, but rather a variety of situations, with only a few years of MBHC activity did caused States to follow an ascending growth not fit into any of these patterns. path. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

302 Bank H olding Company Financial Developments in 1975 The year 1975 was a difficult period for the TABLE 1 American banking system. During the year bank Selected balance sheet items holding companies (BHC’s) suffered a sharp for major bank holding companies increase in loan losses, primarily due to the Amounts in billions of dollars recent recession and to overbuilding in the real estate sector. In addition, BHC’s had to contend Year-end Year-end Percentage with diminished public confidence in the bank­ BHC’s 1974 1975 change ing system as the result of several large failures during the previous 2 years. In this difficult Total assets setting, most BHC’s adopted policies during Largest 10 .......... 310.3 322.5 3.9 1975 that were designed to reduce their risk. 25 .......... 437.9 449.7 2.7 This article reviews the major financial de­ 100 ......... 609.6 626.3 2.7 velopments of BHC’s—both one-bank and Net loans multibank—during 1975, and is based on annual reports to stockholders and other data recently Largest 10 .......... 182.6 183.7 .6 released by BHC’s. Since financial data for all 25 .......... 252.3 251.3 (.4) 100 ......... 347.6 343.3 (1.3) BHC’s are not yet available, the review is limited to the 100 largest BHC’s; these 100 have Stockholders’ equity and reserves the bulk of the assets held by all BHC’s. Largest 10 .......... 12.6 14.1 11.9 w 25 .......... 19.1 21.1 10.5 100 ......... 30.2 32.9 8.9 BHC ASSET AND LOAN GROWTH Growth in BHC assets came to a virtual halt in part to a decline in the share of the total assets in 1975 in marked contrast to the 1970-74 in the banking system held by the larger banks. period when the total assets of major BHC’s During 1975 net loans of the 100 largest expanded at a rapid rate. For the 100 largest BHC’s fell 1.3 per cent from $347.6 billion to BHC’s, total assets increased only 2.7 per cent $343.3 billion.2 This decline reflected a sub­ in 1975 from $609.6 billion to $626.3 billion.1 stantial lessening of the extremely heavy loan Moreover, 36 of the top 100 BHC’s actually pressures to which the major BHC’s had been experienced declines in total assets during the subjected in 1974. It apparently also reflected year. To some extent, the very slow growth of a desire by most BHC’s to reduce their portfolio the large BHC’s simply mirrored the relatively risk and to build up liquidity. At year-end 1975, slow asset growth of the entire commercial the ratio of net loans to total assets for the top banking system in 1975. But it also was due 100 BHC’s was 54.8 per cent, down from 57.0 Note.—This article was prepared by Anthony Cyr- 2 Net loans equal gross loans minus unearned income nak, Michael Martin, and Samuel Talley of the Board’s on loans and reserves for loan losses. Major BHC’s Division of Research and Statistics. began reporting loans on a net basis in 1975. For 1See Table 1 for the asset growth of the largest 10 comparative purposes, they also have reported 1974 and largest 25 BHC’s. loans on a net basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank Holding Company Financial Developments in 1975 303 per cent a year earlier. A major offset to the cent at year-end 1975. Moreover, the ratio of decline of loans in BHC portfolios was a signif­ stockholders’ equity and reserves to net loans icant increase in holdings of U.S. Government during the same period climbed from 8.7 per securities. cent to 9.6 per cent. These increases in the capital ratios of the 100 largest BHC’s are in marked contrast to the sharp declines that had occurred during the 1970-74 period. However, BHC CAPITAL the level of the capital ratios at the end of 1975 In the last 2 years, bank regulators, investors, remained appreciably below those of the early and even bankers themselves have become in­ 1970’s. creasingly concerned about the capital position of banks. In 1975 stockholders’ equity and reserves for loan losses of the 100 largest BHC’s BHC PROFITS increased 8.9 per cent from $30.2 billion to $32.9 billion.3 This increase, when coupled Profits for the 100 largest BHC’s during 1975 with the very slow growth in assets of these increased only slightly over the level reached companies, resulted in a rise in the ratio of in 1974. Income before securities gains and stockholders’ equity and reserves to total assets losses for these organizations rose from $3,253 from 5.0 per cent at year-end 1974 to 5.2 per million in 1974 to $3,272 million in 1975, or 0.6 per cent. Net income—income after securi­ 3Stockholders’ equity rose from $27.0 billion in 1974 ties gains and losses and extraordinary items— to $29.1 billion in 1975, largely as a result of retained earnings. Reserves for loan losses rose from $3.2 billion also increased slightly, rising from $3,192 mil­ in 1974 to $3.8 billion in 1975, primarily as a result lion in 1974 to $3,274 million in 1975, a gain of loan-loss provisions exceeding net loan charge-offs of 2.6 per cent (see Table 3). Earnings per­ (charge-offs less recoveries). formance varied considerably among individual organizations, with 57 BHC’s reporting an in­ TABLE 2 crease and 43 posting a decline over 1974 levels Selected balance sheet ratios in both measures of profit. for major bank holding companies In per cent TABLE 3 Selected performance data Percentage BHC’s Ye 1 a 9 r- 7 e 4 nd Ye 1 a 9 r 7 -e 5 nd c p h o a i n n g t e for major bank holding companies Amounts in millions of dollars Net loans to tqfal assets Percentage Item 1974 1975 increase Largest 10 58.8 57.0 d-8) 25 57.6 55.9 (1.7) 100 57.0 54.8 (2.2) Income before securities gains and losses (after tax) ..... 3,253 3,272 .6 Net income (after tax) ....... 3,192 3,274 2.6 Stockholders’ equity and reserves Provisions for loan losses ... 1,572 2,844 80.9 to total assets Net loan charge-offs .......... 1,205 2,352 95.2 Reserves for loan losses ..... 3,188 3,748 17.6 Largest 10 4.1 4.4 .3 4.4 4.7 .3 Ratio of reserves for loan losses 100 5.0 5.2- .2 to year-end net loans ..... .92 1.09 Stockholders’ equity and reserves to net loans During 1975 BHC earnings were helped sig­ nificantly by unusually wide interest rate Largest 10 6.9 7.7 .8 7.6 8.4 .8 spreads—the difference between the rates re­ 100 8.7 9.6 .9 ceived on interest-bearing assets and the rates Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

304 Federal Reserve Bulletin □ April 1976 paid on interest-bearing liabilities. These earnings decline of about 4 per cent. One factor spreads began to widen sharply in late 1974 and accounting for this difference was the greater reached record levels for recent years in early growth in assets for the top 10 BHC’s. During 1975. While these spreads declined somewhat 1975 total assets for the 10 largest BHC’s in­ during the spring, they persisted at above nor­ creased 3.9 per cent, compared with a 1.5 per mal levels for the remainder of the year. cent increase for the other 90.5 Among the primary factors adversely affect­ One factor adversely affecting the relative ing BHC profits during 1975 were sizable in­ earnings performance of the top 10 BHC’s was creases in nonaccruing loans and large provi­ that their provisions for loan losses rose about sions for loan losses. For many BHC’s, nonac­ 111 per cent in 1975, compared with an increase cruing loans—many of which were related to of only 56 per cent for the next 90 BHC’s. developments in the real estate market—dam­ pened the growth of net interest income signifi­ cantly. Also, the increase in provisions for loan BHC EQUITY FINANCING losses in 1975 depressed earnings to some extent for nearly all of the 100 largest BHC’s. Under Thus far in the 1970’s the major BHC’s have current accounting procedures, BHC’s are re­ issued very few new equity issues, even though quired to make minimum provisions for loan their capital ratios have declined sharply. Dur­ losses by using a formula based on past loan ing some of this period, many BHC’s could loss experience and the current level of loans. have issued stock at attractive prices by histori­ These minimum provisions, however, can be cal standards. However, the BHC managements exceeded if BHC management considers such were apparently reluctant to sustain the resulting a decision prudent in light of current economic dilution in earnings per share. With the precipi­ conditions. By late 1974 the condition of many tous decline in BHC stock prices in the late BHC loan portfolios dictated that provisions for spring of 1974, BHC’s lost access to equity loan losses in excess of the prescribed minimum markets on terms that they deemed acceptable. be charged against earnings. Many BHC’s con­ During 1975 BHC stock prices rose signifi­ tinued these larger provisions for loan losses cantly from their year-end 1974 level, but they throughout much of 1975. As a result, provi­ were still too depressed to encourage a substan­ sions for loan losses for the largest 100 BHC’s tial amount of new equity financing. In the in 1975 were $2,844 million, an increase of second half of the year, however, two rather 80.9 per cent over the 1974 level.4 highly leveraged BHC’s did enter the market In 1975 the top 10 BHC’s had a somewhat with three sizable equity issues. These issues better earnings performance than the other 90 included a $34 million common stock offering, large BHC’s. On the basis of net income before a $75 million nonconvertible preferred issue, securities gains and losses, the top 10 increased and a $46 million exchange of convertible pre­ their earnings, in aggregate, about 6 per cent, ferred stock for a like amount of outstanding whereas the next 90 BHC’s had an aggregate subordinate debentures. In each case, these eq­ uity issues had to be offered on terms that were relatively unfavorable to the BHC by historical 4Under current BHC accounting methods, loan-loss provisions increase the reserve for loan losses while net standards. For example, the common stock issue loan charge-offs reduce the reserve. In 1975, provisions was sold at a price that was almost 30 per cent for loan losses exceeded net loan charge-offs by almost below book value. $500 million for the Largest 100 BHC’s, and were primarily responsible for increasing their reserves from $3,188 million at year-end 1974 to $3,748 million at year-end 1975. With this increase in reserves and a 5 The difference in loan growth rates between the top slight decline in net loans during 1975, the ratio of 10 and the other 90 large BHC’s was even more pro­ reserves to year-end net loans for the 100 largest BHC’s nounced with the top 10 recording a 0.6 per cent rose from 0.92 per cent at the end of 1974 to 1.09 increase, compared with a 3.3 per cent decrease for per cent at the end of 1975. the next 90 BHC’s. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank Holding Company Financial Developments in 1975 305 BHC BOND FINANCING One factor contributing to the increased use of private placements was the controversy over The dollar amount of BHC bond financing dur­ disclosure requirements involving BHC issues ing 1975 was far below the 1974 level. For 1975 sold to the general public. For 1975 BHC pri­ total BHC bond financing consisted of 34 issues vate placements involved eight issues amount­ amounting to $1,320 million, compared with 29 ing to $138 million, in contrast with five issues issues amounting to $2,314 million for 1974 amounting to $43 million for 1974. (Table 4). Bond financing activity increased Third, the issuance of floating-rate notes de­ during the second half of 1975. BHC’s floated clined precipitously during 1975. BHC’s sold 19 issues amounting to $741 million in the three floating-rate note issues amounting to only second half, compared with 15 issues amounting $12 million in 1975, compared with eight float­ to $579 million in the first half. ing-rate note issues amounting to $1,130 million There were several significant aspects of the in 1974. Moreover, BHC’s with assets of less BHC bond financing in 1975. First, bond fi­ than $500 million accounted for all of the float­ nancing continued to be dominated by issues ing-rate notes issued in 1975, whereas in 1974 of the largest companies. In 1975 BHC’s with these issues were dominated by BHC’s with assets exceeding $15 billion accounted for four more than $1 billion in assets. issues amounting to $685 million, or 51.9 per cent of the total BHC bond financing. In 1974 these large BHC’s accounted for eight issues representing $1,530 million, or 66.1 per cent BHC STOCK PRICE TRENDS of the total BHC bond financing. During 1975 BHC common stock prices rose Second, during 1975 more BHC’s resorted from their relatively depressed levels at the end to the private placement market than in 1974. of 1974. However, there was a substantial dif­ ference in the performance among various groups of BHC’s. For example, Standard and TABLE 4 Poor’s stock price index for New York City Aggregate long-term debt offerings banks rose only 4.4 per cent during the year, by bank holding companies1 compared with a 26.0 per cent increase in the Amounts in millions of dollars index for banks outside New York City. The relatively poor performance by the New York Year Number of issues Amount City organizations was due in part to investor concern over holdings by these BHC’s of se­ 1971 .......................... 29 852 1972 .......................... 48 1,817 curities of New York City and New York State. 1973 .......................... 25 877 Also noteworthy is that the increases in the stock 1974 .......................... 29 2,314 1975 .......................... 34 1,320 indexes for both New York City banks and banks outside New York City trailed the 31.5 1 These data include private placements and convertible de­ per cent rise in the Standard and Poor’s com­ benture offerings, but exclude offerings by holding company subsidiaries and foreign holding companies. posite 500-stock index. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

307 Changes in Bank Lending Practices, 1975 Quarterly surveys of changes in bank lending loan policies to restrain business loan growth practices among large commercial banks have and improve earnings. On the other hand, easing been conducted by the Federal Reserve since of lending policies toward consumers was ap­ late 1964. These surveys, taken in February, parent in the surveys, and this availability of May, August, and November of each year, bank financing contributed to the resurgence of provide information relating to changes in recent consumer spending in 1975, which was an im­ and anticipated business loan demand, in price portant element in the recovery of the economy. and nonprice terms of lending, and in banks’ Restrictive policies toward business lending willingness to extend loans of types other than were indicated not only by nonprice terms and short-term commercial and industrial loans. conditions but also by the adoption of a prime This article continues the series of annual re­ rate that, although dropping from IOV2 to 7 per views of the surveys and summarizes the re­ cent over the year, remained high relative to sponses of the 123 banks included in the 1975 market alternatives. Banks tended to overesti­ sample. mate the prospective demand for loans during For much of 1974 the growing momentum 1975 and were slow to lower their prime rates of the economic downturn was obscured from as market rates fell. Loan demand was in fact the view of bankers by the heavy inventory extremely weak in 1975, reflecting reduction in financing of businesses that were willing and economic activity, substantial inventory liqui­ able to pay high rates of interest for bank loans. dation followed by only modest accumulation By late 1974, however, it was becoming in­ in the second half, increasing generation of creasingly apparent that the economy was in the internal funds as the year progressed, and sub­ midst of a severe downturn of uncertain dura­ stantial capital market financing by firms under­ tion. The optimism of the banking community taken in large part to restructure corporate bal­ was rapidly replaced by a highly cautious and ance sheets by funding outstanding business restrictive lending posture that came to charac­ loans. terize bank lending practices throughout 1975. In an atmosphere of diminishing demand on Loan/deposit ratios had risen sharply in 1973 banks for business credits, the 3 months prior and 1974 under the pressure of inflation-induced to the mid-February 1975 survey were marked business borrowing, and bank liquidity had been by a significant contraction in the outstanding permitted to erode. Consequently, 1975 was a volume of commercial and industrial loans. Al­ year when large banks became increasingly most 70 per cent of the banks surveyed in concerned about their heavy reliance on bor­ February reported a weakening in the strength rowed funds to finance loan growth, and they of business loan demand over the Novemberincreased their holdings of liquid assets and to-February interval, and most participants were reduced their dependence on money market anticipating that loan demand would either re­ funcjs. While demands for bank loans declined main weak or deteriorate further during the throughout 1975, banks generally maintained or following months. In addition, with market rates tightened their previously adopted restrictive declining, a sizable proportion of the sample banks eased interest rate terms, as evidenced by a reduction of 175 basis points in the bank Note.—This article was prepared by Virginia L. prime rate from the time of the previous survey. Lewis and Paul Boltz of the Board’s Division of Re­ search and Statistics. However, not only did the prime rate continue Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

308 Federal Reserve Bulletin □ April 1976 high relative to other short-term market rates, mortgage loans, and loans to brokers, and for but also little or no alteration in nonprice terms most respondents such policies were unchanged. of lending to nonfinancial and financial busi­ By May business loan volume had shrunk nesses was noted. Such terms remained at the further, and market interest rates had sunk to highly restrictive levels they had reached during new lows for the year. In addition, at commer­ 1974. cial banks substantial run-offs in the amount In spite of decreased demands for business outstanding of large certificates of deposit loans, most banks retained a restrictive stance (CD’s) had occurred over the first half of the in their willingness to make most other types year, as banks no longer had to depend on sales of loans. Compared with the November 1974 of CD’s for financing business loans. survey, only a few of the respondents were more Although more than 50 per cent of the willing to make consumer loans, single-family respondents in May reported a further weaken- QUARTERLY SURVEY—FEBRUARY 1975 Changes in bank lending practices at selected large banks: Policy on February 15, 1975, compared with policy 3 months earlier Number of banks; figures in parentheses indicate percentage distribution of total banks reporting Total Much Moderately Essentially Moderately Much stronger stronger unchanged weaker weaker Strength of demand for commerical and in­ dustrial loans:1 Compared with 3 months earlier......... 123 (100.0) (4.1) 33 (26.8) 77 (62.6) (6.5) Anticipated in next 3 months............. 123 (100.0) (5.7) 44 (35.7) 67 (54.5) (4.1) Total Much firmer Moderately Essentially Moderately Much policy firmer policy unchanged easier policy easier policy Loans to nonfinancial businesses: Terms and conditions: Interest rates charged................... 123 (100.0) (.8) 7 (5.7) 61 (49.6) 45 (36.6) (7.3) Compensating or supporting balances. 123 (100.0) (3.3) 15 (12.2) 102 (82.9) 2 (1.6) Standards of creditworthiness.......... 123 (100.0) (6.5) 33 (26.8) 82 (66.7) Maturity of term loans................. 123 (100.0) (4.9) 13 (10.6) 103 (83.7) 1 (.8) Practice concerning review of credit lines or loan applications: Established customers................... 123 (100.0) 1 (-8) 12 (9.8) 98 (79.7) 11 (8.9) 1 (.8) New customers........................... 123 (100.0) 13 (10.6) 33 (26.8) 59 (48.0) 18 (14.6) Local service area customers........... 123 (100.0) 11 (8.9) 97 (78.9) 14 (11.4) 1 (.8) Nonlocal service area customers....... 123 (100.0) (8.9) 26 (21.1) 75 (61.1) 11 (8.9) Factors relating to applicant:2 Value as depositor or source of collat­ eral business........................ 123 (100.0) (6.5) 22 (17.9) 92 (74.8) 1 Intended use of the loan................ 123 (100.0) (6.5) 23 (18.7) 90 (73.2) Loans to independent finance companies:3 Terms and conditions: Interest rates charged................... 123 (100.0) 2 (1.6) 7 (5.7) (71.6) Compensating or supporting balances. 123 (100.0) 4 (3.3) 10 (8.1) 108 (87.8) Enforcement of balance requirements ., 123 (100.0) 7 (5.7) 12 (9.8) 104 (84.5) Establishing new or larger credit lines. 123 (100.0) 14 (11.4) 24 (19.5) 82 (66.7) Willingness to make other types of loans: Term loans to businesses................. Consumer instalment loans............... Single-family mortgage loans............. Multifamily mortgage loans............... All other mortgage loans.................. Participation loans with correspondent banks................................... Loans to brokers........................... OO'S' 2 19 (15.4) 7 (5.7) 1 (.8) (2.4) Total Considerably Moderately Essentially Moderately Considerably less willing less willing unchanged more willing more willing 123 (100.0) (4.9) 14 (11.4) 93 (75.6) 10 (8.1) 122 (100.0) 7 (5.7) 99 (81.2) 15 (12.3) (.8) 120 (100.0) (4.2) 8 (6.7) 95 (79.1) 12 (10.0) 119 (100.0) (5.0) 12 (10.1) 100 (84.1) 1 (.8) 121 (100.0) (5.0) 13 (10.7) 98 (81.0) 4 (3.3) 123 (100.0) (1.6) 7 (5.7) 98 (79.7) 15 (12.2) (.8) 123 (100.0) (4.1) 7 (5.7) 97 (78.8) 13 (10.6) (.8) 1 After allowance for bank’s usual seasonal variation. 3 “Independent,” or “noncaptive,” finance companies are finance 2 For these factors, firmer means the factors were considered to be companies other than those organized by a parent company mainly more important in making decisions for approving credit requests, for the purpose of financing dealer inventory and carrying instalment and easier means they were considered to be less important. loans generated through the sale of the parent company’s products. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Changes in Bank Lending Practices, 1975 309 ing of loan demand since the February survey, mid-February to IV2 per cent in mid-May—bank optimism that stabilization in the demand for lending rates remained well above other market business loans was forthcoming was evident in rates. In spite of further softening in loan de­ the estimations of future loan demand: only mand, most banks did not aggressively seek to about one-fifth of the banks foresaw further augment their diminishing loan portfolios by deterioration in demand over the next quarter. relaxing their lending policies regarding either For the most part, nonprice terms of lending business or most other types of loans, though varied only slightly and remained quite restric­ one-quarter of the respondents were moderately tive. Although a significant minority of banks more willing to make consumer loans. had eased their policies with regard to interest Following the mid-May survey, the rate of rates charged to nonfinancial businesses—the shrinkage in the volume of business loans prime rate had declined from 9 per cent in slowed, and short-term market interest rates QUARTERLY SURVEY—MAY 1975 Changes in bank lending practices at selected large banks: Policy on May 15, 1975, compared with policy 3 months earlier Number of banks; figures in parentheses indicate percentage distribution of total banks reporting Item Total Much Moderately Essentially Moderately Much stronger stronger unchanged weaker weaker Strength of demand for commercial and in­ dustrial loans:1 Compared with 3 months earlier...... 123 (100.0) 12 (9.8) 43 (34.9) 64 (52.0) (3.3) Anticipated in next 3 months.......... 123 (100.0) 17 (13.8) 77 (62.6) 28 (22.8) (.8) Total Much firmer Moderately Essentially Moderately Much policy firmer policy unchanged easier policy easier policy Loans to nonfinancial businesses: Terms and conditions: Interest rates charged................... 123 (100.0) 1 (.8) 6 (4.9) 73 (59.3) 39 (31.7) (3.3) Compensating or supporting balances. 123 (100.0) 2 (1.6) 12 (9.8) 106 (86.2) 3 (2.4) Standards of creditworthiness.......... 123 (100.0) 3 (2.4) 15 (12.2) 103 (83.8) 2 (1.6) Maturity of term loans................. 123 (100.0) 1 (.8) 10 (8.1) 105 (85.4) 7 (5.7) Practice concerning review of credit lines or loan applications: Established customers................... 123 (100.0) 6 (4.9) 97 (78.9) 18 (14.6) (1.6) New customers........................... 123 (100.0) 1 (.8) 18 (14.6) 80 (65.1) 24 (19.5) Local service area customers........... 123 (100.0) 7 (5.7) 95 (77.2) 21 (17.1) Nonlocal service area customers....... 123 (100.0) 1 (.8) 17 (13.8) 94 (76.5) 11 (8.9) Factors relating to applicant:2 Value as depositor or source of collat­ eral business........................... 123 (100.0) 8 (6.5) 18 (14.6) 93 (75.6) 4 (3.3) Intended use of the loan................ 123 (100.0) 2 (1.6) 10 (8.1) 104 (84.6) 7 (5.7) Loans to independent finance companies:3 Terms and conditions: Interest rates charged................... 123 (100.0) 2 (1.6) 104 (84.6) 16 (13.0) (.8) Compensating or supporting balances. 123 (100.0) 7 (5.7) 116 (94.3) Enforcement of balance requirements.. 123 (100.0) (.8) 14 (11.4) 108 (87.8) Establishing new or larger credit lines. 123 (100.0) (4.9) 20 (16.3) 88 (71.5) 8 (6.5) (.8) Total Considerably Moderately Essentially Moderately Considerably less willing less willing unchanged more willing more willing Willingness to make other types of loans: Term loans to businesses.................. 123 (100.0) (.8) 7 (5.7) 93 (75.6) 22 (17.9) Consumer instalment loans............... 122 (100.0) 3 (2.5) 85 (69.6) 30 (24.6) (3.3) Single-family mortgage loans............. 121 (100.0) (2.5) 5 (4.1) 103 (85.1) 10 (8.3) Multifamily mortgage loans............... 120 (100.0) (5.0) 11 (9.2) 102 (85.0) 1 (-8) All other mortgage loans.................. 119 (100.0) (4.2) 11 (9.2) 97 (81.6) 6 (5.0) Participation loans with correspondent banks................................... 123 (100.0) (.8) (4.1) 101 (82.1) 16 (13.0) Loans to brokers........................... 122 (100.0) (1.6) (6.6) 101 (82.7) 8 (6.6) (2.5) 1 After allowance for bank’s usual seasonal variation. 3 “Independent,” or “noncaptive,” finance companies are finance For these factors, firmer means the factors were considered to be companies other than those organized by a parent company mainly mo2re important in making decisions for approving credit requests, for the purpose of financing dealer inventory and carrying instalment and easier means they were considered to be less important. loans generated through the sale of the parent company’s products. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

310 Federal Reserve Bulletin □ April 1976 began to rise for the first time in 1975. Yet at anticipated little or no change in the strength the time of the August survey, the demand for of such demand during the period between the business credits was much weaker than had been mid-August and mid-November surveys. anticipated in May, with 45 per cent of the Notwithstanding the continued weak demand participant banks reporting that demand had for loans by nonfinancial businesses, both price declined further and 48 per cent noting that loan and nonprice terms and conditions of lending demand was essentially unchanged from its low at the time of the August survey had become May level. Respondents were evenly divided on more restrictive at many participating banks. prospects for future loan demand. Almost one- More than one-third indicated moderately firmer half of the banks believed demand from com­ policies with regard to interest rate practices, mercial and industrial customers would intensify reversing the trend of the previous two surveys, over the next 3 months, and an equal percentage and a small minority had tightened the compen- QUARTERLY SURVEY—AUGUST 1975 Changes in bank lending practices at selected large banks: Policy on August 15, 1975, compared with policy 3 months earlier Number of banks; figures in parentheses indicate percentage distribution of total banks reporting Item Total Much Moderately Essentially Moderately Much stronger stronger unchanged weaker weaker Strength of demand for commercial and in­ dustrial loans:1 Compared with 3 months earlier......... 123 (100.0) 9 (7.3) 59 (48.0) 52 (42.3) (2.4) Anticipated in next 3 months............. 123 (100.0) 57 (46.3) 55 (44.8) 11 (8.9) Total Much firmer Moderately Essentially Moderately Much policy firmer policy unchanged easier policy easier policy Loans to nonfinancial businesses: Terms and conditions: Interest rates charged................... 123 (100.0) (1.6) 46 (37.4) 72 (58.6) (2.4) Compensating or supporting balances... 123 (100.0) 20 (16.3) 101 (82.1) (1.6) Standards of creditworthiness.......... 123 (100.0) (3.3) 14 (11.4) 105 (85.3) Maturity of term loans................. 123 (100.0) (6.5) 112 (91.1) (2.4) Practice concerning review of credit lines or loan applications: Established customers................... 123 (100.0) 5 (4.1) 107 (87.0) 11 (8.9) New customers........................... 123 (100.0) (.8) 11 (8.9) 92 (74.9) 19 (15.4) Local service area customers........... 122 (100.0) 4 (3.3) 105 (86.0) 13 (10.7) Nonlocal service area customers....... 122 (100.0) (i.6) 7 (5.7) 102 (83.7) 11 (9.0) Factors relating to applicant:2 Value as depositor or source of collat­ eral business........................ 123 (100.0) (2.4) 14 (11.4) 103 (83.8) (2.4) Intended use of the loan................ 123 (100.0) (1.6) 5 (4.1) 110 (89.4) (4.9) Loans to independent finance companies:3 Terms and conditions: Interest rates charged................... 123 (100.0) 1 (-8) 23 (18.7) 98 (79.7) (.8) Compensating or supporting balances. 123 (100.0) (6.5) 115 (93.5) Enforcement of balance requirements . 123 (100.0) 14 (11.4) 109 (88.6) Establishing new or larger credit lines. 123 (100.0) *6 ' " (4.’9) 17 (13.8) 96 (78.0) (3.3) Total Considerably Moderately Essentially Moderately Considerably less willing less willing unchanged more willing more willing Willingness to make other types of loans: Term loans to businesses.................. 123 (100.0) (1.6) 8 (6.5) 92 (74.8) 20 (16.3) (.8) Consumer instalment loans............... 122 (100.0) 89 (72.9) 29 (23.8) (3.3) Single-family mortgage loans............. 121 (100.0) (1.7) (6.6) 101 (83.4) 10 (8.3) Multifamily mortgage loans............... 120 (100.0) (1.7) 10 (8.3) 108 (90.0) All other mortgage loans.................. 121 (100.0) (1.7) 11 (9.1) 101 (83.4) (5.8) Participation loans with correspondent banks................................... 121 (100.0) (.8) 105 (86.8) 15 (12.4) Loans to brokers........................... 120 (100.0) (.8) (1.7) 109 (90.8) (6.7) 1 After allowance for bank’s usual seasonal variation. 3 “Independent,” or “noncaptive,” finance companies are finance 2 For these factors, firmer means the factors were considered to be companies other than those organized by a parent company mainly more important in making decisions for approving credit requests, for the purpose of financing dealer inventory and carrying instalment and easier means they were considered to be less important. loans generated through the sale of the parent company’s products. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Changes in Bank Lending Practices, 1975 311 sating balance requirements and their standards making loans other than business loans. Some of creditworthiness for their loan applicants, banks indicated more willingness to extend with nonprice terms remaining highly stringent consumer or term loans to businesses than in on balance. The prime rate charged by most the previous survey, but these banks reported banks had edged up 50 basis points over the that demand for such loans was still weak in interval between surveys, but since other short­ their market areas. term interest rates had also increased, the rise Almost one-half of the respondents in the in the prime rate was undoubtedly viewed as August survey expected that the demand for maintenance of restrictive price policies by commercial and industrial loans would be mod­ banks relative to other sources of financing. erately stronger over the mid-August to mid- According to the August survey, bankers did November period, but the results of the No­ not appreciably change their posture toward vember survey suggested that business loan de- QUARTERLY SURVEY—NOVEMBER 1975 Changes in bank lending practices at selected large banks: Policy on November 15, 1975, compared with policy 3 months earlier Number of banks; figures in parentheses indicate percentage distribution of total banks reporting Item Total Much Moderately Essentially Moderately Much stronger stronger unchanged weaker weaker Strength of demand for commercial and in­ dustrial loans:1 Compared with 3 months earlier......... 123 (100.0) 7 (5.7) 60 (48.7) 52 (42.3) (3.3) Anticipated in next 3 months............. 123 (100.0) 34 (27.6) 78 (63.5) 9 (7.3) (1.6) Total Much firmer Moderately Essentially Moderately Much policy firmer policy unchanged easier policy easier policy Loans to nonfinancial businesses: Terms and conditions: Interest rates charged................... 123 (100.0) 8 (6.5) 68 (55.3) 47 (38.2) Compensating or supporting balances. 123 (100.0) 6 (4.9) 110 (89.4) 7 (5.7) Standards of creditworthiness.......... 123 (100.0) (.8) 14 (H.4) 108 (87.8) Maturity of term loans................. 123 (100.0) 6 (4.9) 110 (89.4) (5.7) Practice concerning review of credit lines or loan applications : Established customers................... 123 (100.0) 1 (.8) 108 (87.8) 14 (11.4) New customers........................... 123 (100.0) 9 (7.3) 97 (78.9) 17 (13.8) Local service area customers........... 123 (100.0) 2 (1.6) 107 (87.0) 14 (11.4) Nonlocal service area customers....... 123 (100.0) 8 (6.5) 104 (84.6) 11 (8.9) Factors relating to applicant:2 Value as depositor or source of collat­ eral business........................... 123 (100.0) (7.3) 109 (88.6) (4.1) Intended use of the loan................ 123 (100.0) (2.4) 114 (92.7) (4.9) Loans to independent finance companies:3 Terms and conditions: Interest rates charged................... 122 (100.0) 3 (2.5) 103 (84.4) 16 (13.1) Compensating or supporting balances. 122 (100.0) 5 (4.1) 116 (95.1) 1 (.8) Enforcement of balance requirements. 122 (100.0) 9 (7.4) 113 (92.6) Establishing new or larger credit lines. 123 (100.0) (4.1) 15 (12.2) 99 (80.4) (3.3) Total Considerably Moderately Essentially Moderately Considerably less willing less willing unchanged more willing more willing Willingness to make other types of loans: Term loans to businesses.................. 123 (100.0) (.8) (2.4) 98 (79.7) 21 (17.1) Consumer instalment loans................ 122 (100.0) (.8) 89 (73.0) 31 (25.4) 1 (.8) Single-family mortgage loans............. 121 (100.0) (3.3) (1.7) 104 (85.9) 10 (8.3) 1 (.8) Multifamily mortgage loans............... 120 (100.0) (3.3) (4.2) 109 (90.8) 2 (1.7) All other mortgage loans.................. 121 (100.0) (3.3) (5.8) 104 (85.9) 6 (5.0) Participation loans with correspondent banks...................................... 122 (100.0) (.8) (3.3) 105 (86.1) 12 (9.8) Loans to brokers........................... 122 (100.0) (1.6) 110 (90.2) 9 (7.4) 1 (-8) 1 After allowance for bank’s usual seasonal variation. 3 “Independent,” or “noncaptive,” finance companies are finance 2 For these factors, firmer means the factors were considered to be companies other than those organized by a parent company mainly more important in making decisions for approving credit requests, for the purpose of financing dealer inventory and carrying instalment and easier means they were considered to be less important. loans generated through the sale of the parent company’s products. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

312 Federal Reserve Bulletin □ April 1976 mand had again failed to materialize to the lending. However, nearly 40 per cent reported extent projected 3 months earlier. About half easier price terms. For the latter group the of the respondents indicated that loan demands easing appeared to reflect mainly a policy of had remained unchanged, while an almost equal adjusting rates in line with more rapidly declin­ proportion experienced somewhat weaker bor­ ing market rates of interest. Even so, by No­ rowing demands. However, in their estimates vember inflows of deposits to banks had accel­ of prospective strength of loan demand, the erated, respondents had made considerable majority of the reporting banks became more progress in improving their liquidity positions, cautious, as almost three-fourths expected credit and there were some signs that bank lending demands to remain unchanged over the subse­ policies toward business term loans had been quent 3 months. eased. In addition, there had been a further In the November survey, a sizable proportion easing in consumer loan policies; for the year of the respondents indicated no significant as a whole banks appeared to have become change in either price or nonprice terms of increasingly more willing to make such loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

313 Changes in Time and Savings Deposits at Commercial Banks, July-October 1975 The rate of growth in time and savings de­ quarterly rate to a level of $383 billion, not posits of individuals, partnerships, and corpora­ seasonally adjusted. Results of the quarterly tions (IPC’s) at insured commercial banks survey conducted jointly by the Federal Reserve slowed moderately during the 3 months ending System and the Federal Deposit Insurance Cor­ October 31, 1975. After having risen 3.0 per poration indicate that the slowdown was con­ cent in the 3 months ending July 31, 1975, time centrated among savings and small-denomi­ and savings deposits rose at a 2.1 per cent nation (less than $100,000) time deposits. The prolonged decline in the volume of large-de­ nomination ($100,000 or more) time deposits Note.—John R. Williams of the Board’s Division of Research and Statistics prepared this article. ended—at least temporarily—in September. TABLE 1 Types of time and savings deposits of individuals, partnerships, and corporations held by insured commercial banks on survey dates, January 31-October 31, 1975 Number of issuing banks Amount (in millions of dollars) Percentage change in deposits 1975 1975 (quarterly rate) Type of deposit Apr. 30- July 31- Jan. 31 Apr. 30 July 31 Oct. 31 Jan. 31 Apr. 30 July 31 Oct. 31 July 31 Oct. 31 Total time and savings deposits. . 14,204 14,263 14,305 14,378 361,388 364,736 375,731 383,485 3.0 2.1 Savings......................................... 13,989 14,052 14,088 14,214 135,856 144,250 151,965 154,282 5.3 1.5 Time deposits in denomina­ tions of less than $100,000—Total............... 14,085 14,148 14,194 14,280 117,985 123,550 128,771 131,580 4.2 2.2 Accounts with original maturity of— Less than 1 year................ 13,464 13,570 13,587 13,719 34,628 36,329 37,443 37,262 3.1 -.5 1 up to 2y2 years............... 13,792 13,851 13,858 14,003 37,240 36,203 35,872 35,397 -.9 -1.3 12,285 12,573 12,592 12,659 17,365 18,568 19,500 20,318 5.0 4.2 11,336 11,844 12,047 12,188 27,016 30,027 32,658 34,553 8.8 5.8 6 years and over: Negotiable deposits . .. 2,749 3,860 4,371 4,623 1,026 1,157 1,464 1,664 26.5 13.7 Nonnegotiable deposits. 1,417 1,885 2,098 2,296 710 1,266 1,834 2,386 44.9 30.1 All maturities: Open ac­ counts—Passbook or statement form 2........... 3,769 3,902 3,866 3,921 28,581 30,714 31,125 31,820 1.3 2.2 Time deposits in denominations of $100,000 or more.......... 8,295 8,363 8,442 8,699 102,082 91,378 89,008 92,241 -2.6 3.6 Negotiable CD’s................... 3,993 3,969 3,976 3,960 71,718 64,298 62,830 64,895 -2.3 3.3 Nonnegotiable CD’s and 4,763 4,929 4,943 5,230 30,364 27,080 26,178 27,346 -3.3 4.5 Christmas savings and other special funds............................... 8,770 9,044 9,039 8,226 5,465 5,558 5,987 5,382 7.7 -10.1 1 Less than .05 per cent. the Federal Reserve System and the Federal Deposit Insurance 2 Includes time deposits, open account, issued in passbook, state­ Corporation. The information was reported by a probability sample ment, or other forms that are direct alternatives for regular savings of all insured commercial banks. accounts. Most of these are believed to be in accounts totaling less Some deposit categories include a small amount of deposits out­ than $100,000. The figures shown on this line are included above in standing in a relatively few banks that no longer issue these types of the appropriate maturity category. deposits and are not included in the number of issuing banks. Dollar Note.—Data were compiled jointly by the Board of Governors of amounts may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

314 Federal Reserve Bulletin □ April 1976 TABLE 2 Small-denomination time and savings deposits, IPC, held by insured commercial banks on July 31, 1975, and October 31, 1975, by type of deposit, by most common rate paid on new deposits in each category, and by size of bank Size of bank (total deposits in Size of bank (total deposits in millions of dollars) millions of dollars) Deposit group, All banks All banks and distribution of deposits by most Less than 100 100 and over Less than 100 100 and over common rate Oct. 31 July 31 Oct. 31 July 31 Oct. 31 July 31 Oct. 31 July 31 Oct. 31 July 31 Oct. 31 July 31 Number of banks, or percentage distribution Amount of deposits (in millions of dollars), or percentage distribution Savings deposits: Issuing banks................... 14,214 14,088 13,354 13,260 860 828 154,282 151,965 63,067 61,755 91,215 90,210 Distribution: Total............................. 100 100 100 100 100 100 100 100 100 100 100 100 4.00 or less............... 5.9 6.8 5.9 6.8 6.7 7.0 4.6 4.5 3.4 3.9 5.2 5.0 4.01-4.50................... 6.3 6.8 6.0 6.5 10.7 11 .7 10.2 11.1 7.8 8.4 12.0 12.9 4.51-5.00................... 87.8 86.4 88.1 86.7 82.6 81.3 85.2 84.4 88.8 87.7 82.8 82.1 Memo: paying ceiling rate2.......................... 87.8 86.4 88.1 86.7 82.2 80.9 85.0 84.1 88.8 87.1 82.4 81.7 Time deposits in denomina­ tions of less than $100,000: Maturing in— Less than 1 year: Issuing banks................... 13,719 13,587 12,858 12,757 861 830 37,262 37,443 17,310 17,612 19,952 19,831 Distribution: Total.............................. 100' 100 100 100 100 100 100 100 100 100 100 100 5.00 or less............... 6.0 6.5 5.9 6.6 6.5 5.3 8.5 7.2 5.1 5.5 11.5 8.8 5.01-5.50................... 94.0 93.5 94.1 93.4 93.5 94.7 91.5 92.8 94.9 94.5 88.5 91.2 Memo: paying ceiling rate2...................... 93.2 92.7 93.3 92.6 92.4 93.9 90.7 91.7 94.0 93.8 87.7 90.0 1 up to 2l/i years: Issuing banks................... 14,003 13,958 13,150 13,140 853 818 35,397 35,872 23,742 24,098 11,655 11,774 Distribution: Total............................. 100 100 100 100 100 100 100 100 100 100 100 100 5.50 or less............... 2.2 2.0 2.2 2.0 1 .9 1.5 2.1 2.4 1 .6 1 .7 3.1 3.9 5.51-6.00................. 97.8 98.0 97.8 98.0 98.1 98.5 97.9 97.6 98.4 98.3 96.9 96.1 Memo: paying ceiling rate2...................... 96.5 96.5 96.5 96.6 96.4 96.1 96.8 96.2 97.5 97.3 95.3 94.1 2Vi up to 4 years: Issuing banks................... 12,659 12,592 11,830 11,800 829 792 20,318 19,500 12,489 12,134 7,829 7,366 Distribution: Total.............................. 100 100 100 100 100 100 100 100 100 100 100 100 5 5. . 5 5 0 1 - o 6 r . 0 l 0 e . s .. s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0) 1.8 1 . . 1 3 0) 1.8 1. .1 3 0) 1 .7 0 1 ) .9 0) 1 .4 1 . . 1 7 0) .8 . .1 7 (12^ .2„ 0 3 ) .4 6.01-6.50................... 98.2 98.6 98.2 98.6 98.3 98.1 98.6 98.2 99.2 99.2 97.8 96.6 Memo: paying ceiling rate2...................... 97.7 98.1 97.7 98.1 97.7 97.2 97.8 97.4 98.2 98.3 97.0 96.1 4 up to 6 years: Issuing banks................... 12,188 12,047 11,360 11,255 828 792 34,553 32,657 17,093 16,228 17,460 16,429 Distribution: Total. ............................ 100 100 100 100 100 100 100 100 100 100 100 100 6.50 or less............... 1.8 1 .6 1 .8 1.4 2.0 3.1 1.1 1.7 .4 .7 1 .7 2.7 6.51-7.00................... 16.6 16.3 17.0 16.8 10.2 10.5 10.3 9.9 13.0 13.2 7.7 6.6 7.01-7.25................... 81.6 82.1 81.2 81.8 87.8 86.4 88.6 88.4 86.6 86.1 90.6 90.7 Memo: paying ceiling rate2...................... 82.7 81.7 82.5 81 .4 86.4 86.3 89.8 88.0 89.0 85.4 92.2 90.6 6 years and over— Negotiable deposits: Issuing banks................... 4,623 4,371 4,362 4,128 261 243 1,664 1,464 1,019 802 645 662 Distribution: Total............................. 100 100 100 100 100 100 100 100 100 100 100 100 6.00 or less............... .4 .4 .4 .3 1.2 1.2 1.1 10.6 1 .7 1.7 .2 21.6 6.01-7.00................... 1.0 1.8 .9 1.7 2.4 3.0 1.5 1.4 1 .2 2.4 1.9 .1 7.01-7.50................... 98.6 97.8 98.7 98.0 96.4 95.8 97.4 88.0 97.1 95.9 97.9 78.3 Memo: paying ceiling rate2...................... 93.9 95.1 94.0 95.4 92.3 89.7 89.7 84.8 95.0 94.4 81.3 73.1 6 years and over—Non­ negotiable deposits: Issuing banks................... 2,296 2,098 1,837 1,666 459 432 2,386 1,834 609 472 1,777 1,362 Distribution: Total.............................. 100 100 100 100 100 100 100 100 100 100 100 100 6.00 or less............... .5 1.3 .5 1 .5 .5 .4 C1) .1 C1) .2 C1) .1 6.01-7.00................... 1.9 1.2 2.0 1.0 1.3 1.7 4.8 1.7 2.2 .3 5.7 2.1 7.01-7.50................... 97.6 97.5 97.5 97.5 98.2 97.9 95.2 98.2 97.8 99.5 94.3 97.8 Memo: paying ceiling rate2...................... 94.0 94.9 93.7 94.7 95.5 95.7 93.3 96.0 93.7 93.8 93.1 96.8 For Notes, see p. 319. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Changes in Time and Savings Deposits 315 With slack demand for external financing by money market rates, rising during August and businesses continuing throughout most of the September before falling off again in late Oc­ period, total credit demands on commercial tober. The aggregate weighted-average interest banks remained weak. Consequently, banks had cost on savings and small-denomination time little incentive to raise their rates of interest on deposits rose slightly to 5.54 per cent, reflecting deposits in order to attract loanable funds. Rates rapid growth among the longer-maturity time on large-denomination time deposits generally deposits, which bear relatively high interest moved in accordance with changes in short-term rates. TABLE 3 Average of most common interest rates paid on various categories of time and savings deposits, IPC, at insured commercial banks on October 31, 1975 Time deposits in denominations of less than $100,000 Savings and Maturing in— Bank location and smallsize of bank denom- Savings (total deposits in ination 6 years and over— millions of dollars) time Total deposits Less than 1 up to 2 Vi up to 4 up to 1 year 2l/i years 4 years 6 years Negotiable Nonnego­ deposits tiable deposits All banks: All size groups................................. 5.54 4.90 6.28 5.46 5.99 6.49 7.21 7.44 7.47 Less than 10................................. 5.75 4.90 6.20 5.48 5.99 6.50 7.21 7.47 7.49 10-50............................................. 5.66 4.93 6.28 5.47 5.99 6.49 7.21 7.49 7.47 50-100.......................................... 5.55 4.93 6.31 5.47 5.99 6.49 7.22 7.31 7.50 100-500......................................... 5.47 4.88 6.29 5.46 5.99 6.50 7.21 7.45 7.50 500 and over................................ 5.42 4.89 6.29 5.42 5.98 6.48 7.21 7.42 7.46 Banks in— Selected large SMSA’s1: All size groups............................ 5.44 4.90 6.29 5.44 5.98 6.49 7.22 7.39 7.46 Less than 10............................ 5.56 4.89 6.22 5.47 5.99 6.49 7.20 7.49 7.47 10-50......................................... 5.50 4.93 6.32 5.48 5.99 6.49 7.21 7.47 7.50 50-100....................................... 5.49 4.93 6.30 5.47 5.98 6.50 7.23 7.14 7.49 100-500..................................... 5.44 4.90 6.27 5.47 5.98 6.50 7.22 7.50 7.50 500 and over............................ 5.47 4.90 6.29 5.41 5.97 6.48 7.22 7.41 7.45 All other SMSA’s: All size groups............................ 5.54 4.87 6.30 5.47 5.99 6.49 7.19 7.47 7.48 Less than 10............................ 5.67 4.89 6.32 5.48 6.00 6.50 7.19 7.50 7.50 10-50......................................... 5.66 4.91 6.35 5.49 5.99 6.50 7.22 7.50 7.45 50-100....................................... 5.56 4.92 6.27 5.45 5.98 6.48 7.19 7.50 7.50 100-500..................................... 5.47 4.85 6.30 5.47 5.99 6.49 7.20 7.43 7.49 500 and over............................ 5.44 4.81 6.22 5.50 6.00 6.50 7.11 7.50 7.50 Banks outside SMSA’s: All size groups................................. 5.72 4.93 6.25 5.47 5.99 6.49 7.22 7.48 7.48 Less than 10................................ 5.78 4.90 6.18 5.48 5.99 6.50 7.21 7.47 7.50 10-50............................................. 5.73 4.93 6.25 5.47 5.99 6.49 7.21 7.50 7.48 50-100........................................... 5.66 4.93 6.36 5.49 6.00 6.50 7.23 7.50 7.50 100-500......................................... 5.61 4.91 6.32 5.43 5.98 6.49 7.22 7.39 7.50 500 and over................................ 5.75 5.00 6.36 5.50 6.00 6.50 7.25 7.50 1 The selected large Standard Metropolitan Statistical Areas, as defined by the Office of Management and Budget and arranged by size of popula­ tion in the 1970 Census, are as follows: New York City Minneapolis-St. Paul San Jose Albany-Schenectady-Troy Richmond Los Angeles-Long Beach Seattle-Everett New Orleans Akron Jacksonville Chicago Milwaukee Tampa-St. Petersburg Hartford Flint Philadelphia Atlanta Portland Norfolk-Portsmouth Tulsa Detroit Cincinnati Phoenix Syracuse Orlando San Francisco-Oakland Paterson-Clifton-Passaic Columbus Gary-Hammond-E. Chicago Charlotte Washington, D.C. Dallas Rochester Oklahoma City Wichita Boston Buffalo San Antonio Honolulu West Palm Beach Pittsburgh San Diego Dayton Ft. Lauderdale-Hollywood Des Moines St. Louis Miami Louisville Jersey City Ft. Wayne Baltimore Kansas City Sacramento Salt Lake City Baton Rouge Cleveland Denver Memphis Omaha Rockford Houston San Bernardino-Riverside Ft. Worth Nashville-Davidson Jackson, Miss. Newark Indianapolis Birmingham Youngstown-Warren Note.—The average rates were calculated by weighting the most common rate reported on each type of deposit at each bank by the amount of that type of deposit outstanding. Christmas savings and other special funds, for which no rate information was collected, were excluded. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

316 Federal Reserve Bulletin □ April 1976 CONSUMER-TYPE paying ceiling rates. In contrast, such deposits TIME AND SAVINGS DEPOSITS maturing in 2 V 2 years or more expanded sub­ stantially—although at reduced rates compared During the August-October period, inflows of with those earlier in the year. Typically, the savings deposits slowed sharply from the ex­ most rapid rates of increase occurred among tremely rapid pace earlier in the year, increasing deposits with maturities of 6 years or more; such $2.3 billion or only 1.5 per cent. The spring time deposits pay rates up to 7.5 per cent, and and summer surge in such deposits had been more than 90 per cent of issuing banks were strengthened by massive payments of tax re­ paying maximum permissible rates. bates, tax refunds, and special social security payments. With the ending of these exceptional Treasury disbursements and with savers adjust­ LARGE-DENOMINATION ing their financial portfolios to the higher money TIME DEPOSITS market yields that had developed since late June, the growth of savings returned to a more After having fallen for seven consecutive months, normal rate. The yields on 3-month Treasury the level of large-denomination time deposits bills, though well below those prevailing in outstanding increased 3.6 per cent between the 1974, ranged from 1 to IV2 per cent above the end of July and the end of October. Although 5 per cent ceiling rate payable on savings ac­ not large compared with inflows in the early counts at commercial banks. Meanwhile, the 1970’s, this increase—combined with the avail­ proportion of banks paying the maximum rate ability of other funds—proved sufficient to sat­ on such deposits increased slightly to nearly 88 isfy the still sluggish loan demands faced by per cent. banks, despite the decline in the rate of growth Outstanding small-denomination time depos­ of consumer-type time and savings deposits. its in all maturity ranges also grew at slower Rates offered by most banks competing for rates during the August-October period than large-denomination deposits at the end of Oc­ during the three previous months. Taken to­ tober remained near the levels paid in July. gether, such time deposits rose 2.2 per cent, Survey results for both months indicate that the lowest 3-month increase since the survey banks paying rates of 6.5 per cent held the on October 31, 1974. Regulation Q ceiling largest dollar volume of negotiable and nonnerates—graduated according to maturity—con­ gotiable CD’s and large-denomination open ac­ tinued to encourage depositors to substitute count deposits. However, rates paid near the longer-maturity time deposits for short-maturity two survey dates do not reflect the higher rates deposits. Specifically, the outstanding volume paid to attract funds during the September-early of small-denomination time deposits maturing October interval when market rates were rising in less than 2Vi years declined absolutely despite and a substantial portion of the build-up in a modest increase in the proportion of banks outstanding CD’s occurred. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Changes in Time and Savings Deposits 317 APPENDIX TABLES 1. Savings deposits Most common interest rates paid by insured commercial banks on new deposits, October 31, 1975 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 4.00 Memo: 4.00 Memo: or 4.50 5.00 ceiling or 4.50 5.00 ceiling less rate3 less rate3 NUMBER OF BANKS MILLIONS OF DOLLARS All banks................................................................... 14,214 841 896 12,477 12,474 154,282 6,982 15,809 131,491 131,124 Size of bank (total deposits in millions of dollars): Less than 10......................................................... 4,586 483 99 4,004 4,004 5,304 426 115 4,763 4,763 10-50...................................................................... 7,557 259 605 6,693 6,693 39,729 1,238 3,161 35,330 35,330 50-100.................................................................... 1,211 41 100 1,070 1,070 18,034 498 1,622 15,914 15,914 100-500................................................................. 685 43 65 577 575 34,214 2,269 3,497 28,448 (2) 500 and over........................................................ 175 15 27 133 132 57,001 2,551 7,414 47,036 (2) 2. Time deposits, IPC, in denominations of less than $100,000—Maturing in less than 1 year Most common interest rates paid by insured commercial banks on new deposits, October 31, 1975 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 5.00 Memo: 5.00 Memo: or 5.50 ceiling or 5.50 ceiling less rate3 less rate3 NUMBER OF BANKS MILLIONS OF DOLLARS All banks...................................................................... 13,718 819 12,899 12,791 37,262 3,174 34,088 33,780 Size of bank (total deposits in millions of dollars): Less than 10........................................................... 4,345 325 4,020 4,009 1,628 77 1,551 1,550 10-50....................................................................... 7,314 338 6,976 6,898 11,041 528 10,513 10,422 50-100..................................................................... 1,199 101 1,098 1,089 4,642 277 4,365 4,307 100-500................................................................... 686 42 644 639 8,563 619 7,944 7,882 500 and over.......................................................... 174 13 161 156 11,388 1,673 9,715 9,619 3. Time deposits, IPC, in denominations of less than $100,000—Maturing in 1 up to 2y2 years Most common interest rates paid by insured commercial banks on new deposits, October 31, 1975 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 5.50 Memo: 5.50 Memo: or 6.00 ceiling or 6.00 ceiling less rate3 less rate3 NUMBER OF BANKS MILLIONS OF DOLLARS All banks..................................................................... 14,003 305 13,698 13,516 35,397 737 34,660 34,248 Size of bank (total deposits in millions of dollars): Less than 10........................................................... 4,498 98 4,400 4,369 5,219 83 5,136 5,087 10-50....................................................................... 7,447 117 7,330 7,207 15,343 219 15,124 14,984 50-100..................................................................... 1,205 74 1,131 1,117 3,180 79 3,101 3,075 100-500................................................................... 679 11 668 657 4,883 65 4,818 4,704 500 and over.......................................................... 174 5 169 166 6,772 291 6,481 6,398 For notes to Appendix Tables 1-8, see p. 319. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

318 Federal Reserve Bulletin □ April 1976 4. Time deposits, IPC, in denominations of less than $100,000— Maturing in 2^ years up to 4 years Most common interest rates paid by insured commercial banks on new deposits, October 31, 1975 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 6.00 Memo: 6.00 Memo: or 6.50 ceiling or 6.50 ceiling less rate3 less rate3 NUMBER OF BANKS MILLIONS OF DOLLARS All banks...................................................................... 12,659 228 12,431 12,367 20,318 276 20,042 19,864 Size of bank (total deposits in millions of dollars): Less than 10........................................................... 3,642 38 3,604 3,600 1,769 8 1,761 1,761 10-50........................................................................ 7,014 71 6,943 6,889 8,498 58 8,440 8,323 50-100..................................................................... 1,173 105 1,068 1,067 2,222 34 2,188 (2) 100-500.................................................................... 665 10 655 652 3,126 22 3,104 3,092 500 and over........................................................... 165 4 161 159 4,703 154 4,549 (2) 5. Time deposits, IPC, in denominations of less than $100,000— Maturing in 4 years up to 6 years Most common interest rates paid by insured commercial banks on new deposits, October 31, 1975 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 6.50 Memo: 6.50 Memo: or 7.00 7.25 ceiling or 7.00 7.25 ceiling less rate3 less rate3 NUMBER OF BANKS MILLIONS OF DOLLARS All banks................................................................... 12,188 215 2,022 9,951 9,902 34,553 358 3,570 30,625 30,456 Size of bank (total deposits in millions of dollars): Less than 10........................................................ 3,516 67 770 2,679 2,679 1,525 3 249 1,273 1,273 10-50..................................................................... 6,697 95 1,010 5,592 5,553 11,155 36 1,474 9,645 9,555 50-100................................................................... 1,147 37 157 953 949 4,413 27 502 3,884 3,882 100-500................................................................. 660 10 71 579 573 7,382 71 724 6,587 6,510 500 and over........................................................ 168 6 14 148 148 10,078 221 621 9,236 9,236 6. Time deposits, IPC, in denominations of less than $100,000— Maturing in 6 years or more: negotiable and nonnegotiable deposits Most common interest rates paid by insured commercial banks on new deposits, October 31, 1975 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 6.50 Memo: 6.50 Memo: or 7.00 7.50 ceiling or 7.00 7.25 ceiling less rate3 less rate3 NUMBER OF BANKS MILLIONS OF DOLLARS All banks................................................................... 6,919 40 79 6,800 6,499 4,050 40 119 3,891 3,717 Size of bank (total deposits in millions of dollars): Less than 10......................................................... 1,472 24 1,448 1,386 138 1 137 124 10-50..................................................................... 3,851 19 44 3,788 3,593 1,020 3 13 1,004 973 50-100................................................................... 875 11 3 861 841 470 26 (!) 444 441 100-500................................................................. 559 6 6 547 528 931 (2) (2) 917 890 500 and over........................................................ 162 4 2 156 151 1,491 (2) (2) 1,389 1,289 For notes to Appendix Tables 1-8, see p. 319. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Changes in Time and Savings Deposits 319 7. Negotiable CD’s, IPC, in denominations of $100,000 or more Most common interest rates paid by insured commercial banks on new deposits, October 31, 1975 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 6.00 More 6.00 More or 6.50 7.00 7.50 8.00 than or 6.50 7.00 7.50 8.00 than less 8.00 less 8.00 NUMBER OF BANKS MILLIONS OF DOLLARS All banks........................ 3,960 999 1,226 854 650 165 66 64,895 19,216 24,001 12,163 4,907 718 3,890 Size of bank (total de­ posits in millions of dollars): Less than 10............. 728 104 240 231 126 4 23 245 28 77 87 48 3 2 10-50.......................... 2,328 560 673 488 447 150 10 2,553 473 943 667 346 121 3 50-100........................ 440 140 141 72 56 6 25 2,004 522 440 284 514 29 215 100-500...................... 312 132 121 37 12 3 7 5,991 2,156 2,611 873 203 (2) (2) 500 and over............. 152 63 51 26 9 2 1 54,102 16,037 19,930 10,252 3,796 (2) (2) 8. Nonnegotiable CD’s and open account deposits, IPC, in denominations of $100,000 or more Most common interest rates paid by insured commercial banks on new deposits, October 31, 1975 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 5.50 More 5.50 More or 6.00 6.50 7.00 7.50 than or 6.00 6.50 7.00 7.50 than less 7.50 less 7.50 NUMBER OF BANKS MILLIONS OF DOLLARS All banks........................ 5,230 619 1,098 1,732 900 661 220 27,346 1,187 9,474 10,521 4,763 980 421 Size of bank (total de­ posits in millions of dollars):............. Less than 10............. 573 68 16 156 89 144 0) 171 19 17 45 60 30 0) 10-50.......................... 3,208 338 522 1,130 592 427 199 3,428 162 479 1,612 542 458 175 50-100........................ 794 106 243 264 132 44 5 2,585 217 787 928 570 79 4 100-500...................... 504 76 179 140 65 31 13 6,104 275 2,093 2,342 965 228 201 500 and over............. 151 31 38 42 22 15 3 15,058 514 6,098 5,594 2,626 185 41 NOTES TO APPENDIX TABLES 1-8: 1 Less than $500,000. Figures exclude banks that reported no interest rate paid and 2 Omitted to avoid individual bank disclosure. that held no deposits on the survey dates, and they also exclude 3 See p. A-8 for maximum interest rates payable on time and savings a few banks that had discontinued issuing these instruments but deposits at the time of each survey. Note that the ceiling rate is still had some deposits outstanding on the survey date. Dollar amounts included in the rate interval in the column to the left. may not add to totals because of rounding. In the headings of these tables under “Most common rate paid Note.—Data were compiled from information reported by a (per cent)” the rates shown are those being paid by nearly all reporting probability sample of member and insured nonmember commercial banks. However, for the relatively few banks that reported a rate in banks. The data were expanded to provide universe estimates. between those shown, the bank was included in the next higher rate. NOTES TO TABLE 2: 1 Less than .05 per cent. deposit inflows during the 30-day period. If the rate changed during 2 See p. A-8 for maximum interest rates payable on time and that period, the rate reported was the rate prevailing on the largest savings deposits at the time of each survey. Note that the ceiling rate dollar volume of inflows from the time of the last rate change to the is included in rate interval in the line above. survey date. While rate ranges of % or Vi of a percentage point are shown in Note.—The most common interest rate for each instrument refers this and other tables, the most common rate reported by most banks to the basic stated rate per annum (before compounding) in effect on was the top rate in the range; for example, 4.00, 4.50, etc. Some the survey date that was generating the largest dollar volume of de­ deposit categories exclude a small amount of deposits outstanding in posit inflows. If the posted rates were unchanged during the 30-day a relatively few banks that no longer issue these types of deposits and period just preceding the survey date, the rate reported as the most are not included in the number of issuing banks. common rate was the rate in effect on the largest dollar volume of Figures may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

320 Statements to Congress Statement by Philip C. Jackson, Jr., Member, permitted to sustain the regulation unless it were Board of Governors of the Federal Reserve to find that the regulation is supported by “sub­ System, before the Subcommittee on Consumer stantial evidence.” Affairs of the Committee on Banking, Housing, I can assure the committee that the Board and Urban Affairs, U.S. Senate, March 17, is quite sensitive to the need for rule-making 1976. procedures that afford all interested parties a full opportunity to express their views. Our rule- I am pleased to have this opportunity to present making actions can have a significant impact on the views of the Board of Governors of the both businesses and consumers, and we are Federal Reserve System on S. 3008, dealing acutely aware of the need to be well informed with rule-making procedures under the Equal when we act. However, we firmly believe that Credit Opportunity Act, and on a draft proposal the procedures we have been following are for a new form of private enforcement remedy eminently fair to all interested parties, and we for violations of the Truth in Lending Act. do not believe that the new procedures proposed S. 3008 would require the Board to follow in S. 3008 would improve the quality of our special rule-making procedures, beyond those rule-making. Furthermore, we fear that such already imposed upon it by the Administrative new procedures would significantly impede our Procedure Act, in adopting regulations under the ability to implement promptly the congressional Equal Credit Opportunity Act. Specifically, the purpose underlying consumer protection legis­ bill would prescribe three new procedures. First, lation. it would require the Board to hold oral hearings When the Congress adopted the Administra­ in connection with any rule-making proceeding tive Procedure Act in 1946, it imposed a general under the Act unless the rule-making involved requirement that before an administrative solely a “nonsubstantive amendment” to an agency could adopt substantive regulations it existing regulation. Second, the bill would re­ must give public notice and offer interested quire the Board to provide any person interested members of the public an opportunity to submit in a proposed regulation an opportunity to comments. However, the Congress did not see cross-examine any other interested person who fit in that Act to impose a requirement for oral has made an oral presentation, as well as any hearings in connection with the promulgation employee of the United States who has made of regulations, and the great preponderance of either a written or an oral presentation. Such administrative rule-making has been carried on cross-examination would be limited to solely on the basis of written submissions. “disputed issues of material fact,” and the Nonetheless, it has been the practice of the Board would be given authority to impose limits Board of Governors in complex rule-making on cross-examination and to conduct the cross- proceedings, particularly such as those arising examination itself on behalf of any person who under recent consumer legislation, to afford may be entitled to cross-examine. Further, any interested members of the public an opportunity regulations adopted by the Board under the to present their views both in writing and orally Equal Credit Opportunity Act would be subject in public sessions, generally conducted by to direct review in a U.S. Court of Appeals members of the Board. For example, during the within 60 days after the regulation is promul­ years following the 1970 Amendments to the gated, and the reviewing court would not be Bank Holding Company Act, the Board has held Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 321 extensive public hearings in considering pro­ tion. It is too easy for “due process” to become posed regulations defining permissible non­ a means for delay, and those who have the banking activites for holding companies. During greatest interest in obstructing new regulations 1975 the Board held public hearings in connec­ and the greatest willingness and ability to bear tion with its rule-making under the Equal Credit the costs of litigation are likely to be the ones Opportunity Act and under the Fair Credit Bill­ who will benefit most from highly formalized ing Act, during which it received testimony procedures. It is principally for this reason that from 38 witnesses. On the basis of the com­ the Board opposes the provisions in S. 3008 ments received at the Equal Credit hearings, the that would give a right of cross-examination to Board revised its proposed regulation and any party to a proposed rule-making. Even republished it for additional written comments though the bill provides some safeguards against before adopting a final regulation. protracted cross-examination by private parties, In any future rule-making of similar magni­ the creation of a right of cross-examination in tude, such as will be called for under the Equal proceedings in which there may be literally Credit Opportunity Act Amendments passed by dozens of parties eligible to exercise that right the Congress last week, the Board would expect is in itself likely to lead to significantly more to follow the same practice. In fact, in connec­ lengthy rule-making. We are particularly con­ tion with such Equal Credit rule-making, it is cerned that the provision of S. 3008 that would the Board’s intention to hold a public hearing permit cross-examination of Government em­ prior to promulgating any proposed regulations ployees could be interpreted to require public simply to elicit suggestions as to how we might interrogations of Board staff members who have proceed in this area. When proposed regulations helped to develop proposed regulations. We do have been drafted, we will then schedule a not think this was the intent of the bill, and second hearing to provide an opportunity for we think it would significantly inhibit the free­ comment on those specific proposals. dom of communication within the Board if staff The Board believes, however, that it is not members were subject to public questioning on necessary to make oral presentations mandatory their recommendations to Board members. for all future rule-making under the Equal Credit Furthermore, we believe that cross-examina­ Opportunity Act, or even for all future “sub­ tion in proceedings of this sort is unnecessary stantive” amendments to rules adopted under for several reasons. First, the judgments that the that Act. The Board frequently has occasion to Board must make in rule-making proceedings make relatively minor substantive changes in its will very rarely turn upon narrow issues of fact, rules in order to strengthen their enforcement of a sort particularly susceptible to cross-exam­ or to correct deficiencies that have come to light, ination. Rather, the Board’s judgment will nor­ and the amendatory process could be unduly mally be formed on the basis of its understand­ encumbered and delayed if an oral presentation ing of congressional intent, on broad policy were required in every such case. While S. 3008 considerations, economic data, and more gen­ would relieve the Board from the mandatory eral information about industry and consumer oral hearing requirement in the case of any practices. While cross-examination can serve a “nonsubstantive” amendment, it is often ex­ very valuable function in adjudicatory proceed­ tremely difficult to draw the line between “sub­ ings, where the Board must decide the rights stantive” and “nonsubstantive” actions. The of specific parties based upon the narrow facts drawing of such distinctions is a lawyer’s de­ of a particular case, it is of much less impor­ light, and to make the hearing requirement turn tance in broadly applicable rule-making. Sec­ on such a distinction would, we fear, simply ond, in our oral hearings interested parties will encourage litigation over relatively minor always have an opportunity to rebut factual aspects of procedure. assertions made by others with whom they dis­ There is great danger, we believe, of “over- agree. It is our practice to keep the hearing judicializing” rule-making procedures, particu­ record open for a reasonable period following larly in the area of consumer protection legisla­ the close of the hearing for the submission of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

322 Federal Reserve Bulletin □ April 1976 additional data and views, so that any party who strated for special judicial review procedures takes issue with a factual assertion made during under the Equal Credit Opportunity Act. the hearing will have a chance to contest that Let me now turn to the draft proposal to assertion. amend the civil liability provisions of the Truth On the subject of judicial review of the in Lending Act. This interesting proposal would Board’s Equal Credit rules, we seriously ques­ create a new form of enforcement action that tion the desirability of imposing stricter stand­ could be instituted by private parties. The idea ards than are applicable in the case of other derives from the ancient concept of an action types of rule-making. Generally, rules promul­ qui tarn—that is, an action brought by an “in­ gated by an administrative agency are reviewa- former” under a statute that provides for the ble under the “rational basis” test—that is, they recovery in a civil action of a money penalty must be sustained by the reviewing court if they for violation of a particular law, with a portion are not arbitrary and there is any rational basis of the penalty going to the person who brings to support them. This standard of review recog­ the action and the remainder to the state or to nizes that there is necessarily a range in which some other institution. The Board believes this agency discretion may be exercised in adopting idea is worthy of further discussion and consid­ substantive rules to effectuate the intent of the eration by the Congress, but we have some Congress. Under a given set of circumstances concerns about the impact it could have on the an agency may reasonably elect any one of a volume of Truth in Lending litigation. number of approaches—in fact, it may reasona­ Under Section 130(a) of the Truth in Lending bly be able to choose either of two alternatives Act, as it was amended in Public Law 93-495, that are in direct conflict with one another. consumers can bring individual or class actions Under the “substantial evidence” test pro­ against creditors who violate the Act’s provi­ posed in S. 3008, however, much more com­ sions and recover actual damages plus court pelling support for the regulation would have costs and reasonable attorney’s fees. In addi­ to be shown in the record. A reviewing court tion, in an individual action, a plaintiff is en­ would be required to weigh all the evidence in titled to recover twice the applicable finance the record, and to set aside the Board’s judg­ charge but not less than $100 nor more than ment if it were not supported by the weight of $1,000. In a class action, members of the class the evidence—even though the Board’s action are entitled to recover such additional sums as may have a rational basis in the record. Under the court may allow without regard to any this standard the range in which Board discre­ minimum amount for each member of the tion could operate v/ould thus be significantly class. However, under a measure passed by the more limited than it is at present. Congress last week, the total statutory recovery Undoubtedly there are some groups affected may not exceed the lesser of $500,000 or 1 per by our regulations who would like to see the cent of the creditor’s net worth. Board’s discretion limited. But the Congress has Under the qui tam proposal a creditor who entrusted rule-making authority under the Equal violates a Truth in Lending requirement may Credit Opportunity Act to the Board, as it has be liable to an individual for the greater of $500 with respect to a number of other consumer or any actual damage sustained by the individ­ protection measures, presumably because it has ual, but in a class action the recovery would confidence in the Board’s ability to make rea­ be limited to actual damages sustained by soned judgments in this area. We at the Board members of the class. In addition, any obligor, value that confidence, and we trust that the or any “bona fide consumer protection organi­ results of our efforts in this area have demon­ zation,” would be permitted to institute an strated it was not misplaced. The Congress has action in a Federal court alleging that a creditor not given us reason to believe that more strict has engaged in a course of conduct in violation judicial review of our rule-making efforts is of Truth in Lending requirements. If the plaintiff warranted by our performance. Accordingly, we in such an action prevailed, the court could issue do not believe that any need has been demon­ a declaratory judgment or enjoin the course of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 323 conduct, and could impose a civil penalty upon be brought. In every such case the Board and the creditor of not less than $15,000 nor more the Department of Justice would be obliged to than $500,000, of which not less than $5,000 assess the case and to decide whether to inter­ nor more than $10,000 would be awarded to vene. Where the suit is successful the plaintiff the prevailing plaintiff with the balance going will enjoy a windfall—far in excess of the to the United States. Attorney’s fees and costs statutory penalties presently permitted—while would also be awarded. At the time the qui tarn other obligors who may have been equally suit was instituted, the plaintiff would be re­ wronged by the same creditor will receive noth­ quired to notify both the Board and the Attorney ing. Indeed, while it is not clear in the bill, General of the pendency of the case, and the it may well be that the rights of such other Government would have the option of interven­ obligors would be extinguished by the qui tarn ing as coplaintiff if it so elected. recovery. While this proposal merits further study, the There is no question that the subject of reme­ Board is not presently convinced that the qui dies for Truth in Lending violations is an ex­ tarn proposal would strengthen enforcement of tremely important one—particularly in view of Truth in Lending, nor do we see a need for the growing amount of litigation involving Truth this remedy in order to protect creditors from in Lending issues. In one Federal court in exposure to extraordinary liabilities. The present Georgia, for example, more than one-fourth of limitations upon class action recoveries in these the cases oh the docket are Truth in Lending cases, it seems to us, not only provide a signifi­ cases. The Board endorses the basic concept that cant deterrent to violations but also guard enforcement of Truth in Lending should be against potentially crippling liabilities. There is principally through the actions of private par­ some danger, moreover, that by holding out the ties, and while the qui tam proposal is an prospect of a reward to the successful plaintiff innovative one, we believe caution is advisable of up to $10,000, in addition to attorney’s fees in creating new rights of action, so that the ends and costs, this proposed remedy could encour­ of justice are not disserved by a clogging of age frivolous litigation that might not otherwise the judicial and regulatory processes. □ Statement by Arthur F. Burns, Chairman, of the Committee Print. If our experience is at Board of Governors of the Federal Reserve all indicative, I would urge this committee to System, before the Subcommittee on Financial proceed cautiously, as it has been doing, and Institutions Supervision, Regulation, and In­ to avoid the temptation of legislating change for surance of the Committee on Banking, Cur­ the sake of change. rency, and Housing, U.S. House of Repre­ I shall confine my testimony today to matters sentatives, March 18, 1976. that relate directly to the Federal Reserve Sys­ tem. Other parts of the proposed legislation are I am pleased to have the opportunity to present not escaping our attention, and I want to assure the views of the Board of Governors of the you that we at the Federal Reserve shall render Federal Reserve System on the proposed Finan­ all the help we can to this committee in dealing cial Reform Act of 1976. with them. The scope of the proposed Act is awesome, The most dramatic change proposed by this its provisions are complex, and its implications legislation is the creation of a Federal Banking far-reaching. The members of the Board and our Commission. This proposal would eradicate the staff have already devoted many days to the Office of the Comptroller of the Currency and study of the proposed legislation, but I am would divest from the Federal Reserve System bound to say at the outset that we as yet have the bank regulatory functions it has performed a very imperfect understanding of some parts for over 60 years. In the Board’s judgment, such Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

324 Federal Reserve Bulletin □ April 1976 radical surgery would weaken bank regulation system cannot easily be understood, if it has at a time when the banking system needs firm, overlapping authorities, and if it promotes experienced, and responsible regulatory guid­ “competition in laxity,” the new system pro­ ance. Beyond that, it would be a serious blow posed in the Committee Print is subject to the to the public interest if, in the name of “re­ same charges. form” of the regulatory structure, the Congress I would like now to expand on the Board’s were to cripple the one agency of Government position that the proposed Federal Banking that has rather consistently had the courage to Commission could, either deliberately or inad­ resist the inflationary forces that have wrought vertently, frustrate monetary policy and destroy so much havoc and anguish in our country. the effectiveness of the Federal Reserve in There is a need for some reform in Federal seeking to achieve the economic goals set by bank regulation, but it is not of the kind called the Congress. for in the proposal before the committee. In­ At present, our national policy is to encourage deed, there is some danger that the excited cry economic expansion even as we attempt to un­ for “reform” of the regulatory structure may wind the inflation, so more jobs may be created itself unjustifiably shake public confidence in the and the rolls of the unemployed may be reduced. banking system, weaken our Nation’s economic This objective requires a moderately active prospects, and cast doubt on the future of the lending policy on the part of banks, including dollar in both domestic and international mar­ a willingness to take reasonable risks. But the kets. banking community’s willingness to expand The Board’s position on regulatory reorgani­ credit could easily be inhibited by a Federal zation can be summarized briefly. Banking Commission that had no responsibility First, under the present regulatory structure, for over-all economic policy and that looked our banks have met satisfactorily the critical test only to its own special concerns—such as loanof adversity. Despite some isolated points of quality standards, adequacy of bank capital, and weakness, the banking system as a whole has the state of bank liquidity. emerged from the severest business recession This is not mere speculation. The rigid bank since the 1930’s in thoroughly good condition. examination standards used by Federal regula­ To scrap the present regulatory structure now, tors during the Great Depression of the in favor of a completely new and untried 1930’s—when the interdependence of monetary scheme, would run the risk of weakening both and supervisory policy was not well under­ bank regulation and the banking system. stood—unquestionably retarded the process of Second, the proposal to lop off the Board’s economic recovery. Indeed, the issue became bank regulatory role would—whether by intent so critical to the Federal Reserve and so divisive or inadvertence—drastically diminish the ability within the Government that it was only after of the Federal Reserve to perform its monetary a Presidential initiative that the regulators policy mission. Monetary policy and bank reg­ agreed with the Board that examination stand­ ulation are organically intertwined. Over the ards were too exacting. Finally, in 1938 an years, the Congress has consistently rejected accord was reached among the bank regulatory attempts to diminish the effectiveness of the agencies that set forth new examination stand­ Federal Reserve. If there is to be any move now ards to prevent further frustration of monetary to emasculate the Federal Reserve, the public policy. interest requires that this be argued explicitly It must be clearly understood that even an rather than in the name of “reform” of the bank aggressive monetary policy would have regulatory structure. difficulty in overcoming bank supervisory Third, not only have the proponents of “re­ standards of undue strictness. The Federal Re­ form” failed to make a factual case for restruc­ serve might indeed pump up bank reserves in turing the agencies, but the proposal before the an effort to encourage credit expansion. But in committee will not cure the defects with which the face of an overly strict regulator, banks may the present system is charged. If the present react by avoiding the risks of lending and devote Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 325 their resources largely to buying Government commitments, a wave of bankruptcies could be securities; in other words, banks might turn set off among businesses. In effect, therefore, themselves into warehouses of Treasury paper the Banking Commission will have made the while businesses around the country languish. Nation’s monetary policy. In such circumstances, the Federal Reserve’s But that is by no means the whole of this plan to expand credit would obviously be frus­ sorry tale. Apart from its open market opera­ trated. Businessmen, farmers, homebuyers—all tions, the Federal Reserve has the respon­ those who rely on banks for credit—would be sibility—and this is central to the stability of pinched despite massive reserves supplied by our financial system—of providing temporary the Federal Reserve. assistance through the discount window to banks The same result could occur if a Federal whose liquidity has been reduced as a result of Banking Commission applied restrictive stand­ an unexpected outflow of deposits or an unfore­ ards in an untimely fashion to bank capital or seen expansion in loan demand. bank liquidity. Credit expansion could be Our ability to carry out this function prudently thwarted if an overly cautious supervisor in­ depends on the backlog of knowledge that we sisted that banks improve their capital or liquid­ have built up about individual banks as well as ity positions before they used any increased the entire banking system. At present, we have liquidity provided by the Federal Reserve for direct knowledge concerning the quality of expanding loans. In the real world, there must management and the problems faced by member be a balance between economic and regulatory banks and bank holding companies. Under a concerns so that the one will not stifle the other. Federal Banking Commission our direct con­ In another area, as many of you know, it is tacts with the institutions that may need to possible for one bank to lend its excess reserves borrow from us would be lost. We would then to another bank through the Federal funds mar­ have to rely on reports from another Govern­ ket. At present, in order to implement its mon­ ment agency in assessing the need for borrowing etary policy, the Federal Reserve is always and the ability of the institution to repay. These involved in increasing or decreasing the avail­ reports might be furnished promptly upon re­ ability of funds in that market. A Federal Bank­ quest, or they may not be. They might be ing Commission, however, would have the prepared with care, or they may not be. Indeed, power to set limits on the use of the Federal it is conceivable that the information provided funds market and thus could frustrate any given to us could be slanted in order to induce the monetary stance. The same would apply to bank Federal Reserve to provide liquidity for a pur­ borrowings from the Euro-dollar market, which pose unrelated to the functions of the discount has at times been an important source of funds window. to the American banking system. Splitting off the Board’s bank regulatory I have thus far suggested how inappropriate functions could also have a profound effect on supervisory policies of a Federal Banking Com­ our ability to interpret the behavior of the mon­ mission could thwart economic stimulation. etary aggregates that we are charged with con­ Now, let us imagine a period during which the trolling. We live in a world of very rapid change economy has developed a strong momentum and in financial technology. New financial practices the Federal Reserve decides that monetary re­ have been spreading rapidly through our mar­ straint is needed. This could be accomplished kets for the past 20 to 30 years. Of late, more­ only if the Federal Banking Commission had over, the innovative process has been acceler­ in preceding years paid adequate attention to ating, and it appears that the amount of money commitments by banks to make future loans. needed during the past year or two to finance If it had not done so, the Federal Reserve’s a given dollar volume of economic activity has ability to take counterinflationary steps would been substantially smaller than would have been be severely limited. For, as a practical matter, the case in earlier years. unless the Federal Reserve made sufficient funds One very recent development that has had a available to enable the banks to fulfill their considerable impact on the behavior of demand Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

326 Federal Reserve Bulletin □ April 1976 deposits was the regulation, issued by the bank­ it is not clear that the stability of our financial ing agencies last November, which enabled system or international respect for the dollar partnerships and corporations to open savings would be enhanced thereby. accounts at commercial banks in amounts up Since the proposal for restructuring the Fed­ to $150,000. When this regulatory change was eral bank regulatory agencies would have such made, the Federal Reserve was acutely aware far-reaching effects upon the Board’s activities, of its possible impact on the monetary aggre­ there should be compelling reasons for advanc­ gates. A special survey was therefore immedi­ ing it. What good, one may ask, does this ately undertaken; it showed that within 2 months measure seek to accomplish? What advantage after the regulatory action, some $2 billion had does it hold out to compensate for the destruc­ been placed in savings accounts of this type. tive thrust that I have delineated? I submit that Had we not monitored bank activity in this area when the case in favor of the proposal is ana­ so promptly, misunderstandings could have re­ lyzed, it simply does not stand up. sulted, and we might have reacted erroneously One argument offered in support of the pro­ to the decline of demand deposit balances by posed restructuring is that the present system increasing bank reserves and thus rekindling is much too confusing. I have no doubt that inflationary pressures. if we were setting out today to create a system In short, there is no escape from the conclu­ of bank regulation where none existed before, sion that the proposed Federal Banking Com­ we would arrive at something other than the mission would frequently be in a position of present structure. Much of our present regula­ making, diluting, or frustrating monetary pol­ tory framework can be understood only by ref­ icy. The role of the Federal Reserve, its ability erence to historical developments in our to promote the Nation’s industry and commerce, country. True, the system is complex, but we its ability to protect the domestic and interna­ live in a complex world and the bank regulatory tional value of the dollar, might well be weak­ system is part of it. Simplification of govern­ ened to a point where continued discussion mental structure is certainly a desirable objec­ about the cherished independence of the Federal tive, but the simplification must be of a kind Reserve System would be entirely pointless. For that serves the public interest. the Federal Reserve would be left with only a Granted that the present system is in some vestige of its authority and power to carry out respects confusing, the proposal before the monetary policy. Prompt and bold action to committee would create a regulatory scheme prevent a crisis, such as the Federal Reserve that may be no less confusing. According to took in June 1970 when the Penn Central went the Committee Print, national banks would be into bankruptcy, would then no longer be pos­ regulated by the Federal Banking Commission sible. while State banks would be regulated by the Even if conflicts with the Federal Banking Federal Deposit Insurance Corporation. But if Commission were avoided, I doubt that we a State bank happened to be a subsidiary of a could discharge our obligations in a manner that bank holding company, it would be removed would be satisfactory to the Congress and the from FDIC jurisdiction and become subject to American people. Knowing less and less about the Federal Banking Commission. To be more banks, we at the Board would end up living precise, if 24 per cent of the bank’s stock were in an ivory tower. As our understanding of the owned by a corporation, the bank would be real relationship between the world of finance regulated by the FDIC; but if 26 per cent were and the world of business withered away, we owned by the same corporation, the bank would would probably concern ourselves increasingly be regulated by the Federal Banking Commis­ with esoteric, theoretical issues. Life at the sion. Thus, regulatory jurisdiction could change Federal Reserve might become more pleasant at the whim of a minority shareholder. If our for some of us, as we debate the merits of Mx citizens have difficulty understanding the present over M5 or M7, or whether a new variant of structure of regulation, they will not be signifi­ M7 should not be immediately constructed; but cantly enlightened by this new proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 327 It is also argued that the agencies perform for the banks to play the agencies off against overlapping functions. This, too, is true to a one another. Banks will still have the opportu­ degree. There are undoubtedly some common nity to choose between State and national functions that could be handled more efficiently. charters, and by that choice may elect one of But the new proposal does not eliminate over­ two Federal regulators. And even if a State laps. Indeed, it purposely continues two Federal charter is elected, the bank will still be able agencies having many identical functions. to choose between two Federal regulators by In some respects, the Committee Print creates deciding whether or not to do business as a more overlapping than exists in present law. For holding company subsidiary. Thus, even under example, Title I empowers the Federal Banking this “reformed” structure, many of the old Commission to enforce against any insured bank tensions will remain. the prohibitions of Sections 22 and 23 A of the The committee should also consider carefully Federal Reserve Act, dealing with loans to what may be lost with this restructuring. The affiliates and executive officers. Yet under Title Federal Banking Commission will be a brand III, identical authority is vested in the Federal new agency. It will have no tradition, no his­ Deposit Insurance Corporation again with tory, no body of precedent to bring to bear upon respect to any insured bank. In addition, the its judgments. How it will develop, whether or bill assigns to both the Commission and the not it will deal at arm’s length with the banks Corporation the power to issue cease-and-desist being regulated, cannot be predicted. The Fed­ orders against banks under their respective ju­ eral Reserve, on the other hand, is a known risdictions to remedy any violation of law— quantity as a bank regulator. It has a record of including presumably, Sections 22 and 23A of accomplishment, a distinguished tradition, and the Federal Reserve Act. The bill thus creates a reputation for integrity and thoughtful decision­ confusion and overlap in an area where none making. The fact that the Congress has repeat­ existed before. edly seen fit to assign the Board of Governors Another argument advanced in favor of regu­ the task of developing industrywide regulations latory reform is that the present system inspires in the increasingly important consumer protec­ “competition in laxity. ” This criticism has been tion area must mean that the Congress, if not made for many years. Indeed, I have made the also the country at large, has confidence in the same point in public statements. There is, of Board’s objectivity and judgment. course, a danger that our present tripartite sys­ Some have argued also that the condition of tem may encourage banks to play one agency the banking system, particularly the fact that the off against another. But the proper remedy for number of banks on the so-called problem bank this consists, first, in a determination by the list has increased, constitutes proof that the agencies not to allow themselves to be so used, present system has failed. The implicit assump­ and, second, in proper oversight by the banking tion underlying such an argument is that bank committees of the Congress. supervisors can practically assure that problems Absolute consistency in bank regulation is not will not arise. But this assumption is utterly necessarily a virtue. On the contrary, some unrealistic. No matter how strict the system of diversity of viewpoint among the banking agen­ supervision, managerial mis judgments or out­ cies can be healthy for the banking system. For right fraud will occur at times. Supervisors example, I think that a good case can be made cannot guarantee that bad loans will never be for the proposition that banking has benefited made, or that banks will never fail. Nor can from some of the provocative and innovative they foresee with any precision what effects a policies that were first advanced during the business recession may have on many individual tenure of Comptroller Saxon in the early I960’s. borrowers. They can, however, identify weak­ In any event, the Committee Print does little nesses that turn up, and they certainly can take to eliminate “competition in laxity.” It reduces steps to correct them and minimize the chances the number of Federal banking agencies from of their repetition. The problem bank list is thus three to two, but it still offers ample opportunity simply a tool to direct supervisory attention Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

328 Federal Reserve Bulletin □ April 1976 where it is most needed. The very existence of sensational stories in the press. The fact is that a problem bank list—indeed, a list that keeps bank stock prices have risen significantly since changing—indicates that the bank regulators are late 1975. Apparently, the abler market analysts attending to their job. have read the dramatized reports about banking The recent furor over the condition of banks difficulties as stale news that, taken as a whole, and the so-called problem bank list has been had little relevance to the current situation. based on massive exaggeration and misun­ In sum, our commercial banking system derstanding. It is true, of course, that some of today is basically sound and is well prepared our banks—particularly the larger banks—par­ to provide the credit needed to support the ticipated in the euphoria of the early 1970’s. economic expansion that is again under way in But they have learned their lesson, and they are our country. again emphasizing careful appraisal of risk and Let me now turn to some alternative courses the maintenance of adequate return on assets. of action that this committee might wish to Today’s bankers are a chastened and prudent consider. While the Board sees no clear need lot; they reject the goal of growth for growth’s for a major restructuring of bank supervision, sake. it does recognize that improvements in bank One aspect of this change of attitude is the regulation can and should be made. To this end, increased liquidity of commercial banks. Hold­ the Board has recommended several remedial ings of liquid assets at large banks rose 33 per measures to the Congress over the past year, cent during 1975. At the same time, these banks which we are glad to see incorporated in the sharply reduced their reliance on volatile Committee Print. These measures would bring sources of funds. U.S. offices of foreign banks under Federal With greater attention to the precepts of sound supervision, permit more expeditious handling financial management, commercial banks im­ of problem bank cases, strengthen penalties for proved their profits last year despite the negative violation of cease-and-desist orders, place limits impact of increased loan loss provisions and a on insider loans, permit easier removal of bank reduction in the size of their loan portfolios. officers for unsound practices, and enable the The 50 largest bank holding companies, for Board to require a bank holding company to example, reported a IV2 per cent increase in net divest an unsound subsidiary. income during 1975 ; if loan loss provisions had In addition, over the past 18 months, the been the same as in 1974, the increase would Board has conducted an intensive review of its have amounted to 42 per cent. regulatory and supervisory function and has A large share of these improved earnings was introduced a number of measures to improve used to build up the capital position of banks. bank examination, supervision, and regulation. The total capital of all insured commercial banks These include efforts to identify problems in rose to $75 billion in June of 1975 from less their early stages through a stronger compu­ than $72 billion at the end of 1974. Further­ terized surveillance system. The other bank more, the ratio of capital to assets, which had regulatory agencies have likewise been engaged declined steadily during the early 1970’s, rose in improving their regulatory capability. appreciably during the first half of 1975; and Several weeks ago, I proposed a program for we can be quite sure that once data for the congressional oversight of the bank examination second half of the year become available, they function because the Board believes that the will reveal additional improvement. Congress should take a more active role in the Further strengthening of the capital position regulatory process. The essence of this proposal of some of our banks would undoubtedly be is to provide the banking committees with sta­ prudent and wise. Fortunately, the stock and tistical information and analyses that would re­ bond markets are more receptive to new bank late to the conduct of the examination process issues today than they were last year, and this and the condition of the banks. has occurred despite the adverse publicity re­ I have in mind that such data would include, garding so-called “problem” banks and other for example, information as to trends of capital, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 329 liquidity, earnings, classified loans, and portfo­ manner what the draft legislation seeks to ac­ lio losses. These data could be set forth in complish through the Federal Banking Com­ appropriate categories relating to such factors mission. as the size and regional location of the banks. There is logic in this proposal since all na­ In addition, information could be provided on tional banks are required by law to be members the examination process itself—that is, on the of the Federal Reserve System and are thus number and duration of examinations, the size already subject to many of our regulations. At of the examination force, the costs incurred, and present, however, their primary examination the nature and promptness of remedial efforts. and supervision rests with the Comptroller. The Board believes that data and analyses of Also, the Board has supervisory responsibility this sort would provide a meaningful factual for all bank holding companies, yet many of basis for the banking committees to evaluate the the major subsidiaries of these holding compa­ effectiveness of bank supervision. Moreover, nies are national banks. In addition, the Board we would further propose that such data and must approve the opening of foreign branches analyses be furnished to the Congress regularly, of national banks, but the supervision of these perhaps once or twice a year, so as to enable branches rests with the Comptroller. Similarly, the banking committees to carry out their over­ the Board authorizes Edge Act corporations, but sight responsibilities in this area on a continuing many of the banks that control them are super­ basis. vised by the Comptroller. The Board has also considered at great length The examination and supervision of national over the past year the additional steps that might and State member banks could be integrated be useful in helping to achieve the goal of more efficiently through this proposal. At the same efficient and uniform bank examination and sur­ time, the continued existence of the FDIC— veillance. No one proposal for reform has de­ together with the additional congressional over­ veloped the support of a strong majority within sight that I have outlined—would enable another the Board, but we believe that two proposals Federal banking agency to check or stimulate have significant promise. the supervisory and regulatory actions of the The first of these calls for the creation of a Federal Reserve. Federal Bank Examination Council to focus on The Board firmly believes that alternatives the most critical need—namely, modernized such as these should be explored thoroughly bank examinations and vigorous follow-up pro­ before the creation of an entirely new agency cedures to cure weaknesses that are uncovered. is given serious consideration. The Examination Council would have authority Let me now touch on some of the provisions to set standards and procedures that would apply of Title V of the Financial Reform Act of 1976 to all the Federal banking agencies. It would that have a special interest to the Board. The also review significant problem cases, when and attached Appendixes spell out the Board’s views as they develop. All three agencies would be in some detail. represented on the Council. The Board believes that the Congress should It is entirely possible that experience with continue to hold oversight hearings on monetary such a Council will in time support a conclusion policy as provided by House Concurrent Reso­ that some further consolidation of banking lution 133, but we see no need to make this supervision and regulation would be desirable. a permanent part of the law. Each Congress If that turns out to be the case, the decision should have an opportunity to decide for itself would be based on actual experience and a just how it wants to participate in this essential greater practical awareness of the difficulties to interchange. be overcome and the advantages to be reaped. Because circumstances change and the thrust The second proposal is to consolidate the of policy necessarily changes with them, the functions of the office of the Comptroller of the Board believes it would be especially unwise Currency within the Federal Reserve. This to legislate in detail how monetary policy ob­ change would accomplish in a constructive jectives should be set forth and therefore, by Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

330 Federal Reserve Bulletin □ April 1976 implication, the terms under which policy legislate fundamental changes in the structure should be conducted. One provision of the of bank regulation at this time. The fact that Committee Print would require the Federal Re­ only a handful of banks failed during the recent serve to specify the interest rate levels that are recession is a triumph for bank regulation in intended or expected over the succeeding 12 this country. During the Great Depression, lit­ months. But no one has yet developed the erally thousands of banks failed. But the Con­ expertise to predict the course of interest rates. gress in its wisdom adopted several laws in the If the central bank is forced to announce interest 1930’s that reshaped bank regulation and gave rate intentions or expectations, the result could us the strongest banking system in the world. only be misleading. Interest rate movements The Congress can be proud that the measures depend basically on many factors outside the it adopted in the 1930’s—including a strength­ control of the Federal Reserve, including the ening of the Federal Reserve and creation of expectations of borrowers and lenders about the the Federal Deposit Insurance Corporation— future rate of inflation. have worked so well and withstood the test of The Board also believes it would be a serious time. mistake to require the Federal Reserve to de­ The remedial legislation we have proposed scribe monetary policy in terms of its expected to the Congress will provide the regulatory effects on statistical measures of employment, agencies with authority they need for more production, and the price level. There is a effective supervision. If some structural changes looseness in the relationship between monetary are also believed to be necessary, the adoption policy and economic developments that makes of either of the two proposals that I have projections of this type exceedingly imprecise. sketched—moving the Comptroller’s office to Our experience has been that economic projec­ the Federal Reserve or establishing a Federal tions require continuous updating. Publication Bank Examination Council—deserves thought­ of one projection, and then another 2 weeks or ful consideration. a month later, would be highly confusing to the Because of the strong feelings among mem­ public and might well feed back adversely on bers of the Board concerning Title I of this business and consumer attitudes. legislation, I have devoted most of my testi­ On another provision, the Board opposes the mony to that section of the Committee Print. proposal that would require Presidential ap­ I should point out, however, that there are major pointment and Senate confirmation of Federal principles embodied in this legislation— Reserve Bank presidents. Since the term of particularly those relating to uniform reserve office for a Reserve Bank president is only 5 requirements, regulation of foreign banks, years, these positions could be turned into po­ and additional supervisory authority over do­ litical plums to be dished out by the party that mestic banks—that the Board warmly supports. happens to be in power at any given time. The We will be glad to work with the committee Federal Open Market Committee could then on perfecting amendments to these important become a focal point for partisan political ac­ sections. tivity since the Reserve Bank presidents also I again urge the committee to avoid precipi­ serve on that body. The position of Reserve tous action on the complex and comprehensive Bank president is a career post in the Federal piece of legislation that is before you. This Reserve System, and we have been extremely committee should not let itself be stampeded by fortunate in being able to attract people of dramatic headlines to adopt legislation that will outstanding ability to serve in these jobs. These effect major changes in Government. To do positions should not be brought into the political otherwise would be out of line with the careful arena. procedures that have been so wisely observed In conclusion, we see no compelling need to by this committee over the years. The Appendixes to this statement follow. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 331 APPENDIX 1 Supplemental Statement of the Board of Governors on Section 503 of Title V of the Committee Print The Board believes that Section 503 of the pro­ be—it would be misleading to the public and the posed bill, which legislates oversight hearings on effectiveness of monetary policy would be im­ monetary policy and specifies the topics to be paired, with harmful consequences for the econ­ covered in such hearings, is unnecessary and does omy and the Nation. not serve a constructive purpose. During the past The announcement of interest rate intentions or year, the Federal Reserve Board has regularly expectations by the Federal Reserve would lead accounted to the Congress for its conduct of mon­ many borrowers and lenders to believe that the etary policy through the quarterly hearings result­ System could—and in practice would—guarantee ing from House Concurrent Resolution 133. These particular interest rate levels. But the Federal Re­ procedures have worked reasonably well. It is the serve does not have the power to do this because Board’s expectation that oversight hearings would interest rates depend basically on many factors be continued, whether or not a new Resolution outside the control of the central bank. Funda­ is passed by the next Congress. The Board there­ mentally, interest rate movements reflect the in­ fore believes that the provision of Section 503 teraction of changing demands for credit with the concerning quarterly hearings is not needed and available supply of funds from a wide variety of also, for reasons to be given below, is unwise in institutional and other lenders. Interest rates are its particulars. influenced not only by the strength of the economy It would be especially unwise to legislate in and by the public’s willingness to defer current detail how monetary policy should be described consumption and save for the future, but also—and and therefore, by implication, the terms under this has been especially important in recent which it should be conducted. Circumstances years—by the expectations of borrowers and change, and the thrust of policy necessarily lenders about the rate of inflation. changes with them. In that respect, the provisions If the Federal Reserve nevertheless attempted of the Concurrent Resolution are reasonably flexi­ to keep particular interest rates at some specified ble—and therefore more realistic than those of level, this might well lead to inappropriate rates Section 503. First of all, the Resolution refers to of growth in bank reserves and money. If, for the specification of policy aims in terms of credit example, interest rates came under upward pres­ flows as well as monetary aggregates. Second, it sure because of rising demands for funds, System notes that account may need to be taken of inter­ efforts to prevent, or limit, interest rate increases national flows of funds and conditions in interna­ could result in unduly rapid monetary expansion, tional money and credit markets. Third, and most thereby feeding inflationary pressures. If, on the important, the Resolution explicitly recognizes the other hand, interest rates came under downward great merit of flexibility by indicating that the pressure because of slackening business activity ranges of growth or diminution in the monetary and declining demands for funds, System efforts and credit aggregates specified in advance in the to prevent or slow down the declines could result oversight Hearings are not required to be achieved in monetary growth rates below those needed to “if the Board of Governors and Open Market reinvigorate the economy. Committee determine that they cannot or should Thus, the announced interest rate intentions or not be achieved because of changing conditions.” expectations may well prove to be inconsistent Section 503 carries the process of advance with stated objectives in terms of monetary growth specification of unknown factors a giant step fur­ rate ranges. Efforts to maintain interest rate levels ther by requiring the Federal Reserve to announce would have harmful effects on the economy and “ranges within which the levels or rates of would in the end fail. change” not only of monetary aggregates but also The Board also strongly believes that it would of interest rates are intended or expected to vary be a mistake for the Congress to require the over the next 12 months. However, if the central Federal Reserve to describe monetary policy “in bank is forced to announce interest rate intentions terms of its expected effects on statistical measures or expectations—imprecise as these guesses must of employment, production, and purchasing power Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

332 Federal Reserve Bulletin □ April 1976 (price stability), as contrasted with the effects be highly confusing to the public and might well which could be expected from alternative poli­ feed back on business and consumer attitudes. cies.” Economic activity, prices, and employment Because the Federal Reserve is aware that the depend on many powerful influences apart from linkages between monetary policy actions and the instruments under the control of the Federal Re­ economy are extremely loose, the Federal Open serve. Fiscal policy is one. Labor market policy Market Committee has never officially attempted is another. The state of public confidence—the to reach agreement on specific projections of eco­ willingness to spend freely from income and ac­ nomic magnitudes. Our staff does present projec­ cumulated savings—is still another. Thus, there tions that aid in Committee deliberations. But staff is a looseness in the relationship between monetary projections do not necessarily represent the expec­ policy and economic developments that makes tations held by the policy-makers of the likely projections of the effects that different policy pos­ course of economic activity. Different individuals tures might produce exceedingly imprecise. The may well have different evaluations of the eco­ sorry track record of most projections during the nomic outlook, and all have learned from experi­ past year or two makes that clear. ence the necessity of remaining flexible in their Thrusting economic projections by the Federal views in order to take account of the stream of Reserve into the public arena would surely lead incoming evidence. Therefore, we believe that a many to exaggerate the influence that monetary requirement calling for the adoption and publica­ policy has on the economy and would not enhance tion of specific economic projections by the Fed­ understanding of monetary policy or of the objec­ eral Reserve would seriously mislead the public tives of policy-makers. Moreover, our experience about the likelihood of a particular economic out­ has been that economic projections require contin­ come, would adversely affect policy discussions uous re-evaluation and updating if they are to serve within the Federal Open Market Committee by a useful purpose in policy-making. But publication introducing concerns of a public relations nature, of first one projection and then another 2 or 4 and would inevitably politicize the policy-making weeks later, soon followed by yet a third, would process. APPENDIX 2 Supplemental Statement of the Board of Governors on Sections 504 and 505 of Title V of the Committee Print I have indicated the Board’s strong reservations economic intelligence system, through a detailed about the wisdom of the part of Title V dealing knowledge of the state of business and consumer with the appointment of presidents of Federal psychology and through a “feel” for prospective Reserve Banks. In addition, however, there are developments in their particular sphere of activity. certain other provisions in Title V that are trou­ This “grass roots” input from directors serves as blesome. These provisions have to do, first, with an important complement to the work of our eco­ the composition, terms, methods of selection, and nomic research staffs. Secondly, many of our responsibilities of boards of directors of Federal directors bring to us important management skills Reserve Banks; and secondly, with membership and “know-how” in their oversight respon­ and holding of capital stock in Reserve Banks. sibilities for efficient operation of Federal Reserve Before any changes are enacted in the above Banks. It is important, therefore, to secure knowl­ areas, they should be subjected to a fundamental edgeable, effective, and highly motivated persons test—namely, will such changes improve the ef­ to serve in such capacities. With those thoughts fectiveness and efficiency of the Federal Reserve in mind, I submit the following comments. System? If not, no public advantage will be 1. Repeal of Section 4(6) of the Federal derived from their enactment. Reserve Act, which now provides that Let me state briefly some of the benefits the “every Federal Reserve Bank shall be con­ System receives from Reserve Bank directors. ducted under the supervision and control of First, they make an important contribution to our a board of directors” is undesirable. This Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 333 responsibility of Reserve Bank directors is 4. Elimination of “membership” as such discharged subject to the statutory provision in the Federal Reserve System and making for general supervision by the Board of the holdings of Federal Reserve Bank stock Governors, which is a sound and sensible optional could in time lead to the disap­ arrangement. pearance of Reserve Banks as a constructive 2. Removal from boards of directors of influence at the regional level. In our judg­ the authority to appoint Reserve Bank pres­ ment, all financial institutions that hold their idents, subject to approval of the Board of reserves with the Reserve Banks and are thus Governors, would undermine the role of the entitled to use their services should be re­ directors in overseeing the efficient and ef­ quired to hold at least a nominal amount of fective performance of the Reserve Banks. stock in Reserve Banks. 3. Limiting directors to a single 3-year 5. Removal of the right of member insti­ term (as opposed to the present practice of tutions in the Federal Reserve System to two 3-year terms) would create more turn­ elect any directors of Reserve Banks is un­ over, less continuity, and perhaps lead to desirable. In order to maintain a strong in­ greater difficulty in recruiting qualified terest by member institutions in the effective directors. Also, one 3-year term would limit and efficient performance of central bank their effectiveness because of the time nec­ services by the Reserve Banks, the member essary for a new director to understand the institutions should continue to elect some of range of activities and responsibilities. the directors of Reserve Banks. □ Statement by Arthur F. Burns, Chairman, 1975, the physical volume of our Nation’s total Board of Governors of the Federal Reserve production rose at an annual rate of 8 per cent, System, before the Committee on the Budget, and another substantial gain is being recorded U.S. Senate, March 22, 1976. in the current quarter. In the industrial sector of our economy, the I am glad to represent the Board of Governors advance of production was initially most prom­ of the Federal Reserve at these hearings on the inent in the textile, leather, paper, and chemical budget for fiscal year 1977. For many years, industries. The scope of recovery broadened I have urged a reform of Federal budgetary during the fall and winter months and now procedures. The Congressional Budget and Im­ includes a wide range of durable and nondurable poundment Control Act of 1974, which this goods. Since last April the combined output of committee is implementing, was a gigantic factories, mines, and power plants has increased stride in that direction. Your efforts to bring at an annual rate of 11 per cent. order to our budgetary affairs can play a vital As production rose, the rate of utilization of role in the restoration of confidence in our our industrial plant increased and the demand Nation’s future. for labor strengthened. Employment across the My comments today will be directed, first, Nation has risen by more than 2 million since to the condition of the national economy, and last spring, and the average factory workweek second, to the implications of prospective eco­ has lengthened by IVi hours. Meanwhile, the nomic and financial developments for public unemployment rate has come down from about policy. 9 per cent to IVi per cent. The number of A year ago, when this committee began to individuals out of work is still deplorably high; consider the fiscal 1976 budget, our economy but the new entrants or re-entrants into the labor was in the final stages of the most severe reces­ force account for a larger part of the unem­ sion of the postwar period. But an upturn in ployed total now than 6 or 9 months ago, while business activity soon got under way, and we job losers account for a much smaller part. have experienced since last spring a substantial As the recovery has proceeded, the state of economic recovery. During the second half of confidence has improved, and significant further Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

334 Federal Reserve Bulletin □ April 1976 increases in production and employment can be Department’s recent survey suggests that busi­ expected over the remainder of this year. Of nessmen plan only a moderate increase in the late, consumers have been buying more liber­ dollar value of their expenditures for plant and ally. Over the past 3 months, retail sales have equipment this year. On the other hand, new risen at an annual irate of 16 per cent. Sales capital appropriations of large manufacturing of new automobiles during February rose to the firms rose sharply during the final quarter of highest level since August 1974; the sales rate 1975, and production of business equipment has moved up still further in early March, and there risen over the past several months. With rates are even some signs of revived interest in more of capacity utilization increasing, corporate expensive cars. profits moving up strongly, business confidence In view of this marked strengthening of con­ gaining, and the stock and bond markets much sumer spending, businessmen have been reas­ improved, we can reasonably expect consid­ sessing the adequacy of their inventories. The erable strengthening this year in business plans ratio of inventories to sales is low at most retail for buying new equipment and building new outlets, and also at manufacturing establish­ facilities—as normally happens in the course of ments producing nondurable goods. Vendors in a business-cycle expansion. many lines are less able to meet demands from The precise magnitude of the recovery in existing stocks, and delivery times are length­ business investment outlays will depend to a ening. Businessmen therefore are increasing large degree on the vigor of consumer markets. orders and production in an effort to rebuild While the recent improvement in consumer inventories to levels consistent with the im­ buying has been encouraging to the business proved pace of consumer buying. Inventories community, the present, more optimistic mood of goods rose in January, and further needed of consumers could be destroyed by a new burst accumulation should act as a significant stimulus of inflation. Any resurgence in the pace of to recovery throughout most of this year. inflation this year would pose a threat to con­ Prospects for residential construction also sumer and business confidence, and thus to the have improved. Prices of new homes remain further recovery of economic activity that is so exceedingly high, and this has limited the re­ urgently needed. covery in homebuilding. Nevertheless, the in­ Our Nation made notable progress last year ventory of unsold units has declined, rental in reducing the rate of inflation. The rise in vacancy rates have feillen sharply, and mortgage consumer prices came down to 7 per cent, well credit is now readily available in practically all below the rate recorded in 1974. The rise in parts of the country. In February housing starts wholesale prices slowed even more. Much of rose to the highest level in 2 years, and home- this improvement, however, stemmed from the building activity is likely to move upward over absence of powerful special factors—such as the the course of 1976. quadrupling in prices of imported oil, short Exports, too, will probably register further supplies of agricultural commodities, and the improvement this year. Economic recovery is termination of wage and price controls—all of now under way in other industrial countries, and which drove up prices in 1974. as it gathers momentum the demand for our Furthermore, most of the improvement in exports should intensify. However, the foreign price performance during 1975 occurred in the trade balance is likely to narrow because our first half of the year. During the second half, own economic expansion has given rise to an consumer prices rose at a somewhat more rapid enlarged demand for imports—including prod­ pace than in the first 6 months, and wholesale ucts, such as petroleum and industrial supplies prices accelerated sharply during the summer that fell off sharply during the recession. and early fall. Since late autumn declining Business capital spending is likely to contrib­ prices of food and fuel have attenuated the rate ute significantly to economic expansion this of inflation. Prices of other goods and services, year. True, this sector of demand has yet to however, have continued to rise at a disconcert­ evidence a solid upturn. Also, the Commerce ing pace, and wages are still increasing much Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 335 faster than the long-term rate of growth of reach the $100 billion mark. This occurred in productivity. fiscal year 1962. Only 9 years later, in fiscal Thus, despite the calmer pace of over-all 1971, expenditures already exceeded $200 bil­ price indexes in recent months, the menace of lion. Four years from that date, in fiscal 1975, inflation is by no means behind us. As the the $300 billion mark was passed. And unless recovery proceeds, it is of critical importance expenditures are held under a very tight rein, that our Government manage economic policies Federal spending will easily exceed the $400 so that a new burst of inflation is avoided. billion level in fiscal 1977. Our country is now confronted with a serious One aspect of the sharply rising curve of dilemma. Over 7 million people are still unem­ expenditures is that Government has been as­ ployed, and many of them have been seeking suming an ever larger role in the economic life work for an extended period. More jobs are of our people. In 1929 Federal expenditures clearly needed—not only for workers who are amounted to less than 3 per cent of the dollar now unemployed but also for those who will value of our total national output, and expendi­ soon be entering the labor force. tures at all levels of government—Federal, In the current inflationary environment, how­ State, and local—amounted to about 10 per cent ever, expansionist policies of the traditional type of the national product. Last year, Federal ex­ cannot be counted on to restore full employ­ penditures alone were about 25 per cent of the ment. Recent experience in both our own and dollar value of our national output, and the other industrial countries suggests that once combined expenditures of all governmental inflation has become ingrained in the thinking units reached almost 40 per cent. of a nation’s businessmen and consumers, Much of this increase in the role of govern­ highly expansionist monetary and fiscal policies ment in our economy was made necessary by do not have their intended effect. In particular, the rapid growth of population in recent dec­ instead of fostering larger consumer spending, ades, the increasing complexity of modern they may intensify inflationary expectations and urban life, the explosion of military technology, lead to larger precautionary savings and sluggish and the enlarged responsibilities of the United consumer buying. The only sound course for States in world affairs. However, the trend of fiscal and monetary policy today is one of pru­ Federal spending has also been significantly dence and moderation. influenced by strong intellectual currents, both One of the urgent tasks facing our Nation is in our country and elsewhere, that keep to end the Federal deficits that have been a major nourishing the belief that practically all eco­ and persistent source of our inflation. Since nomic and social problems can be solved 1960 the Federal budget has been in deficit every through the expenditure of public funds. year but one. The cumulative deficit in the Where the line can best be drawn between unified budget over the past 10 years, including governmental and private use of resources is, the official estimate for the current fiscal year, in the final analysis, a matter of social or philo­ comes to $217 billion. If the spending of off- sophic values and of political judgment. But budget agencies and Government-sponsored en­ regardless of how this question is resolved, it terprises is taken into account, the aggregate should be clear to everyone that Federal spend­ deficit for the 10 years amounts to almost $300 ing, whatever its level, must be soundly fi­ billion. nanced. The large budgetary deficits that have This sorry record of deficit financing means, persisted since the mid-1960’s—and in good of course, that we as a people have been un­ years as well as bad years—added little to our willing to tax ourselves sufficiently to finance capacity to produce, but they added substan­ the recent sharp increases of governmental tially to aggregate monetary demand for goods spending. In this bicentennial anniversary of our and services. They were thus largely responsible Nation’s independence, we would do well to for the 10-year stretch of accelerating inflation reflect on the fact that it took all of 186 years that culminated in the deep recession from for the annual total of Federal expenditures to which we are now emerging. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

336 Federal Reserve Bulletin □ April 1976 The President’s budgetary program for the were accompanied, as we expected, by a sharp coming fiscal year, taken on an over-all basis, rise in the turnover of money balances. The would go far toward breaking the spiral of rising velocity of money has not, however, been Federal spending ancl bringing order to our fiscal associated with higher rates of interest or devel­ affairs. The proposed budget would limit the rise oping shortages of credit—as some critics of of spending in fiscal 1977 to 5Vi per cent, Federal Reserve policy had predicted. On the compared with an average yearly increase of 12 contrary, conditions in financial markets have per cent over the previous 5 years. The Federal eased materially and are more comfortable now deficit is projected to decline from $76 billion than at any time in the past 2 years. in the current fiscal year to $43 billion in the There is a striking contrast between the next, with a balanced budget finally in view by movement of interest rates during the current fiscal 1979. recovery and their behavior in past cyclical Some well-meaning citizens are now urging upswings. Short-term interest rates normally the Congress to provide added fiscal stimulus begin to move up at about the same time as in the interest of speeding the return to full a recovery in general business activity gets employment. I would warn this committee that under way, although the degree of rise varies still larger Federal expenditures and a bigger from one cycle to another. In the current eco­ deficit may fail of their purpose. A deeper deficit nomic upswing, a vigorous rebound of activity, would require the Treasury to rely more heavily a continuing high rate of inflation, and a record on credit markets, thus drawing on funds badly volume of Treasury borrowing might well have needed for homebuilding and for business capi­ been expected to exert strong upward pressures tal formation. Worse still, a significantly larger on short-term interest rates. In fact, after some deficit would revive fears of accelerating infla­ run-up in the summer months of last year, tion and weaken the confidence of businessmen short-term rates turned down again last fall, and and consumers that is essential to the return of since then they have declined to the lowest level general prosperity. since late 1972. Long-term rates have also Moderation in monetary policy is also needed moved down; yields on high-grade new issues to bolster confidence in the economic future. of corporations are at their lowest level since That is why the Federal Reserve has been so early 1974. diligently seeking to foster a financial climate Conditions in financial markets thus remain conducive to a satisfactory recovery but at the favorable for economic expansion. Interest rates same time to mininme the chances of rekindling are generally lower than at the trough of the inflationary fires. 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—while varying widely the mortgage market are continuing to increase. from month to month—have generally been Mortgage interest rates are therefore edging within the ranges specified by the Federal Re­ down. serve in its periodic reports to the banking Moreover, the stock market has been staging committees of the Congress. On a seasonally a dramatic recovery. The average price of a adjusted basis, the quarterly-average level of share on the New York Stock Exchange at Mx—that is, currency plus demand deposits held present is about 60 per cent above its 1974 low. by the public—rose over the last three quarters A large measure of financial wealth has thus of 1975 at an annual rate of 5.7 per cent. M2, been restored to the millions of individuals which also includes time and savings deposits across our land who have invested in common at commercial banks other than large certificates stocks. Besides this, the advance in stock prices of deposit, rose at a rate of 9 per cent. A still has made it considerably easier for many firms broader monetary composite, M3, which also to raise equity funds for new investment pro­ includes deposits at thrift institutions, rose at grams or for restoring their capital cushions. a rate of 12 per cent. In general, the liquidity position of our Na­ These increases in the monetary aggregates tion’s financial institutions and business enter­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 337 prises is now much improved. Since the begin­ significant economies in the handling of cash ning of 1975, corporations have issued a record balances were therefore being effected. volume of long-term bonds, and they have used The developments that have recently fostered the proceeds to repay short-term debts and to economizing on the sums held as currency or acquire liquid assets. Commercial banks have demand deposits include the spread of overdraft reduced their reliance on volatile funds and facilities at banks, increased use of credit cards, added a large quantity of Federal securities to the growth of negotiable order of withdrawal their asset portfolios. The liquidity position of (NOW) accounts in New Hampshire and Mas­ savings banks and savings and loan associations sachusetts, the emergence of money market has likewise been strengthened. mutual funds, the development of telephonic The market for State and local government transfers of funds from savings to checking securities was, of course, adversely affected by accounts, and the growing use of savings de­ the New York City financial crisis. Even in this posits to pay utility bills, mortgage payments, market, however, interest rates are now well and other obligations. One very recent develop­ below their 1975 highs, and the volume of ment that has had a considerable downward securities issued has remained relatively large. influence on the level of demand deposits was The difficulties of New York City, moreover, the regulation issued by the banking agencies have had a constructive influence on the finan­ last November, which enabled partnerships and cial practices of State and local govern­ corporations to open savings accounts at com­ ments—as well as on the other economic mercial banks in amounts up to $150,000. units—throughout the country. The emphasis on The relatively slow rate of growth in demand sound finance that is now under way enhances deposits since last summer has been watched the chances of achieving a lasting prosperity in carefully by the Federal Reserve. In view of our country. the rather rapid pace of economic expansion, These notable accomplishments in financial the relative ease of financial markets, and the markets indicate, I believe, that the course of absence of any evidence of a developing short­ moderation in monetary policy pursued by the age of money and credit, we have been inclined Federal Reserve over the past year has contrib­ to view the sluggish rate of expansion in uted to economic recovery. The Board was as reflecting the influence of various factors that pleased to learn that the Senate banking com­ are reducing the amount of narrowly defined mittee, in its recent “Report on the Conduct money needed to finance economic expansion. of Monetary Policy,” agrees with this view. However, since it is practically impossible to Last spring, when the Federal Reserve first project the scale on which further economies announced its projected growth ranges for the may be realized, we have taken steps to ensure monetary aggregates, concern was expressed by that the rate of monetary expansion does not some economists, as well as by some members slow too much or for too long. of the Congress, that the rates of monetary During recent months, open market policies growth we were seeking would prove inade­ have therefore been somewhat more accommo­ quate to finance a good economic expansion. dative in the provision of reserves to the banking Interest rates would rise sharply, it was argued, system. In January the discount rate was as the demand for money rose with increased lowered from 6 to 5Vi per cent. And on two aggregate spending, and shortages of money and occasions—in mid-October and again in late credit might soon choke off the recovery. December—the Board reduced reserve require­ We at the Federal Reserve did not share this ments. These reductions were aimed principally pessimistic view, and our judgment has been at encouraging a further lengthening of the ma­ borne out by events. We knew that the turnover turities of time deposits at member banks, but of money is apt to increase rapidly with a return they also released nearly $700 million of re­ of confidence. We knew also that financial serves and thus enabled banks to support a technology has been changing, that the innova­ higher level of money balances. tive process has accelerated of late, and that These actions appear to be bearing fruit. In Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

338 Federal Reserve Bulletin □ April 1976 January and February, taken together, growth by overhauling the structure of Federal taxation, of moved up to an annual rate of about AV2 so as to increase incentives for business capital per cent, compared with 2 per cent in the fourth spending and for equity investments in Ameri­ quarter of last year. The effect on broader mon­ can enterprises. etary aggregates has been substantially greater. Second, we should face up to the fact that During the past 2 months, the annual growth environmental and safety regulations have in rate of M2 accelerated to over 12 per cent, recent years run up costs and prices and have compared with 6 per cent in the final quarter held up industrial construction across our land. of 1975. Progress toward full employment and price sta­ Our objective is to stay on a course of mone­ bility would be hastened by stretching out the tary policy that will continue to support a good timetables for achieving our environmental and rate of growth in output and employment, while safety goals. avoiding excesses that would aggravate inflation Third, a vigorous search should be made for and create trouble for the future. As I indicated ways to enhance price competition among our in testimony before the House banking com­ business enterprises. The Congress is to be mittee last month, the Federal Open Market commended for putting an end to the so-called Committee has projected growth ranges of the fair trade laws. It would be desirable to go monetary aggregates for the year ending in the further and reassess the entire body of laws fourth quarter of 1976 that differ only a little directed against restraint of trade by business from those announced previously. firms and to improve the enforcement of such We believe that the monetary growth ranges laws. We also need to reassess the highly com­ we have projected will prove adequate to fi­ plex governmental regulations affecting trans­ nance a good expansion of economic activity portation and the many other laws and practices in 1976. But the uncertainties that at present that impede the competitive process. surround monetary developments, particularly Fourth, governmental policies that affect the behavior of Mu will require a posture of labor markets have to be reviewed. There are exceptional vigilance and flexibility by the Fed­ grounds for thinking that the Federal minimum eral Reserve in the months ahead. wage law is pricing many teenagers out of the Before closing, I would remind this commit­ job market, that the Davis-Bacon Act is serving tee that fiscal and monetary policies alone can­ to escalate construction costs, and that programs not be expected to achieve our economic goals for income maintenance now provide benefits in the current economic and financial environ­ on such a generous scale that they may be ment. It is not enough to ask what further fiscal blunting incentives to work. High unemploy­ stimulation, if ny, or what further monetary ment and numerous job vacancies still exist side stimulation, our economy requires. Nor is this by side—perhaps because job seekers are un­ even the basic question. We should rather be aware of the opportunities, or because the skills asking what governmental policies, covering as of the unemployed are not suitable, or for other they might an enormous range of actions and reasons. Surely, better results could be achieved even inactions, are most likely to strengthen the with more effective job banks, more realistic hope and confidence of our people. In the time training programs, and other labor market poli­ remaining, let me briefly comment on some cies. policies, outside the monetary and fiscal area, Finally, we need to think through the appro­ that can make a significant contribution to the priate role of a limited incomes policy in the restoration of full employment and also to cor­ present environment. Recent experience has recting the long-run inflationary bias in our emphatically demonstrated that lasting benefits economy. cannot be expected from comprehensive or First, governmental efforts are long overdue mandatory wage and price controls. However, to encourage improvements in productivity a policy that would permit modest delay of key through larger investment in modern plant and wage or price increases, thus providing oppor­ equipment. This objective would be promoted tunity for quiet governmental intervention or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 339 for public hearings and the mobilization of pub­ competition and release the great energies of our lic opinion, may yet be of significant benefit people. Such policies are not, however, a sub­ in reducing abuses of private economic power stitute for responsible fiscal and monetary ac­ and moving our Nation toward the goal of full tions. In order to strengthen the confidence of employment and a stable price level. people in their own future and the future of our Under current conditions, the return to full country, we in government will need to work employment will have to depend rather heavily constructively on all three policy fronts—fiscal, on structural policies that serve to reinvigorate monetary, and structural. □ Statement by Robert C. Holland, Member, divided into three general categories: (1) pro­ Board of Governors of the Federal Reserve posals for civil penalties for violations of System, before the Committee on Banking, various provisions of Federal banking law that Housing, and Urban Affairs, U.S. Senate, presently carry no penalties or carry only crimi­ March 26, 1976. nal penalties; (2) a proposal to restrict dealings with insiders; and (3) proposals to increase and I am pleased to appear before this committee streamline the ability of the agencies to take on behalf of the Board of Governors of the remedial actions. Federal Reserve System to discuss the Board’s An examination of the present restrictions on reasons for recommending the enactment of the operation of banks and actions of bank legislation embodied in S. 2304. Let me try to officers, directors, and employees indicates that summarize the proposals and the Board’s views in many instances violations of those restrictions thereon in rather general terms and then respond carry either no penalties or solely criminal pen­ to any specific questions. alties. The Board’s experience with the opera­ These proposals arise from a number of stud­ tions of the criminal penalty provisions under ies, which the Federal Reserve has conducted the Bank Holding Company Act is that the in the aftermath of the banking difficulties of application of these provisions is a slow and recent years. One objective of those studies was tedious process. Furthermore, in order to obtain to determine whether there were some feasible a conviction it must be established that the new measures that would decrease the incidence violation was willful. Courts in the past have of specific banking difficulties or would increase read this as requiring a showing not only that the effectiveness of remedial regulatory action the individual intended to take the action but once a particular bank difficulty was identified. that in so doing the individual intended to break In fact, those studies have turned up a number the law. This is a very difficult matter to prove, of constructive suggestions for reducing banking and it is believed that these difficulties of proof problems without at the same time unduly in­ have decreased the effectiveness of the criminal terfering with the effective conduct of banking remedy as a deterrent to particular actions in business. violation of the Act. Some of those suggestions involved changes There are other provisions of banking law for in procedures or regulations that the Federal which there are either inadequate or no deterring Reserve could introduce under its existing au­ penalties attached to any violation. For instance, thority, and we have done so. But several sug­ Section 23 A of the Federal Reserve Act places gested steps needed statutory authorization. We stringent limitations on transactions between have refined those ideas, in coordination with affiliates. Violation of this provision, however, the other Federal bank regulatory agencies, and currently carries no civil or criminal penalties. they are now embodied in the present S. 2304, In recent experience, two examples have come submitted jointly on behalf of all three agencies. to the Board’s attention that, in the Board’s The legislative proposals in S. 2304 can be opinion, involved violations of Section 23A Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

340 Federal Reserve Bulletin □ April 1976 with respect to transactions between the banking cials of various businesses in the area. Lending and nonbanking affiliates of a holding company. to such insiders and their enterprises follows In both instances, these transactions contributed naturally and, in the case of smaller financial heavily to the ultimate failure of the banking institutions in smaller communities, is almost subsidiary. Once these transactions came to the inevitable. Such lending, to the extent it is made attention of the appropriate regulatory authori­ on an arm’s-length basis to creditworthy bor­ ties, the only available remedy would have been rowers, is not objectionable in and of itself, and a cease-and-desist order under the Financial in fact such loans may well help the community Institutions Supervisory Act of 1966 requiring and at the same time benefit the bank. reversal of the transaction. However, since the If an insider is prepared to abuse his banking funds were no longer available to accomplish connections, however, and the bank is compli­ such a reversal, this represented a hollow rem­ ant, he may effectively pyramid the resulting edy indeed. risks to the bank by exploiting his position to The Board strongly believes that the existence obtain credit for or through firms he controls. of an expeditious civil penalty procedure will Accordingly, the Board has concluded that on act as a deterrent to this kind of activity and balance it would be wise to place aggregate should significantly decrease the incidence of it. limits on the amount of lending on behalf of For this reason, the Board has recommended any insider by his bank in order to prevent the in the proposed legislation that civil penalties incurring of excessive risk through such lend­ be applied to violations of the Bank Holding ing. The proposed legislation would therefore Company Act, Section 23A of the Federal Re­ place a limitation on loans to any officer, direc­ serve Act, Section 22 of the Federal Reserve tor, or shareholder who owns more than 5 per Act relating to loans to officers and directors cent of the stock of the lending bank. This (as proposed to be amended), violations of final limitation would aggregate all loans or exten­ cease-and-desist orders, and certain other pro­ sions of credit to such an officer, director, or visions. In order to help insure that these penal­ shareholder and his controlled corporations and ties would only apply in an appropriate and provide that the aggregate may not exceed the equitable manner, the proposed bill provides statutory limit on loans to any one borrower that, in assessing the amount of the penalty, the established by Federal or State law. I should responsible agencies must take into account the alert the committee that, among the three kinds financial resources and good faith of the person of insiders I have just mentioned, officers, or organization charged with the violation, the directors, and important shareholders, public gravity of the violation, and the history of policy considerations weigh least heavily toward previous violations. Any penalty so assessed adoption of these restrictions when it comes to may be collected by court action and would be aggregating loans of all interests of an “outside subject to judicial review. director.” Such restrictions might well discour­ The second area covered by this bill is the age some individuals from serving as directors establishing of appropriate limitations on bank­ who would otherwise provide valuable experi­ ing transactions with insiders. The history of ence and advice for the bank. On balance, banking difficulties over the last few years indi­ however, the Board believes that the establish­ cates that, in numerous instances, banks have ment of such a limitation for each of these encountered difficulties by virtue of having in­ insiders is a prudent step. curred excessive risks through a high concen­ The third problem area that this bill addresses tration of loans to “related persons.” The Board is a strengthening of supervisory power to take recognizes that, in the banking industry as a remedial actions once difficulties have been dis­ whole, major abuses by insiders are not com­ covered in a financial institution. We see a mon. The Board further recognizes that the particular need to strengthen the remedial board of directors of a bank or bank holding powers provided in the Financial Institutions company typically includes a number of com­ Supervisory Act of 1966, and we have recom­ munity leaders, not the least of whom are offi­ mended a number of changes in that Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 341 The most important of these changes relates stability of its subsidiary banks. Several in­ to the ability of the banking agencies to remove stances have come to the Board’s attention in an officer or director or prohibit a shareholder which adverse developments and publicity with from participating in the conduct of the affairs respect to a bank holding company’s nonbank­ of a bank when such an individual’s conduct ing activities have had a very adverse impact is causing or is likely to cause substantial finan­ upon, and even caused the failure of, a banking cial harm to the bank. Under present law, in subsidiary. We therefore believe that it is im­ order to take such action the agencies must portant for the Board to have such legislation establish that the individual (1) has participated available in order to protect banking subsidiaries in a violation of law or of a final cease-and-de- in appropriate instances. The proposed legisla­ sist order, breaches of fiduciary duty, or unsafe tion provides for due notice and opportunity for and unsound practices, (2) that his action is seen hearing. It provides that the divestiture may be as causing substantial financial loss to the bank by sale or by pro rata distribution and, in order or damage to depositors and, further (3) that to assure that the activity threatening the bank the acts complained of constitute personal dis­ is terminated as rapidly as possible, sets a rela­ honesty on the part of such an individual. The tively short time frame within which this is to Board believes that, if an individual is grossly be accomplished. negligent or inept in the operation of a banking A final remedial provision that I would call institution, and the findings set forth in (1) and to your attention lies outside the bill presently (2) above are made, he should be removed before the committee. That is our proposal to regardless of whether his actions constitute per­ allow a failing bank to be acquired by an outsonal dishonesty. of-State holding company when no satisfactory Accordingly, we recommend the adoption of alternative for preserving the bank’s services the proposed provisions, which would authorize exists. This proposal was earlier introduced as the appropriate regulatory agencies to remove part of S. 890, but it has generated some oppo­ the offending individuals in such circumstances. sition from observers concerned with breaching We believe that the present hearing and judicial the traditional bar to interstate banking. Yet review provisions of the Act are sufficient to since that bill was introduced, two significant shield innocent individuals from arbitrary and instances have arisen requiring sale of a failing capricious agency action. bank when the communities involved might We have also recommended a number of have been better off if an emergency interstate other technical changes to the Financial Institu­ acquisition of that size had been permissible. tions Supervisory Act that we believe would I urge this committee to consider and act fa­ increase its effectiveness. I would be happy to vorably on this proposal, even as it already has answer questions about any of them at the on the companion bill to eliminate the statutory conclusion of my statement. 30-day delay in emergency bank holding com­ Another urgent remedial power requested for pany acquisitions. I believe the people in the the Board is that it be given the power under few unfortunate communities affected would be the Bank Holding Company Act to order the well served. divestiture of a banking or nonbanking subsidi­ We realize that each one of the proposals I ary whenever it has reasonable cause to believe have mentioned this morning can be said to that the continuation of that nonbanking activity involve certain costs or burdens as well as or ownership of a banking or nonbanking activ­ benefits. We have tried to aim only at demon­ ity constitutes a serious risk to the financial strated problems, not hypothetical ones. We safety, soundness, or stability of a bank holding have designed the proposed legal powers so as company’s subsidiary banks. to minimize unwanted side effects, and we have We recognize that such a remedy is an ex­ included provisions that give protection or room treme one. However, we believe that a key for accommodation to legitimate business function of a bank holding company is to con­ needs. The remaining inconveniences or ineffi­ tribute to, rather than detract from, the financial ciencies that this legislation may cause we be­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

342 Federal Reserve Bulletin □ April 1976 lieve are justified by the added protection it of occasions on which supervisory action would affords to banks and the banking system. be necessary in order to correct problems exist­ In conclusion, we believe that these proposals ing in banking institutions. Furthermore, in zero in on specific identified weaknesses in the those instances where the problems do occur, regulation and supervision of bank holding these provisions would increase the effec­ companies and banks. Adoption of these pro­ tiveness of agency response. We urge favorable posals would, in the Board’s opinion, have a consideration of these proposals by this com­ deterrent effect and thus decrease the number mittee. □ Statement by Henry C. Wallich, Member, supply and demand are once more in balance. Board of Governors of the Federal Reserve By this definition, there cannot long be a short­ System, before the Committee to Investigate a age of capital or of anything else. But, of Balanced Federal Budget of the Democratic course, that is a tautological solution. If the Research Organization, Washington, D.C., demand for capital could be met only at rates March 26, 1976. of interest that are excessively high—after making allowance for the rate of inflation, which I welcome this opportunity to appear before the tends to raise interest rates—one would not Committee to Investigate a Balanced Federal regard that as a satisfactory solution. Budget of the Democratic Research Organi­ Our national income accounting system, too, zation to present my personal views on the may lead us into an erroneous belief that a outlook for an adequate supply of capital. capital shortage is being avoided when, in a I believe that there is a serious danger of a meaningful sense, that would not be the case. capital shortage, not today, but later as the Our national income accounts are so set up that economy approaches full employment. The role saving always turns out to be equal to invest­ of the Federal budget will be crucial. The Fed­ ment. That is true simply because of a conven­ eral Government today is a heavy borrower, that tion that defines saving as the difference between is, a user of the Nation’s savings. If by the time consumption and income, and investment as the we approach full employment the Federal Gov­ difference between consumption and produc­ ernment has shifted its position and has become tion, while simultaneously treating income and a net saver and supplier of capital, the proba­ production as opposite sides of the same coin. bility of capital shortages will be much reduced. Any consistent set of estimates of future saving If, however, the budget then is still in heavy and investment, therefore, necessarily arrives at deficit, a shortage, in my opinion, is very likely. the conclusion that the two are equal in an ex You have asked me to focus on a number post sense. This does not mean that the level of studies that seek to evaluate the prospects of investment is satisfactory. If investment has of a capital shortage, and this topic will be the been held down by inadequate savings to such main focus of this presentation. To begin with, a degree that reasonable economic objectives however, I would like to comment briefly on cannot be met, we have, to my way of looking what I mean by capital shortage. For it is only at the matter, a capital shortage. too easy, by appropriate use of the terminology I would suggest three tests of what it means and technique of economics, to arrive at the to meet reasonable economic objectives. One conclusion that there can be no question of a would be the maintenance of sufficient capacity capital shortage. in critical industries to avoid bottlenecks that In an economy in which prices, including would lead to shortages or sharp price increases, interest rates, are free to move, rising demand even before the economy as a whole began to for anything will normally raise the price until reach full operating potential. We experienced Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 343 severe bottlenecks in 1973, though somewhat market—made equity financing difficult. Such exaggerated by duplication of orders. Invest­ a situation could arise if corporations feel, as ment since has been relatively low, and I doubt they seem to feel currently, that they have too that many of these bottlenecks have been re­ much debt relative to equity, while an adverse moved. In the major materials area for instance, climate or inflation or poor prospects were de­ the Federal Reserve index of capacity utilization pressing the stock market. Even if the savings in major materials industries reached a mini­ were available, there might be no way of trans­ mum of 67.9 per cent in March 1975. It has forming them into productive investment. since risen to about 80 per cent, which still In addition, what would constitute an ade­ seems to leave a good margin. But breaking this quate supply of capital by each of the three down between durable and nondurable goods, foregoing tests by no means promises the the index shows that capacity utilization for American economy a high rate of growth. Cap­ nondurables is already up to around 83 per cent, ital adequacy in all three tests noted above might while that for durables stands at only about 69 mean that we could continue to grow at about per cent. If investment is not sufficient to re­ the same rate as in the past—when we were move bottlenecks before we approach full em­ relatively free of capital shortages—or perhaps ployment, I would consider the result as a kind a little more slowly, given the higher cost of of capital shortage. energy and other new burdens imposed upon A second test of capital inadequacy would the economy. In that event, we would be grow­ be an over-all insufficiency of our capital stock ing at a rate inferior to that of many of the other to employ fully and efficiently our rising labor major industrial economies. They would gradu­ force, after allowance is made for its changing ally catch up and eventually surpass us, if we composition. I cannot provide data to demon­ project their and our growth at post-Worldstrate whether or not we can count, at the time War-II historic rates. But that prospect cannot we approach full employment, on having be deemed a capital shortage. enough plant and equipment in place to absorb the entire labor force. Considering, however, that the growth of the labor force, which reflects STUDIES OF the birth rates after World War II and increased CAPITAL ADEQUACY participation rates for women, has been high by historical standards, while investment has been A number of studies on the problem of capital relatively low for the past 2 years by such adequacy have been done in the past year and standards and seems likely to remain relatively a half, and I would like to review these for you low for most of this year, I think that there is this morning.1 These studies unfortunately do reason to fear that a disproportion between the capital stock and the labor force is developing, 1 The studies are the following: to the disadvantage of labor. Barry Bos worth, James S. Duesenberry, and Andrew There is a third, and rather different, standard S. Carron, Capital Needs in the Seventies (Brookings by which the adequacy of the supply of capital Institution, 1975). Council of Economic Advisers. “Will Capital Re­ can be assessed, which happens to be frequently quirements for the Remainder of this Decade Be Met?” employed these days in business circles. It re­ Economic Report of the President, 1976, pp. 39-^7. lates to the ability of American business to Robert Dennis, Clambering Into the Eighties, Report Number 74-N-l (National Planning Association, Dec. obtain the financing needed to effect the desired 1974). amount of capital spending. It could turn out Michael K. Evans, Long-Term Forecast: The Next that conditions could arise in which households Ten Years, Inflation, Recession, and Capital Shortage (Chase Econometric Associates, Inc., Aug. 1975). supplied enough savings and government made Benjamin M. Friedman, “Financing the Next Five no excessive demands, but in which the state Years of Fixed Investment,” Sloan Management Re­ of corporate finances made it inadvisable or view (Spring 1975). Gary Fromm, Investment Requirements and Financ­ impossible for business to incur heavy debts, ing: 1975-1985, National Bureau of Economic Re­ while a low level of profits—or of the stock search, Working Paper (Oct. 1975). continued Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

344 Federal Reserve Bulletin □ April 1976 not always span the same years. Also, there are First, the authors of these studies almost important differences in assumptions regarding unanimously envision prospective fixed business tax laws, monetary and fiscal policy, and other investment to be greater than the 10-year his­ factors that complicate comparison. Appended torical average. Even those studies that place to this text are two tables from the study by this figure at the low side expect this part of Gary Fromm. One of the tables delineates some investment to be greater than it has been over of the principal differences in assumptions and the past decade. The reason for this is the also summarizes the major findings of the stud­ anticipation, in varying degrees, of substantially ies.2 larger increases in investment for environmental In spite of the differences, there is sufficient protection, energy independence, electricity agreement in terms of basic methodology to generation, and occupational health and safety. make a comparative discussion worthwhile. For In evaluating the excess of the projections purposes of the presentation, the dollar figures over the historical average, the following facts in the various studies have been expressed as need to be taken into account. The historical percentages of gross national product (GNP). average contains years of unusually high busi­ This permits us, at once, to avoid being misled ness fixed investment as well as some low years. by the very large sums involved and to put the It reflects the average level of investment over problem in perspective. I shall consider first the a period of years in which full employment was prospects for gross private domestic investment not always attained. Most of the projections also and then the outlook for total savings. contain some years of relatively low investment, since some of them include the recession year of 1974, and almost all include 1975, the year of incipient recovery. Thus, for years ap­ THE DEMAND FOR CAPITAL proaching full employment, one must assume Most but not all of the studies provide projec­ for most of these studies a projection of business tions, either year by year or for an average of fixed investment implicitly or explicitly above years, of each of the three subcategories of gross private domestic investment: nonresidential TABLE 1 fixed business investment, inventory accumula­ Range of investment rates1 tion, and residential construction. These projec­ tions are shown in Table 1 as percentages of GNP. Several important points emerge from the Study Nonresidential Inventory Residential fixed business comparison. Bureau of Economic Analysis (1975-80) 12.0 n.a. n.a. Bosworth, Duesenberry, General Electric, Economic Prospects: 1975-85 Carron (1973-80) 10.9 .7 4.0 (March 1975) and supplementary materials. Benjamin M. Friedman New York Stock Exchange, The Capital Needs and (1977-81) ........................ 11.5 .8 3.5 Data Resources, Inc. Savings Potential of the U.S. Economy: Projections (1975-85) ........................ 10.6 .7 4.0 Through 1985 (Sept. 1974). Special Study Group Allen Sinai and Roger E. Brinner, The Capital (1975-85) ........................ 11.2 .9 3.3 General Electric Shortage: Near-Term Outlook and Long-Term Pros­ (1974-85) ........................ 10.7 .5 3.7 pects, Economic Studies Series No. 18 (Data Resources, National Planning Assn. Inc., 1975). (1974-85) ........................ 12.3 .7 3.5 U.S. Department of Commerce, Bureau of Economic Chase (1975-84) ............... 10.6 .7 3.1 NYSE (1974-85) ............... 29.4 33.1 4.0 Analysis, A Study of Fixed Capital Requirements of the U.S. Business Economy (Dec. 1975). Average (except NYSE).... 11.0 .7 3.6 U.S. Department of Labor, Economic Policy Board Historical (1965-74)............ 10.4 1.0 3.7 Special Study Group, unpublished materials partially based on The Structure of the U.S. Economy in 1980 1From Gary Fromm, Investment Requirements and Financ­ and 1985, BLS Bulletin 1831 (1975). ing: 1975-1985, National Bureau of Economic Research, Working Paper (October 1975), quoted with modifications. 2 The Appendix tables are available on request from 2Plant and equipment only. Publications Services, Division of Administrative Serv­ 3 Inventory and other nonresidential fixed business invest­ ices, Board of Governors of the Federal Reserve Sys­ ment. tem, Washington, D.C. 20551. n.a. not available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 345 the average. It is during these periods of high of the studies coming in well above this figure employment, however, when the maximum and some, well below. pressure of investment on savings is likely to be felt and when the issue of capital shortage will be most seriously posed. Thus, most of the THE SUPPLY OF SAVINGS projections tend to understate the probability of shortage during the crucial years. Personal saving, corporate retention of profits, I would like to draw particular attention to and business depreciation allowances are the the study done by the Bureau of Economic principal sources of supply of capital within the Analysis (BEA) of the Department of Com­ private sector, if we abstract from the possibility merce, which examines nonresidential fixed in­ of net capital imports. Projections here are more vestment by a different methodology and in difficult to make, in my view, than on the much greater detail than the others. The BEA investment side. The personal saving rate for study concludes that, because of the anticipated the studies shown in Table 2 averages 5.1 per cyclical and secular changes in industry mix, cent of GNP, which comes very close to the future capital spending for fixed business in­ historical average from 1965 to 1974 of 5.0 per vestment of the historical kind could represent cent. But the range of the individual estimates a smaller fraction of GNP than in the past. But is wide, running from 4.0 to 6.2 per cent. the needs imposed upon us by the new invest­ Household saving has increased of late, prob­ ment demands noted above bring the BEA pro­ ably reflecting job insecurity and other risks jections of business fixed investment for created by inflation as well as, more enduringly 1975-80 to 12 per cent, compared with an perhaps, a desire to restore wealth holdings average of 11.0 per cent for the bulk of the eroded by inflation to a more acceptable rela­ studies and an historical 10.4 per cent for the tionship to income. As wealth/income ratios years 1965-74 (Table 1). once more approach satisfactory levels, house­ It should be noted that one major area of hold savings may well decline. The increasing uncertainty involves the future of investment in degree of protection by social security, as well the electric utilities industry especially since the as medicare, may also push personal saving future role of highly capital-intensive nuclear rates downward. This conclusion is indicated by power remains unknown. It seems fair to say at least one careful piece of research.3 It should nevertheless that there is a considerable amount be noted, furthermore, that since social security of agreement among the projections of business is on a pay-as-you-go basis at best, it does not fixed investment, given the difficulties of the lead to an accumulation of capital as does pri­ exercise, but that their average probably is vate saving. Thus, its net effect is to reduce somewhat on the low side for years approaching the total supply of saving and to increase the full employment. threat of capital shortage. Inventory investment, to the extent that it Corporate savings, including depreciation al­ appears separately in the projections, is univer­ lowances, have been severely distorted by in­ sally expected to drop slightly below its histori­ flation. Inventory profits do not add to investible cal average, from 1 per cent of GNP to an funds. Neither do profits resulting from low average for the studies of 0.7 per cent. This depreciation based on original cost when infla­ provides a partial but insufficient offset to the tion raises replacement costs. These unproduc­ projected increase in business fixed investment. tive profits, while they improve the appearance Residential construction is particularly diffi­ of balance sheets and income statements, de­ cult to estimate. In contrast to the two other prive corporations of liquidity because they raise areas, there is little agreement about the future tax liabilities. A widespread view holds that course of housing investment. Over the past decade, this type of investment has accounted 3Martin Feldstein, “Social Security, Induced Retire­ for 3.7 per cent of GNP. The mean of the studies ment, and Aggregate Capital Accumulation,” Journal puts this at 3.6 per cent of GNP, with some of Political Economy, September-October 1974. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

346 Federal Reserve Bulletin □ April 1976 capital’s share of GNP has been trending down TABLE 3 for a number of years. Certainly the share of A comparison of investment corporate investment financed from internal cash and Government savings rates1 flow had declined for many years until very recently. Investment Government Study Since the Congress has made an effort to rate savings rate improve corporate finances by providing for Bos worth, Duesenberry, accelerated depreciation and an investment tax Carron (1973-80) ............ 15.6 - .2 Benjamin M. Friedman credit, it is important to note that these measures (1977-81) ........................... 15.8 - .1 have sufficed only to slow down adverse trends Data Resources, Inc. (1975-85) ........................... 15.3 - .8 in corporate balance sheet structure and finan­ Special Study Group (1975-85) ........................... 15.4 - .4 cial flows. For instance, external financing has General Electric increased relative to internal. Within external (1974-85) ........................... 14.9 -1.4 National Planning Assn. financing, the share of debt has risen relative (1974-85) ........................... 16.4 .1 Chase (1975-84) .................. 14.5 -2.0 to the share of equity financing, and within the NYSE (1974-85) .................. 16.4 .3 total of debt financing, short-term debt has risen Average .................................... 15.5 - .5 relative to long-term debt. Some improvement has occurred in these relationships during the 1From Gary Fromm, op cit., quoted with modifications. recent recovery, owing partly to the low level of corporate capital spending, and partly to This leaves the government sector in a key better profits, a higher stock market, and some position as the marginal supplier—or user—of long-term funding of short-term debt. In the face savings. At a time of low investment, a large of uncertainties surrounding the appropriate deficit can be accommodated. Under conditions calculation of, and the outlook for, corporate of high investment—such as would reflect an profits and cash flows over a longer period, too approach to full employment—the prospective much weight should not be attached to the adequacy of private savings seems to me very projections concerning the level of business much in doubt. The studies do not directly savings. The projections average out at 10.8 per reveal this because, as noted before, the use of cent of GNP—exactly equal to the historical averages over low and high periods tends to record—but with a range of 10.2 to 11.2 per understate the volume of savings required near cent. full employment. The studies show a projected government sector deficit (Federal plus State and local government) averaging 0.5 per cent of TABLE 2 GNP, with a range from a deficit of 2.0 per Range of savings rates1 cent to a surplus of 0.3 per cent. On average, therefore, these projections seem to imply that a small deficit in the public sector would be Study Personal Business Government consistent with a balance of supply and demand Bos worth, Duesenberry, for saving. In my view, however, this would Carron (1973-80) 4.6 10.6 .2 be a misleading interpretation. Benjamin M. Friedman (1977-81) ..................... 4.9 10.8 - .1 In the first place, as shown in Table 3, there Data Resources, Inc. (1975-85) ..................... 5.4 11.0 - .8 is present in the projections a clear correlation Special Study Group between the findings of the respective authors (1975-85) ..................... 4.7 11.2 - .4 General Electric about capital investment needs and their con­ (1974-85) ..................... 5.8 10.9 -1.4 National Planning Assn. clusions about the public sector deficit or sur­ (1974-85) ..................... 4.8 11.2 .1 Chase (1975-84) ............ 6.2 10.2 -2.0 plus. Studies that have high estimates of invest­ NYSE (1974-85) ............ 4.0 10.6 .3 ment needs tend to assume a surplus or a small Average .............................. 5.1 10.8 - .5 deficit. Studies showing low investment rates Historical (1965-74) 5.0 10.8 - .5 tend to project a larger deficit. One way of 1From Gary Fromm, op cit., quoted with modifications. interpreting this coincidence of high investment Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 347 with low deficits (or surpluses) and that of low tion causes the Government to overstate the size investment with higher deficits is that invest­ of its deficit. Of the $23 billion paid as interest ment determines income and therefore the size on the publicly held Government debt instru­ of the deficit. But another way is to consider ments in fiscal-year 1975, some fraction possi­ that a high deficit may discourage and depress bly exceeding one-half must properly be re­ investment and thereby create a fictitious justi­ garded as an inflation premium. This premium, fication for itself. If the deficit were smaller, the purpose of which is to preserve intact the investment would be larger in this interpreta­ purchasing power of the investor, is not added tion. to the principal of a Government bond but Secondly, the projection of a small deficit rather, is paid to the investor currently. As a over a period containing some years of very result, while the nominal value of the bond large deficits implies that for some other years represents lower purchasing power at maturity, balance or even a substantial surplus will be the investor has received back an amount corre­ attained. This, in my view, is the crucial point. sponding to the shrinkage in the value of his The adequacy of the supply of capital implied principal. The inflation premium, or that excess in most of these studies is plausible only if one of interest paid over what would be an infla­ assumes that as we approach full employment tion-free rate, is, in an economic sense, not the public sector will come into surplus. This interest but a repayment of principal. One may conclusion is most clearly borne out by the surmise, also under such conditions, that the Bosworth-Duesenberry-Carron study that for its typical holder of Government debt does not treat terminal year 1980 requires a Federal surplus the entire interest as spendable income but ac­ of $13.2 billion on the assumption of 4 per cent cumulates part of it to protect the value of his unemployment and a Federal surplus of $18.7 savings. Adjusted for this inflation premium billion on the assumption of 5 per cent unem­ factor, the Government deficit is somewhat ployment. smaller than it appears. Of course, there are A small element of comfort can be derived other factors, such as off-budget financing, that from the circumstance, perhaps worth noting should be included in the deficit and that would because it is not always recognized, that infla­ make it correspondingly larger. □ Statement by J. Charles Partee, Member, Board to the Congress on its efforts to further the of Governors of the Federal Reserve System, objectives of the law. The central question fac­ before the Subcommittee on Manpower, Com­ ing the Congress as it considers H.R. 50 is pensation, and Health and Safety of the Com­ whether or not the proposed amendments will mittee on Education and Labor, U.S. House of help advance the goals of the original Act. I Representatives, April 8, 1976. am sorry to say that we do not believe they will. The bill is both too rigid and too inflation­ I appreciate the opportunity to present the views ary and, on balance, would likely prove to be of the Board of Governors of the Federal Re­ inconsistent with the long-term economic well­ serve System on H.R. 50, the “Full Employ­ being of the Nation. ment and Balanced Growth Act of 1976.” This Unemployment has been a very serious prob­ bill would amend the Employment Act of 1946, lem recently in the United States, as in many which requires the Federal Government to uti­ other countries. But this condition is mainly a lize all of its resources in order “to promote product of the recession, which in turn was maximum employment, production and pur­ caused by the excesses and imbalances that had chasing power.” developed earlier in the economy. With eco­ The Board fully recognizes its responsibility nomic recovery, good progress is being made under the 1946 Act and has reported regularly in restoring jobs, and the unemployment rate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

348 Federal Reserve Bulletin □ April 1976 has dropped IV2 percentage points over the past be reached and sustained within 4 years follow­ year. ing enactment. This is a most arbitrary target. Substantial further progress is necessary in Historically, a 3 per cent adult unemployment creating new job opportunities, thereby reducing rate is very low. Over the past 30 years, the unemployment and providing for the absorption jobless rate for those 18 and over has been in of a steadily growing labor force. This must be the neighborhood of 3 per cent only during a primary objective of governmental economic 1952-53 and 1968-69, years in which the num­ policy. It is also of crucial importance, how­ ber of men in the armed forces was over 3V2 ever, that we avoid recreating the conditions that million—half again as high as the present level. led to the past recession and, which could do Moreover, both of these periods of heightened so again. This means that continued attention economic activity were characterized by demust be directed to questions of economic mand-pull inflation and were followed eventu­ structure and balance, including avoidance of ally by major recessions. Thus, our postwar the extremely injurious effects of rapid inflation. experience suggests that achievement of 3 per We at the Board are gravely concerned that cent unemployment typically is accompanied by the net effect of H R. 50 would be to add substantial inflation and followed by economic substantially to the inflationary bias already evi­ decline rather than by sustained full employ­ dent in the performance of the Nation’s econ­ ment. omy, without generating a lasting increase in In addition, the setting of a rigid unemploy­ productive employment opportunities. Surely, ment goal ignores the dynamic character of the the events of recent years have demonstrated American labor force. The jobless rate of a that rapid inflation can undermine prosperity and decade or so ago does not have the same mean­ exacerbate unemployment. The inflation of 1973 ing as the current rate, principally because of and 1974, with its adverse effects on real in­ the shifting composition of the labor force and comes, attitudes, and the quality of economic the more liberal nature of our Federal incomedecision-making, was a major force contributing support programs. Today’s labor force has rela­ to the subsequent deep economic recession. It tively more new entrants and re-entrants— should be clear from this experience that such chiefly the young, and married women—than conditions exact their toll in terms of economic it did then. These groups typically have higher inequity and social discontent. The American rates of joblessness as they search—often inter­ people have become painfully aware of the costs mittently and through trial and error—for a of inflation and of the need to control it. satisfactory job. It is reasonable to think that It is of the utmost importance, we believe, this fact has had an upward bias on the official that the containment of inflation be recognized jobless rate. explicitly as an important national priority in­ Indeed, the fact that the bill sets forth an separable from the goals of maximum employ­ unemployment target while making no mention ment and production. Indeed, a principal flaw of a comparable specific objective with regard in the 1946 Act is its failure to identify clearly to inflation is illustrative of its uneven treatment price stability as a long-run economic goal. of these two economic problems. I would not H.R. 50 shares and extends this shortcoming. urge that any fixed target for short-run price In the Board’s judgment, the anti-inflation pro­ behavior be set; the meaning of an inflation rate, visions of the bill are too weak and too vague in its own way, can be as changeable as the to be satisfactory. Nowhere are there workable meaning of a jobless rate. My purpose simply safeguards against inflation. Instead, the bill has is to point out the bias of H.R. 50 in favor of many provisions that would contribute further one important national goal at the expense of to conditions and practices that would likely another. result in an intensification of upward price pres­ Some of the countercyclical and structural sures. programs of H.R. 50 are likely to introduce Certainly one inflationary feature is the bill’s important new elements of inflationary bias into objective of 3 per cent adult unemployment to our economic system. A significant problem of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 349 many past stabilization programs has been tim­ significant demand-pull pressures on prices. ing. Although the bill calls for the establishment Given our demonstrated national reluctance to of triggers and allocation formulas, I believe it raise taxes sufficiently to cover increases in still unlikely that we would avoid the pitfall of government spending, the financing of the pro­ applying the aid too late in an economic down­ gram would tend to add to the Federal deficit— turn and continuing it too far into a recovery, very substantially so, at some points in time. when the effect on price pressures can be most This year, for example, the Federal Government pronounced. Experience has shown that such will spend close to $3 billion to support some defects in timing have been particularly marked 320,000 public service employment jobs in in programs of accelerated public works—one State and local government. The program pro­ of the bill’s recommended options. The infla­ posed by H.R. 50 has the potential of being tionary implications of some of the other sug­ many times larger than this. Its attractive wage gested programs—including those to stabilize provisions would draw not only from the unem­ State and local government budgets over the ployed but also from those working part time cycle and to extend unemployment insurance— or at less desirable jobs, and from those not also require careful evaluation. presently in the labor force, including retired The major inflationary thrust from the coun­ persons, housewives, and students. The upper tercyclical programs, however, would come bound of potential participation cannot be esti­ from the specific provisions of this bill that make mated with any degree of accuracy. But it seems the Federal Government the employer of last quite possible that several million jobs might resort. While worthy in principle, the program come to be needed to employ all of those as specified in H.R. 50 has a critical flaw. It seeking these positions at the relatively attrac­ requires the payment of prevailing wages, de­ tive rates of pay that would be offered. Such fined where applicable as the highest of the a program might therefore involve $30 billion following: the Federal minimum wage, the State or more in outlays at current average pay scales. or local minimum wage, the prevailing wage I might note also that we have learned from in State or local government, or the prevailing the existing public service employment pro­ wage in construction as specified by the Davis- grams that cost offsets in terms of reduced 13 aeon Act. transfer payments under other programs may not This program—and these wages—would be as large as is often thought. Only about have profound inflationary consequences for one-fourth of the public service enrollees in several reasons. First, the program would result 1975 had been receiving unemployment insur­ in substantial cost-push pressures. Private labor ance or public assistance prior to participation markets would be tightened, and this would in the program. cause private employers to bid up wage rates Far and away the most significant defect of in order to obtain and retain workers. Also, by the bill as far as inflation is concerned, however, making public jobs available at attractive wages results from the limitations it places on the as a matter of right, the program would encour­ exercise of monetary and fiscal policy. If I age workers now employed in the private sector interpret H.R. 50 correctly, such policies are to press for even larger wage gains, or to to be directed solely to the achievement of the transfer to governmental jobs. As an example, 3 per cent unemployment goal until this target any construction project under this bill would is reached. Only when that rate is below 3 per pay the going union rate; but since a large cent can macroeconomic tools be directed in proportion of building in the United States is any degree to the problems of inflation and nonunion, this wage would be higher than many economic instability. Instead, these fundamental construction workers now receive and would techniques of demand management—used provide an alternative preferable to their existing throughout the world in governmental efforts to jobs. combat inflation as well as unemployment—are Second, the employer-of-last-resort program, to be supplanted in the bill by a series of specific as specified, would very likely come to generate program initiatives. The list of these substitute Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

350 Federal Reserve Bulletin □ April 1976 measures includes the following: a comprehen­ Federal Reserve Board is required to submit its sive information system to monitor inflationary intended policies for the coming year to the trends; programs to encourage greater supplies Congress, indicating the extent to which its of goods, services, and factors of production; plans support the goals of H.R. 50 and provid­ export licensing; establishment of stockpile re­ ing justification for any variation from the Pres­ serves of food and critical materials; encour­ ident’s recommendations. agement to labor and management to raise pro­ The Federal Reserve Board strongly objects ductivity through voluntary action; and propos­ to these proposed new procedures on two als to increase competition. grounds: (1) they would alter the traditional Whatever the individual merits of these pro­ relationship between the Congress, the Federal grams—and some are worthy of careful consid­ Reserve, and the Executive Branch in a way eration—one fact is abundantly clear. They do that could well prove detrimental to the eco­ not constitute an effective policy of inflation nomic well-being of the Nation, and (2) the control. We believe that it would be a most procedures specified would seriously impair the serious mistake to discard the use of monetary current operational flexibility needed in the for­ and fiscal policy without first finding some ef­ mulation and conduct of monetary policy. fective alternative means of constraining infla­ The Federal Reserve Act was carefully drawn tion on an enduring basis. to specify a relationship between the Congress Moreover, the bill’s adoption of a trigger and the Federal Reserve System that would point with regard to economic goals simply does serve to insulate the monetary authority from not provide a workable basis for employing short-run political pressures. This feature of the accumulated knowledge about the behavior of Act stemmed from a well-founded concern that the economy. It would not be practicable, in excessive government spending could be aided my view, to focus macroeconomic policies and abetted if the executive were granted the exclusively toward a full employment goal and authority to control a nation’s money supply. then, at a given point, abruptly shift attention It is a fact of economic history that governments to the containment of inflation. That is analo­ everywhere have come under great pressure to gous to approaching a stoplight at top speed and engage in massive deficit spending, at one time then applying the brakes with equal vigor; the or another, even though this patently jeopar­ momentum would be sure to carry one into the dized the longer-run health of the economy. His­ intersection, or the deceleration to send one tory also is replete with the inflationary conse­ through the car’s windshield, or more probably quences that have followed when governments both. There needs to be the latitude to modulate have given in to such temptations and have then and balance policy objectives to changing eco­ simply run the printing presses in order to sup­ nomic circumstances if we are to have any hope ply the money needed to finance their deficits. of achieving a lasting economic prosperity. The need to turn to private financial markets The changes required by the bill would go in order to finance public deficit spending per­ considerably beyond narrowing the options for forms an important function. The process of modulating macro-policy objectives in accord financing shifts purchasing power from private with the perceived needs of the economy. They savers to the Government, thus neutralizing would also alter dramatically the features of the much of the potential inflationary effect of defi­ existing process for review and oversight of the cit financing, while the necessity of finding monetary policy function. In this regard, I willing investors imposes a market discipline on would like to direct my comments to two spe­ the scale of such deficits. But even in the United cific provisions. First, the President is required States, where this discipline has largely pre­ to recommend a particular plan for monetary vailed, the Federal budget has been in deficit policy and to submit it annually to the Congress every year but one since 1960. There is nothing along with his numerical goals for employment, in this record that suggests that we can relent production, and purchasing power. Second, in the battle to avoid excessive deficit financing. within 15 days of the President’s report, the But instead, H.R. 50 proposes to weaken one Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 351 key safeguard against inflationary public finance of some economists would have you believe. by introducing the Executive Branch explicitly In recent quarters, for example, there appears and publicly into the making of monetary pol­ to have been a dramatic reduction in the amount icy. And were the Congress to mandate these of money needed to finance the rise in gross new procedures, it also would significantly di­ national product (GNP). lute its pre-eminent role in the oversight of the Under these circumstances, holding to a monetary policy process. course of monetary expansion that might have Moreover, the proposed procedures for the been suggested by historical money stock/GNP planning and evaluation of monetary policy are, relationships could have been quite damaging. for operational reasons, inferior to those now Speculative activities would have been en­ in place. Under House Concurrent Resolution couraged, thus sowing the seeds for future eco­ 133, the Federal Reserve Board presently re­ nomic instability, and the monetary base might ports quarterly on economic and financial de­ well have been laid for a renewal of intense velopments and specifies its current expectations inflationary pressures. for a variety of monetary aggregates to the Technical and financial innovations, accom­ appropriate oversight committees of the Con­ panied by regulatory changes, undoubtedly have gress. The great advantage of this reporting accounted in part for the slower growth in the procedure is that it permits the Federal Reserve narrowly defined money stock. For example, the the flexibility necessary to adapt monetary pol­ spread of overdraft checking account credit icy to changing economic conditions. The pro­ privileges, increased use of credit cards to fa­ cedures proposed in H.R. 50 would sharply cilitate transactions, and the introduction of curtail such flexibility. savings accounts at commercial banks for busi­ There are two major changes in the existing ness firms all have tended to encourage greater process required by the bill: (1) policy planning economizing in the use of currency and check­ is moved from a quarterly to what would effec­ ing account balances. These effects could not tively be a 12- to 15-month reference period, have been estimated with any accuracy in ad­ and (2) there would appear to be an unalterable vance, however, and in any event, I do not "hink commitment to longer-term plans for monetary that they provide a complete explanation. The policy in support of specified numerical national fact is that there is a potential for short-run economic goals. On the basis of experience, the volatility in monetary relationships that can Board is convinced that these changes would make economic forecasts based on monetary make the proposed planning and evaluation inputs very treacherous indeed. process too rigid to be workable. In the first These uncertainties about monetary and eco­ place, the ability of economists to forecast eco­ nomic relationships—uncertainties that are par­ nomic events for a year or more into the future ticularly marked at present—will require vigi­ with any high degree of reliability simply does lance and flexibility by the Federal Reserve in not exist. Two rather notable recent illustrations the months ahead and serve to point out the need of forecasting imprecision come quickly to for flexibility as a characteristic of the monetary mind: the extraordinarily high rates of inflation policy process. Ours is an extraordinarily com­ that developed in 1973 and 1974 that virtually plex and dynamic economy; its linkages and no one foresaw, and the severity of the 1974-75 responses are still imperfectly understood and recession, which was also quite unexpected. In probably always will be. Thus, in order to either case, it would have been a serious error accomplish the objectives of economic stabili­ to adhere to outdated plans based upon eco­ zation, the formulation and conduct of monetary nomic forecasts that proved to be wide of the policy need to retain their flexibility to adapt mark. to unforeseen developments in our economic In addition, the current state of knowledge and financial system. For these reasons we be­ about the relationship between movements in lieve the provisions of H.R. 50 with respect to the monetary aggregates and real economic ac­ the monetary policy planning process would tivity is not nearly so precise as the comments serve to reduce the contribution the Federal Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

352 Federal Reserve Bulletin □ April 1976 Reserve can make in helping to achieve our kets. There is need to reassess the effectiveness national economic goals. of our antitrust legislation—with regard to both Let me turn now to what this bill has to offer business and labor practices—and the anti-com­ by way of improving the trade-off between petitive effects of Federal regulation of all kinds. unemployment and inflation. We need also to re-examine the costs and bene­ We have all painf ully learned that the unem- fits of such Federally mandated programs as the ployment-inflation trade-off—which is gener­ Davis-Bacon Act, the minimum wage for teen­ ally thought to be shaped by our endowment agers, and extended unemployment insurance. of human and material resources, our economic Second, are programs that would serve to institutions and processes, and our social prac­ increase over time the employability of the tices and aspirations—has grown distinctly more jobless. We need better and more imaginative unfavorable in recent years. A simple but useful training programs and an improved labor market illustration of this deterioration is the so-called information system that would match job va­ discomfort index, which adds together the un­ cancies with available people, perhaps on a employment rate and the rate of increase in national basis. consumer prices. Last year, that index was 15.6, Other programs are worthy of consideration. while a decade ago it was 6.4 and two decades We should seek out ways to encourage more ago, 4.8. investment in productive plant and equipment High unemployment side by side with high through stronger incentives and perhaps some rates of inflation presents the most difficult revisions in the tax laws. We should stress problem facing economic policy-makers, not programs to improve efficiency in both the pri­ only in the United States but throughout the vate and public sectors. In this regard, the Board world. The sources of this problem are far from would endorse the principle of zero-base budg­ fully understood, but an important part appears eting, which appears to be contemplated by the to be structural in nature and, therefore, rela­ feature of H.R. 50 requiring an annual review tively immune to monetary and fiscal policy. of one-fifth (by dollar value) of all Federal A look at the composition of the unemployment Government programs. figures illustrates some of the structural impedi­ A new emphasis on structural programs such ments in labor markets. Groups experiencing the as these, together with prudent monetary and greatest barriers—(discrimination, marginal fiscal policies, will provide our best hope for skills, location in depressed areas—have jobless achieving the goals of the Employment Act of rates well above the national average, even 1946. But the Board believes that H.R. 50, when the economy is not in a recession. For while reasserting these goals, would in the end example, in 1973, when the average unemploy­ be counterproductive in the effort to achieve ment rate nationally was 4.9 per cent, black them. The bill would release a powerful combi­ joblessness was 8.9 per cent, while 14.5 per nation of demand-pull and cost-push pressures cent of all teenagers in the labor force were on prices. As has been demonstrated by the unemployed. experience of many other countries—and, to a The bill properly recognizes the importance degree, by our recent experience here at of structural problems and suggests a variety of home—rapid inflation can breed economic in­ programs to alleviate them. There are many stability and ultimately retard—not promote— such programs that might prove beneficial, but the growth of productive jobs. If we are truly I believe that two broad areas deserve special to commit ourselves to the broad goals of the emphasis. 1946 Act, we need programs and policies that First, are programs that would help to in­ achieve a greater balance among our economic crease competition in product and factor mar­ objectives than is recognized in H.R. 50. □ Additional statement follows. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 353 Statement by Arthur F. Burns, Chairman, composition of Reserve Bank directorates. It is Board of Governors of the Federal Reserve not at all clear why these features of the Federal System, before the Committee on Banking, Reserve System have become the focal point Currency, and Housing, U.S. House of Repre­ for “reform.” In all candor, this bill seems to sentatives, April 9, 1976. me and my colleagues on the Board to propose change for the sake of change. I wish to thank the Chairman of the committee Before turning to the specific provisions of for scheduling a meeting on short notice to H.R. 12934, I want to invite your attention to accommodate the desire of the Board of Gover­ its basic premises—as set forth by Chairman nors of the Federal Reserve System to testify Reuss when he introduced the bill. The premises on the proposed Federal Reserve Reform Act appear to be as follows: First, the Nation needs of 1976. a “better balanced” monetary policy; second, When I appeared here on March 18 to testify the Federal Reserve does not have sufficiently on the Committee Print of the Financial Reform in mind the objectives of the Employment Act Act of 1976, I devoted my statement mainly of 1946; third, the Federal Reserve discrim­ to the proposal for a Federal Banking Commis­ inates against women and minorities; and sion. I expressed the Board’s opposition to the fourth, the Federal Reserve is controlled by the portions of that massive document that would commercial banks. have weakened the Federal Reserve System, and We see no validity whatever in these prem­ I urged the committee to avoid the temptation ises. I must, add, however, that if sufficient of legislating hastily. At the same time I pointed evidence is ever adduced to persuade members out that there were major principles embodied of the Congress that there is truth in such in the Committee Print that the Board warmly charges, then far more drastic remedies will be endorses. required than the so-called “reforms” proposed The bill now before your committee—H.R. in this bill. 12934—is more modest in its scope than even As to the first two premises, we believe that Title V of the earlier proposal. It again bears our Nation is benefiting from a monetary policy the label of “reform” legislation, but it omits that, besides being well balanced, is faithful to the one reform that the Board has repeatedly the objectives of the Employment Act. The advised the Congress is most needed to improve Federal Reserve has been providing reserves to the precision of monetary policy—namely, pro­ the banking system at a sufficient rate to facili­ vision for broader application of reserve re­ tate a vigorous economic expansion, and at the quirements. Such a provision was wisely in­ same time we have been mindful of the need cluded in the earlier Committee Print. It is now to prevent a new wave of inflation. inexplicably removed. Nor is this all. H.R. This policy has been marked by considerable 12934 actually takes a contrary course on re­ success. The economy is again expanding at a serve requirements by repealing the provision good pace, the burden of inflation is subdued, in present law that makes membership in the and conditions in financial markets strongly Federal Reserve System mandatory for national favor continuance of expansion in output and banks. Such a repeal can only weaken the exe­ employment. Interest rates are generally lower cution of monetary policy. We were pleased to than at the trough of the recession. Savings learn yesterday that this change was uninten­ flows to thrift institutions are very ample, and tional; but the very fact that an error of this commitments of funds to the mortgage market magnitude was made emphasizes a need for are continuing to increase. Mortgage interest caution and care by all of us. rates are edging down. The stock market has The principal explicit provisions of the pro­ staged a dramatic recovery. The liquidity posi­ posed Act deal with the manner of appointment tion of our Nation’s financial institutions and and terms of Reserve Bank presidents and of business enterprises is much improved. Me­ the Chairman and Vice Chairman of the Board dium-sized firms of less than the highest stand­ of Governors, as well as with the size and ing again have reasonable access to the public Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

354 Federal Reserve Bulletin □ April 1976 market for securities. And interest rates have a legal commitment to the principle of equal come down even in the troubled market for State employment opportunity. and local government securities, while the vol­ We have tried hard in recent years to appoint ume of new municipal issues has remained qualified women and minority group members relatively large. to the boards of directors of the Reserve Banks. These facts indicate, I believe, that the course We have achieved some but not enough success of moderation in monetary policy pursued by in these efforts. We now have six women serv­ the Federal Reserve has significantly contributed ing as members of Reserve Bank Branch to economic recovery. Our present objective is Boards, including one—at the San Antonio to stay on a course that will continue to support Branch—who chairs the board. There are also a good rate of growth in output and employ­ thirteen directors in the System drawn from ment, while avoiding excesses that would ag­ minority groups, including two who serve on gravate inflation and create trouble for the fu­ boards of head offices. I can assure the commit­ ture. It is our judgment that this represents a tee that our efforts to add women and members balanced monetary policy, and that the objec­ of minorities to our highest posts are thoroughly tives of the Employment Act are being well sincere, that they will be pursued energetically, served by that policy. and that we would welcome suggestions of the If I may digress for a moment, one of the names of highly qualified individuals. curious arguments put forth in support of this The final premise of H.R. 12934 is that the bill is that in 1972 the Federal Reserve “unnec­ Federal Reserve is so dominated by bankers that essarily opened the monetary floodgates” for it is a “wholly owned subsidiary” of the com­ partisan purposes, and that “catastrophic infla­ mercial banks. I trust that serious observers of tion” followed. This charge is so shopworn and the Federal Reserve will dismiss this charge for has been so thoroughly discredited that it should what it is—an empty slogan. It is perfectly true, suffice to recall that early in 1973 the distin­ of course, that the Federal Reserve is in some guished Chairman of this committee congrat­ of its functions a bankers’ bank. Indeed, the ulated the Federal Reserve System on the mon­ Congress created it for just that reason—that is, etary policy it had pursued during 1972. to serve as a source of liquidity for our Nation’s As to “catastrophic inflation,” the fact is that banking system and to hold the reserves of the inflation started in the mid-1960’s and was member banks. It is also true that the member mainly caused by the large deficits, continued banks elect six of the nine directors of each year after year, in the Federal budget. As a Reserve Bank. But the charge that these rela­ result of the excess demand created by a per­ tionships result in control of the Federal Reserve sistently loose fiscal policy, a spiral of wages System by bankers is absurd. and prices got under way in the private sector, The control of the Federal Reserve resides and the rate of inflation began to quicken. Dur­ firmly with the Board of Governors. The Federal ing the period 1972-74, moreover, the underly­ Reserve Act empowers the Board to exercise ing forces of inflation were augmented by spe­ supervision over the Federal Reserve Banks and cial factors—the devaluation of the dollar, to suspend or remove any officer or director of shortages of agricultural products, and soaring a Reserve Bank. The Board has exclusive re­ energy prices, all of which pushed up the gen­ sponsibility for changes in reserve requirements, eral price level. margin requirements, and banking regulations. The third premise underlying the legislation True, changes in the discount rate originate at before us is that women and minorities “have the Reserve Banks; but they require explicit been badly discriminated against” by the Fed­ approval by the Board of Governors, and we eral Reserve. Again, this charge is not based examine every discount rate proposal with ut­ upon fact. The representation of women and most care. Open market decisions are made by minorities in the Federal Reserve System is the Federal Open Market Committee (FOMC), significantly larger than in the Federal civilian which consists—as you know—of the seven service. We fully recognize a moral as well as members of the Board and five Reserve Bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 355 presidents. This structure of the FOMC avoids Under the method now proposed for appointing complete centralization of monetary policy de­ Reserve Bank presidents, it would be extremely cisions in Washington, but the Board members difficult for our Board to remove a Presidential are plainly in the majority on that body and the appointee. The practical effect would therefore Chairman of the Board serves also as Chairman be to exempt these positions from the strict of the FOMC. Thus, responsibility for deci­ supervisory controls that we at the Board have sion-making rests preponderantly with the seven developed over the years. The net result might members of the Board of Governors. be to limit the improvements of productivity that So much for the underlying premises of H.R. our Banks have been steadily achieving in han­ 12934. I would like now to turn to the specific dling currency, clearing checks, carrying out proposals of this bill for “reforming” the Fed­ fiscal functions in behalf of the Treasury, and eral Reserve—and presumably for curing its in their other activities. alleged shortcomings. It should also be noted that while the Reserve This committee is already aware of the Bank boards of directors play a part in choosing Board’s position on the proposal that Reserve Bank presidents, in actual practice the Board Bank presidents be appointed for a 6-year term of Governors has the decisive voice in their by the President of the United States, subject selection. In filling vacancies of Reserve Bank to confirmation by the Senate. The Board be­ presidencies, the Board of Governors has fre­ lieves that this provision would turn these of­ quently turned down recommendations of Re­ fices into political plums, and that an atmos­ serve Bank boards. But we do not merely wait phere of partisanship would thus be injected into for recommendations by the Bank boards. On the formulation of monetary policy. It is erro­ the contrary, we typically make thorough eval­ neous to compare these appointments either to uations of possible candidates on our own. those of Board Members or, as some have done, I have already commented on the charge that to Federal judgeships. Federal judges hold life­ the Federal Reserve has been guilty of discrim­ time appointments, and their independence from ination. To write into the Federal Reserve Act transitory political considerations is thus as­ a provision that Class C Reserve Bank directors sured. are to be selected “without discrimination” is Board Members are appointed for a 14-year to imply that the Federal Reserve has refused, term, which provides them a substantial meas­ solely on the basis of race or sex or national ure of independence. Moreover, the Board origin, to accept particular candidates for direc­ functions as a deliberative, collegial body in an torships who otherwise were fully qualified. We atmosphere in which partisan considerations are resent any such implication, and we cannot shunned. This has a very significant leavening believe that it conveys the true sentiment of the effect even though Board Members are ap­ Congress. If the Congress as a whole had any pointed by the President and confirmed by the doubt about the Board’s commitment to equal Senate. A like remark could not be applied to opportunity, it would not have assigned to us Reserve Bank executives who are geograph­ in 1974 the responsibility to write regulations ically separated and who would hold office for prohibiting discrimination in the granting of a much shorter term under the proposed bill. credit—a responsibility that was enlarged just Furthermore, the provision of H.R. 12934 2 weeks ago. regarding the appointment of Reserve Bank We see no difficulty in the provision for presidents would weaken, perhaps to the point increasing the number of Class C directors from of nullifying, the ability of the Board of Gover­ three to six. But with respect to the requirement nors to fulfill its statutory responsibility of exer­ that the Board of Governors give “due consid­ cising guidance and control over the Federal eration to the interests of labor, education and Reserve Banks. Under present law a Reserve consumers,” we are concerned that singling out Bank president who does not manage his bank certain favored interests may have the effect of satisfactorily may be removed from office excluding others. Why, for example, should not through action taken by the Board of Governors. due consideration also be given to the interests Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

356 Federal Reserve Bulletin □ April 1976 of ictired persons, or investors, or professional mation of Reserve Bank presidents. We oppose men and women, or the clergy? also the narrow criteria for selection of Class In my earlier testimony I commented on the C Reserve Bank directors, and the requirement proposal to make the quarterly hearings on that the System provide explicit projections of monetary policy a matter of statute. The Board employment, production, the price level, and welcomes these oversight hearings on monetary interest rates. policy, and we have actually proposed addi­ We have no objection, however, to making tional oversight healings on bank regulation and the term of the Chairman and Vice Chairman supervision; but we see no need to write such of the Board of Governors roughly coterminous provisions into law . with that of the President, or to Senate confir­ In this connection, we object to the require­ mation of the Chairman, or to enlargement of ment that the expected impact of monetary pol­ Reserve Bank directorates from 9 to 12 mem­ icy be expressed in terms of effects “on statisti­ bers, or to broader representation on those cal measures of employment, production and boards, or—for that matter—to reaffirming the purchasing power.” As I have indicated on objectives of the Employment Act. earlier occasions, such a formulation assumes I noted at the beginning—and I feel the point a procedure by the Federal Open Market Com­ deserves emphasis—that if the members of the mittee that does not now exist and that could Congress should find that the premises underly­ not be brought into existence in any meaningful ing H.R. 12934 are valid, then far more drastic way. remedies than any proposed by this legislation And we especially object to the provision that would be necessary. But I also find it hard to we try to forecast interest rates over a 12-month believe that the members of the Congress or the period. Such a requirement could cause inves­ members of this committee really think that the tors and consumers to act to their detriment on Federal Reserve is unmindful of congressional the assumption that such forecasts had some objectives, or that we are responsible for the measure of validity. I must warn this committee havoc wrought by inflation and recession, or that that any effort by the Federal Reserve to carry we are a racist organization, or that we are out such a provision might well cause a danger­ dominated by commercial bankers. Certainly no ous boom on the stock exchanges if we fore­ facts have been advanced to support such no­ casted a decline of interest rates, or a collapse tions, and anyone who is familiar with the of both the stock and bond markets if we fore­ Federal Reserve should know these charges are casted a rise of interest rates. untrue. I have already alluded to the proposal requir­ In conclusion, although the Board sees no ing monetary policy to be governed by the difficulty with some parts of the legislation objectives of the Employment Act. Need I say under discussion, we also see no clear need to again that we fully observe the Employment Act adopt any of it. Indeed, as I have indicated, in formulating our policies? This is what we there are strong reasons for the committee to work at every day. All of our energies are reject some of its key provisions. Your prede­ devoted to it. We could not be more mindful cessors in the Congress acted wisely in provid­ of it. Moreover, the statement of policy in the ing a design for the Federal Reserve that insu­ Employment Act already covers the Federal lated it from politics. This committee has al­ Reserve; it is carefully worded, and there is no ready rejected efforts to weaken a structure that need to repeat it in summary form in new has stood so well the test of time and experi­ legislation. ence, and we urge you not to begin a process In summary, the Board opposes the provision of erosion by adopting legislation for which no for Presidential appointment and Senate confir­ need has been demonstrated. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

357 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON FEBRUARY 17-18, 19761 1. Domestic Policy Directive The information reviewed at this meeting suggested that output of goods and services—which had increased at an annual rate of 5.4 per cent in the fourth quarter of 1975, according to preliminary estimates—was continuing to expand at a moderate pace in the current quarter and that the rise in prices was near the fourth-quarter rate. Staff projections for the second quarter of this year suggested that growth in output would remain moderate and that the rate of increase in prices would change little. In January retail sales had remained close to the high level reached in December, according to the advance report. Reflecting widespread gains—especially among nondurable goods—industrial production was estimated to have recovered further. Nonfarm payroll employment—which had increased appreciably in De­ cember—expanded even more in January. In manufacturing, gains in employment were sizable and the average workweek, which had lengthened considerably in December, increased a little further. The unemployment rate dropped from 8.3 to 7.8 per cent. The index of average hourly earnings for private nonfarm pro­ duction workers rose sharply in January, but a significant part of the rise reflected an increase in the minimum wage as of the first of the month. Increases in wholesale prices of industrial commodi­ ties were again pervasive, but the rise in the average was somewhat less than in November and December; average prices of farm products and foods declined appreciably further. In December the consumer price index had risen slightly less than in the preceding 2 months, reflecting smaller increases in prices of foods and energy. Staff projections for the first half of 1976 suggested that growth in real output would be somewhat stronger than had been suggested 1This meeting was held over a 2-day period, beginning on the afternoon of February 17. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

358 Federal Reserve Bulletin □ April 1976 4 weeks earlier. The greater strength was attributed in large part to a sizable shift in nonfarm business inventories from liquidation in the fourth quarter of 1975 to accumulation in the first half of this year and to somewhat larger gains in personal consumption expenditures. It was still anticipated that residential construction and business fixed investment would continue to recover but that exports of goods and services would rise less than imports. The trade-weighted value of the dollar had changed little over the 4 weeks since the January meeting of the Committee. Foreign exchange markets had been unsettled at times, but the disturbances had affected primarily the Italian lira, the French franc, and a few other European currencies—some of which moved considerably. In December merchandise imports rose considerably more than exports, reflecting recovery in imports of industrial supplies; the foreign trade surplus, although not so large as in most other months last year, was still substantial. Bank-reported private capital move­ ments shifted to a net outflow in December. Total loans and investments at U.S. commercial banks—after having declined appreciably in December—increased somewhat in January, reflecting for the most part another large increase in bank holdings of Treasury securities. Outstanding loans to businesses rose slightly while the outstanding volume of commercial paper issued by nonfinancial corporations expanded substantially. In late January most banks reduced the prime rate applicable to large business borrowers from 7 to 63A per cent. M1;, which had declined in December and grown at an annual rate of 2.5 per cent from the third to the fourth quarter, in­ creased at an annual rate of about 1.5 per cent in January. However, M2 and M3 expanded at annual rates of about 11 per cent in January, after having grown from the third to the fourth quarter at annual rates of about 6 and 9 per cent, respectively. At commercial banks and nonbank thrift institutions, inflows of time and savings deposits other than large-denomination CD’s expanded substantially in January; inflows into savings accounts were especially large, as short-term market interest rates continued to decline early in the month and fell below Regulation Q ceiling rates on such accounts. System open market operations in the inter-meeting period had been guided by the Committee’s decision to maintain the bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 359 reserve and money market conditions prevailing at the time of the January meeting, provided that monetary aggregates appeared to be growing at about the rates then expected. Data that became available week by week suggested that in the January-February period would grow at a rate near the lower limit of the range of tolerance that had been specified by the Committee but that M2 would grow at a rate near the upper limit of its range of tolerance. Therefore, operations were directed toward maintaining the Federal funds rate close to 4% per cent, the level prevailing at the time of the January meeting. Throughout the inter-meeting period, the rate was close to 4% per cent. Short-term market interest rates—which had declined appreciably from mid-December to mid-January—drifted down somewhat fur­ ther in late January, when market participants apparently anticipated further easing in money market conditions. When the easing failed to develop, however, most short-term rates returned to about the levels prevailing at the time of the January meeting. For example, the rate on 3-month Treasury bills was around 4.85 per cent at the time of this meeting, compared with around 4.80 per cent 4 weeks earlier. In longer-term markets, interest rates also changed little over the inter-meeting period. In part because of declines that had occurred in rates earlier, the volume of publicly offered corporate bonds expanded in January. Mortgage interest rates declined some­ what, in response to the earlier decreases in other rates and to the strong inflows of deposits to thrift institutions. On January 27 the Treasury announced that it would sell $6.9 billion of notes and bonds to refund $4.3 billion of publicly held notes that were to mature on February 15 and to raise $2.6 billion of new cash. In auctions on February 5 the Treasury sold $3 billion of 3-year notes and $0.4 billion of 29-year 3-month bonds at average prices to yield 7.05 per cent and 8.09 per cent, respectively. For the remaining $3.5 billion, the Treasury offered 7-year, 8 per cent notes at par. However, subscriptions for these notes—which had a yield somewhat higher than that on outstanding issues of similar maturity—amounted to $29 billion, and on February 4 the Treasury accepted $6 billion of them. On February 13 the Treasury announced that it would auction $2.5 billion of 21-month notes to raise new cash from the public. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

360 Federal Reserve Bulletin □ April 1976 At its January meeting, the Committee had agreed that growth in the monetary aggregates on the average over the period from the fourth quarter of 1975 to the fourth quarter of 1976 at rates within the following ranges appeared to be consistent with its broad economic aims: Mu AVi to IVi per cent; M2, IVi to IOV2 per cent; and M3, 9 to 12 per cent. The associated range for growth in the bank credit proxy was 6 to 9 per cent. It was understood that the longer-term ranges, as well as the particular list of aggre­ gates for which such ranges were specified, would be subject to re vie v/ and modification at subsequent meetings. It also was under­ stood 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 immedi­ ately ahead transactions demands for money—at current levels of short-term interest rates—might be expected to pick up in associa­ tion v/ith expansion in economic activity. Moreover, growth in M1 might be temporarily bolstered by refunds of Federal income tax payments—which, beginning in the latter part of February, were expected to be even larger than a year earlier. At the same time, however, growth in time and savings deposits other than large-de­ nomination CD’s might moderate from the rapid pace in January, as payments were made for the new 7-year note being issued by the Treasury. During the discussion it was noted that the economic situation and outlook had improved in recent weeks, and almost all Com­ mittee members indicated that they favored essentially no change in policy. The Committee decided that operations in the period immediately ahead should be directed toward maintaining the bank reserve and money market conditions now prevailing, characterized by a Federal funds rate of about 43A per cent, provided that monetary aggregates appeared to be growing at about the rates currently expected. The members concluded that growth in and M2 over the February-March period at annual rates within ranges of tolerance of 5 to 9 per cent and 9 to 13 per cent, respectively, would be acceptable. Mainly because the outstanding volume of large-denomination CD’s was projected to decline substantially over the 2-month period, it was expected that these growth rates Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 361 for the monetary aggregates would be associated with an annual rate of decline in reserves available to support private nonbank deposits (RPD’s) between V2 and 4V2 per cent. The members agreed that, should the aggregates appear to be deviating significantly from the midpoints of their specified ranges, the weekly-average funds rate might be expected to vary in an orderly fashion within a range of 4XA to 5lA per cent. The Commit­ tee decided that, in assessing the behavior of the aggregates, approximately equal weight should be given to M1 and M2. 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 is continuing to expand at a moderate rate in the current quarter. In January retail sales remained at an advanced level and recovery in industrial production continued. Gains in nonfarm employment were large and widespread and the unemploy­ ment rate dropped from 8.3 per cent to 7.8 per cent. Average wholesale prices of industrial commodities increased somewhat less than in the preceding 2 months, and average prices of farm products and foods declined appreciably further. The index of average wage rates advanced substantially in January, but a significant part of the rise reflected an increase in the minimum wage on the first of the month. The trade-weighted value of the dollar has changed little over the past 4 weeks. There have been disturbances in foreign exchange markets affecting primarily European currencies, and rates for sev­ eral currencies have moved considerably. In December the foreign trade surplus was substantial, although not as large as in other recent months, and bank-reported private capital movements shifted to a net outflow. M1? which had declined in December, increased only a little in January, but M2 and M3 rose considerably. At commercial banks and nonbank thrift institutions, inflows of time and savings deposits other than large-denomination CD’s expanded substantially. Inflows into savings accounts were especially large in January, as short-term market interest rates continued to decline early in the month and fell below Regulation Q ceiling rates on such accounts. In recent weeks, interest rates on both short- and long-term securities have changed little, while mortgage interest rates have declined some­ what. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

362 Federal Reserve Bulletin □ April 1976 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 infla­ tionary pressures and contributing to a sustainable pattern of inter­ national 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 aggre­ gates appear to be growing at about the rates currently expected. Votes for this action: Messrs. Burns, Volcker, Baughman, Coldwell, Eastburn, Holland, Jackson, MacLaury, Mayo, Partee, and Wallich. Votes against this action: None. Absent and not voting: Mr. Gardner. 2. Amendment to Authorization for Foreign Currency Operations At this meeting the Committee amended paragraph 6 of the author­ ization for foreign currency operations in order to create a new Foreign Currency Subcommittee, to which the Committee would delegate special duties in the foreign currency area. Previously, the Committee had delegated such duties to a standing Subcommit­ tee, designated in the Committee’s rules of procedure, consisting of the Chairman and Vice Chairman of the Committee and the Vice Chairman of the Board of Governors. The amendment creating the new Subcommittee provided for the same membership, with the addition of such other member of thie Board as the Chairman might designate. It was contemplated that the Chairman would designate the member of the Board having particular responsibilities for international matters. With this amendment, paragraph 6 read as follows: 6. The Foreign Currency Subcommittee is authorized to act on behalf of the Committee when it is necessary to enable the Federal Reserve Bank of New York to engage in foreign currency operations before the Committee can be consulted. The Foreign Currency Subcommittee consists of the Chairman and Vice Chairman of the Committee, the Vice Chairman of the Board of Governors, and such other member of the Board as the Chairman may designate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 363 (or in the absence of members of the Board serving on the Subcom­ mittee, other Board Members designated by the Chairman as alter­ nates, and in the absence of the Vice Chairman of the Committee, his alternate). All actions taken by the Foreign Currency Subcom­ mittee under this paragraph shall be reported promptly to the Committee. Votes for this action: Messrs. Burns, Volcker, Baughman, Coldwell, Eastburn, Holland, Jackson, MacLaury, Mayo, Partee, and Wallich. Votes against this action: None. Absent and not voting: Mr. Gardner. 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

364 Law Department Statutes, regulations, interpretations, and decisions Interpretation of Regulation B law and enforcement agency immediately follow­ ing the reference to the Federal law and agency. Modification of Equal Credit Opportunity Act In these circumstances, a creditor may add to Notice pursuant to State law. Section 202.4(d)(1) or modify the notice prescribed in section requires creditors to provide applicants with a 202.4(d)(1) to refer to the relevant State law and/or notice explaining the Act’s general rule prohibiting to provide the name and address of the appropriate discrimination in credit on the basis of sex or State enforcement agency. This modification may marital status. This notice contains a specific ref­ take the following form: erence to the “Fedeml Equal Credit Opportunity Act” and to the “Federal agency” responsible for The Federal Equal Credit Opportunity Act and enforcing the Act. the (insert the name of the State law) prohibit Certain States have adopted, or intend to adopt, creditors from discriminating against credit ap­ plicants on the basis of sex or marital status. The statutes prohibiting discrimination in credit that are Federal agency which administers compliance similar to the Federal law. In some cases, State with the Federal Act concerning this (insert ap­ law or regulation requires that creditors provide propriate description—bank, store, etc.) is (name applicants with a notice regarding a State Equal and address of the appropriate Federal agency). Credit law. The Board has been asked whether The State agency which administers compliance the statement prescribed by section 202.4(d)(1) with the State law is (insert name of the State may be modified to include a reference to a State agency). Bank H olding Company and Bank M erger Orders Issued by the Board of Governors Orders Under Section 3 the factors set forth in § 3(c) of the Act (12 U.S.C. of Bank Holding Company Act 1842(c)). Applicant is a recently formed corporation or­ CU Bank Shares, Inc., ganized for the purpose of becoming a bank hold­ Dallas, Texas ing company through the acquisition of Bank.1 Order Approving Bank has total deposits of approximately $12.1 Formation of Bank Holding Company million, representing 0.1 per cent of total deposits in commercial banks in the relevant banking mar­ CU Bank Shares, Inc., Dallas, Texas, has ap­ ket,2 and is the 74th largest banking organization plied for the Board’s approval under § 3(a)(1) of in the market.3 the Bank Holding Company Act (12 U.S.C. 1842(a)(1)) of formation of a bank holding com­ pany through acquisition of 99 per cent or more 1 All of Applicant’s shares are currently owned by the Texas of the voting shares (less directors’ qualifying Credit Union League (“TCUL”), an association of Texas shares) of Town North National Bank, Farmers credit unions. As part of the proposed transaction, Applicant will issue an additional 3,500,000 shares. Over 150 State and Branch, Texas (“Bank”). Federal credit unions in Texas have committed themselves to Notice of the application, affording opportunity acquiring Applicant’s shares if this application is approved. After the additional shares of Applicant are issued, neither for interested persons to submit comments and TCUL nor any credit union will own more than 5 per cent views, has been given in accordance with § 3(b) of the voting shares of Applicant. of the Act. The time for filing comments and views 2 The relevant banking market is approximated by the Dallas RMA, which consists of Dallas County and portions of six has expired, and the Board has considered the adjacent counties. application and all comments received in light of 3 All banking data are as of June 30, 1975. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 365 Since Applicant has no present operations or of Pine City, Pine City, Minnesota (“Bank”). subsidiaries, consummation of the proposed trans­ Applicant has also applied, pursuant to § 4(c)(8) action would not have any adverse effect on exist­ of the Act (12 U.S.C. § 1843(c)(8)) and § ing or potential competition, nor would it increase 225.4(b)(2) of the Board’s Regulation Y, for per­ the concentration of banking resources or have an mission to retain the general insurance agency adverse effect on other banks in the relevant mar­ business (“Agency”) (in a town with a population ket. Thus the Board concludes that competitive of less than 5,000) presently operated by Appli­ considerations are consistent with approval of the cant. The activities that Applicant proposes to application. engage in have been determined by the Board to The financial and managerial resources of Ap­ be closely related to banking (12 CFR plicant and Bank are regarded as satisfactory and 225.4(a)(9)(iii)(a)). the future prospects for each appear favorable. Notice of the applications, affording opportunity Applicant will not incur debt incident to the subject for interested persons to submit comments and proposal. Following consummation of this pro­ views, has been given in accordance with §§ 3 posal, Applicant proposes to enable Bank to offer and 4 of the Act (41 Federal Register 824). The trust services. Moreover, as a result of the pro­ time for filing comments and views has expired, posal, credit unions that share in the ownership and the applications and all comments received of Applicant would be able to expand and improve have been considered in light of the factors set their services. Accordingly, considerations relat­ forth in § 3(c) of the Act, and the considerations ing to the convenience and needs of the communi­ specified in § 4(c)(8) of the Act. ties to be served lend some weight toward approval Applicant was organized in 1970 and operates of the application. It is the Board’s judgment that a general insurance agency business in Pine City, the proposed acquisition is in the public interest Minnesota. Bank, with deposits of approximately and should be approved. $16 million,1 representing 0.1 per cent of the total On the basis of the record, the application is commercial bank deposits in Minnesota, is the approved for the reasons set forth above. The largest of five commercial banks operating in the transaction shall not be made (a) before the thir­ Pine County banking market.2 Bank holds ap­ tieth calendar day following the effective date of proximately 48 per cent of the total commercial this Order or (b) later than three months after the bank deposits in commercial banks located in this effective date of this Order, unless such period market. Two individuals that own 100 per cent is extended for good cause by the Board or by of the outstanding shares of Applicant own 50.2 the Federal Reserve Bank of Dallas pursuant to per cent of the outstanding shares of Bank. Inas­ delegated authority. much as the proposal represents merely a restruc­ By order of the Board of Governors, effective turing of Bank’s ownership, the acquisition of March 17, 1976. Bank by Applicant would have no adverse effects on competition within the area served by Bank. Voting for this action: Chairman Burns and Gover­ Accordingly, the Board concludes that competitive nors Gardner, Holland, Wallich, Cold well, Jackson, and Partee. considerations are consistent with approval of the application. (Signed) J. P. Garbarini, The financial and managerial resources and [seal] Assistant Secretary of the Board. prospects of Bank appear generally satisfactory. In regard to such considerations as they relate to P.B.C., Inc., Applicant, Applicant, as part of the instant pro­ Pine City, Minnesota posal, would assume a portion of the debt that its principals incurred in their original acquisition Order Denying of shares of Bank. Applicant’s principals also own Formation of Bank Holding Company 62 per cent of the outstanding shares of another P.B.C., Inc., Pine City, Minnesota, has applied bank and 100 per cent of the assets of another for the Board’s approval under § 3(a)(1) of the Bank Holding Company Act (12 U.S.C. § 1842(a)(1)) of formation of a bank holding com­ XA11 banking data are as of June 30, 1975. pany through acquisition of 48.9 per cent or more 2 The Pine County banking market is approximated by Pine of the voting shares of The First National Bank County. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

366 Federal Reserve Bulletin □ April 1976 insurance agency as a result of acquisitions made Voting for this action: Vice Chairman Gardner and in 1974.3 The 1974 acquisitions involved a sub­ Governors Holland, Wallich, Coldwell, Jackson, and Partee. Absent and not voting: Chairman Burns. stantial amount of personal debt on the part of these principals, most of which remains outstand­ (Signed) G riffith L. Garwood, ing. Applicant itself plans to incur additional debt [seal] Assistant Secretary of the Board. in the immediate future for the purchase of addi­ tional shares of Ban!:. It does not appear that Applicant and its principals will be able to service these various debts without impairing their ability BancOhio Corporation, to meet unforeseen financial problems that Bank Columbus, Ohio might encounter in the future. In the Board’s view, the debt position of Applicant and its principals Order Approving Acquisition of Bank and the limited financial flexibility that would result from consummation of the instant proposal BancOhio Corporation, Columbus, Ohio, a indicate that Applicant would not be able to serve bank holding company within the meaning of the as a source of strength to Bank. Accordingly, on Bank Holding Company Act, has applied for the the basis of the facts of record, the Board con­ Board’s approval under § 3(a)(3) of the Act (12 cludes that considerations relating to the financial U.S.C. § 1842(a)(3)) to acquire all of the voting aspects of Applicant’s proposal lend weight toward shares, less directors’ qualifying shares, of the denial of the application. successor by merger to The Geauga County Na­ Applicant indicates that banking services cur­ tional Bank of Chardon, Chardon, Ohio rently rendered the community by Bank will re­ (“Bank”). The bank into which Bank is to be main unchanged upon consummation of the pro­ merged has no significance except as a means to posal. Accordingly, considerations relating to the facilitate the acquisition of the voting shares of convenience and needs of the community to be Bank. Accordingly, the proposed acquisition of served do not outweigh the adverse findings with shares of the successor organization is treated respect to the financial factors involved in Appli­ herein as the proposed acquisition of the shares cant’s proposal. of Bank. On the basis of all of the circumstances of this Notice of the application, affording opportunity case and the facts of record, the Board concludes for interested persons to submit comments and that the acquisition debt involved in this proposal views, has been given in accordance with § 3(b) presents adverse circumstances bearing on the fi­ of the Act. The time for filing comments and views nancial condition and future prospects of Applicant has expired, and the Board has considered the and Bank. Such adverse factors are not outweighed application and all comments received in light of by any procompetitive effects or by benefits to the the factors set forth in § 3(c) of the Act (12 U.S.C. convenience and needs of the communities to be § 1842(c)). served. Accordingly, it is the Board’s judgment Applicant, the second largest banking organi­ that approval of the application to become a bank zation in Ohio, controls 40 banks with aggregate holding company would not be in the public inter­ deposits of approximately $2.5 billion, repre­ est and the application should be denied.4 senting approximately 8.5 per cent of total deposits On the basis of the record, the application is held by commercial banks in the State of Ohio.1 denied for the reasons summarized above. Acquisition of Bank, which holds deposits of By order of the Board of Governors, effective $14.9 million, would increase Applicant’s share March 3, 1976. of deposits in commercial banks in the State by less than one-tenth of one per cent and would not result in any significant increase in the concentra­ tion of banking resources in Ohio. Bank ranks 29th among the 38 banking organi­ 3Farmers State Bank of Waubun, Inc., Waubun, Minnesota, and the H & H Insurance Agency located on the premises of the bank. 4In view of the Board’s action with respect to the application 1 Banking data are as of June 30, 1975, and reflect holding to become a bank holding company, consideration of the company formations and acquisitions approved by the Board application to retain the agency becomes moot. through December 31, 1975. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 367 zations located in the Cleveland banking market2 approved for the reasons summarized above. The and controls approximately .16 of one per cent transaction shall not be made (a) before the thir­ of total market deposits. Three banking subsidi­ tieth calendar day following the effective date of aries of Applicant operate a total of 17 offices in this Order or (b) later than three months after the the Cleveland market and Applicant’s subsidiaries effective date of this Order, unless such period thereby hold approximately 1.3 per cent of the is extended for good cause by the Board, or by total market deposits; Applicant thus ranks as the the Federal Reserve Bank of Cleveland pursuant eighth largest banking organization in the market. to delegated authority. Consummation of the proposed transaction would By order of the Board of Governors, effective not increase its rank in the market. Applicant’s March 1, 1976. closest banking subsidiary to Bank is located ap­ Voting for this action: Chairman Burns and Gover­ proximately 17 miles from Bank. Bank does not nors Gardner, Holland, Wallich, Coldwell, and Partee. derive a significant amount of deposits or loans Absent and not voting: Governor Jackson. from the service areas of Applicant’s banking (Signed) Theodore E. A llison, subsidiaries with offices in the Cleveland market; [seal] Secretary of the Board. nor do those subsidiaries derive a significant amount of loans and deposits from Bank’s service area. Accordingly, there is no significant existing Barnett Banks of Florida, Inc., competition between any of Applicant’s subsidi­ Jacksonville, Florida aries and Bank, and it appears unlikely that any significant competition would develop in the fu­ Order Approving Acquisition of Banks ture, particularly in view of Ohio’s restrictive Barnett Banks of Florida, Inc., Jacksonville, branching laws and Bank’s small size. Therefore, Florida, a bank holding company within the on the basis of the record, the Board concludes meaning of the Bank Holding Company Act, has that consummation of the proposal would not have applied for the Board’s approval under § 3(a)(3) significant adverse effects on existing or potential of the Act (12 U.S.C. 1842(a)(3)) to acquire 90 competition in any relevant area, and that compet­ per cent or more of the voting shares of each of itive considerations are consistent with approval the following proposed new banks: Barnett Bank of the application. of Orange Park, National Association, Clay The financial and managerial resources and fu­ County, Florida (“Orange Park Bank”), and Bar­ ture prospects of Applicant, its subsidiaries and nett Bank of Gainesville, National Association, Bank are generally satisfactory. Accordingly, the Alachua County, Florida (“Gainesville Bank”). banking factors are consistent with approval of the Notice of the applications, affording opportunity application. While it does not appear that the for interested persons to submit comments and convenience and needs of the community to be views, has been given in accordance with § 3(b) served are not being adequately met, Applicant of the Act. The time for filing comments and views does propose to make equipment leasing and trust has expired, and the Board has considered the services available to Bank’s customers. Accord­ applications and all comments received in light of ingly, considerations relating to the convenience the factors set forth in § 3(c) of the Act (12 U.S.C. and needs of the community to be served are 1842(c)). regarded as being consistent with approval of the Applicant is the second largest banking organi­ application. It is the Board’s judgment that the zation in Florida, controlling 58 banks with ag­ proposed acquisition would be in the public inter­ gregate deposits of $1.9 billion, representing 8.2 est and that the application should be approved. per cent of the total deposits in commercial banks On the basis of the record, the application is in the State.1 Since each Bank is a proposed new bank, no existing competition would be eliminated nor would concentration be increased in any rele­ vant area. 2 The Cleveland banking market is approximated by Cuya­ hoga, Lake, Geauga Counties, the northwestern quarter of Portage County, the northern third of Summit County, all but the southern-most tier of townships in Medina and Lorain *A11 banking data are as of December 31, 1974, and reflect Counties, and the City of Vermilion, which straddles the border bank holding company formations and acquisitions approved of Lorain and Erie Counties. as of January 31, 1976. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

368 Federal Reserve Bulletin □ April 1976 Gainesville Bank will represent Applicant’s ini­ posed acquisitions would be in the public interest tial entry into the Gainesville banking market2 and and that the applications should be approved. is located 45 miles from Applicant’s closest bank­ On the basis of the record, the applications are ing subsidiary. Applicant’s acquisition of Gaines­ approved for the reasons summarized above. The ville Bank should have a favorable competitive transactions shall not be made (a) before the thir­ effect by introducing a new competitor into the tieth calendar day following the effective date of Gainesville banking market in which four of the this Order or (b) later than three months after the eleven banking organizations competing in that effective date of this Order, and (c) Barnett Bank market control over 75 per cent of market deposits. of Orange Park, National Association, Clay Six of the competing banking organizations are County, Florida, and Barnett Bank of Gainesville, multi-bank holding companies. Applicant’s entry National Association, Alachua County, Florida, would not have any adverse effect on any compet­ shall be opened for business not later than six ing bank. months after the effective date of this Order. Each Orange Park Bank will be located in the Orange of the periods described in (b) and (c) may be Park area of Clay County, a rapidly growing part extended for good cause by the Board, or by the of the Jacksonville banking market.3 Applicant is Federal Reserve Bank of Atlanta pursuant to dele­ the third largest banking organization in the market gated authority. and controls 20.4 per cent of market deposits. By order of the Board of Governors, effective Already competing in the market are 16 banking March 29, 1976. organizations (42 banks), including the six largest Voting for this action: Chairman Burns, Governors banking organizations in Florida. Applicant’s Gardner, Holland, Wallich, and Coldwell. Absent and closest subsidiary banking office is about 10 miles not voting: Governors Jackson and Partee. north of Orange Park Bank. The projected area Orange Park Bank will serve is expected to con­ (Signed) J. P. Garbarini, tinue to experience significant growth.4 Moreover, [seal] Assistant Secretary of the Board. this area is presently served directly by only one bank which is a subsidiary of the State’s largest Commerce Bancshares, Inc., banking organization. It therefore appears that Kansas City, Missouri consummation of the proposal would not adversely Order Approving Acquisition of Bank affect the competitive situation nor increase the concentration of resources in the market. Further­ Commerce Bancshares, Inc., Kansas City, more, there is no evidence in the record that Missouri, a bank holding company within the Applicant’s proposal is an attempt to preempt a meaning of the Bank Holding Company Act, has site before there is a need for a bank. applied for the Board’s approval under § 3(a)(3) The financial and managerial resources and fu­ of the Act (12 U.S.C. 1842(a)(3)) to acquire all ture prospects of Applicant and its subsidiaries are of the voting shares (less directors’ qualifying regarded as generally satisfactory. Prospects for shares) of Commerce Bank of Grandview, N.A., both Banks appear favorable since they would Grandview, Missouri, a proposed new bank. have capable and experienced management and Notice of the application, affording opportunity would be adequately capitalized. Each Bank would for interested persons to submit comments and be able to provide an additional source of full views, has been given in accordance with § 3(b) banking services for the community. Consid­ of the Act. The time for filing comments and views erations relating to the convenience and needs of has expired, and the Board has considered the the areas to be served lend weight toward ap­ application and all comments received, including proval. It is the Board’s judgment that the pro­ those submitted on behalf of the Grandview Bank and Trust Company, Grandview, Missouri, and Bank of Belton, Belton, Missouri (“Protestants”), in light of the factors set forth in § 3(c) of the 2 The Gainesville banking market consists of Alachua Act (12 U.S.C. 1842(c)). County. 3The Jacksonville banking market comprises Duval County, Applicant, the third largest banking organization plus the Orange Park area in northern Clay County. in Missouri, controls 31 banks with aggregate 4Most of the past (42.7 per cent population increase from deposits of approximately $1.2 billion, repre­ 1970 to 1974) and projected growth of Clay County is in the Orange Park area. senting 8.4 per cent of total deposits in commercial Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 369 banks in the State. (All banking data are as of banks are regarded as satisfactory and consistent December 31, 1974, and reflect bank holding with approval of the application. Similarly, the company formations and acquisitions approved by financial and managerial resources and future the Board through June 30, 1975.) Since Bank prospects of Bank as a subsidiary of Applicant are is a proposed new bank, its acquisition by Appli­ satisfactory and consistent with approval of the cant would not increase the concentration of application. Since Grandview is located in the banking resources in Missouri nor change Appli­ Kansas City market, the residents of the area have cant’s rank among banking organizations in the a full range of banking services available to them State. from the banks in that market. However, as noted Bank is to be located near U.S. 71 in the city above, there is only one bank located in Grand­ of Grandview, a residential community of approx­ view at the present time. Thus, consummation of imately 23,000 in the south-central portion of the this proposal would benefit the convenience and Kansas City market.1 One of the Protestants needs of the area by introducing an alternative (Grandview Bank and Trust Company) is the only source of a full range of banking services. The bank presently located in Grandview. Applicant Board regards such a factor as lending weight is the largest banking organization in the relevant toward approval of the application. market with five of its subsidiary banks holding In its review of the subject application, the 13.9 per cent of the deposits in the market; how­ Board has given careful consideration to the com­ ever, it does not appear that Applicant holds a ments submitted on behalf of Protestants, two dominant position in the market. The second and banks that are located near the proposed site of third largest banking organizations in the market Bank. In addition to requesting a hearing on the are of comparable size to Applicant, and the mar­ application and a delay in the processing, which ket also includes subsidiaries of some of the State’s requests the Board has denied,2 Protestants con­ largest banking organizations. Since Bank is a tend, inter alia, that Bank’s proposed affiliation proposed new bank, consummation of the proposal with Applicant would offend Missouri law prohi­ would not eliminate any existing competition, nor biting branch banking, R.S. Mo. § 362.105(1). does it appear that the proposal would have ad­ The facts of record indicate that Bank will be a verse effects on potential competition. Since Ap­ separate corporation, with its own reserve require­ plicant’s subsidiaries are now precluded from es­ ments and capital stock and a loan limit based on tablishing offices in the city of Grandview proper such capital stock; that Bank will be managed by because of Missouri’s branching laws, the subject its own officers; that Bank’s board of directors will proposal represents the only means by which Ap­ be generally separate and independent from the plicant can extend its operations in that city. boards of Applicant and of Applicant’s subsidi­ Moreover, it appears that the proposal may in­ aries; and that Bank will maintain its own separate crease competition in this area through the intro­ books of account,3 issue its own distinctive duction of another competitor. Accordingly, on the basis of the facts of record, the Board concludes that consummation of the proposal woul d not have significant adverse effects on existing or potential 2 Protestants requested that the Board hold a hearing on the competition and that competitive considerations application and that the Board delay acting on the application are consistent with approval of the application. until a suit which Protestant, Grandview Bank and Trust Company, has filed against the Comptroller of the Currency The financial and managerial resources and fu­ is resolved. Under § 3(b) of the Act, the Board is required ture prospects of Applicant and its subsidiary to hold a hearing when the primary supervisor of the Bank to be acquired recommends disapproval of the application (12 U.S.C. 1842(b)). In this case, after a hearing on the charter application, the Comptroller of the Currency issued preliminary charter approval to Bank on January 23, 1975, and he has not subsequently recommended that the subject application be 1The relevant banking market is approximated by Clay, denied. Thus, there is no statutory requirement that the Board Jackson, and Platte Counties and the northern half of Cass hold a hearing. In view of the Board’s conclusion that the County, Missouri, and Johnson and Wyandotte Counties in record in this case is sufficiently complete to render a decision, Kansas. Protestants have urged that the relevant market is the Board has denied Protestant’s requests for a hearing and Jackson County; however, economic and demographic consid­ a continuance pending resolution of Protestant’s action versus erations indicate that Jackson County is not a separate market the Comptroller of the Currency. insulated from the competitive influence of the other banks 3 Applicant states, however, that one of its affiliates, Compac in the overall Kansas City area. Accordingly, the Board con­ Services, Inc., may provide automated general ledger service cludes that the relevant market is as hereinbefore described. to Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

370 Federal Reserve Bulletin □ April 1976 checks, and use its own stationery. Applicant First Marine Banks, Inc., further states that Bank will be managed by its Riviera Beach, Florida own local officers and that money deposited at Bank will not be credited to the account of a Order Approving Acquisition of Banks depositor at any other banking subsidiary of Ap­ First Marine Banks, Inc., Riviera Beach, plicant and, conversely, any money deposited at Florida (“Applicant”),1 a bank holding company any other banking subsidiary of Applicant will not within the meaning of the Bank Holding Company be credited to the account of a depositor at Bank. Act, has applied for the Board’s approval under The Board concludes, based upon the above and § 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to other facts of record, that Applicant is a “tradi­ acquire not less than 50 per cent plus one share tionally recognized bank holding company which, of the voting shares of three banks located in the with its own capital, invests in or buys the stock State of Florida: First Marine Bank of Boca Raton, of banks,” Whitney National Bank v. Bank of Boca Raton (“Boca Raton Bank”);2 First Marine New Orleans, 323 F. 2d 290 (D.C. Cir. 1963), National Bank, Palm Springs (“Palm Springs rev’d on other grounds, 379 U.S. 411 (1965), and Bank”);3 and First Marine Bank of Palm Beach that, upon consummation of the proposed acquisi­ Gardens, Palm Beach Gardens (“Palm Beach tion, a unitary operation will not exist between Gardens Bank”)4 (collectively referred to herein Bank and any of Applicant’s other banking sub­ as “Banks”). sidiaries. Notice of the applications, affording opportunity In view of the foregoing discussion and having for interested persons to submit comments and considered the facts of record and all the comments views, has been given in accordance with § 3(b) of Protestants in light of the statutory factors the of the Act. The time for filing comments and views Board must consider under § 3(c) of the Act, it has expired, and the Board has considered the is the Board’s judgment that consummation of the applications and all comments received in light of subject proposal would be in the public interest the factors set forth in § 3(c) of the Act (12 U.S.C. and that the application to acquire Bank should § 1842(c)). be approved. Although each of the applications has been Accordingly, on the basis of the record, the separately considered by the Board, because of the application is approved for the reasons sum­ facts and circumstances common to each, this marized above. The transaction shall not be made Order contains the Board’s findings and conclu­ (a) before the thirtieth calendar day following the sions of law with respect to all three applications. effective date of this Order or (b) later than three Applicant, the twenty-first largest banking or­ months after that date, and (c) Commerce Bank ganization in Florida, directly owns more than of Grandview, N.A., Grandview, Missouri, shall twenty-five per cent of the outstanding shares of be opened for business not later than six months each of four banks5 with total deposits of $210.4 after the effective date of this Order. Each of the million, representing almost 0.9 per cent of the periods described in (b) and (c) may be extended total deposits in commercial banks in the State of for good cause by the Board, or by the Federal Florida.6 Applicant currently owns 17.8 per cent Reserve Bank of Kansas City pursuant to delegated authority. By order of the Board of Governors, effective March 15, 1976. 1 Applicant was formerly named General Financial Systems, Inc. The change in corporate name occurred on March 1, 1976. Related to this change, effective March 15, 1976, are changes in the names of five banks in which Applicant has an ownership Voting for this action: Vice Chairman Gardner and interest. These changes are denoted infra. Governors Wallich, Coldwell, and Jackson. Absent and 2Formerly, First Community Bank of Boca Raton, Boca not voting: Chairman Burns and Governors Holland and Raton. Partee. 3Formerly, Congress National Bank, Palm Springs. 4Formerly, Tri-City Bank, Palm Beach Gardens. 5Applicant also directly owns interests ranging from 15.1 per cent to 24.9 per cent of the outstanding shares of each of six other banks in Florida, including Banks. 6 All banking data are as of June 30, 1975 and reflect holding (Signed) J. P. G arbarini, company formations and acquisitions approved through Jan­ [seal] Assistant Secretary of the Board. uary 1, 1976. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 371 of the outstanding voting shares of Boca Raton plicant similar management and operations poli­ Bank, 20.9 per cent of the outstanding voting cies and procedures. Furthermore, since Appli­ shares of Palm Springs Bank, and 24.9 per cent cant’s proposed acquisitions would merely for­ of the outstanding voting shares of Palm Beach malize its existing close relationship with Banks, Gardens Bank. Acquisition of additional shares of consummation would have no adverse effect on Banks, which hold aggregate deposits of $44.2 the development of competition in any market. million, would not significantly increase Appli­ Accordingly, on the basis of record, the Board cant’s share of total deposits in commercial banks concludes that consummation of the proposed ac­ in Florida and would have no appreciable effect quisitions would not have significant adverse ef­ upon the concentration of banking resources in the fects on existing or potential competition in the State. relevant banking markets, and that competitive Boca Raton Bank, the fourth largest of six banks considerations are therefore consistent with ap­ in the Boca Raton banking market,7 holds deposits proval of the applications. of approximately $10.3 million, representing 3.9 Considerations relating to the financial and per cent of total market deposits. Palm Springs managerial resources and future prospects of Ap­ Bank and Palm Beach Gardens Bank are, respec­ plicant, its subsidiaries, and Banks are regarded tively, the eighteenth and twenty-fifth largest of as generally satisfactory and consistent with ap­ 38 banks in the West Palm Beach banking market.8 proval, particularly in view of Applicant’s com­ Palm Springs Bank holds deposits totalling ap­ mitment to inject, within six months after con­ proximately $22.9 million, representing 1.8 per summation of the proposed transactions, $400,cent of market deposits; and Palm Beach Gardens 000, $750,000 and $300,000, respectively, into Banks holds deposits of $11.1 million, repre­ the capital accounts of Boca Raton Bank, Palm senting approximately 0.9 per cent of market de­ Springs Bank, and Palm Beach Gardens Bank.10 posits. Other than by its investment in Boca Raton Affiliation with Applicant would provide Banks Bank, Applicant is not represented in the Boca with access to Applicant’s financial and managerial Raton banking market. In the West Palm Beach resources. Thus, the considerations relating to banking market, however, Applicant is the largest convenience and needs of the residents of the banking organization, and, through its subsidiary communities to be served are consistent with ap­ banks, holds aggregate deposits9 of approximately proval of the proposal. It has been determined that $209.5 million, representing 16.7 per cent of the the proposed acquisitions would be in the public total deposits in commercial banks in the market. However, it appears that consummation of the proposal would not eliminate existing competition, 10By Order dated November 6, 1973 (59 Federal Reserve due to the close relationship that has existed be­ Bulletin 903), the Board approved Applicant’s dual applica­ tween Applicant and Bank. Principals of Applicant tions to acquire First Marine National Bank and Trust Co. were involved in the establishment of Banks; at of Lake Worth (then the First National Bank & Trust Co. of Lake Worth), Lake Worth, Florida (“Lake Worth Bank”), present, and in addition to its minority interests and First Marine National Bank and Trust Co., Jupiter/Tein Banks, two directors of Applicant also serve questa (then the First National Bank & Trust Co., Jupiter/Tequesta), Tequesta, Florida (“Tequesta Bank”). In approving as directors of Banks; and Banks share with Ap­ these acquisitions, the Board relied in part upon Applicant’s commitment to make equity additions to the capital structures of Lake Worth Bank, Tequesta Bank and Applicant’s lead bank, First Marine Bank & Trust Co., Riviera Beach, Florida (“Riviera Bank”). At the present time, the commitment re­ garding Lake Worth Bank is still outstanding. In the applica­ 7The Boca Raton banking market, in the lower quarter of tions presently before the Board, Applicant makes reference Palm Beach County, is the relevant market for the Boca Raton to these prior commitments and now commits itself to improve Bank application and is delineated by 67th Street (Highland the equity capital of certain of its subsidiary banks. As de­ Beach area) on the north, the Florida Turnpike on the west, scribed above, approximately $1.5 million will be added to and the Hillsboro Canal and Palm Beach County line on the the capital accounts of Banks within six months after consum­ south. mation of the instant proposed acquisitions. Applicant now 8The West Palm Beach banking market, the relevant market proposes to improve the capital position of Lake Worth Bank for the Palm Springs Bank and Palm Beach Gardens Bank through earnings retention rather than through direct capital applications, is approximated by the upper two-thirds of Palm injections. Based upon the facts in the record, the Board Beach County’s eastern coastal area. Its commercial and trade concludes that Applicant has acted in good faith in meeting centers include West Palm Beach, Palm Beach, Palm Beach its previous capital commitments for its subsidiary banks and Gardens, Riviera Beach, Boynton Beach, and Delray Beach. that sufficient improvement has occurred in the capital position 9These figures exclude deposits held by Palm Springs Bank of Lake Worth Bank to sanction Applicant’s modified proposal and Palm Beach Gardens Bank. to improve the capital of Lake Worth Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

372 Federal Reserve Bulletin □ April 1976 interest and that these three applications should Bank, the 71st largest bank in the State, controls be approved. total deposits of $26.6 million representing 2.9 per On the basis of the record, the applications are cent of the total deposits in commercial banking approved for the reasons summarized above. The institutions in the relevant market,3 and is the 5th transactions shall not be made (a) before the thir­ largest of eight commercial banks in the Worcester tieth calendar day following the effective date of market. Three of Bank’s five offices are located this Order nor (b) later than three months after in the Worcester banking market and two are the effective date of this Order, unless such period located on the western edges of the Boston and is extended for good cause by the Board, or by Providence banking markets, respectively. The the Federal Reserve Bank of Atlanta pursuant to closest office of any office of Bank to a subsidiary delegated authority. of Applicant is 17 miles away. Both of these By order of the Board of Governors, effective offices are located on the fringes of the Boston March 31, 1976. banking market and consummation of the proposal would therefore eliminate a small amount of ex­ Voting for this action: Chairman Burns and Gover­ isting and potential competition involving these nors Gardner, Holland, Wallich, Coldwell, Jackson, and Partee. two offices. Applicant, while not having a subsid­ iary in the Worcester market, draws a significant (Signed) G riffith L. Garwood, amount of business from that area. While a good [seal] Assistant Secretary of the Board. deal of this involves corporate and trust business, there is no question that consummation of the proposal will have some adverse effects on existing competition for such types of accounts. Further­ First National Boston Corporation, more, Applicant appears to be the most likely Boston, Massachusetts potential entrant into the Worcester banking mar­ Order Denying Acquisition of Bank ket. While current economic prospects of the area may somewhat decrease the likelihood of Appli­ First National Boston Corporation, Boston, cant’s entry absent this proposal, it still appears Massachusetts, a bank holding company within the that consummation of the proposal would have meaning of the Bank Holding Company Act, has some adverse effects on existing and potential applied for the Board’s approval under § 3(a)(3) competition and that competitive considerations of the Act (12 U.S.C. § 1842(a)(3)) to acquire therefore weigh against approval of the applica­ all of the voting shares of Blackstone Valley tion. National Bank, Northbridge, Massachusetts (“Bank”). Notice of the application, affording opportunity for interested persons to submit comments and *In a letter dated October 27, 1975, the Federal Reserve Bank of Boston was informed that the Massachusetts Board views, has been given in accordance with § 3(b) of Bank Incorporation had voted to revoke the authority granted of the Act. The time for filing comments and views on May 28, 1974, to Applicant to acquire up to 100 per cent has expired, and the Board has considered the of the successor by merger to Blackstone Valley National Bank. Subsequently, in a letter dated November 4, 1975, the application and all comments received in light of Board of Bank Incorporation informed the Federal Reserve the factors set forth in § 3(c) of the Act (12 U.S.C. Bank of Boston that “. . . the Board had voted to reinstate authority as previously voted on May 28, 1974, by rescinding § 1842(c)).1 the revocation of authority voted by the Board of October 27, Applicant, the largest banking organization in 1975.” Massachusetts, controls four banks, with aggre­ In a letter dated January 12, 1976, the Comptroller of the Currency expressed the views and recommendations of his gate deposits of approximately $3.4 billion, repre­ office with respect to this application. That letter and the senting approximately 23.9 per cent of the total comments expressed in it are part of the record of this applica­ deposits in commercial banks in the State.2 Ac­ tion upon which the Board based its decision. In addition, the record includes, and the Board has relied upon, consoli­ quisition of Bank would increase Applicant’s share dated financial statements of Applicant for the year ended of total State deposits by .2 per cent and would December 31, 1975, which were forwarded to the Board on January 26, 1976, and Applicant’s 1975 Annual Report, which not result in a significant increase in the concen­ was received on February 26, 1976. tration of banking resources in Massachusetts. 2 All banking data are as of June 30, 1975. 3 The relevant banking market is approximated by the Worcester Ranally Metro Area, which is comprised of the city See opposite column for footnotes. of Worcester and 26 towns in Worcester County. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 373 In recent years, Applicant has expanded its holding company with a national and international activities on a broad front, both in the United presence and its participation in regional banking States and abroad.4 Applicant has management of in Massachusetts outside of metropolitan Boston recognized ability, and while it is soundly capital­ is but a small part of its activities. ized and has a favorable earnings record, such The Applicant has substantial depth in manage­ expansion must necessarily be accompanied by ment and a strong capital position. It has been some dispersion of its financial and managerial a leader in accepting community responsibilities resources. The facts of record show that approval in its service area. Rather than concluding that the of this acquisition would result in a cash expendi­ proposal will have some adverse competitive ef­ ture by Applicant of approximately $3.8 million fects as does the majority, I believe Applicant’s from general corporate funds. In addition, Appli­ willingness to inject capital and strengthen the cant would commit to increase Bank’s capital by management of Blackstone Valley National Bank at least $620,000 and to maintain Bank’s capital would improve competition in the acquired bank’s on a par with other commercial banks in the State. service area. Furthermore, additional benefits will The Board believes, as it has in a number of other accrue to the public in that service area due to applications involving leading banks, that at the the proposed expansion of the services offered by present time, Applicant should direct its financial Bank. Therefore, I believe that the proposal is, and managerial resources toward its existing on balance, in the public interest. structure and that considerations relating to finan­ cial and managerial factors lend some weight Dissenting Statement of Governor Wallich against approval of the application. There is no evidence in the record that the I would approve this application. Although Ap­ banking needs of the community are not currently plicant draws some business from the Worcester being adequately served. Applicant has proposed market, it involves primarily corporate and trust to implement a number of wholesale and retail business that Bank is not presently pursuing and, banking services that would benefit some of therefore, the adverse effects of this acquisition Bank’s customers. However, these considerations upon existing competition are at most minimal. are not sufficient to outweigh the adverse consid­ The economic prospects of the Worcester market erations referred to above. Accordingly, it is the would not encourage de novo entry by Applicant, Board’s judgment that approval of the application and there would appear to be no significant adverse would not be in the public interest and that the effects of this proposal on potential competition. application should be denied. Although this is a cash acquisition rather than a On the basis of the record, the application is stock exchange, the proposal does not represent denied for the reasons summarized above. a significant demand upon the resources of Appli­ By order of the Board of Governors, effective cant. In light of the increased services Applicant March 18, 1976. proposes to provide through Bank, the conven­ ience and needs factors would appear to outweigh Voting for this action: Chairman Burns and Gover­ any adverse effects that might result from approval nors Holland, Coldwell, Jackson, and Partee. Voting of this application. Thus, I conclude that the against this action: Governors Gardner and Wallich. proposal is in the public interest and that the (Signed) J. P. Garbarini, application should be approved. [seal] Assistant Secretary of the Board. First New Mexico Bankshare Corporation, Dissenting Statement of Governor Gardner Albuquerque, New Mexico It is my view that this application should be approved. The Applicant is a very large bank Order Approving Acquisition of Bank First New Mexico Bankshare Corporation, Al­ buquerque, New Mexico, a bank holding company 4Since year-end 1972, Applicant has acquired three com­ within the meaning of the Bank Holding Company mercial bank subsidiaries, proposed to acquire three other banks, merged two banks, and refiled this application. Appli­ Act, has applied for the Board’s approval under cant has expanded its foreign banking activities through cash § 3(a)(3) of the Act (12 U.S.C. 1842(a)(3)) to expenditures and currently has four proposals pending involv­ acquire all of the voting shares (less directors’ ing cash outlays. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

374 Federal Reserve Bulletin □ April 1976 qualifying shares) of Bank of Las Cruces, National The financial and managerial resources and Association, Las Cruces, New Mexico (“Bank”), prospects of Applicant and its subsidiary banks are a proposed new bank. satisfactory. As a new bank, Bank has no operat­ Notice of the application, affording opportunity ing financial history; however, its proposed capi­ for interested persons to submit comments and talization, management and prospects appear sat­ views, has been given in accordance with § 3(b) isfactory. These considerations relating to banking of the Act. The time for filing comments and views factors are consistent with approval of the appli­ has expired, and the Board has considered the cation. Considerations relating to the convenience application and all comments received, including and needs of the community to be served lend those submitted on behalf of Farmers and Mer­ weight toward approval as Bank will provide an chants Bank, Las Cruces, New Mexico (herein­ additional source of full banking services. after referred to as “Protestant”), in light of the During the course of its consideration of this factors set forth in § 3(c) of the Act (12 U.S.C. application, the Board also considered the com­ 1842(c)). ments submitted on behalf of Protestant. Protestant Applicant, the largest banking organization in alleges that affiliation of Applicant with Bank New Mexico, controls nine banks with aggregate would contravene New Mexico law restricting deposits of $678 million, representing approxi­ branch banking (N.M. Stat. Ann. § 48-2-17 mately 24 per cent of total deposits in commercial (1953)). In addition, Protestant has made several banks in the State. (All banking data are as of other arguments in opposition to the application, June 30, 1975, and reflect all bank holding com­ namely, that (1) Applicant’s acquisition of Bank pany formations and acquisitions approved would have adverse competitive effects both through February 29, 1976.) Since Bank is a within the State of New Mexico and on the three proposed new bank, its acquisition would neither existing banks in the relevant market; (2) that the eliminate any existing competition nor immedi­ relevant banking market is not presently attractive ately increase Applicant’s share of commercial for de novo entry; and (3) that there is no need bank deposits. for an additional bank in the market.2 Applicant is seeking to make its initial entry With regard to the branching issue, the Board into the Las Cruces banking market (the relevant has stated that a State’s restrictive branch banking banking market).1 There are three banks presently laws are not automatically applicable to bank in the Las Cruces market, the largest bank con­ holding company operations. In a given case the trolling approximately 58 per cent of market de­ Board examines the facts to determine whether a posits and the second largest bank (“Protestant”) particular acquisition by a bank holding company controlling approximately 33 per cent of deposits. would constitute an illegal branch under State law. Applicant’s closest subsidiary bank is located 101 If the Board determines that a violation of State miles west of Las Cruces in a separate banking law would result, it is required to disapprove the market. Consummation of the transaction would transaction. (Whitney National Bank v. Bank of not have an adverse effect on future competition New Orleans, 323 F. 2d 290 (D.C. Cir 1963), between any of Applicant’s banking subsidiaries rev’d on other grounds, 379 U.S. 411 (1965); and Bank in view of the distances involved and Gravois Bank, et al. v. Board of Governors, 478 New Mexico’s restrictive branching laws. On the F. 2d 546 (8th Cir. 1973).) The Board notes that other hand, Applicant’s acquisition of Bank should the Office of the Comptroller of the Currency has stimulate competition in the market by introducing granted preliminary approval for the charter of into this heavily concentrated market an additional banking alternative without having adverse effects on any competing bank. On the basis of the facts of record, the Board concludes that the competitive 2 Protestant also requested that the Board hold a hearing on the application. Under § 3(b) of the Act, the Board is required considerations of the transaction are consistent to hold a hearing only when the primary supervisor of the with, and lend some weight toward, approval of bank to be acquired recommends disapproval of the application the application. (12 U.S.C. 1842(b)). In this case, the Comptroller of the Currency issued preliminary charter approval for Bank on July 15, 1975, and has recommended that the subject application be approved. Thus, there is no statutory requirement that the Board hold a hearing. Moreover, the Board is of the view 1The Las Cruces banking market is approximated by Dona that the record in this case is sufficiently complete to render Ana County. a decision without the necessity for a hearing. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 375 Bank, following a hearing, apparently concluding and population growth of the area for the past two that Bank would not be an illegal branch under years was not as dramatic as the growth experi­ New Mexico law. The facts of record in this case enced over the preceding two decades, the facts indicate that Bank will be a separate corporation, of record indicate that prospects for the area are with its own capital stock and a loan limit based favorable and that the market can support an on such capital stock; that Bank will have its own additional banking alternative. Finally, Protestant statutory limit on indebtedness and liability with­ asserts that there is no need for an additional bank out any reference to the limits of any other banking in the area in that all banking needs are being subsidiary of Applicant; that Bank’s operations served by the existing organizations. While it will be conducted by its own officers; that Bank’s appears that Bank would not offer any new serv­ board of directors will be generally separate from ices to the area not currently available, consum­ the boards of Applicant and of Applicant’s sub­ mation of the proposal would enable Bank to help sidiaries and will exercise independent judgment satisfy the present strong market demand for Small with respect to the management of Bank; that Business Administration guaranteed loans and real Bank’s customers will be able to deposit and estate financing. Therefore, it is the Board’s judg­ withdraw their funds only with respect to accounts ment, upon consideration of all the facts of record, in Bank and will not be able to effect a deposit that the arguments raised by Protestant are not or withdrawal from Bank at any other subsidiary sufficient to warrant denial of the subject proposal. of Applicant; and that Bank’s name will be com­ In view of the foregoing discussion and having pletely separate and is different from the name of considered the facts of record and all the comments any other of Applicant’s banking subsidiaries. of Protestant in light of the statutory factors the Accordingly, the Board concludes that Bank Board must consider under § 3(c) of the Act, it will not be operated in a unitary fashion with any is the Board’s judgment that consummation of the banking subsidiary of Applicant and thus this subject proposal would be in the public interest proposal will not contravene New Mexico’s re­ and that the application to acquire Bank should strictive branch banking law. Further, the Board be approved. concludes that Applicant is a “traditionally recog­ On the basis of the record, the application is nized bank holding company which, with its own approved for the reasons summarized above. The capital, invests in or buys the stock of banks,” transaction shall not be made (a) before the thir­ Whitney National Bank v. Bank of New Orleans, tieth calendar day following the effective date of supra. this Order or (b) later than three months after that With regard to the other issues raised by Pro­ date and (c) Bank of Las Cruces, National Asso­ testant, the Board notes again that Applicant’s ciation, shall be opened for business not later than initial entry into the Las Cruces area will be by six months after the effective date of this Order. means of a de novo acquisition which would not Each of the periods described in (b) and (c) may have any significant adverse effect on concentra­ be extended for good cause by the Board or by tion or competition in New Mexico. With regard the Federal Reserve Bank of Kansas City pursuant to the effect in the Las Cruces banking market, to delegated authority. the Board notes that the market exhibits a high By order of the Board of Governors, effective degree of concentration which has remained es­ March 29, 1976. sentially unchanged over the past few years. Thus, Voting for this action: Chairman Burns and Gover­ it would appear that competition in the market nors Gardner, Holland, Wallich, and Coldwell. Absent would be enhanced by the entrance of a fourth and not voting: Governors Jackson and Partee. banking alternative; furthermore, while approval (Signed) J.P. Garbarini, of this proposal may moderate somewhat the rate [seal] Assistant Secretary of the Board. of growth of the banks presently in the market, the Board is unable to conclude that Bank’s entry Landmark Banking Corporation, into the market would have significant adverse Fort Lauderdale, Florida effects on any bank therein or impair their ability to remain viable banking organizations. Order Approving Acquisition of Bank In addition, Protestant contends that the Las Cruces area cannot support an additional bank. Landmark Banking Corporation, Fort Lauder­ However, the Board notes that while the economic dale, Florida, a bank holding company within the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

376 Federal Reserve Bulletin □ April 1976 meaning of the Bank Holding Company Act, has organizations in the relevant market,2 and holds applied for the Board’s approval under § 3(a)(3) 22 per cent of the total deposits therein, it is also of the Act (12 U.S.C. § 1842(a)(3)) to acquire the only institution that has expressed an interest 80 per cent or more of the voting shares of Land­ in acquiring Security Bank. As new financial and mark Bank of Pompano Beach, N.A., Pompano managerial resources must be added to Security Beach, Florida (“Bank”), a proposed de novo Bank immediately to avoid its failure, and in view bank which will acquire the majority of the assets, of the fact that the proposed acquisition would and assume all of the deposits and certain of the increase Applicant’s market share by only 0.3 per other liabilities of Security State Bank of Pompano cent, the Board finds that any adverse effects on Beach, Pompano Beach, Florida (“Security competition in any relevant banking market that Bank”), which holds total deposits of $4.5 mil­ would result from consummation of the acquisition lion.1 are outweighed by the public interest consid­ Notice has been given to the Comptroller of the erations relating to the acquisition. Considerations Currency in accordance with § 3(b) of the Act. relating to convenience and needs of the commu­ The Comptroller has recommended approval of the nities to be served lend very strong weight toward application. The Florida Comptroller, who is the approval as the proposal will protect all depositors primary supervisory authority for Security Bank, of Security Bank and will ensure the continued has also recommended approval of the application. provision of banking services. In addition, the Board has solicited and considered The financial and managerial resources and fu­ herein the views of the United States Department ture prospects of Applicant, its subsidiaries, and of Justice. Public notice of the application is not Bank, as a subsidiary of Applicant, are regarded required by the Act, and in view of the emergency as generally satisfactory. In light of the condition situation set forth below, the Board has not fol­ of Security Bank and the fact that Applicant will lowed its normal practice of affording interested provide $700,000 for the initial capitalization of parties the opportunity to submit comments and Bank, financial and managerial factors lend sup­ views. The Board has considered the application port to approval of the application. It is the Board’s and the above comments in light of the factors judgment that the proposed transaction would be set forth in § 3(c) of the Act (12 U.S.C. § in the public interest and that the application 1842(c)). should be approved. Applicant is the eighth largest holding company On the basis of the record, the application is in the State of Florida with 16 subsidiary banks approved for the reasons summarized above. The and total deposits of $707.5 million, representing transaction shall not be made (a) before the thir­ 3 per cent of the total deposits in commercial banks tieth calendar day following the effective date of in the State. Bank has been formed to acquire this Order or (b) later than three months after that certain assets and assume certain liabilities of date, and (c) Landmark Bank of Pompano Beach, Security Bank. Security Bank has experienced N.A., Pompano Beach, Florida shall be opened substantial loan losses since its organization in for business not later than six months after the 1973 and its capital base has been seriously eroded effective date of this order. Each of the periods by a continuing trend of net operating losses. described in clauses (b) and (c) may be extended Despite its relatively short operating history there for good cause by the Board, or by the Federal has been a rapid turnover of management person­ Reserve Bank of Atlanta pursuant to delegated nel and the bank has suffered a 42 per cent loss authority. in total deposits between December, 1974 and By order of the Board of Governors, effective June, 1975. A recent examination of Security March 19, 1976. Bank by the Federal Deposit Insurance Corpora­ Voting for this action: Chairman Burns and Gover­ tion indicates that the bank’s situation has become nors Gardner, Coldwell, Jackson, and Partee. Absent critical; it is the Board’s judgment that, absent the and not voting: Governors Holland and Wallich. proposed acquisition, the failure of Security Bank (Signed) Theodore E. A llison, would be probable. [seal] Secretary of the Board. Although Applicant is the largest of 23 banking 2 The relevant banking market is approximated by the north­ ern two-thirds of Broward County lying north of the Dania 1 Banking data are as of June 30, 1975. Canal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 377 Mark Twain Bancshares, Inc., approximately 10 miles away. Since Bank is a St. Louis, Missouri proposed new bank, consummation of the proposal would not eliminate any existing competition in Order Approving Acquisition of Bank the relevant market. Nor is there any evidence that Applicant is attempting to preempt a bank site Mark Twain Bancshares, Inc., St. Louis, Mis­ before there is need for another bank. souri, a bank holding company within the meaning In its consideration of the subject application of the Bank Holding Company Act, has applied the Board has considered the comments submitted for the Board’s approval under § 3(a)(3) of the by Protestant, a bank located in close proximity Act (12 U.S.C. 1842(a)(3)) to acquire 98.75 per to the proposed site of Bank. Generally speaking, cent of the voting shares of Mark Twain Bank, Protestant asserts that the area that will be served National Association, Ladue, Missouri (“Bank”), by Bank is not capable of supporting another bank a proposed new bank. and that the introduction of a new bank so close Notice of the application, affording opportunity to Protestant would have an adverse impact on for interested persons to submit comments and Protestant. views, has been given in accordance with § 3 (b) On the basis of the facts of record, the Board of the Act. The time for filing comments and views is of the view that the record, including the sub­ has expired, and the Board has considered the missions of Protestant, does not warrant denial of application and all comments received, including the application. The proposed service area of Bank those submitted by Ladue-Innerbelt Bank and includes large portions of Ladue, one of the Trust Company, Ladue, Missouri (“Protestant”), wealthiest residential areas in Missouri, and in light of the factors set forth in § 3 (c) of the downtown Clayton, the county seat and business- Act (12 U.S.C. 1842(c)). financial center of St. Louis County. The deposits Applicant, the thirteenth largest banking orga­ per banking office ratio of the proposed service nization in Missouri, controls five banks with area of Bank is significantly higher than the aggregate deposits of approximately $179.4 mil­ average for the State. In addition, the potential lion, representing 1.1 per cent of total deposits for growth in this area appears favorable. With in commercial banks in the State.1 Since Bank is respect to Protestant’s second argument, the open­ a proposed new bank, its acquisition by Applicant ing of Bank by Applicant should increase compe­ would not immediately increase Applicant’s share tition within the area served by Protestant. How­ of commercial bank deposits in Missouri. ever, the evidence in the record is not sufficient, Bank is a proposed new bank, which has re­ in the Board’s judgment, to conclude that con­ ceived preliminary charter approval from the summation of the subject proposal would have a Comptroller of the Currency, and is to be located significantly adverse effect on Protestant as a via­ in the city of Ladue, Missouri, within the St. Louis ble banking organization. banking market.2 With all five of its subsidiary Accordingly, on the basis of all the facts of banks located in the St. Louis market, Applicant record and having considered the comments of controls 2.3 per cent of market deposits3 and ranks Protestant, the Board concludes that consumma­ as the tenth largest banking organization operating tion of the proposed acquisition would not have therein. The two largest banking organizations in any significant adverse competitive effects and that the market control, respectively, 18.6 and 17.4 competitive considerations are consistent with ap­ per cent of market deposits. Applicant’s subsidiary proval of the application. bank closest to the proposed site of Bank is located The financial condition and managerial re­ sources of Applicant and its subsidiaries are con­ sidered generally satisfactory and future prospects for each appear favorable. Since Bank has not yet 1 Unless otherwise indicated, all banking data are as of June 30, 1975, and reflect bank holding company formations and opened for business, it has no financial or operat­ acquisitions approved through January 31, 1976. ing history. However, its prospects as a subsidiary 2The St. Louis market, the relevant geographic market for of Applicant appeaj* favorable. Considerations re­ purposes of analyzing the competitive effects of the subject proposal, is approximated by the city of St. Louis, St. Louis lating to banking factors, therefore, are consistent County and portions of St. Charles and Jefferson Counties, with approval of the application. As proposed by all in Missouri; and portions of Madison and St. Clair Counties Applicant, Bank would serve as an additional in Illinois. 3 All market data are as of December 31, 1974. source of full banking services to the residents of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

378 Federal Reserve Bulletin □ April 1976 the area, including offering such services on Sat­ significance except as a means to facilitate the urdays. Accordingly., considerations relating to acquisition of the voting shares of Bank. Accord­ convenience and needs lend weight toward ap­ ingly, the proposed acquisition of shares of the proval of the application. successor organization is treated herein as the On the basis of the record, the application is proposed acquisition of the shares of Lufkin Bank. approved for the reasons summarized above. The Notice of the applications, affording opportunity transaction shall not be made (a) before the thir­ for interested persons to submit comments and tieth calendar day following the effective date of views, has been given in accordance with § 3(b) this Order or (b) later than three months after that of the Act. The time for filing comments and views date, and (c) Mark Twain Bank, National Associ­ has expired, and the Board has considered the ation, Ladue, Missouri, shall be opened for busi­ application and all comments received in light of ness not later than six months after the effective the factors set forth in § 3(c) of the Act (12 U.S.C. date of this Order. Each of the periods described § 1842(c)). in (b) and (c) may t>e extended for good cause Applicant, the fourth largest banking organi­ by the Board, or by the Federal Reserve Bank of zation in Texas, controls three subsidiary banks St. Louis pursuant to delegated authority. with aggregate deposits of approximately $2.8 By order of the Board of Governors, effective billion representing approximately 6.5 per cent of March 3, 1976. total deposits in commercial banks in the State of Voting for this action: Chairman Burns and Gover­ Texas.1 Applicant’s acquisition of Lufkin Bank nors Gardner, Holland, Wallich, Coldwell, Jackson, would increase Applicant’s share of such deposits and Partee. only slightly and would not have any appreciable (Signed) G riffith L. Garwood, effect upon the concentration of banking resources [seal] Assistant Secretary of the Board. in Texas. Lufkin Bank holds deposits of approximately $58.6 million, representing approximately 42 per Republic of Texas Corporation, cent of the total deposits held by commercial banks Dallas, Texas in the relevant geographic market, which is ap­ proximated by Angelina County, Texas, and is the Order Approving Acquisition of Banks second largest of five commercial banks operating Republic of Texas Corporation, Dallas, Texas, therein. Diboll Bank holds deposits of approxi­ a bank holding company within the meaning of mately $10.6 million, representing approximately the Bank Holding Company Act, has applied for 8 per cent of the total deposits held by commercial the Board’s approval under § 3(a)(3) of the Act banks in the relevant market and is the third largest (12 U.S.C. § 1842(a)(3)) to acquire all of the of the five commercial banks operating therein. voting shares, less directors’ qualifying shares, of Applicant’s present banking subsidiary nearest to the successor by merger to First Bank & Trust, Lufkin Bank and Diboll Bank is Houston National Lufkin, Texas (“Lufkin Bank”) and, through that Bank, in Houston, which is located in a separate acquisition, to acquire indirectly 24.9 per cent of banking market approximately 120 miles south­ the voting shares of Diboll State Bank, Diboll, west from Lufkin.2 The Board concludes that no Texas (“Diboll Bank”). All of the shares of First significant existing competition would be elimi­ State Corporation, which owns 24.9 per cent of nated between any of Applicant’s present and the voting shares of Diboll Bank, are held in trust for the benefit of the shareholders of Lufkin Bank. Under section 2(g)(2)(B) of the Act, those shares 1 All banking data are as of June 30, 1975, and reflect holding of Diboll Bank are deemed to be controlled by company formations and acquisitions approved through Jan­ Lufkin Bank. Hence, Applicant’s acquisition of uary 31, 1976. 2By Order of February 20, 1976, the Board approved sepa­ all the shares of Lufkin Bank would result in the rate applications by Applicant to acquire shares of The First acquisition of control of 24.9 per cent of the shares National Bank of Henderson, Henderson, Texas, located 60 of Diboll Bank. Applicant has committed that, in miles north of Lufkin and shares of First Bank in Groveton, Groveton, Texas, located 33 miles southwest of Lufkin. Both the event its acquisition of Lufkin Bank is con­ of these banks operate in markets separate from the Angelina summated, it would divest any interest in Diboll County market and the amount of deposits Lufkin Bank and Diboll Bank derive from the service areas of these banks, as Bank within twelve months of that date. The bank well as the amount of deposits they derive from Lufkin Bank’s into which Lufkin Bank is to be merged has no and Diboll Bank’s service areas, are not considered significant. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 379 approved subsidiary banks, on the one hand, and market was already being adequately served and either of the two banks to be acquired, on the there was no public need for a new bank. other. On the basis of the foregoing, the Board con­ The Board has previously expressed its concern cludes that consummation of the proposal would with the tendency of the leading banking organi­ not foreclose a substantial likelihood that Appli­ zations in Texas to seek to acquire the leading cant would otherwise enter the market de novo. banks in the State’s smaller metropolitan areas and For the foregoing reasons, the Board concludes the adverse effects this has upon potential compe­ that consummation of the proposal is unlikely to tition in the State as a whole and in particular local have any significant effects on potential competi­ markets. While the Board has not abandoned that tion. In fact, Applicant’s entry may have some concern, it does not warrant denial of the present procompetitive effect due to Applicant’s commit­ application. ment to cause the divestiture, in 12 months, of As an initial matter, it does not appear that Lufkin Bank’s 24.9 per cent interest in Diboll Applicant has pursued the aggressive policy of Bank (the third largest bank in the market and a geographic expansion that has been pursued by the direct competitor of Lufkin Bank, but for the link other large Texas bank holding companies. Appli­ between the two banks). cant’s ranking among Texas banking organizations In order to ensure prompt realization of this is due almost entirely to the size of its lead bank, benefit, the Board’s approval of these applications rather than to a network of separate subsidiaries. is conditioned upon Applicant’s placing the shares Any conclusions that might be drawn with respect of Diboll Bank in escrow with an independent to whether Applicant would enter the market de trustee acceptable to the Federal Reserve Bank of novo absent this proposal must be tempered by Dallas immediately upon Applicant’s acquisition this consideration. Furthermore, Applicant, of shares of Lufkin Bank. Applicant further shall, through its lead bank, has had an established at that time, instruct the trustee to sell the shares business relationship with Lufkin Bank, and such of Diboll Bank within one year from the date of relationship would also appear to decrease some­ Applicant’s acquisition of shares of Lufkin Bank, what the likelihood that Applicant would enter by competitive bid at public auction if necessary through an alternative method. to accomplish such sale by that date, if Applicant Upon reexamination of the attractiveness of the has not by that date been able to sell such shares market for de novo entry, the Board concludes that to an independent third party. The trust shall it does not appear as attractive as may earlier have terminate upon sale of the shares by Applicant or appeared.3 Deposits in the market, on a per capita the trustee. Applicant shall submit to the Federal basis, have declined since that earlier examination Reserve Bank of Dallas for its approval a plan and now are considerably below the per capita of divestiture and an escrow agreement relating figure for the State as a whole. In its earlier to the shares to be divested. Such plan shall further consideration of the market the Board had noted provide for the breaking of management interlocks the recent favorable population growth in the mar­ between Diboll Bank and Lufkin Bank no later ket. However, it now appears that this growth may than the time of such divestiture. have been attributable primarily to a major expan­ The financial and managerial resources and fu­ sion in one industry thus raising questions about ture prospects of Applicant and its subsidiaries are the sustainability of this rate of growth on a regarded as generally satisfactory. Financial re­ long-term basis. Further weight is lent to the sources and future prospects of Lufkin Bank and conclusion that the market may not be as attractive Diboll Bank also appear generally satisfactory. as previously thought for de novo entry by the Considerations relating to the convenience and fact that the Texas Banking Commission has re­ needs of the community favor approval. Consum­ cently denied two applications by local groups for mation of the proposal is expected to result in the banking charters in Lufkin. The basis for the establishment of a residential mortgage lending Commission’s actions in both cases was that the program by Lufkin Bank in response to a signifi­ cant local need for housing funds. Lufkin Bank would also initiate an equipment leasing program 3 See Board’s Order of May 1 1974, denying application and, as a result of consummation, be enabled to by First City Bancorporation of Texas, Inc., Houston, Texas, provide other relatively sophisticated services, to acquire The Lufkin National Bank, Lufkin, Texas (60 Fed. particularly in the international and trust areas. Res. Bulletin 450 (1974)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

380 Federal Reserve Bulletin □ April 1976 It has been determined that the proposed acqui­ that Applicant has not pursued the expansion pol­ sitions would be in the public interest and that icy followed by First City. Over the last two years, the applications should be approved. Applicant has not pursued aggressive expansion. On the basis of record, the applications are However, prior to that time, Applicant, or at least approved for the reasons summarized above. The its lead bank, was making indirect banking acqui­ transaction shall not be made (a) before the thir­ sitions about as aggressively as most other leading tieth calendar day following the date of this Order Texas banking institutions. It appears that Appli­ or (b) later than three months after the date of cant’s pause in this expansion is temporary, at­ this Order, unless such period is extended for good tributable to the state of the economy, the diffi­ cause by the Board, or by the Federal Reserve culties it has encountered in consolidating its stock Bank of Dallas pursuant to delegated authority. ownership of certain affiliated banks, and the di­ By order of the Board of Governors, effective version of its attention to the Board’s mandated March 23, 1976. divestiture of certain nonbanking assets. Second, the Board asserts that the Angelina Voting for this action: Vice Chairman Gardner and County market in two years has become unattrac­ Governors Coldwell, Jackson, and Partee. Voting against this action: Governors Holland and Wallich. tive for de novo entry, speculating that the popu­ Absent and not voting: Chairman Burns. lation growth of the market, which to date has exceeded that of 19 of the 21 secondary Standard (Signed) J. P. Garbarini, Metropolitan Statistical Areas in Texas,2 cannot [seal] Assistant Secretary of the Board. be sustained and assuming that, because the Texas Banking Commissioner has denied two applica­ Dissenting Statement of tions for bank charters in Lufkin by local groups, Governors Holland and Wallich Applicant cannot secure a charter there for a de We would deny the application of Republic of novo bank. In our judgment, the sustainability of Texas Corporation to acquire shares of First Bank the market’s growth is a matter of speculation by & Trust, Lufkin, Texas, and of Diboll State Bank, the Board and the weight the Board gives the Diboll, Texas. As we see this case, consummation charter denial is excessive. The fact that the Texas of the proposed acquisitions would remove a Banking Commissioner did not approve the charter probable future entrant into a highly concentrated applications of two particular local groups is not banking market. Furthermore, the support that indicative that he would not grant such an appli­ Applicant’s resources will give to the bank being cation by Applicant; nor is it indicative that the acquired—one of the two dominant banks in the Comptroller of the Currency, who is responsive market—will raise barriers to future de novo entry to the national policy favoring competition, would into the market by other firms. We believe these not grant a de novo bank charter in this highly anticompetitive effects; should not be tolerated ab­ concentrated banking market. In any event, spec­ sent compelling benefits to the public, which ben­ ulation aside, the Angelina County market in fact efits are not present in this case. continues to grow and quite conceivably, sufficient In our judgment, these two instant applications time has already elapsed since those charter denials present much the same circumstances that gave a year and a half ago that the Texas Banking rise to the Board’s denial of an application by First Commissioner could well now find a public need City Bancorporation of Texas, Inc., to acquire The for an additional bank in the market. Ir addition, Lufkin National Bank, Lufkin, Texas,1 the largest Applicant, upon whom the burden of proof in this bank in the Angelina County market. The Board case falls, has not demonstrated the unavailability today seeks to distinguish that case on several of foothold entry into this market. Indeed, the grounds, each of which in our view fails under record clearly reflects the availability of all of the analysis. shares of Diboll State Bank to Applicant and that First, the Board has sought to distinguish this case from the First City precedent on the ground 2In Texas, a secondary Standard Metropolitan Statistical Area is one other than the Houston, Dallas-Fort Worth, and 1See Board’s Order of May 1, 1974, denying that application San Antonio SMSAs. Angelina County itself is not yet quite (60 Federal Reserve Bulletin 450 (1974)). large enough to be classified as an SMSA. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 381 Applicant rejected those shares in fear that such Palm Beach County) and controls approximately an acquisition would jeopardize its application to 2.3 per cent of total market deposits. Applicant’s acquire First Bank & Trust. closest banking subsidiary to Bank is located ap­ In conclusion, we believe these proposed ac­ proximately 28 miles southwest of Bank in a quisitions would adversely affect certain aspects separate banking market. There is no significant of potential competition in a highly concentrated existing competition between any of Applicant’s Texas banking market. We believe more procom- banking or nonbanking subsidiaries and Bank, and petitive acquisitions than these are feasible in this it appears unlikely that any such competition market, when raised in the long-run context that would develop in the future. Since a number of befits such cases. We see no benefits to be gained other banks would remain as potential entry points, from these acquisitions that outweigh these ad­ ease of entry into the market would not be signifi­ verse competitive considerations. cantly diminished by the proposed acquisition. Therefore, on the basis of the record, the Board concludes that consummation of the proposal would not have significant adverse effects on ex­ Southeast Banking Corporation, isting or potential competition in any relevant area. Miami, Florida As the Board has previously stated on a number of occasions, a bank holding company should be Order Denying Acquisition of Bank a source of financial and managerial strength for its subsidiary banks. Acquisition of Bank at this Southeast Banking Corporation, Miami, Florida time, especially in light of Bank’s financial and (“Applicant”), a bank holding company within managerial needs, would necessarily divert some the meaning of the Bank Holding Company Act, of Applicant’s attention and resources from its has applied for the Board’s approval under § present subsidiaries. Applicant’s recent acquisition 3(a)(3) of the Act (12 U.S.C. 1842(a)(3)) to ac­ of the financially-troubled Palmer Bank Corpora­ quire 80 per cent or more of the voting shares tion2 has placed additional demands upon the of Worth Avenue National Bank, Palm Beach, financial and managerial resources of Applicant. Florida (“Bank”). While Applicant has taken vigorous steps to meet Notice of the application, affording opportunity these demands, including reducing its annual divi­ for interested persons to submit comments and dends, it is the Board’s view that, at the present views, has been given in accordance with § 3(b) time, Applicant would better serve the public by of the Act. The time for filing comments and views directing its resources toward developing and has expired, and the Board has considered the maintaining strong and efficient operations within application and all commments received in light its existing and recently expanded structure. Ac­ of the factors set forth in § 3(c) of the Act (12 cordingly, the Board concludes that the consid­ U.S.C. 1842(c)). erations relating to the financial and managerial Applicant, the largest banking organization in aspects of Applicant’s proposal weigh against ap­ Florida, controls 47 banks with aggregate deposits proval of the application. of approximately $2.6 billion, representing ap­ Applicant claims that through affiliation Bank proximately 10.8 per cent of the total deposits in will be capable of offering additional services to commercial banks in Florida.1 Acquisition of Bank its customers, including trust and investment serv­ ($28.1 million in deposits) would increase Appli­ ices. While convenience and needs considerations cant’s share of the total commercial bank deposits appear to be consistent with approval of the appli­ in the State by 0.1 of 1 per cent and would not cation, they are not sufficient, in the Board’s significantly increase the concentration of banking judgment, to outweigh the aforementioned adverse resources in Florida. banking factors reflected in the record. Accord­ Bank ranks 12th among the 21 banking organi­ ingly, it is the Board’s judgment that approval of zations located in the West Palm Beach banking market (approximated by the upper two-thirds of 1 All banking data are as of June 30, 1975, and reflect bank 2Board Order dated November 17, 1975, approving the holding company formations and acquisitions approved through application of Southeast Banking Corporation, Miami, Florida, January 31, 1976. to acquire Palmer Bank Corporation, Sarasota, Florida. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

382 Federal Reserve Bulletin □ April 1976 the application would not be in the public interest zations competing in the Houston banking market* and that the application should be denied. and holds approximately $33 million in deposits, On the basis of the record, the application is or about .3 per cent of the total commercial bank denied for the reasons summarized above. deposits in the market. Applicant is the ninth By order of the Board of Governors, effective largest banking organization in the Houston market March 16, 1976. and controls two subsidiary banks with approxi­ mately 1.7 per cent of the total market deposits. Voting for this action: Chairman Burns and Gover­ The three largest banking organizations in the nors Gardner, Wallich, and Coldwell. Absent and not voting: Governors Holland, Jackson, and Partee. market control, respectively, approximately 21, 18, and 10 per cent of total market deposits. (Signed) J. P. Garbarini, Applicant’s acquisition of Bank would thus not [seal] Assistant Secretary of the Board. have a significant effect on banking structure within the market, as Applicant’s market share Texas American Bancshares, Inc., would increase to only 2 per cent of the total Fort Worth, Texas market deposits. Applicant’s banking subsidiaries in the Houston Order Approving Acquisition of Bank market are Southern National Bank of Houston, Texas American Bancshares, Inc., Fort Worth, Houston, Texas (“Southern Bank”), and Gulf Texas, a bank holding company within the mean­ Southern National Bank, Houston, Texas (“Gulf ing of the Bank Holding Company Act, has ap­ Bank”), a de novo bank opened on October 1, plied for the Board’s approval under § 3(a(3) of 1975. Gulf Bank and Bank are located about 15 the Act (12 U.S.C. 1842(a)(3)) to acquire 100 per miles apart and because of their relatively small cent, less directors’ qualifying shares, of the suc­ sizes and their locations no service area overlap cessor by merger to Galleria Bank (“Bank”), exists. Although Southern Bank, which is located Houston, Texas. The bank into which Bank is to in downtown Houston approximately 10 miles east be merged has no significance except as a means of Bank which is located in a suburban shopping to facilitate the acquisition of the voting shares center, does derive some deposits from Bank’s of Bank. Accordingly, the proposed acquisition of service area, in view of the distance between the shares of the successor organization is treated two banks, the number of intervening banks, and herein as the proposed acquisition of the shares the number of banking organizations competing of Bank. in the market, it appears that consummation of Notice of the application, affording opportunity the proposal would not result in the elimination for interested persons to submit comments and of significant existing competition between Bank views, has been given in accordance with § 3(b) and Southern Bank. of the Act (12 U.S;C. 1842(b)). The time for filing It does not appear likely that significant compe­ comments and views has expired, and the Board tition would develop between Bank and any of has considered the application and all comments Applicant’s banking subsidiaries in the foreseeable received in light of the factors set forth in § 3(c) future due to the distances between Bank and of the Act (12 U.S.C. 1842(c)). Applicant’s subsidiaries, the large number of in­ Applicant, the fifth largest banking organization tervening banks in the market, and Texas’ branch­ in Texas, controls 9 banks with aggregate deposits ing laws. Furthermore, since the ratio of popula­ of $1.3 billion, representing approximately 3.0 per tion to banking offices in the Houston banking cent of the total commercial bank deposits in the market exceeds the Statewide average, the market State.1 Consummation of this proposal would in­ would continue to be attractive to de novo entry, crease Applicant’s share of Statewide deposits by and numerous medium-sized banks would remain approximately .1 per cent and would not have a as possible vehicles for foothold entry by other significant effect upon the concentration of banking expanding bank holding companies. The Board resources in the State. concludes, therefore, that competitive consid- Bank is the 53rd largest of 142 banking organi­ 2 The Houston banking market is approximated by the Hous­ ton SMSA (Standard Metropolitan Statistical Area), which 1A11 banking data are as of June 30, 1975. encompasses Harris County and five adjacent counties. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 383 erations are consistent with approval of the appli­ Accordingly, the application is approved for the cation. reasons summarized above. The transaction shall The financial and managerial resources and fu­ not be made (a) before the thirtieth calendar day ture prospects of Applicant, its subsidiaries, and following the effective date of this Order or (b) Bank are regarded as generally satisfactory and later than three months after the effective date of consistent with approval. Applicant’s acquisition this Order, unless such period is extended for good of Bank would give Bank access to Applicant’s cause by the Board, or by the Federal Reserve banking expertise, particularly in the areas of Bank of Dallas pursuant to delegated authority. consumer credit, credit cards, commercial loans, By order of the Board of Governors, effective and trust services. Considerations relating to the March 11, 1976. convenience and needs of the community to be Voting for this action: Chairman Burns and Gover­ served thus lend some weight toward approval. nors Gardner, Coldwell, and Jackson. Absent and not It is the Board’s judgment that the proposed ac­ voting: Governors Holland, Wallich, and Partee. quisition would be in the public interest and that (Signed) J. P. Garbarini, the application should be approved. [seal] Assistant Secretary of the Board. In considering this proposal, the Board ex­ pressed concern over the fact that several of the directors of Bank are also directors of other de­ 4See the Board’s Order of October 12, 1973 involving a pository institutions located in the Houston bank­ conditional approval of the applications of Central National ing market. The Board has each year since 1970 Bancshares, Inc., Des Moines, Iowa, to acquire voting shares of The Security State Bank, Algona, Iowa, and United Home recommended to the Congress that it amend Sec­ Bank & Trust Company, Massen City, Iowa, and of the related tion 8 of the Clayton Act in order to explicitly application to acquire the assets of LuVerne Insurance Agency, prohibit interlocks between any depository institu­ LuVerne, Iowa, 38 F.R. 29366. tions in the same or an adjacent community.3 In the Board’s judgment, the potential conflicts of Texas Commerce Bancshares, Inc., interest and anticompetitive implications of such Houston, Texas interlock situations will generally outweigh the likelihood of public benefits resulting from such Order Approving Acquisition of Bank interlocks. Even where interlocks are not prohibited by law, Texas Commerce Bancshares, Inc., Houston, the Board may consider the possible effects of such Texas, a bank holding company within the mean­ interlocks in light of the factors set forth in section ing of the Bank Holding Company Act, has ap­ 3(c) of the Act. In particular, the Board may plied for the Board’s approval, under § 3(a)(3) consider whether the interlocks involved in a pro­ of the Bank Holding Company Act (12 U.S.C. posal would be likely to have clear anticompetitive § 1842(a)(3)), to acquire 100 per cent of the voting effects within a relevant market, would bear ad­ shares (less directors’ qualifying shares) of the versely on the managerial resources of an applicant successor by merger to The First National Bank or bank involved or would result in a control of New Braunfels, New Braunfels, Texas relationship not sanctioned under the Act. In this (“Bank”). The bank into which Bank is to be regard, the Board has in the past made the sever­ merged has no significance except as a means to ance of interlocks a condition of approval in a facilitate the acquisition of the voting shares of situation where directors and officers of a bank Bank. Accordingly, the proposed acquisition of to be acquired by a bank holding company held shares of the successor organization is treated similar positions in competing banks in the rele­ herein as the proposed acquisition of the shares vant market and exercised control over such com­ of Bank. peting banks.4 The record of this application would Notice of the application, affording opportunity not appear to support a determination requiring the for interested persons to submit comments and severance of any of the particular interlocks in­ views, has been given in accordance with § 3(b) volving Bank. of the Act. The time for filing comments and views has expired, and the application and all comments received have been considered in light of the factors set forth in § 3(c) of the Act (12 U.S.C. 3See p. 242 of the Board’s 1974 Annual Report to Congress. 4See opposite column for footnote. § 1842(c)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

384 Federal Reserve Bulletin □ April 1976 Applicant, the third largest banking organization market as potential entry points for expanding in Texas, controls 30 banks with aggregate depos­ bank holding companies. Accordingly, on the its of approximately $2.9 billion, representing basis of the record, it is concluded that consum­ approximately 6.8 per cent of total commercial mation of the proposed transaction would not have bank deposits in Texas.1 Acquisition of Bank any significant adverse effects on existing or po­ ($30.3 million in deposits) would increase Appli­ tential competition in any relevant area. cant’s share of Statewide commercial bank depos­ The financial condition, managerial resources, its by less than 0.1 of 1 per cent, would not change and future prospects of Bank, Applicant, and its Applicant’s rank in Texas, and would have no subsidiaries are regarded as generally satisfactory appreciable effect upon the concentration of bank­ and consistent with approval of the application. ing resources in the State. Considerations relating to the convenience and Bank is the 14th largest of 48 banks operating needs of the community to be served are also in the San Antonio banking market (the relevant consistent with approval of the application, for banking market)2 and controls approximately 1.2 affiliation with Applicant will enable Bank to better per cent of the total deposits in commercial banks meet increased demand for larger commercial in the market. Applicant is the 8th largest banking loans and interim construction financing stimulated organization in the San Antonio banking market, by growth and recreational development and resi­ controlling one banking subsidiary with deposits dential construction in the New Braunfels area. of $78.6 million or approximately 3.0 per cent It has been determined that the proposed acquisi­ of market deposits. The three largest banking tion would be in the public interest and that the organizations in the market control 53.1 per cent application should be approved. of total deposits in the market. Approval of the On the basis of the record, the application is application would increase Applicant’s market approved for the reasons summarized above. The share from 3.0 per cent to 4.2 per cent, leaving transaction shall not be made (a) before the thir­ its relative market position well below that of the tieth calendar day following the effective date of three largest banks, all of which are subsidiaries this Order or (b) later than three months after the of multi-bank holding companies. Accordingly, effective date of this Order, unless such period consummation of the proposal would not appre­ is extended for good cause by the Board, or by ciably affect the structure of banking within the the Federal Reserve Bank of Dallas pursuant to market. delegated authority. Similarly, it appears from the record that the By order of the Secretary of the Board, acting proposal would not have significant adverse effects pursuant to delegated authority from the Board of on existing or potential competition. Applicant’s Governors, effective March 2, 1976. closest existing subsidiary bank, also located in (Signed) G riffith L. Garwood, the San Antonio banking market, is some 40 miles [seal] Assistant Secretary of the Board. southwest of Bank. There is virtually no service overlap between Bank and Applicant’s existing Ameribanc, Inc., subsidiary in the market, and none of Applicant’s St. Joseph, Missouri more distant subsidiaries derives any significant amount of business from the market. The market Order Approving would remain attractive to de novo entry after Merger of Bank Holding Companies acquisition of Bank, which is located on the pe­ riphery of the banking market and, therefore, Ameribanc, Inc., St. Joseph, Missouri cannot be considered a likely entry point for an (“Ameribanc”), a bank holding company within outside-based bank holding company. Also, nu­ the meaning of the Bank Holding Company Act, merous medium-sized banks would remain in the has applied for the Board’s approval under § 3(a)(5) of the Act (12 U.S.C. 1842(a)(5)) to merge with First American Bancshares Inc., St. Joseph, Missouri (“First American”), under the 1 All banking data are as; of June 30, 1975, and reflect bank holding company formations and acquisitions approved through charter and title of Ameribanc, Inc. January 30, 1976. By Order dated December 31, 1974, the Board 2 The relevant banking market is approximated by the San of Governors denied the subject application (40 Antonio SMSA located in South Central Texas and includes Bexar, Comal, and Guadalupe Counties. Federal Register 1568). Thereafter, on August 25, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 385 1975, the Board granted a Request for Recon­ tion in the St. Joseph market.2 Upon recon­ sideration filed by Applicant, pursuant to sideration of the entire record on the application, § 262.3(g)(5) of the Board’s Rules of Procedure including the additional submissions by Applicant, (12 CFR 262.3(g)(5)), whereby the Board agreed the Board is of the view that the facts of record to reconsider the application. support approval of the subject application. Notice of the Board’s action agreeing to recon­ The Board continues to believe that consumma­ sider the application to acquire First American and tion of the subject proposal insofar as it relates providing an opportunity for interested persons to to First American’s banking subsidiaries compet­ submit comments and views has been given (40 ing outside the St. Joseph banking market would Federal Register 40213). The time for filing com­ have no adverse effects on competition. In regard ments and views with respect to the application to the St. Joseph market, the competitive effects has expired. The Board has considered the appli­ are not as serious as they originally appeared. As cation, together with all comments received, and noted above, First American has two subsidiaries the supplemental material submitted by Applicant in the St. Joseph market. Applicant, in an effort in connection therewith, in light of the factors set to rebut the Board’s earlier conclusion, has argued forth in § 3(c) of the Act. that these two banks are outside the St. Joseph Ameribanc controls seven banks with aggregate market. The Board does not agree; however, it deposits of approximately $208.3 million, repre­ appears that the amount of competition that exists senting 1.3 per cent of the deposits in commercial between these banks and the subsidiaries of banks in Missouri, and is the tenth largest banking Ameribanc in the St. Joseph market is not signifi­ organization in the State.1 First American controls cant. Both of Ameribanc’s subsidiaries are located five banks with aggregate deposits of $27.6 mil­ in the city of St. Joseph, while First American’s lion, representing 0.2 per cent of the total com­ subsidiaries are located on the periphery of the mercial bank deposits in the State. Consummation market some 19 and 18 miles, respectively, from of the proposed merger would increase Ameri­ Ameribanc’s nearest subsidiary in St. Joseph. In banc’s share of total deposits in the State to 1.5 view of the distances involved and the fact that per cent and would have no significant adverse Stewartsville Bank and Union Star Bank are rela­ effect upon the concentration of banking resources tively small banks primarily serving small, rural in Missouri. communities, it does not appear likely that signif­ Ameribanc and First American are each regional icant competition would develop in the future bank holding companies serving portions of between these banks and Applicant’s subsidiaries northwestern Missouri. In its earlier Order denying in the St. Joseph market. the application of Ameribanc to merge with First While consummation of the proposal would American, the Board indicated that three of First increase concentration of banking resources in the American’s five subsidiary banks (i.e., Bank of St. Joseph market and foreclose the possibility that Edgerton, The First National Bank of Plattsburg, First American would develop as a more effective and First American Bank of Skidmore) were lo­ competitor in the St. Joseph market, it does not cated in markets in which Ameribanc had no appear, in the Board’s view, that the proposal banking subsidiaries and, with respect to those would seriously affect the competitive structure in subsidiaries, the Board concluded that the pro­ that market. Ameribanc would continue to face posed merger would have no adverse effects on competitive pressure from four multibank holding existing or potential competition. However, with companies, including subsidiaries of the State’s respect to First American’s other two subsidiary largest, third largest, and sixth largest banking banks (The First National Bank of Stewartville and organizations. Moreover, even after consumma­ First American Bank of Union Star), the Board tion of the proposal, four other independent banks concluded generally that consummation of the would remain available for acquisition by organi­ proposal would have adverse effects on competi­ zations not presently represented in the St. Joseph 2The St. Joseph banking market is approximated by Bu­ 1 All banking data, unless otherwise indicated, are as of June chanan County (less Rush and Bloomington townships), An­ 30, 1975, and reflect bank holding company formations and drew County, and western DeKalb County, all in Missouri, acquisitions approved as of February 6, 1976. and northern Doniphan County in Kansas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

386 Federal Reserve Bulletin □ April 1976 market. On the other hand, it appears that con­ tablish other banking services at First American’s summation of the proposal may have some bene­ subsidiaries, including overdraft checking ac­ ficial effects on competition in that it would en­ counts, check guarantee cards, and individual re­ hance the development of Applicant as a regional tirement accounts, which should serve to benefit holding company serving the northwestern portion the residents of the areas served by these banks. of Missouri. Thus, Applicant would be better able In the Board’s view, these considerations relating to compete with the larger holding companies that to convenience and needs lend weight toward are now in the area or will enter it in the future. approval of the proposal and are sufficient to The Board regards such a development as favor­ outweigh any slight adverse competitive effects able as it relates to fostering competition in this that may result from the consummation thereof. portion of Missouri. Accordingly, it is the Board’s judgment that the On the basis of the foregoing and other facts proposal is in the public interest and that the of record, the Board concludes that consummation application should be approved. of the subject proposal would not have signifi­ On the basis of the record in the case,3 the cantly adverse effects on existing competition nor application is approved for the reasons sum­ would it foreclose the development of significant marized above. The transaction shall not be made potential competition. Although the Board be­ (a) before the thirtieth calendar day following the lieves that the proposal may have some slight effective date of this Order, or (b) later than three adverse effects on competition in the St. Joseph months after the effective date of this Order, unless market, those effects when viewed in light of the such period is extended for good cause by the other considerations reflected in the record are not Board or by the Federal Reserve Bank of Kansas so serious, in the Board’s view, as to require denial City pursuant to delegated authority. of the subject proposal. By order of the Board of Governors, effective In regard to the other factors considered by the March 1, 1976. Board, it appears that the financial and managerial Voting for this action: Chairman Burns and Gover­ resources of Ameribanc and its subsidiaries are nors Mitchell, Holland, Wallich, Coldwell, Jackson, satisfactory and consistent with approval of the and Partee. application. While the same conclusions generally Board action was taken before Governor Gardner apply with respect to those factors as they pertain became a Board Member. to First American, the proposal would result in (Signed) Theodore E. A llison, some positive benefits. Applicant has committed [seal] Secretary of the Board. itself to supplying a total of $270,000 in additional capital to the subsidiaries of First American. 3In its consideration of the subject application, the Board Moreover, there is a need to provide for manage­ also considered the comments of Mr. John F. Schoenfelder, ment succession and neater management depth at a shareholder of Ameribanc. Having examined his submis­ sions, the Board is of the view that they do not warrant denial some of First American’s subsidiaries, and of the application. Ameribanc appears to possess the resources to fulfill such needs. The Board regards such banking factor considerations as lending some weight Broward Bancshares, Inc., toward approval of the application. Fort Lauderdale, Florida Considerations relating to convenience and needs also lend weight toward approval of the Order Approving application. First American has limited capabilities Merger of Bank Holding Companies in terms of the banking services that it is able to offer the residents of the areas in which its subsid­ Broward Bancshares, Inc., Fort Lauderdale, iaries are located. However, as subsidiaries of Florida (“Broward”), a bank holding company Ameribanc, these banks will be able to expand within the meaning of the Bank Holding Company and improve their services by drawing on the Act, has applied for the Board’s approval under expertise and resources that Ameribanc possesses. section 3(a)(5) of the Act (12 U.S.C. § 1842(a)(5)) In this regard, Ameribanc proposes to make to merge with Charter Bankshares Corporation, various trust services available and to broaden Jacksonville, Florida (“Charter”), a bank holding agricultural lending amd management services at company within the meaning of the Act. Broward these banks. In addition, Ameribanc plans to es­ would be the surviving corporation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 387 Notice of the application, affording opportunity largest of 11 banking organizations in the Pensa­ for interested persons to submit comments and cola banking market and the largest of 16 banking views, has been given in accordance with section organizations in the South Pinellas banking mar­ 3(b) of the Act. The time for filing comments and ket. The Pensacola and South Pinellas banking views has expired, and the Board has considered markets include, respectively, two and five of the the application and all comments received in light State’s six largest organizations. Also, Charter is of the factors set forth in section 3(c) of the Act the second largest of three banking organizations (12 U.S.C. § 1842(c)). in the Putnam County banking market, which Broward controls seven banks with aggregate includes two of the six largest organizations in the deposits of $303 million, representing approxi­ State. In addition, Charter ranks as the fourth mately 1.3 per cent of the total deposits held by largest of 11 banking organizations in the Gaines­ commercial banks in Florida, and is the sixteenth ville banking market; the fifth largest of six bank­ largest multi-bank holding company in that State.1 ing organizations in the South Brevard banking Charter controls nine banks with aggregate depos­ market; and the sixth largest of 13 banking orga­ its of $357.5 million, representing approximately nizations in the Fort Myers banking market. Nei­ 1.5 per cent of the total deposits held by commer­ ther Broward nor Charter has any subsidiary bank cial banks in the State, and is Florida’s fifteenth that competes within the same market, nor does largest multi-bank holding company. Consumma­ Charter have a subsidiary that competes with tion of the proposed merger would result in Broward’s computer service firm. Therefore, it Broward’s control of approximately 2.8 per cent appears that no meaningful competition currently of total deposits held by the State’s commercial exists between any of the subsidiaries of Broward banks, and Broward would become the State’s and those of Charter. Furthermore, it does not tenth largest multi-bank holding company. appear that any such competition will develop in Broward operates its present subsidiary banks view of Florida’s restrictive branch banking laws and a computer service company in two banking and the 100 mile distance between the closest bank markets in southeastern Florida.2 In the North subsidiaries of Broward and Charter. Broward banking market, Broward is the second Although consummation of the proposed merger largest of 23 banking organizations including five would foreclose the possibility that either Broward of the six largest banking organizations in Florida. or Charter would enter the banking markets of the Broward also is the thirteenth largest of 19 banking other, the Board believes that there is little likeli­ organizations in the West Palm Beach banking hood of significant competition developing be­ market. On the other hand, Charter operates its tween the two banking organizations in the ab­ present subsidiary banks in six banking markets sence of the subject proposal. Since their respec­ in northern and central Florida.3 Charter is the tive formations as bank holding companies in 1970, neither Broward nor Charter has pursued an aggressive expansion policy and both have remained small relative to the larger banking or­ ganizations in Florida.4 It does not appear from 1 All banking data are as of June 30, 1975, unless otherwise the facts of record that Broward is a likely entrant indicated, and include bank holding company formations and into the banking markets that are served by acquisitions as of February 29, 1976. Charter, nor does it appear that Charter is a likely 2These two markets are the North Broward banking market, future competitor of Broward. Therefore, on the which is approximated by the northern two-thirds of Broward County, and the West Palm Beach banking market, which is basis of the facts of record, the Board concludes approximated by the northern three-quarters of Palm Beach that consummation of the proposed transaction County. 3The relevant banking markets within which Charter’s sub­ would not have any significant adverse effects on sidiary banks operate are the following: Fort Myers, which is comprised of Lee County on the southern Gulf Coast; Gainesville, which is comprised of Alachua County in northcentral Florida; Pensacola, which encompasses Escambia and Santa Rosa Counties at the western end of the Panhandle; Putnam County, which includes Putnam County in east-central 4Since its formation, Broward has opened three de novo Florida and the nearby town of Hastings in St. Johns County; banks and has acquired one existing bank. Charter has acquired South Brevard which is approximated by the southern one-third only one bank since its formation and, in the past two years, of Brevard County on the central Atlantic coast; and South has been involved in one agreement to sell seven of its Pinellas which is comprised of Pinellas County south of the subsidiary banks to another organization, and in one agreement town of Largo. to merge with two. other organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

388 Federal Reserve Bulletin □ April 1976 either existing or potential competition in any Orders Under Section 4 relevant area and that the competitive consid­ of Bank Holding Company Act erations are consistent with approval of the appli­ cation. Chemical New York Corporation, The financial conditions and managerial re­ New York, New York sources and future prospects of Broward, Charter, and their respective subsidiaries are considered, Order Approving Acquisition of Company in general, to be satisfactory. Furthermore, Broward has committed itself to purchase addi­ Chemical New York Corporation, New York, tional equity in three of Charter’s subsidiary banks New York, a bank holding company within the within six months alter consummation of this meaning of the Bank Holding Company Act, has proposal.5 Thus, the banking factors lend weight applied for the Board’s approval, under § 4(c)(8) toward approval of the application. Although the of the Act and § 225.4(b)(2) of the Board’s Regu­ banking needs of the communities to be served lation Y, to acquire all of the voting shares of by Broward and Charter appear to be met ade­ Van Deventer & Hoch, Glendale, California quately at the present time, consummation of the (“Company”), a company that engages in the proposal would enable the principals to combine activities of serving as an investment advisor, their trust departments, thereby improving the providing portfolio investment advisory and man­ provision of trust services to their customers. In agement services, furnishing general economic addition, the combined size of the merged holding information and advice, general economic statisti­ companies may result in their gaining better access cal forecasting services and industry studies, and to capital markets. Accordingly, considerations acting in an agency capacity with respect to both relating to the convenience and needs of the com­ discretionary and non-discretionary managing munities to be served lend some weight toward agency accounts. Such activities have been deter­ approval of the application. Therefore, it is the mined by the Board to be closely related to bank­ Board’s judgment that the proposed transaction is ing (12 CFR § 225.4(a)(4) and (5)). in the public interest: and that the application Notice of the application, affording opportunity should be approved. for interested persons to submit comments and On the basis of the record, the application is views on the public interest factors, has been duly approved for the reasons summarized above. The published (40 Federal Register 48898). The time transaction shall not be made (a) before the thir­ for filing comments and views has expired, and tieth calendar day following the effective date of the Board has considered all comments received this Order or (b) later than three months after the in the light of the public interest factors set forth effective date of this Order, unless such period in § 4(c)(8) of the Act (12 U.S.C. 1843(c)). is extended for good cause by the Board, or by Applicant, the fourth largest bank holding com­ the Federal Reserve Bank of Atlanta pursuant to pany in New York State, controls seven subsidiary delegated authority. banks with aggregate domestic deposits of $13.7 By order of the Board of Governors, effective billion, representing approximately 10 per cent of March 8, 1976. the total deposits in commercial banks in the State.1 Applicant also controls nonbanking sub­ Voting for this action: Chairman Burns and Gover­ sidiaries that engage principally in consumer fi­ nors Gardner, Holland, Jackson, and Partee. Absent and not voting: Governors Wallich and Coldwell. nancing, mortgage banking, leasing, and con­ struction lending. (Signed) J. P. Garbarini, Company, with total assets of $54,000 as of [seal] Assistant Secretary of the Board. September 30, 1975, operates from its sole office in Glendale, California. Company engages in pro­ viding investment advisory and investment man­ 5 Broward will inject additional capital in the amount of $500,OCX) into Charter Bank: of Lehigh Acres, and $250,000 1 All banking data are as of June 30, 1975, and reflect bank each into Charter Bank of Gainesville, and Charter Bank of holding company formations and acquisitions approved by the Palatka. Board through January 31, 1976. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 389 agement services and is registered as an investment pany’s present capabilities. In addition, Company adviser under the Investment Advisers Act of does not obtain any business from the areas served 1940. Its principal activity is the management of by Applicant’s banking subsidiaries. In view of investment portfolios for individuals, charitable Company’s small size, the fact that it does not organizations, profit-sharing plans, and pension operate in New York and the fact that Chemical plans on a continuing basis. Depending on the Bank does not solicit personal trust business in preference of the customer, Company manages the Company’s service area, there does not appear to portfolio on a discretionary, advisory, or non-dis- be any significant existing competition between cretionary basis. In addition, Company offers in­ Company and Applicant or any of its subsidiaries. vestment counseling services on a one-time basis. Although there is the possibility of future com­ In conjunction with its portfolio investment advi­ petition developing between Applicant and Com­ sory and management services, Company also pany and although Applicant possesses the re­ furnishes general economic information and ad­ sources and the capability to expand de novo into vice, provides general economic forecasts, and the attractive Southern California market, the conducts industry studies. elimination of future competition is not considered As of July 1975, Company administered 233 to be significant in light of the large number of accounts with assets worth approximately $40.6 existing competitors in the market and Company’s million, consisting principally of 186 personal small market share. Accordingly, the Board con­ accounts valued at $22.5 million, with the re­ cludes that competitive considerations are consist­ maining accounts being administered for profit- ent with approval of the application. sharing trusts, pension plans, foundations and It is anticipated that Company’s affiliation with charitable organizations. Company primarily Applicant should enable Company to improve the serves Los Angeles and Orange Counties, from quality and depth of its investment advisory serv­ which it obtained about 84 per cent of its revenues ices and thereby enable it to compete more effec­ for the fiscal year ending September 30, 1974; the tively with the larger organizations in the market. remainder of its revenues are derived from the Furthermore, there is no evidence in the record neighboring counties of Santa Barbara, Ventura, indicating that acquisition of Company would re­ San Bernardino, Riverside and San Diego. Com­ sult in any undue concentration of resources, un­ pany competes with many small firms in Los fair competition, conflicts of interests, or unsound Angeles and Orange Counties, as well as with banking practices. commercial banks, trust companies, and insurance Based upon the foregoing and other consid­ companies, but holds significantly less than 1 per erations reflected in the record, the Board has cent of the aggregate assets managed by all com­ determined, in accordance with the provisions of panies engaged in investment advisory activities § 4(c)(8) of the Act, that consummation of this in the area. proposal can reasonably be expected to produce All of Applicant’s subsidiary banks engage in benefits to the public that outweigh possible ad­ investment advisory activities through their re­ verse effects. Accordingly, the application is spective trust departments; however, only Chemi­ hereby approved. This determination is subject to cal Bank, New York, New York, Applicant’s lead the conditions set forth in § 225.4(c) of Regulation bank, obtains any investment advisory or manage­ Y and to the Board’s authority to require such ment business from Company’s service area. Al­ modification or termination of the activities of a though the volume of business that Chemical Bank holding company or any of its subsidiaries as the derives from Los Angeles and Orange Counties Board finds necessary to assure compliance with exceeds that of Company, the proposed acquisition the provisions and purposes of the Act and the would not eliminate any significant competition. Board’s regulations and orders issued thereunder, Chemical Bank does not solicit personal invest­ or to prevent evasion thereof. ment advisory and management accounts from The transaction shall be made no later than three Company’s service area, but has a small amount months after the effective date of this Order, unless of such business derived from individuals who such period is extended for good cause by the formerly resided in the New York area. Moreover, Board or by the Federal Reserve Bank of New the asset size of the large employee benefits ac­ York. counts that Chemical Bank derives from Com­ By order of the Board of Governors, effective pany’s service area appears to be beyond Com­ March 9, 1976. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

390 Federal Reserve Bulletin □ April 1976 Voting for this action: Chairman Burns and Gover­ subsidiary banks operating 279 banking offices nors Gardner, Holland, Coldwell, Jackson, and Partee. throughout New York State.2 Applicant’s lead Absent and not voting: Governor Wallich. bank, Citibank, formerly First National City Bank, (Signed) J. P. Garbarini, New York, New York, is the largest bank in New [seal] Assistant Secretary of the Board. York State with domestic deposits of $21.3 bil­ lion,3 representing 15.4 per cent of the total com­ Citicorp, mercial bank deposits in the State, and offers a New York, New York full range of retail, wholesale, domestic, and in­ ternational banking and trust services. Applicant Order Approving Acquisition engages in a variety of permissible nonbank activ­ of West Coast Credit Corporation ities through 85 direct and indirect domestic non­ bank subsidiaries.4 Applicant’s nonbank activities Citicorp, New York, New York, a bank holding include mortgage banking activities and leasing company within the meaning of the Bank Holding activities, and through Nationwide, Applicant en­ Company Act, has applied for the Board’s ap­ gages in consumer and sales finance activities and proval, under § 4(c)(8) of the Act and in the sale of insurance which is directly related § 225.4(b)(2) of the Board’s Regulation Y, to to extensions of credit. acquire indirectly through its subsidiary Nation­ In order for the subject application to be ap­ wide Financial Services Corporation (“Nation­ proved, § 4(c)(8) of the Bank Holding Company wide”), all of the voting shares of West Coast Act requires the Board to find that the performance Credit Corporation (“West Coast”), Seattle, of a particular activity by an affiliate of a bank Washington. West Coast is a company that en­ holding company “can reasonably be expected to gages in the activities of making consumer install­ produce benefits to the public such as greater ment loans; purchasing consumer installment sales convenience, increased competition, or gains in finance contracts; and acting as agent in the sale efficiency, that outweigh possible adverse effects, of credit life, credit accident and health, and such as undue concentration of resources, de­ property and casualty insurance which is directly creased or unfair competition, conflicts of inter­ related to extensions of credit by the offices of ests, or unsound banking practices.” This balanc­ West Coast. These activities are conducted ing test necessitates a positive showing of public through offices of West Coast which operate as benefits, outweighing the “possible” adverse ef­ industrial banks or as consumer finance compa­ fects of any proposed acquisition, before an appli­ nies. Such activities have been determined by the cation may be approved. Board to be closely related to banking (12 CFR Applicant acquired Nationwide in 1973, at 225.4(a)(1), (2), and (9)). which time Nationwide had assets of $31 million By Order dated November 10, 1975, the Board and operated 85 small loan offices in 14 States. of Governors denied the application of Citicorp Since that time, Applicant has engaged in an to acquire West Coast (40 Federal Register aggressive program of expansion, and since 1973, 53315).1 Thereafter, Applicant filed a Request for Nationwide has opened 87 new offices and has Reconsideration pursuant to § 262.3(g)(5) of the entered seven additional States. Nationwide has Board’s Rules of Procedure (12 CFR § assets of $304.1 million, total net receivables of 262.3(g)(5)). The Request for Reconsideration $284 million,5 and operates 172 offices in 21 was filed only with respect to the application to States. acquire West Coast, and by Order dated January 9, 1976 (41 Federal Register 2687), the Board agreed to reconsider the application. 2 Number of banking offices as of December 31, 1974. Applicant, the largest banking organization in 3 Deposit data are as of December 31, 1974. New York State and the second largest banking 4 Applicant engages in mortgage banking activities through organization in the United States, controls seven Advance Mortgage Company (“Advance”), Southfield, Mich­ igan, a nonbank subsidiary which Applicant acquired on June 15, 1970. Under the provisions of § 4(a)(2) of the Act, Applicant may not retain the shares of Advance beyond De­ cember 31, 1980, without Board approval. By Order dated 'In the same Order, the Board denied concurrent applications December 26, 1973, the Board denied Applicant’s application of Citicorp to acquire Amfac Credit Corporation, Los Angeles, to retain Advance pursuant to § 4(c)(8) of the Act. (60 Federal California, and Federal Discount Corporation, Dubuque, Iowa. Reserve Bulletin 50.) These applications are not involved in the instant proposal. 5 Asset and net receivables data as of December 31, 1975. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 391 West Coast (total assets of $8.5 million, as of operating difficulties are overcome, and unless September 30, 1975) operates 20 offices in the West Coast can supplement existing lines of bank State of Washington which make secured and credit with additional sources of long-term financ­ unsecured direct consumer loans and purchase ing to replace declining long-term subordinated sales finance paper. Nationwide operates four of­ debt, it appears that it will be unable to sustain fices in the State of Washington which engage in a meaningful competitive posture in the State of the activity of making personal consumer loans. Washington. In view of the continuing deterio­ In its earlier Order denying the application of ration of West Coast’s financial condition, it ap­ Citicorp to acquire West Coast, the Board indi­ pears that West Coast has at best a tenuous ability cated its concern that the combination of these two to survive, and its ability to offer effective compe­ firms would eliminate existing competition in some tition, as an independent company, has diminished of the consumer finance markets in the State of significantly. Furthermore, West Coast is plagued Washington and that such a combination would with added problems which involve sustained un­ deprive the public of an alternative source of profitability, and the recent loss of key operating consumer credit. The Board also indicated its personnel. Under these circumstances, it appears further concern that consummation of the proposed conjectural whether Applicant’s acquisition of acquisition would foreclose the likelihood that West Coast would eliminate an amount of compe­ increased competition would develop in the future tition that may be regarded as significant. Finally, between Nationwide and West Coast in those West Coast’s uncertain future combined with its markets where they presently compete and also lack of geographic diversification and management would foreclose the likelihood that Applicant depth, tend to lessen its attractiveness as a “going would expand Nationwide on a de novo basis into concern” acquisition vehicle for bank holding other areas served by West Coast. Thus, the Board companies that have not yet entered the consumer concluded that consummation of the proposal finance field. would have eliminated competition and that this In denying the previous application, the Board represented an adverse factor which was not out­ cited other factors which weighed against approval weighed in the public interest by the expected of the application, including the Board’s concern public benefits of the proposal. In arriving at that that the proposal would divert funds to expansion conclusion the Board considered West Coast as when those funds might be better utilized for being among the largest remaining independent6 improvement of Applicant’s financial position. finance companies in the State of Washington and Applicant has changed the proposed transaction as representing an attractive vehicle by which bank from a cash purchase of three finance companies holding companies that have not yet entered the to an exchange of stock for the acquisition of one finance company field might do so. finance company. Accordingly, this factor does not Upon reconsideration of the entire record of the carry the adverse weight previously ascribed to it. application, including supplemental submissions The Board believes that a substantial public by Citicorp, the Board is of the view that the facts benefit which may be expected to result from this of record support approval of the subject applica­ proposal would be the continued viability of a tion. company that has a long history of service to the West Coast is experiencing severe difficulty in area. In addition, it is anticipated that through its obtaining operating funds at competitive interest affiliation with Applicant, West Coast will be able rates. This situation has necessitated West Coast’s to expand the services which it offers to the public. contraction of its business to less diversified fi­ While the Board remains concerned about some nancial services and a consequent reduction in its of the aspects of this proposal to which adverse customer base. West Coast’s scope of operations weight was accorded in the previous Order, the has been so contracted that it now consists almost Board concludes that, on balance, this proposal entirely of small personal loans. Unless persisting can be expected to result in benefits to the public that outweigh possible adverse effects. Based upon the foregoing and other consid­ erations reflected in the record, the Board has 6 As used herein, the term “independent” finance company refers to unaffiliated, noncaptive finance companies which are determined that the balance of the public interest not so large or so heavily diversified into nonfinancial activities factors the Board is required to consider under as to be regarded as unsuitable acquisition candidates for a bank holding company. § 4(c)(8) is favorable. Accordingly, the application Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

392 Federal Reserve Bulletin □ April 1976 is hereby approved. This determination is subject unless such period is extended for good cause by to the conditions set forth in § 225.4(c) of Regu­ the Board or by the Federal Reserve Bank of New lation Y and to the Board’s authority to require York. such modification or termination of the activities By order of the Board of Governors, effective of a holding compan}' or any of its subsidiaries March 22, 1976. as the Board finds necessary to assure compliance with the provisions and purposes of the Act and Voting for this action: Vice Chairman Gardner and Governors Holland, Wallich, Coldwell, Jackson, and the Board’s regulations and orders issued there­ Partee. Absent and not voting: Chairman Burns. under, or to prevent evasion thereof. The transaction shall be made not later than (Signed) J. P. Garbarini, three months after the effective date of this Order, [seal] Assistant Secretary of the Board. O rders A pproved U nder B ank H olding C ompany A ct— By the Board of Governors During March 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 Banks of Iowa, Inc., Cedar First National Bank 3/22/76 41 F.R. 13673 Rapids, Iowa in Sioux City, Sioux 3/31/76 City, Iowa Ellis Banking Corporation, North Port Bank, 3/3/76 41 F.R. 10268 Bradenton, Florida North Port, Florida 3/10/76 Roxton Bancshares, Inc., The First Bank of 3/5/76 41 F.R. 10179 Roxton, Texas Roxton, Roxton, 3/11/76 Texas Section 4 Board action Federal Nonbanking company (effective Register Applicant (or activity) date) citation National Detroit Corporation, NDC Insurance Company, 3/24/76 41 F.R. 13675 Detroit, Michigan Detroit, Michigan 3/31/76 Labanco, Inc., Burwell, Nebraska Burwell Insurance Agency, 3/3/76 41 F.R. 10178 Inc., Burwell, Nebraska 3/11/76 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 393 Sections 3 and 4 Board action Federal Nonbanking company (effective Register Applicant Bank(s) (or activity) date) citation Cameron Bancshares, Cameron State General insurance 3/1/76 41 F.R. 9934 Inc., Cameron, Bank, Cameron, agency activities 3/8/76 Missouri Missouri First Tribune Insur­ The First National General insurance 3/24/76 41 F.R. 13674 ance Agency, Inc. Bank of Tribune, agency activities 3/31/76 Tribune, Kansas Tribune, Kansas By Federal Reserve Banks During March 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 Citizens Bancorpora­ American National Chicago 2/27/76 41 F.R. 10268 tion, Sheboygan, Bank of Green 3/10/76 Wisconsin Bay, Green Bay, Wisconsin First National The Bank of Kansas City 3/8/76 41 F.R. 11364 Charter Corpora­ Ladue, Ladue, 3/18/76 tion, Kansas City, Missouri M issouri United Missouri Gillioz Bank and Kansas City 3/26/76 41 F.R. 14598 Bancshares, Inc., Trust Company, 4/6/76 Kansas City, Monett, Missouri Missouri Section 4 Board action Federal Nonbanking company Reserve (effective Register Applicant (or activity) Bank date) citation Ribanco, Inc., Rising City Insurance Kansas City 3/11/76 41 F.R. 12044 North Loup, Agency, Inc., Rising 3/23/76 Nebraska City, Nebraska Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

394 Federal Reserve Bulletin □ April 1976 P ending C ases Involving the B oard of G overnors* Grandview Bank & Trust Company v. Board tA.R. Martin-Trigona v. Board of Governors, of Governors, filed March 1976, U.S.C.A. et al., filed September 1975, U.S.D.C. for for the Eighth Circuit. the Northern District of Illinois, (motion for Federated Capital Corporation v. Board of reconsideration). Governors, filed March 1976, U.S.C.A. for Logan v. Secretary of State, et al., filed Sep­ the District of Columbia. tember 1975, U.S.D.C. for the District of Association of Bank Travel Bureaus, Inc. v. Columbia. Board of Governors, filed February 1976, Reserve Enterprises v. Arthur F. Burns, et al., U.S.C.A. for the Seventh Circuit. filed September 1975, U.S.D.C. for the Dis­ Memphis Trust Company v. Board of Gover­ trict of Columbia. nors, filed February 1976, U.S.D.C. for the Florida Association of Insurance Agents, Inc. Western District of Tennessee. v. Board of Governors, and National Asso­ First Lincolnwood Corporation v. Board of ciation of Insurance Agents, Inc. v. Board Governors, filed February 1976, U.S.C.A. of Governors, filed August 1975, actions for the Seventh Circuit. consolidated in U.S.C.A. for the Fifth Cir­ Helen C. Hatten, et al. v. Board of Governors, cuit. filed January 1976, U.S.D.C. for the District Henry M. Smith v. National Bank of Boulder, of Connecticut. et al., filed June 1975, U.S.D.C. for the International Bank v. Board of Governors, filed Northern District of Texas. December, 1975, U.S.C.A. for the Sixth Bank of Boulder v. Board of Governors, et al., Circuit. filed June 1975, U.S.C.A. for the Tenth Cir­ Community Bancorporation v. Board of Gov­ cuit. ernors, filed December 1975, U.S.C.A. for ttDavidR. Merrill, et al. v. Federal Open Market the 6th Circuit. Committee of the Federal Reserve System, Roberts Farms, Inc. v. Comptroller of the Cur­ filed May 1975, U.S.D.C. for the District of rency, et al., filed November 1975, U.S.D.C. Columbia, appeal pending, U.S.C.A. for the for the Southern District of California. District of Columbia. National Computer Analysts, Inc. v. Decimus Curvin J. Trone v. United States, filed April Corporation, et al., filed November 1975, 1975, U.S. Court of Claims. U.S.D.C. for the District of New Jersey. Richard S. Kaye v. Arthur F. Burns, et al., Peter E. Blum v. First National Holding Cor­ filed April 1975, U.S.D.C. for the Southern poration, filed November 1975, U.S.D.C. for District of New York. the Northern District of Georgia. Louis I. Roussel v. Board of Governors, filed Harlan National Co. v. Board of Governors, April 1975, U.S.D.C. for the Eastern District filed November 1975, U.S.C.A. for the of Louisiana. Eighth Circuit. Georgia Association of Insurance Agents, et al. Peter E. Blum v. Morgan Guaranty Trust Co., v. Board of Governors, filed October 1974, et al., filed October 1975, U.S.D.C. for the U.S.C.A. for the Fifth Circuit. Northern District of Georgia, Alabama Association of Insurance Agents, et tA.R. Martin-Trigona v. Board of Governors, al. v. Board of Governors, filed July 1974, et al., filed September 1975, U.S.D.C. for U.S.C.A. for the Fifth Circuit. the Northern District of Illinois. *This list of pending cases does not include suits against the Federal Reserve Banks in which the Board of Governors fDecisions have been handed down in these cases, subject is not named as a party. to appeals noted. fDecisions 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

Law Department 395 Pending C ases Inv olving th e B o ard o f G o v ern o rs* — Continued tInvestment Company Institute v. Board of Gov­ nors, filed December 1973, U.S.C.A. for the ernors, dismissed July 1975, U.S.D.C. for Sixth Circuit, the District of Columbia, appeal pending, tConsumers Union of the United States, Inc., U.S.C.A. for the District of Columbia Cir­ etal. v. Board of Governors, filed September cuit. 1973, U.S.D.C. for the District of Columbia. tGeorge Brice, Jr., et al. v. Board of Governors, Bankers Trust New York Corporation v. Board filed April 1974, U.S.C.A. for the Ninth of Governors, filed May 1973, U.S.C. A. for Circuit. the Second Circuit. East Lansing State Bank v. Board of Gover­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

397 Announcements RESIGNATION OF THE WHITE HOUSE WASHINGTON M R. H OLLAND AS M EM BER OF April 15, 1976 THE BO ARD OF GOVERNORS Dear Mr. Holland: Robert C. Holland, a Member of the Board of I have your letter of March 17, and it is Governors of the Federal Reserve System, has with deep regret that I accept your resigna­ announced his resignation from the Board, effec­ tion as a Member of the Board of Governors of the Federal Reserve System, effective tive May 15, 1976. May 15, 1976, as you requested. Governor Holland’s letter of resignation to President Ford and the President’s letter of accept­ In doing so, I welcome this opportunity to express my personal appreciation for your ance follow: many years of devoted service to our Nation. As a member of the Federal Reserve Staff March 17, 1976 for nearly twenty-four years and since 1973 as a Member of the Board of Governors, you have established an outstanding record Dear Mr. President: of leadership, integrity and achievement. I wish to tender herewith my resignation You were the first staff member to become as a Member of the Board of Governors of a Member of the Board—an accomplishment the Federal Reserve System, effective May in which you can take great personal pride. 15, 1976, or such earlier date as may suit But beyond that, you brought to the Board your convenience. I take this action with exceptional insight and a broad range of deep regret, but the fact is that I simply experience which have greatly strengthened cannot afford to serve in this capacity any the Board’s internal administration and longer. helped streamline its decision-making pro­ cedures. Throughout this period, your ef­ I depart from office a firm supporter of forts have been distinguished not only by the current thrust of Federal Reserve poli­ exceptional ability but also a genuine con­ cies. I leave behind a Board membership, cern and determination that all Americans the majority of which will have been named should share in a better, more secure life. under your Administration, which I regard as exemplary in its collective wisdom, di­ Now, as you prepare to leave government, versity of experience, and uniformity of I extend to you my gratitude as well as my dedication to the public interest. I have every very best wishes that the future may be filled confidence that the central bank will remain with every continued success and happiness. a faithful steward of the Nation’s trust. Sincerely, For nearly twenty-seven years I have been part of the Federal Reserve System, and it Gerald R. Ford has been part of me. I am deeply grateful to those who have made it possible for me to have that experience and to contribute what I could to the performance of our c h a n g e in b o a r d s t a f f monetary system. The Board of Governors has announced the retire­ ment of Robert Solomon, Adviser to the Board Yours respectfully, and its senior staff member in the international Robert C. Holland field, effective May 3, 1976. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

398 Federal Reserve Bulletin □ April 1976 REGULATION Y: Amendment heavy debt service obligations may encourage undue risk-taking aimed at increasing the earnings The Board of Governors on April 8, 1976, of its subsidiary bank or banks. amended its Regulation Y to require prior notifi­ The Board also wished to forestall bootstrapping cation by bank holding companies planning to because of the difficulties that may be encountered purchase their own stock. in unwinding such a transaction once it has taken The purpose of the amendment is to assist the place. Board in supervising baink holding companies by Where the required prenotification indicates that providing advance notice of redemptions of bank consummation of a proposed purchase of its own holding company stock that could have a signifi­ stock by a bank holding company would violate cant impact on the company’s capital structure. applicable law, or would create an unsafe or un­ In particular, the amendment is intended to deter sound condition in a holding company, the Board the practice known as “bootstrapping,” whereby could, if necessary, use its cease-and-desist a holding company incurs substantial debt in order powers to prevent the transaction. to purchase or redeem its own outstanding stock, The amendment specified the information to be generally to help a shareholder or shareholder included with notifications. group gain control of the company. The Reserve Bank to which the transaction is Effective May 15, the regulatory amendment reported may allow it to take place in less than will require 45 days’ advance notice to the Board 45 days if it determines that the transaction would by a bank holding company planning to redeem not be an unsafe or unsound practice and would its own stock. A proposal to require prior notifi­ not violate applicable law or regulations. cation was issued for comment by the Board on December 11, 1975, and the final amendment includes the following two principal changes from REGULATION B: Interpretation the earlier proposal: —The period for prior notification was The Board of Governors on March 23, 1976, shortened from 60 to 45 days. published an interpretation of its Regulation B —The threshold requirement for notifica­ (Equal Credit Opportunity). tion, in the amendment as adopted, makes The interpretation permits creditors to modify prior notification necessary when the gross consideration in the tr ansaction equals 10 per a prescribed general notice of rights under the Act cent or more of the company’s net worth, with a reference to a similar State law and the or when the current transaction combined name and address of the relevant State enforce­ with the net consideration for similar trans­ ment agency. The interpretation includes an ex­ actions during the past 12 months (pre­ viously 5 years) aggregates 10 per cent ample of the form the modified notice might take. (previously 25 per cent) of the company’s Ohio and Utah currently have laws prohibiting net worth. discrimination in credit transactions similar to the Although the Board is aware that there are Federal statute, and other States intend to adopt legitimate reasons for a bank holding company to such equal credit opportunity laws. buy its own stock, it is requiring prior notification of transactions that may result in the following conditions: SYSTEM M EM BERSHIP: —The “bootstrapped” bank holding company is left with heavy debts and with much reduced, Adm ission of State Banks perhaps very little, or no equity. The following banks were admitted to membership —Repayment and servicing of the debt depend in the Federal Reserve System during the period mainly upon dividends the holding company re­ March 16, 1976, through April 15, 1976: ceives from its subsidiary bank or banks, resulting in substantial pressure on them to pay excessive Florida dividends to the parent company, possibly creating Pensacola...........First State Bank of Pensacola an unsafe or unsound bank condition. Texas —The need of the holding company to meet Olton............................................Olton State Bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

399 Industrial Production Seasonally adjusted, ratio scale, 1967=100 Released for publication April 15 Industrial production is estimated to have in­ creased 0.6 per cent in March following rises of 0.7 and 0.8 per cent in February and January, respectively. Gains continue to be widespread among most components of the index. The index is now 10 per cent above the April 1975 low but remains close to 4 per cent under its September 1974 level. Autos again provided the major impetus to rais­ ing consumer goods output. Assemblies increased almost 3 per cent to an 8.3 million unit annual rate; schedules indicate a similar rise in April. Output of home goods advanced moderately, while nondurable consumer goods showed a small in­ crease from the downward revised February level. Business equipment production, which was re­ vised upward for the preceding 3 months, in­ creased 0.7 per cent further in March. Production of durable materials increased again sharply in March, reflecting gains in metals and F.R. indexes, seasonally adjusted. Latest figures: March. consumer durable parts. Materials such as textiles, *Auto sales and stocks include imports. paper, and chemicals continued to expand at the slower pace of the last several months following the March Bulletin. The index was recalculated for dramatic increases in the second and third quarters this period after discovery of internal inconsistencies of 1975. caused by the introduction of a new computer program. In this Bulletin, corrected November indexes are noted with a “c” on tables A-48, A-49, and A-50. Note.—Revised and corrected figures for industrial As customary, indexes for December, January, and production for the 4-month period from November 1975 February reflect the inclusion of additional data intro­ to February 1976 became available after publication of duced when the March estimates were calculated. Seasonally adjusted, 1967 == 100 Per cent changes from— Industrial production 1975 1976 Month Year Q4 to Dec. Jan. Feb.p Mar.e ago ago Ql Total ........................................................................... 118.4 119.4 120.2 120.9 .6 9.8 2.2 Products, total ................................................................... 119.3 120.2 121.1 121.5 .3 8.1 2.4 Final products ................................................................ 119.0 119.7 120.5 121.0 .4 7.8 2.0 Consumer goods ....................................................... 130.2 130.9 131.6 132.2 .5 11.8 2.3 Durable goods ..................................................... 119.5 120.8 122.4 123.8 1.1 20.1 2.9 Nondurable goods .............................................. 134.4 134.8 135.0 135.4 .3 9.0 2.0 Business equipment ................................................ 118.2 119.1 120.6 121.4 .7 3.8 3.1 Intermediate products .................................................. 120.3 122.2 122.9 123.3 .3 9.4 3.5 Construction products ............................................ 114.2 116.7 117.0 117.2 .2 7.4 3.4 Materials .............................................................................. 116.8 118.1 118.8 120.2 1.2 13.5 2.0 p Preliminary. eEstimated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Al 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 A40 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 AS 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

A2 BANK RESERVES AND RELATED ITEMS □ APRIL 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. Total 5 account stand­ Total out­ repur­ assets4 ing right2 chase agree­ ment Averages of daily figures 1939—Dec................................. 2,510 2,510 8 83 2,612 17,518 2,956 1941—Dec.................................. 2,219 2,219 5 170 2,404 22,759 3*239 1945—Dec................................. 23,708 23,708 381 652 24,744 20,047 4*322 1950—Dec................................. 20,345 20,336 9 142 1,117 21,606 22,879 4,629 I960—Dec.................................. 27,248 27,170 78 94 1,665 29,060 17,954 5,396 1969—Dec.................................. 57,500 57,295 205 1,086 3,235 2,204 64,100 10,367 6,841 1970—Dec.................................. 61,688 61,310 378 321 3,570 1,032 66,708 11,105 400 7,145 1971—Dec.................................. 69,158 68,868 290 107 3,905 982 74,255 10,132 400 7,611 1972—Dec.................................. 71,094 70,790 304 1,049 3,479 1,138 76,851 10,410 400 8,293 1973—Dec.................................. 79,701 78,833 868 1,298 3,414 1,079 85,642 11,567 400 8,668 1974—Dec.................................. 86,679 85,202 1,477 703 2,734 3,129 93,967 11,630 400 9,179 1975—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 91,918 89,355 2,563 60 1,877 3,039 97,845 11,620 429 9,464 June................................ 88,912 87,618 1,294 271 2,046 3,098 95,119 11,620 500 9,536 July................................. 88,166 87,882 284 261 1,911 3,100 94,144 11,620 500 9,616 Aug................................. 86,829 86,348 481 211 1,691 2,953 92,395 11,604 500 9,721 Sept................................. 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................................... 92,998 91,524 1,474 79 2,684 3,505 100,172 11,599 500 10,177 Feb.................................. 94,610 92,812 1,798 76 2,375 3,384 101,369 11,599 500 10,267 Mar.*.............................. 94,880 93,503 1,377 58 2,235 3,412 101,367 11,599 500 10,436 Week ending— 1976—Jan. 7......................... 94,151 92,462 1,689 67 3,450 3,501 102,215 11,599 500 10,119 14.......................... 90,940 90,940 45 2,846 3,414 97,987 11,599 500 10,139 21.......................... 91,705 91,070 635 153 2,380 3,373 98,361 11,599 500 10,157 28.......................... 94,040 91,480 2,560 58 2,401 3,622 101,088 11,599 500 10,246 Feb. 4.......................... 95,470 91,928 3,542 57 2,170 3,671 102,509 11,599 500 10,263 11.......................... 91,827 91,827 51 2,359 3,683 98,652 11,599 500 10,256 18......................... 94,396 92,718 * "i *678* ’ 56 2,155 3,535 100,962 11,599 500 10,257 25......................... 96,610 93,573 3,037 148 2,934 2,959 103,686 11,599 500 10,269 Mar. 3......................... 96,404 94,161 2,243 85 2,115 3,081 102,832 11,599 500 10,356 10......................... 92,768 92,113 655 48 2,577 3,232 99,358 11,599 500 10,430 17.......................... 93,316 93,316 40 2,446 3,347 99,762 11,599 500 10,436 24*....................... 96,724 94,409 2,315 77 2,084 3,501 103,133 11,599 500 10,442 31*....................... 95,638 93,917 1,721 37 1,652 3,687 101,845 11,599 500 10,449 End of month 1976—Jan................................... 96,588 91,850 4,738 66 1,620 3,676 103,180 11,599 500 10,275 Feb.................................. 95,667 94,354 1,313 52 1,649 3,062 101,480 11,599 500 10,330 Mar.p.............................. 96,647 93,900 2,747 54 2,108 3,707 103,399 11,599 500 10,452 Wednesday 1976—Jan. 7......................... 91,872 90,810 1,062 41 3,586 3,443 99,896 11,599 500 10,138 14.......................... 91,507 91,507 48 3,448 3,362 99,100 11,599 500 10,142 21......................... 92,068 92,068 843 2,387 3,395 99,429 11,599 500 10,243 28......................... 98,344 91,833 6,511 138 2,594 3,668 105,900 11,599 500 10,250 Feb. 4......................... 94,918 91,899 3,019 44 2,715 3,684 102,406 11,599 500 10,256 11......................... 92,610 92,610 62 2,311 3,672 99,375 11,599 500 10,256 18......................... 95,357 92,870 *2*487* * 59 3,156 3,036 102,611 11,599 500 10,261 25......................... 99,554 93,549 6,005 688 3,152 3,021 107,611 11,599 500 10,272 Mar. 3......................... 96,716 94,287 2,429 317 3,120 3,153 104,433 11,599 500 10,427 10......................... 87,567 87,567 36 3,283 3,264 94,773 11,599 500 10,433 17......................... 92,430 93,430 72 3,869 3,370 100,326 11,599 500 10,440 24*....................... 95,920 94,671 1,249 323 2,507 3,613 102,978 11,599 500 10,446 31*....................... 96,647 93,900 2,747 54 2,108 3,707 103,399 11,599 500 10,452 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

APRIL 1976 □ BANK RESERVES AND RELATED ITEMS A3 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. lia­ cir­ hold­ ac­ bilities cula­ ings counts4 and With Cur­ tion Treas­ For­ Other 3,6 capital4 F.R. rency Total 8 ury eign Banks and coin 7 Averages of daily figures 7,609 2,402 616 72\9 248 11,473 11,473 .1939—Dec. 10,985 2,189 592 1,531 292 12,812 12,812 .1941—Dec. 28,452 2,269 625 1,247 493 16,027 16,027 . 1945—Dec. 27,806 1,290 615 920 353 739 17,391 17,391 .1950—Dec. 33,019 408 522 250 495 1,029 16,688 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 1,892 406 111 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. 77,692 277 1 ,887 363 958 3,076 27,948 6,831 34,779 .1975—Mar. 78,377 309 3,532 307 718 3,137 28,264 6,870 35,134 .............Apr. 79,102 326 8,115 262 746 3,231 27,576 6,916 34,492 ..............May 80,607 355 3,353 272 989 3,191 28,007 6,969 34,976 .............June 81,758 358 2,207 269 711 3,135 27,442 7,213 34,655 .............July 81,822 368 818 274 660 3,096 27,183 7,299 34,482 .............Aug. '81,907 r362 3,415 308 798 3,169 27,215 7,431 34,646 .............Sept. 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 26,995 8,445 935,575 . 1976—Jan. 84,002 527 8,811 280 716 3,231 26,168 7,646 933,953 .............Feb. 85,014 511 7,653 264 810 3,252 26,397 7,457 933,995 .............Mar.23 Week ending— 86,011 478 5,939 278 1,185 3,059 27,483 7,937 935,551 . 1976—Jan. 7 85,140 496 3,414 338 903 3,167 26,766 8,903 935,802 ........................14 84,288 519 4,040 304 922 3,219 27,324 8,733 936,193 ........................21 83,581 521 8,385 230 772 3,359 26,585 8,349 935,072 ........................28 83,406 537 9,805 268 730 3,312 26,815 8,116 935,069 .Feb. 4 83,951 529 6,966 247 688 3,038 25,590 8,050 933,779 ...........11 84,369 533 7,354 279 673 3,225 26,885 7,516 934,540 ......... 18 84,061 521 10,783 278 692 3,347 26,372 7,145 933,656 ...........25 84,077 513 9,911 312 813 3,289 26,371 7,577 934,088 . Mar. 3 84,776 510 7,227 288 740 3,061 25,283 7,955 933,379 ............10 85,261 498 6,036 262 950 3,217 26,072 7,493 933,710 ............17 85,168 514 8,972 267 822 3,343 26,589 6,877 933,606 ............24* 85,131 522 7,705 246 724 3,433 26,630 7,450 934,221 ............31 v End of month 83,231 541 10,075 294 651 3,459 27,306 8,116 935,560 . 1976—Jan. 83,831 512 10,366 412 809 3,396 24,585 7,577 932,302 .............Feb. 85,548 519 7,144 305 796 3,490 28,148 7,450 935,739 .............Mar.* Wednesday 85,712 487 2,246 244 909 3,068 29,466 7,937 937,534 .1976—Jan. 7 84,950 502 4,217 235 969 3,166 27,301 8,903 936,337 .14 84,130 518 4,682 248 943 3,254 27,996 8,733 936,865 .21 83,609 513 10,360 209 627 3,427 29,503 8,349 937,990 .28 83,750 531 7,800 225 717 2,986 28,751 8,116 937,005 .Feb. 4 84,463 517 6,705 257 594 3,096 26,097 8,050 934,286 ...........11 84,584 523 9,603 252 501 3,224 26,285 7,516 933,940 ...........18 84,135 523 10,836 261 975 3,435 29,816 7,145 937,100 ............25 84,601 505 9,820 233 690 2,994 28,115 7,577 935,832 . Mar. 3 85,330 510 5,300 255 936 3,106 21,868 7,955 929,964 ...........10 85,454 507 9,531 234 982 3,220 22,936 7,493 930,574 ...........17 85,307 524 8,838 271 755 3,330 26,498 6,877 933,515 ...........24* 85,548 519 7,144 305 796 3,490 28,148 7,450 935,739 ...........31* 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 (be­ serves 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; all 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 Board averages. Beginning Sept. 12, 1968, amount is based on close-of-business policy 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

A4 BANK RESERVES AND RELATED ITEMS □ APRIL 1976 RESERVES AND BORROWINGS OF MEMBER BANKS (In millions of dollars) All member banks Large banks2 All other banks Period Borrowings New York City City of Chicago Other Total Re­ Excess1 Total Sea­ Excess Borrow­ Excess Borrow­ Excess Borrow­ Excess Borrow­ held1 quired sonal ings ings ings ings 1939—Dec...................... 11,473 6,462 5,011 3 2,611 540 1,188 671 3 1941—Dec...................... 12,812 9,422 3,390 5 989 295 1,303 1 804 4 1945—Dec...................... 16,027 14,536 1,491 334 48 192 14 418 96 1,011 46 1950—Dec...................... 17,391 16,364 1,027 142 125 58 8 5 232 50 663 29 1960—Dec...................... 19,283 18,527 756 87 29 19 4 8 100 20 623 40 1965—Dec...................... 22,719 22,267 452 454 41 111 15 23 67 228 330 92 1967—Dec...................... 25,260 24,915 345 238 18 40 8 13 50 105 267 80 1968—Dec...................... 27,221 26,766 455 765 100 230 15 85 90 270 250 180 1969—Dec...................... 28,031 27,774 257 1,086 56 259 18 27 6 479 177 321 1970—Dec...................... 29,265 28,993 272 321 34 25 7 4 42 264 189 28 1971—Dec...................... 31,329 31,164 165 107 25 35 1 8 -35 22 174 42 1972—Dec...................... 31,353 31,134 219 1,049 -20 301 13 55 -42 429 -160 264 1973—Dec...................... 35,068 34,806 262 1,298 -23 74 43 28 28 761 133 435 1974—Dec...................... 36,941 36,602 339 703 132 80 5 18 39 323 163 282 1975—Mar..................... 34,779 34,513 266 106 53 22 20 10 56 28 137 46 Apr...................... 35,134 35,014 120 110 32 25 -23 14 -4 38 115 33 May.................... 34,492 34,493 -1 60 -28 24 -21 -89 13 137 23 June.................... 34,976 34,428 548 271 142 90 47 2 217 114 142 65 July..................... 34,655 34,687 -32 261 -22 54 -24 23 -118 62 132 122 Aug..................... 34,482 34,265 217 211 -18 14 5 1 98 51 132 145 Sept..................... 34,646 34,447 199 396 17 68 27 2 23 141 132 185 Oct...................... 34,567 34,411 156 191 42 31 -23 3 32 134 128 Nov..................... 34,571 34,281 290 61 50 7 34 42 5 164 49 Dec...................... 34,989 34,727 262 127 64 63 -18 89 26 127 38 1976—Jan....................... 35,575 35,366 209 79 52 9 -18 17 3 13 172 40 Feb...................... 333,953 33,939 14 76 -147 20 -14 1 -2 16 177 39 Mar.p................. 333,995 33,526 469 58 147 21 32 3 34 14 99 20 Week ending— 1975—Mar. 5............. 34,795 34,386 409 70 9 117 4 90 10 198 60 12............. 34,482 34,252 230 60 7 122 15 — 20 19 113 41 19............. 34,510 34,490 20 167 6 -96 88 -37 10 36 143 43 26............. 34,819 34,675 144 155 7 54 8 16 44 -12 58 86 45 Sept. 3............. 34,529 34,228 301 222 50 28 24 81 58 168 164 10............. 34,098 34,104 -6 385 53 -45 215 -31 -66 34 136 136 17............. 34,552 34,285 267 327 60 79 19 11 17 174 152 142 24............. 34,617 34,584 33 395 64 -66 79 -2 28 115 73 201 Oct. 1............. 35,444 34,982 462 581 73 149 2 147 304 164 277 8............. 34,260 34,284 -24 239 74 -83 —16 — 52 51 127 188 15............. 34,654 34,358 296 172 65 -9 39 33 94 12 178 121 22............. 34,576 34,577 -1 232 63 -8 97 -18 -35 22 60 113 29............. 34,715 34,437 278 94 60 102 15 33 7 128 87 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 16 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 17............. 35,139 34,906 233 44 13 111 -12 6 11 128 33 24............. 34,836 34,625 211 219 12 7 140 -5 75 42 134 37 31............. 335,611 35,197 414 253 13 57 140 20 129 57 208 56 1976—Jan. 7............. 335,551 35,227 324 67 10 59 -12 102 11 175 56 14............. 335,802 35,639 163 45 8 71 -2 -94 2 188 43 21............. 336,193 35,996 197 153 10 -62 28 -2 77 91 18 170 30 28............. 335,072 34,907 165 58 8 49 10 28 -23 15 111 33 Feb. 4............. 335,069 34,652 417 57 12 94 -14 139 16 198 41 11............. 333,779 33,729 50 51 12 -83 20 -31 14 144 37 18............. 334,540 34,040 500 56 10 180 -7 4 95 10 232 42 25............. 333,656 33,773 -117 148 10 -157 82 -5 -43 24 88 42 Mar. 3............. 334,088 33,678 410 85 8 98 31 11 11 122 14 179 29 10............. 333,379 33,276 103 48 8 53 26 -18 -67 3 135 19 17............. 333,710 33,509 201 40 8 26 21 13 22 141 18 24*>........... 333,606 33,436 170 77 8 -46 36 -15 -30 22 103 19 31*>........... 334,221 33,820 401 37 10 84 7 74 14 172 23 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 connecti on 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 Board policy million; Q2, $172 million; Q3, $112 million; Q4, $84 million. Beginning 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 lend­ for 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 demand deposits of more than $400 million), as described in the Bulletin the seasonal borrowing needs of their communities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APRIL 1976 □ MONEY MARKET BANKS A5 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 Net surplus, or Less— deficit (—) Gross transactions Net transactions Reporting banks and Total Bor­ week ending— ess Net Per cent two-way Pur­ Loans row­ Net Bor­ inter­ of Pur­ trans­ chases Sales to ings loans es1 rowings bank Amount avg. chases Sales actions 2 of net of net dealers3 from at F.R. Federal required buying selling dealers4 Banks funds reserves banks banks trans. Total—46 banks 1976—Feb. 4'......... 210 12,106 -11,896 75.7 18,090 5,985 5,033 13,058 952 ,432 436 1,996 11 *■......... 56 2 17,080 -17,026 111 .7 23,009 5,929 5,109 17,901 821 ,562 285 2,277 18r......... 212 15,126 -14,915 95.9 21,194 6,068 5,646 15,548 422 ,074 297 1,777 25 r........ -35 86 13,732 -13,853 91 .7 18,675 4,944 4,424 14,252 520 ,133 414 1,718 Mar. 3 r......... 122 41 14,491 -14,411 95.3 20,009 5,518 4,805 15,204 713 355 561 1,794 10r......... 200 26 17,543 -17,369 117.1 23,428 5,885 4,987 18,440 898 576 557 3,019 17r........ 52 6 15,565 -15,519 102.6 21,394 5,829 5,167 16,227 662 342 432 2,910 24 r......... 32 38 13,738 -13,744 92.3 18,805 5,068 4,125 14,680 943 438 495 1,943 31........... 200 13,232 -13,032 86.0 19;046 5,815 4,340 14,707 1,475 420 481 1,939 8 in New York City 1976—Feb. 4........... 113 2,479 -2,367 36.5 3,735 1,256 1,108 2,627 147 1,301 104 1,197 11........... -17 5,645 -5,662 90.8 6,341 696 696 5,645 1,418 81 1,337 18........... 176 3,849 -3,673 56.9 5,152 1,304 1,304 3,849 1,061 116 946 2 5 -47 82 3,591 -3,720 60.3 4,263 672 672 3,590 1,295 97 1,199 Mar. 3........... 37 31 4,421 -4,415 72.6 5,042 621 621 4,421 1,548 139 1,409 10........... 111 26 6,595 -6,510 106.1 7,251 656 656 6,595 2,069 237 1 ,832 17........... 40 5,020 -4,980 79.8 5,678 658 658 5,020 2,282 236 2,047 2 4 -4 36 3,641 -3,681 60.8 4,404 763 540 3,864 223 1,612 200 1,412 31........... 86 4,312 -4,226 68.9 4,885 572 572 4,312 1,457 241 1,216 38 outside New York City 1976—Feb. 4*......... 97 9,627 -9,529 103.2 14,356 4,729 3,924 10,431 805 1,131 332 799 U r......... 72 2 11,435 -11,364 126.2 16,669 5,234 4,413 12,256 821 1,145 204 941 18r......... 36 11,278 -11,242 123.6 16,042 4,764 4,343 11,699 422 1,013 182 832 25 '......... 12 4 10,141 -10,133 113.3 14,413 4,272 3,751 10,661 520 837 318 520 Mar. 3 r......... 85 11 10,070 -9,996 110.5 14,967 4,897 4,184 10,783 713 807 422 385 10'......... 89 10,948 -10,859 124.8 16,176 5,229 4,331 11,845 898 1,507 320 1,187 17 r......... 12 6 10,546 -10,539 118,5 15,717 5,171 4,509 11,208 662 1,059 196 864 24 r......... 36 3 10,097 -10,063 113.8 14,402 4,305 3,585 10,817 720 826 296 531 31........... 114 8,919 -8,806 97.6 14,162 5,243 3,767 10,395 1,475 963 240 722 5 in City of Chicago 1976—Feb. 4r......... 12 4,970 -4,958 310.3 5,707 737 712 4,995 388 388 11 *■......... 27 5,571 -5,544 351.9 6,236 665 633 5,603 425 425 18'..:.. 16 5,354 -5,338 329.8 6,117 763 725 5,393 400 400 25 r......... -1 4,605 -4,606 293.2 5,451 846 811 4,640 320 320 Mar. 3r......... 18 11 4,932 -4,925 301.5 5,630 699 666 4,964 243 243 10r......... -11 5,138 -5,150 322.5 5,713 575 551 5,163 356 356 17 r......... 15 5,224 -5,208 325.6 5,875 651 613 5,262 347 347 24'......... -1 4,712 -4,713 302.4 5,387 675 636 4,751 301 301 31........... 8 4,623 -4,615 292.4 5,272 649 591 4,681 427 427 33 others 1976—Feb. 4........... 85 4,656 -4,571 59.9 8,648 3,992 3,212 5,437 781 744 332 412 11........... 46 2 5,864 -5,820 78.3 10,432 4,569 3,779 6,653 790 720 204 516 1 8 20 5,924 -5,904 79.0 9,925 4,001 3,618 6,307 383 613 182 432 25........... 14 4 5,536 -5,527 75.0 8,962 3,426 2,941 6,021 485 517 318 200 Mar. 3........... 67 5,138 -5,071 68.4 9,337 4,198 3,518 5,819 680 564 422 142 10........... 100 5,809 -5,709 80.4 10,463 4,654 3,781 6,682 873 1,151 320 831 17........... -3 6 5,322 -5,331 73.1 9,842 4,520 3,896 5,946 624 712 196 516 24........... 37 3 5,384 -5,350 73.5 9,015 3,630 2,949 6,066 681 525 296 229 31........... 106 4,296 -4,191 56.3 8,890 4,594 3,176 5,714 1,418 536 240 296 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. Beginning with week ending Jan. 7, 1976, adjusted to clearing banks, reverse repurchase agreements (sales of securities to include waivers of penalties for reserve deficiencies in accordance with dealers subject to repurchase), resale agreements, and borrowings secured Board policy change effective Nov. 19, 1975. by Govt, or other issues. 2 Derived from averages for individual banks for entire week. Figure Note.—Weekly averages of daily figures. For description of series for each bank indicates extent to which the bank’s weekly average pur­ and back data, see Aug. 1964 Bulletin, pp. 944-74. Revised data for chases and sales are offsetting. Jan. 1976 may be obtained from the Public Information Office, Office of 3 Federal funds loaned, net funds supplied to each dealer by clearing the Secretary, Board of Governors of the Federal Reserve System, Wash­ ington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 F.R. BANK INTEREST RATES □ APRIL 1976 CURRENT RATES (Per cent per annum) Loans to member banks— Under Se:c. 10(b) 2 Loans to all others under Under Secs. 13 and 13a1 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 3/31/76 date rate 3/31/76 date rate 3/31/76 date3 rate 3/31/76 date rate Boston..................... 5Vi 1/19/76 6 6 1/19/76 6Vi 61/2 1/19/76 7 8Vi 1/19/76 9 New York............... 51/2 1/19/76 6 6 1/19/76 6Vi 61/2 1/19/76 7 81/2 1/19/76 9 Philadelphia........... 51/2 1/19/76 6 6 1/19/76 6 Vi 6 Vi i/19/76 7 81/2 1/19/76 9 Cleveland................ 51/2 1/19/76 6 6 1/19/76 6 Vi 61/2 1/19/76 7 81/2 1/19/76 9 Richmond............... 5i/i 1/19/76 6 6 1/19/76 61/2 6Vi 1/19/76 7 8i/i 1/19/76 9 Atlanta.................... 5 Vi 1/19/76 6 6 1/19/76 6Vi 6 Vi 1/19/76 7 8Vi 1/19/76 9 Chicago................... 5Vl 1/19/76 6 6 1/19/76 6i/i 61/2 1/19/76 7 8Vi 1/19/76 9 St. Louis................. 51/2 1123/76 6 6 1/23/76 6 Vi 6Vi 1/23/76 7 8Vi 1/23/76 9 Minneapolis........... 51/2 1/19/76 6 6 1/19/76 61/2 61/2 1/19/76 7 81/2 1/19/76 9 Kansas City........... 51/2 1/19/76 6 6 1/19/76 61/2 61/2 1/19/76 7 8Vi 1/19/76 9 Dallas...................... 51/2 1/19/76 6 6 1/19/76 6Vi 61/2 1/19/76 7 81/2 1/19/76 9 San Francisco........ 5'A 1/19/76 6 6 1/19/76 6Vi 6Vi 1/19/76 7 8 Vi 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 13 rate. agency thereof. SUMMARY OF EARLIER CHANGES (Per cent per annum) Range F.R. Range F.R. Range F.R. Effective (or level)— Bank Effective (or level)— Bank Effective (or level)— Bank date All F.R. of date All F.R. of date All F.R. of Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1955........ 2Vi 2Vi 1964—Nov. 24. 31/2-4 4 1971—Nov. 11. 434-5 5 30. 4 4 19. 434 434 1956—Apr. 13..................... 21/2-3 234 Dec. 13. 41/2-434 434 20..................... 234-3 234 1965--Dec. 6. 4 -41/2 41/2 17. 41/2-434 41/2 Aug. 24...................... 234-3 3 13. 41/2 41/2 41/2 41/2 31...................... 3 3 1967—Apr. 7. 4 -41/2 4 1973—Jan. 5 5 1957—Aug. 9...................... 3 -31/2 3 14. 4 4 Feb. 5 -5Vi 51/2 Nov. 2 1 3 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 31 - /2 31/2 3 31/2 Nov. 2 2 0 7 . . 4 41 - / 4 2 1/2 4 41 V /2 i A M p a r r . . 2..................... 51/ 5 2 1 - /2 534 5 5 1 1 / / 2 2 Dec. 2..................... 3 3 1968—Mar. 15. 4Vi-5 4Vi May 4..................... 534 534 22. 5 5 11..................... 534-6 6 1958—J M an a . r . 2 2 1 7 4 2 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2 2 21 3 1 3 / 4 4 4 4 - - - - 3 3 3 234 2 2 2 3 1 3 1 / 4 4 4 A Au p g r. . 2 3 1 1 6 6 9 0 . . . . 5 5 V 5 5 4 1 - V - / 5 5 4 i y V 2 i 5 5 5 5 1 1 1 V / / / 2 2 4 i J J u u n ly e 1 1 2 1 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 6 6 7 - V 6 i Vi 6 6 6 7 1 V /2 i 21...................... 214 214 Dec. 18. 5Vi-5i/2 51/2 Aug. 14..................... 7 -7Vi 7Vi Apr. 18...................... 134-214 134 20. 51/2 51/2 23..................... 7Vi 71/2 May 9...................... 134 134 Aug. 15...................... 134-2 13/4 1969—Apr. 4. 51/2-6 6 1974—Apr. 25..................... 7Vi-8 8 Sept. 12...................... 134-2 2 6 6 30.................... 8 8 23...................... 2 2 Dec. 9..................... 734-8 734 Oct. 24...................... 2 -2Vi 2 1970—Nov. 11. 534-6 6 16..................... 734 734 Nov. 7...................... 21/2 21/2 13. 53/4-6 53/4 16. 5*4 53/4 1975—Jan. 714-734 734 1959—Mar. 6..................... 21/2-3 3 Dec. 1. 51/2-53/4 53/4 10..................... 71/4-734 71/4 16...................... 3 3 4. 51,4-53/4 51/2 714 71/4 May 29...................... 3 -31/2 31/2 11. 51/2 51/2 Feb. 5..................... 634-71/4 634 June 12..................... 3Vi 31/2 7..................... 63/4 63/4 Sept. 11...................... 31/2-4 4 1971—Jan. 8. 514-51/2 51/4 Mar. 10.................... 61/4-634 61/4 18...................... 4 4 15. 514 51/4 14..................... 614 61/4 1960—June 1 3 0. . . . . . . . . .. .. .. .. . . . . . . . . . . . . . . . . . . . . .. .. . 3 3 1 1 / / 2 2 - - 4 4 4 3Vi 2 2 1 2 9 9. . . 5 5 5 - - 5 5 1 1/ 4 4 5 5 5 1/4 May 2 1 3 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 6 -61/4 6 6 S A e u p g t . . 1 1 9 4 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3 3 - V 3 i 1/2 3 3 3 1/2 J F u e l b y . 1 1 13 9 6 . . . 4 4 3 3 4 4 ^ 3 - - / 5 5 4 5 5 434 1976—Jan. 2 1 3 9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5V 5 i V -6 i 5 5V % i 1963—July 17..................... 3 -31/2 31/2 23. 5 5 In effect, Mar. 31, 1976. 5 Vi 5Vi 26..................... 31/2 3i/i Note.—Rates under Secs. 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

APRIL 1976 □ RESERVE REQUIREMENTS A7 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 1 Reserve city Other Other time Savings 0-5 Over 5 0-5 Over 5 0-5 Over 5 In effect Jan. 1, 1963................ 161/2 12 4 1966 July 14,21........... 4 4 5 ........... Sept. 8,15 6 1967 Mar. 2................. 31/2 3% Mar. 16............... 3 3 1968—Jan. 11,18........... 161/2 17 12 12Vi 1969—Apr. 17................ 17 171/2 121/2 13 1970—Oct. 1................... 5 Beginning Nov. 9, 1972 Net demand2,4 Time3 Other time Effective date 0-5, maturing in— Over 55, maturing in— 0-2 2-10 10-100 100- Over Savings 400 400 180 180 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 6 16% 17% 73 7 3 75 Nov. 16..................... 13 1973 July 19....................... 10% 12i/i 13% 18 1974 Dec. 12..................... 17% 6 3 1975—Feb. 13...................... 7% 10 12 13 16% Oct. 30...................... 1 8 1 3 8 1 1976 Jan. 8......................... 3 8 2% 8 2% In effect Mar. 31, 1976.... m 10 12 13 16% 3 3 8 2% 8 1 6 8 2% 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 the second to the change at country banks. For changes deposits. The new reserve city designations are as follows: A bank having prior to 1963 see Board’s Annual Reports. net demand deposits of more than $400 million is considered to have the 2 (a) Demand deposits subject to reserve requirements are gross de­ character of business of a reserve city bank, and the presence of the head mand deposits minus cash items in process of collection and demand office of such a bank constitutes designation of that place as a reserve balances due from domestic banks. city. Cities in which there are F.R. Banks or branches are also (b) Requirement schedules are graduated, and each deposit interval reserve cities. Any banks having net demand deposits of $400 million or applies to that part of the deposits of each bank. less are considered to have the character of business of banks outside of (c) Since Oct. 16, 1969, member banks have been required under reserve cities and are permitted to maintain reserves at ratios set for banks Regulation M to maintain reserves against foreign branch deposits not in reserve cities. For details, see Regulation D and appropriate sup­ computed 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 Vi 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 Regu­ p. 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

A8 MAXIMUM INTEREST RATES; MARGIN REQUIREMENTS □ APRIL 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............... 4% Savings deposits......................... Other time deposits:1 Other time deposits (multiple- Multiple maturity:2 and single-maturity):1, 2 30-89 days............ 4 4% Less than $100,000: 90 days to 1 year., 5 30-89 days.......................... 5 5 5 5 1-2 years............. 5 5% 90 days to 1 year............... 5% 5% 5% 5 Vi 2 years or more... sy4 1-2% years......................... 6 6 6 6 Single-maturity: 2% years or more............. 6% 6% 6% 6% Less than $100,000: Minimum denomination 30 days to 1 year., 5 of $1,000:4 2 1 - y 2 e a y rs e a o r r s . m .... o ... r . e ... . .. . 5% 3 5V % 4 4 6 - y 6 e a y r e s a r o s r . .. m ... o ... r .. e .. . . . . . . . . . . . . . . . . . . . . . . . . . (5) m m 7 7 % % $100,000 or more: Governmental units.......... (6) (6) 7% 7V4 30-59 days........... 5% (3) $100,000 or more................. (3) (3> (3> (3) 60-89 days........... 5y4 (3) 90-179 days......... 5% 5V2 6 (3) 180 days to 1 year (3) 1 year or more 6Va (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% per cent ceiling that applies to time de­ 2 Multiple-maturity time deposits include deposits that are automati­ posits maturing in 2% years or more. cally renewable at maturity without action by the depositor and deposits Effective Nov. 1, 1973, a ceiling rate of 1^/4 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 % p p e e r r c ce e n n t t } f June 24, 1970 t g i o o v n e r Q n m ce e i n li t n a g l s u o n n it s r a w te e s r e 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 ce ld rn e sa d v . in E g ff s e c d ti e v 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 6Y4 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 7% per centj 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 estab­ or 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 s date date (T) 1937—Nov. 1 1945--Feb. 4. 40 50 1945—Feb. 5 July 4. 50 50 July 5 1946--Jan. 20. 75 75 1946—Jan. 21 1947- -Jan. 31. 100 100 1947—Feb. 1 1949- -Mar. 29. 75 75 1949—Mar. 30 1951- -Jan. 16. 50 50 1951—Jan. 17 1953- -Feb. 19. 75 75 1953—Feb. 1955--Jan. 3. 50 50 1955—Jan. Apr. 22. 60 60 Apr. 1958--Jan. 15. 70 70 1958—Jan. Aug. 4. 50 50 Aug. Oct. 15. 70 70 Oct. 1960--July 27. 90 90 1960—July 1962--July 9. 70 70 1962—July 1963--Nov. 5. 50 50 1963—Nov. 1968--Mar. 10. 70 70 1968—Mar. 11 June 7.. 70 50 70 June 8 1970—May 5.. 80 60 80 1970—May 6 1971—Dec. 3 .. 65 50 65 1971—Dec. 1972—Nov. 22.. 55 50 55 1972—Nov. 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

APRIL 1976 □ OPEN MARKET ACCOUNT A9 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 Period Exch Gross Gross Redemp­ Gross Gross maturity Gross Gross Exch. or Gross Gross Exch. or Gross Gross Exch. or pur­ sales tions pur­ sales shifts, or pur­ sales maturity pur­ sales maturity pur­ maturity chases chases redemp­ chases shifts chases shifts chases shifts tions 197 0 11,074 5,214 2,160 99 -3,483 848 5,430 249 -1,845 93 -102 197 1 8,896 3,642 1,064 1,036 -6,462 1,338 4,672 933 685 311 150 197 2 8,522 6,467 2,545 125 2,933 789 -1,405 539 -2,094 167 250 197 3 15,517 4,880 3,405 1,396 -140 579 -2,028 500 895 129 87 197 4 11,660 5,830 4,550 450 -1,314 797 -697 434 1,675 196 205 197 5 11,562 5,599 6,431 3,886 -3,553 2,863 4,275 1,510 -4,697 1,070 848 1975—Feb.. 357 460 900 2,437 129 -2,836 113 249 74 150 Mar.. 760 156 487 1,579 -1,494 361 194 450 212 Apr.. 2,119 318 506 148 485 274 164 May. 903 354 407 50 -3,131 6,635 -3,801 298 June. 421 161 612 20 691 488 -529 180 109 July.. 1,505 800 Aug.. 312 282 400 2,002 -2,144 150 1,299 64 -1,444 47 '300 Sept.. 2,118 200 278 562 -278 137 124 Oct... 1,263 ‘*766 400 48 -48 Nov.. 983 652 919 -265 267 -135 155 ’“300 244 ioo Dec.. 1,984 200 28 118 -28 78 71 1976—Jan... 243 1,239 600 110 100 Feb.. 1,664 389 -1,153 177 174 63 968 200 Matched sale-purchase Repurchase Federal agency ob ligations Bankers Total outright1 transactions agreements Net acceptances, (U.S. Govt, (U.S. Govt, change net securities) securities) in U.S. Outright Repur­ Net Period Govt, chase change 3 securi­ agree­ Repur­ Gross Gross Gross ties Gross Sales or ments, chase pur­ Gross Redemp­ Gross pur­ pur­ Gross pur­ redemp­ net Out­ agree­ chases sales tions sales chases chases sales chases tions right ments 1970............... 12,362 5,214 2,160 12,177 12,177 33,859 33,859 4,988 -6 4,982 1971............... 12,515 3,642 2,019 16,205 16,205 44,741 43,519 8,076 485 101 22 181 8,866 1972............... 10,142 6,467 2,862 23,319 23,319 31,103 32,228 -312 1,197 370 -88 -9 -145 272 1973............... 18,121 4,880 4,592 45,780 45,780 74,755 74,795 8,610 865 239 29 -2 -36 9,227 1974............... 13,537 5,830 4,682 64,229 62,801 71,333 70,947 1,984 3,087 322 469 511 420 6,149 1975............... 20,892 5,599 9,559 151,205 152,132 140,311 139,538 7,434 1,616 246 -392 163 -35 8,539 1975—Feb... 673 460 900 7,167 6,634 11,267 10,305 -258 376 81 246 -12 39 309 Mar.. 3,362 156 1,788 15,933 16,763 5,011 6,928 332 210 2 -347 -5 -323 -136 Apr... 3,189 318 506 12,375 12,216 12,774 8,551 6,428 2 883 24 496 7,829 May.. 953 354 407 2,996 3,044 19,489 21,952 -2,224 97 -567 55 -375 -3,207 June.. 1,217 161 450 12,914 13,026 15,219 16,810 -873 6 -255 -62 -121 -1,317 July 1,505 800 15,532 15,139 5,977 6,146 —2 866 2 — 61 3 —2,926 Aug... 2,574 282 2,389 14,234 13,730 8,146 6,881 663 353 40 90 -1 156 1,222 Sept... 2,940 200 19,931 19,835 16,664 14,857 4,451 394 1 203 14 94 5,155 Oct... 1,263 .........766 400 15,886 16,113 13,699 13,838 186 284 -124 49 50 445 Nov. . 1,693 652 919 14,442 15,207 14,342 17,275 -2,047 1 -169 -21 -300 -2,537 Dec... 2,281 200 10,559 10,058 8,464 7,247 2,797 118 15 385 3,315 1976—Jan.. . 563 1,239 600 11,407 11,503 18,135 14,919 2,037 239 187 5 98 2,567 Feb... 2,003 200 7,551 7,957 17,753 20,943 -982 297 1 -236 -70 -109 -1,101 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

A10 FEDERAL RESERVE BANKS □ APRIL 1976 CONSOLIDATED STATEMENT OF CONDITION OF ALL FEDERAL RESERVE BANKS (In millions of dollars) Wednesday End of month Item 1976 1976 1975 Mar. 31 Mar. 24 Mar. 17 Mar. 10 Mar. 3 Mar. 31 Feb. 29 Mar. 31 Gold certificate account................................... 11,599 11,599 11,599 11,599 11,599 11,599 11,599 11,620 Special Drawing Rights certificate account. 500 500 500 500 500 500 500 400 Cash........................................................... 367 377 385 394 399 367 409 352 Loans: Member bank borrowings............... 54 323 72 36 317 54 52 60 Other..................................................... Acceptances: Bought outright.................................. 540 530 585 623 645 540 677 665 Held under repurchase agreements. 343 85 482 343 374 Federal agency obligations: Bought outright................................... 6,607 6,607 6,607 6,607 6,607 6,607 6,607 5,190 Held under repurchase agreements. 287 231 100 287 70 U.S. Govt, securities: Bought outright: Bills.............................. 36,731 37,502 35,261 30,708 37,321 36,731 37,388 36,087 Certificates—Special. Other.. Notes........................... 44,684 44,684 44,684 44,398 44,505 44,684 44,505 41,583 Bonds......................... 5,878 5,878 5,878 5,854 5,854 5,878 5,854 3,748 Total bought outright....................... 1 87,293 88,064 1 85,823 i 80,960 87,680 87,293 l 87,747 1 81,418 Held under repurchase agreements. 2,460 1,018 2,329 2,460 1,243 Total U.S. Govt, securities. 89,753 89,082 85,823 80,960 90,009 89,753 88,990 81,418 Total loans and securities..................... 97,584 96,858 93,087 88,226 98,160 97,584 .96,770 87,333 Cash items in process of collection... * 6,937 p 7,367 9,827 8,091 8,526 p 6,937 6,103 5,588 Bank premises......................................... 333 332 331 330 328 333 329 275 Operating equipment.............................. 18 16 16 16 16 18 16 2 Other assets: Denominated in foreign currencies. 571 536 287 304 305 571 296 19 All other............................................... 2,785 2,729 2,736 2,614 2,504 2,785 2,421 2,776 Total assets. p 120,694 p 120,314 118,768 112,074 122,337 p 120,694 118,443 108,365 Liabilities F.R. notes.......................................... 75,982 75,762 75,907 75,801 75,079 75,982 74,421 69,270 Deposits: Member bank reserves............... p 28,148 » 26,498 22,936 21,868 28,115 p 28,148 24,585 27,139 U.S. Treasury—General account. 7,144 8,838 9,531 5,300 9,820 7,144 10,366 4,269 Foreign............................................... 305 271 234 255 233 305 412 402 Other: All other 2...................................... 796 755 982 936 690 796 809 709 Total deposits. p 36,393 p 36,362 33,683 28,359 38,858 p 36,393 36,172 32,519 Deferred availability cash items............ 4,829 4,860 5,958 4,808 5,406 4,829 4,454 3,456 Other liabilities and accrued dividends. 1,099 1,051 1,057 1,069 1,059 1,099 1,067 1,012 Total liabilities. *118,303 p 118,035 116,605 110,037 120,402 p 118,303 116,114 106,257 Capital accounts Capital paid in............... 945 942 941 940 939 945 940 903 Surplus............................. 929 929 929 929 929 929 929 897 Other capital accounts. 517 408 293 168 67 517 460 308 Total liabilities and capital accounts. p 120,694 p 120,314 118,768 112,074 122,337 p 120,694 118,443 108,365 Contingent liability on acceptances purchased for foreign correspondents................................................. 37 Marketable U.S. Govt, securities; held in custody for foreign and international accounts........................ 43,737 43,291 43,411 44,172 44,785 43,737 43,650 37,974 Federal Reserve Notes—Federal Reserve Agents* Accounts F.R. notes outstanding (issued to Bank).......... 81,420 81,271 80,927 80,802 80,802 81,420 80,820 74,473 Collateral held against notes outstanding: Gold certificate account................................... 11,597 11,597 11,596 11,597 11,596 11,597 11,597 3,809 Special Drawing Rights certificate account. 302 302 302 302 302 302 302 138 Acceptances........................................................ U.S. Govt, securities........................................ 72,095 71,975 71,910 71,910 71,910 72,095 71,710 72,277 Total collateral. 83,994 83,874 83,808 83,809 83,808 83,994 83,609 76,224 1 See note 2 on p. A-2. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APRIL 1976 □ FEDERAL RESERVE BANKS; BANK DEBITS All MATURITY DISTRIBUTION OF LOANS AND U.S. GOVERNMENT SECURITIES HELD BY FEDERAL RESERVE BANKS (In millions of dollars) Wednesday End of month Item 1976 1976 1975 Mar. 31 Mar. 24 Mar. 17 Mar. 10 Mar. 3 Mar. 31 Feb. 29 Mar. 31 Loans—Total........................................................................ 54 323 73 35 317 54 51 59 Within 15 days................................................................. 44 321 72 34 309 44 51 58 16 90 days......................................................................... 10 2 1 1 8 10 1 91 days to 1 year.............................................................. Acceptances—Total............................................................. 883 615 585 623 1,127 883 1,051 665 434 168 118 148 593 434 505 111 16-90 days.......................................................................... 293 301 322 334 152 293 399 139 91 days to 1 year.............................................................. 156 146 145 141 382 156 147 415 U.S. Govt, securities—Total.............................................. 89,753 89,082 85,823 80,960 90,009 89,753 88,990 81,418 Within 15 days1............................................................... 7,365 6,927 4,029 2,474 7,421 7,365 4,675 3,771 16-90 days.......................................................................... 16,662 15,944 15,765 12,893 17,494 16,662 18,489 22,146 91 days to 1 year.............................................................. 23,205 23,342 23,160 22,996 22,389 23,205 23,000 21,102 1-5 years............................................................................ 30,463 30,811 30,811 30,626 30,734 30,463 30,855 21,288 5-10 years.......................................................................... 7,620 7,620 7,620 7,557 7,557 7,620 7,557 10,485 Over 10 years.................................................................... 4,438 4,438 4,438 4,414 4,414 4,438 4,414 2,626 Federal agency obligations—Total.................................. 6,894 6,838 6,607 6,607 6,707 6,894 6,677 5,190 Within 15 days1............................................................... 328 272 41 163 328 162 6 278 277 277 208 209 278 146 189 91 days to 1 year.............................................................. 930 917 917 1,027 904 930 938 643 1-5 years............................................................................ 3,306 3,309 3,309 3,309 3,419 3,306 3,419 2,580 5-10 years.......................................................................... 1,404 1,415 1,415 1,415 1,364 1,404 1,364 1,211 Over 10 years.................................................................... 648 648 648 648 648 648 648 561 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 1975—Feb.................................. 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................................. 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.................................. 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 May................................ 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................................ 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.................................. 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................................. 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.................................. 23,565.1 10,970.9 4,932.5 12,594.2 7,661.8 131.0 351.8 118.4 84.7 71.6 1976—Jan................................... 23,853.5 11,517.7 4,797.5 12,335.7 7,538.2 132.5 366.0 115.6 83.0 70.4 Feb.................................. 25,528.9 12,212.0 5,321.0 13,316.9 7,995.9 140.9 375.4 128.0 89.6 74.6 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

A12 MONEY STOCK □ APRIL 1976 MEASURES OF THE MONEY STOCK (In billions of dollars) Seasonally adjusted Not seasonally adjusted Period Mi A/2 Mz Mi Ms Mi m2 Mi Mi m6 Composition of measures is described inthe Note below. 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-—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 1,147.2 291.7 649.5 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 1,091.8 746.2 1,174.7 303.4 668.4 1,093.6 751.8 1,177.0 1976-—Jan................................... 295.3 669.0 1,102.4 748.2 1,181.6 301.2 674.1 1,105.8 752.6 1,184.3 Feb.................................. 296.8 676.9 1,115.5 752.3 1,191.0 293.2 673.8 1,111.6 746.8 1,184.7 Note.—Composition of the money stock measures is as follows: M3: M2 plus the average of the beginning and end-of-month deposits of mutual savings banks, savings and loan shares, and credit union shares M\: Averages of daily figures for (1) demand deposits of commercial (nonbank thrift). banks other than domestic interbank and U.S. Govt., less cash items in Mi: M2 plus large negotiable CD’s. process of collection and F.R. float; (2) foreign demand balances at F.R. Mb: Mz plus large negotiable CD’s. Banks; and (3) currency outside the Treasury, F.R. Banks, and vaults of For a description of the latest revisions in Mi, M2, M3, Mi, and Mb, see commercial banks. “Revision of Money Stock Measures” on pp. 82-87 of the Feb. 1976 M%: Averages of daily figures for Mi plus savings deposits, time de­ Bulletin. posits open account, and time certificates of deposit other than negoti­ Latest monthly and weekly figures are available from the Board’s H.6 able CD’s of $100,000 of large weekly reporting banks. release. Back data are available from the Banking Section, Division of 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 Non­ Demand deposits Time and savings Non­ U.S. Period deposits bank deposits bank Govt. Cur­ De­ thrift Cur­ thrift de­ ren­ mand insti­ ren­ insti­ pos­ cy de­ tu­ cy Do­ tu­ its3 pos­ tions2 mes­ tions2 its CD’s1 Other Total Mem­ tic Total CD’s1 Other Total ber nonmem­ ber 1973—Dec................. 61.5 209.0 63.5 300.9 364.4 348.0 62.7 156.5 56.3 215.7 64.0 298.2 362.2 345.3 6.3 1974—Dec................ 67.8 215.3 89.8 329.3 419.1 369.2 69.0 159.7 58.5 222.2 90.5 326.3 416.7 366.3 4.9 1975—Mar................ 69.4 214.7 89.8 339.0 428.7 380.7 68.8 153.4 56.0 212.6 88.1 341.4 429.4 383.3 3.8 Apr................. 69.5 215.4 88.4 341.8 430.1 386.0 69.1 156.9 57.4 217.4 85.8 344.6 430.4 388.9 4.0 May............... 70.2 217.4 85.1 346.1 431 .2 391.6 70.0 153.4 56.6 212.9 84.1 349.1 433.2 393.8 4.1 June............... 71.0 220.0 84.1 351.4 435.5 397.8 71.2 157.2 58.9 219.1 82.3 353.2 435.5 401.0 4.2 July................. 71.3 220.6 82.1 355.5 437.6 404.1 71.9 157.9 59.4 220.3 81.3 355.7 436.9 407.2 3.4 Aug................. 71.9 221.3 78.8 357.4 436.2 410.0 72.1 155.8 59.0 217.8 81.1 357.3 438.4 409.9 2.7 Sept................ 72.0 221.6 79.1 359.2 438.3 415.2 71.9 157.0 59.7 219.9 82.7 357.7 440.5 413.3 3.9 Oct.................. 72.6 220.8 80.9 362.3 443.2 420.0 72.5 156.6 60.3 219.9 83.7 360.7 444.4 417.2 3.4 Nov................ 73.4 222.3 81.8 365.9 447.6 424.4 73.9 158.9 61 .5 223.6 82.9 362.1 444.9 420.4 3.5 Dec................. 73.7 221 .3 82.9 368.3 451.2 428.5 75.0 162.1 62.9 228.4 83.5 365.0 448.4 425.2 4.2 1976—Jan.................. 74.2 221.2 79.2 373.7 452.9 433.4 73.7 161.9 62.5 227.6 78.5 372.8 451.3 431.8 3.8 Feb................. 75.0 221.8 75.4 380.1 455.5 438.6 74.0 155.7 60.3 219.2 73.1 380.6 453.7 437.9 4.6 1 Negotiable time certificates of deposit issued in denominations of 3 At all commercial banks. $1 00,000 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

APRIL 1976 □ BANK RESERVES; BANK CREDIT A13 AGGREGATE RESERVES AND MEMBER BANK DEPOSITS (In billions of dollars) Member bank reserves, S.A.1 Deposits subject to reserve requirements3 Total member bank deposits plus nondeposit S.A. N.S.A. items4 Period Non­ Total bor­ Re­ Avail­ Demand Demand rowed quired able2 Time Time Total and Total and S.A. N.S.A. savings Private U.S. savings Private U.S. Govt. Govt. 1973—Dec.... 34.98 33.69 34.68 32.78 442.8 279.7 158.1 5.0 447.5 278.5 164.0 5.0 449.4 454.0 1974—Dec. i.. 36.63 35.90 36.37 34.42 486.9 322.9 160.6 3.4 491 .8 321 .7 166.6 3.5 495.3 500.1 1975—Feb. i.. 35.49 35.34 35.30 33.50 490.9 329.1 159.9 1.9 487.0 326.5 158.0 2.4 497.4 493.5 Mar.... 34.99 34.88 34.79 32.94 493.4 329.2 161 .7 2.5 491 .6 328.9 159.8 2.8 499.9 498.1 Apr.... 35.08 34.97 34.92 33.00 494.1 329.7 161 .7 2.7 495.4 329.1 163.2 3.1 500.8 502.2 May1.. 34.74 34.67 34.58 32.77 493.7 328.6 162.6 2.5 491 .8 329.8 159.0 3.0 501 .2 499.2 June... 35.07 34.85 34.87 32.90 499.5 330.5 165.8 3.2 497.5 330.2 164.2 3.1 506.5 504.5 July. .. 34.98 34.68 34.79 32.89 498.3 330.8 164.9 2.6 497.2 330.2 164.5 2.5 505.1 504.0 Aug— 34.88 34.67 34.69 32.77 496.3 328.4 165.1 2.8 494.8 330.5 162.3 2.0 503.3 501 .8 Sept.... 34.99 34.59 34.80 32.77 498.4 329.8 165.6 3.0 499.1 332.2 164.0 2.9 505.5 506.1 Oct.1.. 34.79 34.60 34.58 32.61 500,1 333.1 164.0 3.0 500.4 334.7 163.3 2.5 508.0 508.3 Nov.... 34.73 34.67 34.44 32.43 505.9 336.1 165.9 3.9 503.6 334.3 166.7 2.6 514.1 511 .9 Dec__ 34.75 34.62 34.49 32.44 506.0 338.7 164.4 3.0 510.9 337.2 170.7 3.1 514.4 519.3 1976—Jan. i. . 34.32 34.24 34.08 32.17 506.2 338.9 164.7 2.6 511 .1 337.9 170.3 2.9 514.1 519.0 Feb.. . . 34.05 33.97 33.83 31.85 507.6 339.5 165.5 2.6 504.2 337.5 163.4 3.4 515.9 512.6 1 Averages of daily figures. Member bank reserve series reflect 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. There are breaks in series by Regulation D. Private demand deposits include all demand deposits because of changes in reserve requirements effective Dec. 12, 1974, Feb. except those due to the U.S. Govt., less cash items in process of collection 13, May 22, and Oct. 30, 1975, and Jan. 8, 1976. In addition, effective and demand balances due from domestic commercial banks. Jan. 1, 1976, statewide branching in New York was instituted. The sub­ 4 “Total member bank deposits” subject to reserve requirements, plus sequent merger of a number of banks raised required reserves because of Euro-dollar borrowings, loans sold to bank-related institutions, and higher reserve requirements on aggregate deposits at these banks. 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.—Back data and estimates of the impact of required reserve and savings deposits, and (c) nondeposit sources subject to reserve re­ changes may be obtained from the Banking Section, Division of Research quirements, and (2) excess reserves. This series excludes required reserves and Statistics, Board of Governors of the Federal Reserve System, Wash­ for net interbank and U.S. Govt, demand deposits. ington, D.C. 20551. LOANS AND INVESTMENTS AT ALL COMMERCIAL BANKS (In billions of dollars) Seasonally adjusted Not seasonally adjusted Loans Securities Loans Securities Total Total Date loans Commercial loans Commercial and and industrial3 and and industrial3 invest­ Plus U.S. invest­ Plus U.S. ments1 Total1 loans Plus Treas­ Other4 ments1 Total1 loans Plus Treas­ Other4 sold2 Total loans ury sold2 Total loans ury sold 2 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—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. 24*.... 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. 29*.... 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. 26* ... 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. 28*___ 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 Feb. 25*.... 725.2 496.2 500.7 177.1 179.8 84.4 144.6 719.3 490.2 494.7 175.3 178.0 85.6 143.5 Mar. 31*.... 730.5 498.9 503.1 174.6 177.2 88.3 143.3 727.6 494.9 499.1 174.5 177.1 89.4 143.4 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 re­ was 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 and by about $700 million as of June 1973, see Nov. 1973 Bulletin, pp. A-96-A-97, and for 1948-58, March 31, 1976. Aug. 1968 Bulletin, pp. A-94-A-97. For a description of the current 4 Farmers Home Administration insured notes included in “Other seasonally adjusted series see the Nov. 1973 Bulletin, pp. 831-32, and securities” rather than in loans beginning June 30, 1971, when such notes the Dec. 1971 Bulletin, pp. 971-73. Commercial and industrial loans: totaled about $700 million. For monthly data, Jan. 1959-June 1973, see Nov. 1973 Bulletin, pp. 5 Data beginning June 30, 1974, include one large mutual savings A-96-A-98; for description see July 1972 Bulletin, p. 683. Data are for bank that merged with a nonmember commercial bank. As of that date last Wednesday of month except for June 30 and Dec. 31; data are partly there were increases of about $500 million in loans, $100 million in “Other or wholly estimated except when June 30 and Dec. 31 are call dates. securities,” and $600 million in “Total loans and investments.” Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 COMMERCIAL BANKS o APRIL 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 assets 3 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 series 6 All commercial banks: 1941—Dec. 31.. 50,746 21,714 21, 7 225 26,551 79,104 71,283 10,982 44,349 15,952 23 7,173 14,278 1947—Dec. 317. 116,284 38,057 69,221 9 006 37,502 155,377 144,103 12,792 240 1,343 94,367 35,360 65 10,059 14,181 1960—Dec. 31.. 199,509 117,642 61,003 20 864 52,150 257.552 229,843 17,079 1,799 5,945 133,379 71,641 163 20,986 13,472 1970—Dec. 318. 461,194 313,334 61,742 86;118 93,643 576,242 480,940 30,608 1,975 7,938 209,335 231,084 19,375 42,958 13,686 1971—Dec. 31.. 516,564 346,930 64,930 104!704 99,832 640,255 537,946 32,205 2,908 10,169 220,375 272,289 25,912 47,211 13,783 1972—Dec. 31.. 598,808 414,696 67,028 117 084113,128 739,033 616,037 33,854 4,194 10,875 252,223 314,891 38,083 52,658 13,927 1973—Dec. 31.. 683,799 494,947 58,277 130 574118,276 835,224 681,847 36,839 6,773 9,865 263,367 365,002 58,994 58,128 14,171 1974—Dec. 31.. 744,107 549,183 54,451140,473128,042 919.552 747,903 43,48311,496 4,807 267,506 420,611 58.369 63,650 14,465 1975—Mar. 26.. 731.690 531,440 59,330140 920105,850 889,370 712,520 30,41011,680 3.950 236,900 429,580 63.370 65,220 14,525 Apr. 30.. 731,100 526,120 63,280141 ,700114.140 899,110 723,060 33,14011,880 7,910 242,580 427,550 61,340 65,100 14,537 May 28.. 733.690 527,030 65,000141 ,660114,400 901,280 725,590 32.510 11,200 2.950 246,410 432,520 61,700 65,080 14,558 June 30.. 747,551 535,493 68,191143 ,868128,716 930,719 754,324 42,582 11.209 3,117 264,027 433,389 62,420 66,557 14,573 July 30p. 738,850 525,640 69,6201143,590106,780 900,210 724,350 33,16010.830 2,230 243,470 434.660 61,800 66,150 14,583 Aug. 27*\ 740,590 524,700 72,060143,830104,030 898,940 723,090 31.510 10,570 2,850 242,290 435,870 59,770 66,580 14,595 Sept. 24*\ 742,300 522,580 75,440144 280105,160 903,440 724,490 31,280 10.990 3,220 240,080 438,920 60,790 66,900 14.612 Oct. 29*\ 745,150 524,260 76,050144,840109.140 911,930 733,730 31,830 11.210 2,700 247,030 440.960 60,310 67,440 14.629 Nov. 26^. 754,780 529,890 79,550145 ,340121,370 934,450 749,140 34,470 11,160 3,600 256,970 442,940 66,360 67,850 14.625 Dec. 31 p. 771,380 542,090 84,220145,070128,270 958,410 781,770 41,66011.830 3,170 278,280 446,830 58,100 68,510 14.630 1976—Jan. 28 p. 753,420 524,510 84,920143,990111,050 921,760 738,930 32,00011,160 3,880 245.230 446.660 66,780 68,600 14.612 Feb. 2Sp. 754,210 525,170 85,570143,470109,590 922,850 736,740 31,45010.990 4,110 242.230 447.960 68,000 68,940 14.625 Mar. 31 p. 763,770 530,980 89,400143,390118,940 943,600 762,180 37,90011,480 2,490 255,950 454,360 62,840 69,660 14.625 Members of F.R. System: 1941—Dec. 31.. 43,521 18,021 19,539 5961 23,113 68,121 61,717 10,385 140 1,709 37,136 12,347 4 5,886 6,619 1947—Dec. 31.. 97,846 32,628 57,914 7 304 32,845 132,060 122,528 12,353 50 1,176 80,609 28,340 54 8,464 6,923 1960—Dec. 31.. 165,619 99,933 49,106 16 579 45,756 216,577 193,029 16,437 1,639 5,287 112,393 57,273 130 17,398 6,174 1970—Dec. 318. 365.940 253,936 45,399 66 604 81,500 465,644 384,596 29,142 1,733 6,460 168,032 179,229 18,578 34,100 5.767 1971—Dec. 31.. 405,087 277,717 47,633 79 738 86,189 511,353 425,380 30,612 2,549 8,427 174,385 209,406 25,046 37,279 5,727 1972—Dec. 31.. 465,788 329,548 48,715 87 524 96,566 585,125 482,124 31,958 3,561 9,024 197,817 239,763 36,357 41,228 5,704 1973—Dec. 31.. 528,124 391,032 41,494 95 598100,098 655, r 526,837 34,782 5,843 8,273 202,564 275,374 55,611 44,741 5,735 1974—Dec. 31.. 568,532 429,537 38,921100,073106,995 715,615 575,563 41,06210,052 3,183 204,203 317,064 52,850 48,240 5,780 1975—Mar. 26.. 552,957 411,446 42,544 98,967 89,685 685,906 542,076 28,56410,231 2,794 180,214 320,273 58,030 49,219 5,785 Apr. 30.. 550,756 406,676 45,142 98. 938 96,694 692,147 549,824 31,10210,433 6,212 184,693 317.384 55,738 49,267 5.789 May 28.. 551,264 405,803 46,918 98;543 96,455 691,485 549,996 30,191 9,751 2,178 187,439 320,437 56,140 49,188 5.790 June 30.. 562,667 412,939 49,610 ioo;118107,152 716,364 573,382 39,847 9,576 2,166 201,197 320,596 56,334 50,257 5,794 July 30.. 553,545 403,742 50,050 99,753 89,898 688,756 547,222 30,980 9,198 1,541 184,595 320,908 56,094 49,951 5.796 Aug. 27.. 554,007 402,281 51,899 99,827 87,208 686,266 545,021 29,335 8,932 2,099 183,283 321,372 54,175 50,281 5.792 Sept. 24.. 555,096 400,695 54,355 100, 046 88,004 689,717 546,360 29,150 9,360 2,343 181,340 324,167 54,929 50,543 5.792 Oct. 29.. 556,383 401,492 54,546 100, 345 91,397 695,312 552,649 29,568 9,578 1,952 186,851 324,700 54,250 50,963 5.796 Nov. 26.. 564,055 405,825 57,477 100, 753102,106 714,149 564,856 32,064 9,527 2,708 194,502 326,055 60,162 51,199 5.792 Dec. 31 p. 577,678 416,039 61,238100,401107,211 733,267 591,358 38,59510,197 2,226 211,418 328,922 52,756 51,748 5,789 1976—Jan. 28.. 563,471 402,067 61,710 99,694 93,794 705,136 556,298 29,712 9,529 2,908 185,783 328,366 61,022 52,067 5.767 Feb. 28.. 562.940 401 ,731 61,869 99,340 91,914 704,357 552,942 29,145 9,357 2,977 183,458 328,005 62,051 52,300 5.769 Mar. 31 p. 569,868 406,092 64,630 99,146100,355 720,672 574,333 35,430 9,848 1,767 194,903 332.385 57,402 52,962 5.769 Call date series ! Insured banks: Total: 1941—Dec. 31... 49,290 21,259 21,046 6,984 25,788 76,820 69,411 10,654 1,762 41,298 15,699 10 6,844 13,426 1947—Dec. 31... 114,274 37,583 67,941 8,750 36,926 152,733 141,851 12,615 54 1,325 92,975 34,882 61 9,734 13,398 1960—Dec. 31... 198,011 117,092 60,468 20,451 51,836 255,669 228,401 16,921 1,667 5,932 132,533 71,348 149 20,628 13,119 1970—Dec. 318.. 458,919 312,006 61,438 85,475 92,708 572,682 479,174 30,233 1,874 7,898 208,037 231,132 19,149 42,427 13,502 1972—Dec. 31... 594,502 411,525 66,679116,298111,333 732,519 612,822 33,366 4,113 10,820 250,693 313,830 37,556 52,166 13,721 1973—Dec. 31... 678,113 490,527 57,961 129,625116,266 827,081 677,358 36,248 6,429 9,856 261,530 363,294 57,531 57,603 13,964 1974—Dec. 31... 734,516 541,111 54,132139,272125,375 906,325 741,665 42,58710,693 4,799 265,444 418,142 55,988 63,039 14,216 1975—June 30... 736,164 526,272 67,833142,060125,181 914,781 746,348 41,24410,252 3,106 261,903 416,962 59,310 65,986 14,320 Sept. 30... 740,882 521,673 73,382140,627117,774 911,981 741,758 37,652 9,876 3,606 252,945 425,382 58,325 67,579 14,357 National member: 1941—Dec. 31... 27,571 11,725 12,039 3,806 14,977 43,433 39,458 6,786 1,088 23,262 8,322 4 3,640 5,117 1947—Dec. 31... 65,280 21,428 38,674 5,178 22,024 88,182 82,023 8,375 35 795 53,541 19,278 45 5,409 5,005 1960—Dec. 31... 107,546 63,694 32,712 11,140 28,675 139,261 124,911 9,829 611 3,265 71,660 39,546 111 11,098 4,530 1970—Dec. 318.. 271,760 187.554 34,203 50,004 56,028 340,764 283,663 18,051 982 4,740 122,298 137,592 13,100 24,868 4,620 1972—Dec. 31... 350,743 247,041 37,185 66,516 67,390 434,810 359,319 19,096 2,155 6,646 146,800 184,622 26,706 30,342 4,612 1973—Dec. 31... 398,236 293.555 30,962 73,718 70,711 489,470 395,767 20,357 3,876 5,955 152,705 212,874 39,696 33,125 4,659 1974—Dec. 31... 428,433 321,466 29,075 77,892 76,523 534,207 431,039 23,497 6,750 2,437 154,397 243,959 39,603 35,815 4,706 1975—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 37,483 4,730 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 38,346 4,738 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APRIL 1976 □ COMMERCIAL BANKS A15 PRINCIPAL ASSETS AND LIABILITIES AND NUMBER, BY CLASS OF BANK—Continued (Amounts in millions of dollars) Loans and investments Deposits Total assets— Classification by Securities Total Interbank3 Other Total Num­ FRS membership Cash lia­ Bor­ capital ber and FDIC assets3 bilities row­ ac­ of insurance Total Loans U.S. and Total3 Demand ings counts 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: I941_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.... 5,776 3,241 1,509 1,025 2,668 8,708 7,702 129 53 4,162 3,360 6 959 6,810 1947—Dec. 31.... 16,444 4,958 10.039 1,448 4,083 20,691 19,342 262 4 149 12,366 6,558 7 1,271 6,478 1960—Dec. 31.... 32,411 17,169 11,368 3,874 6,082 39,114 35,391 484 27 645 20,140 14,095 19 3,232 6,948 1970—Dec. 318... 92,399 57,489 16.039 18,871 11,208 106,457 93,998 1,091 141 1,438 40,005 51,322 571 8,326 7,735 1972—Dec. 31.... 128,333 81,594 17,964 28,774 14,767 147,013 130,316 1,408 552 1,796 52,876 73,685 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 16,717201,299 175,060 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 i,: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 1960—Dec. 31.... 1,498 550 535 413 314 1,883 1,443 159 132 13 846 293 14 358 352 1970—Dec. 318... 3,079 2,132 304 642 934 4,365 2,570 375 101 40 1,298 756 226 532 184 1971—Dec. 31.... 3,147 2,224 239 684 1,551 5,130 2,923 380 116 19 1,273 1,134 283 480 181 1972—Dec. 31.... 4,865 3,731 349 785 1,794 7,073 3,775 488 81 55 1,530 1,620 527 491 206 1973—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 i157 5,i504 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 I960—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 21,047204,051 172,454 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

A16 COMMERCIAL BANKS □ APRIL 1976 ASSETS BY CLASS OF BANK, JUNE 30, 1975 (Assets and liabilities are shown in millions of dollars.) Member banks1 All Insured Large banks Account commercialcommercial 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 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 14,556 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 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 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 1,227 762 761 706 136 25 331 214 56 Other...................................................................... 5,986 5,983 4,815 978 30 2,269 1,537 1,171 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 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 1,326 747,889 736,164 562,926 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

APRIL 1976 □ COMMERCIAL BANKS A17 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 Account commercialcommercial member banks banks Total All other banks1 New City of Other York Chicago large City Demand deposits.................................................................. 309,726 306,253 243,210 57,475 9,911 85,372 90,453 66,516 Mutual savings banks..................................................... 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 34,345 34,019 32,823 16,986 1,593 10,482 3,762 1,522 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 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 Total deposits........................................................................ 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 8,667 855,533 839,879 659,069 127,870 33,507 244,864 252,827 196,464 Minority interest in consolidated subsidiaries............... 5 4 1 1 4 Total reserves on loans/securities...................................... 8,963 8,912 7,297 1,685 525 2,761 2,325 1,666 Reserves for bad debts (IRS)........................................ 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 Equity capital.................................................................... 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 Surplus............................................................................ 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................................................ 963 905 638 44 264 330 324 Total liabilities, reserves, minority interest, capital accounts.............................................................................. 931,057 914,781 716,623 139,333 36,268 264,990 276,032 214,434 222,842 219,813 160,611 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 Cash and balances with other banks........................... 13.8 13.7 15.0 21.3 12.2 14.7 12.4 10.1 22.8 22.9 20.9 12.1 16.2 18.9 27.9 29.1 Total securities held......................................................... Trading account securities.......................................... .7 .7 .9 1.8 1.5 1.1 . 1 U S Treasury .. • . .3 .3 .4 1.0 .9 .4 States and political subdivisions . • .. .2 .2 .3 .5 .3 .4 All other trading account securities . 1 .1 .2 .2 .3 .3 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 States and political subdivisions........................... 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 All other assets................................................................. 5.8 5.8 6.5 11.3 6.1 7.1 3.5 3.7 Total loans and securities.............................................. 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 .8 .8 6.7 6.7 6.5 6.5 5.9 5.9 7.2 7.2 Total capital accounts..................................................... 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

A18 WEEKLY REPORTING BANKS □ APRIL 1976 ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKSA (In millions of dollars) Loans Federal funds sold, etc.1 Other To bi okers For pui• chasing and d ealers or carryinjI securities To nonbank Total invohring— financial loans institutions Wednesday and To brokers To invest­ To Com­ and dealers others ments com­ To mer­ Agri­ Total mer­ US. Other others Total 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 secs. ury secs. finance ties secs. secs. COS., etc. Large banks— Total 1975 Mar. 5..................... 401,363 22,964 17,717 2,904 1,377 966290,879 127,054 3,438 1,618 3,268 80 2,409 9,766 20,526 59,953 12..................... 401,318 22,225 16,131 3,438 1,510 1,146290,445 125,986 3,461 3,284 3,486 82 2,396 9,492 20,304 60,014 19..................... 397,240 19,568 14,703 2,320 1,537 1,008 289,205 126,314 3,416 1,573 3,718 84 2,375 9,448 20,230 59,959 26..................... 395,224 19,402 15,344 2,072 1,196 790287,150 126,008 3,408 914 3,230 84 2,374 9,285 20,238 59,939 1976 Feb. 4..................... 394,748 18,435 15,655 1,623 550 607276,261 117,179 3,652 877 3,857 78 2,292 8,333 17,809 59,583 11...................... 394,909 19,596 16,826 1,521 588 661 275,398 116,883 3,639 834 4,084 72 2,304 8,201 17,831 59,557 18..................... 395,874 18,816 16,448 1,233 561 574276,597 116,699 3,645 1,137 4,216 84 2,301 8,507 17,767 59,663 25..................... 391,308 17,188 15,007 1,182 450 549274,882 116,041 3,642 876 4,157 77 2,292 8,204 17,837 59,638 Mar. 3..................... 395,484 19,932 17,172 1,497 591 672276,182 115,977 3,666 1,256 4,547 83 2,310 8,432 17,857 59,545 10..................... 401,203 23,434 17,909 3,320 890 1,315 278,207 115,919 3,695 3,027 5,538 76 2,317 8,286 17,797 59,614 17...................... 397,694 19,306 15,963 1,903 629 811 277,496 115,768 3,683 2,026 5,725 73 2,316 8,299 17,771 59,660 24..................... 393,684 16,918 14,300 1,391 573 654276,231 115,056 3,692 1,576 5,017 78 2,301 8,156 17,965 60,335 31...................... 394,802 18,380 15,132 1,808 624 816275,829 114,594 3,710 1,104 4,994 78 2,338 8,417 18,015 60,417 New York City 1975 Mar. 5...................... 95,596 1,397 1,159 110 1 127 78,038 40,525 137 1,421 2,281 17 481 3,449 8,199 8,852 12..................... 96,421 1,928 1,476 164 1 287 78,443 40,029 135 2,987 2,408 19 484 3,301 8,012 8,862 26...................... 95,479 1 ,974 1,524 133 1 316 77,199 40,014 134 1,354 2,691 20 477 3,314 8,026 8,870 26..................... 94,121 2,134 1,922 131 81 75,864 39,895 132 781 2,316 19 473 3,196 8,050 8,869 1976 Feb. 4. . . 90,426 1 ,355 1,082 140 133 70,806 36,250 93 783 2,601 19 393 2,854 6,966 9,441 11..................... 89,618 1 ,285 1,117 40 128 70,290 35,948 91 731 2,787 18 398 2,735 6,943 9,461 18. . 91,587 1 ,762 1,532 99 131 71,333 35,791 92 1,044 3,016 21 396 2,989 6,929 9,493 25...................... 89,672 1 ,172 848 65 259 70,421 35,486 90 831 2,908 19 396 2,917 6,965 9,480 Mar. 3...................... 91,012 1 ,,586 1,222 49 315 71,377 35,488 88 1,152 3,128 19 397 3,055 6,979 9,474 10..................... 93,226 1; 880 1,390 58 432 73,404 35,486 87 2,830 3,879 18 392 2,886 6,931 9,467 17...................... 92,272 2; 091 1,707 66 318 72,264 35,119 86 1,886 4,049 17 397 2,823 6,943 9,473 24...................... 91,115 2;, 060 1,643 153 264 71,162 35,143 89 1,471 3,404 16 393 2,847 6,945 9,451 31...................... 89,851 r:,681 985 293 403 70,308 35,006 84 935 3,288 19 390 2,963 6,905 9,396 Outside New York City 1975 Mar. 5...................... 305,767 21.567 16,558 2,794 1,376 839212,841 86,529 3,301 197 987 63 1,928 6,317 12,327 51,101 12...................... 304,897 20;297 14,655 3,274 1,509 859212,002 85,957 3,326 297 1,078 63 1,912 6,192 12,292 51,152 19...................... 301,761 17.594 13,179 2,187 1,536 692212,006 86,300 3,282 219 1,027 64 1,898 6,134 12,204 51,089 26...................... 301,103 17;268 13,422 1,941 1,196 709211,286 86,113 3,276 133 914 65 1,901 6,089 12,188 51,070 1976 Feb. 4..................... 304,322 17,080 14,573 1,483 550 474205,455 80,929 3,559 94 1,256 59 1,899 5,479 10,843 50,142 11...................... 305,291 18.311 15,709 1,481 588 533205,108 80,935 3,548 103 1,297 54 1,906 5,466 10,888 50,096 18..................... 304,287 17^ 054 14,916 1,134 561 443205,264 80,908 3,553 93 1,200 63 1,905 5,518 10,838 50,170 25..................... 301,636 16., 016 14,159 1,117 450 290204,461 80,555 3,552 45 1,249 58 1,896 5,287 10,872 50,158 Mar. 3...................... 304,472 18,346 15,950 1,448 591 357204,805 80,489 3,578 104 1,419 64 1,913 5,377 10,878 50,071 10...................... 307,977 2i; 554 16,519 3,262 890 883204,803 80,433 3,608 197 1,659 58 1,925 5,400 10,866 50,147 17...................... 305,422 17 ,215 14,256 1,837 629 493205,232 80,649 3,597 140 1,676 56 1,919 5,476 10,828 50,187 24...................... 302,569 14!858 12,657 1,238 573 390205,069 79,913 3,603 105 1,613 62 1,908 5,309 11,020 50,884 31...................... 304,951 16;699 14,147 1,515 624 413205,521 79,588 3,626 169 1,706 59 1,948 5,454 11,110 51,021 A 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 with 1976 data to branches. are available from the Public Information Department of the Federal The principal effects of these cha nges 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

APRIL 1976 □ WEEKLY REPORTING BANKS A19 ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKSA—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 Do­ For­ ment mes­ eign Within 1 to After tic 1 yr. 5 yrs. 5 yrs. Tax Certif. war­ All of rants 3 other partici­ All pation4 others Large banks— Total 1975 2,745 5,329 34,530 1,453 18,710 25,571 4,116 3,742 14,217 3,496 61,949 6,258 40,602 2,590 12,499 .................Mar. 5 2,671 5,168 34,405 1,363 18,333 26,535 4,975 3,915 14,180 3,465 62,113 6,392 40,604 2,589 12,528 ............................12 2,684 5,222 34,307 1.308 18,567 26,861 4,796 3,762 14,310 3,993 61,606 6,152 40,332 2,472 12,650 ............................19 2,740 5,159 34,210 1.308 18,253 27,355 5,101 3,735 14,650 3,869 61,317 6,170 40,133 2,433 12,581 ............................26 1976 2,150 5,113 35,618 1,663 18,057 40,682 12,629 6,806 18,158 3,089 59,370 6,231 39,230 2,222 11,687 .................Feb. 4 1,925 5,122 35,512 1,717 17,717 40,534 12,677 6,756 18,035 3,066 59,381 6,214 39,323 2,168 11,676 ............................11 1,921 5,244 35,433 1,721 18,259 41,107 13,062 6,013 19,119 2,913 59,354 6,053 39,387 2,184 11,730 ............................18 2,009 5,108 35,447 1,781 17,773 40,083 12,440 6,006 18,826 2,811 59,155 5,955 39,501 2,168 11,531 ............................25 1,970 5,192 35,352 1,786 18,209 40,477 12,141 6,160 19,421 2,755 58,893 6,013 39,464 2,156 11,260 .................Mar. 3 1,931 5,040 35.343 1,771 17,853 40,265 12,485 6,083 19,098 2,599 59,297 6,286 39,599 2,108 11,304 ............................10 1,951 5,088 35,317 1,797 18,022 41,747 13,279 6,050 19,746 2,672 59,145 6,011 39,519 2,118 11,497 ............................17 1,964 5,153 35.344 1,790 17,804 41,432 13,149 5,982 19,656 2,645 59,103 5,900 39,605 2,174 11,424 ............................24 2,047 5,239 35,354 1,765 17,757 41,781 13,071 5,949 20,360 2,401 58,812 5,540 39,543 2,212 11,517 ............................31 New York City 1975 1,396 2,703 3,613 751 4,213 5,784 1,040 480 3,127 1,137 10,377 1,732 5,956 229 2,460 ................Mar. 5 1,320 2,615 3,601 709 3,961 5,864 1,126 594 3,041 1,103 10,186 1,760 5,803 184 2,439 ............................12 1,288 2,688 3,594 665 4,064 6,130 1,074 519 3,107 1,430 10,176 1.757 5,742 187 2,490 ............................19 1,384 2,635 3,584 674 3,856 6,012 1,026 482 3,205 1,299 10,111 1.758 5,653 179 2,521 ............................26 1976 664 2,228 3,808 606 4,100 9,016 2,635 1,070 4,401 910 9,249 1,310 6,029 200 1,710 ................Feb. 4 605 2,233 3,780 644 3,916 8,799 2,372 1,075 4,478 874 9,244 1,272 6,038 195 1,739 ............................11 611 2,372 3.758 623 4,198 9,294 2,885 975 4,714 720 9,198 1,178 6,124 194 1,702 ............................18 652 2,285 3.759 612 4,021 8,871 2,865 1,006 4,438 562 9,208 1,163 6,192 193 1,660 ............................25 650 2,391 3.753 619 4,184 9,034 944 4,362 553 9,015 1,153 ,107 193 1,562 .................Mar. 3 572 2,298 3,772 590 4,196 8,961 945 4,159 460 8,981 1,056 ,183 187 1,555 ............................10 601 2,282 3.753 598 4,237 9,052 911 4,417 552 8,865 972 ,164 191 1,538 ............................17 589 2,358 3,746 599 4,111 9,051 863 4,447 599 8,842 964 ,178 187 1,513 ............................24 597 2,422 3,737 562 4,004 9,074 795 4,898 507 8,788 892 ,094 191 1,611 ............................31 Outside New York City 1975 1,349 2,626 30,917 702 14,497 19,787 3,076 3,262 11,090 2,359 51,572 4,526 34,646 2,361 10,039 .................Mar. 5 1,351 2,553 30,804 654 14,372 20,671 3,849 3,321 11,139 2,362 51,927 4,632 34,801 2,405 10,089 ............................12 1,396 2,534 30,713 643 14,503 20,731 3,722 3,243 11,203 2,563 51,430 4,395 34,590 2,285 10,160 ............................19 1,356 2,524 30,626 634 14,397 21,343 4,075 3,253 11,445 2,570 51,206 4,412 34,480 2,254 10,060 ............................26 1976 1,486 2,885 31,810 1,057 13,957 31,666 9,994 5,736 13,757 2,179 50,121 4,921 33,201 2,022 9,977 .................Feb. 4 1.320 2,889 31,732 1,073 13,801 31,735 10,305 5,681 13,557 2.192 50,137 4,942 33,285 1,973 9,937 ..........................11 1,310 2,872 31,675 1,098 14,061 31,813 10,177 5,038 14,405 2.193 50,156 4,875 33,263 1,990 10,028 ..............................18 1,357 2,823 31,688 1,169 13.752 31,212 9,575 5,000 14,388 2,249 49,947 4,792 33,309 1,975 9,871 .......................25 1.320 2,801 31,599 1,167 14,025 31,443 8,966 5,216 15,059 2,202 49,878 4,860 33,357 1,963 9,698 .............Mar. 3 1,359 2,742 31,571 1,181 13,657 31,304 9,088 5.138 14.939 2,139 50,316 5,230 33,416 1,921 9,749 .......................10 1,350 2,806 31,564 1,199 13,785 32,695 10,107 5.139 15,329 2,120 50,280 5,039 33,355 1,927 9,959 .......................17 1,375 2,795 31,598 1,191 13,693 32,381 10,007 5,119 15,209 2,046 50,261 4,936 33,427 1,987 9,911 .......................24 1,450 2,817 31,617 1,203 13.753 32,707 10,197 5,154 15,462 1,894 50,024 4,648 33,449 2,021 9,906 .......................31 For notes see pp. A-l 8 and A-22. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 WEEKLY REPORTING BANKS a APRIL 1976 ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKSA-Continued (In millions of dollars) Deposits Demand Cash Bal­ Invest­ items Re­ 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. mestic ies not liabil- and collec­ Banks banks consol­ tites polit­ For­ tion idated Total ical U.S. eign sub­ Govt. Com­ Mutual govts., divi­ mer­ sav­ etc.2 sions cial ings Large banks— Total 1975 Mar. 5........................... 34,101 22,256 4,180 11,741 1,681 35,081 510,403 161,515 115,124 6,389 2,348 23,659 690 1,153 12.......................... 32^095 19,698 4,549 11,561 1,681 35,093 505,995 159,509 116,875 5,930 1,730 22,037 662 1,223 19.......................... 301850 21,586 4,699 11,422 1,680 33,935 501,412 157,181 113,061 6,004 3,581 21,651 630 1,029 26.......................... 30,572 23,757 4,679 11,148 1,692 35,598 502,670 155,902 113,129 6,428 1,673 21,128 603 1,129 1976 Feb. 4.......................... 34,943 22,411 4,633 12,695 2,081 40,843 512,354 165,265 118,034 6,378 3,464 23,821 816 979 11.......................... 32,910 19,940 4,945 12,380 2.053 41,532508,669 160,269 117,256 6,090 1,777 22,523 708 1,032 18.......................... 43,914 20,000 5,299 13,601 2.053 41,041 521,782 174,892 122,912 6,550 3,418 27,013 728 935 2 5 31,676 22,523 5,263 11,021 2,047 41,176505,014 156,767 115,121 5,920 1,862 21,251 644 990 Mar. 3.......................... 36,623 21,776 4,694 12,839 2,043 41,881 515,340 165,507 118,246 6,010 2,720 24,451 721 1,067 10.......................... 32,776 15,243 4,882 13,320 2,074 41,736511,234 163,393 117,432 5,846 1,774 24,711 679 1,046 1 7 36,622 16,636 5,003 12,425 2,125 40,459 510,964 165,585 120,286 5,980 1,926 23,710 678 1,017 2 4 32,970 19,469 5,121 12,155 2,077 40,948 506,424 159,826 115,953 6,510 1,141 22.480 628 1,099 31.......................... 36,746 21,008 5,152 14,406 2,083 43,305 517,502 170,182 122,238 6,087 1,067 26.480 775 1,408 New York City 1975 Mar. 5.......................... 12.169 7,552 612 4,946 770 12,817 134,462 48,217 27,534 684 513 10,817 395 950 12.......................... 11,474 5,459 642 5,079 768 13,009 132,852 46,915 27,615 568 284 10,506 374 1,017 19.......................... 11,439 5,389 639 4,920 768 11,850 130,484 46,284 26,303 651 647 10,723 352 753 2 6 12.169 7,228 646 5,104 774 12,990 133,032 47,715 26,925 821 304 10,778 335 933 1976 Feb. 4.......................... 11,782 6,217 745 5,391 843 13,301 128,705 47,875 27,898 640 680 10,605 452 785 11.......................... 11,815 5,553 766 5,403 847 14,253 128,255 46,118 27,061 632 311 10,812 367 825 1 8 15,992 5,599 833 5,146 847 13,893 133,897 52,636 28,639 645 647 13,123 383 737 2 5 11,410 7,077 4,467 847 13.801 128,082 45,720 27,241 61 325 9,826 331 799 Mar. 3.......................... 13,041 7,231 755 846 13.802 132,222 48,718 27,331 560 544 11,629 381 847 10.......................... 12,320 4,375 749 853 13,840 131,701 49,346 27,178 590 284 12.676 338 841 1 7 13.553 3,399 753 853 12,904 129,034 48,960 28,306 577 183 11,449 353 819 2 4 12,861 4,591 782 862 13,458 129,055 47,855 26,999 749 143 11,137 301 884 31.......................... 14.554 4,692 786 866 14,869 131,299 53,422 29,795 549 120 13,741 436 1,192 Outside New York City 1975 Mar. 5.......................... 21,932 14,704 3,568 6,795 911 22,264375,941 113,298 87,590 5,705 1,835 12,842 295 203 12.......................... 20,621 14,239 3,907 6,482 913 22.084373,143 112,594 89,260 5,362 1,446 11,531 288 206 19.......................... 19,411 16,197 4,060 6,502 912 22.085 370,928 110,897 86,758 5,353 2,934 10,928 278 276 2 6 18,403 16,529 4,033 6,044 918 22,608 369,638 108,187 86,204 5,607 1,369 10,350 268 196 1976 Feb. 4.......................... 23,161 16,194 3,* 7.304 1,238 27,542 383,649 117,390 90,136 5,738 2,784 13,216 364 194 11.......................... 21,095 14,387 4,179 6,977 1,206 27,279 380,414 114,151 90,195 5,458 1,466 11,711 341 207 1 8 27,922 14,401 4,466 8,455 1,206 27,148 387,885 122,256 94,273 5,905 2,771 13,890 345 198 2 5 20,266 15,446 4,455 6,554 1,200 27,375 376,932 111.047 87,880 5,302 1,537 11,425 313 191 Mar. 3.......................... 23,582 14,545 3,939 7.304 1,197 28,079 383,118 116,789 90,915 5,450 2,176 12,822 340 220 10.......................... 20,456 10,868 4,133 6,982 1,221 27,896379,533 114.047 90,254 5,256 1,490 12,035 341 205 17.......................... 23,069 13,237 4,250 7,125 1,272 27,555 381,930 116,625 91,980 5,403 1,743 12,261 325 198 24.......................... 20,109 14,878 4,339 6,769 1,215 27,490377,369 111,971 88,954 5,761 998 11,343 327 215 31.......................... 22,192 16,316 4,366 7,121 1,217 28,436386,203 116,760 92,443 5,538 947 12,739 339 216 For notes see pp. A-l 8 and A-22. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APRIL 1976 □ WEEKLY REPORTING BANKS A21 ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKSA-Continued (In millions of dollars) Deposits (cont.) Borrowings Reserves from— for— Demand (cont.) Time and savings Fed­ eral Other Total funds liabili­ Secur­ capital For­ Certi­ States pur­ ties, Loans ities ac­ Wednesday eign fied and Do­ chased, etc. 8 counts com­ and polit­ mes­ For­ etc. 7 F.R. mer­ offi­ Total6 ical tic eign Banks Other cial cers’ Sav­ Other sub­ inter­ govts.2 banks checks ings divi­ bank sions Large banks— Total 1975 5,181 6,971 225,531 60,587 118,969 25,157 7,263 11,626 55,449 3,953 23,510 5,649 60 34,736 .................Mar. 5 5,123 5,929 226,564 61,076 119,169 25,046 7,763 11,579 51,800 40 4,096 23,500 5,667 60 34,759 ............................12 4,939 6,286226,954 61,531 118,891 24,813 8,104 11,681 47,628 798 4,091 24,301 5,650 60 34,749 ...........................19 4,978 6,834227,740 61,934 119,102 24,680 8,349 11,703 49,967 738 4,008 23,844 5,645 60 34,766 ...........................26 1976 5,130 6,643 224,178 73,639 109,429 22,156 7,625 9,725 52,554 5 3,529 24,086 5,262 285 37,190 .................Feb. 4 4,775 6,108 224,090 74,571 108,734 21,949 7,593 9,657 54,240 12 3,491 23,765 5,501 74 37,227 ............................11 5,446 7,890222,617 74,787 107,586 21,804 7,460 9,389 54,054 3,371 24,050 5,542 75 37,181 ...........................18 5,178 5,801 223,129 75,271 107,521 22,107 7,527 9,099 54,663 629 2,975 24,157 5,548 76 37,070 ...........................25 5,428 6,864222,340 76,031 106,702 21,894 7,557 8,683 56,757 293 2,929 24,599 5,569 80 37,266 .................Mar. 3 5,357 6,548 223,572 76,472 107,392 21,784 7,627 8,781 53,241 22 3,334 24,732 5,565 82 37,293 ............................10 5,193 6,795223,955 76,947 107,825 21.407 7,690 8,488 50,275 55 3,280 24,969 5,578 77 37,190 ...........................17 4,921 7,094225,002 77,409 108,482 21.407 7,805 8,334 50,184 303 3,263 24,732 5,557 80 37,477 ...........................24 5,353 6,774225,902 78,224 108,381 21,475 8,031 8,184 49,868 14 3,419 24,874 5,482 69 37,692 ...........................31 New York City 1975 3,827 3,497 50,243 6,752 29,160 2,006 3,627 7,238 15,337 1,459 8,042 1,687 9,477 ...............Mar. 5 3,763 2,788 50,280 6,807 29,021 1,954 3,831 7,213 14,944 1,508 8,041 1,699 9,465 ..........................12 3,618 3,237 49,946 6,858 28,586 1,867 3,921 7,267 11,964 615 1,622 8,895 1,702 9,456 ...........................19 3,667 3,952 50,176 6,921 28,800 1,844 3,860 7,280 13,955 53 1,634 8,352 1,700 9,447 ...........................26 1976 3,798 3,017 44,190 ,536 23,685 1,389 3,032 6,483 13,529 1,759 9,297 1,659 1 10,395 .................Feb. 4 3,491 2,619 44,213 ,645 23,529 1,392 3,140 6,466 14,623 1,778 9,421 1,705 1 10,396 ..........................11 4,030 4,432 43,810 ,621 23,291 1,414 3,114 6,325 14,211 1,697 9,430 1,704 1 10,408 ..........................18 3,839 2,741 43,847 ,671 23,404 1,484 3,150 6,085 15,001 574 1,283 9,562 1,714 1 10,380 ...........................25 4,185 3,241 43,502 ,770 23,368 1,491 3,164 5,799 16,660 215 1,291 9,705 1,706 1 10,424 ...............Mar. 3 3,979 3,460 43,562 ,796 23,453 1,463 3,207 5,687 15,254 1,665 9,704 1,730 1 10,439 ............................10 3,731 3,542 43,629 ,806 23,581 1,467 3,250 5,493 12,644 1,641 10,003 1,732 1 10,424 ...........................17 3,633 4,009 43,803 ,887 23,846 1,429 3,270 5,363 13,335 250 1,664 9,780 1,725 1 10,642 ...........................24 4,124 3,465 43,930 ,962 24,000 1,475 3,262 5,191 11,576 1,734 9,886 1,623 1 10,731 ............................31 Outside New York City 1975 1,354 3,474 175,288 53,835 89,809 23,151 3,636 4,388 40,112 2,494 15,468 3,962 60 25,259 .................Mar. 5 1,360 3,141 176,284 54,269 90,148 23,092 3,932 4,366 36,856 40 2,588 15,459 3,968 60 25,294 ...........................12 1,321 3,049 177,008 54,673 90,305 22,946 4,183 4,414 35,664 183 2,469 15,406 3,948 60 25,293 ...........................19 1,311 2,882 177,564 55,013 90,302 22,836 4,489 4,423 36,012 685 2,374 15,492 3,945 60 25,319 ...........................26 1976 1,332 3,626 179,988 65,103 85,744 20,767 4,593 3,242 39,025 5 1,770 14,789 3,603 284 26,795 ...............Feb. 4 1,284 3,489 179,877 65,926 85,205 20,557 4,453 3,191 39,617 12 1,713 14,344 3,796 73 26,831 ............................11 1,416 3,458 178,807 66,166 84,295 20,390 4,346 3,064 39,843 1,674 14,620 3,838 74 26,773 ...........................18 1,339 3,060 179,282 66,600 84,117 20,623 4,377 3,014 39,662 55 1,692 14,595 3,834 75 26,690 ...........................25 1,243 3,623 178,838 67.261 83,334 20,403 4,393 2,884 40,097 78 1,638 14,894 3,863 79 26,842 ...............Mar. 3 1,378 3,088 180,010 67,676 83,939 20,321 4,420 3,094 37,987 22 1,669 15,028 3,835 81 26,854 ...........................10 1,462 3,253 180,326 68,141 84,244 19,940 4,440 2,995 37,631 55 1,639 14,966 3,846 76 26,766 ...........................17 1,288 3,085 181,199 68,522 84,636 19,978 4,535 2,971 36,849 53 1,599 14,952 3,832 79 26,835 ...........................24 1,229 3,309 181,972 69.262 84,381 20,000 4,769 2,993 38,292 14 1,685 14,988 3,859 68 26,961 ...........................31 For notes see pp. A-l 8 and A-22. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 WEEKLY REPORTING BANKS □ APRIL 1976 ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKS A—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 liabili­ loans 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 profit Large banks— Total 1975 Mar. 5.......................... 293,381 380,901 101,407 87,542 60,202 27,340 37,458 20,425 17,033 60,587 1,899 12.......................... 293,T “ 382,516 103,647 88,125 60,416 27,709 37,146 20,276 16,870 61,076 1,676 19.......................... 291,386 379,853 101,099 88,104 60,012 28,092 36,876 20,124 16,752 61,531 2,667 26.......................... 288,468 377,140 102,529 88,871 60,534 28,337 36,471 19,804 16,667 61,934 1,922 1976 Feb. 4.......................... 276,891 376,943 103,037 74,197 49,225 24,972 32,008 16,840 15,168 71,150 1,703 659 127 3,258 11.......................... 276,243 376,158 103,059 73,623 48,597 25,026 31,314 16,565 14,749 71,836 1,861 745 129 2,987 18.......................... 277,044 377,505 100,547 72,093 47,440 24,653 30,884 16,333 14,551 71,969 1,966 759 93 3,254 2 5 275,054 374,292 101,978 71,918 47,187 24,731 30,799 16,250 14,549 72,257 2,141 790 83 3,416 Mar. 3.......................... 276,972376,342 101,713 70,655 46,450 24,205 30,370 16,146 14,224 72,881 2,246 816 88 3,619 10.......................... 281,801 381,363 104,132 71,587 47,059 24,528 30,167 16,069 14,098 73,203 2,345 833 91 3,375 1 7 278,888 379,780 103,327 71,650 47,240 24,410 29,745 15,946 13,799 73,582 2,385 904 76 4,478 2 4 276,885 377,420 103,235 72,375 47,969 24,406 29,474 15,754 13,720 73,928 2,473 909 99 3,914 31.......................... 277,030377,623 105,889 72,709 48,371 24,338 29,374 15,313 14,061 74,708 2,481 925 110 3,151 New York City 1975 Mar. 5.......................... 76,880 93,041 24,718 30,674 20,449 10,225 9,378 5,592 3,786 6,752 1,120 12.......................... 77,575 93,625 24,651 30,756 20.346 10,410 9,201 5,516 3,685 6,807 1,005 19.......................... 76,361 92,667 23,475 30,386 19,974 10,412 9,153 5,432 3,721 6,858 1,902 2 6 74,692 90,815 24,464 30,762 20.347 10,415 9,018 5,362 3,656 6,921 1,014 1976 Feb. 4.......................... 70,415 88,680 24,808 25,205 15,784 9,421 6,840 4,340 2,500 8,134 114 184 104 2,433 11.......................... 69,853 87,896 23,180 25,247 15,614 9,633 6,683 4,320 2.363 8.191 134 214 106 2,224 1 8 70,952 89,444 22,874 24,905 15,433 9,472 6,590 4,226 2.364 8.192 147 212 70 2,447 2 5 70,093 88,172 24,159 24,946 15,529 9,417 6,533 4,222 2,311 8,235 162 218 56 2,380 Mar. 3.......................... 71,091 89,140 23,504 24,520 15,419 9,101 6,523 4,290 2,233 8,314 175 216 65 2,682 10.......................... 73,322 91,264 24,066 24,608 15,552 9,056 6,474 4,246 2,228 8,325 185 222 64 2,584 27.......................... 72,047 89,964 23,775 24,543 15,599 8,944 6,529 4,265 2,264 8,356 191 206 53 3,539 24.......................... 70,990 88,883 23,714 24,805 15,946 8,859 6,340 4,188 2,152 8,405 193 211 78 3,141 31.......................... 70,407 88,269 25,007 24,834 16,094 8,740 6,326 4,152 2,164 8,503 204 183 72 2,247 Outside New York City 1975 Mar. 5. 216,501 287,860 76,689 56,868 39,753 17,115 28,080 14,833 13,247 53,835 779 12. 216,293 288,891 78,996 57,369 40,070 17,299 27,945 14,760 13,185 54,269 671 19. 215,025287,186 77,624 57,718 40,038 17,680 27,723 14,692 13,031 54,673 765 26. 213,776 286,325 78,065 58,109 40,187 17,922 27,453 14,442 13,011 55,013 908 1976 Feb. 4. 206,476288,263 78,229 48,992 33,441 15,551 25,168 12,500 12,668 63,016 1,589 475 825 11. 206,390288,262 79,879 48,376 32,983 15,393 24,631 12,245 12,386 63.645 1,727 531 763 18. 206,092 288,061 77,673 47,188 32,007 15,181 24,294 12,107 12,187 63,777 1,819 547 807 25. 204,961 286,120 77,819 46,972 31,658 15,314 24,266 12,028 12,238 64,022 1,979 572 1,036 Mar. 3.................................... 205,881 287,202 78,209 46,135 31,031 15,104 23,847 11,856 11,991 64,567 2,071 600 937 10. 208,479 290,099 80,066 46,979 31,507 15,472 23,693 11,823 11,870 64,878 2,160 611 791 17. 206,841 289,816 79,552 47,107 31,641 15,466 23,216 11,681 11,535 65,226 2,194 698 939 24. 205,895; 288,537 79,521 47,570 32,023 15,547 23,134 11,566 11,568 65,523 2,280 698 773 31. 206,623 289,354 80,882 47,875 32,277 15,598 23,048 11,161 11,897 66,205 2,277 742 904 ▲ See p. A-18. 1(>A11 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 com­ mercial banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APRIL 1976 □ BUSINESS LOANS OF BANKS A23 COMMERCIAL AND INDUSTRIAL LOANS OF LARGE COMMERCIAL BANKS (In millions of dollars) Outstanding Net change during- 1976 1976 1976 1975 1975 Industry Mar. Mar. Mar. Mar. Mar. 2nd 1st 31 24 17 10 3 Mar. Feb. Jan. I IV III half half Durable goods manufacturing: Primary metals.................................... 2,037 2,012 2,055 2,058 2,058 -16 14 -34 -36 62 -12 50 18 Machinery............................................ 5,479 5,583 5,353 5,308 5,317 3 -79 -204 -280 -781 -887 - 1,668 -1,314 Transportation equipment................ 2,998 3,115 3,016 2,968 3,014 -75 -100 128 -47 -267 -198 -465 -302 Other fabricated metal products... 1,891 1,907 2,043 2,108 2,106 -132 13 37 -82 -473 -277 -750 -188 Other durable goods.......................... 3,509 3,528 3,569 3,541 3,522 -63 -29 148 56 -514 -174 -688 -718 Nondurable goods manufacturing: Food, liquor, and tobacco................ 3,263 3,286 3,426 3,444 3,512 -269 3 -251 -517 455 13 468 -1,609 Textiles, apparel, and leather........... 3,000 2,975 2,997 2,986 2,933 99 212 -2 309 -All -55 -532 -287 Petroleum refining.............................. 2,224 2,194 2,341 2,352 2,389 -189 52 -1 -138 -234 118 -116 228 Chemicals and rubber....................... 2,654 2,653 2,706 2,707 2,700 -36 95 -96 -37 -178 -253 -431 -260 Other nondurable goods................... 1,880 1,891 1,890 1,896 1,901 -31 17 86 72 -268 -147 -415 -283 Mining, including crude petroleum and natural gas................................ 6,476 6,450 6,306 6,265 6,227 281 205 37 523 789 276 1,065 -149 Trade: Commodity dealers................... 1,663 1,683 1,639 1,693 1,631 78 -23 26 81 340 137 All -972 Other wholesale......................... 5,780 5,719 5,617 5,534 5,540 328 21 -8 341 -103 -78 -181 -1,108 Retail............................................ 5,931 5,886 5,804 5,852 5,759 182 6 -49 139 -208 -309 -517 -398 Transportation......................................... 5,890 5,880 5,917 5,909 5,924 -44 -9 -125 -178 127 -124 3 -321 Communication....................................... 1,704 1,660 1,774 1,783 1,847 -119 -30 -131 -280 -49 -109 -158 -357 Other public utilities.......................... 6,117 6,133 6,130 6,300 6,391 -377 -199 -304 -880 33 -231 -198 -1,423 Construction............................................ 4,424 4,575 4,846 4,892 4,894 -494 -99 -108 -701 -381 -55 -436 -622 Services...................................................... 10,953 10,985 10,507 10,536 10,586 297 -71 -92 134 285 -300 -15 - 1,120 All other domestic loans....................... 7,994 8,058 9,047 8,948 8,885 -879 -799 r —731 -2,409 r628 15 r643 -372 Bankers acceptances............................... 3,343 3,417 3,396 3,452 3,442 -125 -211 -1,266 -1,602 2,855 -170 2,685 599 Foreign commercial and industrial loans................................................... 5,328 5,312 5,340 5,317 5,334 35 -116 121 40 222 535 757 294 Total classified loans. ............................ 94,538 94,902 95,719 95,849 95,912 -1 ,546 -1,127 '•-2,819 -5,492 rl ,863 -2,285 r —422 -10,664 Comm, paper included in total clas­ sified loans........................................ 396 -117 28 -45 -134 153 44 197 240 Total commercial and industrial loans of large commercial banks........... 114,594 115,056 115,768 115,919 115,977 -1,447 -942 r-3,671 -6,060 r\ ,680 *-2,622 r_ 942 -10,370 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 1976 1975 Mar. Feb. Jan. Dec. Nov. Oct. Sept. Aug. July 2nd 31 25 28 31 26 29 24 27 30 I IV III II halfr Durable goods manufactur­ ing: Primary metals..................... 1,290 1,335 1,341 1,372 1,381 1,320 1,338 1,286 1,269 -82 34 50 4 84 Machinery............................ 3,139 3,072 3,117 3,313 3.451 3,538 3,737 3,825 3,864 -174 -424 -240 -94 -664 Transportation equipment. 1,691 1,643 1,686 1,615 1,727 1,624 1,693 1,722 1,725 76 -78 -47 68 -125 Other fabricated metal products........................ 909 1,035 1,041 1,024 1,087 1,175 1,268 1,228 1,196 -115 -244 46 -90 -198 Other durable goods.......... 1,793 1,838 1,874 1,823 1,905 1,950 2,012 2,042 2,058 -30 -189 -78 -161 -267 Nondurable goods manufac­ turing: Food, liquor, and tobacco, 1,391 1,5^6 1,547 1,578 1,544 1,451 1,471 1,461 1,440 -187 107 -43 -47 64 Textiles, apparel, and leather............................... 993 1,055 1,032 995 1,072 1,074 1,103 1,077 1,116 -2 -108 8 -63 -100 Petroleum refining.............. 1,685 1,886 1,859 1,831 1,860 1,914 1,967 1,889 1,828 -146 -136 258 226 122 Chemicals and rubber........ 1,540 1,603 1,588 1,622 1,549 1,605 1,665 1,645 1,678 -82 — 43 -97 -84 -140 Other nondurable goods., 962 942 925 888 955 995 1,056 1,023 1,085 74 -168 -87 13 -255 Mining, including crude pe­ troleum and natural gas, 4,904 4,731 4,528 4,484 3,867 3,896 3,847 3,754 3,801 420 637 113 197 750 Trade: Commodity dealers., 190 182 196 172 168 162 150 148 152 18 22 2 -2 24 Other wholesale 1,344 1,279 1,290 1,276 1,308 1,403 1,319 1,371 1,344 68 -43 -10 -121 -53 Retail........................... 2,007 1,987 2,007 1,996 2,115 2,150 2,153 2,139 2,111 11 -157 17 -147 -140 Transportation........................ 4,250 4,329 4,291 4,390 4,324 4,420 4,391 4,405 4,399 -140 -1 -34 -99 -35 Communication..................... 998 1,095 1,101 1,081 1,112 1,122 1,132 1,149 1,136 -83 -51 -1 -2 -52 Other public utilities.............. 3,898 3,940 3,995 3,979 3,942 4,027 3,966 3,902 4,018 -81 13 -79 11 -66 Construction........................... 1,917 2,141 2,258 2,181 2,207 2,267 2,359 2,367 2,360 -264 -178 45 117 -133 Services..................................... 5,368 5,147 5,038 5,135 5,082 5,097 5,122 5,010 5,155 233 13 -18 -290 -5 All other domestic loans 2,697 3,093 3,396 3,299 3,116 3,054 3,244 3,257 3,232 -602 55 -14 176 41 Foreign commercial and in­ dustrial loans................. 2,984 3,001 2,999 2,921 2,851 2,834 2,763 2,695 2,676 63 158 169 66 327 Total loans.............................. 45,950 46,870 47,109 46,975 46,623 47,078 47,756 47,395 47,643 -1,025 -781 -40 -322 -821 Note.—About 160 weekly reporting banks are included in this series; an original maturity of more than 1 year and all outstanding loans granted these banks classify by industry, commercial and industrial loans amount­ under a formal agreement—revolving credit or standby—on which the ing to about 90 per cent of such loans held by all weekly reporting banks original maturity of the commitment was in excess of 1 year. and about 70 per cent of those held by all commercial banks. Effective Mar. 24, 1976, reclassification of loans in Chicago City resulted For description of series see article “Revised Series on Commercial and in the following major revisions: all other domestic loans, —$859 million; Industrial Loans by Industry,” Feb. 1967 Bulletin, p. 209. total classified loans, —$673 million. These reclassifications are not Commercial and industrial “term” loans are all outstanding loans with reflected in data prior to Mar. 24, 1976. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 DEMAND DEPOSIT OWNERSHIP □ APRIL 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—Dec......................................................................................... 18.5 98.4 58.6 1.3 10.7 187.5 1972—Mar......................................................................................... 20.2 92.6 54.7 1.4 12.3 181.2 June....................................................................................... 17.9 97.6 60.5 1.4 11.0 188.4 18.0 101.5 63.1 1.4 11.4 195.4 18.9 109.9 65.4 1.5 12.3 208.0 1973—Mar........................................................................................ 18.6 102.8 65.1 1.7 11.8 200.0 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......................................................................................... 20.1 125.1 78.0 2.4 11 .3 236.9 Weekly reporting banks: 1971—Dec......................................................................................... 14.4 64.4 27.1 1.4 6.6 114.3 1972 Dec......................................................................................... 14.7 66.2 28.0 2.2 6.8 118.1 1973—Dec......................................................................................... 14.9 66.9 29.0 2.2 6.8 119.7 1974—Dec......................................................................................... 14.8 63.1 27.9 2.3 6.2 113.9 1975—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 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 Sent........................................................................................ 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 1976—Jan.......................................................................................... 15.2 68.0 30.3 2.2 6.7 122.4 Feb.*...................................................................................... 15.3 65.6 29.2 2.2 6.4 119.0 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, Sept. 30, bank 1973 1974 1975 1975 bank 1973 1974 1975 1975 All commercial............................ 507 389 338 All member—Cont. Insured...................................... 503 387 335 323 Other large banks 1 58 69 74 74 National member................... 288 236 223 222 All other member 1 294 206 186 183 State member........................... 64 39 36 35 All nonmember......... 155 115 79 66 All member.................................. 352 275 260 257 Insured.................... 152 112 76 66 Noninsured............. 3 3 3 1 Beginning Nov. 9,1972, designation of banks as reserve city banks for Note.—Hypothecated deposits, as shown in this table, are treated one reserve-requirement purposes has been based on size of bank (net demand way in monthly and weekly series for commercial banks and in another deposits of more than $400 million), as described in the Bulletin for way in call-date series. That is, they are excluded from “Time deposits” July 1972, p. 626. Categories shown here as “Other large” and “All other and “Loans” in the monthly (and year-end) series as shown on p. A-14; member” parallel the previous “Reserve City” (other than in New York from the figures for weekly reporting banks as shown on pp. A-18-A-22 City and the City of Chicago) and “Country” categories, respectively (consumer instalment loans); and from the figures in the table at the (hence the series are continuous over time). bottom of p. A-13. But they are included in the figures for “Time de­ posits” and “Loans” for call dates as shown on pp. A-14-A-17. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APRIL 1976 o LOAN SALES BY BANKS; OPEN MARKET PAPER A25 LOANS SOLD OUTRIGHT BY LARGE COMMERCIAL BANKS (Amounts outstanding; in millions of dollars) To selected related institutions! By type of loan Date Total Commercial Real All and estate other industrial 1975—Dec. 3........................... 4,677 2,800 201 1,676 10........................... 4,441 2,597 207 1,637 17........................... 4,416 2,575 207 1,634 24........................... 4,486 2,650 204 1,632 31........................... 4,375 2,530 206 1,639 1976—Jan. 7........................... 4,424 2,618 205 1,601 14........................... 4,369 2,617 205 1,547 21........................... 4,355 2,598 205 1,552 28........................... 4,292 2,522 208 1,562 1 To bank’s own foreign branches, nonconsolidated non­ Feb. 4........................... 4,313 2,560 208 1,545 bank affiliates of the bank, the bank’s holding company (if 11........................... 4,455 2,710 208 1,537 not a bank), and nonconsolidated nonbank subsidiaries of 18........................... 4,441 2,719 205 1,517 the holding company. 25........................... 4,478 2,725 200 1,553 Note.—Series changed on Aug. 28, 1974. For a comparison Mar. 3........................... 4,482 2,731 201 1,550 of the old and new data for that date, see p. 741 of the Oct. 10........................... 4,390 2,653 197 1,540 1974 Bulletin. Revised figures received since Oct. 1974 17........................... 4,348 2,604 200 1,544 that affect that comparison are shown in note 2 to this table 24........................... 4,239 2,531 201 1,507 in the Dec. 1974 Bulletin, p. A-27. 31........................... 4,235 2,553 197 1,485 COMMERCIAL PAPER AND BANKERS ACCEPTANCES OUTSTANDING (In millions of dollars) Commercial paper Dollar acceptances Financial Bank-related 5 Held by- Based on— End companies1 of Non­ period All finan­ Accepting banks F.R. Banks issuers cial Total Im­ Ex­ Dealer- Di­ com­ Dealer- Di­ Others ports ports All placed2 rectly- panies4 placed rectly- For­ into from other placed 3 placed Total Own Bills Own eign United United bills bought acct. corr. < States States 196 6 13,645 2,332 10,556 757 3,603 1,198 983 215 193 191 2,022 997 829 1,778 196 7 17,085 2,790 12,184 2,111 4,317 1,906 1,447 459 164 156 2,090 1,086 989 2,241 196 8 21,173 4,427 13,972 2,774 4,428 1,544 1,344 200 58 109 2,717 1,423 952 2,053 196 9 32,600 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 2,408 197 0 33,071 5,514 20,424 7,133 352 1,997 7,058 2,694 1,960 735 57 250 4,057 2,601 1,561 2,895 197 1 32,126 5,297 20,582 6,247 524 1,449 7,889 3,480 2,689 791 261 254 3,894 2,834 1,546 3,509 197 2 34,721 5,655 22,098 6,968 1,226 1,411 6,898 2,706 2,006 700 106 179 3,907 2,531 1,909 2,458 197 3 41,073 5,487 27,204 8,382 1,938 2,943 8,892 2,837 2.318 519 68 581 5,406 2,273 3,499 3,120 197 4 49,144 4,611 31,839 12,694 '1,814 6,518 18,484 4,226 3,685 542 999 ,109 12,150 4,023 4,067 10,394 1975-Jan.. 51,685 5,029 32,008 14,648 1,822 6,784 18,602 4,357 3,903 454 966 560 12,718 4,120 4,314 10,168 Feb.. 52,415 5,167 32,516 14,732 1,786 7,318 18,579 4,864 4,370 494 993 325 12,398 3,974 4,210 10,396 Mar. 50,827 5,342 31,221 14,264 1,682 7,272 18,730 4.773 4,085 688 665 263 13,029 3,845 4,296 10,589 Apr. 51,623 5,461 32,144 14,018 1,618 7,002 18.727 4,485 3,900 585 1,185 235 '12,822 3,690 4,206 10,831 May. 51,317 5,889 32,821 12,607 1,543 7,096 18,108 4,450 3,892 558 865 234 12,559 3,665 4,186 10,257 June. 48,765 5,604 31,115 12,045 1,561 7,230 17,740 4.774 4,224 550 682 319 11,965 3.466 4,080 10,193 July. 49,352 6,018 31,263 12,072 1,649 7,038 16,930 4,778 4,275 503 685 329 11,138 3,474 3,865 9,591 Aug. 49,810 5,645 32,172 11,993 1,511 7,392 16,456 4,546 3,988 558 840 304 10,766 3,305 3,806 9,344 Sept. 48,274 5,574 30,513 12,187 1,464 7,333 16,790 5,002 4,190 812 948 302 10,538 3,313 3,783 9,693 Oct.. 50,437 6,360 32,351 11,726 1,590 7,157 17,304 r5,213 4,288 924 1,047 284 10,760 3.467 3,947 9,890 Nov. 49,557 6,389 32,048 11,120 1,671 7,019 17,875 6,497 5,684 813 727 279 10,372 3,545 3,888 10,443 Dec. 47,739 6,239 31,325 10,175 1,712 6,941 18.727 7,333 5,899 1,435 1,126 293 9,975 3,726 4,001 11,000 1976—Jan. 48,910 6,072 31,357 11,481 1,604 6,969 18,677 6,294 5,367 927 1,230 248 10,904 3,891 3,906 10, 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, manufac­ sales, 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

A26 INTEREST RATES a APRIL 1976 PRIME RATE CHARGED BY BANKS (Per cent per annum) Effective date Effective date Rate Effective date Rate Monthly average rate 1974—Apr. 11 10 1975—Jan. 9, 101/4 1975—July 18 7% 1974—Oct. 11.68 19 10% 15, 10 28 m Nov. 10.83 25 101/2 20, 9Y4 Dec. 10.50 28, 91/2 Aug. 12. 7% May 2 103^ 1975—Jan. 10.05 6 11 Feb. 3, 91/4 Sept. 15 8 Feb. 8.96 10 11 % 10. 9 Mar. 7.93 17 11% 18. 8% Oct. 27 m Apr. 7.50 24. 81/2 May 7.40 June 26 11% Nov. 5, m June 7.07 Mar. 5, 81/4 July 7.15 July 5 12 10, 8 Dec. 2 m Aug. 7.66 18, 7% Sept. 7.88 Oct. 7 11% 24, 71/2 1976—Jan. 12 7 Oct. 7.96 21 11% 21 ey4 Nov. 7.53 28 111/4 May 20, 71/4 Dec. 7.26 Nov. 4 11 June 9 1976—Jan. 7.00 14 10% Feb. 6.75 25 101/2 Mar. 6.75 Note.—Effective Apr. 16, 1973, with the adoption of a two-tier or “dual prime rate,” this table shows only the “large-business prime rate,” which is the range of rates charged by commercial banks on short-term loans to large businesses with the highest credit standing. RATES ON BUSINESS LOANS OF BANKS Size of loan (in thousands of dollars) All sizes 1--9 10-99 100-499 500-999 1,000 and over Center 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

APRIL 1976 □ INTEREST RATES A27 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 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 days3 Rate Market Rate Market 1-year issues 7 days 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 A. 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 5l 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—Mar................ 6.06 6.06 6.00 6.22 5.54 5.544 5.49 5.635 5.62 5.70 6.10 7.00 Apr................. 6.11 6.15 5.97 6.15 5.49 5.694 5.61 6.012 6.00 6.40 6.83 7.76 May............... 5.70 5.82 5.74 5.76 5.22 5.315 5.23 5.649 5.59 5.91 6.31 7.49 June............... 5.67 5.79 5.53 5.70 5.55 5.193 5.34 5.463 5.61 5.86 6.26 7.26 July................ 6.32 6.44 6.02 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 Feb................. 5.13 5.23 5.09 4.99 4.77 4.852 4.88 5.144 5.20 5.53 5.78 7.18 Mar................ 5.25 5.37 5.27 5.18 4.84 5.047 5.00 5.488 5.44 5.82 6.12 7.25 Week ending— 1975—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 Feb. 7........ 5.05 5.15 5.00 4.95 4.82 4.811 4.90 5.066 5.15 5.45 5.71 7.16 14 5.13 5.25 5.13 4.97 4.73 4.872 4.85 5.133 5.13 5.47 5.74 7.17 21 5.22 5.28 5.13 5.02 4.70 4.854 4.87 5.171 5.22 5.58 5.79 7.20 28 5.13 5.25 5.13 5.04 4.80 4.870 4.90 5.204 5.28 5.62 5.86 7.18 Mar. 6 5.25 5.38 5.23 5.26 4.95 5.258 5.20 5.724 5.65 5.98 6.30 7.36 13 5.25 5.38 5.28 5.21 4.86 5.060 4.99 5.487 5.47 5.86 6.19 7.30 20 5.35 5.45 5.38 5.19 4.77 4.981 4.98 5.459 5.43 5.82 6.13 7.25 27 5.23 5.35 5.28 5.12 4.79 4.890 4.87 5.283 5.26 5.67 5.93 7.14 Apr. 3........ 5.15 5.30 5.13 5.10 4.84 4.929 4.97 5.327 5.34 5.76 6.03 7.14 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

A28 INTEREST RATES □ APRIL 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 l ( S t l e t o a r n m te g ) s ­ Total i Aaa Baa New ce R n e tl ­ y 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 Com­ issue 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—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 Aue. 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 Feb........... 6.92 6.94 6.04 7.76 8.63 8.63 9.23 8.55 10.10 9.12 9.25 9.50 8.00 3.67 Mar.......... 6.87 6.90 5.99 7.72 8.62 8.61 9.18 8.52 9.99 9.10 9.16 9.43 8.07 3.65 Week ending— 1976—Feb. 7.. 6.93 6.90 6.00 7.70 8.68 8.62 9.26 8.56 10.14 9.14 9.28 9.52 7.91 3.63 14.. 6.96 6.95 6.05 7.77 8.68 9.25 8.57 10.12 9.13 9.27 9.52 7.95 3.67 21.. 6.94 6.96 6.06 7.78 * 8^64 8.67 9.23 8.56 10.09 9.12 9.23 9.50 7.99 3.71 28.. 6.88 6.96 6.06 7.78 8.58 8.56 9.19 8.51 10.04 9.10 9.20 9.44 8.14 3.65 Mar. 6.. 6.96 6.99 6.10 7.79 8.72 8.72 9.20 8.55 10.04 9.12 9.19 9.46 8.00 3.71 13.. 6.91 6.94 6.05 7.75 8.63 8.64 9.20 8.55 10.01 9.12 9.17 9.46 8.06 3.67 20.. 6.89 6.91 6.01 7.74 8.61 8.60 9.18 8.54 9.98 9.11 9.16 9.44 8.10 3.68 27.. 6.80 6.74 5.81 7.60 8.53 8.50 9.16 8.50 9.97 9.07 9.16 9.40 8.03 3.59 Apr. 3.. 6.78 6.70 5.77 7.56 8.60 8.54 9.10 8.46 9.92 9.04 9.11 9.34 8.14 3.61 Number of 15 20 5 5 121 20 30 41 30 40 14 500 500 1 Includes bonds rated Aa and A, data for which are not shown sep­ govt., general obligations only, based on Thurs. figures, from Moody’s arately. Because of a limited number of suitable issues, the number Investors Service. (3) Corporate, rates for “New issue” and “Recently of corporate bonds in some groups has varied somewhat. As of Dec. offered” Aaa utility bonds, weekly averages compiled by the Board of 23, 1967, there is no longer an Aaa-rated railroad bond series. Governors of the Federal Reserve System; and rates for seasoned issues, 2 Number of issues varies over itime; 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 ac­ year bond; Wed. closing prices. Common stocks, derived from com­ counted for 60 per cent of security credit outstanding at banks on June 30, ponent common stock prices. Average daily volume of trading, 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

APRIL 1976 □ SECURITY MARKETS A29 SECURITY PRICES Common stock prices Volume of Bond prices New York Stock Exchange Amer­ trading in ican stocks Stock (thousands of Period Standard and Poor’s index New York Stock Exchange index Ex­ shares) (1941-43= 10) (Dec. 31, 1965=50) change total index ( G t l U e o o r . n m S v g t . ) . ­ l S a o t n c a a d te l p A C o A r o a r A t ­ e Total In tr d ia u l s­ R ro a a i d l­ P u u ti b li l t i y c Total In tr d i u al s­ T p t o r i a o r n t n a s ­ ­ Utility na F n i c ­ e 1 ( 9 A 1 3 7 0 u 1 3 0 g , ) = . NYSE AMEX 1970............................ 60.52 72.3 61.6 83.22 91.29 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—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 r32.38 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 r32.90 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 >•30.08 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 *•32.09 r32.99 r45.10 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 57.0 96.86 108.45 41.42 46.99 51.31 56.72 35.77 35.23 48.83 91 .47 32,794 3,070 Feb................. 57.86 68.8 57.1 100.64 113.43 43.40 47.22 53.73 59.79 38.53 36.12 52.06 100.58 31.375 4,765 Mar................ 58.23 69.2 57.3 101.08 113.73 44.54 45.67 54.01 61.60 39.19 35.44 r52.59 104.04 23,069 3,479 Week ending— 1976—Mar. 6........ 57.62 68.2 57.0 99.72 112.09 43.68 45.67 53.37 59.49 39.13 35.30 51.85 103.59 24,110 4,004 13........ 57.94 68.3 56.9 100.89 113.50 44.49 45.66 53.94 60.25 39.57 35.34 52.08 104.68 27,210 4,040 20........ 58.11 68.7 57.0 100.52 113.07 44.57 45.47 53.72 59.93 39.00 35.36 52.51 103.50 21,392 3,292 27........ 58.79 70.1 57.6 102.41 115.34 45.01 45.69 54.64 67.09 39.14 35.57 53.42 104.24 23,098 3,128 Apr. 3......... 58.91 70.6 57.9 102.34 115.16 45.10 46.08 54.59 60.98 38.98 35.71 53.49 104.15 17,756 2,702 For notes see opposite page. STOCK MARKET CUSTOMER FINANCING (In millions of dollars) Margin credit at brokers and banks 1 Regulated 2 Unregu­ lated 3 Free credit balances at brokers 4 End of period By source By type Margin stock Convertible Subscription Nonmargin bonds issues stock Total Brokers Banks credit at banks Brokers Banks Brokers Banks Brokers Banks Margin Cash accts. accts. 1975—Feb.. 5,099 4,269 830 4,130 783 136 13 1,897 480 1,610 Mar.. 5,164 4,320 844 4,180 800 134 14 1,882 515 1,770 Apr.. 5,327 4,503 824 4,360 781 138 13 1,885 505 1.790 May. 5,666 4,847 819 4,700 779 140 13 1,883 520 1,705 June. 5,984 5,140 844 4,990 805 146 11 2,434 520 1.790 July. 6,266 5,446 820 5.300 780 143 10 2,387 555 1,710 Aug.. 6,197 5,365 832 5,220 791 142 11 2,457 515 1,500 Sept.. 6,251 5,399 852 5,250 811 145 10 2,520 470 1,455 Oct.. 6,455 5,448 1.007 5.300 956 144 15 2,311 545 1,495 Nov.. 6,527 5,519 1.008 5,370 958 146 13 2,270 490 1,470 Dec.. 6,500 5,540 960 5,390 909 147 15 2,281 475 1,525 1976—Jan.. 6,568 5,568 1,000 5,420 946 146 20 2,321 655 1,975 Feb., 1,037 984 20 2,333 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 STOCK MARKET CREDIT: SAVINGS INSTITUTIONS □ APRIL 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) Total Equity class (per cent) Equity class of accounts debt Net in debit status Total (mil­ End of period credit balance E p n er d i o o d f l d io o o n f l ­ s 8 m 0 o o re r 70-79 60-69 50-59 40-49 Un 4 d 0 er status 60 o r p e m r o c r e e nt 6 L 0 e p ss e r t h c a e n n tof (m do il l l l i a o r n s s ) lars) 1 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 44.4 40.1 15.5 7,277 Mar.. 4,180 6.5 8.0 15.3 27.6 25.8 16.9 45.2 41.1 13.7 7,505 Apr.. 4,360 7.1 8.7 16.1 28.7 23.5 15.9 44.5 43.2 12.3 7,601 May. 4,700 7.0 9.1 16.7 31.5 21 .0 13.4 45.9 43.1 11.0 7,875 June. 4,990 7.4 9.9 18.3 32.7 20.4 11.4 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 45.3 38.9 15.8 7,515 Sept.. 5,250 5.1 7.3 10.6 19.6 31.0 26.5 44.4 40.1 15.5 7,362 Oct... 5,300 5.5 6.7 11.2 21.8 29.7 25.2 45.3 40.2 14.5 7,425 Nov.. 5,370 5.2 6.7 12.2 23.2 28.6 24.0 43.8 40.8 15.4 7,290 Dec.. 5,390 5.3 6.9 11.6 22.3 28.8 25.0 1976—Jan.......................... 45.8 44.0 r10.3 7,774 1976—Jan... 5,420 7.0 '9.4 r18.3 21.3 28.8 15.5 Note.—Special miscellaneous accounts contain credit balances that 1 Note 1 appears at the bottom of p. A-28. may be used by customers as the margin deposit required for additional purchases. Balances may arise as transfers based on loan values of other Note.—Each customer’s equity in his collateral (market value of col­ collateral in the customer’s margin account or deposits of cash (usually lateral less net debit balance) is expressed as a percentage of current col­ sales proceeds) occur. lateral values. MUTUAL SAVINGS BANKS (In millions of dollars) Loans Securities Total Mortgage loan assets— commitments 2 End of period M ga o g r e t­ Other G U o .S vt . . S g l a o o t n c a v d a t t e l . o C r a t o a h n r t e d p e r o 1 ­ Cash O as t s h e e ts r l g r i T e e a a t s n o b i e n e e t i r d s l a r v i a l ­ e l De it p s os­ l O ia t t i b e h i s e li r ­ G r c e o e s a n u e c e n r ­ v r t a s e l classi ( f i i n e d m b o y n t m hs a ) turity accts. 3 or 3-6 6-9 Over Total less 9 1971................. 62,069 2,808 3,334 385 17,674 1,389 1,711 89,369 81,440 1,810 6,118 1,047 627 463 1,310 3,447 19723............... 67,563 2,979 3,510 873 21,906 1,644 2,117 100,593 91,613 2,024 6,956 1,593 713 609 1,624 4,539 1973................. 73,231 3,871 2,957 926 21,383 1,968 2,314 106,651 96,496 2,566 7.589 1,250 598 405 1,008 3,261 1974................. 74,891 3,812 2,555 930 22,550 2,167 2,645 109,550 98,701 2,888 7,961 664 418 232 726 2,040 1975................. 77,127 4,028 4,777 1 ,541 27,964 2,367 3,195 120,999 109,796 2,770 8,433 896 301 203 403 1,803 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 Dec__ 77,127 4,028 4,777 1,541 27,964 2,367 3,195 120,999 109,796 2,770 8,433 896 301 203 403 1,803 1976—Jan.p.. 77,211 4,832 4,958 1,577 28,451 1,993 3,239 122,263 110,904 2,899 8,459 923 315 195 426 1,859 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

APRIL 1976 o SAVINGS INSTITUTIONS A31 LIFE INSURANCE COMPANIES (In millions of dollars) Government securities Business securities End of period a T s o se ta ts l Total U St n a i t t e e s d Sta lo te c a a l nd Foreign1 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 ts r 1971. 222,102 11,000 4,455 3,363 3,182 99,805 79,198 20,607 75,496 6,904 17,065 11,832 1972. 239,730 11,372 4,562 3,367 3,443 112,985 86,140 26,845 76,948 7,295 18,003 13,127 1973. 252,436 11,403 4,328 3,412 3,663 117,715 91,796 25,919 81,369 7,693 20,199 14,057 1974. 263,817 11,890 4,396 3,653 3,841 119,580 97,430 22,150 86,258 8,249 22,899 14,941 1975. 289,084 14,582 5,894 4,440 4,248 135,014 106,755 28,259 89,358 9,634 24,389 16,107 1975- 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 Julv................................. 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. 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 Dec.................................. 289,084 14,582 5,894 4,440 4,248 135,014 106,755 28,259 89,358 9,634 24,389 16,107 1976--Jan.**.............................. 293,870 15,380 6,446 4,652 4,282 138,965 108,130 30,835 89,395 9,661 24,498 15,971 1 Issues of foreign governments and their subdivisions and bonds of Figures are annual statement asset values, with bonds carried on an the International Bank for Reconstruction and Development. amortized basis and stocks at year-end market value. Adjustments for interest due and accrued and for differences between market and book Note.—Institute of Life Insurance estimates for all life insurance values are not made on each item separately but are included, in total in companies in the United States. “Other assets.” SAVINGS AND LOAN ASSOCIATIONS (In millions of dollars) Assets Liabilities Mortgage Total loan com­ End of period M ga o ge rt s ­ I s n m e v c e e u n s r t t ­ ­ Cash Other l a ia s T b s o e il t t i s a ti — l e s S c a a v p i i n ta g l s w N or e t t h2 m ro B o w n o e e r­ y d 3 p L ro o i c n a e n s s s Other ou m a p t t s i e t t e r m a n i n o d e d d n i o 4 t n s f g ities 1 1971...................................... 174,250 18,185 2,857 10,731 206,023 174,197 13,592 8,992 5,029 4,213 7,328 1972...................................... 206,182 21,574 2,781 12,590 243,127 206,764 15,240 9,782 6,209 5,132 11,515 19735................................... 231,733 21,055 19,117 271,905 226,968 17,056 17,172 4,667 6,042 9,526 1974...................................... 249,293 23,240 22,991 295,524 242,959 18,436 24,780 3,244 6,105 7,454 1975?.................................... 278,693 30,900 28,802 338,395 286,042 19,776 20,730 5,187 6,659 10,675 1975—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.......................... 278,693 30,900 28,802 338,395 286,042 19,776 20,730 5,187 6,659 10,675 1976—Jan........................... 280,071 34,271 29,716 344,058 291,418 19,948 19,652 5,051 7,989 11,111 Feb.?....................... 282,393 36,099 30,338 348,830 295,358 20,164 18,734 5,133 9,441 12,926 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 pass­ all, 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

A32 FEDERAL FINANCE □ APRIL 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 financ­ deficit debt Agency acco>unts Less: Equals: sury ing, (-) securi­ securi­ Special Total operat­ Other net2 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 1,140 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 1,890 -6,920 Half year: 1974—Jan.-June 140,676 138,030 2,646 5,162 426 8,297 295 -3,005 -1,215 1,208 352 July-Dee. 139,607 153,147 -13,540 18,429 -689 2,840 150 14,751 -3,228 557 -3,881 1975 — Jan.-June, 141,189 171,202 -30,013 40,524 -423 5,272 -1 ,231 36,059 1,657 1,643 -2,746 July-Dee., 139,453 184,545 -45,092 43,460 -39 -4,739 -1 ,186 49,347 866 -980 -4,368 Month: 1975—Feb.____r 19,973 25,746 -5,773 5,571 -307 1 ,224 -492 4,531 -2,359 -65 -1,183 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.......... 20,197 31,249 -11,052 5,051 -23 -2,427 -346 7,800 -3,390 -1,373 -1,511 Aug.......... 23,584 30,634 -7,050 9,472 6 2,384 -94 7,189 -630 -263 -1,032 Sept.......... 28,615 29,044 -429 5,935 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 1976—Ja..............n 25,634 30,725 -5,091 7,757 -2 -393 328 7,820 3,532 114 918 Feb........... 20,845 29,833 -8,987 9,465 5 1,062 -564 8,972 64 -125 -46 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 nts 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 i t i c es s A ec g u e r n it c i y es S is p G I s e n u c o v e i v a s e l t s , t m ac e c n o t O u s n t o h ts f e r S n L p o e e te c ss 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 p v o s v s a w o . t t — . r e - e 4 d Fiscal year: 1971........................... 1,274 7,372 109 8,755 398,130 12,163 82,740 22,400 825 304,328 37,086 1972........................... 2,344 7,634 139 10,117 427,260 10,894 89,536 24,023 825 323,770 41,814 1973........................... 4,038 8,433 106 12,576 458,142 11,109 101,248 24,133 825 343,045 51,325 1974........................... 2,919 6,152 88 9,159 475,060 12,012 114,921 25,273 825 346,053 65,411 1975........................... 5,773 1,475 343 7,591 533,188 10,943 123,033 24,192 (5) 396,906 76,092 Calendar year: 1973........................... 2,543 7,760 70 10,374 469,898 11,586 106,624 24,978 825 349,058 59,857 1974........................... 3,113 2,745 70 5,928 492,664 11,323 117,761 25,423 (5) 360,804 76,459 1975........................... 7,286 1,159 7 8,452 576.649 10,904 118,294 23,006 446,253 Month: 1975—Feb................ 2,885 410 220 3,515 499.710 11,037 116,812 24,886 369,049 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 23,916 396,339 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 78,842 1976—Jan ............... 10,075 1,905 7 11,987 584,405 10,902 117,901 23,333 454,072 79,355 Feb................ 10,366 1,678 7 1,205 593,871 10,907 118,963 22,770 463,045 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

APRIL 1976 a FEDERAL FINANCE A33 FEDERAL FISCAL OPERATIONS: DETAIL (In millions of dollars) Budget receipts Individual income taxes Corporation Social insurance taxes income taxes and contributions Period Emplc>yment Total Pres. taxes> and Excise Cus­ Estate Misc. Elec­ Non­ Gross contrilDution2 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 Fund1 roll empl. taxes Fiscal year: 1972......................... 208,649 83,200 25,67914,143 94,737 34,926 2,76044,088 2,032 4,357 3,437 53,914 15,477 3,287 5,436 3,633 1973......................... 232,225 98,093 27,01721,866 103,24639,045 2,893 52,505 2,371 6,051 3,61464,542 16,260 3,188 4,917 3,921 1974......................... 264,932 112,092 2830,81223,952 118,95241,744 3,125 62,878 3,008 6,837 4,051 76,780 16,844 3,334 5,035 5,369 1975......................... 280,997 122,071 3234,29634,013 122,38645,747 5,125 71,789 3,417 6,770 4,46686,441 16,551 3,676 4,611 6,711 Half year: 1974—Jan.-June.. 140,676 59,100 2824,60522,953 60,78225,155 1,631 32,919 2,807 3,862 2,08441,671 7,878 1,701 2,521 2,601 July-Dee... 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 27,19832,997 54,92627,500 3,109 37,371 3,163 3,856 2,27946,667 7,790 1,718 2,327 3,370 July-Dee... 139,453 59,549 7,649 1,362 65,835 18,810 2,735 35,443 268 2,861 2,31440,886 8,759 1,927 2,573 3,397 Month: 1975—Feb.............. "19,973 "10,953 7 1,046"4,263 "7,743 1 ,275 496 7,670 225 732 "355 "8,982 1,277 260 399 535 Mar............. 20,134 9,624 8 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 1512,766 6,258 16,065 5,819 726 5,438 1,743 557 388 8,126 1,166 286 317 399 May............ 12,793 10,300 81912,749 -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 1,514 313 503 757 Aug............. 23,584 10,246 488 331 10,403 1,045 425 8,085 1,257 372 9,713 1,394 302 430 723 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 Oct.............. 19,316 9,983 589 -81 10,653 1,694 821 4,551 259 395 5,206 1,462 343 396 382 Nov............. 21,745 10,195 283 124 10,354 1,072 399 6,900 716 377 7,994 1,476 310 428 511 Dec.............. 25,995 10,738 571 109 11,200 6,884 354 5,043 17 110 395 5,565 1,482 347 386 485 1976—Jan............... 25,634 9,518 1 5,843 86 15,276 1,771 218 5,540 225 223 442 6,430 1,335 348 401 292 Feb.............. 20,845 10,938 7 933 4,100 7,778 1,203 422 8,330 237 693 370 9,631 1,354 288 475 538 Budget outlays Gen­ Nat­ Educa­ Gen­ Rev­ eral 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 off­ de­ affairs space, ture envir., and region. ment, wel­ erans est en­ fiscal setting fense and and transp. devel­ and fare force., assist­ re­ tech. energy opment social and ance ceipts 5 serv. justice Fiscal year: 1973..................... 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 1974..................... 268,392 78,569 3,593 3,977 2,230 6,571 13,096 4,911 11,598 106,505 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 19767.................... 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 Month: 1975—Feb."___ 25,746 7,473 383 213 -90 970 666 74 733 11,450 1,596 2,597 442 8 -770 Mar.......... 27,986 7,435 503 379 347 723 1,415 19 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 -1,221 1976—Jan............ 30,725 6,915 351 336 228 718 1,819 421 1,478 13,714 1,626 2,813 121 1,627 -1,441 Feb........... 29,833 6,120 320 413 315 1,833 900 421 1,530 13,360 1,696 3,143 570 53 -841 1 Collections of these receipts, totaling $2,427 million for fiscal year 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

A34 U.S. GOVERNMENT SECURITIES □ APRIL 1976 GROSS PUBLIC DEBT, BY TYPE OF SECURITY (In billions of dollars) Public issues (interest-bearing) End of period p d T g u e r o b b o t l s t a i s c l i Total Total Bills Ma C c r e k a r t e t e i t f s a i b ­ le Notes Bonds 2 b C v o ib e o n l r n e d t­ ­ s Total N 3 on F m is o s a u r r e e k i s g e t n 4 a bl S e b a o a v n n in d d g s s i S s p su e e c s ia l 5 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—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 Feb. 593.9 473.7 378.8 162.1 177.6 39.1 2.3 92.7 21.7 68.6 119.2 Mar. 600.5 480.7 385.3 163.1 183.1 39.0 2.3 93.1 21.7 69.0 118.5 1 Includes non-interest-bearing debt (of which $614 million on Mar. 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 i t s l c ag G t U e a r o n u n .S v c d 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 ia ­ s l M s b a a v u n i t n u k g a s s l p I c a n a o n s n m c u ie e r ­ s ­ r c O a o t t r i h o p e n o r s ­ g S l a o o t n v c a d a t t s e l . Savi I n n g d s ividu O al t s her n F a i o t n a i r o n t e e n d i r g a ­ n l 1 t O i m o n r t v i s h s e c e s . 2 r ­ funds bonds securities 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 78.5 261.7 60.3 2.9 6.4 10.9 29.2 60.3 16.9 55.6 19.3 1974—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 _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 29.5 547.2 144.8 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 Dec.................. r576.6 137.4 87.9 r349.4 85.8 4.5 9.3 20.2 33.8 67.3 r23.6 66.5 38.3 1976—Jan................... 584.4 139.3 89.8 355.3 87.0 4.7 9.9 21.2 34.6 67.7 23.6 68.3 38.3 1 Consists of investments of foreign and international accounts in The debt and ownership concepts were altered beginning with the the United States. Mar. 1969 Bulletin. The new concepts (1) exclude guaranteed se­ 2 Consists of savings and loan assns., nonprofit institutions, cor­ curities and (2) remove from U.S. Govt, agencies and trust funds porate 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

APRIL 1976 □ U.S. GOVERNMENT SECURITIES A35 OWNERSHIP OF MARKETABLE SECURITIES, BY MATURITY (Par value, in millions of dollars) Within 1 year Type of holder and date Total y 1 e - a 5 rs y 5 e - a 1 r 0 s 1 y 0 e - a 2 rs 0 20 O y v e e a r r s Total Bills Other All holders: 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—Dec. 31............................................................. 366,191 199,692 157,483 42,209 112,270 26,436 14,264 10;530 1976—Jan....................................................................... 369,316 201,854 159,645 42,209 114,283 28,448 14,222 10,509 Feb...................................................................... 378,773 200,775 162,088 38,687 120,331 32,382 14,187 11,098 U.S. Govt, agencies and trust funds: 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—Dec. 31..................................................... 19,347 2,769 207 2,562 7,058 3,283 4,233 2,053 1976—Jan............................................................... 19,703 2,994 420 2,574 7,061 3,348 4,239 2,060 Feb.............................................................. 19,158 3,081 455 2,626 6,652 3,113 4,239 2,074 Federal Reserve Banks: 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—Dec. 31.................................................. 87,934 46,845 38,018 8,827 30,518 6,463 1,507 2,601 1976—Jan............................................................... 89,782 46,783 37,751 9,032 32,043 6,790 1 ,517 2,649 Feb.............................................................. 88,990 45,819 38,240 7,579 31,195 7,562 1,532 2,883 Held by private investors: 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—Dec. 31..................................................... 255,860 150,078 119,258 30,820 74,694 16,690 8,524 5,876 1976—Jan............................................................... 259,831 152,077 121,474 30,603 75,179 18,310 8,466 5,800 Feb.............................................................. 270,625 151,875 123,393 28,482 82,484 21,707 8,416 6,141 Commercial banks: 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—Dec. 31............................................ 64,398 29,875 17,481 12,394 29,629 4,071 552 271 1976—Jan...................................................... 67,461 30,396 17,582 12,814 31,377 4,869 559 260 Feb...................................................... 66,041 27,390 16,289 11,101 33,270 4,597 525 259 Mutual savings banks: 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—Dec. 31............................................ 3,300 983 554 429 1,524 448 232 112 1976—Jan...................................................... 3,442 951 525 426 1 ,602 562 221 106 Feb..................................................... 3,662 946 528 418 1,805 584 220 108 Insurance companies: 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—Dec. 31............................................ 7,565 2,024 1,513 511 2,359 1,592 1,154 436 1976— Jan...................................................... 8,228 2,473 1,910 563 2,481 1,710 1,147 417 Feb...................................................... 8,312 2,213 1,759 454 2,761 1,750 1,154 434 Nonfinancial corporations: 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—Dec. 31............................................ 9,365 7,105 5,829 1,276 1,967 175 61 57 1976—Jan...................................................... 10,500 8,412 7,264 1,148 1,806 174 62 46 Feb...................................................... 11,531 9,251 8,175 1,076 2,009 166 56 49 Savings and loan associations: 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—Dec. 31............................................ 2,793 914 518 396 1,558 216 82 22 1976—Jan...................................................... 3,332 1,284 837 447 1,674 271 87 16 Feb...................................................... 3,662 1,373 979 394 1,981 203 89 16 State and local governments: 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—Dec. 31............................................ 9,285 5,288 4,566 722 1,761 782 896 558 1976—Jan...................................................... 9,769 5,789 4,964 825 1,779 824 826 551 Feb...................................................... 10,573 6,296 5,522 774 2,033 835 802 605 All others: 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—Dec. 31............................................ 159,154 103,889 88,797 15,092 35,894 9,405 5,546 4,420 1976—Jan...................................................... 157,100 102,771 88,392 14,379 34,459 9,902 5,564 4,404 Feb..................................................... 166,846 104,407 90,142 14,265 38,625 13,573 5,569 4,671 Note.—Direct public issues only. Based on Treasury Survey of banks, and 730 insurance companies combined, each about 90 per cent; Ownership. (2) 457 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) 5,531 commercial banks, 471 mutual savings Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 U.S. GOVERNMENT SECURITIES □ APRIL 1976 DAILY-AVERAGE DEALER TRANSACTIONS (Par value, in millions of dollars) U.S. Government securities By maturity By type of customer U.S. Govt. Period agency Total securities Within 1-5 5-10 Over U.S. Govt, U.S. Govt, Com­ All 1 year years years 10 years securities securities mercial other1 dealers brokers banks 1975—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 2,675 1,839 2,929 1,250 Nov................................. 7,594 5,519 1,353 534 189 1,070 2,176 1,875 2,474 1,217 Dec.................................. 7,586 5,919 1,270 278 120 1,190 2,217 1,977 2,202 1,059 1976—Jan.................................. 9,509 "7,049 1,765 569 126 rl ,265 "3,118 2,192 "2,231 1,417 Feb.................................. 8,329 5,863 1,553 755 158 951 2,389 2,196 2,793 1,163 Week ending— 1976—Feb. 4......................... 7,988 6,066 1,046 764 112 928 2,425 1,945 2,690 853 11......................... 8,986 6,074 1,708 1,061 143 976 2,776 2,195 3,039 "1,071 18......................... 7.852 5,788 1,236 675 153 948 1,869 2,423 2,613 "1 ,283 25......................... 8; 896 6,195 1,947 544 209 1,085 2,444 2,420 2,946 "1 ,186 Mar. 3......................... 8.589 6,310 1 ,615 507 158 1,088 2,776 2,130 2,594 1,368 10......................... 10’232 7,880 1 ,784 474 95 1,279 3,533 2,580 2,840 906 17......................... ?; 485 5,777 1 ,355 271 82 1 ,152 2,168 1,874 2,291 831 24......................... 10,237 7,506 2,224 358 149 1 ,589 3,261 2,486 2,901 1 ,806 31......................... 8,180 5,804 1,990 260 127 1 ,281 2,020 2,213 2,666 1,279 i Since Jan. 1972 has included transactions of dealers and brokers in They do not include allotments of, and exchanges for, new U.S. Govt, securities other than U.S. Govt. securities, redemptions of called or matured securities, or purchases or sales of securities under repurchase agreement, reverse repurchase (resale), Note.—The transactions data combine market purchases and sales of or similar contracts. Averages of daily figures based on the number of U.S. Govt, securities dealers reporting to the F.R. Bank of New York. trading days in the period. DAILY-AVERAGE DEALER POSITIONS DAILY-AVERAGE DEALER FINANCING (Par value, in millions of dollars) (In millions of dollars) U.S. Government securities, by maturity Commercial banks U.S. Period m t A a ie t l u s l ri­ W y i e 1 t a h r in y 1 e - a 5 rs y 5 e - a 1 r 0 s y O e 1 v a 0 e rs r a s G e g t c e i o e u n v s r c t i y . ­ Period sou A r l c l es Y N C o i e t r w y k w E h ls e e r ­ e C t o io r n p s o 1 ra­ o A th l e l r 1975—Feb.................. 5,588 3,658 1 ,180 536 213 1,469 1975—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:i23 1,036 218 77 937 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 "491 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 "982 7,107 2,001 1,304 1,086 2,716 1976—Jan................... 6,305 5.,287 449 398 170 "694 1976—Jan.............. 6,766 1,757 1,337 1,147 2,526 Feb.................. 6,263 5; 477 381 224 183 599 Feb............. 6,700 1 ,705 850 1,017 3,128 Week ending— Week ending— 1976—Jan. 7......... 5,969 5,032 461 257 220 792 1976—Jan. 7... 6,541 1,514 1,313 1,138 2,576 14 7,551 6,541 440 367 202 720 14... 7,275 2,165 1,573 1,375 2,163 21 6,629 5,172 643 643 171 724 21... 7,266 1,881 1,762 1,172 2,451 28......... 5,372 4,562 350 340 120 600 28... 5,707 1,466 769 984 2,488 Feb. 4 5,882 5,343 177 246 115 638 Feb. 4... 7,075 1,721 1,037 908 3,409 11 6,967 5,590 761 356 259 658 11... 6,370 1,842 960 935 2,634 18......... 6,977 6,283 309 199 186 605 18... 7,435 1 ,734 1,084 1,037 3,582 25 5,765 5,196 270 151 149 564 25... 6,405 1,535 544 1,059 3,267 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

APRIL 1976 □ FEDERALLY SPONSORED CREDIT AGENCIES A37 MAJOR BALANCE SHEET ITEMS OF SELECTED FEDERALLY SPONSORED CREDIT AGENCIES (In millions of dollars) Federal home loan banks Federal National Mortgage Assn. Banks Federal Federal (secondary market for intermediate land Assets Liabilities and capital operations) cooperatives credit banks banks period Ad­ Cash Mem­ Deben­ Loans Loans vances Invest­ and Bonds ber Capital Mort­ tures to and Mort­ to ments de­ and de­ Stock gage and cooper­ Bonds dis­ Bonds gage Bonds mem­ posits notes posits loans notes atives counts loans bers (A) (L) (A) (L) (A) (L) (A) (L) 1970 10,614 3,864 105 10,183 2,332 1,607 15,502 15,206 2,030 1,755 4,974 4,799 7,186 6,395 1971. 7,936 2,520 142 7,139 1,789 1,618 17,791 17,701 2,076 1,801 5,669 5,503 7,917 7,063 1972 7,979 2,225 129 6,971 1,548 1,756 19,791 19,238 2,298 1,944 6,094 5,804 9,107 8,012 1973 15,147 3,537 157 15,362 1,745 2,122 24,175 23,001 2,577 2,670 7,198 6,861 11,071 9,838 1974, 21,804 3,094 144 21,878 2,484 2,624 29,709 28,201 3,575 3,561 8,848 8,400 13,643 12,427 1975--Feb... 19,460 4,838 99 20,822 2,819 2,698 29,846 27,730 3,821 3,592 9,031 8,484 14,326 13,021 Mar.. 18,164 6,415 154 20,754 3,025 2,677 29,870 28,420 3,741 3,439 9,303 8,703 14,641 13,021 Apr... 17,528 6,836 98 20,738 2,651 2.660 29,931 28,257 3,650 3.329 9,520 9,061 14,917 13,571 May.. 17,145 5,745 98 19,463 2,708 2*656 29,977 27,714 3,499 2,982 9,763 9,231 15,180 13,571 June.. 16,803 6,259 134 19,396 2,831 2,653 30,136 28,237 3,371 2,948 10,031 9,357 15,437 13,961 July. . 16,685 6,174 119 19,446 2,436 2,656 30,453 28,419 3,520 2,914 10,163 9,556 15,654 14,351 Aug... 16,945 4,680 89 18,736 2,281 2,660 30,881 28,718 3,738 3,004 10,176 9,715 15,851 14,351 Sept... 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 14,351 Oct... 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 14,774 Nov. . 17,606 4,439 87 18,874 2,527 2,690 31,647 29,319 4,041 3,664 8,784 9,319 16,380 14,774 Dec... 17,845 4,376 109 18,863 2,701 2,705 31,916 29,963 3,979 3,643 9,947 9,211 16,564 14,773 1976--Jan.. . 17,106 5,549 97 18,850 2,971 2,802 31,866 29,809 4,356 3,793 9,944 9,201 16,746 15,243 Feb... 16,380 5,286 69 17,738 3,085 2,829 31,704 • 29,758 4,546 3,878 10,013 9,254 16,930 15,120 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) are not guaranteed by the U.S. Govt. Loans are gross of valuation sheet items are capital accounts of all agencies, except for stock of FHLB’s. reserves and represent cost for FNMA and unpaid principal for other Bonds, debentures, and notes are valued at par. They include only publicly agencies. NEW ISSUES OF STATE AND LOCAL GOVERNMENT SECURITIES (In millions of dollars) All issues (new capital and refunding) Issues for new capital Type of issue Type of issuer Total Use of proceeds Period amount deliv­ Special ered3 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 .S v n t . s . State di s a s t n t a r d t i . ct Other2 Total c E at d i u o ­ n b R r a i o d n a g d d e s s i U tie ti s l­ 4 H in o g u ^ s­ V a a e n i t d e s r ’ ­ O p p o t u s h r e e ­ s r gations auth. 197 1 24,963 15,220 8,681 1,000 5,999 8,714 10,246 24.495 5,278 2,642 ,214 2,068 9,293 197 2 23,653 13,305 9,332 959 4,991 9,496 9,165 19,959 4,981 1,689 ,638 1,910 6,741 197 3 23,969 12,257 10,632 1,022 4,212 9,505 10,249 22,397 4,311 1,458 ,654 2,639 8,335 197 4 24,315 13,563 10,212 461 4,784 8,638 10,817 23,508 4,730 768 ,634 1,064 11,312 197 5 30,607 16,020 14,511 7,438 12,441 10,660 29.495 4,689 1,277 ,209 647 15,673 1975—Feb.. 2,392 1,723 664 877 629 880 2,353 478 209 425 105 1,136 Mar. 2,137 1,284 851 376 717 1,048 2,083 471 94 474 35 1,009 Apr.. 2,413 1,501 905 368 880 1,161 2,316 405 61 734 38 1,078 May. 2,905 1,885 1,015 811 1,197 889 2,784 419 211 559 25 1,570 June. 3,066 1,772 1,292 938 1,137 989 2,840 430 164 821 28 1,397 July. 3,586 1,371 2,209 1,577 1,063 941 3,554 400 123 879 37 2,115 Aug., 2,786 1,058 1,725 376 1,665 747 2,561 379 55 626 67 1,434 Sept. 2,171 907 1,252 357 1,185 614 2,123 279 134 447 48 1,215 Oct.. 2,337 1,120 1,203 482 979 855 2.241 212 60 487 44 1,438 Nov. 2,385 1,040 1,341 470 1,244 667 2,318 219 88 618 28 1,365 Dec.. 2,062 995 1,057 434 1,043 576 1,990 287 29 495 20 1,159 1976—Jan.' 2,327 1,087 1,229 639 1,051 629 2.242 425 95 590 1,044 Feb.. 2,519 1,237 1,267 434 1,368 699 2,451 268 100 535 130 1,418 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

A38 SECURITY ISSUES □ APRIL 1976 TOTAL NEW ISSUES (In millions of dollars) Gross proceeds, allissues1 Noncorporate Corporate Period Bonds Stock Total U.S. G U o .S vt . . an S d t a lo te cal Others Total Govt.2 agency3 (U.S.)4 Total P o u ff b e l r ic e l d y P p ri l v a a c t e e d ly Preferred Common 1971...................... 105,233 17,235 16,283 24,370 2,165 44,914 31 ,999 24,790 7,209 3,679 9,236 1972....................... 96,522 17,080 12,825 23,070 1,589 40,787 27,727 18,347 9,378 ■ 3,373 9,689 1973....................... 100,417 19,057 23,883 22,700 1,385 33,391 22,268 13,649 8,620 3,372 7,750 1974....................... 37,837 31,551 25,337 6,214 2,253 4,033 1974—Nov........... 3,746 3,346 3,016 330 93 307 Dec........... 3,505 3,052 2,172 880 152 301 1975—Jan............ 5,365 4,792 3.657 1,135 235 338 Feb............ 4,528 3,906 3.201 705 173 449 Mar........... 5,378 4,481 3,971 510 253 644 Apr........... 4,294 3.194 2,771 423 349 751 May.......... 5,798 4; 298 3,796 502 346 1,154 .......... June 5,618 4,613 3,943 670 230 775 July.......... 4.390 3,733 2.658 1,075 198 459 Aug........... 2,396 1,833 1,356 477 129 434 Sept........... 2,838 2,002 1,414 588 308 528 Oct............ 4,619 3,072 2,389 683 332 1,215 Nov.......... 3,965 3,182 1,666 1,516 440 343 1 Gross proceeds, major groups of corporate issuers Period Manufacturing C m om is m ce e ll r a c n ia e l o u an s d Transportation Public utility Communication a R nd e a f l i n e a s n ta c t i e a l Bonds Stocks Bonds Stocks Bonds Stocks Bonds Stocks Bonds Stocks Bonds Stocks 1971................................................... 9,551 2.102 2,158 2,370 2,006 434 7,576 4,201 4,222 1,596 6,484 2,204 1972................................................... 4,796 1,812 2,669 2,878 1,767 187 6,398 4,967 3,680 1,127 8,415 2,096 1973.................................................. 4,329 643 1,283 1,559 1,881 43 5,585 4,661 3,535 1,369 5,661 2,860 1974.................................................. 9,890 543 1,851 956 983 22 8,872 3,964 3,710 222 6,241 587 1974—Nov....................................... 1,697 2 116 100 336 739 225 62 31 397 44 Dec........................................ 1,456 196 180 23 14 435 194 150 25 817 15 1975—Jan........................................ 1,901 3 179 58 84 764 507 933 5 931 Feb........................................ 1,631 44 65 60 75 1,471 486 126 1 539 32 Mar ... ........... 2,368 111 271 74 83 828 679 317 614 34 Apr........................................ 1,498 233 294 211 97 794 586 354 61 156 9 May...................................... 2,266 384 242 141 415 i 845 704 153 260 379 10 June..................................... 2,195 123 384 194 231 838 640 362 603 47 July....................................... 1,116 64 229 231 338 715 324 254 16 1,081 22 Aug....................................... 607 101 141 70 17 719 305 93 19 255 68 Sept .................................. 591 106 57 37 151 720 541 249 48 234 105 Oct . ............................. i 759 142 325 152 626 562 676 373 555 427 23 Nov....................................... 873 229 53 68 1,000 848 420 40 10 368 57 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 preceding 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

APRIL 1976 □ SECURITY ISSUES A39 NET CHANGE IN OUTSTANDING CORPORATE SECURITIES (In millions of dollars) Derivation of change, all issuers1 Period All securities Bonds and notes Common and preferred stocks New issues Retirements Net change New issues Retirements Net change New issues Retirements Net change 1971......................... 46,687 9,507 37,180 31,917 8,190 23,728 14,769 1,318 13,452 1972......................... 42,306 10,224 32,082 27,065 8,003 19,062 15,242 2,222 13,018 1973......................... 33,559 11,804 21,754 21,501 8,810 12,691 12,057 2,993 9,064 1974......................... 39,334 9,935 29,399 31,554 6,255 25,098 7,980 3,678 4,302 1974—111................ 8,452 2,985 5,467 6,611 1,225 5,386 1,841 1,759 82 IV................. 12,272 2,871 9,401 10,086 2,004 8,082 2,186 866 1,319 1975—1................... 15,211 2,088 13,123 12,759 1 ,587 11,172 2,452 501 1 ,951 II.................. 15,602 3,211 12,390 11,460 2,336 9,124 4,142 875 3,266 Ill................ 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 Period facturing and other 2 tation 3 utility cation and financial i 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--III................. 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--I.................... 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 4 at end of period) Year Month Sales 1 Redemp­ Net Total 2 Cash Other Sales 1 Redemp­ Net Total 2 Cash Other tions sales position 3 tions sales position 3 1963............... 2,460 1,504 952 25,214 1,341 23,873 1975—Feb... 889 470 419 39,330 4,006 35,324 1964............... 3,404 1,875 1,528 29,116 1,329 27,787 Mar. . 847 623 224 40,449 3,870 36,579 1965............... 4,359 1,962 2,395 35,220 1.803 33,417 Apr.. . 808 791 17 42,353 3,841 38,512 May.. 677 735 -58 43,832 3,879 39,953 1966............... 4,671 2,005 2,665 34,829 2,971 31,858 June. . 703 811 -108 45,538 3,640 41,898 1967............... 4,670 2,745 1,927 44,701 2,566 42,135 July... r813 1,052 -239 42,896 3,591 39,305 1968............... 6,820 3,841 2,979 52,677 3,187 49,490 Aug... 753 788 -35 41,672 3,660 38,012 Sept... 760 874 -114 40,234 3,664 36,570 1969............... 6,717 3,661 3,056 48,291 3,846 44,445 Oct. . . 914 995 -81 41,860 3,601 38,259 1970................ 4,624 2,987 1,637 47,618 3,649 43,969 Nov... 786 911 -125 42,460 3,733 38,727 1971................ 5,145 4,751 394 55,045 3,038 52,007 Dec... 1,040 1 ,093 -53 42,179 3,748 38,431 1972................ 4,892 6,563 -1,671 59,831 3,035 56,796 1976—Jan. . . 411 538 r 47 46,529 r3,287 '43,242 1973................ 4,358 5,651 -1,261 46,518 4,002 42,516 Feb... 262 571 — 309 46,540 3,084 43,546 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 mem­ contractual 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. 4 Beginning Jan. 1976, sales and redemption figures exclude money market funds. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 BUSINESS FINANCE □ APRIL 1976 SALES, REVENUE, PROFITS, AND DIVIDENDS OF LARGE MANUFACTURING CORPORATIONS (In millions of dollars) 1973 1974 1975 Industry 1972 1973 1974 III IV I II III IV I II III Total (170 corps.): Sales.......................................... 371,946 442,254 563,950 108,370 120,985 126,797 142,974 144,936 149,243 138,245 145,753 147,853 Total revenue......................... 376,604 448,795 572,368 109,984 123,108 128,695 145,125 147,134 151,409 140,343 147,662 149,687 Profits before taxes............... 41,164 53,833 67,650 12,411 14,742 16,588 18,191 17,837 15,033 12,873 14,812 15,425 Profits after taxes................... 21,753 28,772 32,502 6,762 7,750 7,739 9,280 8,420 7,068 5,538 6,678 7,048 Memo: PAT unadj.1........ 21,233 28,804 32,705 6,732 7,930 7,626 9,210 8,487 7,383 5,662 6,566 7,031 Dividends................................ 10,538 11,513 12,302 2,767 3,393 2,906 2,928 3,076 3,390 3,129 3,031 3,089 Nondurable goods industries (86 corps.):2 Sales.......................................... 176,329 210,118 308,699 53,168 59,207 68,767 77,090 80,425 82,417 77,224 78,537 82,228 Total revenue......................... 178,915 213,904 314,256 54,098 60,357 70,049 78,552 81,905 83,746 78,548 79,817 83,462 Profits before taxes............... 21,799 30,200 46,380 7,610 8,988 11,880 11,972 12,595 9,930 9,357 9,942 10,886 Profits after taxes................... 11,154 15,538 20,536 4,018 4,463 5,056 5,728 5,464 4,291 3,575 3,890 4,424 Memo: PAT unadj.1........ 10,859 15,421 20,433 3.957 4,517 4,957 5,677 5,389 4,411 3,567 3,870 4,423 Dividends................................ 5,780 6,103 6,872 1,527 1,633 1,625 1,645 1 ,722 1,882 1 ,816 1,783 1,793 Durable goods industries (84 corps.):3 Sales.......................................... 195,618 232,136 255,251 55,202 61,778 58,029 65,884 64,511 66,826 61,021 67,216 65,625 Total revenue......................... 197,690 234,891 258,112 55,886 62,751 58,646 66,573 65,229 67,663 61,795 67,845 66,225 Profits before taxes............... 19,365 23,633 21,271 4,801 5,754 4,708 6,219 5,242 5,102 3,516 4,870 4,539 Profits after taxes................... 10,599 13,234 11,966 2,744 3,287 2,683 3,552 2,956 2,776 1,963 2,788 2,624 Memo: PAT unadj.1........ 10,374 13,383 12,272 2,775 3,413 2,669 3,533 3,098 2,973 2,095 2,696 2,608 Dividends................................ 4,758 5,410 5,430 1,240 1,760 1,281 1,283 1,354 1,508 1 ,313 1,248 1,296 Selected industries: Food and kindred products (28 corps.): 37,624 42,628 52,753 11,014 11,871 11,885 12,729 13,663 14,476 13,490 14,117 14,600 Total revenue......................... 38,091 43,198 53,728 11,201 11,938 12,110 12,996 13,939 14,683 13,708 14,356 14,844 Profits before taxes............... 3,573 3,957 4,603 1,031 1,067 1,046 1,190 1,289 1,077 1,066 1,190 1,385 1,845 2,063 2,298 546 543 529 607 645 517 502 607 719 1,805 2,074 2,328 546 573 533 610 646 540 526 615 745 893 935 1,010 236 240 243 248 253 267 268 271 274 Chemical and allied products (22 corps.): 36,638 43,208 55,084 10,828 11,534 12,507 13,892 14,606 14,078 13,618 14,329 14,660 Total revenue.......................... 37,053 43,784 55,677 10,968 11,704 12,667 14,066 14,778 14,165 13,761 14,498 14,794 Profits before taxes............... 4,853 6,266 8,264 1,599 1,572 1,856 2,293 2,194 1 ,920 1,641 1,622 1,858 2,672 3,504 4,875 901 883 1,044 1,247 1,223 1 ,362 925 929 1,034 2,671 3,469 4,745 871 880 1,031 1,245 1,180 1 ,289 927 937 1,028 Dividends................................ 1,395 1,496 1,646 374 417 383 405 422 437 431 425 429 Petroleum refining (15 corps.): Sales.......................................... 74,662 93,505 165,150 23,586 27,752 36,103 41,362 42,747 44,938 41,988 41,342 43,873 Total revenue......................... 76,133 95,722 168,680 23,988 28,584 36,913 42,261 43,659 45,847 42,851 42,100 44,633 Profits before taxes............... 11,461 17,494 30,659 4,371 5,724 8,296 7,564 8,339 6,458 6,227 6,612 6,961 Profits after taxes................... 5,562 8,550 11,775 2,230 2,662 3,098 3,349 3,181 2,147 1,905 2,078 2,300 Memo: PAT unadj.1........ 5,325 8,505 11,747 2,192 2,688 3,011 3,304 3,132 2,299 1,871 2,040 2,268 2,992 3,147 3,635 789 832 864 853 899 1 ,019 966 937 939 Primary metals and products (23 corps.): 34,359 42,400 54,045 10,602 11,379 11,888 13,976 14,285 13,895 12,482 12,393 12,274 Total revenue......................... 34,797 43,104 55,049 10,764 11,715 12,045 14,171 14,504 14,328 12,782 12,603 12,479 Profits before taxes............... 1,969 3,221 5,580 799 919 973 1,586 1,791 1,229 1,015 711 457 Profits after taxes................... 1,195 1,966 3,199 480 561 589 927 1,028 655 631 478 366 Memo: PAT unadj.1........ 1,109 2,039 3,485 496 608 607 942 1,137 799 639 485 381 Dividends................................ 653 789 965 184 227 221 209 238 297 273 227 223 Machinery (27 corps.): Sales........................................ 55,615 65,041 73,452 16,306 17,871 16,830 18,836 18,853 18,935 18,245 19,881 19,764 Total revenue......................... 56,348 65,925 74,284 16,519 18,168 17,012 19,023 19,075 19,174 18,464 20,104 19,956 Profits before taxes............... 6,358 7,669 7,643 1,936 2,149 1,829 2,074 1 ,943 1,797 1,727 2,089 2,219 Profits after taxes................... 3,522 4,236 4,213 1,069 1,200 1,006 1,149 1 ,074 985 971 1,178 1,224 Memo: PAT unadj.1 , 3,388 4,208 4,168 1,070 1,188 996 1,137 1,096 939 975 1,173 1,231 Dividends................................ 1,497 1,606 1,839 407 410 441 441 r476 481 483 485 519 Motor vehicles and equipment (9 corps.): Sales.......................................... 70,653 83,016 80,386 17,959 21,186 18,467 20,979 19,443 21,497 18,863 22,275 21,005 Total revenue......................... 71,139 83,671 80,882 18,142 21,362 18,597 2.1,146 19,593 21,545 19,011 22,341 21,083 Profits before taxes............... 6,955 7,429 2,919 729 1,280 636 1,115 231 938 -98 854 590 3,626 3,992 1,686 431 709 369 657 133 527 -127 451 328 Memo: PAT unadj.1........ 3,640 4,078 1,742 450 763 361 648 147 586 -12 455 280 Dividends................................ 1,762 2,063 1,538 404 817 384 382 386 385 294 276 274 1 Profits after taxes unadjusted are as reported by the individual com­ of returns, allowances, and discounts, and exclude excise taxes paid di­ panies. These data are not adjusted to eliminate differences in accounting rectly by the company. Total revenue data include, in addition to sales, treatments of special charges, credits, and other nonoperating items. income from nonmanufacturing operations and nonoperating income. 2 Includes 21 corporations in groups not shown separately. Profits are before dividend payments and have been adjusted to exclude 3 Includes 25 corporations in groups not shown separately. special charges and credits to surplus reserves and extraordinary items not related primarily to the current reporting period. Income taxes (not Note—Data are obtained from published reports of companies and shown) include Federal, State and local government, and foreign. reports made to the Securities and Exchange Commission. Sales are net Previous series last published in June 1972 Bulletin, p. A-50. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APRIL 1976 □ BUSINESS FINANCE A41 CORPORATE PROFITS, TAXES, AND DIVIDENDS (In billions of dollars) Profits In­ Profits Cash Undis­ Profits In­ Profits Cash Undis­ Year before come after divi­ tributed Quarter before come after divi­ tributed taxes taxes taxes dends profits taxes taxes taxes dends profits 1968........................... 85.6 39.3 46.2 21.9 24.2 1973—IV................ 119.1 48.6 70.5 29.5 41.0 1969........................... 83.5 39.7 43.8 22.6 21.2 1970........................... 71.5 34.5 37.0 22.9 14. 1 1974_I................... 128.3 49.4 78.9 30.0 48.9 1971........................... 82.0 37.7 44.3 23.0 21.3 II................. 129.6 52.6 77.1 30.9 46.2 1972........................... 96.2 41.4 54.6 24.6 30.0 Ill................ 146.7 59.3 87.4 31.7 55.7 1973 ....................... 117.0 48.2 68.8 27.8 40.9 IV................ 123.9 49.2 74.7 31.7 43.0 1974........................... 132.1 52.6 79.5 31.1 48.4 1975—1................... 97.1 37.5 59.6 32.1 27.5 II................. 108.2 41.6 66.6 32.6 34.0 Ill................ 129.5 50.7 76.8 33.5 45.3 Note.—Dept, of Commerce estimates. Quarterly data are at seasonally adjusted annual rates. CURRENT ASSETS AND LIABILITIES OF NONFINANCIAL CORPORATIONS (In billions of dollars) Current assets Current liabilities Net Notes and accts. Notes and accts. End of period working U.S. receivable payable Accrued capital Total Cash s G ec o u v r t i . ­ I t n o v ri e e n s ­ Other Total F in e c d o e m ra e l Other ties G U o . v S t . .1 Other G U o . v S t . .1 Other taxes 1970................................ 187.4 492.3 50.2 7.7 4.2 201 .9 193.3 35.0 304.9 6.6 204.7 10.0 83.6 1971................................ 203.6 529.6 53.3 11 .0 3.5 217.6 200.4 43.8 326.0 4.9 215.6 13.1 92.4 1972................................. 221 .3 573.5 57.5 9.3 3.4 240.0 215.2 48.1 352.2 4.0 230.4 15.1 102.6 1973—11......................... 235.4 608.2 59.0 10.0 2.9 255.4 230.1 50.8 372.7 4.5 241 .7 15.0 111 .6 Ill....................... 239.5 625.3 58.9 9.7 3.0 264.4 238.0 51 .3 385.8 4.4 250.2 16.5 114.7 IV........................ 242.3 643.2 61 .6 11.0 3.5 266.1 246.7 54.4 401.0 4.3 261 .6 18.1 117.0 1974—1........................... 250.1 666.2 59.4 12.1 3.2 276.2 258.4 56.9 416.1 4.5 266.5 20.6 124.5 II......................... 253.9 685.4 58.8 10.7 3.4 289.8 269.2 53.5 431 .5 4.7 278.5 19.0 129.1 Ill....................... 259.5 708.6 60.3 11 .0 3.5 295.5 282.1 56.1 449.1 5.1 287.0 22.7 134.3 IV........................ 261 .5 712.2 62.7 11.7 3.5 289.7 288.0 56.6 450.6 5.2 287.5 23.2 134.8 1975—1........................... 260.4 698.4 60.6 12.1 3.2 281 .9 285.2 55.4 438.0 5.3 271 .2 21 .8 139.8 II......................... 269.0 703.2 63.7 12.7 3.3 284.8 281.4 57.3 434.2 5.8 270.1 17.7 140.6 Ill....................... 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 Period Total Durable du N r o a n bl ­ e Mining R ro a a i d l­ Air Other Electric and G a o s t her C ni o c m ati m on u s ­ Other1 T A (S o . . R A ta . . ) l 1971.......................... 81.21 14.15 15.84 2.16 1.67 1.88 1.38 12.68 2.44 10.77 18.05 1972......................... 88.44 15.64 15.72 2.45 1.80 2.46 1.46 14.48 2.52 11.89 20.07 1973......................... 99.74 19.25 18.76 2.74 1.96 2.41 1.66 15.94 2.76 12.85 21.40 1974.......................... 112.40 22.62 23.39 3.18 2.54 2.00 2.12 17.93 2.92 13.96 22.05 1974—1.................... 24.10 4.74 4.75 .68 .50 .47 .34 3.85 .52 3.19 5.05 107.27 II................. 28.16 5.59 5.69 .78 .64 .61 .49 4.56 .75 3.60 5.46 111.40 Ill................. 28.23 5.65 5.96 .80 .64 .43 .58 4.42 .78 3.39 5.57 113.99 IV................. 31.92 6.64 6.99 .91 .78 .48 .71 4.80 .87 3.78 5.97 116.22 1975—1.................... 25.82 5.10 5.74 .91 .59 .44 .62 3.84 .58 3.11 4.88 114.57 II.................. 28.43 5.59 6.55 .97 .71 .47 .77 4.15 .79 3.22 5.19 112.46 Ill................. 27.79 5.16 6.51 .94 .62 .50 .85 4.16 .91 3.14 5.00 112.16 IV................. 30.74 5.99 7.30 .97 .62 .43 .93 4.85 .85 3.26 5.52 111.80 1976—1................... 26.56 4.94 6.12 .89 .49 .35 .67 4.41 .65 8.04 118.70 II2................ 30.19 5.65 7.19 .97 .51 .39 .82 5.01 .86 8.79 119.62 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

A42 REAL ESTATE CREDIT □ APRIL 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 IV I II III IV ALL HOLDERS................................................. 499,767 564,825 634,954 688,652 695,369 '709,153 '724,993 '741,259 1- to 4-family.................................................... 307,204 345,372 384,738 412,168 415,607 425,132 436,511 447,583 Multifamily....................................................... 67,387 76,667 85,296 91,222 91,522 '91,733 '92,316 '93,653 Commercial....................................................... 92,318 107,349 125,572 140,965 142,701 145,353 148,182 151,058 Farm................................................................... 32,858 35,437 39,348 44,297 45,539 46,935 47,984 48,965 PRIVATE FINANCIAL INSTITUTIONS.. 394,239 450,000 505,400 542,552 546,689 558,179 569,499 580,314 253,581 288,018 320,420 340,007 342,313 350,198 358,275 365,608 Multifamily................................................. 52,472 59,398 64,750 68,161 68,095 68,453 68,931 69,579 Commercial....................................................... 78,330 92,063 108,735 121,948 123,684 126,634 129,263 131,939 9,856 10,521 11,495 12,436 12,597 12,894 13,030 13,188 82,515 99,314 119,068 132,105 131,903 133,012 134,025 135,125 48,020 57,004 67,998 74,758 74,696 75,356 75,979 76,616 Multifamily............................................. 3,984 5,778 6,932 7,619 7,176 6,816 6,701 6,621 26,306 31,751 38,696 43,679 43,924 44,598 45,032 45,537 Farm............................................................... 4,205 4,781 5,442 6,049 6,107 6,242 6,313 6,351 Mutual savings banks...................................... 61,978 67,556 73,230 74,920 75,157 75,796 76,429 77,127 1- to 4-family................................................ 38,641 41,650 44,246 44,670 44,795 45,175 45,552 45,968 14,386 15,490 16,843 17,234 17,291 17,433 17,579 17,739 8,901 10,354 12,084 12,956 12,996 13,112 13,221 13,343 Farm............................................................... 50 62 57 60 75 76 77 77 174,250 206,182 231,733 249,293 252,442 261,336 270,600 278,704 142,275 167,049 187,750 201,553 204,099 211,290 218,780 225,332 Multifamily................................................... 17,355 20,783 22,524 23,683 23,831 24,409 24,895 25,362 Commercial................................................... 14,620 18,350 21,459 24,057 24,512 25,637 26,925 28,010 Life insurance companies................................ 75,496 76,948 81,369 86,234 87,187 88,035 88,445 89,358 1- to 4-family................................................ 24,645 22,315 20,426 19,026 18,723 18,377 17,964 17,692 Multifamily................................................... 16,747 17,347 18,451 19,625 19,797 19,795 19,756 19,857 Commercial................................................... 28,503 31,608 36,496 41,256 42,252 43,287 44,085 45,049 Farm................."............................................ 5,601 5,678 5,996 6,327 6,415 6,576 6,640 6,760 FEDERAL AND RELATED AGENCIES.. 39,366 45,790 55,664 72,380 76,010 79,952 84,522 89,073 1- to 4-family.................................................... 26,416 30,170 35,579 46,322 48,455 51,195 54,697 58,436 Multifamily....................................................... 4,601 6,063 8,364 11,329 11,995 12,348 12,753 12,992 Commercial...................................................... 11 Farm................................................................... 8,338 9,557 11,721 14,729 15,560 16,409 17,072 17,645 Government National Mortgage Association.. 5,332 5,113 4,029 4,846 5,599 5,610 6,534 7,438 1- to 4-family................................................ 2,733 2,513 1,455 2,248 2,787 2,787 3,692 4,728 Multifamily.................................................. 2,588 2,600 2,574 2,598 2,812 2,823 2,842 2,710 Commercial.................................................. 11 Farmers Home Administration....................... 819 837 1,200 1,600 1,700 1,800 1,900 2,000 1- to 4-family................................................ 398 387 550 734 780 826 872 918 Farm............................................................... 421 450 650 866 920 974 1,028 1,082 Federal Housing and Veterans Administra­ tions ............................................................ 3,389 3,338 3,476 4,015 4,047 4,297 4,681 5,004 2,517 2,199 2,013 2,009 1,879 1,915 1,951 1,986 Multifamily................................................... 872 1,139 1,463 2,006 2,168 2,382 2,730 3,018 Federal National Mortgage Association.... 17,791 19,791 24,175 29,578 29,754 30,015 31,055 31,824 16,681 17,697 20,370 23,778 23,743 23,988 25,049 25,813 Multifamily................................................... 1,110 2,094 3,805 5,800 6,011 6,027 6,006 6,011 Federal land banks (farm only)................... 7,917 9,107 11,071 13,863 14,640 15,435 16,044 16,563 Federal Home Loan Mortgage Corporation. 964 1,789 2,604 4,586 4,608 4,944 5,033 4,987 1- to 4-family................................................ 934 1,754 2,446 4,217 4,231 4,543 4,632 4,588 Multifamily................................................... 30 35 158 369 377 401 401 399 GNMA Pools.................................................... 3,154 5,815 9,109 13,892 15,662 17,851 19,275 21,257 1- to 4-family.............................................. 3,153 5,620 8,745 13,336 15,035 17,136 18,501 20,403 Multifamily................................................... 1 195 364 556 627 715 774 854 INDIVIDUALS AND OTHERS2................. 66,162 69,035 73,890 73,720 72,670 '71,022 '70,972 '71,872 1- to 4-family................................................... 27,207 27,184 28,739 25,839 24,839 23,739 23,539 23,539 10,314 11,206 12,182 11,732 11,432 '10,932 '10,632 '11,082 13,977 15,286 16,837 19,017 19,017 18,719 18,919 19,119 Farm................................................................... 14,664 15,359 16,132 17,132 17,382 17,632 17,882 18,132 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 or more units. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APRIL 1976 □ REAL ESTATE CREDIT A43 FEDERAL NATIONAL MORTGAGE ASSOCIATION AND FEDERAL HOME LOAN MORTGAGE CORPORATION- SECONDARY MORTGAGE MARKET ACTIVITY (In millions of dollars) FNMA FHLMC Mortgage Mortgage Mortgage Mortgage Mortgage Mortgage End of holdings transactions commitments holdings transactions commitments period (during period) (during period) Total i F su H in re A ­ d - a g n V u t A e a e r - - d chases Sales p d M u er r a i i d o n e d g st O i a n n u g d t­ ­ Total prr VV ul A A A A- t C i v o e o n n n a ­ ­ l c P ha u s r e ­ s Sales p d M e u r r a i i d o n e d g s O t i a n u n g t d ­ ­ 1971............... 17,791 12,681 5,110 3,574 336 9,828 6,497 968 821 147 778 64 182 1972............... 19,791 14,624 5,112 3,699 211 8,797 8,124 1,789 1,503 286 1,297 408 1,606 198 1973............... 24,175 16,852 6,352 6,127 71 8,914 7,889 2,604 1,743 861 1,334 409 1,629 186 1974............., 29,578 19,189 8,310 6,953 5 10,765 7,960 4,586 1,904 2,682 2,191 52 4,553 2,390 1975............... 31,824 19,732 9,573 4,263 2 6,106 4,126 4,987 1,824 3,163 1,716 1,020 982 111 1975—Feb... 29,718 19,256 8,313 169 137 6,672 4,533 1 ,893 2,640 113 309 21 2,070 Mar.. 29,754 19,277 8,304 151 1 639 6,636 4,608 1 ,887 2,722 113 19 52 1 ,040 Apr... 29,815 19,282 8,337 211 913 6,890 4,634 1,890 2,744 121 71 297 1,161 May.. 29,858 19,251 8,395 247 621 6,615 4,773 1,920 2,854 203 38 42 969 June.. 30,015 19,282 8,498 326 557 6,549 4,944 1,936 3,008 210 5 28 700 July. . 30,351 19,385 8,693 538 575 6,119 5,015 1 ,943 3,072 161 63 139 530 Aug... 30,777 19,507 8,942 594 814 5,888 4,942 1,863 3,080 98 145 132 509 Sept... 31,055 19,560 9,122 488 575 5,399 5,033 1,852 3,181 148 31 79 403 Oct... 31,373 19,641 9,309 508 282 4,685 5,119 1,843 3,276 176 59 45 201 Nov... 31,552 19,648 9,430 372 332 4,385 4,971 1,834 3,137 104 225 50 124 Dec... 31,824 19,732 9,573 451 517 4,126 4,987 1,824 3,163 69 30 71 111 1976—Jan.. . 31,772 19,674 9,554 76 189 3,170 4,958 1,816 3,142 47 57 42 99 Feb.. . 31,618 19,541 9,521 56 55 355 3,201 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.-under­ by 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. FEDERAL NATIONAL MORTGAGE ASSOCIATION AUCTIONS OF COMMITMENTS TO BUY HOME MORTGAGES Date of auction Item 1975 1976 Oct. 20 Nov. 3 Nov. 17 Dec. 1 Dec. 15 Dec. 29 Jan.12 Jan. 26 Feb. 9 Feb. 23 Mar. 8 Mar. 22 Amounts (millions of dollars): Govt.-underwritten loans Offered1.................................... 43.2 69.8 293.1 255.9 287.1 95.3 58.4 103.9 252.2 126.9 299.9 146.3 Accepted.................................. 23.2 41.7 180.6 138.5 158.8 52.7 31 .5 57.7 179.9 81.2 171.9 121.6 Conventional loans Offered1.................................... 9.7 19.6 68.6 73.9 69.7 41.8 42.7 33.4 57.8 44.0 75.4 46.2 Accepted.................................. 9.2 15.2 34.6 40.5 31.2 11.8 32.1 24.7 36.9 23.3 45.0 33.7 Average yield (per cent) on short­ term commitments 2 Govt.-underwritten loans......... 9.65 9.32 9.33 9.32 9.31 9.29 9.13 9.07 9.07 9.04 9.06 9.03 Conventional loans................... 9.81 9.54 9.40 9.38 9.36 9.35 9.28 9.22 9.17 9.14 9.15 9.13 1 Mortgage amounts offered by bidders are total bids received. period of 12 years for 30-year loans, without special adjustment for 2 Average accepted bid yield (before deduction of 38 basis-point fee FNMA commitment fees and FNMA stock purchase and holding requirepaid for mortgage servicing) for home mortgages assuming a prepayment ments. Commitments mature in 4 months. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 REAL ESTATE CREDIT □ APRIL 1976 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 136.7 137.8 138.6 140.3 142.0 143.0 144.9 FHA.............................................................. 85.0 84.9 84.1 84.1 84.3 85.0 85.1 VA.................................................................. 51.7 52.9 54.5 56.2 57.7 58.0 59.8 Commercial banks......................................... 11.1 11.0 10.7 10.4 10.5 9.6 9.7 FHA.............................................................. 7.8 7.6 7.4 7.2 7.2 6.4 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 r27.3 27.2 27.0 FHA.............................................................. 15.3 15.1 15.0 14.8 14.7 14.7 14.5 VA.................................................................. 12.9 12.8 12.8 12.7 r 12.6 12.5 12.5 Savings and loan assns................................. FHA.............................................................. } 29.8 ) 29.7 } 29.9 } 29.9 } 29.9 J 30.2 30.4 VA.................................................................. Life insurance cos........................................... 13.3 13.1 12.9 12.7 12.5 12.2 12.1 FHA.............................................................. 9.0 8.8 8.7 8.6 8.4 8.2 8.1 V A................................................................. 4.3 4.3 4.2 4.2 4.1 4.0 4.0 Others............................................................... 54.3 56.1 57.4 59.9 61 .6 62.2 65.7 FHA............................................................. VA................................................................. Note.—VA-guaranteed residential mortgage debt is for 1- to 4-family Detail by type of holder partly estimated by Federal Reserve for first properties while FHA-insured includes some debt in multifamily structures. and third quarters, and for most recent quarter. COMMITMENTS OF LIFE INSURANCE COMPANIES FOR INCOME PROPERTY MORTGAGES Averages Total Period N of u l m oa b n e s r ( c m o ( a i m d m l o l m i l o o l u a i n t r n s t s e t ) d o f ( o th a f m o L d u o o o s l a u a l n a n n r t d s ) s ( C p in o e r t r n a e t c r 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 c a i a e n o l n - u t e ) C ( a p t p e io i r t n a c l e r i n z a t a t ) e ­ co D r v a e e ti r b o a t ge P co er n s c t e a n n t t 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—Dec.................. 37 140.0 3,784 10.28 19/10 74.8 11 .0 1 .33 11.3 1975—Jan................... 31 43.8 1 ,414 10.44 18/4 71 .9 11 .0 1 .33 11.9 Feb.................. 46 94.6 2,057 10.08 22/11 74.3 10.9 1 .34 11.0 Mar.................. 46 109.6 2,382 10.37 23/1 74.1 11 .3 1 .34 11 .3 Apr.................. 32 108.4 3,386 10.02 23/0 75.6 10.8 1.36 10.8 M ay................. 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 Oct................... 57 144.7 2,538 10.29 20/10 74.3 10.7 1 .28 11 .3 Nov................. 47 252.8 5,378 10.24 22/7 72.7 10.9 1 .35 11.2 Dec.................. 52 159.4 3,065 10.15 23/4 73.7 11 .0 1 .34 11 .0 Note.—American Life Insurance Association data for new commitments to cases where information was available or estimates could be made: of $100,000 and over each on mortgages for multifamily and nonresidential capitalization rate (net stabilized property earnings divided by property nonfarm properties located largely in the United States. The 15 companies value); debt coverage ratio (net stabilized earnings divided by debt service); account for a little more than one-half of both the total assets and the and per cent constant (annual level payment, including principal and nonfarm mortgages held by all U.S. life insurance companies. Averages, interest, per $100 of debt). All statistics exclude construction loans, which are based on number of loans, vary in part with loan composition increases in existing loans in a company’s portfolio, reapprovals, and loans by type and location of property, type and purpose of loan, and loan secured by land only. amortization and prepayment terms. Data for the following are limited Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APRIL 1976 □ REAL ESTATE CREDIT AND CONSUMER CREDIT A45 TERMS AND YIELDS ON NEW HOME MORTGAGES Conventional mortgages FHA- Terms i Yields (per cent) in insured primary market loans—Yield Period in private C ra o c te e n n t ( r t p a ) e c r t ( F p c e e h e r a s c r g e a e n n s t d ) 2 M (y a e tu ar r s it ) y L (p o e a r r a n t / c i p e o r n ic t) e pr o P i f c u e d r c o ( h t ll h a a o s r u e s) s. (t a d h m L o o l o u o la a s u r . n n s o ) t f F s H er L ie B s B 3 s H er U ie D s4 s m ec a o r n k d e a t r 5 y 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 1975............................. 8.75 1.54 26.8 76.1 44.6 33.3 9.01 9.10 9.19 1975—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.................. 8.74 1.65 27.6 76.5 46.4 34.8 9.01 9.20 9.41 Dec.................. 8.74 1.65 27.8 76.9 45.9 34.7 9.01 9.15 9.32 1976—Jan................... 8.71 1 .74 27.4 76.9 47.2 35.4 8.99 9.05 9.06 Feb.p............... 8.69 1 .50 26.0 75.0 45.2 33.5 8.94 9.00 9.04 1 Weighted averages based on probability sample survey of character­ (as shown in first column of this table) and an assumed prepayment at istics of mortgages originated by major institutional lender groups (in­ end of 10 years. cluding mortgage companies) for purchase of single-family homes, as 4 Rates on first mortgages, unweighted and rounded to the nearest compiled by Federal Home Loan Bank Board in cooperation with Federal 5 basis points. Deposit Insurance Corporation. Data are not strictly comparable with 5 Based on opinion reports submitted by field offices of prevailing earlier figures beginning Jan. 1973. local conditions as of the first of the succeeding month. Yields are derived 2 Fees and charges—related to principal mortgage amount—include from weighted averages of private secondary market prices for Sec. 203, loan commissions, fees, discounts, and other charges, but exclude closing 30-year mortgages with minimum downpayment and an assumed pre­ costs related solely to transfer of property ownership. payment at the end of 15 years. Any gaps in data are due to periods of 3 Effective rate, reflecting fees and charges as well as contract rates adjustment to changes in maximum permissible contract interest rates. 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—Mar.. 10.50 10.92 12.82 13.04 17.23 12.29 16.69 13.15 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 20.74 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 13.60 19.49 21.11 Dec.. 11.62 11.71 13.27 13.60 17.21 13.10 17.89 1975—Jan... 11.61 11.66 13.28 13.60 17.12 13.08 17.27 13.60 19.80 21.09 Feb... 11.51 12.14 13.20 13.44 17.24 13.07 17.39 Mar.. 11 .46 11 .66 13.07 13.40 17.15 13.07 17.52 13.59 20.00 20.82 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 13.78 19.87 20.93 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 13.43 19.66 21.09 Dec.. 11.25 11.83 13.11 13.46 17.13 13.19 17.86 1976—Jan... 11 .21 11 .76 13.14 13.40 17.08 13.18 17.25 Feb.. 11.18 11 .77 13.02 13.24 17.14 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

A46 CONSUMER CREDIT □ APRIL 1976 INSTALMENT CREDIT-TOTAL OUTSTANDING, AND NET CHANGE (In millions of dollars) 1975 1976 Holder, and type of credit 1973 1974 1975 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Amounts outstanding (end of period) TOTAL........................................................... 148,273 158,101 161,819 156,765 157,720 158,390 159,200 161,819 160,745 160,094 By holder: Commercial banks................................ 71,871 75,846 75,710 74,701 75,024 75,286 75,174 75,710 75,342 75,010 Finance companies............................... 37,243 38,925 38,932 38,340 38,375 38,411 38,642 38,932 38,737 38,660 Credit unions......................................... 19,609 22,116 25,354 24,043 24,510 24,706 24,934 25,354 25,250 25,492 16,395 17,933 18,328 16,172 16,232 16,444 16,860 18,328 17,771 17,192 Others2................................................... 3,155 3,281 3,495 3,509 3,579 3,543 3,590 3,495 3,645 3,740 By type of credit: Automobile, total.................................. 51,274 52,209 53,629 52,545 52,852 53,286 53,479 53,629 53,318 53,519 Commercial banks........................... 31,502 30,994 30,198 30,000 30,031 30,259 30,235 30,198 29,862 29,872 Purchase............................................. 18,997 18,687 17,620 17,773 17,737 17,848 17,761 17,620 17,500 17,409 Direct.................................................. 12,505 12,306 12,578 12,227 12,294 12,411 12,474 12,578 12,363 12,463 Finance companies........................... 11,927 12,435 13,364 12,982 13,066 13,203 13,325 13,364 13,407 13,490 Credit unions.................................... 7,456 8,414 9,653 9,149 9,329 9,403 9,491 9,653 9,612 9,704 Others................................................. 389 366 414 414 426 421 428 414 437 453 Mobile homes: Commercial banks........................... 8,340 8,972 8,420 8,583 8,566 8,519 8,502 8,420 8,351 8,279 Finance companies........................... 3,378 3,570 3,504 3,498 3,499 3,498 3,519 3,504 3,464 3,440 Home improvement, total................... 7,453 8,398 8,301 8,329 8,372 8,374 8,361 8,301 8,263 8,254 4,083 4,694 4,813 4,757 4,797 4,824 4,827 4,813 4,777 4,757 Revolving credit: Bank credit cards.............................. 6,838 8,281 9,078 8,259 8,414 8,450 8,500 9,078 9,150 8,987 Bank check credit............................. 2,254 2,797 2,883 2,793 2,826 2,834 2,822 2,883 2,911 2,912 All other................................................ 68,736 73,874 76,004 72,757 73,192 73,430 74,018 76,004 75,287 74,703 Commercial banks, total................ 18,854 20,108 20,318 20,308 20,390 20,401 20,289 20,318 20,290 20,203 12,873 13,771 14,035 13,856 13,935 14,005 13,943 14,035 14,049 14,010 Finance companies, total................ 21,021 21,927 21,465 21,119 21,104 21,037 21,158 21,465 21,279 21,152 16,587 17,176 17,179 16,868 16,858 16,822 16,942 17,179 17,035 16,952 11,564 13,037 14,937 14,170 14,443 14,559 14,692 14,937 14,878 15,020 Retailers.............................................. 16,395 17,933 18,328 16,172 16,232 16,444 16,860 18,328 17,771 17,192 Others................................................. 902 869 956 988 1,022 989 1,019 956 1,069 1,136 Net change (during period)3 TOTAL........................................................... 20,826 9,824 3,719 637 759 830 805 894 1,295 1,169 By holder: 11,002 3,971 -134 209 295 309 233 310 208 475 Finance companies............................... 5,155 1,682 7 21 95 36 157 34 260 198 2,696 2,507 3,237 291 428 255 270 471 387 420 1,632 1,538 395 181 -107 258 84 125 185 58 Others..................................................... 341 126 214 -65 49 -29 61 -44 254 17 By type of credit: Automobile, total................................. 6,980 935 1,420 213 385 389 404 540 488 632 4,196 -508 -796 8 117 164 163 260 -44 293 2,674 -310 -1,067 -95 6 76 33 48 40 34 Direct.................................................. 1,523 -199 272 103 111 88 130 213 -84 259 Finance companies........................... 1,753 508 929 126 91 103 144 89 275 174 1,024 958 1,239 86 154 122 91 184 203 165 Other................................................... 7 -23 48 -7 23 1 5 6 54 * Mobile homes: Commercial banks........................... 1,933 634 -553 -24 -17 -62 -6 -61 -26 -45 Finance companies........................... 462 192 -66 -11 -10 -7 26 -10 -28 -19 1,196 946 -100 -4 19 -6 38 23 106 57 Commercial banks........................... 483 612 114 24 27 23 42 41 30 32 Revolving credit: 1,428 1,442 798 113 106 78 29 -49 107 133 Bank check credit............................. 479 543 86 12 14 17 2 13 23 19 All other................................................. 8,344 5,141 2,133 338 262 420 312 440 625 392 Commercial banks, total................. 2,479 1,257 213 76 48 89 2 107 118 43 1,491 900 265 48 45 119 -6 149 100 33 Finance companies, total............... 2,520 906 -462 -58 49 -27 20 -4 20 49 1,675 589 — 3 -38 59 -7 15 23 40 114 Credit unions.................................... 1,591 1,473 1,900 189 260 127 173 274 173 242 Retailers.............................................. 1,6 1 3 2 2 2 1, - 5 3 3 3 8 39 8 5 7 - 1 4 8 9 1 -10 1 7 3 - 2 2 5 8 8 3 8 3 4 - 1 6 2 1 5 1 18 2 5 9 58 * 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APRIL 1976 □ CONSUMER CREDIT A47 INSTALMENT CREDIT EXTENSIONS AND REPAYMENTS (In millions of dollars) 1975 1976 Holder, and type of credit 1973 1974 1975 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Extensions1 TOTAL........................................................... 164,527 166,170 166,833 14,427 14,555 14,832 14,877 15,295 16,205 15,824 By holder: Commercial banks............................... 72,216 72,602 73,186 6,362 6,529 6,518 6,599 6,796 6,687 6,939 Finance companies............................... 43,221 41,809 39,543 3,387 3,459 3,412 3,712 3,530 4,231 4,054 Credit unions......................................... 21,143 22,403 24,151 2,056 2,156 2,187 1,995 2,381 2,253 2,248 Retailers2................................................ 25,440 27,034 27,369 2,479 2,164 2,531 2,302 2,431 2,578 2,347 Others3................................................... 2,507 2,322 2,584 144 247 183 268 158 456 236 By type of credit: Automobile, total................................. 46,486 43,431 46,530 4,032 4,235 4,189 4,218 4,405 4,511 4,378 Commercial banks........................... 29,368 26,407 26,693 2,355 2,436 2,434 2,460 2,591 2,361 2,545 Purchase............................................. 17,497 15,575 14,758 1,264 1,301 1,333 1,310 1,450 1,314 1,377 Direct.................................................. 11,871 10,831 11,936 1,091 1,135 1,101 1,150 1,141 1,047 1,168 Finance companies........................... 9,685 8,851 9,651 805 865 836 831 897 987 912 Credit unions..................................... 7,009 7,788 9,702 840 873 878 885 875 1,068 881 Others................................................. 424 385 484 31 61 41 42 42 95 40 Mobile homes: Commercial banks........................... 4,437 3,486 2,349 211 222 198 233 203 209 211 Finance companies...................... 1,673 1,627 1,018 82 83 81 97 88 79 71 Home improvement, total.................. 4,828 4,854 4,333 363 388 392 409 418 459 429 Commercial banks........................... 2,489 2,790 2,515 219 224 238 243 253 231 241 Revolving credit: Bank credit cards............................. 13,862 17,098 19,567 1,689 1,737 1 ,698 1,752 1,719 1,840 1,931 Bank check credit............................. 3,373 4,228 4,214 353 350 357 348 412 397 407 89,864 91,455 88,818 7,697 7,539 7,915 7,819 8,051 8,711 8,397 Commercial banks, total................ 18,683 18,602 17,844 1,535 1,560 1,593 1,562 1,619 1,649 1,604 Personal loans............................... 12,927 13,177 12,623 1,083 1,105 1,144 1,076 1,178 1,145 1,139 Finance companies, total............... 31,032 30,764 28,654 2,482 2,489 2,474 2,771 2,527 3,139 3,041 Personal loans............................... 18,915 18,827 18,406 1,653 1,624 1 ,613 1,674 1,513 1,980 1,916 Credit unions..................................... 13,768 14,228 13,992 1,169 1,238 1,269 1,074 1,461 1,141 1,319 Retailers............................................. 25,440 27,034 27,369 2,479 2,164 2,531 2,302 2,431 2,578 2,347 Others................................................. 941 827 959 32 89 48 111 14 204 86 Repayments1 TOTAL........................................................... 143,701 156,346 163,113 13,790 13,795 14,002 14,072 14,401 14,910 14,656 By holder: Commercial banks................................ 61,214 68,631 73,320 6,153 6,234 6,209 6,367 6,486 6,479 6,464 Finance companies............................... 38,066 40,127 39,536 3,366 3,364 3,376 3,555 3,496 3,971 3,856 Credit unions......................................... 18,447 19,896 20,914 1,764 1,728 1,932 1,725 1,910 1,866 1,828 23,808 25,496 26,974 2,298 2,271 2,273 2,218 2,306 2,393 2,289 Others3................................................... 2,166 2,196 2,370 208 198 212 208 202 202 219 By type of credit: 39,506 42,496 45,110 3,818 3,849 3,800 3,814 3,865 4,023 3,746 Commercial banks........................... 25,172 26,915 27,489 2,347 2,319 2,271 2,297 2,331 2,405 2,252 Purchase............................................. 14,822 15,886 15,825 1,359 1,295 1,257 1,277 1,402 1,274 1,343 Direct.................................................. 10,348 11,028 11,663 988 1,024 1,013 1,020 928 1,131 909 Finance companies........................... 7,932 8,343 8,722 679 773 733 687 808 712 738 5,985 6,830 8,463 755 719 756 794 691 865 716 Others.................................................. 417 408 436 38 38 40 37 36 41 40 Mobile homes:. Commercial banks........................... 2,504 2,852 2,902 235 239 260 239 264 235 256 Finance companies........................... 1,211 1,435 1,084 93 94 88 72 98 107 90 Home improvement, total.................. 3,632 3,908 4,434 367 369 398 371 395 353 372 Commercial banks........................... 2,006 2,178 2,400 195 197 214 202 212 201 209 Revolving credit: Bank credit cards 12,434 15,656 18,769 1,576 1,631 1,619 1,723 1,768 1,733 1,798 Bank check credit............................. 2,894 3,685 4,128 341 336 340 346 399 374 388 All other................................................. 81,520 86,314 86,689 7,359 7,277 7,496 7,507 7,611 8,086 8,005 16,204 17,345 17,635 1,459 1,512 1,504 1,560 1,512 1,531 1,561 Personal loans............................... 11,436 12,277 12,361 1,035 1,060 1,025 1,082 1,029 1,045 1,106 Finance companies, total............... 28,512 29,858 29,116 2,540 2,440 2,501 2,751 2,531 3,119 2,992 Personal loans............................... 17,240 18,238 18,403 1,691 1,565 1,620 1,659 1,490 1,940 1,802 12,177 12,755 12,092 981 978 1,142 901 1,187 968 1,077 Retailers.............................................. 23,808 25,496 26,974 2,298 2,271 2,273 2,218 2,306 2,393 2,289 Others.................................................. 819 860 872 81 76 76 77 75 75 86 1 Monthly figures are seasonally adjusted. 3 Mutual savings banks, savings and loan associations, and auto dealers. 1 Excludes 30-day charge credit held by retailers ,oil and gas companies, and travel and entertainment companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 INDUSTRIAL PRODUCTION □ APRIL 1976 MARKET GROUPINGS (Seasonally adjusted, 1967 = 100) 1967 1975 1975 1976 pro­ aver­ Grouping por­ age tion Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan.r Feb.p Mar. Total index. 100.0 113. 110.0 109.9 110.1 111.1 112.2 114.2 116.2 116.7 417.6 118.4 119.4 120.2 120.9 Products, total.................. 62.21 115.7 112.4 <113.0 113.4 114.2 115.3 115.8 116.9 116.9 <=118.0 119.3 120.2 121.1 121.5 Final products............... 48.95 115.5 112.2 112.6 113.7 114.5 115.7 115.9 116.9 117.0 117.9 119.0 119.7 120.5 121.0 Consumer goods.... 28.53 124.1 118.2 C119.7 121.2 123.3 125.5 125.7 126.8 127.0 c128.9 130.2 130.9 131.6 132.2 Equipment................ 20.42 103.6 103.9 103.0 102.9 102.2 102.2 102.3 102.8 102.6 402.5 103.5 104.2 105.0 105.4 Intermediate products. 13.26 116.3 112.7 113.4 112.4 112.8 114.3 115.4 116.6 117.0 118.5 120.3 122.2 122.9 123.3 Materials........................... 37.79 110.5 105.9 105.2 104.9 106.0 106.8 111.5 115.1 116.5 c116.8 116.8 118.1 118.8 120.2 Consumer goods Durable consumer goods................ 7.86 112.6 103.1 107.8 110.5 113.2 115.9 116.1 118.3 118.3 118.8 119.5 120.8 122.4 123.8 Automotive products................. 2.84 99.2 86.8 93.6 97.6 103.4 106.9 105.9 106.7 108.9 >109.3 111.3 111 .6 115.1 117.2 Autos........................................ 1.87 86.9 73.1 82.4 86.3 93.2 97.7 96.8 97.9 101.2 100.0 100.1 99.2 105.2 108.0 Auto parts and allied goods. .97 122.8 113.2 115.2 119.3 122.8 124.8 123.2 123.5 123.9 =127.2 132.7 135.2 134.2 134.5 Home goods................................ 5.02 120.2 112.3 115.9 117.8 118.8 121.0 121.9 125.0 123.6 124.2 124.1 126.1 126.6 127.5 Appliances, TV, and radios. 1.41 101.9 85.0 96.7 102.4 103.5 =104.8 106.5 108.4 105.4 104.6 106.0 110.3 110.6 112.0 Appliances and A/C......... .92 118.4 99.1 114.2 118.4 118.3 118.9 122.2 124.1 123.4 122.8 123.9 128.5 129.7 TV and home audio.......... .49 70.8 Carpeting and furniture 1. 133.8 127.9 127.8 128.6 131.1 135.5 136.0 137.6 137.9 139.3 138.7 140.4 143.1 Misc. home goods................. 2.53 124.6 121.0 121.4 121 .7 122.1 124.0 124.5 129.0 127.4 428.8 128.1 128.9 128.4 129.6 Nondurable consumer goods........... 20.67 128.4 *124.2 124.0 125.3 127.2 129.0 129.4 130.1 130.5 132.7 134.4 134. 135.0 135.4 Clothing.......................................... 4.32 98.7 90.9 89.2 94.4 97.7 101.6 102.0 101.5 104.5 106.2 108.2 109.5 Consumer staples......................... 16.34 136 132.7 133.3 133.5 134.9 136.3 136.6 137.8 137.3 4 39.7 141.4 141.5 141.6 142.1 Consumer foods and tobacco.,.. 8.37 125.3 120.7 122.7 122.4 <=124.2 125.5 125.8 126.4 127.2 130.0 130.6 131.3 131.5 132.2 Nonfood staples....................... 7.98 147.8 145.3 144.3 145.3 146.4 147.7 148.0 149.9 148.1 450.0 152.7 152.1 152.2 152.6 Consumer chemical products.. 2.64 161 158.2 157.6 158.4 159.2 161.2 160.4 161.6 161.7 167.9 169.0 167.9 165.9 Consumer paper products____ 1.91 125.0 120.9 118.4 122.8 123.3 124.1 126.7 127.7 126.4 125.5 131.9 132.0 133.3 Consumer fuel and lighting... 3.43 150.0 c148.9 148.6 147.8 149.4 150.4 150.3 153.2 149.5 449.8 151.7 151.0 152.1 Residential utilities.......... 2.25 161.9 163.1 161.9 160.9 161.3 160.5 161.1 164.8 160.1 461.5 163.1 Equipment Business equipment....................... 12.74 116.6 117.0 115.4 115.0 113.9 113.9 114.9 115.6 115.7 <=116.5 118.2 119.1 120.6 121.4 Industrial equipment............... 6.77 116.7 118.8 116.4 115.3 114.0 113.3 113.4 114.5 115.4 416.3 118.4 118.4 119.5 120.3 Building and mining equip. 1.45 133.6 137.7 132.3 131.7 127.7 126.9 128.3 129.7 133.1 136.5 138.0 139.8 140.1 140.5 Manufacturing equipment., 3.85 105.9 106.6 105.6 105.0 104.3 105.5 405.2 104.5 104.0 103.6 105.9 106.3 107.0 107.8 Power equipment................. 1.47 128.2 131.8 128.9 126.2 125.8 120.3 120.8 125.7 127.9 429.3 131.3 132.0 131.9 133.0 Commercial, transit, farm equip. 5.97 116.6 115.1 114.2 114.7 113.9 114.6 416.4 116.9 116.2 116.7 118.0 119.8 121.6 122.6 Commercial equipment................. 3.30 125.0 127.8 123.2 121 .5 120.7 123.0 123.4 122.6 123.3 123.3 125.3 126.9 128.3 129.4 Transit equipment................... 2.00 98.0 88.8 92.2 98.6 98.0 98.0 101.5 105.0 100.4 101.7 102.9 105.2 107.8 108.5 Farm equipment....................... .67 130.5 130.2 135.7 129.0 127.3 122.9 127.7 124 128.0 428.6 126.8 128.5 130.1 Defense and space equipment. 7.68 82.0 82.1 82.4 82 82.9 82.6 81.4 81.6 81.1 c79.4 79.0 79.3 79.1 78.9 Military products................. 5.15 80.8 80.3 80.7 82.0 82.0 82.1 80.6 80.7 80.2 77.3 11.0 76.5 76.5 76.1 Intermediate products Construction products.......... 5.93 112.4 109.1 110.1 107.6 106.8 108.0 109.3 112.0 112.5 112.5 114.2 116.7 117.0 117.2 Misc. intermediate products. 7.34 119.7 115.6 116.1 116.2 cl 17.4 119.3 120.3 120.3 120.7 423.3 125.4 126.7 127.6 Materials Durable goods materials.... 20.91 106.5 104.7 101.6 100.2 99. 100.3 106.1 108.7 c110.2 c110.9 110. 112.8 114.0 115.4 Consumer durable parts. 4.75 94.1 84.7 86.0 87.7 90.8 92.8 101.7 103.0 102.4 402.8 103.1 104.7 105.2 107.2 Equipment parts.............. 5.41 106.3 108.7 104.6 102.1 97.3 96.8 100.7 102.4 105.2 407 107.9 108.7 109.5 110.0 Durable materials n.e.c.. 10.75 112.1 111.4 106.9 104.7 105.1 105.3 111.0 114.5 116.3 416.1 115.7 118.6 120.2 121.9 Nondurable goods materials.......... 13.99 114.9 105.3 107.9 109.5 112.3 114.0 c118.3 123.4 125.0 <=124.9 125.7 126.0 126.3 126.8 Textile, paper, and chem. mat., 8.58 121.1 106.2 110.4 113.2 117.0 118.9 126.0 133.9 136.1 136 137.7 138.4 138.6 139.0 Nondurable materials n.e.c.... 5.41 105.0 103.9 104.0 103.7 105.1 106.2 106.0 106.7 107.3 406.9 106.6 106.8 107.1 107.4 Fuel and power, industrial........... 2.89 118.7 118.0 117.5 118.0 119.5 121.1 118.4 121.3 120.6 120.7 117.2 118.1 117.2 122.8 Supplementary groups Home goods and clothing. 9.34 110.3 102.3 103.6 106.9 109.1 112.0 112.8 114.2 114.7 415.8 116.7 118.4 119.1 120.0 Containers............................. 1.82 129.9 122.3 124.2 124.3 128.4 132.8 133.5 142.7 137.6 4 33 133.3 140.8 140.9 Gross value of products in market structure (In billions of 1963 dollars) Products, total........ 286.3 405.1 409.6 408.6 414.5 416.1 418.1 426.1 425.8 c430.9 435.1 438.2 441.3 443.2 Final products............... 221.4 315.3 319.0 319.4 325.0 325.2 326.3 332.9 333.7 <=336.5 339.1 340.8 343.1 345.4 Consumer goods... 156.3 213.2 217.6 217.8 223.6 224.9 225.4 230.8 231.7 <=234.9 237.1 237.7 239.0 240.3 Equipment................. 65.3 102.2 101.4 101.5 101.3 100.5 100.9 102.3 101.7 401.8 102.0 103.1 104.3 104.9 Intermediate products. 64.9 90.0 90.5 89.2 89 91.1 92.9 92.9 93.0 *94.1 96.0 97.5 98.0 98.2 For Note see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APRIL 1976 □ INDUSTRIAL PRODUCTION A49 INDUSTRY GROUPINGS (Seasonally adjusted, 1967 = 100) 1967 pro- 1974 1975 1976 Grouping p ti o o r n ­ age Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.r Jan.r Feb.? 88.55 112.2 107.7 107.9 108.2 109.5 110.6 112.8 114.7 115.8 c116.3 117.0 118.0 119.3 119.9 Durable................................................. 52.33 105.8 103.5 103.3 102.5 103.2 c103.4 105.4 107.0 107.6 c107.8 108.1 109.0 110.3 111 .2 Nondurable.......................................... 36.22 121 .5 113.7 114.8 C116.2 118.6 120.8 123.4 125.7 127.2 c128.7 130.0 131 .2 132.1 132.6 Mining and utilities................................ 11.45 127.5 128.8 c128.0 126.5 126.8 C127.5 127.0 127.8 127.0 127.6 127.7 128.9 127.7 130.4 Mining................................................... 6.37 106.5 108.9 108.5 105.9 106.3 106.4 105.0 105.3 106.4 ^106.9 105.4 106.0 102.9 107.2 Utilities................................................. 5.08 153.8 C154.1 153.1 152.3 152.6 c153.9 154.6 156.1 152.9 c153.9 155.8 157.6 158.7 159.6 Durable manufactures 12.55 105.5 105.1 103.2 99.8 100.8 100.7 104.1 106.1 105.9 c107.1 105.6 108.3 110.9 111.9 Primary metals.................................... 6.61 91.2 98.1 95.0 89.9 91.8 92.8 96.5 97.2 97.0 c98.1 95.1 99.9 103.9 105.5 Iron and steel, subtotal................. 4.23 96.1 103.1 99.4 90.1 88.7 87.0 90.4 91.3 93.2 96.0 92.2 96.2 101 .3 103.0 Fabricated metal products............... 5.94 114.8 112.9 112.4 100.9 110.9 109.7 112.7 116.1 115.9 117.3 117.3 117.7 118.7 119.2 Machinery and allied goods................... 32.44 104.0 101.5 101.9 101.7 102.3 102.4 103.7 105.0 105.8 106.2 106.8 106.5 107.5 108.3 Machinery............................................ 17.39 112.8 112.2 110.8 109.0 108.2 108.4 110.0 111 .7 112.9 114.2 115.1 114.9 115.9 116.7 Nonelectrical machinery............... 9.17 118.6 119.3 C116.8 113.7 112.3 112.9 115.1 116.7 117.7 119.2 119.9 119.5 120.1 120.9 Electrical machinery...................... 8.22 106.3 104.3 104.0 103.8 103.8 103.4 104.4 106.1 107.6 c108.6 109.6 109.9 111.3 112.1 Transportation equipment............... 9.29 88.3 81.0 84.7 87.6 90.5 91 .0 92.9 94.3 94.7 c94.1 95.5 94.2 95.9 97.4 Motor vehicles and parts............. 4.56 98.1 85.4 93.1 95.0 100.0 103.2 107.2 110.1 111 .0 109.4 110.4 109.6 113.7 117.7 Aerospace and misc. trans. eq... 4.73 79.0 76.7 76.6 80.4 81.3 79.3 79.1 79.2 79.0 c79.4 81 .1 79.4 78.7 77.7 Instruments.......................................... 2.07 133.7 130.6 131.1 129.7 C131.0 132.4 132.1 134.5 134.5 137.0 138.7 142.8 143.2 142.6 Ordnance, private and Govt............ 3.69 85.3 86.7 86.7 86.7 87.7 86.4 84.3 84.2 83.9 81 .7 78.7 77.8 77.6 77.3 Lumber, clay, and glass.......................... 4.44 109.2 102.6 104.8 105.9 107.0 c108.2 110.6 113.1 114.4 C112.6 113.9 118.1 117.9 118.3 Lumber and products........................ 1.65 109.9 99.8 104.1 108.0 110.3 112.0 114.5 115.5 116.8 C115 .0 116.1 122.2 121.4 Clay, glass, and stone products.... 2.79 108.8 104.2 105.4 104.7 105.1 106.2 108.3 111 .7 113.0 111 .2 112.6 115.7 115.9 Furniture and miscellaneous.................. 2.90 121.5 118.7 117.6 119.7 120.1 c121.1 123.1 124.3 124.6 C122.9 124.1 125.4 127.1 128.3 Furniture and fixtures....................... 1.38 109.5 106.7 105.6 109.6 107.9 109.4 109.6 110.6 110.8 111 .0 112.2 115.1 118.8 Miscellaneous manufactures............ 1.52 132.4 129.7 128.5 129.0 131.1 131 .8 135.3 136.7 137.2 C133.7 135.1 134.7 134.7 Nondurable manufactures 6.90 97.9 87.5 90.4 93.2 94.9 97.4 100.2 104.0 106.0 108.4 109.7 110.5 110.6 110.6 Textile mill products......................... 2.69 109.8 96.8 100.4 103.8 106.9 110.7 115.0 121.2 123.2 125.2 126.8 125.2 124.3 Apparel products................................ 3.33 94.6 86.4 88.2 90.9 91.5 92.9 95.8 96.1 98.0 «l 01 .3 103.2 106.0 Leather and products........................ .88 73.8 63.5 68.0 70.0 71.2 73.5 71 .7 81.2 83.8 c83.5 81 .5 83.4 84.9 Paper and printing.................................. 7.92 109.7 104.2 102.4 103.9 107.3 C107.4 110.8 113.9 114.8 CU 4.7 116.8 119.2 120.0 120.7 Paper and products............................ 3.18 115.8 104.5 105.8 105.8 109.5 111 .7 116.4 124.0 127.0 127.3 129.2 132.6 133.1 Printing and publishing..................... 4.74 105.5 104.0 100.2 102.6 105.9 104.4 107.1 107.1 106.5 106.2 108.5 110.1 111 .2 iiiii Chemicals, petroleum, and rubber.... 11.92 140.4 130.2 131.0 c132.4 136.2 c140.1 143.6 146.2 148.5 150.2 151.1 151.5 153.5 154.2 Chemicals and products................... 7.86 143.1 133.6 132.8 135.7 138.2 143.4 146.3 148.8 152.5 155.2 156.3 156.8 158.2 158.7 Petroleum products............................ 1.80 124.7 120.1 120.2 118.5 122.4 124.6 126.7 127.1 126.5 c126.8 128.7 124.2 125.9 121.2 Rubber and plastics products.......... 2.26 143.3 126.8 133.5 132.7 140.1 141.6 147.8 152.0 153.1 c151.5 151.2 155.1 159.0 9.48 124.6 120.0 cy 22.5 122.4 123.5 124.8 125.2 126.0 126.3 c128.0 129.3 130.7 131.2 131.9 Foods..................................................... 8.81 125.9 121.3 122.9 «123.7 125.1 126.3 126.7 127.4 127.3 c129.1 130.7 131 .9 132.6 133.2 Tobacco products............................... .67 108.0 102.6 115.9 103.8 102.2 104.8 105.7 109.3 111 .9 C113.7 109.9 114.8 Mining Metal, stone, and earth minerals.......... 1.26 109.9 113.4 113.3 106.2 101.5 105.0 107.2 107.2 108.0 «110.0 108.2 112.1 113.0 114.0 .51 121.7 125.4 125.8 114.8 110.6 110.3 119.2 118.5 119.8 122.1 120.9 124.8 126.1 Stone and earth minerals.................. .76 101.8 105.1 104.7 100.4 95.3 101.4 98.9 99.5 100.0 101.7 99.6 103.6 104.2 Coal, oilt and gas.................................... 5.11 105.7 107.7 107.4 105.8 107.6 106.7 104.4 104.8 106.1 105.9 104.7 104.5 100.4 105.5 Coal....................................................... .69 114.0 117.4 112.2 113.6 120.4 120.6 105.7 113.6 114.6 C119.9 107.8 109.4 104.8 126.4 Oil and gas extraction....................... 4.42 104.4 106.1 106.6 104.5 105.5 104.5 104.2 103.4 104.8 103.8 104.3 103.7 99.8 102.2 Utilities Electric...................................................... 3.90 164.9 c165 .3 c164.2 163.0 163.3 C164.9 c165.9 167.8 163.4 c165 .0 167.6 Gas............................................................ 1.17 117.1 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

A50 BUSINESS ACTIVITY; CONSTRUCTION □ APRIL 1976 SELECTED BUSINESS INDEXES (1967= 100, except as noted) Industrial production Manu­ Prices4 facturing2 In­ Ca­ Market dustry pacity Nonag­ utiliza­ Con­ ricul­ Period Products tion struc­ tural Total Whole­ in mfg. tion em­ Em­ Pay­ retail Con­ sale (1967 con­ ploy­ ploy­ rolls sales3 sumer com­ Mate­ Manu­ output tracts ment— ment modity Inter­ rials factur­ = 100) Total i Con­ Equip­ mediate ing sumer ment goods 195 5 58.5 56.6 54.9 59.5 48.9 62.6 61.5 58.2 90.0 76.9 92.9 61.1 59 80.2 87.8 195 6 61.1 59.7 58.2 61.7 53.7 65.3 63.1 60.5 88.2 79.6 93.9 64.6 61 81.4 90.7 195 7 61.9 61.1 59.9 63.2 55.9 65.3 63.1 61.2 84.5 80.3 92.2 65.4 64 84.3 93.3 195 8 57.9 58.6 57.1 62.6 50.0 63.9 56.8 56.9 75.1 78.0 83.9 60.3 - 64 86.6 94.6 195 9 64.8 64.4 62.7 68.7 54.9 70.5 65.5 64.1 81.4 81.0 88.1 67.8 69 87.3 94.8 196 0 66.2 66.2 64. 71.3 56.4 71.0 66.4 65.4 80.1 68.6 82.4 88.0 68.8 70 88.7 94.9 196 1 66.7 66.9 65.3 72. 55.6 72.4 66.4 65.6 77.6 70.2 82.1 84.5 68.0 70 89.6 94.5 196 2 72.2 72.1 70.8 77.7 61.9 76.9 72.4 71.4 81.4 78.1 84.4 87.3 73.3 75 90.6 94.8 196 3 76.5 76.2 74.9 82.0 65.6 81.1 77.0 75.8 83.0 86.1 86.1 87.8 76.0 79 91.7 94.5 196 4 81.7 81.2 79.6 86. 70.1 87.3 82.6 81.2 85.5 89.4 88.6 89.3 80.1 83 92.9 94.7 196 5 89.2 88.1 86.8 93.0 78.7 93.0 91.0 89.1 89.0 93.2 92.3 93.9 88.1 90 94.5 96.6 196 6 97.9 96.8 96.1 98.6 93.0 99.2 99.8 98.3 91.9 94.8 97.1 99.9 97.8 97 97.2 99.8 196 7 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 87.9 100.0 100.0 100.0 100.0 100 100.0 100.0 196 8 105.7 105. 105 106.6 104.7 105.7 105.7 105.7 87.7 113.2 103.2 101.4 108.3 109 104.2 102.5 196 9 110.7 109.7 109.0 111.1 106.1 112.0 112.4 110.5 86.5 123.7 106.9 103.2 116.6 114 109.8 106.5 197 0 106.6 106.0 104.5 110.3 96.3 111.7 107.7 105.2 78.3 123.1 107.7 98.1 114.1 119 116.3 110.4 197 1 106.8 106.4 104.7 115.7 89.4 112.6 107.4 105.2 75.0 145.4 108.1 94.2 116.7 130 121.2 113.9 197 2 115.2 113.8 111.9 123.6 95.5 121.1 117.4 114.0 78.6 165.3 111.9 97.6 131.5 142 125.3 119.8 197 3 125.6 123.4 121.3 131.7 106.7 131 .1 129.3 125.2 83.0 r179.5 116.8 103.2 149.2 160 133.1 134.7 197 4 124.8 123.1 121 .7 128.8 111 .7 128.3 127.4 124.4 78.9 r169.7 119.1 102.1 157.1 171 147.7 160.1 197 5 113.8 115.7 115.5 124.1 103.6 116.3 110.5 112.2 166.0 116.9 91 .4 151 .0 1975—Feb., 111 .2 113.7 113.3 118.8 105.3 115.2 107.4 109.2 5 68.2 139.0 116.6 91.2 143.5 179 157.2 171.3 Mar. 110.0 112.4 112.2 118.2 103.9 112.7 105.9 107.7 153.0 116.1 90.3 143.3 176 157.8 170.4 Apr. 109.9 '113.0 112.6 C119.7 103.0 113.4 105.2 107.9 189.0 116.1 89.9 144.7 179 158.6 172.1 May 110.1 113.4 113.7 121.2 102.9 112.4 104.9 108.2 67.0 182.0 116.2 90.1 144.7 184 159.3 173.2 J Ju u n ly e . , 1 1 1 1 1 2 . . 1 2 1 1 . 1 1 5 4 . . 3 2 1 1 1 1 4 5 . . 5 7 1 1 2 2 3 5 . . 3 5 1 1 0 0 2 2 . . 2 2 1 1 1 14 2 . . 3 8 1 10 0 6 6 . . 8 0 1 1 0 1 9 0 . . 5 6 1 1 7 6 4 5. . 0 0 1 1 1 1 5 6 . .4 9 8 8 9 9 . .8 7 1 1 4 4 6 8. . 7 4 1 1 8 9 6 0 1 1 6 6 0 2. . 3 6 1 1 7 7 3 5 . . 7 7 Aug. 114.2 115.8 115.9 125.7 102.3 115.4 111.5 112.8 r69.0 208.0 116.9 90.9 154.2 191 162.8 176.7 Sept. 116.2 116.9 116.9 126 102.8 116.6 115.1 114.7 no.7 157.0 117.4 92.0 157.0 189 163.6 177.7 Oct.. 116.7 116.9 117.0 127.0 102.6 117.0 116.5 115.8 166.0 117.8 92.5 158.4 192 164.6 178.9 Nov. C117.6 ;118.0 117.9 '128.9 =102.5 c118.5 =116.8 =116.3 148.0 117.8 92.4 158.9 192 165.6 178.2 Dec. 118.4 119.3 119.0 130.2 103.5 120.3 116.8 117.0 137.0 118.1 93.0 162.3 198 166.3 178.7 1976—Jan.7 119.4 120.2 119.7 130.9 104.2 122.2 118.1 118.0 183.0 118.7 94.0 165.9 197 166.7 179.4 Feb. 120.2 121 .1 120.5 131 .6 105.0 122.9 118.8 119.3 71.0 170.0 118.9 94.3 165.5 200 167.1 179.4 Mar. 120.9 121 .5 121 .0 132.2 105.4 123.3 120.2 119.9 119.2 94.7 167.0 179.8 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 first quarter 1975. includes data for Alaska and Hawaii beginning with 1959. Note.—All series: Data are seasonally adjusted unless otherwise noted. Prices: Bureau of Labor Statistics data. Capacity utilization: Based on data from Federal Reserve, McGraw- Hill Economics Department, and Dept, of Commerce. CONSTRUCTION CONTRACTS AND PRIVATE HOUSING PERMITS (In millions of dollars, except as noted) 1975 1976 Type of ownership and 1974 1975 type of construction Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. total construction contracts 1......... 93,685 90,237 4,955 6,574 9,598 9,143 9,324 9,044 10,037 7,692 7,767 5,573 5,431 6,390 6,149 By type of ownership: Public............................................ 32,062 31,415 2,031 2,182 2,768 2,875 3,891 3,784 3,040 2,725 2,544 1,597 1,724 1,655 1,719 Private 1....................................... 61,623 58,822 2,924 4,393 6,830 6,268 5,432 5,260 6,997 4,967 5,223 3,976 3,708 4,734 4,430 By type of construction: Residential building 1............... 33,567 31,347 f ,583 2,316 3,029 3,073 3,116 3,093 2,784 2,966 3,189 2,404 2,233 2,157 2,546 Nonresidential building............ 33,131 30,301 2,199 2,402 2,987 2,877 3,169 3,165 2,666 2,526 2,629 1,859 1,865 1,939 1,996 26,987 28,313 1,172 1,856 3,582 3,193 3,040 2,786 4,587 2,200 1,949 1,309 1,334 2,294 1,608 ’rivate housing units authorized... 1,074 925 701 677 837 912 949 1,042 995 1,095 1,079 1,085 1,028 *■1,120 1,127 (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

APRIL 1976 □ CONSTRUCTION A51 VALUE OF NEW CONSTRUCTION ACTIVITY (In millions of dollars) Private Public i Nonresidential Total 1 Conser­ Total d R en es ti i a ­ l Buildings P U ub ti l l i ­ c Total M ta i r l y i­ H w ig ay h­ v a a n ti d on Other Total In tr d ia u l s­ m C e o rc m ia ­ l b O in u g t i h s l e d 2 r ­ O i a t t n i h e d e s r de m ve e l n o t p­ 196 7 78,082 52,546 25.564 26,982 25,536 695 8,591 2,124 14,126 196 8 87,093 59,488 30.565 28,923 6,021 7,761 4,382 10,759 27,605 808 9,321 1,973 15,503 196 9 93,917 65,953 33,200 32,753 6,783 9,401 4,971 11,598 27,964 879 9,250 1,783 16,052 197 0 94,855 66,759 31,864 34,895 6,518 9,754 5,125 13,498 28,096 718 9,981 1,908 15,489 197 1 109,950 80.079 43.267 36.812 5,423 11,619 5,437 14,333 29,871 901 10,658 2,095 16,217 197 2 124,085 93,901 54,288 39,613 4.676 13,464 5,898 15,575 30,184 1,087 10,429 2,172 16,496 197 3 135,953 103,444 57,635 45,809 6,243 15,453 5,888 18,225 32,509 1,170 10,506 2,313 18,520 197 4 135,481 97.079 47,044 50,035 7,902 15,945 5,797 20,391 38,402 1,185 12,083 2,782 22,352 197 5 130,779 89,897 42,880 47,017 7,847 12,810 5,587 20.773 40,882 1,396 1975—Feb... 128,862 89,023 38,523 50,500 8,724 14,971 5,883 20,922 39,839 1,319 11,993 3,329 23,198 Mar.. 125,501 85,687 37,999 47,688 7,869 13,032 5,363 21,424 39,814 1,337 11,377 3,024 24,076 Apr... 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 May.. 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 June., 126,884 84,982 40,431 44,551 7.677 11,756 5,415 19,703 41,902 1,120 12,538 3,481 24,763 July'. 128,977 88,344 43.267 44.813 7,714 11,978 5,319 20,066 40,633 1,309 12,536 3,417 23,371 Aug. ' 132,144 90,633 45,271 45.236 7,621 12,586 5.611 19,544 41 ,511 1,383 13,164 3,387 23,577 Sept. r 137,551 92,973 46,125 46,522 7,889 12,431 5,843 20,685 44,578 1 ,662 14,152 3,442 25,322 Oct. r. 135,805 93,419 47,080 46,758 7,470 12,506 5,589 20.774 42,386 1,493 14,076 3,194 23,623 Nov.r 138,047 96,029 48,324 48.237 7,750 12,634 5,771 21,550 42,018 1,661 14,413 3,569 22,375 Dec. ' 137,987 96,526 49,133 47,393 7,548 12,401 5.611 21,833 41,461 1,561 1976—Jan... 134,274 97,008 48,940 48,068 7,464 11,854 5,764 22,986 37,266 1,545 Feb.p. 132,495 98,054 49,448 48,604 7,881 12,521 6,082 22,120 34,441 1,670 1 Data beginning Jan. 1976 are not strictly comparable with prior data 2 Includes religious, educational, hospital, institutional, and other build­ because of change by Census Bureau in its procedure for estimating con­ ings. struction outlays of State and local governments. Such governments accounted for 86 per cent of all public construction expenditures in 1974. Note.—Census Bureau data; monthly series at seasonally adjusted annual rates. PRIVATE HOUSING ACTIVITY (In thousands of units) Starts Completions Under construction New 1-family homes sold (end of period) and for sale 1 Median prices Units (in thousands Mobile of dollars) of Period home units 1- 2-or- 1- 2-or- 1- 2-or- ship­ Total family more Total family more Total family more ments family family family For sale For Sold (end of Sold sale per­ iod) 196 6 1,165 779 386 217 461 196 21.4 22.8 196 7 1,292 844 448 240 487 190 22.7 23.6 196 8 1,508 899 608 1,320 859 461 318 490 218 24.7 24.6 196 9 1,467 811 656 1,399 807 591 885 350 535 413 448 228 25.6 27.0 197 0 1,434 813 621 1,418 802 617 922 381 541 401 485 227 23.4 26.2 197 1 2,052 1,151 901 1,706 1,014 692 1,254 505 749 497 656 294 25.2 25.9 197 2 2,357 1,309 1,047 1,971 1,143 828 1,586 640 947 576 718 416 27.6 28.3 197 3 2,045 1,132 913 2,014 1,174 840 1,599 583 1,016 567 620 456 32.5 32.9 197 4 1,338 888 450 1,692 931 760 1,189 516 673 329 501 407 35.9 36.2 1975 '.......... 1,161 892 268 1,295 866 430 1,005 532 473 216 383 1975—Feb.1 953 722 231 1,350 793 557 1,156 525 631 219 426 408 37.9 36.6 Mar. 986 763 223 1,314 757 557 1,118 521 598 199 466 395 38.8 36.5 Apr.! 982 774 208 1,244 782 462 1,087 515 573 194 556 388 39.2 36.7 May1 1,085 853 232 1,269 827 442 1,060 513 546 224 554 383 39.5 36.9 June1 1,080 874 206 1,202 808 394 1,045 517 528 210 551 379 37.9 37.2 July' 1,207 916 291 1,261 882 379 1,039 521 518 225 548 381 38.6 37.4 Aug. 1,264 979 285 1,267 880 387 1,036 528 507 235 573 378 38.2 37.8 Sept. 1,304 966 338 1,315 969 346 1 ,037 532 505 215 571 384 39.7 38.2 Oct.1 1,431 1,093 338 1,115 738 377 1,061 560 504 229 610 389 40.7 38.4 Nov. 1,381 1,048 333 1,386 992 394 1,037 555 482 232 655 382 41.1 38.5 Dec. 1,283 962 321 1,313 983 330 1,040 560 480 228 655 378 42.1 38.9 1976—Jan.. 1,224 950 274 1,176 903 273 1,050 567 483 263 552 384 41.9 39.1 Feb.2 1,555 1,303 252 i 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

A52 EMPLOYMENT □ APRIL 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 t . u S u l l t . a n A i t o o i . o n n ) n a - l la ( b N N o . o r S t . f A i o n . r ) ce T ( l f a S o o b . r A t c o a e . r l ) Total Total E In m c n u p o l l t n u o a r y a g e l r d i 1 ­ agric I u n lture U pl n o e y m ed ­ U (p n e e m r S a r m . e A t c e p n e . 2 l t ) n o y t; ­ industries 1970............................. 140,182 54,280 85,903 82,715 78,627 75,165 3,462 4,088 4.9 1971............................. 142,596 55,666 86.929 84,113 79,120 75,732 3,387 4,993 5.9 1972............................. 145,775 56,785 88,991 86,542 81,702 78,230 3,472 4,840 5.6 1973............................. 148,263 57,222 91,040 88,714 84,409 80,957 3,452 4,304 4.9 1974............................. 150,827 57,587 93,240 91,011 85,936 82,443 3,492 5,076 5.6 1975............................. 153,449 58,655 94,793 92,613 84,783 81,403 3,380 7,830 8.5 1975—Mar................. 152,646 59,053 94,078 91,880 84,110 80,842 3,268 7,770 8.5 Apr.................. 152,840 59,276 94,449 92,254 84,313 81,012 3,301 7,941 8.6 May................. 153,051 59,101 94,950 92,769 84,519 80,991 3,528 8,250 8.9 June................. 153,278 57,087 94,747 92,569 84,498 81,148 3,350 8,071 8.7 July................. 153,585 56,540 95,249 93,063 84,967 81,528 3,439 8,096 8.7 Aug.................. 153,824 57,331 95,397 93,212 85,288 81,824 3,464 7,924 8.5 Sept................. 154,052 59,087 95,298 93,128 85,158 81,646 3,512 7,970 8.6 Oct................... 154,256 58,825 95,377 93,213 85,151 81,743 3,408 8,062 8.6 Nov................. 154,476 59,533 95,272 93,117 85,178 81,877 3,301 7,939 8.5 Dec.................. 154,700 59,812 95,286 93,129 85,394 82,158 3,236 7,735 8.3 1976—Jan................... 154,915 60.110 95,624 93,484 86,194 82,851 3,343 7,290 7.8 Feb.................. 155,106 60,163 95,601 93,455 86,319 83,149 3,170 7,136 7.6 Mar................. 155,325 60,065 95,866 93,719 86,692 83,513 3,179 7,027 7.5 1 Includes self-employed, unpaid family, and domestic service workers. to the calendar week that contains the 12th day; annual data are averages 2 Per cent of civilian labor force. of monthly figures. Description of changes in series beginning 1967 is Note.—Bureau of Labor Statistics. Information relating to persons 16 available from Bureau of Labor Statistics. years of age and over is obtained on a sample basis. Monthly data relate EMPLOYMENT IN NONAGRICULTURAL ESTABLISHMENTS, BY INDUSTRY DIVISION (In thousands of persons) Period Total M t a u n ri u n f g ac­ Mining c C o o n t n i s o t t r r n a u c c t ­ Tr ti a p o n u n s b p l a o i n c r d ta ­ Trade Finance Service G m ov e e n r t n­ utilities 70,920 19,349 623 3,536 4,504 15,040 3,687 11,621 12,561 71,216 18,572 603 3,639 4,457 15,352 3,802 11,903 12,887 73,711 19,090 622 3,831 4,517 15,975 3,943 12,392 13,340 76,896 20,068 644 4,015 4,644 16,674 4,091 13,021 13,739 1974.............................................................. 78,413 20,046 694 3,957 4,696 17,017 4,208 13,617 14,177 1975............................................................... 76,987 18,342 745 3,462 4,499 16,949 4,473 13,996 14,771 seasonally adjusted 1975—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................................................... 77,574 18,482 766 3,409 4,496 17,010 4,248 14,188 14,975 Dec................................................... 77,796 18,568 769 3,406 4,477 17,080 4,264 14,229 15,003 1976—Jan.................................................... 78,179 18,722 764 3,428 4,494 17,233 4,266 14,307 14,965 Feb.23................................................ 78,320 18,759 765 3,361 4,518 17,302 4,268 14,357 14,990 Mar.®............................................... 78,511 18,834 772 3,346 4,505 17,357 4,277 14,384 15,036 not seasonally adjusted 1975—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 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 78,339 18,635 763 3,522 4,509 17,313 4,235 14,174 15,188 Dec.................................................... 78,527 18,584 763 3,338 4,477 17,737 4,243 14,158 15,227 1976—Jan.................................................... 77,091 18,495 756 3,061 4,440 17,026 4,223 14,049 15,041 Feb.*................................................ 77,293 18,542 754 3,001 4,446 16,902 4,230 14,185 15,233 Mar.*............................................... 77,791 18,637 761 3,085 4,469 17,000 4,247 14,269 15,323 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 bench­ mark. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APRIL 1976 □ PRICES A53 CONSUMER PRICES (1967 = 100) Housing Health and recreation Period it A em ll s Food Total Rent o H w s o h n m i e p e r - - F c a o o u n i a e l d l l tr e G a i l n c e a i c d s t ­ y o n F p i a n i e u n s g r h d r s a ­ ­ ­ A u p p a p k 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 l e ­ s P c o a e n r r a e ­ l r R e a i c e n n r a g e d d a ­ ­ g O s o a e t n o r h v d d e ­ r s tion tion ices 1929........... 51.3 48.3 76.0 48.5 1933........... 38.8 30.6 54.1 36.9 1941........... 44.1 38.4 53.7 57.2 40.5 81.4 44.8 44.2 37.0 41.2 47.7 49.2 1945........... 53.9 50.7 59.1 58.8 48.0 79.6 61.5 47.8 42.1 55.1 62.4 56.9 1960........... 88.7 88.0 90.2 9r.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 1 1 9 9 6 6 9 8 1 1 0 0 4 9. . 8 2 1 1 0 0 8 3 . . 9 6 1 1 1 0 0 4 . . 8 2 1 1 0 0 5 2 . . 7 4 1 1 1 0 6 5. . 7 0 1 10 0 3 5 . . 1 6 1 1 0 0 2 0 . . 8 9 1 1 0 0 4 9 . . 4 0 1 11 0 1 5 . . 5 4 1 10 0 7 3 . . 2 2 1 1 1 0 0 5 . . 3 0 1 1 0 1 6 3 . . 1 4 1 10 0 9 4 . . 3 2 1 1 0 0 8 4 . . 7 7 1 1 0 0 9 4 . . 1 6 197 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 r130.6 163.2 214.6 145.8 140.5 136.2 137.7 140.3 150.5 137.3 133.8 137.2 197 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 1975—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 1976—Jan.. 166.7 180.8 173.2 141.2 188.8 248.9 179.5 163.7 143.3 158.1 158.6 176.6 155.7 148.2 150.5 Feb. 167.1 180.0 173.8 142.1 188.6 249.4 181.9 165.2 144.0 158.5 159.7 178.8 157.0 148.5 151.3 Note.—Bureau of Labor Statistics index for city wage earners and clerical workers. WHOLESALE PRICES: SUMMARY (1967 = 100, except as noted) Industrial commodities Pro­ All Period m c t o i o e m d s i ­ ­ p F u r a c o r t d m s ­ c f f e o a e s e o n s d d d e s d s Total t T e il t e e c x s . ­ , H e i t d c e . s, F e u tc e . l, C i e c h t a e c l m s . , ­ R b et u e c r b . , ­ L b e u t e c m r . , ­ P e a t p c e . r, M e a t l e c s t , . ­ c M a e h n r i a y n d ­ ­ F t u e u t r r c n e . , i­ N t m m a o l i e l n n i - c ­ - T e p t q r o i a o u r n n i t p a s­ ­ ­ n c M e e o l i l u s a ­ s ­ e m q e u n ip t ­ erals ment1 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 1967r. 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 iool8’105.2 1970)................................. 110.4 111.0 112.0 110.0 107.2 110.1 105.9 102.2 108.6 113.7 108.2 116.7 111.4 107.5 113.3 104.5 109.9 1971t. 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. 160.1 187.7 170.9 153.8 139.1 145.1 208.3 146.8 136.2 183.6 151.7 171.9 139.4 127.9 153.2 125.5 133.1 1975. 174.9 186.7 182.6 171.5 137.9 148.5 245.1 181.3 150.2 176.9 170.4 185.6 161.4 139.7 174.0 141.5 147.7 1975i—- 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................... 173.2 184.5 179.0 170.3 135.2 147.7 238.8 182.1 148.9 183.0 169.8 185.1 160.4 138.6 173.1 139.9 147.5 June................... 173.7 186.2 179.7 170.7 135.9 148.7 243.0 181 .2 148.6 181 .0 169.8 184.5 161.0 139.0 173.3 140.1 147.5 July.................... 175.7 193.7 184.6 171 .2 136.8 149.3 246.6 181 .4 150.1 179.6 170.0 183.4 161 .7 139.2 174.7 140.1 147.7 Aug.................... 176.7 193.2 186.3 172.2 137.6 149.3 252.4 182.1 150.0 179.7 170.0 184.3 162.2 139.8 175.8 140.5 147.8 Sept.................... 177.7 197.1 186.1 173.1 138.4 151.3 254.9 182.2 150.8 179.9 170.3 185.5 163. 1 140.1 176.1 141.1 148.2 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 .7 182.6 175.4 143.2 154.4 257.0 182.9 151 .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 19765——JJjan...................... 179.4 192.8 179.4 177.3 145.1 157.5 257.3 184.2 152.4 190.5 174.8 188.1 167.0 143.1 181.1 148.7 151.8 Feb..................... 179.4 191.0 176.4 178.1 146.3 159.9 255.7 184.9 154.2 196.0 175.8 189.8 167.7 143.4 181.3 148.8 152.1 Mar.................... 179.8 187.2 175.8 179.1 146.7 162.0 255.7 185.6 155.5 202.3 176.9 191.7 168.2 143.9 182.5 149.1 152.6 1 Dec. 1968= 100. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 NATIONAL PRODUCT AND INCOME □ APRIL 1976 GROSS NATIONAL PRODUCT (In billions of dollars) 1974 1975 Item 1950 1970 1972 1973 1974 1975 IV I II III IV Gross national product........................................................... 286.2 982.4 1,171.1 1,306.3 1,406.9 1,498.9 1,441.3 1,433.6 1,460.6 1,528.5 1,572.9 Final purchases......................................................................... 279.4 978.6 1,161.7 1,288.8 1,397.2 1,513.5 1,430.9 1,458.4 1,490.2 1,530.6 1,574.9 Personal consumption expenditures..................................... 192.0 618.8 733.0 808.5 885.9 963.8 908.4 926 A 950.3 911A 1,001.0 Durable goods..................................................................... 30.8 84.9 111.2 122.9 121.9 128.1 117.3 118.9 123.8 131.8 137.6 Nondurable goods.............................................................. 98.2 264.7 299.3 334.4 375.7 409.8 387.1 394.1 404.8 416.4 423.7 63.0 269.1 322.4 351.3 388.3 426.0 404.0 413.4 421.6 429.2 439.7 Gross private domestic investment....................................... 53.8 140.8 188.3 220.5 212.2 182.6 210.3 168.7 161.4 194.9 205.4 Fixed investment................................................................. 47.0 137.0 178.8 203.0 202.5 197.3 199.8 193.5 191.1 197.1 207.4 Nonresidential.................................................................. 27.1 100.5 116.8 136.5 147.9 148.5 151.1 149.3 146.1 146.7 151.9 Structures..................................................................... 9.3 37.7 42.5 49.0 54.4 52.7 50.1 54.9 51.1 51.2 53.6 Producers’ durable equipment................................ 17.8 62.8 74.3 87.5 93.5 95.8 95.0 94.4 95.0 95.6 98.3 Residential structures..................................................... 19.9 36.6 62.0 66.5 54.6 48.7 48.7 44.2 45.0 50.4 55.4 Nonfarm....................................................................... 18.7 35.1 60.3 64.7 52.2 46.8 46.3 42.6 43.1 48.2 53.3 Change in business inventories......................................- 6.8 3.8 9.4 17.5 9.7 -14.6 10.4 -24.8 -29.6 -2.1 -2.0 6.0 3.7 8.8 14.1 11.6 -16.5 13.7 -23.3 -29.6 -5.1 -7.5 Net exports of goods and services........................................ 1.9 3.9 -3.3 7.4 7.7 21.3 8.2 17.3 24.2 22.1 21.7 Exports.................................................................................. 13.9 62.5 72.7 101.5 144.2 147.8 153.6 148.2 140.7 148.5 153.8 Imports.................................................................................. 12.0 58.5 75.9 94.2 136.5 126.5 145.3 130.9 116.4 126.4 132.1 Government purchases of goods and services..................... 38.5 218.9 253.1 269.9 301.1 331.2 314.4 321.2 324.7 334.1 344.8 Federal.................................................................................. 18.7 95.6 102.1 102.0 111.7 123.2 118.2 119.4 119.2 124.2 129.2 14.0 73.5 73.5 73.4 11A 84.0 80.5 81.4 82.1 84.9 87.4 4.7 22.1 28.6 28.6 34.3 39.2 37.7 38.0 37.1 39.3 42.5 State local............................................................................. 19.8 123.2 151.0 168.0 189.4 208.0 196.3 201.9 205.5 209.9 214.8 Gross national product in 1972 dollars............................... 533.5 1,075.3 1,171.1 1,233.4 1,210.7 1,186.1 1,186.8 1,158.6 1,168.1 1,201.5 1,216.2 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 I II 111 IV National income....................................................................... 236.2 798.4 951.9 1,067.3 1,141.1 1,208.1 1,161.3 1,155.2 1,180.8 1,232.5 1,264.0 Compensation of employees............................................................ 154.8 609.2 715.1 797.7 873.0 921.4 898.1 897.1 905.4 928.2 955.1 Wages and salaries............................................................. 147.0 546.5 633.8 700.9 763.1 801.6 783.6 781.0 787.6 807.3 830.7 Private............................................................................... 124.4 430.5 496.2 552.3 603.0 627.3 617.7 611.7 615.0 631.9 650.5 Military............................................................................. 5.3 20.7 22.0 22.1 22.3 23.0 23.0 22.9 22.8 22.8 23.6 Government civilian....................................................... 17.4 95.3 115.6 126.5 137.7 151.3 143.0 146.4 149.7 152.6 156.5 Supplements to wages and salaries.................................. 7.8 62.7 81.4 96.8 110.0 119.8 114.4 116.1 117.8 120.9 124.4 Employer contributions for social insurance............ 4.2 30.7 39.4 49.3 55.5 58.5 56.9 57.1 57.5 58.9 60.6 3.7 32.0 42.0 47.5 54.5 61.3 57.6 59.0 60.3 62.0 63.8 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 IS.6 88.0 87.1 Business and professional............................................. 24.9 51.2 58.1 59.3 59.5 58.7 59.0 58.6 58.5 58.7 58.9 Farm.................................................................................. 13.5 13.9 18.0 32.4 25.6 24.6 24.6 21.0 20.1 29.3 28.2 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 20.9 22.0 Corporate profits and inventory valuation adjustment and without capital consumption adjustment................... 37.6 66.4 89.6 98.6 93.6 106.3 86.1 83.4 101.6 119.6 120.7 Profits before tax................................................................. 42.6 71.5 96.2 117.0 132.1 117.1 123.9 97.1 108.2 129.5 133.8 Profits tax liability........................................................ 17.9 34.5 41.5 48.2 52.6 45.7 49.2 37.5 41.6 50.7 53.2 Profits after tax............................................................... 24.7 37.0 54.6 68.8 79.5 71.4 74.7 59.6 66.6 78.8 80.6 Dividends..................................................................... 8.8 22.9 24.6 27.8 31.1 32.8 31.7 32.1 32.6 33.5 33.1 Undistributed profits................................................. 15.9 14.1 30.0 40.9 48.4 38.6 43.0 27.5 34.0 45.3 47.5 Inventory valuation adjustment...................................... -5.0 -5.1 -6.6 -18.4 -38.5 -10.8 -37.7 -13.7 -6.6 -9.9 -13.1 Capital consumption adjustment.................................... -4.0 1.5 2.5 1.6 -2.3 -5.7 -4.2 -4.5 -5.0 -6.5 -6.6 Net interest............................................................................... 2.3 37.5 47.0 56.3 70.0 81.6 76.7 78.7 79.7 82.2 85.7 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

APRIL 1976 □ NATIONAL PRODUCT AND INCOME A55 RELATION OF GROSS NATIONAL PRODUCT, NATIONAL INCOME, AND PERSONAL INCOME AND SAVING (In billions of dollars) 1974 1975 1950 1970 1972 1973 1974 Gross national product........................................................... 286.2 982.4 1,171.1 1,306.3 1,406.9 1,498.9 1,441.3 1,433.6 1,460.6 1,528.5 1,572.9 Less: Capital consumption allowances with capital consumption adjustment..................................... 23.9 90.8 105.4 117.1 134.0 152.0 142.1 145.4 149.5 154.7 158.5 Indirect business tax and nontax liability............... 23.4 94.0 111.0 120.2 127.3 137.3 129.5 131.6 135.2 140.0 142.2 Business transfer payments...................................... 4.0 4.7 5.2 5. 6.3 6.0 6.2 6.3 6.4 6.5 Statistical discrepancy................................................ -2.1 1.7 .4 -.6 -2.9 2.9 -3.2 -8.9 -3.2 3.6 Plus: Subsidies less current surplus of government enterprises................................................................. . 1 2.7 3.6 3.7 •7 1.9 .4 1.6 2.2 1.9 1.9 Equals: National income....................................................... 236.2 798.4 951.9 1,067.3 1,141.1 1,208.1 1,161.3 1,155.2 1,180.8 1,232.5 1,264.0 Less: Corporate profits with inventory valuation and capital consumption adjustments....................... 33.7 67.9 92.1 100.2 91.3 100.7 82.0 78.9 96.6 113.1 114.1 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 91.5 102.9 108.3 105.0 106.0 106.6 108.9 111.8 Wage accruals less disbursements........................... -.1 -.5 .0 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 88.4 106.5 120.5 114.0 116.0 117.6 121.2 127.4 Dividends........................................................... 8.8 22.9 24.6 27.8 31.1 32.8 31.7 32.1 32.6 33.5 33.1 Business transfer payments............................ .8 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 ,154.7 ,245.9 ,194.8 ,203.6 ,223.8 ,261.7 ,294.5 Less: Personal tax and nontax payments. 20.6 115.3 141.2 151.2 171.2 169.2 178.9 179.6 142.1 174.6 180.5 Equals: Disposable personal income.......... 205.5 685.9 801.3 903.1 983.6 ,076.7 ,015.9 ,024.0 ,081.7 ,087.1 ,114.0 Less: Personal outlays........................................ 194.7 635.4 751.9 830.4 909.5 987.8 932.4 950.4 974.2 ,001.3 ,025.4 Personal consumption expenditures. 192.0 618.8 733.0 808.5 885.9 963.8 908.4 926.4 950.3 977.4 ,001.0 Interest paid by consumer to business, 2.3 15.5 17.9 20.6 22.6 23.1 23.0 23.0 22.8 23.0 23.4 Personaall ttrr ansfer payments to f'o rei‘gners (Net) .4 1.1 1.0 1.2 1.0 1.0 1.0 1.0 1.1 .9 1.0 Equals: Personal saving......................................................... 10.8 50.6 49.4 72.7 74.0 88.9 83.6 73.6 107.5 85.9 88.6 Disposable personal income in (1972) dollars. 361.9 741.6 801.3 856.0 843.5 856.7 837.6 831.6 869.8 858.2 867.3 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) 1975 1976 Item 1974 1975 Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb.P Total personal income............................ 1154.71245.9 1203.21205.01209.0 1217.21245.2 1244.01262.4 1278.7 1287.41295.9 1300.2 1315.01327.9 Wage and salary disbursements........... 763.6 801.6 779. 781.7 782.7 787.4 792. 797.4 808.8 815.6 824.1 831 836.8 847.8 853.1 Commodity-producing industries... 273.7 273.6 266. 265.9 265. 267.0 268. 270.9 275.6 279.5 281.7 283 286.9 291.4 292.5 Dis M tr a i n b u u f t a iv c e tu i r n in d g u s o tr n i l e y s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1 1 8 1 4 . . 2 3 2 19 11 5 . .1 2 2 1 0 9 4 0 . . 2 1 0 9 4 0 . . 4 7 2 1 0 9 4 0 . . 9 9 2 1 0 9 5 1 . . 6 7 2 1 0 9 7 2 , . 2 1 0 9 8 3 . .9 8 2 1 1 9 3 7 . . 2 7 2 1 1 9 6 8 . . 6 2 2 2 1 00 8 . . 2 7 2 2 1 0 9 2 2 2 2 0 3 2. . 9 3 2 2 2 0 6 7 . . 7 0 2 20 2 8 7 . . 5 7 Service industries................................ 145.0 158.6 153. 154.6 154.5 156.1 157. 158.2 160.3 161.5 163.1 165 165.7 167.4 169.6 Government........................................ 160.6 174.3 169. 170.5 171.5 172.6 173. 174.4 175.2 176.4 179.0 180 181.2 181.9 182.6 Other labor income............................... 54.5 61.3 59.4 59.8 60.3 60.8 61.4 62.0 62.6 63.2 64.4 65.1 65.8 Proprietors’ income with inventory valuation and capital consumption adjustments........................................ 85.1 83.3 76.5 77.0 78.7 84.5 88.0 91.5 89.4 87.1 84.7 84.4 84.3 B F u a s r i m ne . s .. s .. . a .. n ... d .. . p ... r .. o .. f . e .. s .. s .. i . o .. n ... a .. l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2 5 5 9 . . 6 5 2 5 4 8 . . 6 7 5 1 8 7 . .9 6 5 1 8 8 . . 5 5 2 5 0 8 . . 1 6 2 5 5 8 . .7 2 5 9 8 . . 3 7 5 3 8 2 . . 8 7 5 3 8 0 . . 9 5 2 5 8 8 . . 3 8 2 5 5 8 . . 8 9 2 5 5 9. . 1 3 2 5 4 9 . . 7 6 Rental income of persons with capital consumption adjustment................. 21.0 21.1 20. 20.8 20.7 20.5 20. 20.5 21.0 21.3 21.8 22.0 22.2 22.5 22.7 Dividends................................................ 31.1 32.8 32. 32.1 32.4 32.6 32, 33.2 33.5 33.9 33.8 33.8 31.7 33.4 33.5 Personal interest income..................... 106.5 120.5 116. 116.1 116.6 117.5 118, 119.7 121.2 122.9 125.1 127.9 129.0 130.4 131.8 Transfer payments................................ 140.4 175.0 165. 167.2 168.6 169.3 189, 176 178.1 181.3 180.6 181.4 182.9 184.7 190.2 Less: Personal contributions for social insurance................................ 47.4 49.8 48. 48.9 48.9 49.1 49.3 49.5 50.0 50.4 50.7 51.2 51.6 53.3 53.4 Nonagricultural income.................... 1119.1 1210.21171. 1176.21179.71186.21212. 1207.21222.11234.8 1245.6 1256.3 1262.9 1278.01291.4 Agricultural income.......................... 35.6 35.7 31. 28.8 29.3 31.0 32. 36.8 40.3 43.9 41.8 39.7 37.3 37.0 36.5 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

A56 FLOW OF FUNDS □ APRIL 1976 SUMMARY OF FUNDS RAISED IN U.S. CREDIT MARKETS (Seasonally adjusted annual rates; in billions of dollars) 1975 Transaction category, or sector 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 HI H2 Credit market funds raised by nonfinancial sectors 1 67.9 82.4 96.0 91.8 98.2 147.4 169.4 187.4 180.1 197.3 182.6 212.0 1 2 66.9 80.0 96.0 87.9 92.4 135.9 158.9 180.1 176.2 187.7 172.1 203.2 2 3 U.S. Government............................................................. 3.6 13.0 13.4 -3.7 12.8 25.5 17.3 9.7 12.0 85.2 83.9 86.5 3 4 2.3 8.9 10.4 -1.3 12.9 26.0 13.9 7.7 12.0 85.8 85.1 86.6 4 5 1.3 4.1 3.1 -2.4 -.1 -.5 3.4 2.0 * -.6 -1.2 -.1 5 6 64.3 69.4 82.6 95.5 85.4 121.9 152.1 177.7 168.1 112.0 98.6 125.5 6 7 1 .0 2.4 * 3.9 5.8 11 .5 10.5 7.2 3.8 9.6 10.5 8.7 7 8 63.3 67.0 82.6 91.6 79.7 110.4 141.6 170.4 164.2 102.5 88.2 116.7 8 9 Private domestic nonfinancial sectors......... 62.7 6.45 79.7 91.8 82.7 117.3 147.8 170.1 152.7 100.0 89.1 110.9 9 10 Corporate equities................................................... 1 .3 2.4 -.2 3.4 5.7 11 .4 10.9 7.4 4.1 9.5 10.3 8.7 10 11 Debt instruments...................................................... 61.5 63.0 79.9 88.4 77.0 105.8 136.9 162.7 148.6 90.5 78.8 102.2 11 12 Debt capital instruments................................... 38.2 44.5 49.5 49.6 56.7 83.2 93.8 96.1 92.9 94.9 101.0 88.8 12 13 State and local obligations........................... 5.6 7.8 9.5 9.9 11.2 17.6 14.4 13.7 17.4 15.4 17.1 13.7 13 14 Corporate bonds............................................. 10.2 14.7 12.9 12.0 19.8 18.8 12.2 9.2 19.7 27.0 35.3 18.8 14 15 Home mortgages.............................................. 11.7 11.5 15.1 15.7 12.8 26.1 39.6 43.3 31.7 35.9 32.5 39.3 15 16 Multifamily residential mortgages............... 3.1 3.6 3.4 4.7 5.8 8.8 10.3 8.4 7.8 3.6 2.7 4.5 16 17 Commercial mortgages................................... 5.7 4.7 6.4 5.3 5.3 10.0 14.8 17.0 11.5 8.4 8.5 8.4 17 18 Farm mortgages............................................... 1.8 2.3 2.2 1.9 1.8 2.0 2.6 4.4 4.9 4.5 4.9 4.1 18 19 Other debt instruments..................................... 23.3 18.5 30.4 38.8 20.3 22.6 43.0 66.6 55.6 -4.4 -22.2 13.4 19 20 Consumer credit.............................................. 6.4 4.5 10.0 10.4 6.0 11.2 19.2 22.9 9.6 5.3 -1.5 12.1 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 -12.6 -21.3 -3.8 21 22 Open market paper........................................ 1 .1 1 .7 1.8 3.0 3.0 -1 .2 -.5 -.4 6.6 -1.6 -1.5 -1.7 22 23 Other.................................................................. 5.0 2.6 5.0 9.9 4.6 4.8 5.5 8.3 12.1 4.5 2.2 6.7 23 24 By borrowing sector................................................ 62.7 65.4 79.7 91.8 82.7 117.3 147.8 170.1 152.7 100.0 89.1 110.9 24 25 State and local governments............................ 6.3 7.9 9.8 10.7 11.3 17.8 14.2 12.3 16.6 13.2 14.8 11.7 25 26 Households........................................................... 22.7 19.3 30.0 31 .7 23.4 39.8 63.1 72.8 44.0 43.3 37.4 49.2 26 27 Farm...................................................................... 3.1 3.6 2.8 3.2 3.2 4.1 4.9 8.6 7.8 6.7 6.3 7. 1 27 28 Nonfarm noncorporate...................................... 5.4 5.0 5.6 7.4 5.3 8.7 10.4 9.3 7.2 2.5 -.3 5.4 28 29 Corporate............................................................. 25.3 29.6 31.6 38.9 39.5 46.8 55.3 67.2 77.1 34.2 30.9 37.5 29 30 Foreign........................................................................ 1.5 4.0 2.8 3.7 2.7 4.6 4.3 7.5 15.4 12.0 9.5 14.6 30 31 Corporate equities................................................... -.3 .1 .2 .5 .1 * -.4 -.2 -.3 . 1 . 1 * 31 32 Debt instruments...................................................... 1.8 4.0 2.7 3.2 2.7 4.6 4.7 7.7 15.7 12.0 9.3 14.6 32 33 Bonds..................................................................... .1 1.2 1.1 1 .0 .9 .9 1.0 1.0 2.2 6.1 5.9 6.4 33 34 Bank loans n.e.c.................................................. -.2 -.3 -.5 -.2 -.3 1 .6 2.9 2.8 4.7 3.7 1.3 6.1 34 35 Open market paper............................................ -.1 .5 -.2 .3 .8 .3 -1 .0 2.2 7.1 -.5 -1.2 . 1 35 36 U.S. Government loans..................................... 1 .3 2.6 2.2 2.1 1.3 1 .8 1 .8 1 .7 1.7 2.7 3.4 1.9 36 37 Memo: U.S. Govt, cash balance.................................. -.4 1.2 -1.1 .4 2.8 3.2 -.3 -1 .7 -4.6 2.9 2.8 2.9 37 Totals net of changes in U.S. Govt, cash balances:. 38 Total funds raised........................................................... 68.3 81 .3 97.1 91.4 95.5 144.2 169.7 189.0 184.7 194.4 179.7 209.0 38 39 By U.S. Government................................................. 4.0 11.8 14.6 -4.1 10.0 22.3 17.6 11 .4 16.6 82.3 81.1 83.5 39 Credit market funds raised by financial sectors 1 Total funds raised by financial sectors......................... 11.7 2.0 18.3 33.7 12.6 16.5 28.9 52.0 38.0 11.3 5.3 17.3 1 2 Sponsored credit agencies.......................................... 4.8 -.6 3.5 8.8 8.2 3.8 6.2 19.6 22.1 10.3 9.1 11.6 2 3 U.S. Government securities.................................. 5.1 -.6 3.2 9.1 8.2 3.8 6.2 19.6 21.4 10.1 8.0 12.2 3 4 Loans from U.S. Government............................. -.2 -.1 .2 -.3 .7 .2 1.1 -.6 4 5 Private financial sectors............................................. 6.9 2.6 14.9 24.9 4.3 12.7 22.8 32.4 15.9 1.0 -3.8 5.7 5 6 Corporate equities................................................... 3.7 3.0 6.4 6.1 4.6 3.3 2.4 .8 1.7 1.9 2.1 1.7 6 7 Debt instruments....................................................... 3.2 -.4 8.5 18.8 -.3 9.3 20.3 31.6 14.2 -.9 —5.9 4.0 7 8 Corporate bonds................................................. .9 1.3 1.1 1 .5 3.1 5.1 7.0 2.3 1 .4 1.3 1.6 1.1 8 9 Mortgages............................................................. -.9 1 .0 .4 .2 .7 2.1 1 .7 -1 .2 -1.3 2.3 2.0 2.6 9 10 Bank loans n.e.c................................................... -1 .0 -2.0 2.5 2.3 -.5 3.0 6.8 13.5 7.5 -4.0 -6.0 -2.1 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 3.4 4.6 2.3 11 12 Loans from FHLB’s.......................................... .9 -2.5 .9 4.0 1 .3 -2.7 * 7.2 6.7 -3.9 -8.1 .2 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 11.3 5.3 17.3 13 14 Sponsored credit agencies.......................................... 4.8 -.6 3.5 8.8 8.2 3.8 6.2 19.6 22.1 10.3 9.1 11.6 14 15 Private financial sectors............................................. 6.9 2.6 14.9 24.9 4.3 12.7 22.8 32.4 15.9 1.0 -3.8 5.7 15 16 Commercial banks.................................................. -.1 .1 1 .2 1 .4 -3.1 2.5 4.0 4.5 -1 .9 3.8 4.6 2.9 16 17 Bank affiliates........................................................... 4.2 -1.9 -.4 .7 2.2 2.4 .2 .9 -.5 17 18 Foreign banking agencies...................................... .1 * .1 .2 .1 1 .6 .8 5.1 2.9 -1.0 -.9 -1.0 18 19 Savings and loan associations.............................. .1 -1 .7 1.1 4.1 1 .8 -.1 2.0 6.0 6.3 -2.0 -8.0 3.9 19 20 Other insurance companies................................... .1 .1 .2 .5 .4 .6 .5 .5 .4 .7 .8 .7 20 21 Finance companies................................................. 3.1 1 .2 5.7 8.3 1.6 4.2 9.3 9.4 3.9 -.5 -2.1 1.1 21 22 REIT’s........................................................................ .7 1 .3 2.7 3.0 6.1 6.3 1.0 -1.7 -1.8 -1.6 22 23 Open end investment companies......................... 3.7 3.0 5.8 4.8 2.6 1 .1 -.7 -1.6 1.0 1.5 2.7 .3 23 Total credit market funds raised, all sectors, by type 1 Total funds raised............................................................. 79.6 84.4 114.3 125.5 110.8 163.9 198.3 239.4 218.1 208.5 187.8 229.2 1 2 Investment company shares...................................... 3.7 3.0 5.8 4.8 2.6 1.1 -.7 -1.6 1 .0 1.5 2.7 .3 2 3 Other corporate equities............................................ 1.1 2.5 .6 5.2 7.7 13.6 13.6 9.6 4.6 10.0 9.8 10.1 3 4 Debt instruments.......................................................... 74.9 79.01 107.9 115.5 100.4 149.1 185.4 231.3 212.5 197.1 175.3 218.8 4 5 U.S. Government securities.................................. 8.8 12.5 16.7 5.5 21.1 29.4 23.6 29.4 33.5 95.4 91.8 99.0 5 6 State and local obligations.................................... 5.6 7.8 9.5 9.9 11.2 17.6 14.4 13.7 17.4 15.4 17.1 13.7 6 7 Corporate and foreign bonds............................... 11.8 17.2 15.0 14.5 23.8 24.8 20.2 12.5 23.3 34.5 42.8 26.2 7 8 Mortgages................................................................. 21.3 23.0 27.4 27.8 26.4 48.9 68.8 71.9 54.5 54.6 50.7 58.6 8 9 Consumer credit...................................................... 6.4 4.5 10.0 10.4 6.0 11.2 19.2 22.9 9.6 5.3 -1.5 12.1 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 -12.9 -26.0 .2 10 11 Open market paper and RP’s.............................. 4.4 4.0 5.2 14.1 -1.2 .9 3.3 11.6 13.6 1.3 1.9 .7 11 12 Other loans............................................................... 6.9 2.5 8.3 15.8 7.3 4.0 7.4 17.2 21 .1 3.4 -1.4 8.3 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

APRIL 1976 □ FLOW OF FUNDS A57 DIRECT AND INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS (Seasonally adjusted annual rates; in billions of dollars) 1975 Transaction category, or sector 19 66 1967 1968 1969 1970 1971 1972 1973 1974 1975 HI H2 1 Total funds advanced in credit markets to non­ financial sectors........................................................ 66.9 80.0 95.9 88.0 92.5 135.9 158.9 180.1 176.2 187.7 172.1 203.2 1 By public agencies and foreign 2 Total net advances............................................................ 11.9 11.3 12.2 15.7 28.1 41.7 18.3 33.2 49.2 34.6 39.9 29.2 2 3 U.S. Government securities...................................... 3.4 6.8 3.4 .7 15.9 33.8 8.4 11.0 8.6 17.2 28.3 6.2 3 4 Residential mortgages................................................. 2.8 2.1 2.8 4.6 5.7 5.7 5.2 7.6 13.8 17.0 16.3 17.8 4 5 FHLB advances to S&L’s.......................................... .9 -2.5 .9 4.0 1.3 -2.7 * 7.2 6.7 -3.9 -8.1 .2 5 6 Other loans and securities......................................... 4.8 4.9 5.1 6.3 5.2 4.9 4.6 7.5 20.1 4.2 3.4 5.1 6 By agency— 7 U.S. Government......................................................... 4.9 4.6 4.9 2.9 2.8 3.2 2.6 3.0 7.4 10.6 10.9 10.2 7 8 Sponsored credit agencies.......................................... 5.1 -.1 3.2 8.9 10.0 3.2 7.0 20.3 24.1 11.5 11.1 11.9 8 9 Monetary authorities................................................... 3.5 4.8 3.7 4.2 5.0 8.9 .3 9.2 6.2 8.5 7.0 10.1 9 10 Foreign........................................................................... -1.6 2.0 .3 -.3 10.3 26.4 8.4 .7 11.6 3.9 10.9 -3.0 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 10.3 9.1 11.6 11 Private domestic funds advanced 12 Total net advances............................................................ 59.8 68.1 87.2 81.1 72.6 98.1 146.7 166.5 149.1 163.4 141.3 185.6 12 13 U.S. Government securities...................................... 5.4 5.7 13.3 4.8 5.2 -4.4 15.2 18.4 2.4.9 78.1 63.5 92.8 13 14 State and local obligations........................................ 5.6 7.8 9.5 9.9 11.2 17.6 14.4 13.7 17.4 15.4 17.1 13.7 14 15 Corporate and foreign bonds.................................... 10.3 16.0 13.8 12.5 20.0 19.5 13.2 10.1 20.6 33.3 41.1 25.5 15 16 Residential mortgages................................................. 12.0 13.0 15.5 15.7 12.8 29.1 44.6 44.1 25.6 22.4 19.1 25.7 16 17 Other mortgages and loans....................................... 27.4 23.1 35.9 42.2 24.6 33.7 59.5 87.4 67.4 10.3 -7.5 28.1 17 18 Less: FHLB advances................................................. .9 -2.5 .9 4.0 1.3 -2.7 * 7.2 6.7 -3.9 -8.1 .2 18 Private financial intermediation 19 Credit market funds advanced by private financial institutions.................................................................. 45.4 63.5 75.3 55.3 74.9 110.7 153.4 158.8 131.5 121.7 115.3 128.1 19 20 Commercial banks....................................................... 17.5 35.9 38.7 18.2 35.1 50.6 70.5 86.6 64.6 26.6 16.8 36.3 20 21 Savings institutions..................................................... 7.9 15.0 15.6 14.5 16.9 41.4 49.3 35.1 26.9 56.1 58.9 53.3 21 22 Insurance and pension funds.................................... 15.5 12.9 14.0 12.7 17.3 13.3 17.7 22.1 34.3 39.7 39.8 39.6 22 23 Other finance................................................................ 4.5 -.3 7.0 9.9 5.7 5.3 15.8 15.0 5.7 -.6 -. 1 -1.0 23 24 Sources of funds................................................................ 45.4 63.5 75.3 55.3 74.9 110.7 153.4 158.8 131.5 121.7 115.3 128.1 24 25 Private domestic deposits.......................................... 22.5 50.0 45.9 2.6 63.2 90.3 97.5 84.9 76.5 94.3 105.4 83.1 25 26 Credit market borrowing........................................... 3.2 -.4 8.5 18.8 -.3 9.3 20.3 31.6 14.2 -.9 -5.9 4.0 26 27 Other sources................................................................ 19.8 13.9 21.0 34.0 12.0 11.0 35.5 42.4 40.8 28.4 15.8 41.0 27 28 Foreign funds........................................................... 3.7 2.3 2.6 9.3 -8.5 -3.2 5.2 6.5 13.6 .2 -8.0 8.5 28 29 Treasury balances.................................................... -.5 .2 -.2 * 2.9 2.2 .7 -1.0 -5.1 -1.6 -2.1 -1.1 29 30 Insurance and pension reserves............................ 13.6 12.0 11.4 10.8 13.1 9.1 13.1 16.7 27.9 28.1 27.7 28.5 30 31 Other, net.................................................................. 3.0 -.6 7.2 13.8 4.4 2.9 16.5 20.2 4.4 1.7 -1.8 5.2 31 Private domestic nonfinancial investors 32 Direct lending in credit markets.................................. 17.6 4.2 20.4 44.5 -2.6 -3.2 13.7 39.3 31.8 40.8 20.1 61.4 32 33 U.S. Government securities...................................... 8.4 -1.4 8.1 17.0 -9.0 -14.0 1.6 18.8 18.1 21.1 -4.6 46.8 33 34 State and local obligations........................................ 2.6 -2.5 -.2 8.7 -1.2 .6 2.1 4.4 10.8 9.8 11.5 8.1 34 35 Corporate and foreign bonds.................................... 2.0 4.6 4.7 6.6 10.7 9.3 5.2 1.1 -1.7 7.6 9.2 6.0 35 36 Commercial paper....................................................... 2.3 1.9 5.8 10.2 -4.4 -.6 4.0 11.3 1.6 -.9 1.9 -3.8 36 37 Other............................................................................... 2.3 1.7 2.1 2.0 1.4 1.5 .8 3.8 2.9 3.3 2.1 4.4 37 38 Deposits and currency.................................................... 24.4 52.1 48.3 5.4 66.6 93.7 101.9 88.8 82.8 100.3 112.8 87.8 38 39 Time and savings accounts........................................ 20.3 39.3 33.9 -2.3 56.1 81.0 85.2 76.3 71.9 86.1 91.6 80.7 39 40 Large negotiable CD’s........................................... -.2 4.3 3.5 -13.7 15.0 7.7 8.7 18.5 23.6 -9.5 -22.3 3.4 40 41 Other at commercial banks.................................. 13.3 18.3 17.5 3.4 24.2 32.9 30.6 29.5 26.6 36.2 45.0 27.4 41 42 At savings institutions............................................ 7.3 16.7 12.9 8.0 16.9 40.4 45.9 28.2 21.8 59.4 68.9 49.9 42 43 Money............................................................................ 4.1 12.8 14.5 7.7 10.5 12.7 16.7 12.6 10.8 14.1 21.2 7.1 43 44 Demand deposits..................................................... 2.1 10.6 12.1 4.8 7.1 9.3 12.3 8.6 4.5 8.1 13.8 2.4 44 45 Currency.................................................................... 2.0 2.1 2.4 2.8 3.5 3.4 4.4 3.9 6.3 6.0 7.3 4.7 45 46 Total of credit market instr., deposits, and currency. 42.0 56.3 68.7 49.9 64.1 90.5 115.7 128.1 114.5 141.1 132.9 149.2 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 18.4 23.2 14.4 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 74.5 81.6 69.1 48 49 Total foreign funds..................................................... 2.1 4.3 2.9 9.1 1.8 23.2 13.6 7.2 25.1 4.1 2.8 5.4 49 Corporate equities not included above 1 Total net issues.................................................................. 4.8 5.5 6.4 10.0 10.4 14.8 12.9 8.0 5.6 11.5 12.5 10.4 1 2 Mutual fund shares..................................................... 3.7 3.0 5.8 4.8 2.6 1.1 -.7 -1.6 1.0 1.5 2.7 .3 2 3 Other equities............................................................... 1.1 2.5 .6 5.2 7.7 13.6 13.6 9.6 4.6 10.0 9.8 10.1 3 4 Acquisitions by financial institutions.......................... 6.0 9.1 10.8 12.2 11.4 19.3 16.0 13.4 6.1 8.3 10.4 6.2 4 5 Other net purchases......................................................... -1.2 -3.6 -4.4 -2.2 -1.0 -4.5 -3.1 -5.4 -.5 3.2 2.1 4.2 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 plus 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 Lines 1 and 3. Includes issues by financial institutions. branches, and liabilities of foreign banking agencies to foreign af­ filiates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 U.S. BALANCE OF PAYMENTS □ APRIL 1976 1. U.S. BALANCE OF PAYMENTS SUMMARY (In millions of dollars. Quarterly figures are seasonally adjusted unless shown in italics.) 1974 1975 Line Credits (+), debits (—) 1973 1974 1975 IV r III ^ IVp Merchandise trade balance 1. 955 -5,277 9,045 -1,380 1,495 3,274 2,111 2,165 Exports.............................. 71,379 98,309 107,184 26,593 27,056 25,843 26,596 27,689 Imports.............................. -70,424 -103,568 -98,139 -27,973 -25,561 -22,569 -24,485 -25,524 Military transactions, net.......... -2,317 -2,158 -819 -498 -354 -409 -50 -5 Travel and transportation, net. -2,862 -2,692 -1,968 -741 -545 -370 -481 -573 Investment income, net 2.......................................... 5,179 10,121 6,030 2,559 1,185 1,400 1,773 1,672 U.S. direct investments abroad 2................... 8,841 17,679 9,140 4,080 2,158 2,172 2,428 2,382 Other U.S. investments abroad....................... 5,157 8,389 8,735 2,358 2,148 2,075 2,248 2,264 Foreign investments in the United States 2 . -8,819 -15,946 -11,845 -3,879 3,121 -2,847 -2,903 -2,974 Other services, net 2.................................................. 3,222 3,830 4,211 1,049 1,092 1,041 1,120 959 11 Balance on goods and services 3. 4,177 3,825 16,500 989 2,873 4,936 4,473 4,218 Not seasonally adjusted........ 2,348 4,243 5,214 1,739 5,304 12 Remittances, pensions, and other transfers. -1,903 -1,721 -1,763 -439 -462 -423 -432 13 Balance on goods, services, and remittances. 2,274 2,104 14,736 550 2,425 4,474 4,050 3,786 Not seasonally adjusted............................. 1,904 3,825 4,742 1,302 4,867 14 U.S. Government grants (excluding military). -1,938 4-5,461 -2,820 -649 -727 -721 -604 -169 15 Balance on current account.. 3354-3,357 11,916 -99 1,698 3,753 3,446 3,017 Not seasonally adjusted. 1,289 3,088 3,953 744 4,131 16 U.S. Government capital flows excluding nonscheduled repayments, net 5........................................................................... -2,933 4 408 -3,500 -985 -1,015 -821 -111 -946 17 Nonscheduled repayments of U.S. Government assets............ 289 1 18 U.S. Government nonliquid liabilities to other than foreign official reserve agencies................................................................. 1,154 710 1,774 125 546 471 240 516 19 Long-term private capital flows, net............................................. 177 -8,463 -8,789 -5,570 -2,206 -2,421 -1,573 -2,591 20 U.S. direct investments abroad.............................................. -4,968 -7,455 -5,760 -3,310 -1,041 -2,304 -650 -1,765 21 Foreign direct investments in the United States 6............ 2,656 2,224 1,934 -653 340 679 -94 1,008 22 Foreign securities...................................................................... -759 -1,990 -6,328 -726 -2,021 -1,001 -946 -2,361 23 U.S. securities other than Treasury issues 6....................... 4,055 672 3,899 -663 653 678 1,033 1,535 24 Other, reported by U.S. banks.............................................. -706 -1,166 -2,608 -285 -451 -649 -702 -806 25 Other, reported by U.S. nonbanking concerns................... -101 -748 74 67 314 176 -214 -202 26 Balance on current account and long-term capital 5. -977 -10,702 1,401 -6,529 -977 982 1,396 -4 Not seasonally adjusted.......................................... -4,616 -128 1,106 -1,205 1,628 27 Nonliquid short-term private capital flows, net............. -4,238 -12,936 -2,819 -2,305 1,949 -966 -1,893 -1,909 28 Claims reported by U.S. banks................................. -3,886 -12,173 -1,913 -2,406 1,724 -1,004 -1,126 -1,507 29 Claims reported by U.S. nonbanking concerns -1,183 -2,603 -911 -137 279 -167 -709 -314 30 Liabilities reported by U.S. nonbanking concerns. 831 1,840 5 238 -54 205 -58 31 Allocations of Special Drawing Rights (SDR’s)........... 32 Errors and omissions, net................................................... -2,436 4,698 4,556 1,236 2,485 446 936 690 Net liquidity balance............. -7,651 -18,940 3,138 -7,598 3,457 462 439 -1,223 Not seasonally adjusted. -6,475 4,527 247 -1,345 -291 3 3 5 4 Liqu L id i q p u r i i d v a c t l e a i c m ap s. i . t . a .. l . .. f . l . o ... w ... s . , . .. n .. e .. t .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1 2 , , 9 3 5 4 1 3 -6 10 ,2 ,5 6 4 7 3 - - 5 9 , , 6 2 0 0 1 0 -2 2 , . 1 7 0 3 1 0 - - 6 4 , , 6 7 2 9 3 6 , , 3 2 3 3 1 2 4,5 4 6 3 9 5 - -2 1, , 3 5 1 0 5 8 36 Reported by U.S. banks............................... -1,161 -6,134 -8,933 -1,732 -5,062 ,413 937 -2,395 37 Reported by U.S. nonbanking concerns.. -790 -133 -267 -369 266 82 -502 -113 38 Liquid liabilities—.................................................. 4,294 16,810 3,599 4,831 -1,827 99 4,134 1,193 39 Foreign commercial banks.......................... 3,028 12,621 -501 2.730 -2,808 18 2,572 -283 40 International and regional organizations. 377 1,319 2,277 1,308 877 -182 971 611 41 Other foreigners............................................ 2,870 1,823 793 104 263 -591 -865 42 Official reserve transactions balance, financed by changes in—., -5,308 -8,397 -2,463 -4,868 -3,166 -1,770 5,008 -2,538 Not seasonally adjusted.............................................................. -4,070 -2,194 -1,415 -3,064 -1,918 43 Liquid liabilities to foreign official agencies................................ 4,456 8,503 1,007 3,886 2,686 1,394 -4,962 1,892 44 Other readily marketable liabilities to foreign official agen­ cies 7................................................................................................. 1,118 673 2,072 630 811 406 297 558 45 Nonliquid liabilities to foreign official reserve agencies re­ ported by U.S. Govt..................................................................... -475 655 -9 215 -6 -1 -1 46 U.S. official reserve assets, net....................................................... 209 -1,434 -607 137 -325 -342 89 4 48 7 S G D o R ld ’s ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 -111 -66 -20 -4 -25 -21 49 Convertible currencies.............................................................. 233 3 -75 241 -14 -222 167 50 Gold tranche position in IMF............................................... -33 -1,265 -466 -84 -307 -95 -57 Memoranda: 51 Transfers under military grant programs (excluded from lines 2, 4, and 14).......................................................................... 2,809 1,811 2,287 490 787 1,244 66 190 52 Reinvested earnings of foreign incorporated affiliates of U.S. firms (excluded from lines 7 and 20)............................... 8,124 7,508 53 Reinvested earnings of U.S. incorporated affiliates of foreign firms (excluded from lines 9 and 21)........................................ 945 1,554 Balances excluding allocations of SDR’s: 54 Net liquidity, not seasonally adjusted.. -7,651 -18,940 3,138 -6,475 4,527 247 -1,345 -291 55 Official reserve transactions, N.S.A. -5,308 -8,397 -2,463 -4,070 -2,194 -1,415 3,064 -1,918 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APRIL 1976 □ FOREIGN TRADE; U.S. RESERVE ASSETS A59 2. MERCHANDISE EXPORTS AND IMPORTS (Seasonally adjusted; in millions of dollars) Exports 1 Imports 2 Trade balance 1973 1974 1975 19743 1975 1976 1973 19743 1975 1976 Month: Jan... 4,955 7,150 ,373 9,103 5,244 498 9,635 9,176 -289 +652 -262 -73 Feb.. 5,070 7,549 ,755 8,800 5,483 318 7,928 8,941 -413 +231 +827 141 Mar.. 5,311 7,625 ,685 5,414 742 7,466 -103 -117 + 1,219 Apr... 5,494 8,108 ,648 5,360 025 7,959 + 133 +83 +689 May.. 5,561 7,652 ,222 5,703 265 7,266 -142 -612 +955 June.. 5,728 8,317 ,716 5,775 577 7,104 -47 -260 + 1,613 July.. 5,865 8,307 ,894 5,829 922 7,832 + 37 -615 + 1,062 Aug... 6,042 8,379 ,979 6,011 267 7,877 + 32 -888 + 1,102 Sept... 6,420 8,399 ,146 5,644 696 8,205 +776 -297 +941 Oct.. . 6,585 8,673 ,225 5,996 773 8,170 + 589 -100 + 1,054 Nov... 6,879 8,973 ,409 6,684 973 8,204 + 195 + 1,206 Dec... 6,949 8,862 ,250 6,291 257 8,526 +658 -395 +724 Quarter: I 15,336 22,325 26,813 16,140 21,558 25,030 -804 +767 + 1,784 I I 16,783 24,077 25,585 16,839 24,867 22,328 -56 -790 + 3,257 III... . 18,327 25,085 27,019 17,483 26,885 23,915 +844 -1,800 + 3,104 IV... . 20,413 26,508 27,884 18,972 27,003 24,900 + 1,441 -495 +2,984 Year 4.. 70,823 97,908 107,191 69,476 100,251 96,140 + 1,347 -2,343 +11,050 1 Exports of domestic and foreign merchandise (f.a.s. value basis); basis. For calendar 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 be­ actions value basis; prior data are reported on a Customs import value cause of rounding. 3. U.S. RESERVE ASSETS (In millions of dollars) E y n e d a r of Total Tot G a o l 2 ld st T o r c e k a 1 sury v c fo u e C c r r r i o t e r e i i n e b s g n ­ l n e ­ p R o I e M s s i i n e t r F io v n e SDR’s 3 E m n o d n t o h f Total Tot G al o 2 ld s T to r c ea k sury v c fo u e C c r r r o i e t r e i i n e b s g n ­ l n e ­ p R o I e s M s i i e n t r i F o 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 16,256 11,620 11,620 19 2,194 2,423 1963... 16,843 15,596 15,513 212 1,035 16,183 11,620 11,620 2 2,168 2,393 1964... 16,672 15,471 15,388 432 769 May ___ 16,280 11,620 11,620 4 2,218 2,438 June.... 16,242 11,620 11,620 25 2,179 2,418 1965... 15,450 13,806 13,733 781 863 July.... 16,084 11,618 11,618 2 2,135 2,329 1966... 14,882 13,235 13,159 1,321 326 16,117 11,599 11,599 28 2,169 2,321 1967... 14,830 12,065 11,982 2,345 420 # # .......... 16,291 11,599 11,599 247 2,144 2,301 1968... 15,710 10,892 10,367 3,528 1,290 16,569 11,599 11,599 413 2,192 2,365 1969... 416,964 11,859 10,367 4 2,781 2,324 Nov....... 16,592 11,599 11,599 423 2,234 2,336 16,226 11,599 11,599 80 2,212 2,335 1970... 14,487 11,072 10,732 629 1,935 851 1971.. . 512,167 10,206 10,132 5 276 585 1,100 1976— 19726. . 13,151 10,487 10,410 241 465 1,958 16,622 11,599 11,599 333 2,314 2,376 19737 . . 14,378 11,652 11,567 8 552 2,166 Feb 16,661 11,599 11,599 296 2,390 2,376 1974. . . 15,883 11,652 11,652 5 1,852 2,374 816,941 11,599 11,559 571 82,420 8 2,351 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. I, 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 valua­ mark 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 Mar. amounted to $2,449 million, reserve position in IMF, $2,520 5 Includes $28 million increase in dollar value of foreign currencies million, and total U.S. reserves assets, $17,139. 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, rep­ excludes 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 Eco­ nomic Analysis. Details may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 GOLD RESERVES □ APRIL 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 r707 1 ,470 791 82 65 r93 1971 . 41,160 4,732 10,206 26,220 r208 '98 282 r791 1,676 862 87 69 r103 1972. 44,890 5,830 10,487 28,575 208 rl 69 281 791 1,638 834 87 69 '103 1973. 49,850 6.478 11.652 31,720 231 169 312 881 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—Mar.. 49,760 6.478 11,620 31.660 231 169 312 882 1.781 927 97 76 103 Apr.. 6.478 11,620 231 169 312 882 1.781 927 97 76 103 May. 6.478 11,620 231 169 312 882 1.781 927 97 76 103 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 Aug.. 6.478 11.599 231 169 312 882 1.781 927 97 76 103 Sept.. *>49 *740 6.478 11.599 p3i!660 231 169 312 882 1.781 927 97 76 103 Oct... 6.478 11.599 231 169 312 882 1.781 927 97 76 103 Nov.. 6.478 11.599 231 169 312 882 1.781 927 97 76 103 Dec.. 6.478 11.599 231 169 312 882 1.781 927 97 76 103 1976—Jan.. 6.478 11.599 231 312 882 1.781 927 97 76 Feb.. 6.478 11.599 231 312 882 1.781 927 97 76 End of France Ger­ Greece India Iran Iraq Italy Japan Kuwait Leb­ Libya Mexi­ Nether­ period many anon co lands 1970............................ 3,532 3,980 117 243 131 144 2,887 532 86 288 85 176 1,787 1971 ............................ '3,825 '4,426 '107 '264 '142 '156 '3,131 '738 '94 '350 '93 '200 '2,072 1972............................ 3,826 4,459 133 264 142 156 3,130 801 94 350 93 188 2,059 1973............................ 4,261 4,966 148 293 159 173 3,483 891 120 388 103 196 2,294 1974............................ 4,262 4,966 150 293 158 173 3,483 891 148 389 103 154 2,294 1975—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 3,483 891 160 389 103 2,294 Nov................. 4,262 4,966 150 293 158 173 3,483 891 160 389 103 2,294 Dec .. .... 4,262 4,966 150 293 158 173 3,483 891 '169 389 103 2,294 1976—Jan.................. 4,262 4,966 150 293 158 3,483 891 169 389 103 2,294 Feb.................. 4,262 4,966 150 158 3,483 891 169 103 2,294 United Bank End of Paki­ Portu­ Saudi South Spain Sweden Switzer­ Thai­ Turkey King­ Uru­ Vene­ for Intl. period stan gal Arabia Africa land land dom guay zuela Settle­ ments2 1970............................ 54 902 119 666 498 200 2,732 '82 126 1,349 162 384 -282 1971............................ '60 '1,000 '117 '495 '541 '217 '3,158 '89 130 775 '161 '425 310 1972............................ 60 1,021 117 '756 541 217 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—Mar................. 67 1,175 129 755 602 244 3,513 99 151 886 148 472 259 67 1,175 129 747 602 244 3,513 99 151 886 148 472 260 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 1,175 129 754 602 244 3,513 99 151 135 472 256 Nov............... 67 1,175 129 752 602 244 3,513 99 151 135 472 259 Dec 67 1,175 129 749 602 244 3,513 99 151 135 472 246 1976__jan 67 1,175 129 753 602 244 3,513 99 151 472 213 Feb.................. 67 129 749 244 3,513 99 151 472 205 1 Includes reported or estimated gold holdings of international and The figures included for the Bank for International Settlements are regional organizations, central banks and govts, of countries listed in the Bank’s gold assets net of gold deposit liabilities. This procedure this table, and also of a number not shown separately here, and gold to be avoids the overstatement of total world gold reserves since most of the distributed by the Tripartite Commission for the Restitution of Monetary gold deposited with the BIS is included in the gold reserves of individual Gold; excludes holdings of the U.S.S.R., other Eastern European coun­ countries. tries, and People’s Republic of China. 2 Net gold assets of BIS, i.e., gold assets minus gold deposit liabilities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APRIL 1976 □ INTL. CAPITAL TRANSACTIONS OF THE U.S. A61 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 liabili­ liabili­ foreigners ties to ties to non­ End IMF Liquid mone­ of Total arising Short­ liabili­ Short­ tary period from term Market­ Non­ Other ties term Market­ inti, gold liabili­ able market­ readily to com­ liabili­ able and re­ trans­ ties re­ U.S. able U.S. market­ mercial ties re­ U.S. gional actions i Total ported Treas. Treas. able banks Total ported Treas. organi­ by 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. 1964.......................... 29,364 800 15,786 13,220 1,125 1,283 158 7,303 3,753 3,377 376 1,722 1965.......................... 29,568 834 15,825 13,066 1,105 1,534 120 7,419 4,059 3,587 472 1,431 19669........................ \ ( 3 3 1 1 , , 0 1 1 4 9 4 1 1 , , 0 0 1 1 1 1 1 14 4 , , 8 8 9 4 5 0 1 1 2 2 , , 4 53 8 9 4 8 8 6 6 0 0 5 58 8 3 3 9 9 1 1 3 3 1 9 0 , , 9 1 3 1 6 6 4 4, , 2 2 7 7 1 2 3 3 , , 7 7 4 4 3 4 5 5 2 2 8 8 9 9 0 0 5 6 /35,819 1,033 18,201 14,034 908 1,452 1,807 11,209 4,685 4,127 558 691 19679........................ 135,667 1,033 18,194 14,027 908 1,452 1,807 11,085 4,678 4,120 558 677 19689....................... J 1 3 38 8 , , 4 6 7 8 3 7 1 1, ,0 03 3 0 0 1 1 7 7 , , 4 34 0 0 7 1 1 1 1 , , 3 3 1 18 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 53 9 4 4 , , 4 4 4 4 4 4 4 6 6 0 5 9 7 7 2 2 2 5 19699....................... 10/ 1 4 4 5 5 , , 7 9 5 1 5 4 1 1 , , 0 1 1 0 9 9 10 1 1 5 5 , , 9 9 9 7 8 5 1 11 1, , 0 0 7 5 7 4 3 3 4 4 6 6 10 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 39 4 5 5 2 2 5 5 6 66 5 3 9 1970—Dec............... J 1 4 4 7 6 , , 0 9 0 6 9 0 5 5 6 6 6 6 2 2 3 3 , , 7 7 7 8 5 6 1 1 9 9 , , 3 3 3 3 3 3 2 3 9 0 5 6 3 3 , , 4 4 5 5 2 2 6 6 9 9 5 5 1 17 7, ,1 1 6 3 9 7 4 4 , , 6 6 0 7 4 6 4 4 , , 0 0 3 2 9 9 6 5 4 65 7 8 8 4 4 6 4 1971—Dec. ii......... 1 (6 6 7 7 , , 6 8 8 0 1 8 5 5 4 4 4 4 5 5 0 1 , , 6 2 5 0 1 9 3 3 9 9 , , 0 6 1 7 8 9 1 1 , , 9 9 5 5 5 5 9 9, , 4 5 3 3 1 4 1 1 4 4 4 4 1 1 0 0 , , 9 2 4 6 9 2 4 4 , , 1 1 4 3 1 8 3 3 , , 6 6 9 9 1 4 4 4 4 4 7 7 1 1 , , 5 5 2 2 3 8 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 I 1 1 9 9 , , 0 0 1 9 0 7 7 7 6 6 , , 6 6 6 5 5 8 5 5 3 3 , , 0 05 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 , ,0 31 7 4 9 8 8 , , 8 9 0 4 3 3 8 8 , , 3 4 0 45 5 4 4 9 9 8 8 3 3 , , 3 3 2 2 2 2 1975—Feb............. 119,441 78,689 54,310 5,279 16.324 2,776 27,297 9,093 8,483 610 4,362 Mar.............. 119,851 79,190 53,706 6,003 16.324 3,157 27,414 9,047 8,411 636 4,200 Apr.............. 120.954 79,150 53,531 5,941 16,365 3,313 28,799 8,843 8,188 655 4,162 May............. 122,215 79,865 52,408 6,064 17,925 3,468 28,913 9,123 8,500 623 4,314 June............. 121.954 80,638 51,929 6,119 19,027 3,563 27,990 9,310 8,656 654 4,017 July.............. 122,866 79,880 50,393 6,160 19,474 3,853 29,035 9,337 8,627 710 4,614 Aug.............. 124,269 79,357 49,915 6,276 19.324 3,842 30,340 9,668 8,997 671 4,904 Sept.............. 123,123 77,916 48,080 6,452 19.524 3,860 30,318 9,901 9,200 701 4,988 Oct............... 123,228 79,798 49,602 6,624 19.524 4,048 28,467 10,021 9,283 738 4,942 Nov.............. 126,252 79,267 49,124 6,454 19,584 4,105 32,191 10,234 9,527 707 4,560 Dec............... 125,995 80,008 49,170 6,575 19,834 4,429 29,579 10,765 10,036 729 5,643 1976—-Jan. p............ 127,606 80,559 49,141 6,816 19,909 4,693 30,661 10,859 10,124 735 5,527 Feb.P........... 130,792 81,289 49,758 6,917 19,909 4,705 33,038 10,896 10,151 745 j 5,569 1 Includes (a) liability on gold deposited by the IMF to mitigate the shown for the preceding date; figures on second line are comparable with impact on the U.S. gold stock of foreign purchases for gold subscriptions those shown for the following date. to the IMF under quota increases, and (b) U.S. Treasury obligations at 10 Includes $101 million increase in dollar value of foreign currency cost value and funds awaiting investment obtained from proceeds of sales liabilities resulting from revaluation of the German mark in Oct. 1969. of gold by the IMF to the United States to acquire income-earning assets. 11 Data on the second line differ from those on first line because cer­ 2 Includes BIS, and European Fund 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 non­ ment 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

A62 INTL. CAPITAL TRANSACTIONS OF THE U.S. □ APRIL 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 countries 2 End of period countries Canada republics Asia Africa 61,526 34,197 4,279 1,733 17,577 777 2,963 66,827 45,730 3,853 2,544 10,887 788 3,025 f76,658 44,185 3,662 4,419 18,604 3,161 2,627 \76,665 44,185 3,662 4,419 18,611 3,161 2,627 1975—Feb...................................................................................... 78,689 44,770 3,616 4,223 20,274 3,356 2,450 Mar..................................................................................... 79,190 45,776 3,546 4,390 19,421 3,433 2,624 Apr..................................................................................... 79,150 45,063 3,251 4,506 20,126 3,493 2,711 May.................................................................................... 79,865 45,343 3,101 4,600 20,456 3,448 2,917 80,638 45,341 3,008 4,723 20,497 3,800 3,269 July..................................................................................... 79,880 44,316 2,966 4,763 21,384 3,319 3,132 Aug..................................................................................... 79,357 44,068 2,929 4,937 21,057 3,392 2,974 Sept..................................................................................... 77,916 43,339 3,011 4,840 20,819 3,145 2,762 Oct...................................................................................... 79,798 44,868 3,049 4,254 22,008 3,018 2,601 Nov..................................................................................... 79,267 44,602 3,218 4,056 21,826 2,951 2,614 Dec..................................................................................... 80,008 45,171 3,132 4,447 22,381 2,983 1,894 1976—Jan.*................................................................................... 80,559 45,263 3,420 3,551 23,621 2,724 1,980 Feb.*.................................................................................. 81,289 44,737 3,654 3,375 24,784 2,731 2,008 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 non­ pean 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 organizations5 IMF Payable in dollars gold Deposits Payable invest­ U.S. End of period in ment Treasury Other Total1 Deposits U.S. Other foreign Total bills and short­ Treasury short­ cur­ certifi­ term Total bills and term rencies Demand Time2 cates liab. 6 Demand Time2 certifi­ liab. 4 cates 3 197 2 60,696 60,200 8,290 5,603 31,850 14,457 496 1,412 86 202 326 799 197 3 69,074 68.477 11,310 6,882 31,886 18,399 597 1 ,955 101 83 296 1,474 1974—Dec. 7 f [ 9 9 4 4 , , 8 7 4 6 7 0 9 9 4 3 , , 0 9 8 9 1 4 1 1 4 4 , , 0 0 6 6 8 4 1 10 0, , 1 0 0 1 6 0 3 35 5 . .6 6 6 6 2 2 3 34 4 , , 2 2 5 4 8 6 7 7 6 6 6 6 3 3 . . 1 1 7 7 1 1 1 1 3 3 9 9 1 1 1 1 1 1 4 4 9 9 7 7 2 2 . . 4 4 2 2 4 4 1975—Feb.. 94,174 93,441 12,135 10,202 40,428 30,676 733 4,085 118 102 1,260 2,604 Mar.. 93,032 92,351 12,329 10,043 40,094 29,885 682 3,502 189 116 777 2,419 Apr.. 94,192 93,450 11,696 10,390 40,424 30,941 742 3,674 99 126 781 2,668 May. 93,735 93,070 11,929 10,374 40,628 30,139 665 3.914 115 133 1,994 1,672 June. 92,517 91,933 12,596 10,662 38,265 30,535 584 3,943 106 183 996 2,708 July.. 92,500 91,939 12,218 10,385 38,564 30,772 560 4,444 146 134 2,518 1,646 Aug.. 94,055 93,493 12,218 10,703 38,529 32,043 562 4,804 110 148 3,156 1,389 Sept.. 92,499 91,945 13,422 10,400 36,653 31,470 554 4,901 107 127 3,008 1,659 Oct... 91,935 91,300 12,159 10,584 '37,749 30,808 635 4,583 132 150 2,397 1,903 Nov.. 95,313 94,673 12,813 10,293 37,297 34,270 637 4,471 145 156 1,605 2,562 Dec.. 94,077 93.478 13,579 10,664 37,414 31,821 599 5,293 139 186 2,554 2,412 1976—Jan. 94,841 94,232 12,291 11,115 38,789 32,037 609 4.914 114 217 2,498 2,085 Feb.* 97,462 96,808 13,369 10,463 39,657 33,318 654 4,516 118 162 2,435 1,801 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APRIL 1976 □ INTL. CAPITAL TRANSACTIONS OF THE U.S. A63 SHORT-TERM LIABILITIES TO FOREIGNERS REPORTED BY BANKS IN THE UNITED STATES, BY TYPE—Continued (Amounts outstanding; in millions of dollars) Total to official, banks and other foreigners To official institutions 8 Payable in dollars Payable in dollars Payable End of period in Payable Total Deposits U.S. Other foreign Total Deposits U.S. Other Treasury short­ cur­ Treasury short­ foreign bills and term rencies bills and term currencies Demand Time 2 certifi­ liab. 4 Demand Time2 certifi­ liab. 6 cates3 cates3 1973............. 67,119 11,209 6,799 31,590 16,925 597 43,923 2,125 3,911 31,511 6,248 127 1974—Dec. 7 (91,676 13,928 9,995 35.165 31,822 766 53,057 2.951 4,257 34.656 11,066 127 191,589 13,925 9,899 35.165 31,834 766 53,064 2.951 4,167 34.656 11,163 127 1975—Feb.. 90,090 12,016 10,100 39,169 28,072 733 54,310 2,058 4,206 38,840 9,206 Mar.. 89,531 12,140 9,927 39,316 27,466 682 53,706 2,323 203 39,015 8,164 Apr.. 90,518 11,597 10,264 39,643 28,273 742 53,531 2,147 4,193 39,316 7,874 May. 89,821 11,814 10,241 38,634 28,468 665 52,408 2,175 4,324 38,372 7,537 June. 88,659 12,494 10,654 37,269 27,658 584 52,039 2,564 4,321 36,994 8,160 July. . 88,590 12,086 10,288 36,079 29,577 560 50,643 2.492 4,098 35,803 8,250 Aug.. 89,249 12,121 10,251 35,406 30,909 562 49,932 2.493 3,939 35,055 8,445 Sept.. 87,598 13,315 10,273 33,645 29,811 554 48,080 2,452 3,957 33,284 8,387 Oct... 87,352 12,027 10,434 35,359 28,897 635 49,602 2.448 3,948 34,983 8,223 Nov.. 90,842 12,668 10,137 35,692 31,708 637 49,124 2,242 3,594 35,247 8,041 Dec.. 88,785 13,440 10,478 34,860 29,416 591 49,170 2,644 3,438 34,175 8,913 1976—Jan.?. 89,926 12,177 10,898 36,291 29,960 600 49,141 2.449 3,306 35,633 7,753 Feb.?, 92,946 13,250 10,302 37,222 31,530 642 49,758 2,702 2,934 36,628 7,494 To banks9 To other foreigners To banks Payable in dollars and other foreigners: End of period Total Payable in Deposits U.S. Other Deposits U.S. Other foreign Treasury short­ Treasury short­ cur­ Total bills and term Total bills and term rencies Demand Time2 certifi­ liab.4 Demand Time2 certifi­ liab.6 cates cates 1973.......................... 23,196 17,224 6,941 529 11 9,743 5,502 2,143 2,359 68 933 469 1Q7i__7 /38,619 29,676 8,248 1,942 232 19,254 8,304 2,729 3,796 277 1 ,502 639 \38,525 29,441 8,244 1,936 232 19,029 8,445 2,729 3,796 277 1 ,643 639 1975—Feb............... 35,780 26,564 7,138 2,033 155 17,238 8,483 2,820 3,861 174 1 ,628 733 Mar.............. 35,825 26,732 7,077 1,808 101 17,747 8,411 2,740 3,916 200 1,555 682 Apr.............. 36,988 28,058 6,894 2,102 120 18,941 8,189 2,556 3,969 207 1,457 742 May............. 37,414 28,249 6,856 1,821 105 19,466 8,500 2,784 4,096 156 1,465 665 June............. 36,620 27,261 7,075 2,009 99 18,078 8,775 2,855 4,324 176 1,421 584 July.............. 37,947 28,113 6,906 1,339 124 19,744 9,273 2,688 4,851 152 1,582 560 Aug.............. 39,317 29,708 6,923 1,836 121 20,827 9,048 2,705 4,476 230 1,637 562 Sept.............. 39,518 29,764 7,982 1,775 89 19,918 9,200 2,881 4,541 272 1,506 554 Oct............... 37,750 27,832 6,811 1,777 100 19,143 9,282 2,769 4,708 276 1,530 635 Nov.............. 41,718 31,554 7,587 1,694 135 22,139 9,527 2,839 4,850 311 1,528 637 Dec............... 39,615 28,988 7,549 2,140 335 18,964 10,036 3,248 4,901 349 1 ,538 591 1976—Jan.?............ 40,785 30,061 6,828 2,180 369 20,683 10,123 2,899 5,411 289 1 ,523 600 Feb.?........... 43,188 32,397 7,439 2,184 275 22,498 10,150 3,108 5,184 320 1,538 642 1 Data exclude IMF holdings of dollars. with those shown for the preceding date; figures on the second line are 2 Excludes negotiable time certificates of deposit, which are included comparable with those shown for the following date. in “Other short-term liabilities.” 8 Foreign central banks and foreign central govts, and their agencies, 3 Includes nonmarketable certificates of indebtedness and Treasury Bank for International Settlements, and European Fund through Dec. bills issued to official institutions of foreign countries. 1972. 4 Includes liabilities of U.S. banks to their foreign branches, liabilities 9 Excludes central banks, which are included in “Official institutions.” of U.S. agencies and branches of foreign banks to their head offices and foreign branches, bankers’ acceptances, commercial paper, and negotiable Note.—“Short term” obligations are those payable on demand or having time certificates of deposit. an original maturity of 1 year or less. For data on long-term liabilities 5 Principally the International Bank for Reconstruction and Develop­ reported by banks, see Table 9. Data exclude International Monetary Fund ment and the Inter-American and Asian Development Banks. holdings of dollars; these obligations to the IMF constitute contingent Includes difference between cost value and face value of securities in liabilities, since they represent essentially the amount of dollars available IMF gold investment account. for drawings from the IMF by other member countries. Data exclude also 6 Principally bankers’ acceptances, commercial paper, and negotiable U.S. Treasury letters of credit and nonnegotiable, noninterest-bearing time certificates of deposit. special U.S. notes held by the Inter-American Development Bank and 7 Data on the 2 lines shown for this date differ because of changes in the International Development Association. reporting coverage. Figures on the first line are comparable in coverage Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 INTL. CAPITAL TRANSACTIONS OF THE U.S. □ APRIL 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 1976 Area and country Dec.1 May June July Aug. Sept. Oct. Nov. Dec. Feb.p Europe: Austria........................................ 607 607 627 627 661 667 688 606 635 700 714 693 Belgium-Luxembourg............. 2,506 2,506 2,875 3,070 2,982 2,891 2,865 2,918 2,938 2,917 2,697 2,460 Denmark.................................... 369 369 323 355 325 308 311 327 361 332 375 434 Finland....................................... 266 266 181 365 361 406 391 367 380 391 309 313 France........................................ 4,287 4,287 4,982 5,403 5,515 5,493 5,950 6,608 7,172 7,733 7,498 6,479 Germany.................................... 9,420 9,429 8,203 6,460 5,440 5,277 4,797 5,047 4,841 4,407 3,873 4,522 Greece........................................ 248 248 273 254 299 307 361 331 313 284 263 340 Italy............................................. 2,617 2,617 2,157 2,298 1,426 1,056 1,426 1,398 1,071 1,112 1,052 1,044 Netherlands................................ 3,234 3,234 3,351 3,535 3,539 3,301 3,059 3,199 3,301 3,148 3,132 3,561 Norway...................................... 1,040 1,040 846 945 1,118 1,052 982 886 970 996 888 925 Portugal....................................... 310 310 267 264 279 268 207 236 190 194 243 221 Spain............................................ 382 382 341 362 392 288 459 414 402 426 445 400 Sweden......................................... 1,138 1,138 1,697 1,847 2,010 2,203 2,195 2,252 2,241 2,286 2,266 2,312 Switzerland.................................. 9,986 10,137 8,615 8,445 7,965 8,282 8,048 8,205 8,029 8,556 8,611 8,653 Turkey.......................................... 152 152 87 124 106 134 116 128 120 118 88 104 United Kingdom..................... 7,559 7,584 6,994 6,417 6,461 8,342 6,268 6,722 7,177 6,885 7,609 8,233 Yugoslavia.................................. 183 183 126 83 106 104 128 138 175 126 83 178 Other Western Europe2........... 4,073 4,073 2,546 2,562 2,560 2,291 2,443 2,428 2,370 2,970 2,322 2,229 U.S.S.R......................................... 82 82 61 62 29 50 39 42 38 40 45 43 Other Eastern Europe............... 206 206 148 370 181 160 272 153 128 200 512 201 Total..................................... 48,667 48,852 44,701 43,852 41,755 42,882 41,005 42,405 42,853 43,821 42,666 43,345 Canada............................................. 3,517 3,520 3,951 3,617 3,921 3,637 3,944 3,567 4,091 3,075 3,885 4,715 Latin America: Argentina..................................... 964 989 1,061 1 ,054 984 1,135 1,150 1,147 1,208 1,134 Bahamas...................................... 1,448 1,054 2,288 1,691 1,991 2,190 1,503 2,221 2,989 1,834 3,197 2,897 Brazil............................................ 1,034 1,034 984 1,081 853 921 1,016 1,083 1,075 1,227 1,191 1,210 Chile.............................................. 276 276 260 289 301 280 293 270 266 317 248 248 Colombia..................................... 305 305 307 400 376 367 379 366 387 414 483 533 Mexico.......................................... 1,770 1,770 1,876 1,819 1,809 1,824 1,872 1,956 2,183 2,078 1,899 2,051 Panama........................................ 488 510 579 549 657 649 752 765 840 1,097 1,170 944 Peru.............................................. 272 272 206 219 228 208 245 247 249 244 219 223 Uruguay....................................... 147 165 168 155 190 160 208 168 175 172 185 204 Venezuela.................................... 3,413 3,413 3,866 3,726 3,964 4,242 4,247 3,531 3,188 3,290 2,711 2,571 Other Latin American re­ publics ...................................... 1,316 1,316 1,360 1,513 1,417 1,371 1,469 1,399 1,368 1.500 1,436 1,459 Netherlands Antilles and Surinam.................................... 158 158 123 134 104 105 119 113 118 129 124 128 Other Latin America................. 526 596 899 991 1,603 1,534 1,897 1,046 2,141 1.501 1,613 2,421 Total..................................... 12,038 11,754 13,881 13,557 14,554 14,907 14,983 14,305 16,131 14,950 15,684 16,022 Asia: China, People’s Rep. of (China Mainland).................. 50 50 49 65 50 55 94 104 93 123 263 224 China, Republic of (Taiwan).. 818 818 1,006 1,071 1,015 1,054 1,058 1,061 1,051 1,025 1,010 1,072 Hong Kong................................. 530 530 596 598 540 577 741 684 683 623 667 681 India.............................................. 261 261 168 145 133 214 214 194 181 126 203 321 Indonesia..................................... 1,221 1,221 279 365 527 289 234 612 418 369 762 586 Israel............................................. 386 389 538 472 369 343 322 364 342 386 292 309 Japan............................................ 10,897 10,897 11,109 11,223 11,669 11,218 11,128 9,940 10,776 10,142 10,544 11,657 Korea............................................ 384 384 341 361 366 374 342 400 386 390 395 381 Philippines................................... 747 747 662 697 632 669 604 580 593 698 601 613 Thailand...................................... 333 333 342 370 284 255 207 194 193 252 279 224 Middle East oil-exporting countries 3................................ 4,633 4,608 4,300 3,835 4,432 4,804 5.111 5,785 5,987 6,440 6,428 6,489 Other............................................ 813 820 861 906 767 919 970 925 885 869 970 978 Total.................................... 21,073 21,082 20,251 20,108 20,785 20,770 21,025 20,844 21,589 21,443 22,413 23,537 Africa: Egypt............................................ 103 103 113 514 253 295 188 185 255 342 177 180 South Africa................................ 130 130 179 141 132 147 254 177 108 168 217 132 Oil-exporting countries4........... 2,814 2,814 3,009 2,965 2,785 2,872 2,649 2,447 2,372 2,238 2,134 2,206 Other............................................ 504 504 596 572 563 552 560 575 643 622 561 609 Total.................................... 3,551 3,551 3,897 4,192 3,732 3,866 3,651 3,385 3,377 3,370 3,089 3,127 Other countries: Australia...................................... 2,742 2,742 3,069 3,185 3,231 3,114 2,912 2,766 2,712 2,013 2,046 2,070 All other...................................... 89 89 71 64 77 75 78 80 87 114 143 131 Total.................................... 2,831 2,831 3,140 3,249 3,308 3,189 2,989 2,846 2,800 2,127 2,189 2,200 Total foreign countries................. 91,676 91,589 89,821 88,574 88,055 89,252 87,598 87,352 90,842 88,786 89,926 92,946 International and regional : International5............................ 2,900 2,900 3,661 3,694 4,173 4,500 4,621 4,303 4,217 5,069 4,640 4,195 Latin American regional........ 202 202 169 155 181 215 186 190 193 187 198 257 Other regional6........................ 69 69 84 94 90 94 90 61 37 76 66 Total.................................. 3,171 3,171 3,914 3,943 4,444 4,804 4,901 4,583 4,471 5,293 4,915 4,516 Grand total....................... 94,847 94,760 93,735 92,517 92,500 94,055 92,499 91,935 95,313 94,078 94,841 97,462 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APRIL 1976 □ INTL. CAPITAL TRANSACTIONS OF THE U.S. A65 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 Area and country Dec. Apr. Dec. Apr. Dec. Dec. Apr. Dec. Apr. Dec. Other Western Europe: Other Asia—Cont.: Cyprus......................................... 19 10 7 17 6 Cambodia............... 2 4 4 4 Iceland........................................ 8 11 21 20 33 Jordan..................... 6 6 22 30 39 Ireland, Rep. of........................ 62 53 29 29 Laos......................... 3 3 3 5 2 Lebanon................. 62 68 126 180 Other Latin American republics: Malaysia................. 58 40 63 92 77 Bolivia......................................... 68 102 96 93 110 Pakistan.................. 105 108 91 118 74 Costa Rica.................................. 86 88 118 120 124 Singapore............... 141 165 245 215 Dominican Republic................ 118 137 128 214 169 Sri Lanka (Ceylon) 13 13 14 13 13 Ecuador....................................... 92 90 122 157 Vietnam................... 88 98 126 70 62 El Salvador................................. 90 129 129 144 171 Guatemala................................... 156 245 219 255 260 Haiti............................................. 21 28 35 34 38 Honduras..................................... 56 71 88 92 99 Other Africa: Jamaica........................................ 39 52 69 62 41 Ethiopia (incl. Eritrea) 79 118 95 76 60 Nicaragua.................................... 99 119 127 125 133 Ghana........................... 20 22 18 13 Paraguay....................................... 29 40 46 38 43 Kenya............................ 23 20 31 32 19 Trinidad and Tobago......... 17 21 107 31 Liberia........................... 42 29 39 33 53 Southern Rhodesia. . . 2 1 2 3 1 Other Latin America: Sudan............................ 3 2 4 14 12 Bermuda....................................... 242 201 116 100 Tanzania....................... 12 12 11 21 British West Indies.................... 109 354 449 627 Tunisia........................... 7 17 19 23 29 Uganda......................... 6 11 13 38 22 Other Asia:.................................... Zambia.......................... 22 66 22 18 78 Afghanistan................................ 22 11 18 19 Burma........................................... 12 42 65 49 All other: New Zealand............... 39 33 47 36 42 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 To inti. End of period Total and Official Other United Total All regional Total institu­ Banks1 foreign­ Ger­ King­ Total Latin Middle Other other tions ers many dom Europe America East2 Asia3 coun­ tries ' 1972................................. 1,018 580 439 93 259 87 165 63 260 136 33 10 1973................................. 1,462 761 700 310 291 100 159 66 470 132 83 16 1974................................. 1,285 822 464 124 261 79 146 43 227 115 94 8 20 1975—Feb...................... 1,435 770 666 336 264 66 141 57 211 119 304 9 21 Mar..................... 1,512 794 718 396 255 67 131 57 202 120 364 9 21 Apr...................... 1,463 620 843 521 253 68 129 57 205 121 484 10 22 May.................... 1,497 579 918 601 248 69 123 57 199 121 569 5 22 June..................... 1,460 512 948 806 247 70 120 59 197 121 599 2 23 July..................... 1,493 432 1,060 1,041 242 77 121 61 201 121 709 5 24 Aug..................... 1,446 372 1,074 751 243 81 120 61 202 123 719 6 23 Sept..................... 1,468 395 1,073 753 241 79 118 61 201 121 721 6 23 Oct...................... 1,385 311 1,072 748 241 83 118 61 206 126 712 4 24 Nov..................... 1,391 297 1,093 749 261 83 115 61 206 147 712 4 24 Dec...................... 1,757 415 1,340 951 289 100 164 61 256 140 913 9 24 1976—Jan.*................... 1,875 306 1,567 1,042 402 123 264 65 373 142 1,005 8 41 Feb.*................... 1,863 287 1,574 1,066 398 110 262 64 369 142 1,024 13 27 1 Excludes central banks, which are included with “Official institutions.” Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial 2 Comprises oil-exporting countries as follows; Bahrain, Iran, Iraq, States). 3 Until Dec. 1974 includes Middle East oil-exporting countries. 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A66 INTL. CAPITAL TRANSACTIONS OF THE U.S. □ APRIL 1976 10. ESTIMATED FOREIGN HOLDINGS OF MARKETABLE U.S. TREASURY BONDS AND NOTES (End of period; in millions of dollars) 1974 1975 1976 Area and country Dec. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan.? Feb.? Europe: Belgium-Luxembourg....................... 10 14 14 14 14 14 14 14 14 13 13 13 13 Germany.............................................. 9 208 209 209 209 209 210 217 216 216 215 212 238 Sweden................................................. 251 252 252 251 252 252 278 275 275 275 276 276 275 Switzerland.......................................... 30 29 32 34 37 37 41 44 54 58 55 68 72 United Kingdom................................ 493 599 611 564 522 536 520 501 441 414 363 374 370 Other Western Europe..................... r88 r79 r95 r97 97 98 102 114 152 152 117 199 204 Eastern Europe.................................. 5 5 5 5 5 5 5 5 5 4 4 4 4 Total............................................. 885 1,186 1,217 1,174 1,135 1,151 1,169 1,170 1,157 1,134 1,044 1,146 1,176 Canada..................................................... 713 588 460 412 412 408 406 404 399 400 393 393 416 Latin America: Latin American republics................. 12 11 11 11 13 13 13 13 13 33 33 33 31 Netherlands Antilles1........................ 83 130 125 118 134 178 149 149 158 160 161 159 131 Other Latin America......................... 5 5 4 4 5 5 5 5 6 6 6 7 8 100 147 140 133 152 196 167 168 177 199 200 199 170 Asia: Japan..................................................... 3,498 3,496 3,496 3,496 3,496 3,496 3,496 3,502 3,520 3,269 3,271 3,268 3,212 Other Asia.......................................... 212 1,071 1,121 1,291 1,397 1,418 1,498 1,648 1,798 1,849 2,075 2,195 2,337 Total............................................. 3,709 4,567 4,617 4,787 4,893 4,914 4,994 5,149 5,319 5,118 5,346 5,473 5,549 151 151 161 181 181 201 211 261 311 311 321 340 350 Total foreign countries......................... 5,557 6,639 6,596 6,687 6,773 6,870 6,945 7,153 7,362 7,161 7,304 7,552 7,662 International and regional: 97 627 419 342 29 128 66 52 324 60 322 593 1,034 Latin American regional................... 53 71 69 57 44 40 35 35 35 29 29 19 19 Total.............................................. 150 699 488 399 74 169 101 87 359 89 351 612 1,053 Grand total.................................. 5,708 7,337 7,084 7,087 6,847 7,039 7,048 7,240 7,721 7,250 7,655 8,164 8,715 1 Includes Surinam until Jan. 1976. year, and are based on a benchmark survey of holdings as of Jan. 31,1971, Note.—Data represent estimated official and private holdings of mar- and monthly transactions reports (see Table 14). ketable U.S. Treasury securities with an original maturity of more than 1 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, se­ tions made Deposits curities, Total Official out­ for acct. Other Total with for­ coml. Other Total institu­ Banks1 Others2 stand­ of for­ eigners and fi­ tions ing eigners nance paper 1972................................ 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................................ 39,030 37,835 11,301 381 7,342 3,579 5,637 11,237 9,659 1,195 668 289 238 1975—Feb...................... 39,863 38,689 10,288 379 6,384 3,525 5,346 11,127 11,927 1,175 609 336 229 Mar..................... 42,283 41,136 9,615 310 5,664 3,641 5,418 11,341 14,762 1,147 626 290 231 Apr..................... 42,753 41,651 10,642 362 6,499 3,780 5,342 11,441 14,226 1,102 619 241 242 May.................... 45,866 44,810 11,853 366 7,636 3,852 5,537 10,959 16,460 1,056 478 301 277 June.................... 45,710 44,497 11,347 494 6,796 4,057 5,345 10,641 17,165 1,212 591 335 286 July..................... 45,542 44,368 11,705 572 6,837 4,296 5,383 10,204 17,076 1,175 608 296 271 Aug..................... 45,441 44,293 13,084 626 7,960 4,499 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 46,390 12,632 632 7,483 4,517 5,465 10,134 18,160 1,306 734 231 341 Nov..................... 48,127 46,846 13,075 670 7,929 4,476 5,363 10,610 17,799 1,281 625 340 316 Dec..................... 49,876 48,588 13,352 586 7,736 5,030 5,467 11,132 18,637 1,288 612 301 376 1976—Jan ?................... 51,234 49,992 13,662 668 8,196 4,799 5,311 11,047 19,972 1,242 693 263 286 Feb.?.................. 53,405 52,020 14,463 737 8,841 4,886 5,191 10,993 21,372 1,386 715 241 429 1 Excludes central banks which are included with “Official institutions.” 2 Includes international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APRIL 1976 □ INTL. CAPITAL TRANSACTIONS OF THE U.S. A67 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 Area and country Dec. May June July Aug. Sept. Oct. Nov. Dec. Jan.P Feb.*’ Europe: Austria............................................................ 21 19 17 16 28 20 19 32 15 20 23 Belgium-Luxembourg................................. 384 647 600 620 598 536 555 463 352 401 420 Denmark....................................................... 46 49 64 62 60 46 50 54 49 55 54 Finland........................................................... 122 137 133 143 143 130 127 133 128 132 120 France............................................................ 673 726 584 666 741 906 1,329 1,195 1,403 1,336 1,445 Germany........................................................ 589 389 428 482 448 443 496 659 427 485 425 Greece............................................................ 64 37 37 46 50 54 56 91 49 55 52 Italy................................................................. 345 329 339 363 336 363 438 418 370 369 402 Netherlands................................................... 348 221 218 288 338 313 264 285 300 316 266 Norway.......................................................... 119 126 98 91 106 102 102 92 71 66 63 Portugal..................................................... 20 25 25 27 22 18 15 19 16 20 20 Spain............................................................... 196 251 235 257 214 245 256 261 249 274 262 Sweden ........................................................... 180 132 115 155 185 182 152 182 167 124 111 Switzerland................................................... 335 277 252 254 290 214 274 314 232 244 273 Turkey............................................................ 15 30 40 26 43 56 54 121 86 59 82 United Kingdom......................................... 2,570 3,718 3,476 3,458 4,067 3,724 3,792 3,858 4,586 4,506 4,712 Yugoslavia..................................................... 22 39 31 36 40 37 34 55 38 37 49 Other Western Europe............................... 22 25 22 22 62 23 22 25 27 26 29 U.S.S.R........................................................... 46 83 77 80 79 106 144 165 103 101 84 Other Eastern Europe................................ 131 117 118 130 110 110 96 103 114 124 158 Total. 6,245 7,379 6,910 7,222 7,960 7,630 8,275 8,526 8,781 8,752 9,051 Canada. 2,776 3,081 2,837 2,651 2,340 2,626 2,728 2,742 2,812 3,015 2,977 Latin America: Argentina............................................. 720 1,007 1,111 1,105 1,115 1,219 1,343 1,229 1,203 1,246 1,335 Bahamas............................................. 3,398 7,738 8,660 7,813 6,627 6,432 7,250 6,856 7,513 7,981 9,551 Brazil.................................................... 1,415 1,272 1,184 1,390 1,505 1,491 1,536 1,785 2,200 2,132 2,163 C C o h l i o le m ... b .. i .. a .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 7 9 13 0 4 7 2 0 2 2 4 6 2 8 9 7 4 6 7 6 2 6 4 6 3 6 5 7 4 6 0 8 5 4 6 35 6 1 2 6 3 4 81 9 3 68 6 9 0 3 65 1 1 2 3 5 4 8 3 3 Mexico................................................. 1,972 2,383 2,548 2,676 2,762 2,705 2,623 2,565 2,800 2,773 3,069 P P U e a r r n u u a g . m u .. a .. a . y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 5 1 6 0 8 3 3 5 6 1 7 9 0 1 0 0 6 5 2 8 2 3 5 7 6 58 2 9 1 0 6 6 5 4 7 7 8 3 6 6 72 2 5 1 4 4 9 5 0 9 5 3 9 2 8 5 8 6 5 6 5 6 1,0 5 3 8 51 2 8 1,2 6 3 2 6 7 8 4 1,1 6 5 3 5 8 4 8 O V t e h n e e r z u L e a l t a i . n .. . A ... m .... e .. r .. i . c .. a .. n .. .. r . e .. p ... u .. b ... l . i . c .. s .. _ . __ 8 7 6 0 6 4 9 7 7 4 2 5 7 9 9 6 1 6 1,0 9 5 0 5 2 1,0 9 0 5 5 6 1 1, ,1 0 0 1 9 4 1 1 , , 0 04 5 1 1 9 96 8 9 0 1,0 9 8 8 6 0 1 1 , . 0 0 0 5 1 7 1,0 9 6 2 8 5 N O e th th er e r L la a n t d in s A A m nt e il r le ic s a a .. n .. d ... . S ... u .. r .. i . n .. a .. m .... . . 1,14 6 2 2 2,22 4 7 4 1,83 8 0 3 1,67 6 9 2 2,09 5 1 4 1,68 5 4 7 2,20 5 2 9 2,55 4 5 6 1,81 4 6 9 3.05 5 7 3 3,24 43 6 Total. 12,366 18,874 19,523 19,118 18,516 18,199 19,673 19,522 20,417 22,193 24,177 Asia: China, People’s Rep. of (China Mainland) 4 12 9 13 13 5 11 11 22 10 17 China, Republic of (Taiwan).................... 500 434 483 463 503 606 601 681 735 725 729 H I I n n o d d n i o a g n . . e K .. s . i . o . a . n . . . . . g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1 2 5 1 3 7 4 2 1 8 1 1 8 9 7 3 1 2 1 1 0 5 5 2 1 0 2 1 1 3 3 1 8 3 9 8 8 0 23 2 9 1 1 1 25 8 1 7 6 7 2 9 5 1 2 8 6 2 1 5 2 0 1 8 5 2 1 3 2 1 9 4 9 2 1 2 2 31 5 6 Israel............................................................... 255 287 312 362 358 398 389 387 491 419 365 Japan.............................................................. 12,514 10,603 10,245 10,310 10,294 10,400 10,253 10,429 10,760 10,109 9,860 Korea............................................................. 955 1,415 1,523 1,462 1,502 1,515 1,555 1,505 1,556 1,605 1,715 Philippines..................................................... 372 455 478 481 410 340 338 347 377 426 497 Thailand......................................................... 458 374 441 461 494 474 501 499 495 535 516 Middle East oil-exporting countries1.... 330 411 418 527 493 624 446 506 524 525 600 Other............................................................... 441 568 492 544 572 651 702 665 683 733 704 Total. 16,222 14,984 14,850 14,960 14,956 15,357 15,156 15,396 16,025 15,468 15,386 Af E ri g c y a: pt................................... 111 138 149 134 141 125 127 130 104 106 101 O So il u - t e h x p A or f t r i i n c g a . c .. o .. u ... n .. t .. r . i .. e .. s . 2 ... . 3 1 2 1 9 5 4 1 7 2 5 8 4 1 9 2 8 0 4 1 8 4 9 4 4 1 9 3 2 4 5 1 0 9 4 0 2 5 0 13 7 2 5 1 4 5 0 2 5 3 4 1 6 5 2 4 1 7 3 2 54 3 6 0 Other................................... 300 276 301 297 347 343 380 409 351 348 330 Total. 855 1,018 1,068 1,064 1,114 1,162 1,227 1,294 1,231 1,214 1,207 Other countries: Australia......... 466 440 428 446 466 509 532 554 535 502 491 All other.......... 99 89 81 80 80 105 91 73 87 113 Total.......................... 565 528 509 526 554 589 638 645 608 589 605 Total foreign countries.... 39,030 45,864 45,699 45.541 45,438 45,562 47.696 48.126 49.875 51,232 53,403 International and regional. 2 11 1 3 1 * 1 1 3 2 Grand total............. 39,030 45,866 45,710 45.542 45,441 45,564 47.697 48.127 49.876 51,234 53,405 1 Comprises Bahrain, Irarj, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, made to, and acceptances made for, foreigners; drafts drawn against and United Arab Emirates (Trucial States). foreigners, where collection is being made by banks and bankers for 2 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

A68 INTL. CAPITAL TRANSACTIONS OF THE U.S. o APRIL 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 Total Total Middle Other All Other foreign Europe Canada Latin Japan East3 Asia4 other long­ curren­ America coun­ Official Other term cies tries 2 Total institu­ Banks1 foreign­ claims tions ers2 1972................... 5,063 4,588 844 430 3,314 435 40 853 406 2,020 353 918 514 1973................... 5,996 5,446 1,160 591 3,694 478 72 1,272 490 2,116 251 1,331 536 1974................... 7,183 6,494 1,333 931 4,230 609 80 1,907 501 2,613 258 384 977 542 1975—Feb 7,491 6,811 i 1,378 1,035 4,397 611 69 2,096 500 2,686 248 388 972 601 Mar.. .. 7,589 6,920 ! 1,401 1,069 4,450 598 70 2,126 500 2,707 247 385 1,029 595 Apr....... 7,619 6,935 1,241 1,117 4,578 605 78 2,188 505 2,798 242 247 1,006 633 May.... 7,906 7,215 1,283 1,198 4,733 610 8! 2,325 491 2,864 254 242 1,047 683 June.... 7,995 7,184 1,274 1,226 4,683 719 92 2,303 461 2,880 264 241 1,150 696 July.... 8,208 7,425 1,292 1,319 4,815 792 90 2,344 471 3,037 270 241 1 ,223 723 Aug. . .. 8,265 7,394 1,276 1,336 4,782 787 85 2,395 438 3,003 259 237 1,204 728 Sep........ 8,539 7,637 1,348 1,364 4,926 809 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.. . . 9,070 8,050 1,303 1,547 5,201 903 118 2,529 569 3,281 293 249 1,218 931 Dec___ 9,485 8,435 1,380 1,692 5,362 934 116 2,675 555 3,448 296 220 1,276 1,016 1976—Jan.*. .. 9,413 8,350 1,291 1,636 5,423 945 118 2,677 552 3,383 289 213 1,269 1,030 Feb.*... 9,512 8,352 1,266 1,636 5,450 1,012 149 2,603 576 3,474 289 230 1,249 1,092 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 notes1 U.S. corporate Foreign bonds 3 Foreign stocks 3 securities2,3 Net purchases or sales (—) Period Pur­ Net pur­ Pur­ Net pur­ Pur- Net pur­ Intl. Foreign chases Sales chases or chases Sales chases Sales Sales chases Ol Total and sales ( —) sales ( — ) sales ( — ] regional 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 1,036 3,254 -2,218 1,907 1,722 185 1975............................... 1,948 201 1,747 1,516 230 20,360 15,212 5,148 2,386 8,687 -6,300 1,538 1,719 -182 1976—Jan.-Feb *___ 1,060 702 357 341 16 5,259 4,152 1,106 864 2,336 -1,473 307 357 -50 1975—Feb..................... 214 9 205 102 102 1,699 1,445 254 117 546 -429 134 173 -39 Mar.................... 1,171 421 749 724 25 1,760 1,155 604 195 647 -452 148 159 -11 Apr.................... -254 -210 -43 -62 20 1,640 1,397 243 167 338 -171 155 141 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 1,332 422 215 852 -637 129 143 -15 July.................... 192 95 96 41 56 2,251 1,278 973 315 1,008 -693 109 119 -10 Aug.................... 9 -67 77 117 -40 1,421 1,338 82 158 '318 -160 89 256 -167 Sept............... 192 -14 206 175 31 1,257 1,124 '1 34 194 '285 -91 91 79 11 Oct..................... 481 272 209 173 37 2,023 1,362 662 195 678 -484 137 161 -24 Nov.................... -470 -270 -201 -171 -30 1,605 1,231 374 248 991 -743 107 78 29 Dec.................... 405 262 143 121 21 1,859 958 901 282 1,471 -1,190 148 97 51 1976—Jan.*................. 508 261 247 241 6 2,789 2,077 712 462 789 -328 145 139 6 Feb.*................. 551 441 110 101 10 2,469 2,075 394 402 1,547 -1,145 162 218 -56 1 Excludes nonmarketable U.S. Treasury bonds and notes issued to Middle East Africa official institutions of foreign countries. 2 Includes State and local govt, securities, and securities of U.S. Govt, 1975* 1,773 170 agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. corporations organized to finance direct investments 1976—Jan.-Feb.* 30 abroad. 3 Includes transactions of international and regional organizations. 1975—Feb. 209 4 Includes transactions (in millions of dollars) of oil-exporting countries Mar. 525 in Middle East and Africa as shown in the tabulation in the opposite Apr. 50 10 column: May 175 20 June 106 July 1 20 Aug. 80 10 Sept. 150 50 Oct. 150 50 Nov. 51 Dec. 176 10 1976—Jan.* 115 20 Feb.* 116 10 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APRIL 1976 □ INTL. CAPITAL TRANSACTIONS OF THE U.S. A69 15. NET PURCHASES OR SALES BY FOREIGNERS OF U.S. CORPORATE STOCKS, BY COUNTRY (In millions of dollars) Pur­ Net pur­ Ger­ Nether­ Switzer­ United Total Total Middle Other Period chases Sales chases or France many lands land King­ Europe Canada America East1 Asia2 Other3 sales (—) dom Latin 1973....................... 12,767 9,978 2,790 439 2 339 686 366 2,104 99 4 577 5 1974....................... 7,634 7,095 540 203 39 330 36 -377 281 -6 -33 288 10 1975....................... 15,066 10,600 4,465 262 250 359 897 569 2,464 356 -7 1,470 140 39 1976—Jan.-Feb.p 4,121 3,252 868 15 147 -62 60 130 339 87 86 359 -4 3 1975—Feb............ 1,420 891 529 21 25 14 115 147 331 20 13 153 -4 15 Mar........... 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 -1 122 12 4 Dec............ 1,355 686 669 28 40 64 123 32 297 102 -9 268 13 -3 1976—Jan.p . 2,051 1,536 515 1 136 -48 -2 88 207 40 76 198 -7 1 Feb.?\ 2,070 1,716 353 14 11 -14 62 41 132 47 10 161 3 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 Nether­Switzer­ United Total Total Middle Other Total Other Intl. and Period Total France many lands land Kingdom Europe Canada Latin East1 Asia2 Africa countries regional America 197 3 1,948 201 -33 -19 307 275 1,204 49 44 588 * 10 52 197 4 993 96 28 183 96 373 719 45 43 632 * 10 -456 197 5 681 82 -11 -16 116 80 116 127 30 1,437 -42 5 1 -993 1976—Jan.-Feb.p 238 7 * 3 56 140 15 32 9 242 -55 -1 -10 5 1975—Fe b -275 -4 3 * 3 -91 -87 16 * 35 1 * 1 -241 Mar........... 365 1 -1 -1 10 23 32 4 -4 341 -19 * * 10 Apr............ -16 1 2 -26 35 -99 -100 5 3 80 1 * * -6 May........... -212 3 1 -1 7 -81 -72 7 1 81 -11 * * -218 June........... 164 9 * 8 5 32 58 4 * 65 -1 * * 38 July............ 384 27 16 6 35 80 183 33 1 179 4 * * -17 Aug........... -358 13 -3 -18 -6 -69 -73 6 1 -1 1 * * -292 Sept........... -107 -13 6 25 -7 121 -19 -5 5 82 -7 * * -162 Oct............. 296 1 -50 2 12 89 51 38 11 209 -4 3 * -11 Nov........... 69 39 8 -17 9 -41 -25 -2 6 75 4 1 * 11 Dec............ 232 2 3 3 8 56 74 6 6 140 -12 1 * 16 1976—Jan. *......... 197 5 1 1 36 142 -8 29 3 219 -21 -2 -10 -13 Feb.p...... 41 2 -1 2 20 -2 23 4 6 24 -34 1 * 18 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 di­ rect investments abroad. 17. NET PURCHASES OR SALES BY FOREIGNERS OF 18. FOREIGN CREDIT AND DEBIT LONG-TERM FOREIGN SECURITIES, BY AREA BALANCES IN BROKERAGE ACCOUNTS (In millions of dollars) (Amounts outstanding; in millions of dollars) Intl. Total Latin Other Credit Debit Period Total and foreign Eu­ Canada Amer­ Asia Af­ coun- End of balances balances re­ coun­ rope ica rica tries period (due to (due from gional tries foreigners) foreigners) 1973 — 818 139 — 957 — 141 — 569 — 120 — 168 3 37 1973—June.............................. 316 243 1974................. -2,033 -60 -1,973 -546 -1,508 -93 144 7 22 Sept............................... 290 255 1975 ................. -6,480 -2,192 -4,290 -48 -3,173 -308 -618 14 -154 Dec............................... 333 231 1976— 1974—Mar.............................. 383 225 Jan.-Feb. p -1,522 -45 -1,478 -76 -1,265 -4 -114 -7 11 June.............................. 354 241 Sept.............................. 298 178 1975—Feb___ -468 -147 -321 19 -152 -97 -94 2 * Dec............................... 293 194 Mar.... -463 -106 -358 — 66 -176 -3 -112 -2 1 Apr.. .. -157 -57 -100 -57 -3 17 -59 * 2 1975—Mar.............................. 349 209 May... -184 31 -215 39 -167 * -88 -2 2 June.............................. 380 233 June... -652 * -652 -22 -475 * -30 2 127 Sept.............................. 343 258 July___ -703 -475 -229 -26 -113 -25 -69 * 4 Dec.p........................... 364 319 Aug----- -327 12 -339 24 -199 -164 1 1 2 Sept___ -80 18 -98 -19 -129 25 24 -1 1 Oct....... -508 5 -513 48 -460 -48 -56 -3 6 Note.—Data represent the money credit balances and Nov___ -714 -62 -652 -27 -584 6 3 -2 —48 money debit balances appearing on the books of reporting Dec.. .. -1,139 -839 -299 80 -310 9 -78 -1 1 brokers and dealers in the United States, in accounts of foreigners with them, and in their accounts carried by Digitized for 1F9R76A—SJ F Ea e nR b . . ? p . . . . . - 1 - , 3 2 2 0 1 1 -13 9 9 4 -1 - ,0 41 6 5 3 -10 3 9 3 - - 2 9 9 7 3 3 -9 5 -1 - 1 4 0 - - 4 3 -14 2 foreigners. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 INTL. CAPITAL TRANSACTIONS OF THE U.S. □ APRIL 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 Other Total Parent Other Total branches Other cial bank bank of parent banks insti­ for­ bank tutions eigners IN ALL FOREIGN COUNTRIES 1973—Dec............ 121,866 5,091 1,886 3,205 111,974 19,177 56,368 2,693 33,736 4,802 1974—Dec............ 151,905 6,900 4,464 2,435 138,712 27,559 60,283 4,077 46,793 6,294 1975—Jan............. 151,140 7,031 4,360 2,671 138,141 27,894 58,863 4,152 47,233 5,968 Feb............ 151,662 5,487 2,882 2,605 140,343 28,969 58,794 4,246 48,334 5,832 Mar............ 155,204 5,328 2,638 2,689 143,749 28,330 61,611 4,407 49,400 6,127 Apr............ 155,616 5,832 3,052 2,780 143,948 29,195 60,292 4,353 50,108 5,836 May........... 156,909 7,727 4,889 2,838 143,099 27,581 60,330 4,494 50,695 6,083 June........... 162,342 5,540 2,342 3,198 150,515 30,870 63,710 4,836 51,100 6,287 July............ 160,703 5,919 2,788 3,131 148,224 30,153 62,438 4,796 50,837 6,561 Aug............ 165,835 9,102 6,048 3,054 150,196 31,283 62,455 4,892 51,566 6,537 Sept............ 166,075 6,574 3,267 3,307 153,169 31,506 65,011 4,861 51,792 6,332 Oct............. 169,456 7,919 4,892 3,027 155,043 32,675 64,209 5,226 52,933 6,494 Nov............ 172,408 8,691 5,763 2,928 156,938 34,325 64,347 5,504 52,762 6,779 Dec............ 177,541 6,723 3,661 3,061 164,521 36,123 68,391 5,869 54,137 6,297 1976—Jan.*.......... 181,027 8,024 5,036 2,988 166,759 38,994 66,571 6,099 55,096 6,243 1973—Dec............ 79,445 4,599 1,848 2,751 73,018 12,799 39,527 1,777 18,915 1,828 1974—Dec............ 105,969 6,603 4,428 2,175 96,209 19,688 45,067 3,289 28,164 3,157 1975—Jan............. 105,776 6,707 4,318 2,389 95,987 20,448 43,151 3,370 29,018 3,082 Feb............ 104,360 5,143 2,839 2,304 96,326 20,827 42,672 3,431 29,395 2,891 Mar............ 107,519 5,014 2,607 2,407 99,635 19,836 46,118 3,604 30,078 2,870 Apr............ 108,399 5,467 3,009 2,458 100,230 20,993 45,172 3,599 30,465 2,702 May........... 111,638 7,318 4,825 2,493 101,383 21,281 45,403 3,685 31,015 2,938 June........... 117,296 5,113 2,280 2,833 109,180 24,529 49,132 3,949 31,569 3,003 July............ 117,268 5,513 2,737 2,776 108,279 24,180 48,572 3,929 31,598 3,476 Aug............ 121,478 8,778 5,995 2,783 109,423 25,071 48,063 4,148 32,141 3,277 Sept............ 123,119 6,237 3,210 3,027 113,925 25,444 51,470 4,040 32,970 2,957 Oct............. 125,870 7,501 4,817 2,684 115,191 26,555 50,028 4,363 34,246 3,178 Nov........... 129,121 8,336 5,711 2,625 117,504 27,899 50,962 4,646 33,998 3,281 Dec............ 133,676 6,388 3,624 2,764 124,265 29,310 54,752 4,945 35,258 3,023 1976—Jan.*......... 135,342 7,688 4,996 2,692 124,569 30,852 52,658 5,222 35,836 3,086 IN UNITED KINGDOM Total all currencies................................ 1973—Dec............ 61,732 1,789 738 1,051 57,761 8,773 34,442 735 13,811 2,183 ............ 69,804 3,24819724,4—72Dec 776 64,111 12,724 32,701 788 17,898 2,445 1975—Jan............. 68,451 2,633 1,902 731 63,527 12,873 32,057 854 17,743 2,291 Feb............ 67,038 1,818 1,023 796 63,250 13,246 31,641 848 17,515 1,970 Mar............ 69,654 1,798 982 817 65,693 12,806 34,260 929 17,699 2,163 Apr............ 69,248 2,017 1,126 891 65,330 13,314 33,079 919 18,018 1,902 May........... 68,707 2,535 1,689 845 64,269 12,491 32,443 920 18,415 1,904 June........... 70,751 1,834 641 1,192 66,868 13,765 34,634 948 17,522 2,049 July............ 70,382 1,904 807 1,097 66,277 14,414 33,431 923 17,509 2,202 Aug............ 72,455 3,795 2,698 1,097 66,428 15,213 32,998 948 17,268 2,232 Sept............ 72,120 2,042 1,076 967 67,923 15,249 34,759 825 17,091 2,155 Oct............. 72,742 2,681 1,699 982 67,631 16,555 32,806 830 17,440 2,430 Nov............ 73,924 3,112 2,137 975 68,494 17,549 33,189 852 16,904 2,319 Dec............ 74,883 2,375 1,449 926 70,354 17,557 35,102 881 16,814 2,153 1976—Jan.*......... 73,437 2,251 1,467 784 68,985 18,028 33,094 1,034 16,828 2,202 Payable in U.S. dollars.......................... 1973—Dec............ 40,323 1,642 730 912 37,816 6,509 23,389 510 7,409 865 1974—Dec............ 49,211 3,146 2,468 678 44,693 10,265 23,716 610 10,102 1,372 1975—Jan............. 47,769 2,542 1,892 650 43,959 10,421 22,610 661 10,268 1,267 Feb............ 46,019 1,697 1,017 680 43,244 10,615 21,918 657 10,055 1,077 Mar............ 48,939 1,687 974 713 46,039 10,373 24,874 736 10,057 1,212 Apr............ 48,797 1,885 1,109 776 45,923 10,995 23,990 721 10,217 989 May........... 48,506 2,404 1,671 733 45,180 10,656 23,320 698 10,506 922 June........... 51,365 1,669 623 1,045 48,713 12,054 25,761 721 10,178 983 July............ 51,665 1,742 793 949 48,787 12,664 25,143 713 10,267 1,136 Aug............ 53,456 3,661 2,681 980 48,763 13,315 24,540 740 10,168 1,032 Sept............ 54,256 1,910 1,054 856 51,369 13,488 27,008 596 10,277 977 Oct............. 54,192 2,552 1,687 865 50,494 14,654 24,691 592 10,557 1,146 56,221 2,988 2,123 865 52,145 15,555 25,600 638 10,353 1,087 Dec............ 57,361 2,257 1,445 812 54,137 15,645 27,669 648 10,175 967 1976—Jan.*......... 55,067 2,139 1,457 683 52,048 15,575 25,311 837 10,325 880 IN BAHAMAS AND CAYMANS i Total all currencies................................ 1973—Dec............ 23,771 2,210 317 1,893 21,041 1,928 9,895 1,151 8,068 520 1974—Dec............ 31,733 2,464 1,081 1,383 28,453 3,478 11,354 2,022 11,599 815 1975—Jan............. 33,131 3,225 1,594 1,630 29,069 3,644 11,194 2,027 12,205 838 Feb............ 33,534 2,565 1,072 1,493 30,135 3,855 11,474 2,060 12,747 834 Mar............ 33,793 2,407 839 1,568 30,670 3,568 11,634 2,393 13,075 716 Apr............ 35,666 2,588 1,006 1,582 32,358 4,320 12,229 2,419 13,390 720 May........... 38,198 4,126 2,468 1,658 33,214 4,270 13,181 2,531 13,232 858 June........... 39,646 2,634 987 1,647 36,181 5,831 13,747 2,772 13,831 831 July............ 39,614 2,787 1,134 1,653 35,676 5,015 14,065 2,747 13,849 1,150 Aug............ 41,624 4,117 2,580 1,536 36,555 5,222 14,117 2,891 14,324 953 Sept............ 41,601 3,189 1,289 1,900 37,479 5,220 14,604 3,020 14,635 933 Oct............. 44,166 3,989 2,295 1,694 39,225 5,604 15,414 3,308 14,899 952 Nov............ 44,471 4,544 2,929 1,615 38,973 5,321 15,134 3,434 15,084 954 Dec............ 45,203 3,229 1,477 1,752 41,040 5,411 16,298 3,576 15,756 933 1976—Jan *......... 2 48,694 4,488 2,614 1,874 43,104 6,296 17,195 3,677 15,935 1,102 Digitized for FRASFEoRr notes see p. A-74. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APRIL 1976 □ INTL. CAPITAL TRANSACTIONS OF THE U.S. A71 19b. LIABILITIES OF FOREIGN BRANCHES OF U.S. BANKS (In millions of dollars) To U.S. To foreigners Total Other Offi­ Non­ Other Month-end Location and currency form Total Parent Other Total branches Other cial bank bank of parent banks insti­ for­ bank tutions eigners IN ALL FOREIGN COUNTRIES 121,866 5,610 1,642 3,968 111,615 18.213 65,389 10,330 17,683 4,641 . 1973—Dec. .. .Total, all currencies 151.905 11,982 5,809 6,173 132,990 26,941 65,675 20,185 20,189 6,933 . 1974—Dec. 151,140 11,831 6,356 5.476 132,775 27,019 64,147 21,683 19,926 6,533 . 1975—Jan. 151,662 12,561 6,607 5,954 132.594 28,185 63,402 21,951 19,057 6,507 .............Feb. 155,204 15,407 8,849 6,557 133,540 28.214 63,419 22,577 19,330 6,257 .............Mar. 155,617 14,935 8,703 6,233 134.594 29,192 62,287 23,236 19,879 6,088 .............Apr. 156,910 16,861 10,366 6,494 133,806 26,725 64.700 22,223 20,158 6,243 .............May 162,342 18,618 12,204 6,414 137,189 30,412 64.955 21,106 20,715 6,535 .............June 160,703 17,704 11,542 6,162 136,808 30,233 65.956 20,371 20,249 6,191 .............July 165,837 17,183 10,021 7,162 142,327 30,582 70,161 21,093 20,492 6,326 .............Aug. 166,075 18,324 10,848 7.476 141,602 30,314 70,756 19,744 20,789 6,149 .............Sept.5 169,456 19.073 11,201 7,872 144,209 31,781 70,353 20,627 21,449 6,174 .............Oct. 1 172,408 19,771 11,114 8,657 145,895 33,188 70,408 21,187 21,111 6,742 .............Nov.1 177,541 20,116 12,060 8,056 151.041 35,545 72,173 22,761 20,562 6,384 .............Dec. 181,027 22,742 12,863 9,879 152,378 37,742 72,258 21,705 20,672 5,907 . 1976—Jan.? 80,374 5,027 1,477 3,550 73,189 12,554 43,641 7,491 9,502 2,158 . 1973—Dec. . Payable in U.S. dollars 107,890 11,437 5,641 5,795 92,503 19,330 43,656 17,444 12,072 3,951 . 1974—Dec. 108,190 11,368 6,204 ,164 93,044 19,999 42,854 18,343 11,848 3,778 . 1975—Jan. 106,125 12,063 6,460 ,603 90,426 20,109 40.701 18,708 10,907 3,636 .............Feb. 109,501 14,795 8,660 ,135 91,338 19,880 41,216 19,303 10,939 3,368 .............Mar. 110,405 14,277 8,517 ,760 92,715 20,683 40,999 19,909 11,123 3,414 .............Apr. 114,105 16,256 10,189 ,067 94,452 20,521 43,863 18,928 11,139 3,397 .............May 119,385 17,998 12,008 ,990 97,828 23,969 44,202 17,968 11,689 3,560 .............June 119,319 17,090 11,335 ,755 99,013 24,112 45,897 17,393 11,611 3,216 .............July 123.906 16,538 9,840 6,698 103,987 24,435 49,418 18,080 12,055 3,381 .............Aug. 125,442 17,693 10,645 7,048 104,562 24,477 50,682 16,777 12,626 3,187 .............Sept. 127,930 18.396 10,997 7,399 106,170 25,824 49,724 17,476 13,146 3,364 .............Oct. 131,981 19.074 10,923 8,151 109.042 27,054 50,292 18,407 13,289 3,865 .............Nov. 136,454 19.397 11,834 7,563 113,571 28,912 51,494 19,982 13,183 3,486 .............Dec. 139,532 22,102 12,690 9,411 114,121 30,361 51,824 18,906 13,030 3,309 IN UNITED KINGDOM 61,732 2,431 136 2,295 57.311 3,944 34,979 8,140 10,248 1,990 .1973- Dec. .. .Total, all currencies 69,804 3,978 510 3.468 63,409 4,762 32,040 15,258 11,349 2,418 . 1974--Dec. 68,451 3.804 873 2,931 62,360 4,567 30,266 16,419 11,108 2,287 .1975—Jan. 67.038 4,376 913 3,462 60.546 4,693 29,207 16,517 10,127 2,117 .............Feb. 69,654 5,095 1,224 3,871 62,363 4,630 29,990 17,305 10,438 2,196 .............Mar. 69,248 4,596 1,342 3,254 62,625 5,394 28,666 17,812 10,753 2,026 .............Apr. 68,708 4,772 1,337 3,435 61,772 5,325 28,957 16,726 10,764 2,164 .............May 70,751 4,668 1,451 3,217 63,857 7,030 30,030 15,524 11.274 2,226 ...........June 70,382 4,679 1 ,718 2.961 63,501 6,475 30,636 15,312 11,077 2,203 ............July 72,457 5,251 1,904 3,348 65,012 6,260 32,097 15,617 11,038 2,194 ...........Aug. 72,120 5,112 1,833 3.279 64,962 6,396 33,130 14,486 10,950 2,046 .............Sept. 72,742 4,905 1,766 3,139 65,699 6,746 32,334 14,909 11,711 2,138 .............Oct. 73,924 5,497 2,028 3.468 66,267 6,470 33,340 15,180 11.275 2,161 .............Nov.r 74,883 5,646 2,122 3,523 67,261 6,494 32,985 16,553 11,229 1,976 .............Dec. 73,437 5,645 1,749 3,896 65,914 6,444 33,534 15,053 10,882 1,878 .1976—Jan.* 39,689 2,173 113 2,060 36,646 P.,519 22,051 5,923 6,152 870 .1973—Dec. .Payable in U.S. dollars 49,666 3,744 484 3,261 44,594 3,256 20,526 13,225 7,587 1,328 .1974—Dec. 48,490 3,599 854 2,744 43,578 3,172 19,061 13,736 7,609 1,313 .1975--Jan. 46,698 4,164 895 3,269 41,350 3,266 17,673 13,932 6,479 1,184 .Feb. 49,533 4.805 1,189 3,616 43.546 3,072 19,128 14,688 6,658 1,183 .Mar. 49,177 4,297 1.313 2,984 43,758 3,886 17,997 15,158 6,717 1,122 .Apr. 49,479 4,487 1.314 3,173 43,784 4,220 18.640 14,135 6,789 1,208 .May 51,848 4,369 1,412 2,957 46.312 5,962 20,039 13,083 7,228 1,167 June 51,826 4,421 1,684 2,737 46,217 5.478 20,775 12,915 7,049 1,188 .July 54,017 4,975 1,873 3,103 47,912 5,288 22,087 13,249 7,287 1,129 Aug. 54,683 4,889 1,808 3,081 48,814 5,456 23,645 12,182 7,531 980 . Sept. 54,478 4,696 1,735 2.961 48,660 5,708 72,452 12,500 7,999 1,123 .Oct. 56,696 5,288 2,009 3.279 50,185 5.478 23.641 12,999 8,066 1,223 .Nov. 57,820 5,415 2,083 3,332 51,466 5,442 23,349 14,498 8,176 940 .Dec. 56.039 5,446 1,732 3,714 49,676 5,422 23,389 13,070 7,796 917 . 1976—Jan.* IN BAHAMAS AND CAYMANS i 23,771 1,573 307 1,266 21,747 5,508 14,071 492 1,676 451 . 1973—Dec. .. .Total, all currencies 31,733 4,815 2,636 2,180 26,140 7,702 14,050 2,377 2,011 778 . 1974—Dec. 33,131 5,036 2,926 2,111 27,343 8,269 14,259 2,595 2,220 752 . 1975—Jan. 33,534 5,243 3,281 1,962 27,498 8,975 13,550 2,711 2,262 793 .............Feb. 33,793 7,228 5,081 2,147 25,875 8,498 12,614 2,520 2,243 690 .............Mar. 35,667 7,420 5,083 2,337 27,536 8,756 13,694 2,769 2,318 711 .............Apr. 38,198 9,090 6,766 2,324 28,309 6,872 16,018 2,977 2,441 799 .............May 39,646 10,866 8,322 2,544 27,987 8,075 14,482 3,036 2,393 793 .............June 39,614 9,991 7,407 2,584 28,933 8,401 15,539 2,500 2,492 690 .............July 41,624 8,800 5,715 3,085 31,913 9,128 17,317 2,860 2,607 911 .............Aug. 41,601 9,928 6,490 3,439 30,861 8,918 16,834 2,570 2,540 812 .............Sept. 44,166 10,833 7,056 3,778 32,327 9,725 17,296 2,775 2,577 961 .............Oct. 44,471 11,082 6,710 4,372 32,239 10,553 15,972 3,230 2,483 1,150 .............Nov. 45,203 11,146 7,628 3,519 32,950 10,569 16,726 3,308 2,348 1,106 .............Dec. 2 48,694 13,110 5,022 34,475 11,230 17,543 3,416 2,287 1,109 . 1976—Jan.* Digitized for FFRoAr SnoEteRs see p. A-74. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 INTL. CAPITAL TRANSACTIONS OF THE U.S. □ APRIL 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 in custody E p n er d i o o d f Deposits U se .S cu . r T it r i e e a s s 1 . Ear g m o a ld rked E pe n r d i o o d f Total Deposits i S n t h e v r o e m r s t t ­ ­ Deposits i S n t h e v o r e m r s t t ­ ­ U K d n i o n it m g ed ­ Canada ments 1 ments 1 1972. 325 50,934 215,530 1973. 251 52,070 217,068 1971..................... 1,507 1,078 127 234 68 580 443 1974. 418 55.600 16,838 1975—Mar.. 402 60,729 16,818 1 070 2 / 1 l 2 , ,3 9 7 6 4 5 1 1 , , 4 9 4 1 6 0 16 5 9 5 3 3 0 4 7 0 4 6 2 8 9 7 1 0 1 2 4 5 8 3 5 6 Apr.. 270 60,618 16,818 1973..................... 3,162 2,588 37 427 109 1,118 770 May. 310 61,539 16,818 June., 373 61,406 16.803 1974—Dec.......... 3,311 2,582 56 412 261 1,350 951 July.. 369 60,999 16.803 Aug. , 342 60,120 16.803 1975—Jan.......... 3,275 2,521 50 359 345 1,145 1,117 Sept.. 324 58,420 16.795 Feb.......... 3,376 2,515 52 403 406 1,088 1,136 Oct.. 297 60,307 16,751 Mar......... 3,283 2,434 67 395 388 1,064 1,134 Nov.. 346 60,512 16.745 Apr.......... 3,368 2,458 48 314 550 1,065 1,279 Dec.. 352 60,019 16.745 May........ 3,188 2,220 47 393 527 908 1,240 June........ 3,138 2,241 95 369 433 974 1,128 1976—Jan.., 294 61,796 16,669 July......... 3,221 2,278 118 420 405 904 1,109 Feb.. 412 62,640 16,666 Aug......... 3,438 2,334 129 453 522 1,017 1,309 Mar.. 305 61,271 16,660 Sept.......... 3,602 2,522 125 456 499 1,104 1,252 Oct........... 3,411 2,581 179 410 241 1,178 1,127 Nov.p.... 3,543 2,571 266 442 264 1,098 1,291 1 Marketable U.S. Treasury bills, certificates of in­ Dec.*3... . 3,571 2,568 279 483 241 1,234 1,090 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. Ear­ marked 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 Total 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 1 / 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 Juner..................... 5,746 4,922 824 10,827 9,546 466 815 Sept.*5..................... 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 compa­ because 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

APRIL 1976 □ INTL. CAPITAL TRANSACTIONS OF THE U.S. A73 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 15 501 516 474 338 332 114 128 137 132 131 22 24 23 14 8 25 42 35 22 24 Finland....................................................... 12 16 16 12 14 91 120 77 87 114 157 202 151 138 149 461 430 328 287 311 240 313 350 291 275 326 339 276 346 319 28 39 25 27 21 69 65 59 69 56 129 125 109 110 156 413 397 309 300 380 120 117 121 141 153 144 148 157 135 139 Norway....................................................... 10 9 9 8 13 32 36 35 41 48 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.......................... 125 158 201 257 267 1 * 1 1 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

A74 INTL. CAPITAL TRANSACTIONS OF THE U.S. □ APRIL 1976 24. LONG-TERM LIABILITIES TO AND CLAIMS ON FOREIGNERS REPORTED BY NONBANKING CONCERNS (Amounts outstanding; in millions of dollars) Claims Total Country or area End of period liabilities Total K U in n g i d te o d m E O u t r h o e p r e Canada Brazil Mexico A O L m a t e h t r i e n i r ca Japan O A t s h i e a r Africa o A th l e l r 1971—Sept........................... 2,939 3,019 135 672 765 178 60 597 133 319 85 75 i / 3,159 3,118 128 705 761 174 60 652 141 327 86 85 \ 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 3,448 3,187 128 695 757 177 63 662 132 390 89 96 / 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......................... 4,068 4,063 299 632 1,018 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 fDr 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 money2 bills, 3 months money deposit money3 60-90 money 5 3 months money 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—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................ 8.59 8.75 9.83 9.87 9.08 5.75 6.38 3.13 3.58 4.52 3.76 5.00 Feb............... 8.70 8.74 8.86 8.42 6.50 7.27 3.13 3.08 2.86 3.05 5.00 Mar.............. 9.04 9.05 8.46 7.63 3.62 4.78 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 $45,268 million and $45,683 million, respectively, on Jan. 31, 1976. 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

APRIL 1976 p CENTRAL BANK AND EXCHANGE RATES A75 26. CENTRAL BANK RATES FOR DISCOUNTS AND ADVANCES TO COMMERCIAL BANKS (Per cent per annum) Rate as of March 31, 1976 Rate as of March 31, 1976 Country Country Per Month Per Month cent effective cent effective Argentina........................ 18.0 Feb. 1972 Italy..................... 12.0 Mar. 1976 Austria............................ 5.0 Jan. 1976 Japan................... 6.5 Oct. 1975 Belgium............................ 7.0 Mar. 1976 Mexico................ 4.5 June 1942 Brazil............................... 18.0 Feb. 1972 Netherlands.... 4.0 Feb. 1976 Canada............................ 9.5 Mar. 1976 Norway............... 5.0 Oct. 1975 Denmark......................... 8.5 Mar. 1976 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 9.0 Mar. 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, 4% Argentina—3 and 5 per cent for certain rural and industrial paper, de­ per cent for advances against government bonds, and 5% 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—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 Feb............ 125.85 5.4628 2.5554 100.652 16.278 22.351 39.034 11.186 202.62 .13021 .33157 124.79 5.4383 2.5480 101.431 16.273 21.657 39.064 11.157 194.28 .12113 .33276 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—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 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 Feb............ 38.998 8.0000 37.529 104.25 18.098 3.6394 114.79 1.5523 22.861 38.912 202.62 Mar........... 39.047 8.0000 37.149 102.42 18.022 3.4987 114.83 1.4947 22.702 38.980 194.28 Note.—Averages of certified noon buying rates in New York for cable transfers. For description of rates and back data, see “International Fi­ nance,” Section 15 of Supplement to Banking and Monetary Statistics, 1962. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Board of Governors of the Federal Reserve System Arthur F. Burns, Chairman Stephen S. Gardner, Vice Chairman Henry C. Wallich Robert C. Holland Philip E. Coldwell Philip C. Jackson, Jr. J. Charles Partee OFFICE OF STAFF DIRECTOR OFFICE OF BOARD MEMBERS OFFICE OF STAFF DIRECTOR FOR MONETARY POLICY FOR MANAGEMENT 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 Normand 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 DIVISION OF RESEARCH AND STATISTICS Banking Structure Board Peter E. Barn a, Program Director for Lyle E. Gramley, Director Bank Holding Company Analysis 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 DIVISION OF FEDERAL RESERVE BANK Counsel Helmut F. Wendel, Associate Adviser OPERATIONS Robert E. Mannion, Assistant General James R. Wetzel, Associate Adviser 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 A76 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 tR alph C. Bryant, Director William H. Wallace, Director Board and Director John E. Reynolds, Acting Director Albert R. Hamilton, Associate Director Janet O. Hart, Deputy Director Robert F. Gemmill, Adviser Clyde H. Farnsworth, Jr., Assistant Director Jerauld C. Kluckman, Assistant Director Reed J. Irvine, Adviser Thomas E. Mead, Assistant Director Robert S. Plotkin, Assistant Director tHELEN B. Junz, Adviser P. D. Ring, Assistant Director Samuel Pizer, Adviser OFFICE OF THE SECRETARY George B. Henry, Associate Adviser DIVISION OF DATA PROCESSING Charles J. Siegman, Associate Adviser Theodore E. Allison, Secretary Edwin M. Truman, Associate Adviser Charles L. Hampton, Director * Joseph P. Garbarini, Assistant Secretary G Br l u e c n e n M L. . C B u e m ar m d i s n l s e , y A , s A si s s s t o a c n i t a D te i r D ec ir t e o c r t or Griffith L. Garwood, Assistant Secretary Warren N. Min ami, Assistant Director Robert J. Zemel, Assistant Director DIVISION OF BANKING SUPERVISION tOn leave of absence. AND REGULATION DIVISION OF PERSONNEL Brenton C. Leavitt, Director Frederick R. Dahl, Assistant Director Keith D. Engstrom, Director Jack M. Egertson, Assistant Director Charles W. Wood, Assistant Director John N. Lyon, Assistant Director John T. McClintock, Assistant Director OFFICE OF THE CONTROLLER John E. Ryan, Assistant Director Thomas A. Sidman, Assistant Director John Kakalec, Controller William W. Wiles, Assistant Director Tyler E. Williams, Jr., Assistant Controller DIVISION OF ADMINISTRATIVE SERVICES *On loan from the Federal Reserve Bank of St. Louis. Walter W. Kreimann, Director Donald E. Anderson, Assistant Director John D. Smith, Assistant Director A ll Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Federal Open Market Committee Arthur F. Burns, Chairman Paul A. Volcker, Vice Chairman John J. Balles Stephen S. Gardner J. Charles Partee Robert P. Black Robert C. Holland Henry C. Wallich Philip E. Coldwell Philip C. Jackson, Jr. Willis J. Winn Monroe Kimbrel Arthur L. Broida, Secretary Lyle E. Gramley, Economist Murray Altmann, Deputy Secretary (Domestic Business) Normand R. V. Bernard, Assistant Harry Brandt, Associate Economist Secretary Richard G. Davis, Associate Economist Thomas J. O’Connell, General Counsel William J. Hocter, Associate Economist Edward G. Guy, Deputy General Counsel Michael W. Keran, Associate Economist Baldwin B. Tuttle, Assistant General James L. Kichline, Associate Economist Counsel James Parthemos, Associate Economist Stephen H. Axilrod, Economist John E. Reynolds, Associate Economist (Domestic Finance) Joseph S. Zeisel, Associate Economist * Ralph C. Bryant, Economist (International Finance) 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 Donald R. Grangaard, ninth reserve district federal 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

A79 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. Showaiter 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 Jordan B. Tatter William C. Conrad ST. LOUIS ............... 63166 Edward J. Schnuck Lawrence K. Roos William B. Walton 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 Roger Guffey 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 24 pp. $.35. Sec. 15. International Finance. 1962. Functions. 1974. 125pp. $1.00each; lOormore 92 pp. $.65. Sec. 16 (New). Consumer Credit. to one address, $.75 each. 1965. 103 pp. $.65. The Federal Funds Market. 1959. Ill pp. $1.00 Annual Report each; 10 or more to one address, $.85 each. Federal Reserve Bulletin. Monthly. $20.00 per Trading in Federal Funds. 1965. 116 pp. $1.00 year or $2.00 each in the United States, its posses­ each; 10 or more to one address, $.85 each. sions, Canada, and Mexico; 10 or more of same Industrial Production—1971 Edition. 1972. 383 issue to one address, $18.00 per year or $1.75 pp. $4.00 each; 10 or more to one address, $3.50 each. Elsewhere, $24.00 per year or $2.50 each. each. Federal Reserve Chart Book on Financial and The Performance of Bank Holding Companies. Business Statistics. Monthly. Subscription in­ 1967. 29 pp. $.25 each; 10 or more to one address, cludes one issue of Historical Chart Book. $12.00 $.20 each. per year or $1.25 each in the United States, its Bank Credit-Card and Check-Credit Plans. 1968. possessions, Canada, and Mexico; 10 or more of 102 pp. $1.00 each; 10 or more to one address, same issue to one address, $1.00 each. Elsewhere, $.85 each. $15.00 per year or $1.50 each. Survey of Financial Characteristics of Con­ Historical Chart Book. Issued annually in Sept. sumers. 1966. 166 pp. $1.00 each; 10 or more Subscription to monthly chart book includes one to one address, $.85 each. issue. $1.25 each in the United States, its posses­ Survey of Changes in Family Finances. 1968. 321 sions, Canada, and Mexico; 10 or more to one pp. $1.00 each; 10 or more to one address, $.85 address, $1.00 each. Elsewhere, $1.50 each. each. Capital Market Developments. Weekly. $15.00 per Report of the Joint Treasury-Federal Reserve year or $.40 each in the United States, its posses­ Study of the U.S. Government Securities sions, Canada, and Mexico; 10 or more of same Market. 1969. 48 pp. $.25 each; 10 or more to issue to one address, $13.50 per year or $.35 each. one address, $.20 each. Elsewhere, $20.00 per year or $.50 each. Joint Treasury-Federal Reserve Study of the Selected Interest and Exchange Rates—Weekly Government Securities Market: Staff Stud­ Series of Charts. Weekly. $15.00 per year or ies—Part 1. 1970. 86 pp. $.50 each; 10 or more $.40 each in the United States, its possessions, to one address, $.40 each. Part 2. 1971. 153 pp. Canada, and Mexico; 10 or more of same issue and Part 3. 1973. 131 pp. Each volume $1.00; to one address, $13.50 per year or $.35 each. 10 or more to one address, $.85 each. Elsewhere, $20.00 per year or $.50 each. Open Market Policies and Operating Proce­ The Federal Reserve Act, as amended through De­ dures—Staff Studies. 1971. 218 pp. $2.00 cember 1971, with an appendix containing provi­ each; 10 or more to one address, $1.75 each. sions of certain other statutes affecting the Federal Reappraisal of the Federal Reserve Discount Reserve System. 252 pp. $1.25. Mechanism. Vol. 1. 1971. 276 pp. Vol. 2. 1971. Regulations of the Board of Governors of the 173 pp. Vol. 3. 1972. 220 pp. Each volume $3.00; Federal Reserve System 10 or more to one address, $2.50 each. Published Interpretations of the Board of Gov­ The Econometrics of Price Determination Con­ ernors, as of Dec. 31, 1975. $2.50. ference, October 30-31, 1970, Washington, D.C. Supplement to Banking and Monetary Statistics. Oct. 1972. 397 pp. Cloth ed. $5.00 each; 10 or Sec. 1. Banks and the Monetary System. 1962. more to one address, $4.50 each. Paper ed. $4.00 35 pp. $.35. Sec. 2. Member Banks. 1967. 59 each; 10 or more to one address, $3.60 each. pp. $.50. Sec. 5. Bank Debits. 1966. 36 pp. $.35. Federal Reserve Staff Study: Ways to Moderate Sec. 6. Bank Income. 1966. 29 pp. $.35. Sec. Fluctuations in Housing Construction, Dec. 9. Federal Reserve Banks. 1965. 36 pp. $.35. Sec. 1972. 487 pp. $4.00 each; 10 or more to one 10. Member Bank Reserves and Related Items. address, $3.60 each. 1962. 64 pp. $.50. Sec. 11. Currency. 1963. 11 Lending Functions of the Federal Reserve pp. $.35. Sec. 12. Money Rates and Securities Banks. 1973. 271 pp. $3.50 each; 10 or more Markets. 1966. 182 pp. $.65. Sec. 14. Gold. 1962. to one address, $3.00 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A81 Introduction to Flow of Funds. 1975. 64 pp. $.50 Yields on Newly Issued Corporate Bonds. 9/72. each; 10 or more to one address, $.40 each. Recent Activities of Foreign Branches of U.S. Improved Fund Availability at Rural Banks (Re­ Banks. 10/72. port and study papers of the Committee on Rural Revision of Consumer Credit Statistics. 10/72. Banking Problems). June 1975. 133 pp. $1.00; 10 One-Bank Holding Companies Before the 1970 or more to one address, $.85 each. Amendments. 12/72. Yields on Recently Offered Corporate Bonds. STAFF ECONOMIC STUDIES 5/73. Capacity Utilization in Major Materials Indus­ Studies and papers on economic and financial subjects tries. 8/73. that are of general interest in the field of economic Credit-Card and Check-Credit Plans at Commer­ research. cial Banks. 9/73. Rates on Consumer Instalment Loans. 9/73. Summaries Only Printed in the Bulletin New Series for Large Manufacturing Corpora­ (Limited supply of mimeographed copies of full tions. 10/73. text available upon request for single copies) Money Supply in the Conduct of Monetary Policy. 11/73. Household-Sector Economic Accounts, by David U.S. Energy Supplies and Uses, Staff Economic F. Seiders. Jan. 1975. 84 pp. Study by Clayton Gehman. 12/73. The Performance of Individual Bank Holding Capacity Utilization for Major Materials: Re­ Companies, by Arthur G. Fraas. Aug. 1975. vised Measures. 4/74. 27 pp. Numerical Specifications of Financial Variables The Growth of Multibank Holding Companies: and Their Role in Monetary Policy. 5/74. 1956-73, by Gregory E. Boczar. Apr. 1976. 27 Inflation and Stagnation in Major Foreign In­ pp. dustrial Countries. 10/74. Monetary Policy in a Changing Financial Envi­ ronment: Open Market Operations in 1974. Printed in Full in the Bulletin 4/75. Staff Economic Studies shown in list below. The Structure of Margin Credit. 4/75. New Statistical Series on Loan Commitments at REPRINTS Selected Large Commercial Banks. 4/75. (Except for Staff Papers, Staff Economic Studies, and Recent Trends in Federal Budget Policy. 7/75. some leading articles, most of the articles reprinted do Banking and Monetary Statistics, 1974. Selected not exceed 12 pages.) series of banking and monetary statistics for 1974 only. 2/75, 3/75, 4/75 and 7/75. Seasonal Factors Affecting Bank Reserves. 2/58. Recent Developments in International Financial Measures of Member Bank Reserves. 7/63. Markets. 10/75. Research on Banking Structure and Perform­ MINNIE: A Small Version of the ance, Staff Economic Study by Tynan Smith. MIT-PENN-SSRC Econometric Model, Staff 4/66. Economic Study by Douglas Battenberg, Jared J. A Revised Index of Manufacturing Capacity, Enzler and Arthur M. Havenner. 11/75. Staff Economic Study by Frank de Leeuw with An Assessment of Bank Holding Companies, Staff Frank E. Hopkins and Michael D. Sherman. 11/66. Economic Study by Robert J. Lawrence and U.S. International Transactions: Trends in Samuel H. Talley. 1/76. 1960-67. 4/68. Industrial Electric Power Use. 1/76. Measures of Security Credit. 12/70. Revision of Money Stock Measures. 2/76. Monetary Aggregates and Money Market Con­ Survey of Finance Companies, 1975. 3/76. ditions in Open Market Policy. 2/71. Changing Patterns in U.S. International Trans­ Revised Measures of Manufacturing Capacity actions. 4/76 Utilization. 10/71. Changes in Time and Savings Deposits at Com­ Revision of Bank Credit Series. 12/71. mercial Banks, July-October 1975. 4/76 Assets and Liabilities of Foreign Branches of Revised Series for Member Bank Deposits and U.S. Banks. 2/72. Aggregate Reserves. 4/76 Bank Debits, Deposits, and Deposit Turnover— Bank Holding Company Financial Developments Revised Series. 7/72. in 1975. 4/76 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A82 Federal Reserve Bulletin □ April 1976 Index to Statistical Tables References are to pages A-2 through A-75 although the prefix “A” is omitted in this index ACCEPTANCES, bankers, 9, 25, 27 Demand deposits: Agricultural loans of commercial banks, 16, 18 Adjusted, commercial banks, 11, 13, 17 Assets and liabilities (See also Foreigners): Banks, by classes, 14, 17, 20, 21 Banks, by classes, 14, 16, 17, 18, 30 Ownership by individuals, partnerships, and cor­ Federal Reserve Banks, 10 porations, 24 Nonfinancial corporations, current, 41 Subject to reserve requirements, 13 Automobiles: Turnover, 11 Consumer instalment credit, 45, 46, 47 Deposits (See also specific types of deposits): Production index, 48, 49 Accumulated at commercial banks for payment of personal loans, 24 BANK credit proxy, 13 Banks, by classes, 14, 17, 20, 21, 30 Bankers balances, 16 17, 20 Federal Reserve Banks, 10, 72 (See also Foreig ers) Subject to reserve requirements, 13 Banks for cooperatives, 37 Discount rates at Federal Reserve Banks (See Interest Bonds (See also U.S. Govt, securities): rates) New issues, 37, 38, 39 Discounts and advances by Reserve Banks (See Loans) Yields and prices, 28, 29 Dividends, corporate, 40, 41 Branch banks: Assets, foreign branches of U.S. banks, 70 EMPLOYMENT, 50, 52 Liabilities of U.S. banks to their foreign branches and foreign branches of U.S. banks, 22, 71 FARM mortgage loans, 42 Brokerage balances, 69 Federal agency obligations, 9, 10, 11 Business expenditures on new plant and equipment, 41 Federal finance: Business indexes, 50 Receipts and outlays, 32, 33 Business loans (See Commercial and industrial loans) Treasury operating balance, 32 Federal funds, 5, 16, 18, 21, 27 CAPACITY utilization, 50 Federal home loan banks, 37 Capital accounts: Federal Home Loan Mortgage Corporation, 42, 43 Banks, by classe;, 14, 17, 22 Federal Housing Administration, 42, 43, 44, 45 Federal Reserve Banks, 10 Federal intermediate credit banks, 37 Central banks, 60, 75 Federal land banks, 37 Certificates of deposit, 22 Federal National Mortgage Assn., 37, 42, 43 Commercial and industrial loans: Federal Reserve Banks: Commercial banks, 13, 16 Condition statement, 10 Weekly reporting banks, 18, 23 U.S. Govt, securities held, 2, 10, 11, 34, 35 Commercial banks: Federal Reserve credit, 2, 4, 10, 11 Assets and liabilities, 13, 14, 16, 17, 18 Federal Reserve notes, 10 Consumer loans held, by type, 45, 46, 47 Federally sponsored credit agencies, 37 Deposits at, for payment of personal loans, 24 Finance companies: Loans sold outright, 25 Loans, 18, 45, 46, 47 Number, by classes, 14 Paper, 25, 27 Real estate mortgages held, by type of holder and Financial institutions, loans to, 16, 18 property, 42-44 Float, 2 Commercial paper, 23, 25, 27 Flow of funds, 56, 57 Condition statements (See Assets and liabilities) Foreign: Construction, 50, 51 Currency operations, 10 Consumer instalment credit, 45, 46, 47 Deposits in U.S. banks, 3, 10, 17, 21, 72 Consumer price indexes, 50, 53 Exchange rates, 75 Consumption expenditures, 54, 55 Trade, 59 Corporations: Foreigners: Profits, taxes, and dividends, 41 Claims on, 66, 67, 68, 72, 73, 74 Sales, revenue, profits, and dividends of large Liabilities to, 22, 61, 62, 64, 65, 72, 73, 74 manufacturing corporations, 40 Security issues, 38, 39 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, stoc market, 29, 30 Gross national product, 54, 55 DEBITS to deposit unts, 11 HOUSING permits, 50 Debt (See specific i of debt or securities) Housing starts, 51 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A83 References are to pages A-2 through A-75 although the prefix “A” is omitted in this index INCOME, national and personal, 54, 55 REAL estate loans: Industrial production index, 48, 49, 50 Banks, by classes, 16, 18, 30, 42 Instalment loans, 45, 46, 47 Mortgage yields, 43, 45 Insurance companies, 31, 34, 35, 42, 44 Type of holder and property mortgaged, 42^-4 Insured commercial banks, 14, 16, 17, 24 Reserve position, basic, member banks, 5 Interbank deposits, 14, 20 Reserve requirements, member banks, 7 Interest rates: Reserves: Bond and stock yields, 28 Central banks and govts., 60 Business loans of banks, 26 Commercial banks, 17, 20, 22 Federal Reserve Banks, 6 Federal Reserve Banks, 10 Foreign countries, 74, 75 Member banks, 3,4, 13, 17 Money market rates, 27 U.S. reserve assets, 59 Mortgage yields, 43, 45 Residential mortgage loans, 43, 44, 45 Prime rate, commercial banks, 26 Retail credit, 46, 47 Time and savings deposits, maximum rates, 8 Retail sales, 50 International capital transactions of U.S., 61-74 International institutions, 60-64, 66, 67-69, 73 SALES, revenue, profits, and dividends of large manu­ Inventories, 54 facturing corporations, 40 Investment companies, issues and assets, 39 Saving: Investments (See also specific types of investments): Flow of funds series, 56, 57 Banks, by classes, 14, 16, 19, 30 National income series, 54, 55 Commercial banks, 13 Savings and loan assns., 31, 35, 42, 44 Federal Reserve Banks, 10, 11 Savings deposits (See Time deposits) Life insurance companies, 31 Savings institutions, principal assets, 30, 31 Savings and loan assns., 31 Securities (See also U.S. Govt, securities): Federally sponsored agencies, 37 LABOR force, 52 International transactions, 68, 69 Life insurance companies (See Insurance companies) New issues, 37, 38, 39 Loans (See also specific types of loans): Yields and prices, 28, 29 Banks, by classes, 14, 16, 18, 30 Special Drawing Rights, 2, 10, 58, 59 Commercial banks, 13, 14, 16, 18, 23, 25, 26 State and local govts.: Federal Reserve Banks, 2, 4, 6, 10, 11 Deposits, 17, 20 Insurance companies, 31, 44 Holdings of U.S. Govt, securities, 34, 35, Insured or guaranteed by U.S., 42, 43, 44, 45 New security issues, 37, 38 Savings and loan assns., 31 Ownership of securities of, 16, 19, 30 Yields and prices of securities, 28, 29 MANUFACTURERS: State member banks, 15, 24 Capacity utilization, 50 Stock market credit, 29, 30 Production index, 49, 50 Stocks (See also Securities): Margin requirements, 8 New issues, 38, 39 Member banks: Yields and prices, 28, 29 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, 38 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, 40, 41 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A84 The Federal Reserve System B oundaries of Federal R eserve D istricts and Their B ranch Territories Minneapolis^ Chicago j Onuxfui* Kansas City^ Jt 'cfuirbtu Oklahoma City Dallas Jiouston 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 and Statistical Releases 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 III, IV Quarters U Uses of funds * Amounts insignificant in terms of the partic­ n.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. “State and local govt.” A heavy vertical rule is used in the following in­ also includes municipalities, special districts, and other stances: (1) to the right (to the left) of a total when political subdivisions. the components shown to the right (left) of it add to In some of the tables details do not add to totals that total (totals separated by ordinary rules include because of rounding. more components than those shown), (2) to the right The footnotes labeled Note (which always appear (to the left) of items that are not part of a balance sheet, last) provide (1) the source or sources of data that do (3) to the left of memorandum items. not originate in the System; (2) notice when figures “U.S. Govt, securities” may include guaranteed are estimates; and (3) information on other charac­ issues of U.S. Govt, agencies (the flow of funds figures teristics of the data. 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