Federal Reserve Bulletin, 1977-07

JULY 1977 Recent Labor Market Trends Insured Commercial Bank Income in 1976 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 and its possessions, and in Bolivia, Canada, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, Guatemala, Haiti, Republic of Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, El Salvador, Uruguay, and Venezuela is $20.00 per annum or $2.00 per copy; elsewhere, $24.00 per annum or $2.50 per copy. Group subscriptions in the United States for 10 or more copies to one address, $1.75 per copy per month, or $18.00 for 12 months. The 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

NUMBER 7 □ VOLUME 63 □ JULY 1977 FEDERAL RESERVE BULLETIN Board of Governors of the Federal Reserve System Washington, D.C. PUBLICATIONS COMMITTEE Stephen H. Axilrod □ Joseph R. Coyne □ John M. Denkler □ Janet O. Hart John D. Hawke, Jr. □ James L. Kichline □ Edwin M. Truman Richard H. Puckett, Staff Director The Federal Reserve Bulletin is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed except in official statements and signed articles. Direction for the art work is provided by Mack R. Rowe. Editorial support is furnished by the Economic Editing Unit headed by Elizabeth B. Sette. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Table of Contents 617 Recent Labor Market Trends 644 Philip C. Jackson, Jr., Member of the Board of Governors, affirms the Although labor market conditions support of the Board for simplification have improved considerably over the of the Truth in Lending Act in tes­ past year, the Nation’s economy con­ timony before the Consumer Affairs tinues to be characterized by exten­ Subcommittee of the Committee on sive underuse of both human and Banking, Finance and Urban Affairs, physical resources. U.S. Senate, July 11, 1977. 651 Stephen S. Gardner, Vice Chairman 626 Insured Commercial Bank Income of the Board of Governors, testifies in in 1976 support of the International Banking Net profits of insured commercial Act of 1977, before the Subcommittee banks improved during 1976 com­ on Financial Institutions Supervision, pared with 1975, but gains were at a Regulation and Insurance of the rate below the yearly averages be­ Committee on Banking, Finance and tween 1970 and 1974. Urban Affairs, U.S. House of Rep­ resentatives, July 12, 1977. Statements to Congress 655 Record of Policy Actions of the 636 Arthur F. Burns, Chairman of the Federal Open Market Committee Board of Governors of the Federal In the meeting held on May 17, Reserve System, testifies in support of 1977, the Committee decided that proposed legislation authorizing NOW growth in M-l and Af-2 over the accounts nationwide and addressing May-June period at annual rates the problem of the withdrawal of within ranges of 0 to 4 per cent and 3Vi banks from Federal Reserve member­ to IVi per cent, respectively, would be ship, before the Subcommittee on appropriate. The Committee believed Financial Institutions of the Com­ that such growth rates for the mone­ mittee on Banking, Housing and Urban tary aggregates would be associated Affairs, U.S. Senate, June 20, 1977. with a weekly-average Federal funds rate of about 53/s per cent. The Com­ 643 Chairman Burns also comments on mittee agreed that the operational ob­ a bill to provide—beginning February 1, jective for the funds rate could be 1982—for a 4-year term for the Chair­ modified within a range of 5lA to 53A man and Vice Chairman of the Board per cent, depending on the growth of Governors to start 1 year after the rates of the aggregates over the inauguration of the President, before 2-month period. the Subcommittee on Domestic Monetary Policy of the Committee on Banking, Finance and Urban Affairs, 666 Law Department U.S. House of Representatives, June Various amendments, rules, and 23, 1977. orders. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements Al Financial and Business Statis­ tics Amendment to Regulation J con­ cerning wire transfer of funds between A3 Domestic Financial Statistics member banks. (See Law Depart­ A46 Domestic Nonfinancial Statistics ment.) A54 International Statistics State laws making contracts en­ A70 Board of Governors and Staff forceable against married persons at a younger age than against unmarrieds A72 Open Market Committee and have been ruled not in conflict with Staff; Federal Advisory Council the Equal Credit Opportunity Act. Changes in Board staff. A73 Federal Reserve Banks and Branches Proposed bank holding company activity as futures commission mer­ chant. A74 Federal Reserve Board Publications One State bank admitted to Federal Reserve membership. A76 Index to Statistical Tables Industrial Production A78 Map of Federal Reserve System Output rose in June by an estimated 0.7 per cent—the fifth consecutive Inside Back Cover: monthly increase. Guide to Tabular Presentation and Statistical Releases Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Labor Market Trends This article was prepared by Joyce K. Zickler Although unemployment among workers , , of the Wages Prices and Productivity Sec­ who lost their last job has declined sharply . tion, Division of Research and Statistics during the recovery, jobless rates for these workers are still very high by historical stand­ Labor market conditions have improved con­ ards. The atypical nature of the recovery of siderably since the spring of 1975, but exten­ demand, which was mainly sustained for its sive underutilization of human and physical first year and a half by consumption spending, resources in an environment of unusually large coupled with the severity of the earlier cyclical increases in labor costs and prices continues contraction has left many experienced workers to characterize the economy. still jobless. Their situation seems to derive in Contributing to higher unemployment in this part from the belated and moderate recovery of recovery is a secular increase in the number business investment spending. The recovery of inexperienced job seekers and, as a conse­ of labor demand had not, until recently, re­ quence, an increase in the frictional compo­ flected the effects of a decisive upturn in plant nent of total unemployment. Rapid labor force and equipment spending. In addition, the lib­ growth—arising from large increases in the eralization of income maintenance programs working-age population coupled with a con­ has reduced the cost of longer spells of job tinuing tendency of married women to seek search than had been the case during earlier paid employment—has sharply increased the business cycles, and this may have contribu­ portion of the labor force that is subject to ted to the pattern of extended unemployment temporary unemployment. Moreover, the rise for skilled and experienced workers. in labor force participation of second household The sluggish recovery of business fixed in­ members has accelerated, intensified in part by vestment also was associated with a 6-month the economic stringencies of recent years. Re­ slowdown in the recovery of employment dur­ flecting these factors, the number of unem­ ing 1976. Slow growth of final demand and a ployed workers who have just entered or run-up of inventories early last year was asso­ re-entered the labor force has increased since ciated with a reduction of almost two-thirds in the cycle trough in 1975. the rate of growth of payroll employment. This Selected economic indicators Millions of persons Ratio scale, per cent 100 sJabbT^force 4 'V. • ’ v » I I I I 1973 1975 1977 BLS data, seasonally adjusted. Civilian labor force, employment, and unemployment rates are monthly household data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

618 Federal Reserve Bulletin □ July 1977 slowing was concentrated in goods-produc- agers also has risen strongly, advancing by 12 ing industries, where manufacturing employ­ per cent from March 1975 to 20.7 million in ment about leveled off from April to October June 1977. Because youth had experienced 1976. However, a vigorous bounceback of relatively heavy job losses during the contrac­ consumer demand late in the year laid the tion, however, their recent employment total groundwork for a strong expansion this year. was less than 2 per cent higher than during Business spending finally began to show early 1974. significant gains during the first half of this Nearly 42.9 million adult men were em­ year, and the over-all growth of jobs rose to a ployed in June 1977, an increase of 1.8 million very rapid 5 per cent annual rate. Employment from March 1975. Adult men suffered the in goods-producing industries, which had been most from job loss during the recession, hard hit during the recession, began to increase and their number employed in June was as a share of total jobs, but employment in most only 2 per cent above its pre-recession peak. hard-goods industries still has not reached pre­ By contrast, employment of adult women had recession peaks. risen almost 8 per cent above its pre-recession Increases in compensation have moderated peak by June. The less dramatic gains of from the double-digit rates of 1974 but still employment for adult men reflect their greater continue to outpace productivity gains by a concentration in industries and occupations large margin. As a result, increases in labor where the recovery from the last recession has costs have continued to be substantial. Indeed, been slow and uneven. over the year ending in the first quarter, unit- The industrial and, therefore, demographic labor-cost increases for the nonfarm business composition of employment growth has sensi­ sector were near 516 per cent, as productivity tively reflected the unusual composition of gains averaged near their long-run trend pace growth in real gross national product since the and hourly compensation rose about 8 per cycle trough in the first quarter of 1975. Total cent. While wage rate increases in the first output increased by 12 per cent over the 2 half of 1977 are in line with their 1976 pace, years ending in the first quarter of 1977, with recent run-ups in consumer prices may place real personal consumption showing an equal upward pressure on compensation adjustments rise. Strong growth of consumption demand later this year and into 1978. stimulated large job gains in private serviceproducing industries and triggered a rebound of employment in the manufacture of softgoods and autos. The dramatic recovery of EMPLOYMENT residential construction activity was an im­ Almost 6V2 million persons have joined the portant factor in the recovery. Purchases ranks of the employed since total employment of plant and equipment, however, rose only reached its cyclical low in March 1975. Virtu­ 7 per cent over the 2-year period, well be­ ally all industrial, occupational, and demo­ low the average recovery pace for this key graphic groups have shared in this expansion, sector of economic activity, and this seri­ and the percentage of the population with jobs ously damped the recovery of employment in was near its all-time high in June 1977. the manufacture of capital goods, in related As has been true for many years, the largest supplier industries, and in nonresidential con­ absolute and relative gains in employment struction. The absence of significant growth of have been registered by adult women; the government construction activity over the re­ number employed rose 2.5 million (10 per covery period also slowed growth of em­ cent) over the 27-month expansion period, ployment in goods-producing industries. As a reflecting strong, comparatively steady result of these constraints on demand and growth in service-oriented occupations and in­ production, employment in the goodsdustries, which are still the strongholds of job producing industries has yet to reach its pre­ opportunity for women. Employment of teen­ recession peak. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Labor Market Trends 619 Employment by industry a lag early in the recovery, gains in pro­ duction of business equipment and related Change from Ql 1973, millions of persons employment accelerated in the first half of 1977. Widespread increases amounting to nearly half a million jobs were reported in the durable goods industries between October and June, as production of business equipment accelerated to an 18 per cent annual rate. There were notable employment and produc­ tion gains in the transportation, electrical equipment, and fabricated metals industries. In addition, jobs in machinery groups regis­ tered significant increases for the first time in the recovery. Complementing these gains Based on BLS data, seasonally adjusted. were pick-ups in employment in the metals industries. Despite the recent strong upturn, capacity utilization and employment levels for During the first 12 months of recovery, pro­ most major hard goods industries remain far duction and total employment expanded at short of pre-recession highs. Due mainly to the about the same pace as in earlier recoveries. earlier sluggishness of capital spending, jobs However, capital spending remained weak, among all durable goods producers remained and about a year after the upturn began, expan­ almost 5 per cent below their previous peak; sion in economic activity slowed significantly the shortfall in primary metals employment as moderation in the growth of final demand was 10.2 per cent. led to an unintended accumulation of business inventories and to subsequent cutbacks in pro­ duction. Although growth of nonfarm payrolls Employment and expenditures slowed to about one-third of its earlier pace, Billions of 1972 dollars Millions of persons manufacturing employment was most severely affected, as layoffs were reported at textile and apparel producers, small-car assembly Durable manufacturing employment plants, and steel mills. The already slow re­ covery of employment in durable goods man­ ufacturing stalled because of the weakness in Plant and ^ demand caused in part by the shortfall in equipment spending business fixed investment and a drop in auto sales. Strikes in the tire, auto, and agri­ cultural equipment industries, and their sec­ ondary effects, exacerbated and possibly pro­ longed the slowdown. Allowing for the direct effect of strikes, manufacturing payrolls grew at an annual rate of 50,000 between April and October 1976 after having risen by 815,000 over the first year of the recovery. The most recent phase of the expansion— since October 1976—has been characterized by a strong resurgence in the growth of labor demand as consumption spending strengthened again and plant and equipment Employment data from BLS payroll survey, seasonally adjusted quarterly averages; expenditure data from Dept, of Commerce, spending moved decisively higher. Following seasonally adjusted at an annual rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

620 Federal Reserve Bulletin □ July 1977 Since October 1976 employment increases ment opportunities increased, the number of also resumed in nondurable goods manufactur­ persons who were not in the labor force be­ ing, and by June 1977 employment in this cause they believed that they could not find sector was only marginally below its pre­ jobs dropped 140,000, contributing slightly recession level. The principal exceptions were to the over-all expansion of the civilian labor the apparel and textile industries, which ap­ force. pear to have experienced strong competition More than half of the net gain in the labor from imported goods. There also has been a force since early 1975 has been among adult sizable increase in contract construction jobs women. This increase reflects the continua­ over the last 6 months, in large part because tion of the longer-run trend of rising labor of the strong upturn in single-family housing force participation rates for women. That is, starts. Growth between December 1976 and while their proportion of the population is not June 1977 accounts for about 70 per cent of changing significantly, the number of women the increase in construction employment since who seek work outside the home continues the recovery began 2 years ago. Nevertheless, to increase. In 1960, adult women comprised building trades employment in June was more 42 per cent of the civilian population and 27 than 5 per cent below its early 1974 high as per cent of the civilian labor force. By early lagging nonresidential construction had 1977 their proportion of the civilian population damped gains. was slightly lower, but they accounted for 30 Growth of public payrolls has been modest per cent of the civilian labor force. In part, throughout the recovery. Federal Government this trend may reflect economic pressure on employment in June was marginally below the family well-being. After declining between late level of March 1975, and while Federal counter­ 1973 and early 1975, real per capita income in­ cyclical public service jobs programs provided creased only 8 per cent between early 1975 funding for more than 300,000 jobs, State and and early 1977, an unusually small rise for a local payrolls expanded only 525,000 over recovery period. During the recession the the same period. Growth of State and local erosion of family purchasing power was a fac­ government employment over this period was tor in encouraging additional labor force par­ less than half of the average rate of expansion ticipation by secondary household members, over the prior decade. Adjustment to budget­ and it is likely that this trend has continued ary constraints in some areas, coupled with as workers attempt to restore or expand real declines in the school-age population, retarded family incomes. expansion of both employment and building The other significant source of labor force programs. growth during the recovery has been youth. About one-fourth of the net increase in the civilian labor force over this period has been among youth aged 16 to 24. This increase is LABOR SUPPLY largely the result of past fertility patterns. The AND UNEMPLOYMENT fertility rate, which began to climb about 30 As is typical in a cyclical recovery, the im­ years ago, peaked in 1957 and remained at a provement of labor demand was accompanied high level until 1961; the fertility rate then by an acceleration in the growth of the labor fell sharply and has continued at a low level. force. Since early 1975 the civilian work force The bulge in the labor force due to the baby has increased at a 2.6 million annual rate, well boom of the mid-1950’s, therefore, has moved above the average pace over the preceding from the teenage group into the 20- to 24-year decade. The recent advanced rate reflects con­ age group. tinued large increases in the working-age By contrast, adult men continue to consti­ population and in the participation rate of the tute a smaller share of the civilian work force. female population. In addition, as employ­ Over the long run, declining participation rates Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Labor Market Trends 621 are the major factor for men generally, but they to 54, who account for a significant propor­ have been most significant for those aged 55 tion of the experienced work force, dropped years and over. It has been among the older 2 percentage points to 4.3 per cent by the men that declines in participation have been second quarter of 1977, which was only half concentrated during the recent recovery— way back to its pre-recession low. The decline apparently a continuation of the trend toward for adult women in the prime-age labor force early retirement. However, among working group—to 6.4 per cent in that quarter—about men aged 25 to 44, recent participation has equaled that of their male counterparts. How­ been relatively stable, as the improvement in ever, many labor force entrants and re-entrants economic conditions has attracted some pre­ are included among adult women, who con­ viously discouraged workers back into the stitute the fastest growing labor force group, labor force. and this contributes to high unemployment Total unemployment declined by about Wi rates relative to adult men. million during the recovery period with the The jobless picture for youth and minorities entire reduction among experienced workers has improved relatively less over the recovery who had lost their last job; at 2.9 million in June period. The unemployment rate for teenagers, their number was reduced by more than one- which had climbed from 14Vi per cent in late third from the level in the spring of 1975. This 1973 to more than 20 per cent during the reces­ group included many blue-collar workers re­ sion, was still 18 per cent in mid-1977. Youth turning to manufacturing production lines. On aged 20 to 24 years—the second fastest grow­ the other hand, the number of unemployed ing labor force group—have seen a somewhat who had just entered or re-entered the labor more substantial drop in unemployment, from force has risen almost 300,000 since the cycli­ 14Vi per cent in May 1975 to 10Vi per cent in cal trough. mid-1977. However, neither group has made much progress in reducing its unemployment rate relative to that of more experienced Unemployment by reason workers. Similarly, the jobless rate for black M illions of persons and other minority workers improved rela­ tively more slowly throughout the recovery than the rate for whites. Recent unemployment rates have been well above the 5 per cent range maintained between the final months of 1972 and mid-1974 and even further above the 416 per cent rate of the 1955-57 period. This gap is due, in large part, to the incomplete nature of the current ! 1 i recovery, but it also is indicative of a variety 1973 1975 1977 of noncyclical factors that have been boosting BLS data, seasonally adjusted. the over-all unemployment rate for any given At 7 per cent in the second quarter of 1977, economic situation throughout the past two the over-all unemployment rate was about decades. midway between its cyclical peak of almost Most significant among these noncyclical 9 per cent in the spring of 1975 and its pre­ factors is the changing demographic structure recession low in late 1973. Because in many of the labor force. Since the early 1960’s, the industries capacity utilization and employment fastest growing groups in the civilian work in June was well below pre-recession levels, force have been those more likely to experi­ considerable labor market slack remained ence frictional unemployment—youth and even among experienced workers. For exam­ women. The youth labor force, in particular, ple, the unemployment rate for men aged 25 includes a relatively high proportion of indi­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

622 Federal Reserve Bulletin □ July 1977 Selected unemployment rates BLS data, seasonally adjusted. viduals looking for their first job. In addition, ment among recipients. Estimates of the younger workers are likely to have higher effect of these extensions on the duration rates of turnover as they experiment—often of unemployment range from increases of 15 by trial and error—with alternative jobs or to 30 per cent, which, according to some with a combination of school and work. High analysts, might have added as much as a unemployment rates among adult women also percentage point to the 1976 jobless rate. reflect a higher incidence of initial job search Moreover, the temporary extension of bene­ among new entrants as well as more frequent fits to workers not previously covered by movement in and out of the labor force. As unemployment insurance had a notable impact the chart shows, other things being equal, the on reported unemployment during the sum­ current total unemployment rate is about 1 per­ mers of 1975 and 1976, when about 400,000 centage point higher than it would be if the seasonal workers—many employed on the age-sex composition of the civilian labor force support staffs of public schools—collected were the same as during the mid-1950’s. special unemployment assistance benefits. In addition to demographic changes, the Increases in the level and coverage of the cost of unemployment to individuals may have been declining due to changes in the structure Actual and adjusted unemployment rates and administration of income-support pro­ grams. More liberal benefits, as well as re­ cent extensions of coverage and duration of UNEMPLOYMENT R unemployment insurance, may have contrib­ uted to upward pressure on the unemploy­ ment rate. The after-tax level of unemploy­ ment benefits relative to wages has risen over time; recent studies have shown that those payments now replace from 50 to 80 per Adjusted cent of previous earnings when taxes and work-related expenses are taken into account. Special extensions of the maximum duration of unemployment insurance—up to 65 weeks Based on BLS data, seasonally adjusted. Unemployment rate during 1975-76 and 52 weeks currently—have calculated as the sum of unemployment rates for major age-sex groups weighted by their 1956 proportions of the civilian labor lengthened the average period of unemploy­ force. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Labor Market Trends 623 Federal minimum wage likely have reduced By contrast, wage increases seem to re­ job opportunities for less skilled workers, spond strongly—after a lag of several youth in particular. According to recent esti­ quarters—to price movements. Beginning in mates, past increases in levels and coverage of early 1973, consumer prices accelerated to the minimum wage have led to significant record rates led by fuel and food price in­ declines in teenage employment. Moreover, creases that were affected relatively little by direct surveys of employers in the restaurant the downturn in activity. Following these industry indicate cutbacks in their work forces price developments, wage rate increases because of an increased statutory minimum began to be more rapid in early 1974 and wage. peaked at almost 9 per cent as economic activity was at its early 1975 trough. Con­ sumer prices decelerated sharply throughout WAGES AND COMPENSATION 1975 and 1976, and the rate of wage change Nominal wage rate increases decelerated sig­ dropped to about 7 per cent. In large part, nificantly between 1975 and mid-1976 but have the relationship between wages and prices leveled off over the past year at about a 7 is the result of the general tendency to partially per cent annual rate. Although the decelera­ link compensation adjustments to changes in tion was partially the result of the high level of consumer prices. joblessness, the significant impact that high The movement of consumer prices is espe­ rates of inflation have on wages is apparent in cially important as a determinant of wages the continuation of historically high rates of paid to unionized workers. Cost-of-living es­ wage change in the face of considerable labor calator clauses now cover more than threemarket slack. fifths of the almost 10 million workers in major Over the past year the unemployment rate collective bargaining units—three times the has averaged IVz per cent, yet wages of non­ coverage in the mid-1960’s. Moreover, catch­ farm production workers measured by the up wage increases to compensate for the effect average hourly earnings index have risen almost of past inflation typically are included in the 7 per cent—about twice the rate during the tight first-year wage demands of uncovered or in­ labor markets of the mid-1960’s when the completely protected unionized workers. jobless rate was below 4 per cent. The damp­ First-year wage adjustments in negotiations ening impact of high unemployment on the covering 1,000 or more workers averaged 8.4 growth of wages appears to have weakened in per cent during 1976, well below the 10.2 per recent years. cent rise recorded the previous year but still Wages, prices, and unemployment Percentage change from previous year Percent BLS data, seasonally adjusted. Wages are average hourly earnings index for private nonfarm production or nonsupervisory workers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

624 Federal Reserve Bulletin □ July 1977 substantially above the long-term trend of Productivity and costs productivity improvement. Fringe benefits Percentage change from previous year appeared to have increased about in line with iRLY COMPENSATION wages. In negotiations covering 5,000 or more workers, first-year wages and benefits com­ bined rose 8.5 per cent in 1976, compared with an increase of 11.4 per cent in 1975. In a major round of collective bargaining, which began in 1976, similar pattern-setting PRODUCTIVITY packages have been negotiated in the automo­ bile and steel industries. The steel settle­ ment concluded early in 1977 increased wages and benefits by about 12Vi per cent in the first year and, assuming a 6 per cent annual UNIT LABOR COSTS rate of inflation, will result in compensation in­ creases totaling more than 30 per cent over the next 3 years. Upcoming negotiations in key areas involve the communications industry this summer, coal mining late in the year, and the Nation’s railroads at year-end. BLS data, seasonally adjusted. Wages are average hourly Negotiated wage and benefit changes in earnings index for private nonfarm production or nonsupervisory major collective bargaining units workers. Per cent 1975. The moderation in hourly compensation 12 growth, combined with a cyclical rebound of productivity, resulted in a sharp deceleration in unit labor costs from their double-digit rates 8 of 1974 and early 1975. Between early 1976 and 1977, however, unit labor costs in the nonfarm 4 business sector rose almost 5Vi per cent. Growth in productivity typically accelerates at a rapid pace early in a recovery as more 0 intensive use is made of existing workers and equipment. This burst of productivity is gen­ BLS data. Wage and benefits changes for settlements covering erally followed by a significant deceleration as 5,000 or more workers. Life of contract is annual rate excluding cost-of-living adjustments. laid-off workers are rehired and new, often inexperienced employees are recruited in re­ sponse to the pick-up in demand. As the expansion is sustained, the growth of output per hour normally moderates to its longer-run trend—about 2Vi per cent annually between Growth in hourly compensation for workers in 1948 and 1973. the private nonfarm business sector moder­ Over the two quarters immediately follow­ ated considerably from the pace experienced ing the trough in the first quarter of 1975, just before and during the contraction. Com­ nonfarm business productivity rose at more pensation per hour rose IVi per cent between than a 10 per cent annual rate, as significant early 1976 and 1977, compared with a rate of production gains outpaced the modest rise in increase of 1IV2 per cent from mid-1974 to early hours of work. Then, as the recovery matured, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Labor Market Trends 625 growth of productivity in the nonfarm business sector slowed to a rate about in line with its long-run trend. Although productivity gains over the past 2 years have followed the pattern of previous recoveries, they have not been sufficient to return the level of productivity to its postwar trend line, Indeed, a shortfall of IVx per cent from trend remained in early 1977, with the gap mainly reflecting the unprecedented 10 per cent drop in productivity from its postwar * ■ - K*: I * * • 4 r h j v ? h - < i trend by late 1974. 1 91 H i I Hi In addition to the severity of the business i i i ’i i i mB i 70 1961________1965________1969 1973 1977 cycle, several longer-term factors appear to have weakened productivity performance BLS data, seasonally adjusted. since the late 1960’s, One important factor has been the change in the composition of the in part from inadequate capital formation. In labor force to include a greater proportion of addition, the rise in relative energy prices may young and less experienced workers. In addi­ have led producers to forego the adoption of tion, the pattern of consumer demand has high-productivity, energy-intensive technolo­ been changing, and there has been a corre­ gies and to abandon energy-inefficient capital sponding shift of employment and hours to­ stock. The reallocation of both capital and ward relatively less productive service- labor resources to pollution abatement may producing industries. have contributed to the shortfall in productiv­ The shortfall in productivity also may result ity below its trend. D Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

626 Insured Commercial Bank Income in 1976 1. Income and Expenses of All Insured In order to present the broadest possible pic­ Commercial Banks ture of commercial bank profitability, this year the focus of the annual review of bank earn­ As per cent of average assets1 ings has been moved from member banks to all Item 1972 1973 1974 1975 1976 insured commercial banks. This change brings into consideration more than half of the com­ Gross interest earned 2... 4.67 5.38 6.19 5.45 5.99 mercial bank population and almost two-thirds Gross interest expense 3.. 2.08 2.80 3.55 2.85 3.47 Net interest margin.... 2 59 2 58 2 64 2 60 2 52 of the banks with assets below $100 million. Noninterest income 4. ... >0 [69 >0 [81 i!n Loa-n-Ioss provision 5, . .. .13 .14 .23 .33 .32 Appendix Table 2 presents the historical series Noninterest-expenseS. . .. 2.19 2.13 2.17 2.23 2.44 of member bank income data in an update of Income before tax.......... .97 1.00 .94 .85 .88 Taxes 7............... .24 .24 .21 .17 .21 the tables presented in earlier articles. Other 8........................ .03 -.01 -.01 .01 .03 Net income after tax. . . .76 .75 .72 .69 .70 Cash dividends de­ clared 9............... .29 .28 .28 .29 .27 Net retained earnings.... .47 .47 .44 .40 .43 SUMMARY Memoranda: Taxable equivalent net Net profits of insured commercial banks in­ interest margin i o „ 3.05 3.01 3.06 3.02 2.93 Average net assets, bil­ creased during 1976 and for the year were lions of dollars___ 746 870 985 1,059 1,131 $7,861 million, up $600 million from the previ­ 1 Average of beginning- and end-of-year fully consolidated assets ous year. The rate of growth in profits, which net of loan-loss reserves. 2 Represents the sum of interest on loans, income from Federal at 8 per cent was considerably above the 3 per funds sales and securities purchased under agreements to resell, interest on U.S. Treasury and Government agency obligations, in­ cent pace of 1975, nevertheless remained terest on State and local government issues, and income from other corporate securities. In 1976 dividends on Federal Reserve Stock and below the average of yearly gains achieved corporate stock, amounting to .01 of average assets, was reported separately and included in noninterest income. between 1970 and 1974. Similarly, the 3 Includes interest on time and savings deposits, interest on deposits in foreign offices, expense of Federal funds purchased and securities profitability of insured commercial banks as sold under agreements to repurchase, interest on subordinated notes and debentures, and interest on other borrowed money. measured by net returns on average assets 4 In 1976, for the first time, interest on balances with banks was provided. It amounted to .39 of the 1.11 total noninterest income in also improved moderately in 1976 although it 1976, an amount that is believed to represent a sizable increase from prior years. It was left in noninterest income to preserve consistency too remained below the 1970-74 averages. with 1975 and earlier years. Other items included in noninterest income are income from direct lease financing, from fiduciary activities, from As in 1975, the main impediments to more service charges on deposit accounts in domestic offices, from other commissions and fees, and from miscellaneous sources. vigorous growth of profits at commercial s In 1976, the provision generally was made on the basis of proba­ bility of loss; for earlier years, conformance with regulatory guidelines banks were rising costs of operations and tended to be the rule. 6 Includes costs for salaries and employee benefits, net occupancy lowered interest returns net of the cost of expense of bank premises, furniture and equipment expenses, and other miscellaneous expenses. funds. Provisions for loan losses, at large 7 Includes all taxes estimated to be due on income, on extraordinary gains, and on securities gains. banks especially, also remained high relative 8 Includes securities gains or losses gross of taxes and gross extra­ ordinary gains or losses. to other income and expense items. 9 Represents cash dividends declared as of the statement date on common and preferred stock. The improvement in profitability between i o For each bank, net interest income was increased by the lesser of interest income from State and local government obligations or 1975 and 1976 is attributable to three factors. net profits before tax, but by no less than zero. That adjustment re­ flects the after-tax value to each bank of tax-exempt interest earned and lends consistency to the time series of net interest earned by ab­ stracting changes that would result simply from shifts in the propor­ tion of tax-exempt interest income. The adjustment relates only to Note.—This article was prepared by Barbara N. Opper interest income; other tax-preference income, such as from direct of the Board’s Division of Research and Statistics. lease investments, was not adjusted to a taxable equivalent basis. Rebekah Wright provided valuable research assistance. Note.—Shaded area reflects domestic operations only. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

627 Provisions for loan losses, while still very Gross Interest Income high, stabilized relative to other income and Interest income of commercial banks was in­ expense items. Second, after-tax securities fluenced strongly during 1976 by persistently gains increased, which at least partly was the weak business loan demand and by an upgrad­ result of opportunities presented by falling ing of the credit quality and marketability of interest rates. And the third was an increase in noninterest income, although to some extent the improvement shown in that category dur­ NOTES ON THE COMPARABILITY OF ing 1976 is believed to reflect interest income.1 1976 COMMERCIAL BANK INCOME DATA The components of net returns on average Certain important definitions in the Report of Income and assets can be seen in Table 1, which shows the Dividends were changed in 1976, impairing comparability principal income and expense categories af­ with prior years. The most important is the level of fecting the rate of return on assets during the consolidation. Although net income after taxes in all of the years shown reflects fully consolidated operations, in 1975 past 5 years. Appendix Tables 1 and 2 present and earlier years net income from foreign branches and the actual income and expense data for all subsidiaries was added as a part of “all other income.” insured commercial banks and for insured Beginning with 1976, the statement is fully consolidated so that all_ of the components—such as interest revenue, member banks. As explained in the notes on interesfexpense, and so on—include the gross revenues comparability of 1976 commercial bank in­ and expenses of foreign branches and subsidiaries. As a come data, part of the 1976 data shown in the consequence, for example, the net interest margin reflects only the domestic margin before 1976. This change is perti­ tables are not reported on the same basis as in nent only to the 145 commercial banks that operated earlier years. As a result, conclusions on the foreign branches or subsidiaries during 1976, none of which factors contributing to changes in the rate of had consolidated assets below $100 million. return must remain qualified. An additional change is that the loan-loss reserve in 1976 is subtracted from loans, and hence from assets. Before that, the loan-loss reserve was carried as a liabili­ ty. The asset base used to construct ratios shown in all tables has been adjusted for conformity by subtracting the NET INTEREST MARGINS loan-loss reserve from 1975 and earlier data. The loanloss reserve was more narrowly defined in 1976 to The net interest margin—the interest on assets exclude valuation reserves. This valuation portion was after deducting the interest cost of funds— shifted to the capital account. A change in the definition of “accretion of discount” also caused a one-time increase earned by all insured commercial banks nar­ in equity capital. rowed somewhat during 1976 as a result of Another change affects gross interest income. In shifts affecting both assets and liabilities. 1976, “interest on balances with banks” was set out separately for the first time. This item reflects primarily Those shifts served to increase the proportion Euro-dollar redeposits and is believed to be considerably of relatively low-risk, but low-yield, assets and larger in 1976 than in earlier years. In order to assure on the other side of the balance sheet to in­ consistency of the ratios, this item was left in “noninterest income” for all the years shown in the ratio tables. Most crease the proportion of interest-bearing of “interest on balances with banks” is accounted for by claims. Moreover, declines in market interest the largest banks and by those that operate abroad via rates during 1976 lowered portfolio returns, al­ subsidiaries or branches. Several other changes in the Report of Income and though they also reduced the cost of interest- Dividends were made that are noteworthy. One is that in bearing funds. 1976 unearned income is deducted from loan portfolios for the first time in order to conform with generally accepted accounting principles. Income on securities other than those issued by governments is broken down in 1976 between interest income on obligations issued by non­ during 1976, interest received on balances with banks governmental units and dividend income earned on Fed­ was reported separately for the first time. In prior years, it eral Reserve and other stock. More detail was reported on was an undifferentiated component of other (noninterest) interest paid on deposits in 1976; interest paid on large income, and thus for consistency it was analyzed as part time certificates of deposit issued by domestic offices, of that category during 1976. In 1976 interest on balances interest on foreign deposits, and interest paid on other with banks represented more than one-third of total domestic time and savings deposits are now set out noninterest income, an amount that is believed to be much separately. Additionally, income from direct lease financ­ larger than in earlier years because information now ing is now shown. available for bank holding companies shows a sizable increase. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

628 Federal Reserve Bulletin □ July 1977 2. Composition of Portfolios of All Insured Commercial Banks End-of-period data as per cent of total assets gross of loan-loss reserves Domestic Fully consolidated Item 1972 1973 1974 1975 1976 1975 1976 Interest-earning assets.................................................... 77.0 76.8 75.9 76.2 75.2 74.1 73.2 52.7 55.2 55.4 52.7 51.5 53.5 52.7 Securities....................................................................... 24.3 21.6 20.5 23.5 23.7 20.6 20.5 U.S. Treasury........................................................... 8.8 6.6 5.7 8.5 9.5 7.4 8.1 U.S. Government agencies.................................... 2.9 3.3 3.4 3.5 3.4 3.0 2.9 State and local......................................................... 11.9 11.0 10.7 10.7 10.2 9.2 8.7 Other......................................................................... .7 .7 .7 .8 .6 1.0 .8 Memorandum: total gross assets, billions of dollars, end of period........................................................... 733 826 906 944 1,010 1,091 1,185 investment portfolios. Additionally, returns computed in a way that takes into account the on domestic business loan portfolios were reinvestment of interest, and therefore it re­ reduced during 1976 as the average prime rate flects a compounded, or effective, annual rate. fell below its 1975 level. As described in the Despite general declines between 1975 and notes on the comparability of 1976 data, gross interest income includes, for the first time, TECHNICAL NOTE: Computation of Rate of Return gross returns on assets held by the banks’ foreign branches and subsidiaries. This differ­ Rather than to simply take interest income as a percentage ence has an important impact on the year-to- of portfolio, or of average portfolio, the rate of re­ turn was calculated in a way that recognizes the com­ year pattern of gross interest income;2 in 1976, pounding of interest income. The expression used, which assets invested by foreign branches and sub­ is a regulatory standard for life insurance companies in the sidiaries amounted to 12 per cent of banks’ computation of their annual rate of return on mean assets, is: fully consolidated invested assets. 2i/(A +B - /) Table 2 presents the major interest-earning assets as a percentage of total assets of insured where i is interest received during the period; A is portfolio at the beginning of the period; B is portfolio at commercial banks. In both the domestic and the end of the period. the fully consolidated portfolios, loans de­ clined as a percentage of assets. If portfolio The derivation of this is that interest is assumed to accumulate evenly throughout the period and to be rein­ growth had kept pace with asset growth, vested. Thus, the interest earned on the beginning domestic loan portfolios would have been $12 portfolio (A) is accumulated and represented in the ending billion larger at the end of 1976, and fully portfolio (B) and on average earned interest for one-half of a year. Instead of using in the denominator of the rate of consolidated loan portfolios would have been return formula a simple average of beginning- and end- $9 billion larger. The component of banks’ portfolios, or A + B , the recognition of interest compoundinvestment portfolios that showed the largest 2 increase relative to total assets was their hold­ ing thereby produces a denominator of ings of U.S. Treasury issues—the least risky, A + B i most highly marketable, but lowest yielding of 2 " T all of their investment choices. Average returns on commercial bank which, simplified, produces a rate of return fraction of portfolios are shown in Table 3. As described i in the technical note, the rate of return was lA + B - i) - 2 The level of gross returns on foreign assets, in general, Further simplified, it produces the expression described appears to be above that on portfolios held by domestic originally. offices. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Insured Commercial Bank Income in 1976 629 1976 in market yields on obligations of the 3. Rates of Return On Portfolios of All U.S. Treasury and other domestic debt issuers Insured Commercial Banks 1 represented in bank portfolios, the rate of In per cent return on these assets remained quite stable. To a large extent, that stability is a result of a Fully Domestic portfolio consoli­ lengthening in the maturities of bank holdings. dated Item portfolio For instance, in 1975 44 per cent of banks’ holdings of U.S. Treasury securities matured 1972 1973 1974 1975 1976 in 1 year or less; in 1976, only 38 per cent had Securities— that maturity. Bank holdings of U.S. Govern­ U.S. Treasury............. 5.48 5.95 6.64 6.91 6.96 U.S. Government ment agency issues also lengthened; in 1975, 6 agencies and corporations.... 6.18 6.23 7.13 7.57 7.41 per cent matured in 10 years or more, but that State and local 2.......... 4.26 4.42 4.85 5.11 5.15 7.11 7.10 8.32 8.17 8.07 ratio rose to 12 per cent in 1976. And finally, 7.43 8.73 10.30 9.03 8.89 banks reduced both the longest and the short­ est maturity ranges of State and local obliga­ 1 Calculated as described in the Technical Note. 2 Taxable equivalent returns: tions and increased their holdings in the 1- to State and local 10-year range to 59 per cent of that portfolio, government securities... 8.58 8.92 9.63 9.98 10.11 from 55 per cent in 1975. All securities........................... 7.11 7.50 8.31 8.54 8.43 For each bank, net interest income was increased by the lesser of interest income from State and local government obligations or net profits before tax, but by no less than zero. That adjustment reflects the after-tax value to each bank of tax-exempt interest earned. Gross Interest Expense 3 Includes obligations of nongovernmental units, Federal Reserve stock, and other corporate stock. The composition of financial claims at com­ declined between 1975 and 1976, gross interest mercial banks shifted toward the interestexpenses fell in proportion to assets.3 bearing category during 1976. Certain types of interest-bearing claims were increased in favor 3 Interest expenses on time and savings deposits in domestic offices during 1976 were about equal to the dol­ of others as banks sought both to economize lar volume of those costs in 1975, even though those on total interest costs and to coordinate the deposits increased by $37 billion. Because of the changes management of liabilities and investment in reporting between the 2 years, the only two interest expense items providing strict comparability are time and portfolios. As a result of those efforts, and savings deposits in domestic offices and interest on primarily because interest rates in general purchases of Federal funds. 4. Composition of Financial Claims of All Insured Commercial Banks End-of-period data as per cent of total assets net of loan-loss reserves Domestic Fully consolidated Item 1972 1973 1974 1975 1976 1975 1976 Financial claims............................................................... 90.1 90.2 89.3 89.5 90.2 90.3 91.1 Demand deposits......................................................... 40.6 37.5 34.8 34.2 33.1 29.5 28.2 Interest-bearing claims............................................... 49.5 52.7 54.5 55.3 57.1 60.8 62.9 Time and savings accounts................................... 43.8 45.1 47.8 48.7 49.1 54.8 55.7 Time CD’s 1......................................................... n.a. 15.5 19.0 16.7 13.5 14.4 11.5 In foreign offices................................................. 12.8 13.9 Other domestic.................................................... n.a. 29.6 28.8 32.0 35.5 27.6 30.3 Subordinated notes and debentures................... .6 .5 .5 .5 .5 .4 .4 Other borrowings.................................................... .5 .9 .5 .5 .5 .7 .8 Gross Federal funds............................................... 4.6 6.2 5.7 5.6 7.0 4.9 6.0 Gross sales........................................................... 3.5 4.2 4.3 4.0 4.6 3.4 3.9 Net Federal funds.............................................. 1.1 2.0 1.4 1.6 2.4 1.5 2.1 Memorandum: total net assets, billions of dollars, end of period........................................................... 726 819 898 936 1,004 1,083 1,179 i Of $100,000 and over issued by domestic offices, n.a.—Not available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

630 Federal Reserve Bulletin □ July 1977 Large certificates of deposit (CD’s), for nent; virtually all deposits in foreign offices example, were allowed to run off in the aggre­ are interest bearing. gate, due at least in part to the weakening in Demand deposits fell as a proportion of total business loan demand. At the same time, assets, continuing in a secular pattern. The however, there was an increase in funds raised proliferation of corporate cash management by banks through purchases of Federal funds programs and in 1976 the extension of negotia­ and through repurchase agreements (Rp’s), ble order of withdrawal (NOW) account au­ which largely are overnight funds. Banks thority to all the New England States influ­ minimized their short-term interest costs by enced that pattern. partially replacing CD’s with shorter-term Banks’ gross interest expense during 1976 Federal funds and Rp’s, especially when fell not only because the composition of their short-term rates were falling. Table 4 shows financial claims changed but also because av­ the composition of financial claims at insured erage rates paid for interest-bearing funds fell. commercial banks, expressed as a percentage Table 5 presents the average interest rates of total net assets. On a fully consolidated paid on banks’ primary deposit and non­ basis, time CD’s fell from 14.4 per cent of deposit sources of funds. Strict comparability assets to 11.5 per cent; gross funds raised is hampered by the difference between 1975 through Federal funds and Rp’s grew from 4.9 and 1976 in level of consolidation, although per cent to 6.0 per cent. the table probably accurately represents the An important source of funds during 1976 direction of change, if not the exact mag­ was time and savings accounts other than nitude. CD’s. During much of the year market yields Average interest rates paid on all time and remained below the maximum rates payable savings accounts fell about 35 basis points on those deposits, and as a consequence the during 1976. Some of that decline simply re­ public shifted large amounts of funds to such flects the fact that growth in those deposits claims. Deposit growth at foreign branches was very fast toward the year-end, shortening and subsidiaries, especially at large banks, the average period for interest accumulation, also increased the interest-bearing compo- which of course would be reflected in the actual dollar payout of interest. Nevertheless, some of the decline also reflects the behavior 5. Rates Paid for Funds by All Insured of offering rates. Market yields quoted on Commercial Banks 1 large 90-day CD’s dropped by an average of As per cent of average specific liability more than 40 basis points, for example. In addition, as short-term market yields fell and Fully Domestic consoli­ as deposit growth in savings and small- Item dated denomination time accounts accelerated, 1972 1973 1974 1975 1976 more banks retreated from the Regulation Q maximum offering rates on those accounts.4 Time and savings accounts................... 4.76 5.91 7.21 6.09 5.74 Counteracting that influence on total interest Time CD’s2................. n.a. n.a. n.a. n.a. 4.97 Deposits in foreign cost was strong growth in higher-rate, Offices.................. n.a. n.a. n.a. n.a. 5.96 Other deposits............ n.a. n.a. n.a. n.a. 5.98 longer-maturity time and savings accounts. Subordinated notes and debentures.... 6.24 6.40 6.98 7.03 7.42 Other borrowings........... 4.44 9.54 16.50 8.18 7.94 4 According to the quarterly survey of time and savings Subtotal............................ 4.66 5.97 7.34 6.13 5.78 deposits, some rate cutting by large banks occurred around Gross Federal funds the end of 1976, particularly in long-maturity time de­ and Rp’s 2................ 5.05 9.68 12.49 6.63 5.53 Memorandum: Gross posits and in business and government savings accounts. sales (rates Because these reductions occurred at the end of the year, earned)................. 4.63 8.62 10.63 6.17 4.90 they probably had only a modest effect on interest Total......................... 4.80 6.36 7.89 6.18 5.76 actually paid on deposits. By the end of January 1977, 37 per cent of all small-denomination time and savings 1 Calculated as described in the Technical Note. accounts were to mature in 4 or more years, in contrast 2 Of $100,000 and over issued by domestic offices, n.a.—Not available. to 31 per cent of that total a year earlier. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Insured Commercial Bank Income in 1976 631 Rates earned by banks on Federal funds years. The activity is generally concentrated sales and reverse Rp’s fell, in step with the at the biggest banks and at banks that operate over-all declines in market yields. The average abroad with branches or subsidiaries. The rate earned by banks declined 127 basis points relative share and recent growth of the com­ between 1975 and 1976, whereas the average ponents of “noninterest income” are shown in rate paid by banks on the counterpart source Table 6. of funds declined 110 basis points. LOAN-LOSS PROVISIONS NONINTEREST INCOME Provisions for loan losses during 1976 in­ creased slightly less than proportionally with Although income from fiduciary activities in­ banks’ total asset and loan portfolio growth. creased 12 per cent during 1976, the largest So unlike 1975, when dramatic increases in source of increase in ‘‘noninterest income” loan-loss provisions were one of the major can only be deduced because of the changes in causes of the fall in banks’ rate of return on reporting. Before the 1976 revisions to the assets, during 1976 those provisions had a Report of Income and Dividends, interest on neutral effect. They remained very high, rela­ balances with banks—which represents in­ tive to their pre-1975 levels, but they showed come from Euro-dollar redeposits—was not some minor improvement during 1976, as seen set out as a separate item but was a part of in Table 1. “other income.”5 Information available from The pattern in loan-loss provisions shown other sources for bank holding companies for the banking industry as a whole actually shows that the dollar volume of interest on masks some differences between large and these balances increased sharply over recent small banks. Banks with less than $100 million in assets were the only size category in which 5 Euro-dollar redeposits are Euro-dollars—dollar de­ loss provisions in 1976 grew faster than loan posits with banks outside the United States—that foreign branches of U.S. banks have accepted and then placed portfolios, but even for those banks the in­ with other banks or branches abroad. Generally, the crease over 1975 was minimal.6 For all other depositing bank earns a small margin on the rate it earns size categories of banks, it appears that provi­ over the rate it pays for these funds. sions for loan losses in 1976 grew smaller in relation to end-of-period loan portfolios and 6. Noninterest Income of Insured assets and to gross interest revenue. The im­ Commercial Banks provement became stronger as the bank size increased. In millions of dollars The effect of loan-loss provisions during Fully 1976 was to reduce the rate of return on loan Domestic consoli­ Sources of noninterest dated portfolios by 65 basis points. In other words, income insured banks had a gross rate of return on 1972 1973 1974 1975 1976 loans of 8.89 per cent (Table 3). Since the Fiduciary activities........ 1,366 1,460 1,506 1,600 1,795 loan-loss provision as now calculated reflects Service charges on de­ posit accounts in the probability of loss in the portfolio,7 it is domestic offices.... 1,256 1,320 1,450 1,547 1,629 Other service charges, commissions, and fees........................... 1,079 1,247 1,405 1,647 2,175 Comparisons of loan-loss provisions from 1975 to 1976 Subtotal................... 3,701 4,027 4,361 4,794 5,599 must be qualified because even in 1975, when this item Other sources1................ 1,512 1,942 2,530 3,811 7,005 Interest on balances supposedly reflected domestic business only, many banks with banks.......... n.a. n.a. n.a. n.a. 4,459 are believed to have reported provisions relevant to the Direct lease financing. n.a. n.a. n.a. n.a. 534 Other............................ n.a. n.a. n.a. n.a. 2,012 banks’ foreign as well as domestic branches. Total......................... 5,213 5,969 6,891 8,605 12,604 7Until 1975, calculation of the loan-loss provision had been based primarily upon regulatory guidelines; since i Includes net income remitted from foreign branches and subsidi­ then, it is based more closely upon the probability of credit aries for the years 1972 through 1975. n.a.—Not available. loss in the portfolio. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

632 Federal Reserve Bulletin □ July 1977 7. Loan Portfolio Losses and Recoveries of All Insured Commercial Banks in 1976 With consolidated assets of: Item Total Less than $100 $500 $1 billion $5 billion $100 million million to $5 and million to $500 to $1 billion over million billion In millions of dollars Losses charged....................... 4,159 787 565 257 766 1,783 Recoveries............................... 684 199 113 45 125 201 Net losses............................. 3,475 588 452 212 641 1,582 Loan-loss provision............... 3,643 659 486 212 642 1,644 As per cent of loan portfolio i Net losses.......... .56 .39 .51 .56 .64 .64 Loss provision. .58 .44 .55 .56 .64 .66 i Fully consolidated gross loan portfolios at end of period. reasonable to approximate loan portfolio re­ 8. Components of Noninterest Expense of All turn net of credit risk by deducting those Insured Commercial Banks provisions. In 1976, after deducting the provi­ As per cent of average assets sions for loan losses, the net loan portfolio Fully return amounted to 8.24 per cent. Domestic consoli­ Item dated Table 7 shows actual 1976 losses and re­ coveries on loans and also the different loss 1972 1973 1974 1975 1976 experience of small and large banks. In terms Salaries and employee of both actual net loan losses and the loan-loss benefits..................... 1.21 1.16 1.17 1.19 1.30 Occupancy expense: provision, smaller banks on average had better Gross............................ .26 .25 .25 .26 .29 portfolio experience than larger banks. R N e e n t t . a .. l .. . i . n ... c .. o .. m .... e .. . . . . . . . . . . . . . . . . . . . . . . . . . .2 0 1 5 . . 0 2 4 0 . . 0 21 4 . . 0 2 4 2 . . 0 2 4 4 Furniture and equip­ ment ......................... .15 .14 .14 .14 .15 .62 .62 .66 .68 .75 2.19 2.13 2.17 2.23 2.44 NONINTEREST EXPENSE Note.—Totals may not add due to rounding. Rising costs of operations have had a major impact on the falling rate of return at commer­ cial banks since 1973. A major source of NET RETURNS increase in these costs—defined here to in­ AND RETAINED EARNINGS clude all expenses other than interest ex­ penses and loan-loss provisions—has been in Net securities gains were important in con­ outlays for salaries and employee benefits. tributing to the improved return on assets. Table 8, which presents those costs expressed More banks posted securities gains than in in terms of average assets in order to relate to 1975, and more banks experienced gains that Table 1, shows that salaries and employee were sizable in relation to their income. In benefits in 1976 amounted to more than half of fact, the improvement in net profits before total noninterest expenses. The increase in taxes (and before securities gains) was virtu­ these costs between 1975 and 1976 reflects ally offset by the increase in taxes paid during both the difference in level of consolidation the year. That increase reflects both the larger and the year-to-year change. taxable profits of banks and the greater Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Insured Commercial Bank Income in 1976 633 number of banks in 1976 that had taxable 11. Sources of Increase in Total Equity Capital income. Because of the rise in taxes, there­ at All Insured Commercial Banks fore, net securities gains were an important Millions of dollars factor in the improved return on assets. Retained income Net retained Net increase as per cent of income 1 in equity capital increase in equity Year capital 9. Profit Rates of Insured Commercial Banks In per cent Total Large Total Large Total Large banks 2 banks 2 banks 2 Item 1972 1973 1974 1975 1976 1972 3,438 1,190 4,579 1,612 75 74 1973 4,131 1,491 5,455 1,849 76 81 Return on average assets—All i .76 .75 .72 .69 .70 1974 4,307 1,666 5,631 1,977 76 84 Return on average equity—All 2 12.2 12.9 12.6 11.8 11.6 1975........ 4,224 1,690 5,526 2,396 76 71 Less than $1 billion 3............ 12.6 13.2 12.5 11.3 11.6 1976 4,834 1,909 8,695 4,249 56 45 $1 billion or more 3............... 11.9 12.5 12.8 12.5 11.6 1 Net income after taxes less cash dividends declared on preferred 1 Net income after taxes as a per cent of average of beginning- and and common stock. end-period fully consolidated assets net of loan-loss reserves. 2 Includes banks with fully consolidated assets of $ 1 billion or more. 2 Average of beginning- and end-period equity capital, defined narrowly to exclude loan-loss reserves and subordinated debt. Note.—In 1976, equity capital was affected by one-time accounting 3 Size categories are based upon fully consolidated assets. changes in the treatment of loan-loss and valuation reserves. The dividend payout ratio at all banks re­ mercial banks therefore were helped in 1976 ceded during 1976, and for all size categories by both improved profits and stabilized cash of banks that rate was equal to or below its dividend outlays. As Table 11 shows, retained 1974 values. Total cash dividends declared dur­ income at all banks increased during 1976 by ing 1976 were only a little higher than in 1975, $600 million, in contrast to the decline of $83 despite the profits improvement. By contrast, million recorded during 1975. Equity capital of cash dividends declared had increased by 10 insured banks, in a reversal of a recent trend, per cent during 1975 in an apparent attempt to grew in relation to total assets. At banks with offset the negative common stock price impact assets below $100 million, equity capital grew of the weaker earnings performance that year. from 7.7 to 7.9 per cent of assets; at banks Table 10 shows dividend payout ratios by size with assets of $1 billion and more, it grew from categories of banks. 4.7 to 5 per cent during 1976. Although some of Net retained earnings at all insured com- that increase came from the one-time defini­ tional changes that were described in the 10. Cash Dividends Declared on Preferred and notes on comparability, a significant portion Common Stock by All Insured Commercial came from external equity capital, again in a Banks reversal of a recent trend. At all insured banks, As per cent of net income after taxes for example, $1.4 billion of the total $8.7 bil­ lion increase in equity capital arose because of Banks, by size 1974 1975 1976 definitional changes: even so, retained earn­ With consolidated assets of— ings accounted for only two-thirds of the Less than $100 million............. 28 30 28 $100 million-$500 million. . . . 41 44 40 remaining increase in equity. At large banks $500 million-$l billion............ 49 51 47 $1 billion-$5 billion................. 46 50 47 also, retained income accounted for much less $5 billion and over................... 45 47 44 of the increase in equity capital during 1976 All banks........................................ 39 42 39 than in the four previous years. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

634 Federal Reserve Bulletin □ July 1977 APPENDIX TABLES A.l Report of income for all insured commercial banks Amounts shown in millions of dollars Item 1969 1970 1971 1972 1973 1974 1975 1976 Operating income—Total......................................................................... 30,710 34,574 36,204 40,065 52,794 67,872 66,285 80,390 Loans: Interest and fees................................................................................ 20,645 22,859 22,954 25,498 35,213 46,942 43,197 51,472 Interest on balance with banks...................................................... n.a. n.a. n.a. n.a. n.a. n.a. n.a. 4,459 Federal funds sold and securities purchased under resale agreement.................................................................................... 811 1,004 870 1,023 2,474 3,695 2,283 1,980 Securities (excluding trading account income)— Total:.......................................................................................... 5,733 6,523 7,660 8,329 9,138 10,344 12,201 14,334 U.S. Treasury securities................................................................... 2,837 3,069 3,384 3,376 3,436 3,414 4,415 5,953 U.S. Govt, agencies and corporations.......................................... 549 686 914 1,144 1,469 2,014 2,343 2,410 States and political subdivisions.................................................... 2,213 2,617 3,124 3,490 3,861 4,449 4,911 5,116 Other securities.................................................................................. 134 151 238 319 372 467 532 855 Trust department.................................................................................. 1,035 1,132 1,258 1,366 1,460 1,506 1,600 1,795 Direct lease financing........................................................................... n.a. n.a. n.a. n.a. n.a. n.a. n.a. 534 Service charges on deposits................................................................. 1,117 1,174 1,226 1,256 1,320 1,450 1,547 1,629 Other charges, fees, etc......................................................................... 690 839 981 1,079 1,247 1,405 1,647 2,175 Other operating income....................................................................... 680 1,043 1,256 1,512 1,942 2,530 3,811 2,012 On trading account (net)................................................................. 138 348 344 257 341 430 508 717 Other.................................................................................................... 542 695 912 1,255 1,601 2,100 3,303 1,205 Equity in return of unconsolidated subsidiaries......................... n.a. n.a. n.a. n.a. n.a. n.a. n.a. 90 Operating expenses—Total..................................................................... 23,992 27,465 29,511 32,836 44,113 58,645 57,313 70,458 Salaries, wages, and employee benefits............................................ 6,758 7,683 8,355 9,040 10,076 11,526 12,624 14,686 Interest on: Time and savings deposits.............................................................. 9,758 10,444 12,168 13,781 19,747 27,777 26,147 34,896 Interest on time CD’s of $100,000 or more issued by domestic offices..................................................................... n.a. n.a. n.a. n.a. n.a. n.a. n.a. 7,087 Interest on deposits in foreign offices...................................... n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8,750 Interest on other deposits........................................................... n.a. n.a. n.a. n.a. n.a. n.a. n.a. 19,059 Federal funds purchased and securities sold under repurchase agreements.................................................................................. 1,203 1,396 1,093 1,425 3,883 5,970 3,313 3,306 Other borrowed money................................................................... 432 464 139 115 499 912 374 666 Capital notes and debentures......................................................... 100 104 142 212 253 280 292 343 Occupancy expense............................................................................... 1,326 1,547 1,721 1,915 2,141 2,424 2,739 3,247 Less rental income........................................................................... 257 299 318 340 367 383 427 494 Net....................................................................................................... 1,069 1,249 1,403 1,575 1,774 2,041 2,312 2,753 Furniture and equipment..................................................................... 770 905 1,014 1,083 1,196 1,355 1,525 1,713 Provision for loan losses..................................................................... 519 695 860 964 1,253 2,271 3,578 3,644 Other operating expenses.................................................................... 3,382 4,525 4,337 4,640 5,432 6,514 7,149 8,452 Minority interest in consolidated subsidiaries........................... 1 1 29 Other.................................................................................................... 3,382 4,525 4,337 4,639 5,431 6,514 7,149 8,423 Income before taxes and securities gains or losses............................ 6,718 7,109 6,693 7,229 8,681 9,227 8,973 9,932 Applicable income taxes..................................................................... 2,166 2,173 1,688 1,708 2,120 2,084 1,790 2,289 Income before securities gains or losses.......................................... 4,552 4,936 5,005 5,522 6,560 7,143 7,182 7,643 Net securities gains or losses (—) after taxes.................................. -238 -105 210 90 -27 -87 ' 35 190 Extraordinary charges (—) or credits after taxes........................... 7 -13 -1 18 22 12 32 26 Net income................................................................................................. 4,321 4,818 5,213 5,630 6,555 7,068 7,249 7,861 Cash dividends declared.......................................................................... 1,768 2,036 2,227 2,191 2,423 2,760 3,025 3,031 See notes on comparability of 1976 commercial bank income data. 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Insured Commercial Bank Income in 1976 635 A.2 Report of income for member commercial banks Amounts shown in millions of dollars Item 1969 1970 1971 1972 1973 1974 1975 1976 Operating income—Total......................................................................... 24,994 27,902 28,665 31,344 41,616 53,837 51,368 63,643 Loans: Interest and fees................................................................................ 17,096 18,698 18,315 20,053 28,266 38,063 33,749 40,901 Interest on balance with banks...................................................... n.a. n.a. n.a. n.a. n.a. n.a. n.a. 4,263 Federal funds sold and securities purchased under resale agreement.................................................................................... 649 781 676 794 1,847 2,724 1,716 1,511 Securities (excluding trading account income)— Total:.......................................................................................... 4,263 4,832 5,661 6,087 6,532 7,237 8,559 10,112 U.S. Treasury securities................................................................... 2,041 2,209 2,434 2,412 2,393 2,343 3,166 4,249 U.S. Govt, agencies and corporations.......................................... 322 415 578 731 943 1,268 1,463 1,475 States and political subdivisions.................................................... 1,794 2,090 2,467 2,710 2,928 3,300 3,576 3,686 Other securities.................................................................................. 106 118 182 234 268 326 354 702 Trust department.................................................................................. 984 1,073 1,180 1,269 1,344 1,379 1,457 1,625 Direct lease financing........................................................................... n.a. n.a. n.a. n.a. n.a. n.a. n.a. 508 Service charges on deposits................................................................. 835 867 895 905 940 1,023 1,086 1,122 Other charges, fees, etc......................................................................... 557 682 796 864 998 1,152 1,359 1,808 Other operating income....................................................................... 609 970 1,130 1,372 1,789 2,261 3,442 1,793 On trading account (net)................................................................. 137 346 340 254 338 425 497 696 Other.................................................................................................... 472 624 800 1,118 1,451 1,836 2,945 1,011 Equity in return of unconsolidated subsidiaries......................... n.a. n.a. n.a. n.a. b.a. n.a. n.a. 86 Operating expenses—Total..................................................................... 19,526 22,184 23,342 25,648 35,037 46,815 44,410 55,922 Salaries, wages, and employee benefits............................................ 5,440 6,154 6,638 7,096 7,808 8,834 9,624 11,302 Interest on: Time and savings deposits............................................................... 7,882 8,189 9,426 10,518 15,382 21,812 19,800 27,747 Interest on time CD’s of $100,000 or more issued by domestic offices..................................................................... n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5,899 Interest on deposits in foreign offices...................................... n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8,672 Interest on other deposits........................................................... n.a. n.a. n.a. n.a. n.a. n.a. n.a. 13,176 Federal funds purchased and securities sold under repurchase agreements.................................................................................. 1,177 1,365 1,073 1,387 3,765 5,714 3,151 3,151 Other borrowed money................................................................... 418 444 127 103 473 871 336 638 Capital notes and debentures......................................................... 89 90 123 184 204 217 228 273 Occupancy expense............................................................................... 1,092 1,275 1,408 1,556 1,724 1,929 2,155 2,563 Less rental income............................................................................ 225 263 278 296 316 325 363 416 Net....................................................................................................... 867 1,012 1,130 1,260 1,408 1,603 1,792 2,146 Furniture and equipment..................................................................... 615 722 797 848 924 1,037 1,154 1,305 Provision for loan losses..................................................................... 381 534 682 768 994 1,858 3,050 3,040 Other operating expenses..................................................................... 2,657 3,674 3,346 3,484 4,079 4,870 5,275 6,322 Minority interest in consolidated subsidiaries........................... 28 Other.................................................................................................... 6,293 Income before taxes and securities gains or losses............................ 5,468 5,718 5,322 5,696 6,679 7,022 6,958 7,721 Applicable income taxes...................................................................... 1,814 1,774 1,348 1,356 1,653 1,591 1,453 1,931 Income before securities gains or losses.......................................... 3,654 3,942 3,974 4,340 5,025 5,431 5,505 5,790 Net securities gains or losses ( —) after taxes.................................. -209 -107 144 47 -30 -69 17 111 Extraordinary charges ( —) or credits after taxes........................... 5 -15 -3 14 15 3 23 17 Net income................................................................................................. 3,450 3,821 4,116 4,401 5,011 5,365 5,546 5,917 Cash dividends declared.......................................................................... 1,524 1,753 1,907 1,840 2,019 2,271 2,476 2,451 See notes on comparability of 1976 commercial bank income data. 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636 Statements to Congress Statement by Arthur F. Burns, Chairman, consumer equity and competitive balance Board of Governors of the Federal Reserve among financial institutions; it also will repair System, before the Subcommittee on Finan­ in significant measure the weakening of our cial Institutions of the Committee on Banking, banking structure that has been in process Housing and Urban Affairs, C/.S. Senate, because of the erosion of Federal Reserve June 20, 1977. membership. The first major provision of this legislation I am very pleased to testify today on behalf of authorizes the payment of interest on transac­ the Board of Governors of the Federal Re­ tions balances held by consumers in the form serve System in support of S. 1664. This of NOW or share draft accounts. It thus seeks proposed legislation addresses two problems: to extend and regularize a financial trend that first, the distortions caused by the rather has been developing for some time. The pro­ haphazard spread of the payment of interest hibition on the payment of interest on demand by depositary institutions on transactions bal­ deposits enacted in the 1930’s did not actually ances; and second, the withdrawal of banks end such payments; rather it changed their from Federal Reserve membership because of form. In the case of individuals, commercial a growing sensitivity to the financial costs of banks have been providing an implicit return membership. on demand accounts in the form of free serv­ These are serious matters for our economy, ices or of service charges below bank costs. as I trust my testimony will make clear, and The Board’s staff estimates that such services they are closely interrelated. The bill before received by individuals are now equivalent, on you deals with them in an integrated way. I average, to a rate of return of nearly 5 per cent cannot emphasize too strongly the Board’s on their demand deposits. view that the two major elements of this Reflective of competitive pressures, an im­ legislative package are inseparable. Despite plicit interest rate return is also being paid by our concern about the piecemeal and capri­ banks on the demand accounts of businesses cious manner in which the Nation’s financial and other economic units, such as State and institutions have been moving toward the local governments. Large spending units have payment of interest on transactions balances, acquired the sophistication and skill to we could not support nationwide extension of minimize the balances on which they receive negotiable order of withdrawal (NOW) ac­ an implicit return; that is to say, they have count authority if that extension were not been increasingly investing their surplus funds coupled with action to lighten the burden of in short-dated money market instruments, Federal Reserve membership. The risk to the such as certificates of deposit or Treasury safety and soundness of our banking system bills, that can be readily converted into trans­ on enacting the first part of the package with­ actions balances. This, in effect, gives them an out the second would, in the Board’s judg­ explicit return on a major part of their transac­ ment, be intolerably large. tions balances. The bill as it stands deals constructively An explicit interest rate return has one with both matters, and the Board thus sup­ important advantage over an implicit rate of ports its basic thrust with enthusiasm. In our return: it is usable for any purpose the recip­ view, this bill will serve to enhance both ient elects rather than just for the purchase of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 637 bank services. In some degree, consumers, and piecemeal—entailing, as a consequence, smaller businesses, and governmental units sundry inefficiencies, such as the maintenance have also begun to enjoy explicit returns on of dual accounts by depositors, and various transactions balances. This development re­ inequities, such as those to consumers to flects a broad range of competitive, legislative, which I have already referred. If no broad and regulatory innovations in recent years that Federal reform is made, the trends that I have have facilitated shifts between savings and described will continue, with benefits to con­ demand accounts or directly authorized the sumers to be sure, but with the creation of new payment of interest on what for all practical inequities and with unnecessary inefficiencies. purposes are demand balances. Simple prudence suggests that the move­ Since 1970 these innovations have included ment toward explicit payment of interest on the following: limited preauthorized transfers transactions balances ought to proceed more from savings accounts by depositors in banks deliberately than it has to date. Nationwide and savings and loan associations; NOW ac­ NOW and share-draft accounts limited to in­ counts, at first available only at mutual sav­ dividuals, as proposed in S. 1664, would be a ings banks in Massachusetts and New Hamp­ logical next step in the evolutionary process. shire, and more recently at practically all That step would certainly result in greater depositary institutions in New England; resort equity for consumers—especially those who to withdrawals of cash from money market lack financial sophistication. It might also mutual funds by negotiable draft; the use of permit individuals to earn more on their trans­ credit union share drafts; the ability to transfer actions balances than they now earn in implicit funds by telephone from savings accounts to form. The New England evidence suggests demand deposits; resort to payments to third that, at least in the short run, the combination parties from savings deposits on instructions of implicit and explicit payments would be transmitted by telephone or otherwise; and the appreciably larger than the implicit return that use of electronic terminals located in retail consumers now earn on their demand de­ establishments so that savings and loan cus­ posits. In time, of course, depositary institu­ tomers can make direct payments to mer­ tions could be expected to improve service chants from savings accounts. In order to charges in an effort to recover at least part of share in the opportunities that have been made the costs of offering NOW accounts. They are possible by these innovations, consumers—of also likely to be prodded to productivity gains course—have to live in New England, or be that will limit the need for cost offsets. In the members of a credit union offering share end, heightened competition for consumer de­ drafts, or live in an area outside New England posits that would develop among depositary where financial institutions offer a special institutions, together with economizing by payments plan, or more generally, be sophisti­ consumers in the use of checks, could well cated enough to be aware of the available result in a rate of return to consumers above alternatives. current levels. The broad movement toward explicit inter­ Not only would NOW accounts be advan­ est on transactions balances has eroded the tageous to consumers, they could also pro­ distinction between demand deposits and time duce benefits to the Nation’s mortgage mar­ or savings deposits, and it has significantly ket. Experience teaches that transactions bal­ altered competitive relationships among in­ ances are more stable over the business stitutions. This movement, moreover, con­ cycle—that is, less sensitive to change of tinues to gain momentum and, in the judgment interest rates—than are time and savings ac­ of the Board, has become irreversible. The counts. Hence, as NOW accounts grow, the question, therefore, is not whether we can flow of deposits to thrift institutions should stop it. The issue, rather, is whether we should tend to stabilize. Such a development may try to give more specific guidance to an evolu­ ease the strains of disintermediation that these tionary process that so far has been haphazard institutions have to cope with at times of credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

638 Federal Reserve Bulletin □ July 1977 tightness, and by so doing make the flow of the way it is used in New England. I must mortgage funds somewhat more stable. note, however, that the estimates of the profits Despite the potential benefits of NOW ac­ impact of nationwide NOW-account authority counts, they obviously will involve costs for involve assumptions that may prove to be financial institutions that must be carefully incorrect. And I must also note that the indi­ weighed by the Congress. If NOW account cated average profits shortfall of 5 to 6 per authority is extended, the thrift institutions cent could be appreciably exceeded by indi­ availing themselves of the authority will be vidual institutions—those, for example, whose faced with new expenses in providing check present deposits happen to be weighted heav­ services, while commercial banks offering ily toward consumer demand deposits or those NOW’s will face the need to adjust to explicit that happen to be situated in communities in interest on transactions accounts after almost which competition becomes especially in­ 45 years during which such payments were tense. prohibited. Experience with NOW accounts in The Board is very much concerned about New England indicated that commercial banks the implications of an adverse impact on bank suffer the largest relative decline in earnings earnings during the transition to a nationwide when NOW’s are offered. That is to be ex­ NOW environment. The potential impact on pected because it is their transactions balances bank profits is a key reason for the particular that have the greatest likelihood of being con­ structure of the legislative package embodied verted into NOW form. in S. 1664. Unless their profits are reasonably Analysis by the Federal Reserve’s staff well maintained, banks will not be able to suggests that the transition burden of NOW adequately serve their communities or effec­ accounts on bank profits is likely to be tively support the expansion of our national heaviest some 2 to 3 years after the effective economy. date of the legislation and that thereafter it can To minimize transition costs, S. 1664 limits be expected to decline gradually—perhaps eligibility for NOW and share-draft accounts being entirely eliminated in time. This ex­ to individuals—leaving for another day, when pected cycle is predicated on an assumption we have more knowledge of the impact and that the initial stages of transition are likely to adjustment processes, any extension of such be dominated by an intense and quite costly accounts to a broader range of depositors. The competitive struggle for market shares, which objective of minimizing transition costs is also will give way gradually to a situation in which the reason for requiring that the maximum competitors pay more attention to costs and to interest rate on NOW accounts be set for a the establishment of appropriate service time below the rate on savings deposits at charges. Our staff calculates that at the point banks, and for the provision that would estab­ when profits are depressed most severely, the lish a reserve requirement range for NOW pre-tax earnings of commercial banks are accounts that is lower than the existing de­ likely to be running, on average, 5 to 6 per cent mand deposit range. The bill, moreover, con­ below the level that would prevail in the templates that the operative provisions of the absence of nationwide NOW accounts for legislation will not become effective until 1 individuals. year after enactment. This is intended to give This estimated worst-point impact on profits financial institutions time for rational planning is less than the impact being experienced of their operational systems and marketing currently in New England, partly because the strategies, as well as to allow States time to competitive struggle between thrift institu­ adjust their statutes and regulations. tions and banks for NOW accounts is not Efforts to minimize the transitional costs of likely to be as severe in most parts of the NOW accounts are important for all banks, country as it has been in New England and particularly so in the case of Federal Reserve partly because the proposed legislation struc­ member banks. As you know, a substantial tures NOW-account authority differently from number of banks have given up membership in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 639 the System in recent years, the preponderant deposits, down about 15 percentage points reasons being to escape the financial burden from the share held in 1950. In New England, that membership entails. Most nonmember the member banks share of deposits fell from banks can hold a significant portion of re­ 75 per cent at the end of 1974 to 70 per cent at quired reserves in the form of earning assets. the end of 1976; and the erosion accelerated Member banks, on the other hand, must keep sharply in the first 5 months of 1977, so that at their reserves entirely in nonearning form. The the end of May, the New England member burden of Federal Reserve membership thus banks held only about 63 per cent of that consists of the earnings that member banks region’s commercial bank deposits. forego because of their high cash reserves The implications of these statistics are clear. relative to those of nonmember banks; these The burden of membership has been causing foregone earnings must, of course, be adjusted banks to leave the Federal Reserve System at for the monetary value of the services to an accelerating rate, and the New England member banks that are rendered by the Fed­ experience indicated that nationwide NOW eral Reserve banks. accounts will probably accentuate the with­ It is obvious from the trend in Federal drawal trend. It is thus imperative that author­ Reserve membership that more and more ity for extension of NOW accounts be com­ banks are becoming acutely aware of the cost bined with action to lighten the burden of burden of membership and of the competitive Federal Reserve membership. S. 1664 would handicap arising from that burden. In 1976, 46 accomplish that by providing for the payment banks chose to give up membership and 9 of interest on all required reserve balances banks left the System as a result of mergers held at Federal Reserve Banks. This is an with nonmembers. Over the past 8 years a essential part of the administration’s legisla­ total of 430 member banks have withdrawn tive proposal. Without it, as I have indicated, from the System, and an additional 90 have it would be impossible for the Board to sup­ left as a result of merger. Whereas most of the port the proposal to extend NOW accounts banks withdrawing from membership during nationwide. this period were small, a trend has also de­ The declining fraction of banks that are veloped recently toward departure by larger members of the Federal Reserve System is banks. Of some 42 banks that withdrew from cause for concern on several counts. First, as the Federal Reserve System during the first 5 the proportion of bank deposits at member months of 1977, 13 had deposits of more than banks declines, the links between bank re­ $100 million. The 5-month loss this year al­ serves, on the one hand, and bank credit and most equalled the number of banks of such the money supply, on the other, are loosened. size that left the System in the preceding 3 This lessens the precision of the Federal Re­ years. Significantly, 9 of those 13 banks were serve’s monetary control. The problem is located in New England. Indeed, almost one- complicated by the variability in the relative fourth of membership withdrawals so far in growth rates of member and nonmember de­ 1977 have involved New England banks, a mand deposits. Over the last decade about 45 strikingly high share considering that as of the per cent of the total rise in demand deposits end of 1976 that region’s members accounted has occurred at nonmember banks, but the for only 3 per cent of total System member­ proportion was as low as 23 per cent in 1967 ship. The influence of NOW accounts on the and as high as 67 per cent in 1969. Swings of cost sensitivity of commercial banks is clearly such magnitude add to uncertainty about the visible in these statistics. effects of open market operations on aggregate The growing awareness of the burden of bank credit and deposits. Federal Reserve membership is dramatically The membership problem complicates the reflected in data on bank deposits for our exercise of the System’s monetary control in country. As of May 30 this year, member still another way. At present, the Board’s banks held an estimated 73 per cent of total ability to vary reserve requirements in the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

640 Federal Reserve Bulletin □ July 1977 course of conducting monetary policy is cir­ For such institutions, cost cutting is under­ cumscribed by the fact that any increase in standably a pressing matter. But it is precisely reserve requirements would tend to worsen those banks that can least afford to forfeit the the competitive disadvantage of member insurance of ready access both to Federal banks, and thereby prompt a further erosion of Reserve counsel and to the discount window. membership and perhaps also some more Remedial proposals for equal treatment of loosening of the ties between reserves and the member and nonmember banks for reserve monetary aggregates. purposes are not new. In substance, the The nationwide NOW accounts proposed recommendation was embodied in a report of by S. 1664 would have the effect of further a congressional committee chaired by Senator reducing the Federal Reserve’s control over Douglas in 1950, repeated in 1952 in a report of transactions balances if reserve requirements a congressional committee chaired by Con­ were not imposed on the NOW accounts at all gressman Patman, endorsed by the Commis­ depositary institutions. That is why the legisla­ sion on Money and Credit in 1961, reaffirmed tion before you prescribes reserve require­ by the President’s Committee on Financial ments for NOW accounts at all depositary Institutions in 1963, and restated again in the institutions. This is an essential element of the 1971 report of the President’s Commission on legislative package. As the New England ex­ Financial Structure and Regulation. Since perience indicates, thrift institutions can be 1964, the Federal Reserve Board has re­ expected to capture a significant share of peatedly urged the Congress to bring all insured personal transactions balances nationwide, commercial banks under the same reserve from both member and nonmember banks. requirements, and to provide all these banks Furthermore, if the attrition of membership is with equal access to the discount window. not arrested, a rising share of transactions Regrettably, however, such legislative propos­ balances at commercial banks will be in the als have evoked little interest in either branch form of NOW accounts at nonmember banks. of the Congress. NOW accounts, however, are an integral part In view of the apparent reluctance of the of the money stock. In order to bring this Congress to enact uniform reserve require­ portion of the money stock under the influence ments for all banks, the Board has considered of monetary policy, it is clearly necessary that other proposals for ending the erosion of Fed­ all NOW accounts be brought under the re­ eral Reserve membership. Our conclusion is serve requirement control of the central bank. that the payment of interest on required re­ Aside from its implications for monetary serve balances is the most straightforward and control, the Board is deeply concerned about appropriate step. Since the Federal Reserve the structural weakening of the Nation’s bank­ returns virtually all its net earnings to the ing system that is being caused by membership Treasury, payments of interest on required attrition. Nonmember banks do not, of course, reserve balances would reduce Treasury have ready access to the Federal Reserve revenues—something, let me note with some discount window; they must rely instead on emphasis, that would not occur if the Con­ correspondent banks to meet their urgent gress were to enact uniform reserve require­ credit needs. However, banking history dem­ ments. The net reduction in Treasury reve­ onstrates that correspondent banks cannot ful­ nues would, of course, be considerably less fill the function of lender of last resort in than the total of interest payments to financial periods of strong over-all credit demands. institutions, since part of the additional in­ The decline in membership increases li­ come of commercial banks and their stockhold­ quidity risk not just for individual institutions ers would be recovered through the income but for the banking system at large. This tax. Staff estimates indicate that the Treasury problem, moreover, is exacerbated by the fact would recover about 55 cents of each dollar that some of the banks that have withdrawn paid in interest by the Federal Reserve to from membership have been on the weak side. financial institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 641 Even though the cost to the Treasury would necessary precaution. Over time, as the tran­ be only about 45 per cent of the payments sitory costs of the NOW accounts subside and made by the Federal Reserve, the Board is as the average reserve requirement declines as very mindful of the budgetary impact. If the a result of the public’s shift from higher re­ Congress enacts this legislation, I assure you serve ratio demand deposits to lower reserve that we intend to keep the net cost to the ratio NOW accounts, the size of interest pay­ Treasury as low as possible. However, the ments on reserves is likely to decline below 10 Board will need sufficient flexibility to ac­ per cent of System earnings. But for the years complish the purposes of the legislation. The immediately ahead, flexibility above the 10 per bill before you limits the total payment that cent level is needed. could be made to depositary institutions in any In connection with the matter of making the given year to a maximum of 10 per cent of the Federal Reserve’s payments services directly previous year’s net earnings of the Reserve available to thrift institutions and nonmember Banks. At the present level of earnings, the banks, as authorized by the proposed legisla­ indicated maximum could not exceed $600 tion, I think it is important to indicate the million—roughly equal to 2Va per cent of re­ Board’s present thinking and intentions. We quired reserve balances. Given the host of believe that open access to the System’s check prevailing uncertainties, the Board doubts that collection services is desirable, providing a the proposed 10 per cent ceiling will prove means can be devised for effectively equaliz­ adequate for coping with unavoidable cost ing the terms of access by all depositary problems of member banks. If present esti­ institutions. Equalization requires that all in­ mates are near the mark, overcoming the stitutions bear the same level of costs for a burden of membership will of itself require given level of services. Member banks, in interest payments in the neighborhood of $500 effect, already pay for payments services re­ million, so that there would be little room left ceived through foregone income on reserves. for alleviating transition costs of NOW’s or for The practicality of requiring equivalent bal­ introducing charges on Federal Reserve pay­ ances from nonmembers is questionable in ments services. We are concerned, therefore, view of the apparent reluctance of the Con­ that the 10 per cent constraint may reduce gress to enact a system of uniform reserve System flexibility to a degree that will thwart requirements. Thus, unless the Congress the basic objectives of this legislation. moves in this direction, equalization presuma­ All the estimates of costs made by the bly will have to be accomplished by means of a Board’s staff inevitably are subject to a sub­ system of equitable charges and respon­ stantial margin of error that should be allowed sibilities applicable to all institutions. for in setting the ceiling that will govern inter­ The Board is considering—and must con­ est payments on reserve balances. One simply sider more fully—alternative systems for col­ cannot be sure, for example, what the transi­ lecting charges for services, such as requiring tion costs of NOW’s will be for banks. Nor clearings balances or fees from all depositary can one rule out the possibility of either higher institutions. The imposition of such charges, interest rates or higher reserve requirements however, would have to make allowance for in some year or years in the future. Either or the fact that member banks are presently both would increase the net burden of Federal paying for the services they receive through Reserve membership. income foregone. Such allowance is essential In order to provide necessary flexibility, the if we are to avoid reintroducing a burden of Board urges that the maximum payment to membership. Consequently, it will be neces­ depositary institutions be set at 15 per cent of sary to offset charges for services to members Reserve Bank earnings instead of the 10 per by payments of interest on reserves. cent specified in S. 1664. The additional mar­ Let me stress, however, that this additional gin of 5 percentage points may never be interest will cause no net reduction in the utilized, but having the extra latitude is a amount of money turned over to the Treasury Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

642 Federal Reserve Bulletin D July 1977 by the Federal Reserve. That is so because The Board seeks one amendment to the interest payments made to the members for reserve requirement section of S. 1664. The this purpose would be equal in the aggregate to statutory range from 3 to 10 per cent for time the amount of the charges imposed. As the bill and savings deposits limits the Board’s ability is now written, the interest paid to offset to modify reserve requirements in the interest charging for services would be included in the of inducing member banks to lengthen the total of all interest payments on reserves and maturity of their time deposits. Although the would thus use up a substantial part of the Board has reduced reserve requirements on amount available under the 10 per cent earn­ longer-term time deposits to as little as 1 per ings ceiling. This very fact indicates in yet cent for maturities of 4 years or more, most another way the desirability of a higher limit member banks cannot take advantage of this than 10 per cent. Indeed, retention of the 10 provision since their average reserve require­ per cent ceiling could preclude adoption by the ment on time and savings deposits has reached Federal Reserve of a pricing schedule for its the legal minimum of 3 per cent. Consequently, payments services. the Federal Reserve Board wishes to have the I must also advise this committee that while lower boundary of the reserve requirement the Board desires to move to open access, it range on time and savings deposits reduced to will in fact be a difficult and time-consuming 1 per cent. task to construct a system of equitable That, Mr. Chairman, completes the Board’s charges, in view of the diverse situations of assessment of the major points of the pro­ the Nation’s 15,000 banks and of the other posed legislation. In closing, I would just like depositary institutions that will be affected. to restate the essentials of the Board’s posi­ Furthermore, since charges for Federal Re­ tion. Interest is increasingly being paid on serve services will require significant adjust­ transactions balances, but the incidence of ments at individual institutions, the Board such payments is capricious—determined by considers it important to defer imposing the accident of geography or by the financial charges until the transition to nationwide sophistication of depositors. Congressional NOW accounts has been well accomplished. inaction will not stop the spread of interest Until such time as it proves feasible to impose payments on transactions balances; it will charges, the Board contemplates that as of the simply mean that the spread is to continue in effective date of this legislation the System’s haphazard, piecemeal fashion, attended by check collection services will be made avail­ sundry inefficiencies and further distortion in able to thrift institutions holding NOW re­ competitive relationships among financial in­ serves on terms comparable to those available stitutions. Official action to guide in an orderly to nonmember banks. manner the widening scope of interest pay­ Before concluding this statement, I would ments on transactions balances is long over­ like to comment briefly on one other area due. The extension of NOW-account authority treated in the proposed legislation, namely, should not occur, however, without simul­ general reserve requirements. In addition to taneous action to eliminate the burden of providing for the extension of reserve re­ Federal Reserve membership. That burden— quirements at a uniform rate to all NOW and by inducing membership withdrawals—is share-draft accounts, this bill widens the band weakening the structure of our banking sys­ within which reserve requirements against tem. We should not risk a further weakening demand deposits may be set. It also con­ by legislating nationwide NOW-account au­ templates ending the anachronistic differentia­ thority without addressing the membership tion between reserve city and country member problem. banks. The Board welcomes these changes, Most proposals for financial reform that since they provide the Federal Reserve with have been considered in recent years have an added measure of flexibility in the use of its involved an unduly large number of compli­ authority over reserve requirements. cated provisions which, in their entirety, pre­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 643 sented formidable difficulties to proper evalu­ tives. The Board hopes that these features of ation. By contrast, S. 1664 addresses specific, the bill will enhance the prospect of early pressing issues and has quite limited objec­ congressional action. □ Statement by Arthur F. Burns, Chairman, pressures that surround the appointment of Board of Governors of the Federal Reserve cabinet members by a new President. System, before the Subcommittee on Domes­ Moreover, by providing that the new proce­ tic Monetary Policy of the Committee on dure will not take effect until 1982, the propos­ Banking, Finance and Urban Affairs, U.S. al is clearly not motivated by any personalized House of Representatives, June 23, 1977. political concerns. On the other hand, my earnest evaluation of It is a pleasure to meet with this subcommittee this and other proposals that would directly and to testify on H.R. 6273. The bill provides link the term of the Chairman of the Federal that, beginning on February 1, 1982, and at Reserve to the term of the President has led 4-year intervals thereafter, the Chairman and me to conclude not only that such linkage is Vice Chairman of the Board of Governors of unnecessary but that it would also be the Federal Reserve System shall be ap­ unwise—principally because it would amplify pointed by the President with the advice and the political aspects of Federal Reserve ap­ consent of the Senate. It further provides that pointments. if a vacancy occurs in either of these offices, Let me explain. The premise of the legisla­ any portion of the term remaining shall be tion is that every President should be assured filled only for that unexpired portion. of having his “own man” as Chairman within Let me say at the outset that at various a relatively short time after his inauguration. times I, as well as many other students, have In my judgment, this premise is out of har­ been on different sides of the principal issue mony with the Act’s provision of a 14-year raised by this bill. I have always felt, however, term for Board members. By providing for that the present procedure of appointing the 14-year terms, staggered so that one expires Federal Reserve Chairman has worked quite every 2 years—which this bill wisely would well for more than four decades, and that no not change—the Congress constructed a solid clear need has been demonstrated for chang­ foundation for a monetary authority having ing that procedure. both independence and continuity. The as­ I recognize that there is some force in the sumption underlying the 14-year term is that argument that the Chairman of the Board of Board members will serve the public interest Governors should be congenial to the Presi­ exclusively; and that even though they are dent, and this is essentially the philosophy appointed through the political process, as underlying H.R. 6273. The manner in which Federal judges indeed are, the assurance of a the bill proposes to advance that objective is lengthy term will free them from political thoroughly responsible. By providing that the pressures that might affect officeholders with terms of the Chairman and Vice Chairman short terms. shall begin 1 year after a President is inaugu­ However, because H.R. 6273 would link the rated, H.R. 6273 would certainly reduce the Chairmanship to the incumbency of a Presi­ extent to which these appointments might dent, the likely result is that the person become enmeshed in the politics of presiden­ selected for that position would not serve his tial elections. The bill would thus encourage full term and would leave the Board only a the selection of persons to fill these important year after the President who appointed him left offices in a deliberative manner, free from the his office. The consequence could be some Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

644 Federal Reserve Bulletin □ July 1977 politicizing of the Federal Reserve, and per­ procedure for filling unexpired terms might haps some erosion of the independence of the result in the office of Chairman being unfilled Nation’s monetary authority. until the President was in a position to make A corollary of the “linked” terms proce­ an appointment for a full 4-year term, thus dure, of course, is that vacancies in the offices leaving the central bank handicapped for that of Chairman and Vice Chairman can be filled period. To my mind, these are serious limita­ only for the unexpired portions of the terms. tions. This aspect of the proposal is also quite trou­ Finally, H.R. 6273 would require the ap­ bling. Where only a relatively short portion of pointment of the Chairman and Vice Chairman the 4-year term remains to be served, it may to be subject to Senate confirmation. While I be quite difficult for a President to recruit a see no compelling need for this procedure, highly qualified individual in view of the need since all nominees to the Board must be con­ for an appointee to sever his prior relationship firmed, I have no objection to it, as I informed and divest or put in trust his investments. Nor Chairman Proxmire on June 3. could the President give any assurance of Over the years, Presidents and Federal Re­ reappointment to a full term—where, for serve Chairmen have developed effective example, he himself was not eligible for re- means of exchanging views and cooperating in election. the public interest without legislation identify­ Even where it might be possible for the ing the Chairman as the selection of a particu­ President to reappoint his nominee for a full lar President. I believe your predecessors in term, the individual appointed to fill an unex­ the Congress acted wisely in creating a design pired term would in effect be on probation for the Federal Reserve that insulated it from until the partial term expired. The implications politics. That design has stood the test of time of this for the independence of the Federal and experience exceptionally well. I urge you Reserve during that period—the possibility not to risk introducing a political dimension that the individual will be inclined to act in into the Federal Reserve by adopting legisla­ such a way as to promote his own tion for which no need has been demon­ reappointment—are obvious. Moreover, the strated. □ Statement by Philip C. Jackson, Jr., Gover­ Board. I will be commenting on the specifics nor, Board of Governors of the Federal Re­ of those proposals later on in this testimony. serve System, before the Consumer Affairs Simplification has several dimensions. To Subcommittee of the Committee on Banking, some people, it means a reduction in the Finance and Urban Affairs, U.S. Senate, July number of disclosures or the combining of 11, 1977. many items of information into a few. To others, it means a reduction in a creditor’s The Board of Governors of the Federal Re­ exposure to civil liability. To still others, it serve System wishes to commend this com­ means a reduction in the number of court mittee for considering this very complex con­ decisions and administrative interpretations of sumer issue and wants to affirm its the statute. To many consumers, it means an wholehearted support for simplification of the easier to read, more usable Truth in Lending Truth in Lending Act. Furthermore, the Board statement. commends the sponsors of S. 1213, S. 1653, The Board has been working on simplifica­ and S. 1501 and endorses in principle the tion for some time. In order to attack the simplification aspects of those measures. Cer­ problem at a fundamental level, however, the tain features in these bills would implement Board retained several outside consultants to some of the earlier recommendations from the work with the staff and the Board on how the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 645 statute might be revised in order to remedy penalties or rebates be made along with a some of the complexities that have become reference to the actual contract for details. evident in the closed-end provisions of the act. There is no question that these are important With me today as consultants to the Board terms and that the consumer should be aware are Professor Jonathan Landers of the Univer­ of them. However, a complete disclosure de­ sity of Illinois School of Law, an acknowl­ scribing these terms in utter detail is lengthy, edged expert in Truth in Lending; Professor legalistic, and of doubtful value in that form. Ralph Rohner of the Columbus School of Law On the other hand, any summary of the terms of The Catholic University of America, who can be insufficiently informative. As a middle recently completed a term as counsel to your position, the Board recommends requiring a subcommittee; and Professor Steven Permut brief summary of certain terms plus a crossof the School of Organization and Manage­ reference, to the contract for further details. ment of Yale University, who has specialized Under our proposal the consumer would in how consumers process and use informa­ know, for example, that there may be a rebate tion. They are available should you have ques­ of finance charges on refinancing. For a fuller tions. explanation of when such a rebate will arise The initial product of the task force’s efforts and how it is computed, the customer would on Truth in Lending simplification was a com­ need to review the terms of the contract. prehensive draft statute raising several differ­ Similar short-form disclosures would be used ent issues and approaches to simplification. for security interests and for late payments, That draft has been considered and com­ and there would be a general reference to the mented upon by the Board’s Consumer Advi­ contract for provisions dealing with the con­ sory Council, other Truth in Lending regula­ sequences of default. tory agencies, and interested members of the I want to emphasize that the Board is not public. I am happy to submit this draft bill and recommending that important information an explanatory memorandum as attachments now being given be taken away from the to this testimony.1 consumer. Instead, we believe that clarity is The basic thrust of the Board’s proposal is better served if only the most important terms to improve the delivery of information to the are emphasized on the disclosure statement. consumer, emphasize the most significant dis­ The rest will be in the contract, just as they are closures, and clear up ambiguities and uncer­ now. In making these recommendations to tainties. Thus, our draft bill reduces required reduce disclosures, we are quite aware that disclosures to: (1) the identity of the creditor; reasonable persons may have different opin­ (2) the amount financed; (3) the total finance ions on how much information is important charge; (4) the annual percentage rate; (5) the enough to be retained on the disclosure state­ schedule of payments; (6) the total of pay­ ment. We believe that reaching a consensus on ments; and (7) in the case of credit sales, the this question is the most critical step toward total sales price including any downpayment. Truth in Lending simplification. In addition, the Board recommends that The Board would like to endorse proposed certain important terms continue to be provisions directing the issuance of model disclosed—terms that are less directly related forms. To the extent that the number of dis­ to cost and credit shopping and more related closures is limited and the term disclosures to the consumer’s rights on default or prepay­ summarized, the Board is confident that it can ment. The Board recommends that a summary fulfill these statutory mandates. However, if a statement with respect to late payment complete explanation of particular contract charges, security interests, and prepayment terms is required, drafting model forms be­ comes complicated and perhaps fruitless be­ The attachments to this statement are available on cause provisions may vary from transaction to request from Publications Services, Division of Adminis­ transaction and from State to State. The pre­ trative Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. payment provision in Attachment A is an Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

646 Federal Reserve Bulletin □ July 1977 example of how complicated a detailed disclo­ integrate the disclosure statement with the sure may be. terms of the note and security agreement. As S. 1312 and S. 1501 would retain the basic evidenced in Exhibit A, this makes the dis­ disclosure requirements of present law but closed items difficult to find and understand. limit the penalties to certain important disclo­ Instead of allowing this integration, the Board sures. The Board supports this approach. But recommends that the disclosure be made in our opinion, the total present disclosure either on a separate piece of paper with no requirements are simply too extensive to per­ other information, or on the contract, but in a mit effective use by the vast majority of con­ way which clearly identifies the disclosures sumers. This view is based in part upon Pro­ and segregates them from the other informa­ fessor Permut’s advice that the mass of infor­ tion. mation now provided may produce a kind of We would also recommend that the items to “information overload” that overpowers be disclosed contain brief explanations in many consumers and renders the entire dis­ everyday language. Exhibit C is an example of closure statement a forbidding and incom­ how the principal cost terms might be de­ prehensible document. Indeed, behavioral re­ scribed. Although these explanations add to search suggests that when confronted with the length of the disclosure statement, the more than a few “bits” of information, con­ Board believes that the benefits derived from sumers cease to read or retain any of the these simple explanations, particularly by less material offered. sophisticated consumers, outweigh the costs Exhibits A and B attached offer some involved in adding information to the disclo­ graphic evidence of what I am talking about. sure statement. Exhibit A is part of a combination contract- In summary, the Board believes that by disclosure statement currently in use in Mary­ reducing the number of items emphasized, land. The required Truth in Lending disclo­ improving the manner in which the informa­ sures are boxed, and you can see how they tion is delivered, and explaining in everyday produce a long and cluttered form. Exhibit B language the meaning of the terms, the effec­ is a form designed by a trade association of tiveness of the act could be substantially im­ small creditors. It is a general purpose form proved. for both loans and credit sales and consists Another major issue raised in our draft bill is exclusively of Truth in Lending disclosures. the treatment of credit insurance—an issue Looking at these forms, it is hard to avoid the that has been controversial since the inception impression of information overload. There is of Truth in Lending. The general rule of the more information than most consumers can act is that all charges that are incident to or a digest. By reducing the number of items of condition of the extension of credit are finance information disclosed as under the Board’s charges. On the one hand, credit insurance proposal, the important ones will receive a would not exist but for the credit transaction. greater emphasis and there will be a greater On the other hand, such insurance is a product likelihood of affecting consumer behavior. separate from the credit with a separate price. Stated another way, if consumers’ attention is Under the existing law, credit insurance is focused on essential information, it is more excluded from the finance charge only if it is likely that they will use it to become more voluntary and the consumer elects to purchase aware of credit costs and in time, through such insurance after the additional cost has experience, to shop more wisely for credit. been disclosed. There has been some concern Not only does the Board believe that the that, at least in some markets, credit insurance effectiveness of Truth in Lending will be in­ has been forced upon unwilling consumers. creased by limiting the number of items dis­ Although it has been suggested that insurance closed, but, in addition, it recommends two be a part of the finance charge in all cases, the changes in how the information is delivered. Board believes that this would lead to compul­ Under the existing law creditors are allowed to sory insurance in some markets and would Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 647 complicate shopping for credit between trans­ credit would cost over the full term of the actions in which insurance is offered and mortgage. Certain States do require that these transactions in which it is not offered. There­ items be disclosed in real estate transactions, fore, the Board recommends that the volun­ and we know of no evidence from these States tary nature of the insurance purchase be but­ that indicates that consumers are frightened tressed further by requiring that the creditor away by this information. The value of these give the consumer 30 days to cancel the insur­ disclosures is that a consumer’s ability to ance if the premiums are to be excluded from assess the dollar difference between different the finance charge. annual percentage rates is improved. A V4 of 1 The Board has several recommendations per cent difference in the annual percentage with respect to real estate credit. In purchase rate will take on greater significance when the money situations, the Board recommends dollar difference it makes over the life of the early disclosure of Truth in Lending informa­ loan is disclosed. tion, at the same time and along with the Finally, with respect to real estate, the estimate of closing costs required by the Real Board recommends disclosure of whether a Estate Settlement Procedures Act. We believe loan may be assumed on the original terms and that consumers would be better served by conditions and disclosure if there may be a receiving estimates of credit costs at an early prepayment penalty. Since most real estate point in the negotiations, while the consumer loans are paid off before maturity of the loan, still has an effective option to shop for credit. the right of a subsequent purchaser to assume Purchasing a home is the transaction in which the loan and the existence of a prepayment a consumer is most likely to shop from penalty are matters for which a consumer creditor to creditor for the best financing. might wisely shop. Truth in Lending should encourage such be­ The Board is concerned with rescission havior. rights that are exercised long after a proper The Board recommends that the general rescission notice has been given. Present law rule on what charges must be included in the permits this when there has been a technical finance charge be applied to real estate. This error in the disclosure statement. The Board means eliminating some special exceptions in would recommend that the rescission right the present law. Such exceptions now permit terminate 3 days after the creditor furnishes certain charges, which are analytically part of notice of the right and a Truth in Lending the cost of credit, to be excluded from the disclosure statement accurate in its annual finance charge—such as credit investigation percentage rate that discloses the existence of fees, appraisal fees, creditor title insurance, a security interest in the consumer’s home, and other costs associated with the mortgage. and is otherwise completed in good faith. We believe that in addition to cleaning up the One issue that has spawned extensive litiga­ disclosure statement, simplification is best tion is who must make the disclosures if there achieved by doing away with as many special is more than one creditor in the transaction. rules and exceptions as possible. If the cost is The Board recommends that only one disclo­ one that would not be incurred by a prudent sure statement be required and that the obliga­ cash buyer, it should be part of the finance tion to disclose be placed upon the creditor to charge and the annual percentage rate. whom the obligation is made payable on its The Board also believes that real estate face. This provides a simple mechanical rule creditors should be required to disclose the for creditors to follow and should insure that total finance charge and the total of payments consumers get the required disclosures. as is done in all other consumer credit transac­ As I have noted, our draft bill and this tions. These exceptions were originally per­ summary of the Board’s recommendations for mitted for real estate creditors because of simplifying Truth in Lending apply primarily to concern that consumers would be discouraged closed-end credit transactions. The Board ex­ from purchasing homes if told how much the pects to turn its attention shortly to the area of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

648 Federal Reserve Bulletin □ July 1977 open-end credit. We will report promptly to The Board believes that the inclusion of ag­ this committee on the results of our efforts ricultural credit under Truth in Lending has when completed. caused complexity in the disclosure require­ Now I would like to discuss some specific ments and difficulties for creditors in making aspects of the three bills already before the disclosures. committee. In connection with the exemption for ag­ S. 1653 is directed principally at strengthen­ ricultural credit transactions, Section 2(c) of ing the authority of the Federal Trade Com­ S. 1501 would exempt from the act’s coverage mission, which is responsible for Truth in “credit transactions of borrower-owned Fed­ Lending supervision of over a million eral instrumentalities which extend credit creditors, to enforce the act. The Board be­ under the supervision of an agent of the lieves it is particularly desirable to strengthen United States.” The suggested purpose of this the powers of administrative agencies in the section is to exempt Farm Credit System light of proposals to limit consumer actions for loans. The Board believes that the exemption redress to the substantive disclosures and to for agricultural transactions should provide leave enforcement of the balance of the act to the necessary relief to agricultural lenders. A the administrative agencies. S. 1653 also gives general exemption for certain types of throughtful attention to clarifying certain dif­ creditors from the disclosure requirements is ficult areas involving assignee liability and the neither warranted nor equitable. Consumer consumer’s right to rescission. The Board loans to farmers for nonagricultural purposes agrees that these questions deserve careful should be subject to the act, regardless of the reconsideration in connection with this major type of creditor granting that loan. Further­ review of Truth in Lending. more, the Board is concerned that the broad The Board is pleased to see that both sweep of the exemption as written may well S. 1312 and S. 1501 incorporate many of the exempt credit unions from coverage as well. simplification recommendations made previ­ Both bills would amend the act’s current ously by the Board. Briefly, both bills, as well provisions regarding the disclosure of the type as the Board’s draft bill, would: of security interest taken and an identification 1. Eliminate those sections of the act that of the property taken as security. The Board’s permit the use of the comparative index of draft also would eliminate disclosure of the credit costs. type of security interest but would require 2. Eliminate the right of rescission in the identification only of collateral that was not sale of vacant lots—transactions often subject the subject of the transaction. to the Interstate Land Sales Disclosure Act. The Board believes that the bank enforce­ 3. Permit a single annual report by the ment agencies now have ample powers to Board to the Congress for the Truth in Lend­ perform their responsibilities under the statute ing, Equal Credit Opportunity, and Federal including requiring restitution of overcharges, Trade Commission Improvement Acts. notification of consumers, public exposure of 4. Eliminate the requirement that certain violations, and cease-and-desist power over charges listed in Section 106(d) be itemized in repeated offenses. Furthermore, the Board order to exclude them from the finance feels that selective application of these powers charge. The Board’s proposal goes further by to individual violations is preferable to the including credit-related costs, such as filing requirements proposed in S. 1312. fees and nonfiling insurance premiums, in the S. 1312 would eliminate the requirement to finance charge in all cases, while eliminating disclose monetary charges payable upon de­ any charges payable in both cash and credit fault but would retain the disclosure for late transactions from the finance charge, regard­ payment charges. This is essentially the same less of itemization. provision as recommended by the Board in Both bills, and the Board’s draft, exempt 1976 and contained in the Board’s draft. Con­ agricultural credit from the act’s coverage. trary to the provisions in S. 1501 that would Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 649 remove the disclosure requirement, the Board only would hundreds of thousands of retail believes this late payment charge disclosure is outlets be involved but also retailers may have an important one and should be continued. credit arrangements with more than one Section 15 of S. 1501 would substantially lender. That could mean that more than one amend the act’s provisions regarding its rela­ possible rate per loan type would have to be tionship to State laws. The general impact disclosed for certain retailers. would be to expand the act’s pre-emptive Even if retailers were to be excluded, scores effect. The Board supports the thrust of this of banks, finance companies, credit unions, provision that responds to some of the con­ and savings and loans would be covered in a cerns I commented on in testimony before the large SMSA. For example, Chicago includes Consumer Affairs Subcommittee of the House approximately 1,800; Dallas, over 600; New Committee on Banking, Housing and Urban York, over 800; and Milwaukee, more than Affairs on February 9, 1977. We are con­ 300. These figures do not include branch cerned however, that the provisions of sub- offices. paragraphs (2) and (3) may be so sweeping as Not only would many creditors be involved to pre-empt all State laws regarding consumer in each area but the bill also specifies that all credit, including laws that regulate interest types of loans, excluding open-end credit, be rates and the terms of credit transactions. In surveyed. As many as 25 possible loan types considering this issue, the Congress should may prevail at some institutions, and at least bear in mind that the appropriate degree of 10 at most creditors. If the proposed survey pre-emption of State law is related to the were to distinguish among loans of the same amount of information that will be required to type but differing by maturity or downpay­ be disclosed. ment requirements, the volume of published The Board supports the broad objective of data would be still more cumbersome. And helping consumers to develop their credit- while 75 SMSA’s would now be covered, no shopping skills. But it strongly questions information would be available for residents of whether a massive survey of the scope con­ smaller localities, where nearly half of our templated in S. 1312 would best meet that total population lives. objective. The exclusive focus on annual per­ The reduction of the act’s restrictions on centage rates, for example, tends to de- credit advertising, proposed by the bills, is emphasize other important credit information. intended to encourage the greater use of this On the other hand, the intended coverage of method to inform the public of comparative all loan categories at all creditors—even if costs. Advertising is more effective than any only in large standard metropolitan statistical surveys in that it is usually directly related to areas (SMSA’s)—seems overly broad. Though the product or service that is the primary limited to one substantive credit term (an­ object of the consumer’s buying interest and nual percentage rate), the survey could still reflects current credit cost information. prove so formidable in the volume of its nu­ We are sympathetic to the cost burdens of merical data that it would produce its own creditors that Section 6 of S. 1501 seeks to “information overload.” Coupled with the de­ reduce. At times, we have considered delaying lays inevitable in assembling, editing, publish­ regulatory changes so that they could be ing, and disseminating the information re­ bunched. However, most of the changes quired by the bill, the end product could be of promulgated up to now have been either in very limited use to most consumers engaged in response to court decisions or to creditor shopping for credit. requests. If legislative emphasis is needed, a The magnitude of the semiannual survey requirement that the Board give consideration proposed in the bill raises additional issues. to creditor costs as well as to consumer bene­ One would be the difficulty of identifying such fits would be preferable to the mandated delay creditors. Obviously, commercial banks and in changes. finance companies would be surveyed. Not Section 7 of S. 1501 contains several provi­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

650 Federal Reserve Bulletin □ July 1977 sions relating to the right of rescission in statements in connection with credit other certain credit transactions. The first would than open end include certain disclosures on extend from 10 to 20 days the time frame in those billing statements. Since there are no which creditors must return to customers requirements that creditors send such periodic property received in the transactions and ter­ statements, it does not seem necessary to minate security interests. It would also extend impose requirements on those creditors who to 20 days the time the creditor has to take do. The Board supports this deletion. possession of property tendered by the cus­ Section 9(c) of S. 1501 would permit tomer in a rescinded transaction. While the creditors to send the notice of fair credit billing Board has no particular information indicating rights to customers annually rather than that the 10-day period is not sufficient, it semiannually as is currently required. The would not oppose an extension to 20 days. Board believes that an annual notice is suffi­ More importantly, however, the act would cient and supports this relaxation. be amended to provide that, with respect to The Board concurs that the type of toler­ transactions rescinded after the third business ance in long-term credit proposed in Section day, the customer could not rescind the trans­ 10(d) and (e) of S. 1501 would aid in the action unless the customer also tenders the administrative aspects of this type of credit. property, principal amount of the loan, or Section 13 of S. 1501 changes the advertising other consideration received from the provisions of the current act to permit the creditor. Currently, the act requires the advertising of the periodic rate and the annual creditor, within 10 days of receipt of notifica­ percentage rate alone in open-end credit, tion of rescission, to cancel any lien and to without including other credit terms. In closedreturn to the customer any money or property end credit advertising, Section 13 would elimi­ received from the customer. Once the creditor nate the requirement that the cash price or the has performed, the customer must then tender amount of the loan and the downpayment to the creditor the property it has received as must be disclosed if specific terms are men­ part of the transaction. Requiring the cus­ tioned in the advertisement. The Board would tomer to tender the property before the support the concept of limiting restrictions on creditor acts could seriously inhibit any cus­ advertising of terms but thinks that a final tomer from rescinding. resolution should await a decision on possible A third major rescission provision is to changes in the disclosure requirements. Be­ provide a definition of “material disclosures” cause of the multitude of ways of computing as applicable to certain disclosures. The Board the finance charges in open-end credit has addressed this same issue in its draft, accounts, the annual percentage rate standing providing that the rescission information and alone is not a meaningful disclosure and, in annual percentage rate must be stated accu­ fact, may be misleading in some cases. rately and that the other elements of the I am attaching to this testimony a technical disclosure must be completed in good faith. analysis of the open-end and advertising provi­ Section 8 of S. 1501 would eliminate the sions of three bills that have been introduced requirement of Section 126 of the act that as well as some technical comments on these creditors who choose to send periodic billing bills. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 651 Statement by Stephen S. Gardner, Vice been ample opportunity for the Congress to Chairman, Board of Governors of the Federal hear all points of view germane to this bill. Reserve System, before the Subcommittee on Two things have happened in this process. Financial Institutions Supervision, Regulation First, the original legislative proposals have and Insurance of the Committee on Banking, been changed significantly to meet some basic Finance and Urban Affairs, U.S. House of objections, and the Federal Reserve has rec­ Representatives, July 12, 1977. ommended further changes that, in our judg­ ment, should meet the remaining points of Mr. Chairman, members of the committee, it controversy. Second, those who foresaw a is a pleasure to testify in support of the Inter­ continued and rapid growth of foreign bank national Banking Act of 1977. This landmark operations in the United States have seen their legislation is very important to American con­ predictions fulfilled. Since the introduction of sumers and businesses, to Federal and State the Board’s first proposal in 1974, foreign bank bank regulatory authorities and legislators, to operations in this country have continued to the management of monetary policy, and to grow in number, size, and importance. They U.S. relations with our trading partners. have been assuming an increasingly important Without attempting to weigh the importance of share of the market for commercial and indus­ each relative interest, because all must be trial loans, have been increasing their penetra­ considered fairly, I would emphasize that the tion into regional markets and retail banking bill is a domestic bank regulatory measure and services, and have been active participants in should be so characterized. The only unique domestic money markets. Our most recent thing about foreign bank offices in this country data show that 210 banking facilities are oper­ is that they are owned and managed from ated by 94 foreign banks in the United States. abroad mostly by large multinational banks More than half of these foreign banks operate with worldwide assets exceeding $1 billion. As across State lines: 22 foreign banks have bank­ these hearings will indicate, they are also a ing offices in three or more States, and another very large and rapidly growing part of our 28 foreign banks have banking offices in two domestic banking system. Their banking ser­ States, an advantage denied to domestic vices are sold to American consumers and banks. Foreign bank interest in the United businesses, and they compete directly with States is growing at a remarkably rapid pace, domestic banks that are regulated and super­ and even the most partisan of those who vised under a comprehensive system of Fed­ oppose any form of Federal regulation must eral and State laws and regulations. grant that further delay will surely complicate I am optimistic that these hearings will lead the work of the Congress in enacting appropri­ to the enactment of a law that is fair and ate legislation. appropriate for all parties, embodying the Mr. Chairman, I am submitting with my principle of national treatment for foreign testimony a Statistical Appendix providing banks and conforming their regulation evenly data on the growth of foreign bank operations and equitably to that imposed on similar and a compendium of supporting documents domestic banking organizations. My optimism intended for the committee’s use. In today’s is based on these facts. Last year this commit­ statement, I would like to address those provi­ tee did an outstanding job in proposing an sions of the act that may be questioned by International Banking Act to the full House, later witnesses. which passed as H.R. 13876. The appropriate As recently as 3 years ago, many held the subcommittee of the Senate held a full set of belief that foreign banks in our economy hearings on this proposal and was prevented were highly specialized institutions operating from continuing this work only because of the only in port and gateway cities where interna­ adjournment of the Congress. Further, propos­ tional trade was important, and those opposed als of this kind have been before the Congress to legislation argued that their chartering and and before the public since 1974, and there has regulation could be left to the States. Such Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

652 Federal Reserve Bulletin □ July 1977 arguments today, in view of the extraordinary valid concerns of those opposing certain of its expansion of these banks in the context of the sections. I would like to touch on these development of multinational banking, have amendatory proposals and underline their im­ been thoroughly disproved. portance to the success of the legislation The rapid expansion of multinational bank­ before you. ing has been occurring abroad as well as in the I have referred to monetary policy controls, United States. The growth of this international and your bill largely accomplishes the objec­ financial community is testing the regulatory tive of establishing for foreign banks a fair frameworks and monetary system in many equivalant to the monetary regulations that other countries. In Belgium, the Netherlands, affect comparable domestic banking institu­ the United Kingdom, and Canada, banking tions. The bill does not require formal mem­ laws are currently being revised. Other coun­ bership in the Federal Reserve System. It tries are reviewing their existing regulations simply requires that those foreign banks and supervisory practices. The business this operating in the United States that have $1 committee is about is thus very common in billion or more in worldwide bank assets main­ other nations, and it is an entirely responsible tain reserves in the same way as the largest and appropriate activity. For the United U.S. banks, virtually all of which are members States is alone among the leading trading na­ of the Federal Reserve System. tions of the western world in having virtually There is, however, an omission in the pres­ no national policy, monetary controls, or na­ ent bill. The State-chartered subsidiaries of tional presence where foreign banks are con­ large foreign banks are exempted from mone­ cerned. tary controls. The Board believes that the Over the past several years, as we have appropriate test for the imposition of mone­ testified before, we have generally found the tary controls is the size and the ability of a banking authorities in other countries to be foreign bank to compete and participate sympathetic and understanding of the need to through its U.S. affiliates in our large money rationalize the treatment of foreign banks in and credit markets. Thus, the Board recom­ our country with our domestic banking sys­ mends that Section 7 of the bill be amended to tem. Many foreign central bankers consider it require that Federal Reserve monetary con­ surprising that the United States does not have trols be applied to all the U.S. operations of a a national policy on foreign banks, and, in foreign bank that has $1 billion or more in particular, they recognize the logic of extend­ worldwide bank assets, irrespective of ing monetary and credit controls to foreign whether they are conducted through agencies, banks operating within our borders and con­ branches, subsidiary banks, or subsidiary ducting transactions in our currency. This, of New York investment companies. If we omit course, is a fundamental reason for enacting one corporate form of organization from such this bill. restrictions, the bill’s purpose will be sub­ The committee should not be misled by verted and its effectiveness will be severely criticism from commercial bankers abroad. reduced. The objections to the legislation addressed to Consistent with national treatment, Section those sections of the bill that would require 5 of the bill generally subjects foreign banks to divestitures or the closing of existing facilities the same multi-State restrictions that apply to can be dealt with during the legislative pro­ domestic banks. The Board believes, how­ cess. Objections to the United States having ever, that direct imposition of the branching appropriate powers to guide monetary and restrictions of the McFadden Act should be credit policies within this country should not limited to Federal branches and agencies. be given undue weight. State branches should be put on the same In the Board’s letter to you endorsing the competitive footing as State banks in their present legislation, there are included propos­ home State. In this way, foreign banks may als for amendments addressed to the most benefit from future reciprocal interstate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 653 branching legislation that may be agreed upon ent Section 6 of the bill. The Board favors among the States. compulsory FDIC insurance on deposits in In our previous comments on the bill, we branches of foreign banks. The arguments for suggested that multi-State restrictions apply to extending FDIC insurance to these deposits both branches and agencies of foreign banks. I are very direct and simple. The United States expect you will hear strong testimony from has enjoyed an extraordinarily successful sys­ State authorities urging that agencies remain tem of deposit insurance protecting in its end exempted from multi-State branching restric­ effect jobs, businesses, and our economies tions as the bill now provides. The Board has locally, regionally, and nationally since the carefully considered these arguments, which 1930’s. It is a model act covering virtually all arise quite naturally from those States in­ full-service commercial banks in this country. terested in attracting offices of foreign banks It is being studied and copied by foreign to assist in expanding their local industries’ governments. It would be a curious turn of participation in foreign trade. I would like now events to abandon our world leadership in this to propose what appears to be a reasonable area by substituting an imperfect form of alternative. That alternative would be to limit protection. Surety bonds or pledges of assets agencies of foreign banks that are licensed by cannot be considered comparable to the cer­ the States in the future to powers that are no tainty of FDIC insurance and the ability of the greater than Federally chartered Edge Act FDIC to protect our citizens from bank fail­ Corporations. These future State-licensed ures. agencies would thus be able to conduct a full Because of the continuing rapid growth of service international banking business and to foreign bank operations in this country, it will promote the further development of interna­ become progressively more difficult to adopt tional trade and investment throughout the grandfathering proposals for their existing ac­ country. At the same time, the multi-State tivities that are equitable and consistent with restrictions on banking offices conducting a prior legislative precedent. Your bill grand­ full-service domestic banking business would fathers multi-State banking operations as of not be compromised. To exempt agencies en­ May 1, 1976. Nonbanking activities, other tirely would, in our judgment, exacerbate the than securities affiliates, are permanently present multi-State advantages enjoyed by grandfathered as of December 3, 1974. The foreign banks, as, traditionally, agencies have Board concurs strongly in the permanent been the most important form of foreign bank grandfathering of these activities and believes activity. This alternative would equitably meet it appropriate for the Congress to review the the interests of the States that wish to have existing grandfathering dates. A majority of international banking agencies, the interests of the Board believes these dates should be foreign banks that wish to establish interna­ brought forward to afford equitable treatment tional banking facilities in more than one trade to all existing facilities. center, and the public interest in competitive As for securities affiliates, it will be recalled equality with our domestic banks. that the Senate hearings on the International The issue of deposit insurance on foreign Banking Act of 1976 produced extensive con­ bank operations in order to protect U.S. con­ troversy concerning the securities affiliate sumers and business has been debated since provisions in the present bill. The Board urges 1974. Following the action of this committee that the securities affiliations that are in place and the House vote on H.R. 13876 last year, today be permanently grandfathered to quiet the Federal Deposit Insurance Corporation the controversy, and that, as a safeguard, the (FDIC) suggested in comments to the Senate a Board be given the discretion to review these method of applying deposit insurance to the activities under the nonbanking standards of domestic deposits of U.S. branches of foreign the Bank Holding Company Act for any banks. In the judgment of the Board, that abuses that might arise over time. This would alternative is far more desirable than the pres­ meet the concerns expressed by the regional Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

654 Federal Reserve Bulletin □ July 1977 stock exchanges. It would also provide some but which are principally engaged in business certainty to foreign banks that their securities outside the United States. While the Board affiliates, which are still a very small part of believes it has sufficient regulatory authority the securities industry, could continue to op­ under present law to deal with such problems, erate in essentially the same form and relative we also believe it would be desirable for the size as at present. Congress to embody this principle in the As we have indicated to the committee, the statute. In this proposal, we have included a Board does not see the necessity for the requirement that any banking transactions with detailed guideline provisions on foreign bank U.S. offices of such foreign affiliates be con­ entry in Section 9 of the bill. The State and ducted at competitive rates and terms. In this Federal regulatory agencies already have ap­ way the firm or bank involved would not have propriate statutory requirements that must be an unfair advantage over their respective fulfilled by those who apply for permission to U.S. competitors. conduct a banking business in this country. The Board’s carefully considered and strong The provisions of the bill, which provide for support of the International Banking Act of consultation between bank regulatory au­ 1977 is based on the conviction that the pro­ thorities and the Secretaries of State and Treas­ posed bill with the amendments that we have ury on new foreign bank applications, would recommended would fairly implement the seem entirely adequate to insure that any principle of national treatment of foreign bank­ important foreign policy issues are considered ing organizations operating in the United when appropriate. I would expect that in al­ States. In the opinion of the Board, as we have most all cases this consultative procedure repeatedly emphasized, that principle is the would be entirely routine. only workable and equitable method of deal­ Legitimate issues that have been raised by ing with these organizations. foreign banks concerning fair national treat­ As I have suggested in this testimony, most ment include a key issue related to the non­ responsible objections to the legislation have banking prohibitions of the Bank Holding been or can be met. The question then is Company Act. Last year there apparently was simply: should we not put foreign and domes­ a misconception on the part of some foreign tic banks on a relatively equal footing now, for bankers, who thought that the nonbanking pro­ surely they should be in time. This legislation hibitions that we apply to banks in our is an essential ingredient in the larger process domestic market would seriously interfere with of rationalizing and modernizing our own their nonbanking interests abroad. For that banking laws. That work will be fairer and reason we have proposed a clarifying amend­ easier if it is evenly applicable to all banks as it ment to this bill whereby foreign banks that would be under this legislation. are principally engaged in banking abroad The conscientious and excellent work of the would not be prohibited from retaining or ac­ Congress and the committee should continue quiring interests in foreign-chartered, non­ until this bill is passed. The Federal Reserve is banking companies that have U.S. activities ready to assist in any way necessary. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

655 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON MAY 17, 1977 Domestic Policy Directive The information reviewed at this meeting suggested that real output of goods and services—which had increased at an annual rate of 5.2 per cent in the first quarter, according to preliminary estimates of the Commerce Department—was expanding at a rapid pace in the current quarter. The rise in average prices—as measured by the fixed-weighted price index for gross domestic business product— appeared to have slowed somewhat from the annual rate of 6.8 per cent estimated for the first quarter. According to staff estimates, real output was growing at a significantly faster pace in the current quarter than had been projected a month earlier. It now appeared that the expansion in consumer purchases of goods and services would be considerably stronger than had been anticipated, although still not so strong as in the first quarter; that the gain in business fixed investment would be larger than had been expected and that the recovery in net exports of goods and services would be greater, following a much larger decline in the first quarter than had been estimated a month ago. The staff projections for the second half of 1977 differed little from those made just before the previous meeting, which had incorpo­ rated assumptions about Federal fiscal measures that were later enacted or funded. Specifically, the assumptions included the in­ crease in the standard deduction for personal income taxes passed by the Congress on May 16 and the expansion in outlays for public service employment, for local public works, and for countercyclical revenue sharing. Growth in real GNP for the second half was projected to be substantial, although not so rapid as in the second quarter. It was anticipated that increases in Federal purchases of goods and serv­ ices would be larger; that expansion of business investment would Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

656 Federal Reserve Bulletin □ July 1977 remain relatively strong; and that investment in inventories would accelerate. At the same time, however, it was expected that growth in consumption expenditures would slow somewhat further; that the pace of the expansion in residential construction would moderate; and that net exports of goods and services would change relatively little from the second-quarter level. In April, expansion in economic activity remained vigorous. Industrial production rose by 0.8 per cent, following a gain of 1.4 per cent in March. Relatively large increases in output were widespread among both final products and materials. However, assemblies of automobiles declined somewhat, both because of strikes at a few motor vehicle plants and because of efforts to reduce the exces­ sive inventories of small-model cars. The rate of capacity utilization in April remained at 82 per cent for manufacturing as a whole and increased from 81 to 82 per cent for the materials-producing industries. These utilization rates were about 6 and 10 percentage points, respectively, below the peaks in the previous business expansion, when capacity restraints in a number of materials-producing industries limited growth in output and contributed to upward pressures on prices. The number of private housing units started in April had not been made public by the time of this meeting. In March, as reported just before the last meeting, starts had risen sharply further to an annual rate of about 2.1 million units—the highest rate in nearly 4 years. For the first quarter as a whole, starts were about the same as for the fourth quarter of 1976 and more than one-tenth above the total for the third quarter. Sales of new and existing homes combined remained vigorous in March, and nonbank thrift institutions con­ tinued to supply a substantial volume of mortgage credit with little change in interest rates, despite reduced inflows of deposits. Developments in labor markets continued to reflect the strength in economic activity. Payroll employment in nonfarm establishments expanded considerably in April, after a sharp rise in March; the increase since December—amounting to 1.3 million persons—was unusually large for a 4-month period. The unemployment rate declined further in April, by 0.3 of a percentage point, to 7.0 per cent. During the second half of 1976 the rate had fluctuated between 7.8 and 8.0 per cent. Growth in total personal income accelerated to an annual rate of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 657 20 per cent in March from about 17 per cent in February, reflecting in large measure faster expansion in private wage and salary payments. The employment statistics suggested that wage and salary payments continued to grow in April, although at a less rapid pace than in the two preceding months. Consumer demands remained strong. In April total retail sales held at the advanced level reached in March and were 214 per cent above the monthly average for the first quarter. Sales of new automobiles declined somewhat, after having surged upward in March. However, sales of other consumer items rose by about 1 per cent, equaling the gain in the preceding month. New orders for nondefense capital goods rose as much in March as they had declined in February, and for the first quarter as a whole they were up about 6 per cent from the preceding quarter. Unfilled orders for such goods edged up during the first quarter. Contract awards for commercial and industrial buildings—measured in terms of floor space—shot upward in March, and the total for the first quarter was SV2 per cent above that for the preceding quarter. A private survey, conducted in late March and early April, indicated that businesses were planning to spend significantly more for plant and equipment in 1977 than had been shown by surveys taken in February and in the autumn of 1976. The index of average hourly earnings for private nonfarm produc­ tion workers rose at an annual rate of 6.8 per cent in April, about the same as the average increase during 1976; over the first quarter the rise had accelerated to a rate of 7.3 per cent, in large part because of an increase in the minimum wage at the beginning of 1977. Major collective bargaining settlements in the first quarter provided for first-year increases in wages averaging 7.6 per cent, compared with an average of 8.4 per cent for the first-year adjustments under contracts negotiated during 1976. However, compensation per hour for all persons in the nonfarm business sector of the economy rose at an annual rate of about 10 per cent in the first quarter, up from 7 per cent in the preceding quarter and from an average of about 8 per cent over the four quarters of 1976. The rise reflected not only the increase in the minimum wage but also an increase in taxes on employers for social security and unemployment insurance. The wholesale price index rose 1.1 per cent in April, marking the third consecutive month of increases of about 1.0 per cent. The Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

658 Federal Reserve Bulletin □ July 1977 index had risen 0.5 per cent on the average during the 6 months ending in January. The acceleration in the latest 3 months was attributable to sharp increases in prices of farm products and foods. At the same time, however, there were sizable advances among industrial commodities; the average for such commodities rose 2.0 per cent over the 3-month period. The consumer price index increased 0.6 per cent in March—less than in January and February but still somewhat more than the average during the second half of 1976. In March price increases averaged 0.6 per cent for foods, 0.4 per cent for nonfood com­ modities, and 0.8 per cent for services. The average value of the dollar against leading foreign currencies changed little on balance over the inter-meeting period. The dollar rose against the Japanese yen, but it declined against the currencies associated in the European “snake” arrangement. The change in the dollar/yen rate reflected a sharp decline in short-term interest rates in Japan and market reaction to a decision by the U.S. Customs Court requiring the imposition of countervailing duties on imports of electronic products from Japan. Despite its recent weakening, the yen was nearly 6 per cent higher against the dollar than it had been at the end of 1976. The U.S. foreign trade deficit, already large in January and February, was still larger in March. The deficit for the first quarter as a whole was almost twice that for the final quarter of 1976, as imports rose 10 per cent and exports were virtually unchanged. Among imports, increases in the first quarter were largest for fuels, foods, automobiles from Canada, and consumer durable goods other than autos. The net outflow on bank-reported capital transactions declined sharply in the first quarter. At U.S. banks, growth in total credit accelerated during April from the already brisk pace of the first quarter. All major loan categories expanded significantly further, and holdings of taxexempt securities increased sharply for the first time since November. A sizable part of bank acquisitions of such securities consisted of tax-anticipation notes—particularly those issued by New York State—but banks in most areas of the country increased their holdings of long- as well as of short-term municipal issues. Bank holdings of U.S. Government securities declined. In April the strength in business credit at banks was concentrated Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 659 at smaller institutions. The relative weakness of business loan demand at large banks apparently reflected a preference of large corporations to cover their increased requirements for short-term financing at the lower interest costs prevailing in the commercial paper market. As a result, commercial paper issued by such corporations rose by the largest amount in 2Vi years. Growth in the narrowly defined money stock (M-l) accelerated to a record annual rate of nearly 20 per cent in April. Temporary influences contributed to this rapid growth, and data for early May indicated some shrinkage in money balances. In addition, however, the rapid expansion in economic activity appeared to have been raising transactions demands for money. Over the 12 months ending in April, M-l grew about 6Vi per cent. Inflows of the time and savings deposits included in M-2 and M-3 continued to moderate in April. However, the large increase in M-l produced a marked acceleration of growth in the broader aggregates in that month. Over the 12 months ending in April, M-2 grew about IOV2 per cent and M-3 about \2Va per cent. At its April meeting the Committee had decided that growth in M-l and M-2 in the April-May period at annual rates within ranges of 6 to 10 per cent and 8 to 12 per cent, respectively, would be appropriate. It had judged that these growth rates were likely to be associated with a weekly-average Federal funds rate of about 43A per cent. The Committee had agreed that if growth rates in the aggre­ gates over the 2-month period appeared to be deviating significantly from the midpoints of the indicated ranges, the operational objective for the weekly-average Federal funds rate should be modified in an orderly fashion within a range of AV2 to 5lA per cent. Data that had become available in the days immediately after the April meeting suggested that over the April-May period both M-l and M-2 would grow at rates well within their specified ranges, although it appeared that growth in April would be strong. Accord­ ingly, the Manager of the System Open Market Account sought to maintain the Federal funds rate at about 43A per cent or a shade higher. By late April, however, incoming data suggested that over the 2-month period M-l was likely to grow at a rate considerably above the upper limit of its specified range and that M-2 was likely to grow at a rate close to the midpoint of its range. In those circum­ stances System operations in late April and early May were Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

660 Federal Reserve Bulletin □ July 1977 conducted with a view to raising the Federal funds rate toward 5Va per cent, the upper limit of its specified range. On May 6 the Committee voted to increase the upper limit of the range for the Federal funds rate from 5XA to 5Vi per cent, with the understanding that the Manager would use the additional leeway only if new data becoming available before May 17, the date for this meeting, suggested that the aggregates were strengthening signifi­ cantly further on balance. Such additional strength did not develop in that period, and the Manager continued to aim for a funds rate of around 5lA per cent. In the final days of the period, the rate actually fluctuated between 5lA and 5% per cent. Short-term market interest rates rose generally by Vi to % of a percentage point during the inter-meeting period. The rate on 3-month commercial paper rose from 43A to 55/s per cent, and near the end of the period most major banks increased their prime interest rate on business loans from 6lA to 6V2 per cent. Upward pressures on short-term rates were tempered by a significant reduction during the period in the outstanding volume of Treasury bills. Yields also rose somewhat in the longer-term markets, but—as in the short-term markets—upward pressures were moderated by Treasury operations. In its mid-May refinancing the Treasury re­ duced its outstanding debt by about $400 million. Moreover, it announced that it planned to reduce the debt by an additional $450 million when $2.0 billion of 2-year notes matured later in the month. In the corporate bond market, rate pressures were tempered by a significant drop in public offerings of new issues in April. Private placements of corporate issues were estimated to have remained large, but insurance companies continued to bid aggressively for privately placed securities. Bond offerings by State and local governments also were large in April. Net mortgage lending during the first quarter of 1977 was near the record rate of the previous quarter, and the volume apparently remained large in April. Issues of GNMA-guaranteed, mortgagebacked securities in April were close to the strong pace of the first quarter, and mortgage loans outstanding at commercial banks also continued to grow at a rapid rate. In March, the latest month for which data were available, mortgage commitments outstanding at savings and loan associations rose further to another new high. Average interest rates on new commitments for conventional home Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 661 mortgages continued to edge higher in April, and yields in the secondary mortgage market for FHA/VA loans changed little on balance over the month. It appeared likely that the Treasury would be able to make additional reductions in the volume of bills outstanding over the rest of the current quarter but that it would need to raise a large volume of new money later in the year. At the same time, business demands for credit—especially for short-term credit—were expected to re­ main relatively large as a result of continuing improvement in economic activity. Projections of consumer expenditures implied a sustained high rate of growth in consumer credit and mortgage debt. At its April meeting the Committee had agreed that from the first quarter of 1977 to the first quarter of 1978 average rates of growth in the monetary aggregates within the following ranges appeared to be consistent with broad economic aims: M-1, 4Vi to 6V2 per cent; M-2, 7 to 9Vi per cent; and M-3, SV2 to 11 per cent. The associated range for growth in the bank credit proxy was 7 to 10 per cent. It was agreed that the longer-term ranges, as well as the particular aggre­ gates for which such ranges were specified, would be subject to review and modification at subsequent meetings. It also was under­ stood that short-run factors might cause growth rates from month to month to fall outside the ranges contemplated for annual periods. With respect to the economic situation and outlook, members of the Committee generally were of the view that the expansion in business activity was quite strong. In particular, they expected over-all growth to remain substantial for a number of quarters ahead. While not disagreeing with that view, a few members indicated that they would not exclude the possibility that growth in output would prove to be slower than generally expected. Two of these members focused on the possibility that a slowing of growth in consumption expenditures might be accompanied by inadequate expansion in other sectors. Specifically, it was suggested that substantial increases in business investment in fixed capital and inventories were not assured in the current business expansion, which was now in its third year and rather old by historical standards. It was also noted in this context that, according to statistics released a day or two ago, the level of inventories at the end of March had been higher than assumed, and that in the spring of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

662 Federal Reserve Bulletin □ July 1977 1976 inventory demands had weakened rather promptly after the rise in retail sales had slowed. One member expressed concern that in­ ventory demands might be unsustainably high in the quarters im­ mediately ahead, leading first to relatively rapid growth in over-all activity and then to a slowing down. Other members felt that if anything the probabilities favored expansion at a faster rather than at a slower rate than generally expected. It was suggested that business confidence in the outlook for economic activity appeared to have increased considerably. One member expressed the opinion that there was nothing particularly abnormal about the current business expansion, despite the pick-up in the rate of increase in prices and the existence of various uncertainties. The recent acceleration in the rate of price rise was a source of concern. One member remarked that the sustainability of the expansion could be threatened by intensified upward pressures on labor costs and prices. The observation was made that the adminis­ tration’s proposals for increases in social security taxes on em­ ployers beginning in 1979 would raise unit labor costs substantially. It was felt that the prospects of such increases—especially in conjunction with certain features of the proposed energy policy— had contributed to business uncertainties. It was reported in the discussion that there had been a consider­ able volume of speculation in real estate in some parts of the country, accompanied by rapidly rising prices. While speculation was described as being greatest in residential properties on the West Coast—with turnovers at rising prices financed by credit from banks and savings and loan associations—it was also reported to be occurring in farmland in some other areas of the country. It was observed that, heretofore, the present business expansion had been free of the sort of speculation that had the potential to cause problems later on. As to policy for the period immediately ahead, members of the Committee thought that relatively slow growth in monetary aggre­ gates over the May-June period would be appropriate in order to compensate at least in part for the exceptionally rapid growth in April. In considering the ranges of growth to be specified for the 2-month period, they took account of a staff analysis that suggested that the extremely large expansion in M-1 in April appeared to have Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 663 raised the money stock sufficiently to accommodate much of the public’s need for additional transactions balances in the second quarter and, consequently, that monetary growth was likely to be slow. The members did not differ a great deal in their preferences for ranges of growth in the monetary aggregates over the May-June period. For M-1, most of them favored a range of 0 to 4 per cent for the annual rate of growth over the 2-month period. Some sentiment was expressed for slightly different ranges: -1 to 4 per cent, 0 to 5 per cent, and 1 to 5 per cent. For Af-2, most members favored a range of either 3 to 7 per cent or 4 to 8 per cent, but those who favored the wider ranges for M-l preferred comparably wider ranges for M-2. Differences of view were somewhat greater concerning the Fed­ eral funds rate, and they turned in large part on the degree of leeway that should be provided for operations during the inter-meeting period in the event that the aggregates appeared to be deviating significantly from the midpoints of the specified ranges. In view of the rapid monetary growth in April, several members suggested that it would be desirable in the coming period to avoid any significant decline in the weekly-average Federal funds rate from its current level of 5lA to 53/s per cent even if growth in the aggregates appeared to be significantly below the midpoints of the specified ranges. Other members were prepared to accept a decline in the funds rate to 5 per cent under those circumstances. Most Committee members did not wish to see a rise in the weekly-average Federal funds rate above 53A per cent during the inter-meeting period—at least not without further consultation. In addition to advocating an upper limit of 53A per cent for the inter-meeting range, these members generally favored maintaining the funds rate at the outset of the period in the area of 5lA to 53/s per cent or permitting it to rise only slightly. In support of constraining the upper limit to 53A per cent, it was suggested that a further rise of 50 to 60 basis points—roughly the magnitude of the increase since the April meeting—was likely to have more significant repercussions on financial markets and that considerable uncertainty existed about the underlying strength of the monetary aggregates. A few members of the Committee suggested an upper limit of 6 per cent for the funds rate range and an initial objective of 5Vz or 55/s per cent, because they Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

664 Federal Reserve Bulletin □ July 1977 viewed the economic situation as quite strong and they thought such a course would be helpful in restraining excessive growth in the aggregates later on. At the conclusion of the discussion the Committee decided that growth in M-1 and M-2 over the May-June period at annual rates within ranges of 0 to 4 per cent and 3Vi to IVi per cent, respectively, would be appropriate. It was understood that in assessing the behavior of the aggregates, the Manager should continue to give approximately equal weight to the behavior of M-1 and M-2. In the judgment of the Committee, such growth rates of the aggregates were likely to be associated with a weekly-average Federal funds rate of about 53/s per cent. The Committee agreed that if growth rates of the aggregates over the 2-month period appeared to be deviating significantly from the midpoints of the indicated ranges, the operational objective for the weekly-average Federal funds rate should be modified in an orderly fashion within a range of 5V\ to 53A per cent. As customary, it was understood that the Chairman might call upon the Committee to consider the need for supplementary instructions before the next scheduled meeting if significant inconsistencies appeared to be developing among the Committee’s various objectives. The following domestic policy directive was issued to the Federal Reserve Bank of New York: The information reviewed at this meeting suggests that real output of goods and services is growing at a rapid rate in the current quarter. In April industrial output and employment continued to expand at a substantial pace, and the unemployment rate declined from 7.3 to 7.0 per cent. Total retail sales remained at the advanced level reached in March. The wholesale price index for all commodities rose substan­ tially in April for the third consecutive month; increases again were particularly sharp among farm products and foods, and they remained sizable for industrial commodities. The average value of the dollar against leading foreign currencies has changed little on balance over the past month. The U.S. foreign trade deficit widened further in March; for the first quarter as a whole the deficit was twice as large as for the preceding quarter. The increase in Af-1, which had been moderate in the first quarter, was exceptionally large in April. Inflows of the time and savings deposits included in the broader aggregates were slower than earlier in the year, but because of the rapid expansion in M-1, growth in M-2 and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 665 M-3 accelerated. Business short-term borrowing expanded sharply while corporate financing in the capital markets was reduced. Market interest rates have risen in recent weeks. In light of the foregoing developments, it is the policy of the Federal Open Market Committee to foster bank reserve and other financial conditions that will encourage continued economic expansion and help resist inflationary pressures, while contributing to a sustainable pat­ tern of international transactions. At its meeting on April 19, 1977, the Committee agreed that growth of M-l, M-2, and M-3 within ranges of AVi to 6V2 per cent, 7 to 9 Vi per cent, and 8V2 to 11 per cent, respectively, from the first quarter of 1977 to the first quarter of 1978 appears to be consistent with these objectives. These ranges are subject to reconsideration at any time as conditions warrant. The Committee seeks to encourage near-term rates of growth in M-l and M-2 on a path believed to be reasonably consistent with the longer-run ranges for monetary aggregates cited in the preceding paragraph. Specifically, at present, it expects the annual growth rates over the May-June period to be within the ranges of 0 to 4 per cent for M-1 and 3Vi to 7V2 per cent for M-2. In the judgment of the Committee such growth rates are likely to be associated with a weekly average Federal funds rate of about 53/s per cent. If, giving approximately equal weight to M-l and M-2, it appears that growth rates over the 2-month period will deviate significantly from the midpoints of the indicated ranges, the operational objective for the Federal funds rate shall be modified in an orderly fashion within a range of 5Va to 53A per cent. If it appears during the period before the next meeting that the operating constraints specified above are proving to be significantly inconsistent, the Manager is promptly to notify the Chairman who will then decide whether the situation calls for supplementary instructions from the Committee. Votes for this action: Messrs. Burns, Volcker, Coldwell, Gardner, Guffey, Jackson, Lilly, Mayo, Morris, Partee, Roos, and Wallich. Votes against this action: None. 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 a month after the meeting and are subsequently published in the Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

666 Law Department Statutes, regulations, interpretations, and decisions. COLLECTION OF CHECKS AND OTHER Subpart B—Transfers of Funds ITEMS AND TRANSFERS OF FUNDS Section 210.50—Authority and scope The Board of Governors has amended its Regula­ Section 210.51—General provisions tion J by establishing subpart B. That subpart sets Section 210.52—Definitions forth the duties and liabilities of those parties Section 210.53—Approved media for issuance, transferring funds over the Federal Reserve Com­ transmission or recording of trans­ munications Systems. fer items Effective September 1, 1977. Regulation J is Section 210.54—Requests for transfer items amended as set forth below: Section 210.55—Transferor’s agreement Section 210.56—Transferee’s agreement 1. The title of Part 210 is amended to read: Section 210.57—Issuance of transfer items and request for transfer items ‘ COLLECTION OF CHECKS AND OTHER Section 210.58—Handling of transfer items and ITEMS AND TRANSFERS OF FUNDS.” requests for transfer items Section 210.59—Time limits 2. The Table of Contents of Part 210 is amended Section 210.60—Advices of credit and debit to read as follows: Section 210.61—Handling of requests for revoca­ Subpart A—Collection of tion of transfer items and requests Checks and Other Items for return of funds Section 210.62—Final payment, right to withdraw Section 210.1—Authority and scope or use funds Section 210.2—Definitions Section 210.63—Timeliness of action Section 210.3—General provisions Section 210.64—Liability of a Federal Reserve Section 210.4—Sending of items to Federal Re­ Bank serve Banks Section 210.65—Operating circulars Section 210.5—Sender’s agreement Section 210.6—Status and warranties of Federal 3. Part 210 is amended by inserting immediately Reserve Bank before § 210.1 a heading reading: “SUBPART Section 210.7—Presentment for payment A—COLLECTION OF CHECKS AND OTHER Section 210.8—Presentment of noncash items for ITEMS.” acceptance 4. Paragraph (a) of § 210.2 is amended, but Section 210.9—Remittance and payment without change in footnotes, to read as follows: Section 210.10—Time schedule and availability of (a) The term “item” means any instrument for credits with respect to cash items the payment of money, whether negotiable or not, Section 210.11—Availability of proceeds of non­ which is payable in a Federal Reserve district; is cash items sent by a sender or a nonbank depositor to a Section 210.12—Return of cash items Federal Reserve Bank for handling under this Part Section 210.13—Charge back of unpaid cash items and is collectible in funds acceptable to the Federal and noncash items Reserve Bank of the district in which the instru­ Section 210.14—Timeliness of action ment is payable; except that the term does not Section 210.15—Effect of direct presentment of include any check that cannot be collected at par, certain warrants nor does it include any item as defined in § 210.52(a) Section 210.16—Operating letters of this Part. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 667 5. Part 210 is amended to change the words “this item issued by a transferor (other tha a Federal Part” wherever they occur in §§ 210.1-210.16 to Reserve Bank) to a Federal Reserve Bank for debit read “this Subpart.” to an account of the transferor at such Federal 6. Part 210 is amended by adding after §210.16 Reserve Bank and for credit to a transferee named the following: in such item, or (2) an item issued by a Federal Reserve Bank to another Federal Reserve Bank for credit to such other Federal Reserve Bank or any other transferee; or (3) an item, issued by a Federal SUBPART B—TRANSFERS OF FUNDS Reserve Bank at the request of a transferor for credit to a transferee. As used in this Subpart, the Section 210.50—A uthority and Scope term “transfer item” includes only an item in a format provided for in operating circulars issued by Pursuant to the provisions of paragraph 1 of Federal Reserve Banks under this Subpart. section 13 of the Federal Reserve Act, as amended (c) The term “instrument for the payment of (12 U.S.C. § 342), paragraph (f) of section 19 of the money” means any writing contained in or on any Federal Reserve Act, as amended (12 U.S.C. § medium approved by § 210.53 of this Subpart for 464), paragraph 14 of section 16 of the Federal the issuance, transmission or recording of transfer Reserve Act (12 U.S.C. § 248(o)), paragraphs (i) items, addressed by one person to another and and (j) of section 11 of the Federal Reserve Act (12 evidencing a right to the payment of money. U.S.C. § 248(i) and (j)), and other provisions of law, (d) The term “transferor” means a member the Board of Governors of the Federal Reserve bank, a corporation that maintains an account with System has promulgated this Subpart governing the a Federal Reserve Bank in conformity with the handling by Federal Reserve Banks of transfer requirements of § 211.7 of Part 211 of this Chapter items and requests for transfer items. (Regulation K), a Federal Reserve Bank, an inter­ national organization, foreign correspondent, or Section 210.51—G eneral Provisions other institution maintaining or using an account (a) In order to afford a direct, expeditious, and with a Federal Reserve Bank, authorized by a economical system for the transfer of funds, each Federal Reserve Bank to issue and send a transfer Federal Reserve Bank, in accordance with the terms item to that Federal Reserve Bank, or to request set forth in this Subpart shall receive, process and that Federal Reserve Bank by telephone to issue a act upon transfer items and requests for transfer transfer item. (e) The term “transferee” means a member items and, where appropriate, shall itself issue trans­ bank, a corporation that maintains an account with fer items. The provisions of this Subpart and the a Federal Reserve Bank in conformity with the operating circulars of the Federal Reserve Banks shall be binding upon transferors and transferees. requirements of § 211.7 of Part 211 of this Chapter (Regulation K), a Federal Reserve Bank, an inter­ (b) Except as may be provided otherwise by any applicable statutes of the United States or regula­ national organization, a foreign correspondent, or other institution maintaining or using an account on tions issued or arrangements made thereunder, the the books of a Federal Reserve Bank that is desig­ provisions of this Subpart and of the operating nated in a transfer item or request for a transfer circulars of the Federal Reserve Banks shall apply, item to receive the amount thereof. as the case may be, to any department, agency, (f) The term “beneficiary” means a person, firm instrumentality, independent establishment or of­ or corporation (other than the transferee) desig­ fice of the United States, or any wholly-owned or nated in a transfer item or request for a transfer controlled Government corporation, that maintains item to receive the amount thereof from the trans­ or uses an account with a Federal Reserve Bank, feree for the use of such person, firm or corpora­ acting as transferor or transferee. tion. Section 210.52—D efinitions (g) The term “international organization” means an international organization for which the Federal As used in this Subpart, unless the context Reserve Banks are empowered to act as de­ otherwise requires: positaries or fiscal agents subject to regulation by (a) The term “item” means any instrument for the Board of Governors of the Federal Reserve the payment of money, issued, transmitted or re­ System and for which a Federal Reserve bank has ceived in accordance with this Subpart. opened and is maintaining an account. (b) The term “transfer item” means either (1) an (h) The term “foreign correspondent” means Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

668 Federal Reserve Bulletin □ July 1977 any of the following for which a Federal Reserve Section 210.55—Transferor’s Agreem ent Bank has opened and is maintaining an account: a By its action in issuing and sending to the Federal foreign bank or banker, a foreign state as defined in Reserve Bank with which it maintains or uses an section 25(b) of the Federal Reserve Act, as account any transfer item contained in any of the amended (12 U.S.C. § 632), or a foreign corre­ media specified in § 210.53 or requesting the is­ spondent or agency referred to in section 14(e) of that Act, as amended (12 U.S.C. § 358). suance of a transfer item as provided in § 210.54, a (i) The term “transferor’s Federal Reserve transferor shall be deemed: (1) to authorize that Federal Reserve Bank to debit the amount thereof Bank” means the office of a Federal Reserve Bank to such account; (2) to authorize said Federal at which the transferor maintains or uses an ac­ Reserve Bank to handle and act upon the transfer count. item or request for a transfer item, and the trans­ (j) The term “transferee’s Federal Reserve feree’s Federal Reserve Bank to handle and act Bank” means the office of a Federal Reserve Bank upon a matching transfer item in the same amount at which the transferee maintains or uses an ac­ and payable to the same transferee and beneficiary, count. if any, as designated by the transferor, in accor­ (k) The term ‘interoffice transaction” means a dance with the provisions of this subpart and the transaction involving a transfer item where the operating circulars of such Federal Reserve Banks; transferor and transferee do not maintain or use and (3) to agree that such provisions shall, insofar as accounts at the same office of a Federal Reserve they are made applicable thereto, govern the rela­ Bank. tionships between such transferor and such Federal Reserve Banks. Section 210.53— Approved M edia for Section 210.56—T ransferee’s Agreem ent Issuance, Transmission or Recording of Transfer Items (a) By its action in maintaining or using an ac­ count at a Federal Reserve Bank, a transferee, other A transferor may issue and send a transfer item in than a Federal Reserve Bank, designated in a any one of the following media that is specified in transfer item to receive the amount thereof, shall be the operating circular of the Federal Reserve Bank deemed to authorize that Federal Reserve Bank to with which the transferor maintains or uses an credit the amount of such item to such account. account: (b) A transferee, other than a Federal Reserve (a) a letter, memorandum or other similar writ­ Bank, receiving from a Federal Reserve Bank the ing; amount of a transfer item designated for the use of a (b) a telegram (including TWX, TELEX and any beneficiary, shall be deemed to agree (1) that it will similar form of communications); and promptly credit said beneficiary’s account or (c) any form of communication, other than voice, otherwise make the amount of the transfer item that is registered upon, or is in form suitable for available to the beneficiary for withdrawal or other being registered upon, magnetic tape, disc or any use; and (2) that, if it is unable to do so because of other medium designed to capture and contain in circumstances beyond its control, it will give durable form conventional signals used for the prompt notice of the facts to the Federal Reserve electronic communication of messages. Bank from which it received such account. Section 210.54— Section 210.57—Issuance of T ransfer Requests for Transfer Items Items and Requests for Transfer Items A transferor may, under special arrangement and (a) Any transferor, other than a Federal Reserve in accordance with the provisions of § 210.57 and Bank, may, in accordance with the provisions of this the operating circular of its Federal Reserve Bank, Subpart and the operating circulars of its Federal request that Federal Reserve Bank by telephone to Reserve Bank, issue and send transfer items to that issue a transfer item and transfer funds to a trans­ Federal Reserve Bank or request that Federal Re­ feree or to issue and send a transfer item to another serve Bank to issue transfer items to transferees for Federal Reserve Bank for credit to such other their own use or the use of beneficiaries: Provided, Federal Reserve Bank or any other transferee. That, at the end of a Federal Reserve Bank’s Such telephone messages may be recorded by the banking day, a transferor shall maintain or cause to Federal Reserve Bank receiving such messages. be maintained a balance of actually and finally Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 669 collected funds sufficient to cover the amounts of transferee by making corresponding debit and transfer items debited to such account at the Fed­ credit entries, respectively, to the account of the eral Reserve Bank during the day and, if such transferor’s Federal Reserve Bank, and to the ac­ balance is not sufficient to cover the amounts count maintained or used by the transferee. debited to such account during that day, that Fed­ (c) When a Federal Reserve Bank obtains eral Reserve Bank shall have a security interest in knowledge that, for whatever reason, it will be any or all assets of the transferor in the possession unable to effectuate transfers of funds on a timely or held for the account of the Federal Reserve basis, said Federal Reserve Bank shall, within a Bank: And further provided, That, if at any time reasonable time thereafter, notify transferors of the during that Federal Reserve Bank’s banking day delay. such transferor suspends payment or is closed and Section 210.59—Time Limits does not have a balance sufficient to cover the amounts so debited to such account, such Federal (a) Each Federal Reserve Bank shall include in Reserve Bank shall have a security interest in any its operating circulars a schedule of the time limits or all assets of such transferor then in the posses­ showing, with respect to interdistrict, interoffice, sion or held for the account of such Federal and intraoffice transfers of funds, the hours on each Reserve Bank. Notwithstanding the foregoing, a business day during which it will receive and handle Federal Reserve Bank may, in its discretion, refuse transfer items and requests for transfer items. to act upon a transfer item at any time when such (b) Each Federal Reserve Bank taking proper Federal Reserve Bank has reason to believe that the action on the day of receipt of a transfer item or balance maintained or used by such transferor is request for a transfer item acts seasonably; taking not sufficient to cover such item. proper action within a reasonably longer time may (b) Any Federal Reserve Bank may, in accor­ be seasonable but the Federal Reserve Bank has the dance with the provisions of this Subpart, issue and burden of so establishing. In order for action to be send transfer items to another Federal Reserve taken on the day of receipt, such item or request Bank, or request that Federal Reserve Bank by must reach the Federal Reserve Bank not later than telephone to issue transfer items for its own use or the time shown in its schedule of time limits. No the use of any other transferee or any beneficiary. representation shall be made by a Federal Reserve (c) The Federal Reserve Banks may, from time Bank to the effect that transfers of funds will be to time, establish in their operating circulars the consummated on the day requested. minimum or maximum dollar amounts, or both, that (c) In emergency or other unusual circumstances, will be transferred, may impose reasonable charges a Federal Reserve Bank may, in its discretion, for transfers of funds, and may impose specific receive transfer items and requests for transfer format requirements for the receipt and handling of items after the hours shown in its schedule of time transfer items. limits. In the case of an interoffice transaction, the completion of each requested transfer shall be Section 210.58—H andling of Transfer discretionary with the transferee’s Federal Reserve Items and Requests for Transfer Items Bank. (a) Where the transferor and the transferee main­ Section 210.60— tain or use accounts at the same office of a Federal Advices of Credit and Debit Reserve Bank, such office receiving a transfer item shall execute a transfer of funds, or receiving a (a) Advice of credit in respect of an executed request for a transfer item shall issue a transfer item transfer of funds shall be given to the transferee in and execute a transfer of funds, by making corre­ any of the media specified in § 210.53 of this sponding debit and credit entries to those accounts. Subpart by the transferee’s Federal Reserve Bank. (b) In the case of an interoffice transaction, the Such advice may be given for each transfer item or, transferor’s Federal Reserve Bank shall debit the if so provided in its operating circulars, for several account maintained or used by the transferor in the transfer items. When the transferor or transferee amount to be transferred and, acting as a transferor, has so requested and when such Federal Reserve shall issue to the transferee’s Federal Reserve Bank Bank deems such action appropriate, or when in the a matching transfer item in the same amount and judgment of such Federal Reserve Bank, the nature payable to the same transferee and beneficiary, if of the transaction or the amount involved justifies any, as designated by the transferor, and the latter such an action, advice of credit shall be given to the office shall execute a transfer of funds to the transferee by telegraph, telephone, or any other Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

670 Federal Reserve Bulletin □ July 1977 means deemed appropriate by such Federal Re­ Section 210.63—Timeliness of Action serve Bank. If, because of circumstances beyond its control, a (b) After receiving a transfer item or request for Federal Reserve Bank shall be delayed beyond a transfer item, the transferor’s Federal Reserve applicable time limits provided in this Subpart or in Bank shall send an advice of debit to the transferor the operating circulars of the Federal Reserve Bank in any of the media specified in § 210.53. Such or by law in taking any action with respect to a advice may be given for each transfer item or, if so transfer item or a request for a transfer item, the provided in its operating circulars, for several trans­ time within which such action shall be completed fer items. If, within 10 calendar days after the shall be extended for such time after the cause of transferor receives an advice of debit, the trans­ the delay ceases to operate as shall be necessary to feror fails to send to said Federal Reserve Bank take or complete the action, provided the Bank written objection to such debit, the transferor shall exercises such diligence as the circumstances re­ be deemed to have approved such debit. quire. Section 210.61—H andling of Requests Section 210.64— for R evocation of Transfer Items and Liability of a Federal Reserve Bank Requests for Return of Funds (a) A Federal Reserve Bank, in connection with (a) A Federal Reserve Bank, upon receipt from the matters specified in this Subpart or its operating the transferor of a request for the revocation of an circulars, shall not have, nor shall it assume, any item, may cancel such item provided that the re­ responsibility to a transferee, a beneficiary, or any quest for revocation is received at such time and in other party, except its immediate transferor, nor such manner as to afford 11?at Fe rve Bank shall a Federal Reserve Bank have or assume any a reasonable opportunity to act. It Oie - not so liability except for its own or another Federal cancelled, a Federal Reserve Bank may, in its sole Reserve Bank’s lack of good faith or failure to discretion, upon request from the transferor (!) t ~dse ordinary care, and, except as herein pro­ where the transferor and transferee maintain or use vided federal Reserve Bank shall not be liable accounts at the same Federal Reserve Bank, send a for the in ‘ ncy, neglect, misconduct, mistake, request to the transferee to return the funds previ­ or def; !t *r >ther bank or person, including a ously transferred or (2) in the case of an interoffice transferor. transaction, send a request to the transferee’s Fed­ (b) Subject to the limitations on liability stated eral Reserve Bank to request the transferee to above, where a Federal Reserve Bank s conduct, return funds previously transferred. notwithstanding its exercise of good faith and ordi­ (b) In the case of an erroneous or otherwise nary care, results in a failure to credit the amount of irregular transfer of funds, a Federal Reserve Bank a transfer item or request for a transfer item to the may, upon its own initiative or at the request of account maintained or used by a transferee on the another Federal Reserve Bank, request the trans­ day requested, the Federal Reserve Bank, unless feree to return funds previously transferred. otherwise instructed shall complete the transfer on the next business day with debits and credits posted Section 210.62—Final Payment, to the appropriate accounts as of the day the transfer was to have been consummated. Right to Withdraw or Use Funds (c) Subject to the limitations on liability stated (a) A transfer item or request for a transfer item above, if the failure to credit the amount of the issued by a transferor is finally paid at the time the transfer item or request for a transfer item to the transfer item is sent, or advice of credit for such account maintained or used by the transferee re­ item is sent or telephoned, to the transferee by a sulted from a failure on the part of any Federal Federal Reserve Bank, whichever occurs first. Reserve Bank to exercise ordinary care or to act in (b) Subject to the right of a Federal Reserve good faith, the transferor shall have the right to Bank to apply the transferred funds to an obligation recover from its Federal Reserve Bank any dam­ owed to the Federal Reserve Bank by the trans­ ages proximately caused by such failure: Provided, feree, credit given by a Federal Reserve Bank for a however, That whether any consequential damages transfer of funds to the transferee’s account be­ are proximately caused by the Federal Reserve comes available for withdrawal as of right by the Bank’s failure to exercise ordinary care or lack of transferee upon final payment of the transfer item good faith is a question of fact to be determined in or request for a transfer item. each case. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 671 (d) The transferee’s Federal Reserve Bank shall scope of authority previously delegated regarding be deemed to agree to indemnify the transferor’s acquisitions of shares of a bank. Federal Reserve Bank for any loss or expense Effective June 10, 1977, Part 265 is amended by sustained (including but not limited to attorneys’ renumbering subsections (33), (34), and (35) as (34), fees and expenses of litigation) as a result of the (35), and (36), respectively, and adding a new sub­ failure of the transferee’s Federal Reserve Bank to section (33) to read as follows: exercise ordinary care or to act in good faith with respect to a transfer item issued to it by the Section 265.2— Specific Functions transferor’s Federal Reserve Bank at the request of Delegated to Board Employees and to transferor. Federal Reserve Banks Section 210.65—Operating Circulars * * * * * Each Federal Reserve Bank shall issue operating (f) Each Federal Reserve Bank is authorized, as circulars (sometimes referred to as operating letters to member banks or other indicated organizations or bulletins), not inconsistent with this Subpart, headquartered in its district or under subparagraph governing the details of its funds transfer operations (f)(34) as to its own facilities: and containing such provisions as are required or permitted by this Subpart and such additional terms (33) Under the provisions of § 3(a)(3) of the and conditions as each Federal Reserve Bank may Bank Holding Company Act (12 U.S.C. impose. § 1842(a)(3)), to approve the acquisition by any bank holding company of additional voting % shares of a bank in which such bank holding company owns 25 per cent or more of any RULES REGARDING class of voting securities, if the proposal DELEGATION OF AUTHORITY generally is in conformity with the conditions The Board of Governors has amended its Rules specified in section 265.2(f) (24) of this part. Regarding Delegation of Authority to expand the (12 U.S.C. 248(k) and 12 U.S.C. 1844(b)). BANK HOLDING COMPANY AND BANK MERGER ORDERS ISSUED BY THE BOARD OF GOVERNORS Orders Under Section 3 ingly, the applications of Banco de Bogota and Banbogota have been considered together and this of Bank Holding Company Act Order contains the Board’s findings and conclu­ Banco de Bogota and Banbogota, Inc., sions with respect to both such applications. Bogota, Colombia Notice of the applications, affording opportunity for interested persons to submit comments and Order Approving Formation of views, has been given in accordance with § 3(b) of Bank Holding Companies the Act. The time for filing comments and views has Banco de Bogota, Bogota, Colombia, and its expired, and the Board has considered the applica­ proposed wholly-owned subsidiary. Banbogota, tions and all comments received in light of the Inc., New York, New York (“Banbogota”), have factors set forth in § 3(c) of the Act (12 U.S.C. applied for the Board’s approval under § 3(a)(1) of § 1842(c)). the Bank Holding Company Act (12 U.S.C. Banco de Bogota (deposits of approximately § 1842(a)(1)) of formation of bank holding companies $464 million), a Colombian commercial bank, is the through acquisition of 100 per cent of the voting largest of twenty-three private commercial banks in shares (less directors’ qualifying shares) of Banco Colombia. Banco de Bogota operates 254 branches de Bogota Trust Company, New York, New York in Colombia and has subsidiary banks in Ecuador (‘Trust Company”). Banbogota was organized and Panama, in addition to being a major shareholder solely for the purpose of acquiring and holding in several financial and nonfinancial institutions shares of Trust Company and has engaged in no in South America. None of these institutions con­ business activities and has no subsidiaries. Accord­ ducts any business in the United States. Banco de Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

672 Federal Reserve Bulletin □ July 1977 Bogota presently operates a branch in New York up to $15 million in additional equity capital during City with total deposits of approximately $22 mil­ the first three years of Trust Company’s operations. lion.1 Thus, the banking factors are consistent with ap­ A recently enacted Colombian law requires that proval of the applications. Trust Company would all banks operating in Colombia be Colombian conduct a wholesale commercial banking business corporations and be at least 51 per cent owned by that would promote trade between the United Colombian nationals. As a result of that law, United States and South America. The considerations re­ States banks are precluded from establishing lating to the convenience and needs of the commu­ branches in Colombia. New York State banking law nity to be served are consistent with approval of the provides that a foreign banking corporation or­ applications. It is the Board’s judgment that the ganized under the laws of a foreign country may be proposed transaction would be consistent with the licensed to maintain a branch or branches in New public interest and that the applications should be York if, under the laws of the foreign country, a approved. New York bank or trust company may be au­ On the basis of the record, the applications are thorized either to maintain a branch or agency or to approved for the reasons summarized above. The own all of the shares of a banking organization transaction shall not be made (a) before the thirtieth organized under the laws of the foreign country.2 calendar day following the effective date of this Banco de Bogota has been informed by the New Order or (b) later than three months after the date, York Banking Department that, as a result of the and (c) Trust Company shall be opened for business recently enacted Colombian law prohibiting not later than six months after the effective date of branches of foreign banks and foreign control of this Order. Each of the periods described in (b) and local banks, Banco de Bogota will have to close its (c) may be extended for good cause by the Board, New York branch. It is, however, permissible or by the Federal Reserve Bank of New York under New York law for Banco de Bogota to main­ pursuant to delegated authority. tain an agency in New York and to acquire a sepa­ By order of the Board of Governors, effective rately chartered subsidiary bank. Upon consumma­ June 22, 1977. tion of the proposed transaction, Banco de Bogota would operate both an agency and a subsidiary bank Voting for this action: Vice Chairman Gardner and Governors Wallich, Coldwell, Jackson, Partee, and Lilly. in the State. Absent and not voting: Chairman Burns. Trust Company would acquire all of the demand deposits of Banco de Bogota’s New York branch (Signed) Ruth A. Reister, and would rank 108th out of 121 banking organiza­ [seal] Assistant Secretary of the Board. tions in the relevant banking market.3 As indicated above, the proposed transaction represents a reor­ ganization of Banco de Bogota’s New York banking operations from a branch to a subsidiary bank and D. H. Baldwin Company, an agency. Accordingly, it does not appear that Cincinnati, Ohio consummation of the proposed transaction would Order Denying Acquisition of Bank result in the elimination of any existing or potential competition in the relevant market. Competitive D. H. Baldwin Company, Cincinnati, Ohio, a considerations, therefore, are consistent with ap­ bank holding company within the meaning of proval of the applications. the Bank Holding Company Act, has applied for The financial and managerial resources of Banco the Board’s approval under § 3(a)(3) of the de Bogota, Banbogota and Trust Company are Act (12 U.S.C. 1842(a)(3)) to directly acquire all considered satisfactory and the future prospects for of the voting shares of Rifle Bank Agency, Inc., each appear favorable. Banco de Bogota has com­ Rifle, Colorado (“Agency”), and to indirectly ac­ mitted that it will make available to Trust Company quire 89.6 per cent or more of Agency’s sole banking subsidiary, The First National Bank in 1 All banking data are as of December 31,1976. Rifle, Rifle, Colorado (“Bank”).1 2 N.Y. Bank Law § 202-a (McKinney 1971). 3 The relevant geographic market is defined to include the five boroughs of New York City, Nassau County, Westchester Coun­ 1 Agency, which became a bank holding company with respect ty, Putnam County, Rockland County, and western Suffolk to Bank as a result of the 1970 Amendments to the Bank Holding County in New York, as well as the northern two-thirds of Bergen Company Act of 1956, currently engages in a general insurance County and eastern Hudson County in New Jersey, plus south­ business on Bank’s premises. Upon acquisition by Applicant, western Fairfield County in Connecticut. Agency would cease all activities except holding shares of Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 673 Notice of the application, affording opportunity holding company not currently represented in the for interested persons to submit comments and market. This factor is even more significant when views, has been given in accordance with § 3(b) of considered in the light of the fact that the market is the Act. The time for filing comments and views has not particularly attractive for de novo entry by expired, and the Board has considered the applica­ banking organizations seeking to gain access to the tion and all comments received, including the denial Garfield County market. On the basis of the facts of recommendation of the United States Department record, including the views of the Department of of Justice, in light of the factors set forth in § 3(c) of Justice and Applicant’s response thereto, the Board the Act (12 U.S.C. 1842 (c)). concludes that approval of the application would Applicant, the fourth largest commercial banking have substantially adverse effects upon existing organization in Colorado, controls 12 banks with competition. aggregate deposits fo $651.4 million, representing On the basis of the foregoing and other facts of approximately 7.9 per cent of the total deposits held record, the Board concludes that the competitive by commercial banks in that State.2 Acquisition of considerations relating to this application weigh Bank (deposits of $12.9 million) would increase sufficiently against approval so that it should not be Applicant’s share of Statewide deposits by approx­ approved unless the anticompetitive effects are imately 0.1 per cent. Although consummation of clearly outweighed by benefits to the public in this proposal would not result in a significant in­ meeting the convenience and needs of the com­ crease in the concentration of banking resources in munities to be served. Colorado, it would have significant adverse effects The financial and managerial resources and fu­ upon both concentration and existing competition ture prospects of Applicant, its subsidiary banks, within the relevant banking market. Agency, and Bank are regarded as generally satis­ Bank, the only bank in Rifle and the largest of factory; however, these banking factors lend only two independent banks in Garfield County (the slight weight for approval of the application. Acqui­ relevant banking market), is the third largest of four sition of Bank by Applicant would enable Bank to banks operating in the market and controls approx­ improve its physical plant and its internal opera­ imately 17.0 per cent of market deposits. Appli­ tions, while also providing trust, leasing, and real cant’s sole banking subsidiary in the market is the estate loan packaging services to Bank’s customers. largest bank therein and controls approximately It appears, however, that the current convenience 57.4 per cent of market deposits. Therefore, con­ and needs of the community are already being summation of this proposal would further entrench served by Bank and that Applicant only offers the Applicant as the market’s largest banking organi­ community marginal benefits for which there is no zation and would significantly increase Applicant’s demonstrable need at this time. Therefore, con­ share of market deposits to approximately 74.4 per siderations relating to convenience and needs lend cent. Furthermore, the two-bank concentration only slight weight for approval of the application. ratio in the market would become 94.1 per cent, a The Board concludes that neither the con­ significant increase in the concentration of banking siderations relating to banking factors nor those resources in the market. relating to convenience and needs are sufficient to In addition to the significant adverse effects upon outweigh the substantially adverse competitive ef­ market concentration noted above, it appears that fects of Applicant’s proposal. the proposal also would have substantially adverse On the basis of the facts in the record, and in light effects upon existing competition within the Gar­ of the factors set forth in § 3(c) of the Act, it is the field County market. Applicant already operates in Board’s judgment that approval of the proposal the relevant market and the record indicates that would not be in the public interest. Therefore, the substantial competition between Applicant and application is denied for the reasons summarized Bank would be eliminated by this proposal. Fur­ above. thermore, consummation of this proposal would By order of the Board of Governors, effective reduce the number of banking alternatives operat­ June 15, 1977. ing in the market from four to three. Moreover, approval of the proposed transaction would remove Voting for this action: Vice Chairman Gardner and Bank as a viable entry vehicle for a Colorado bank Governors Coldwell, Jackson, Partee, and Lilly. Absent and not voting: Chairman Burns and Governor Wallich. 2A11 banking data are as of December 31, 1976, unless otherwise (Signed) G riffith L. G arwood, indicated, and reflect bank holding company formations and acquisitions approved as of May 31, 1977. [seal] Deputy Secretary of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

674 Federal Reserve Bulletin □ July 1977 First City Bancorporation of Texas, Inc., banking organizations.3 The Board has also noted Houston, Texas that a number of the State’s largest banking organi­ zations are not currently represented in that mar­ Order Approving Acquisition of Bank ket. Approval of this application will not foreclose First City Bancorporation of Texas, Inc., Hous­ the possibility of other competitors entering the ton, Texas, a bank holding company within the market either de novo (as four groups have done in meaning of the Bank Holding Company Act, has the last 17 months) or through acquisition of one of applied for the Board’s approval under § 3(a)(3) of the many independent banks in the market, and the Act (12 U.S.C. § 1842(a)(3)) to acquire 100 per thus Applicant’s acquisition of Bank should not cent, less director’s qualifying shares, of the voting significantly reduce the likelihood that the market shares of City National Bank of Austin, Austin, will become less concentrated in the future.4 Texas (“Bank”). While consummation of this proposal would elim­ Notice of the application, affording opportunity inate the possibility of Applicant entering the Aus­ for interested persons to submit comments and tin market de novo or through acquisition of one of views, has been given in accordance with § 3(b) of the numerous smaller independent banks, the the Act. The time for filing comments and views has Board is of the view that Applicant’s entry into the expired, and the Board has considered the applica­ Austin market should not be restricted to establish­ tion and all comments received in light of the ing a bank de novo or acquiring a foothold entry. factors set forth in § 3(c) of the Act (12 U.S.C. Thus, the Board is presently unable to conclude § 1842(c)). that consummation of the proposed transaction Applicant, the second largest banking organiza­ would have such adverse effects upon the concen­ tion in Texas as of December 31, 1976, controls 27 tration of banking resources or upon potential com­ banks with aggregate deposits of approximately petition within the Austin banking market as to $3.4 billion, representing 7.1 per cent of the total justify denial of the subject application. On the deposits in commercial banks in the State.1 Acqui­ other hand, approval of this application may have a sition of Bank, which holds deposits of $289 mil­ positive effect on competition in the market by lion, would increase Applicant’s share of total introducing a new and aggressive competitor into deposits in commercial banks in the State by 0.6 per the Austin banking market. cent causing it to become the largest banking or­ The financial and managerial resources of Appli­ ganization in the State. cant, its subsidiaries and Bank are considered gen­ Bank, the third largest of 20 banks in the relevant erally satisfactory and the future prospects of all market,2 controls total deposits of $289 million, appear favorable. Thus, the Board is of the view representing 16.3 per cent of total deposits in com­ that the banking factors involved in the proposal mercial banking institutions in the market. Appli­ are consistent with approval. cant is not currently represented in the Austin Information contained in the record indicates that banking market. There is virtually no existing com­ banks within the Austin market are not presently petition between Applicant’s banking subsidiaries fully meeting all of the banking needs of the area, es­ and Bank. Applicant’s nearest bank subsidiary is pecially the needs of large national and international located 118 miles southeast of Austin and Appli­ corporations located in the Austin vicinity. Applicant cant’s lead bank is located in Houston, 162 miles proposes to provide Bank with its specialized exper­ southeast of Austin. Thus, in view of the local tise in international banking, trust operations, data nature of banking markets, consummation of Ap­ processing, and commercial and investment serv­ plicant’s proposal would not have any significant ices. Applicant also plans to expand Bank’s credit adverse effects on existing competition within the relevant market. The Board has expressed the opinion that, in 3See Board’s Order of April 13, 1977, approving the application of Texas Commerce Bancshares, Inc., Houston, Texas, to merge view of the exceptionally rapid population and with The BanCapital Financial Corporation, Austin, Texas, 42 economic growth in the Austin area in recent years, Federal Register 20500 (1977); 63 Federal Reserve Bulletin 500 (1977). it appears that the market is attractive for entry by 4It appears that the Austin market is undergoing deconcentra­ tion. The aggregate market shares of the three largest banking organizations in the market declined from 70.2 per cent, as of year-end 1970 to 65.0 per cent at the year-end 1975. The opening of Unless otherwise indicated, all banking data are as of Septem­ four new banks in the market within the last 17 months also ber 30, 1976. reflects the market’s trend toward deconcentration, but has not 2The relevant geographic market is approximated by the Austin really lessened the market’s attractiveness for additional de novo SMSA, which is comprised of Hays and Travis Counties. entry. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 675 capability to better service the credit needs of the market given the attractiveness of the Austin mar­ community. Further, Applicant, through its insur­ ket for de novo entry, the capability of Applicant to ance subsidiary, would offer credit life and credit enter the market, and the expansion pattern dem­ accident and health insurance in connection with onstrated by the Applicant. (Applicant has ex­ extensions of credit by Bank at rates identical to panded into seven of the State’s twenty-five SMS A those approved by the Board for Applicant’s other or RMA markets.) Therefore, so long as Applicant subsidiaries. These rates represent significant re­ remains poised in the “wings” of the Austin mar­ ductions from the maximum rates now being ket, this potential competition exerts a beneficial charged by Bank. Accordingly, considerations re­ effect on the Austin market. If and when this lating to the convenience and needs of the com­ “wings” effect is eliminated by actual entry of the munities to be served lend some weight toward Applicant into the Austin market, it should be by a approval of the application. In view of the forego­ route that offsets elimination of this effect by deing, it is the Board’s judgment that Applicant’s concentrating that market, through de novo entry or acquisition of Bank would be in the public interest. by means of a “foothold acquisition.” On the basis of the record, the application is Prospects for deconcentration at a subsequent approved for the reasons summarized above. The time, the probable future competition effect, are transaction shall not be made (a) before the thirtieth also reduced by this acquisition. With the consum­ calendar day following the effective date of this mation of this acquisition, four of the five largest Order or (b) later than three months after the effec­ Texas organizations will already be represented in tive date of this Order, unless such period is ex­ the market, with two of these owning two of the tended for good cause by the Board, or by the Fed­ three largest banks in Austin, while the third owns eral Reserve Bank of Dallas pursuant to delegated the seventh largest Austin bank and the fifth largest authority. organization owns the fourth largest Austin bank. By order of the Board of Governors, effective The only one of these top five Texas holding June 17, 1977. companies that is not already in the market has Voting for this action: Chairman Burns and Governors expressed an interest in entering the Austin market. Gardner, Coldwell, Jackson, Partee, and Lilly. Voting The chances of the Austin banking market becom­ against this action: Governor Wallich. ing less concentrated and more competitive in the (Signed) G riffith L. G arw ood, future through de novo or foothold entry by the State’s major organizations have been significantly [seal] Deputy Secretary of the Board. reduced by the approval of this and the previous applications. In my opinion, this application represents merely Dissenting Statement of Governor Wallich the first of many that the Board will be receiving I would deny the application of First City Ban- based upon the majority’s views enunciated in the corporation of Texas, Inc., to acquire City National Texas Commerce case. I interpret those views as Bank of Austin, Austin, Texas. I cannot agree with indicating that de novo or foothold entry into attrac­ the majority’s view that the proposed acquisition tive markets will no longer be required of those may have a positive effect on competition in the organizations most capable of entering new markets Austin banking market. My reasons are those that in that manner. While not rigidly adhering to the were prescribed in my Dissenting Statement in the “Tyler Doctrine” (which prevented any of the four recent Texas Commerce decision.1 first-tier holding companies from acquiring the My dissent in this case rests again on the adverse largest banks in any of the secondary markets), I effects of this acquisition on potential competition. am aware that this view would have prevented a The Austin market is highly concentrated. City result such as this where the largest banks in a National Bank of Austin is one of the largest banks secondary market are all acquired by the largest in the market. I regard First City Bancorporation as holding companies. A repetition of this pattern in one of the most likely potential entrants into the other attractive secondary markets in Texas must be expected. Such a pattern would increase the size disparity between the largest Texas banking organi­ ^ee The Dissenting Statement of Governor Wallich accom­ zations and the rest of the State’s organizations, panying the Board Order approving the application of Texas thus leading to an increase in concentration ratios Commerce Bancshares, Inc., Houston, Texas to merge with The and a decrease in the number of effective com­ Bancapital Financial Corporation, Austin, Texas (63 Federal Reserve Bulletin 500 (1977)). petitors and competition within the State. Key Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

676 Federal Reserve Bulletin □ July 1977 banks in attractive secondary markets might well be tion and all comments received in light of the acquired by the largest organizations rather than be factors set forth in § 3(c) of the Act (12 U.S.C. acquired by second-tier holding companies or form § 1842(c)). the nucleus of regional bank holding companies. Applicant, the tenth largest banking organization Elimination of these large banks by acquisition by in the State of Texas,1 presently controls five banks the State’s largest holding companies significantly with aggregate deposits of $742.5 million, represent­ reduces the number of firms most capable of grow­ ing 1.5 per cent of the total deposits in commercial ing into more effective competitors in the future. banks in the State. Cullen, the eighteenth largest In addition, I believe that the convenience and banking organization in the State, presently con­ needs considerations relied upon by the majority trols two banks with aggregate deposits of $279.4 are insufficient to outweigh the significant adverse million, representing 0.6 per cent of total deposits in effects upon potential competition found in this commercial banks in the State. Upon consumma­ acquisition. The Supreme Court has consistently tion of the proposed transaction, Applicant would held that benefits accruing to only a portion of the rank as the State’s eighth largest banking organiza­ relevant market are insufficient to outweigh ad­ tion and control 2.1 per cent of the total deposits in verse competitive effects in the entire market under commercial banks in the State. In light of the the balancing test of the Bank Holding Company present structure of banking in Texas, the Board is Act. Moreover, special service to large national and of the view that approval of this application would international firms through the larger credit not have significantly adverse effects upon the resources of acquired (or merged) banks was spe­ concentration of banking resources in the State.2 cifically rejected as a counter-balancing conve­ With respect to the effects of the proposal on nience and needs argument to a local anticompeti­ existing competition, Applicant and Cullen do not tive effect in the Phillipsburg, Third National, and compete directly in any banking market within the Philadelphia National Bank cases. Banking markets State. Applicant is the largest commercial banking are local markets and anticompetitive effects in organization in the San Antonio banking market3 those markets cannot be outweighed by some spe­ with four of its subsidiaries controlling total de­ cialized service to a narrow segment of that market posits of $649 million or 23.8 per cent of total or by procompetitive effects in a different market. deposits in commercial banks in that market.4 Ap­ This application, and those that may follow, plicant’s fifth banking subsidiary is located in the represent the fruit growing from the Board’s Texas Corpus Christi banking market,5 wherein it is the Commerce decision. That decision, I believe, must fourth largest banking organization and controls be viewed as having an anticompetitive impact on deposits of $38.4 million or 4.4 per cent of total Texas banking market structure, both within local deposits in commercial banks in the market.6 On markets such as Austin and throughout the entire the other hand, Cullen’s lead bank, Cullen Center State. Bank & Trust, is located in the Houston banking For the foregoing reasons, I would deny this market, approximated by the Houston RMA, application. wherein Cullen ranks as the ninth largest banking organization and holds $195 million in deposits of FrostBank Corporation, 1.9 per cent of total deposits in commercial banks in San Antonio, Texas the market. Cullen’s second subsidiary bank, Citi­ zens National Bank of Dallas, is in the Dallas Order Approving Merger of Bank Holding banking market, which is approximated by the Companies FrostBank Corporation, San Antonio, Texas, a registered bank holding company within the mean­ XA11 banking data are as of June 30, 1976, unless otherwise ing of the Bank Holding Company Act, has applied specified and reflect bank holding company formations and acqui­ for the Board’s approval under § 3(a)(5) of the Act sitions approved through January 31, 1977. (12 U.S.C. § 1842(a)(5)) to merge with Cullen 2In particular, the Board notes that Applicant would rank a distant eighth behind four banking organizations with deposits in Bankers, Inc. (“Cullen”), a registered bank holding excess of $3 billion and three banking organizations with deposits company under the charter and title of Applicant. substantially in excess of $1 billion. Notice of the application, affording opportunity 3The San Antonio banking market is approximated by the San Antonio SMSA which is comprised of Bexar, Comal, and Guada­ for interested persons to submit comments and lupe Counties. views, has been given in accordance with § 3(b) of 4As of December 31, 1975. 5The Corpus Christi market is approximated by the Corpus the Act. The time for filing comments and views has Christi SMSA comprised of Nueces and San Patricio Counties. expired, and the Board has considered the applica­ sSupra n.4. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 677 Dallas RMA. Cullen is the ninth largest commercial interest and that the application should be ap­ banking organization in the Dallas market and holds proved. $84 million in deposits or 1.1 per cent of the total On the basis of the record, the application is deposits in commercial banks in the market. Inas­ approved for the reasons summarized above. The much as the distance separating the closest of transaction shall not be made (a) before the thirtieth Applicant’s and Cullen’s subsidiary banks is about calendar day following the effective date of this 197 miles and Applicant and Cullen do not compete Order or (b) later than three months after the effec­ in any relevant market, the Board concludes that tive date of this Order, unless such period is ex­ consummation of the proposed merger would not tended for good cause by the Board, or by the have any adverse effect upon existing competition. Federal Reserve Bank of Dallas pursuant to dele­ Although consummation of the proposed merger gated authority. would foreclose the possibility that either Applicant By order of the Board of Governors, effective or Cullen would enter the banking market of the June 6, 1977. other, the Board believes there is little likelihood of Voting for this action: Chairman Burns and Governors significant competition developing between the two Gardner, Wallich, Coldwell, Jackson, Partee, and Lilly. banking organizations in the absence of the subject proposal. It does not appear from the facts of (Signed) Ruth A. Reister, record that Cullen is a likely entrant into any of the [seal] Assistant Secretary of the Board. markets now served by Applicant. Although Appli­ cant does possess the necessary resources for entry into the Houston or Dallas market, this factor alone does not provide sufficient grounds for denial in view of the fact that Cullen does not occupy a significant position in either market. Granite Holding Corp., Accordingly, based on the foregoing and other Granite Falls, Minnesota facts of record, the Board concludes that consum­ Order Denying Formation of mation of the subject proposal will not have any Bank Holding Company significant adverse effects upon either existing or potential competition. Granite Holding Corp., Granite Falls, Minnesota, The financial and managerial resources of Appli­ has applied for the Board’s approval under section cant, Cullen, and their respective subsidiaries are 3(a)(1) of the Bank Holding Company Act (12 considered generally satisfactory and the future U.S.C. § 1842(a)(1)) of formation of a bank holding prospects for the resulting organization are satisfac­ company through acquisition of 100 per cent (less tory. In particular, it appears that the resulting directors’ qualifying shares) of the voting shares of organization will possess greater managerial depth Granite Falls Bank, Granite Falls, Minnesota and financial resources than either of the organiza­ (“Bank”). tions independently. Thus, the banking factors are Notice of the application, affording opportunity consistent with approval of the application. for interested persons to submit comments and There is no evidence indicating that the banking views, has been given in accordance with section needs of the residents of the relevant markets are 3(b) of the Act. The time for filing comments and not presently being met by the existing institutions. views has expired, and the application and all However, as a result of this proposal, Applicant comments received have been considered in light of will be able to provide the subsidiaries of Cullen the factors set forth in section 3(c) of the Act (12 with increased expertise in the provision of trust U.S.C. § 1842 (c)). and international banking services and Applicant Applicant is a recently chartered, nonoperating will also provide Cullen banks and their customers corporation, organized for the purpose of becoming with increased data processing services. Further, a bank holding company by acquiring Bank, which the larger combined legal lending limit for the holds deposits of $12.4 million.1 Upon acquisition resulting organization’s subsidiary banks would en­ of Bank, Applicant would control the 169th largest able the subsidiary banks to meet the needs of commercial banking organization in the State of larger borrowers. These considerations relating to Minnesota and would control approximately 0.08 convenience and needs are regarded as lending per cent of total deposits in commercial banks in some weight toward approval of the application. that State. Therefore, it is the Board’s judgment that consum­ mation of this transaction would be in the public XA11 banking data are as of June 30, 1976. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

678 Federal Reserve Bulletin □ July 1977 Bank, located in Granite Falls, Minnesota, is the factors. Accordingly, it is the Board’s judgment fifth largest of 11 commercial banks in the relevant that approval of the application to become a bank banking market and holds approximately 9.4 per­ holding company would not be in the public interest cent of the total commercial bank deposits in the and that the application should be denied. market.2 Since Applicant has no subsidiaries and On the basis of the facts of record, the application Applicant’s principals do not control any other is denied for the reasons summarized above. banks, it appears unlikely that consummation of the By order of the Board of Governors, effective proposal would have any adverse effect upon exist­ June 2, 1977. ing or potential competition or increase the concen­ Voting for this action: Chairman Burns and Governors tration of banking resources in any relevant area. Gardner, Wallich, Coldwell, Jackson, Partee, and Lilly. Thus, the Board concludes that the competitive effects of the proposal are consistent with approval (Signed) Griffith L. Garwood, of the application. [seal] Deputy Secretary of the Board. As part of this proposal, Applicant would assume approximately $325,000 in debt incurred by Bank’s principal shareholder in acquiring Bank’s shares. First National Charter Corporation, Applicant proposes to service this debt over a Kansas City, Missouri ten-year period exclusively with distributed earn­ Order Approving Acquisition of Bank ings of Bank. However, Bank’s historical earnings and the operating results of other banks located in First National Charter Corporation, Kansas City, the same geographic area suggest that Bank’s earn­ Missouri (“Applicant”), a bank holding company ings over the ten-year debt retirement period will within the meaning of the Bank Holding Company not be of the magnitude projected by Applicant in Act, has applied for the Board’s approval under planning for the servicing of its acquisition debt. In § 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to ac­ the Board’s view Bank would not provide Appli­ quire 80 per cent or more of the voting shares of The cant with necessary financial resources to meet Farmers Trust Company of Lee’s Summit, Lee’s Applicant’s annual debt servicing requirements as Summit, Missouri (“Bank”). well as any unexpected problems that might arise at Notice of the application, affording opportunity Bank. Furthermore, under the instant proposal, it for interested persons to submit comments and does not appear that Bank would maintain an views, has been given in accordance with § 3(b) of adequate level of capital throughout the debt re­ the Act. The time for filing comments and views has tirement period.3 Accordingly, the Board concludes expired, and the Board has considered the applica­ that Bank’s financial resources and future pros­ tion and all comments received in light of the pects, upon which Applicant is dependent, weigh factors set forth in § 3(c) of the Act (12 U.S.C. against approval of the application. § 1842(c)). No significant changes in Bank’s operations or in Applicant, the fourth largest banking organiza­ the services offered to customers of Bank are tion in Missouri, controls 18 banks with total de­ anticipated to follow from consummation of the posits of $919.2 million, representing 5.4 per cent of proposed acquisition. Consequently, convenience the total deposits in commercial banks in the State.1 and needs factors lend no weight toward approval. Acquisition of Bank (deposits of $18.7 million) On the basis of the entire record before it, the would increase Applicant’s share of commer­ Board concludes that the banking considerations cial bank deposits in Missouri by . 1 of one per cent involved in this proposal present adverse factors and would have no appreciable effect upon concen­ bearing upon the financial and managerial resources tration of banking resources in Missouri. and future prospects of both Applicant and Bank. Bank, the 59th largest of 134 commercial banks in Such adverse factors are not outweighed by any the relevant market2 holds approximately .4 per procompetitive effects or convenience and needs cent of the total commercial bank deposits in the market. Applicant has five banking subsidiaries in the Kansas City market and is the second largest 2The relevant banking market is approximated by southern Chippewa, eastern Lac Qui Parle, northeastern Yellow Medicine, and northwestern Renville Counties. 3Bank recently issued $300,000 of subordinated capital deben­ tures, scheduled to be retired in ten years. Since Applicant must banking data are as of June 30, 1976. rely on Bank’s dividends to service the acquisition debt, Bank will 2The Kansas City banking market is made up of the northern half be unable to retain sufficient earnings to build an adequate and of Cass County, all of Clay, Jackson and Platte Counties in permanent capital base. Missouri and Johnson and Wyandotte Counties in Kansas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 679 banking organization in the market, controlling 11.5 On the basis of the record, the application is per cent of market deposits. Upon consummation approved for the reasons summarized above. The of the proposed acquisition, Applicant’s share of transaction shall not be made (a) before the thirtieth commercial bank deposits in the market would calendar day following the effective date of this increase to 11.9 per cent and Applicant would Order or (b) later than three months after the become the market’s largest banking organization. effective date of this Order, unless such period is Inasmuch as Applicant and Bank are located in the extended for good cause by the Board, or by the relevant market, the proposed acquisition would Federal Reserve Bank of Kansas City pursuant to eliminate some existing competition and increase delegated authority. the concentration of banking resources in that mar­ By order of the Board of Governors, effective ket. However, the Board does not view such effects June 2, 1977. as being particularly serious in light of the competi­ Voting for this action: Chairman Burns and Governors tive banking structure in the Kansas City market. Gardner, Wallich, Coldwell, Jackson, Partee, and Lilly. Eight of the twenty largest banking organizations in Missouri are also represented in the market and are (Signed) Ruth A. Reister, among the ten largest banking organizations in the [seal] Assistant Secretary of the Board. market. In addition, even with the addition of Bank, Applicant’s share of market deposits would be only slightly greater than the shares held by the second and third largest banking organizations in the mar­ ket. While consummation of the proposal would Republic of Texas Corporation, reduce the number of independent banking organi­ Dallas, Texas zations in the Kansas City market, this does not appear to be significant since ninety-seven inde­ Order Denying Acquisition of Bank pendent commercial banks or one-bank holding companies would remain competing in the market. Republic of Texas Corporation, Dallas, Texas, a In light of the above and other facts of record, the bank holding company within the meaning of the Board concludes that the proposed acquisition Bank Holding Company Act, has applied for the would have only slightly adverse effects on compe­ Board’s approval under § 3(a)(3) of the Act (12 tition and, in light of the considerations discussed U.S.C. § 1842(a)(3)) to acquire all of the voting below, the Board does not view such effects as shares (less directors’ qualifying shares) of the being so serious as to require denial of this pro­ successor by merger to Preston State Bank, Dallas, posal. Texas (“Bank”). The bank into which Bank is to be The financial and managerial resources and fu­ merged has no significance except as a means to ture prospects of Applicant and its subsidiaries are facilitate the acquisition of the voting shares of regarded as generally satisfactory and consistent Bank. Accordingly, the proposed acquisition of with approval of the proposal. Applicant has com­ shares of the successor organization is treated mitted itself to take steps to improve Bank’s capital herein as the proposed acquisition of all the shares and intends to strengthen Bank’s management, of Bank. Applicant presently indirectly controls particularly in the areas of loans and investments. voting shares of Bank. Thus, the Board concludes that the financial and Notice of the application, affording opportunity managerial resources and future prospects of Bank for interested persons to submit comments and are consistent with, and lend some weight*toward, views, has been given in accordance with § 3(b) of approval of the application. It appears that the the Act. The time for filing comments and views has proposed affiliation of Bank with Applicant is likely expired, and the Board has considered the applica­ to result in an expansion of the services presently tion and all comments received in light of the offered by Bank, including Bank’s trust services factors set forth in § 3(c) of the Act (12 U.S.C. § and its lending operations. Thus, considerations 1842(c)). relating to the convenience and needs of the com­ Applicant, the fourth largest banking organiza­ munity to be served lend weight toward approval of tion in the State of Texas, has eight banking sub­ the application and, in the Board’s view, are suffi­ sidiaries with aggregate deposits of $2.8 billion, cient to outweigh any slight adverse competitive representing 5.9 per cent of commercial bank de­ effects that might result from consummation of the posits in the State. Acquisition of Bank, the State’s proposal. It is the Board’s judgment that the appli­ 30th largest banking organization, would increase cation should be approved. Applicant’s share of commercial bank deposits in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

680 Federal Reserve Bulletin □ July 1977 Texas by 0.35 per cent but would not alter Appli­ the Board views the effects of the proposal on cant’s ranking in the State.1 concentration in the Dallas banking market as an By Order dated October 25, 1973 (38 F.R. 30581), adverse factor in its consideration of this applica­ the Board approved the application of Applicant to tion. Those effects are regarded as more significant become a bank holding company through the direct in light of the fact that the market is already acquisition of Republic National Bank of Dallas somewhat concentrated with the three largest bank­ (“Republic Bank”) and the indirect acquisition of ing organizations holding 60.7 per cent of the de­ 29.9 per cent of the voting shares of Oak Cliff Bank posits. & Trust Company, Dallas, Texas. In addition to its In addition to having adverse effects upon the interest in Bank, Republic Bank at the time also concentration of banking resources in the Dallas owned indirectly between 5 and 24.99 per cent of banking market, consummation of the proposal the voting shares in twenty other banks, seventeen would eliminate substantial existing competition of which were in the Dallas banking market.2 Ap­ between Bank and Applicant’s subsidiary banks, plicant represented to the Board that it would file particularly Republic Bank. Applicant maintains separate applications for prior approval by the that Bank and Republic Bank serve essentially Board for acquisition of additional shares in each of different kinds of customers,4 and that the long­ certain of those banks, and would divest completely standing relationship between Republic Bank and its interests in others. In its Order the Board stated Bank lessens the competition between them. While that each such application filed by the Applicant Applicant or Republic Bank has indirectly owned would be considered on its own merits in light of the 20 per cent or more of the shares of Bank since statutory standards set forth in § 3 of the Act. Since 1941, Republic Bank did not sponsor Bank’s forma­ that time Applicant has divested its interests in tion in 1939, and it appears that the nature of the seven of the Dallas-area banks, and has applied to relationship has not been such that it has precluded acquire additional shares of four of the Dallas-area the development of meaningful competition be­ banks.3 tween Republic Bank and Bank. Furthermore, the Bank is the seventh largest banking organization record shows that each derives a significant amount and the sixth largest bank in the Dallas banking of its deposits from the service area of the other, market and holds deposits of $167.0 million, repre­ and that Republic Bank and Bank are, respectively, senting 1.8 per cent of the total deposits of com­ the first and second largest issuer of credit card plan mercial banks in the market. Applicant is already a loans in the market with 32.3 and 25.4 per cent, significant competitor in the Dallas banking market. respectively, of all card plan loans held by banks in The recent addition of Garland Bank and Dallas the Dallas banking market. Thus, the Board con­ National Bank as subsidiaries increased Appli­ cludes that consummation of the proposal would cant’s share of the deposits to 25.4 per cent, and at eliminate substantial existing competition between the present time Applicant controls the second and Applicant and Bank. Accordingly, the Board finds ninth largest banks in the market plus two smaller on the basis of the foregoing and other facts of banks. In addition, the nine banks in the Dallas record that competitive considerations relating to market (including Bank) in which Applicant pres­ this application weigh sufficiently against approval ently holds minority interests have aggregate de­ so that it should not be approved unless the anti­ posits of $416.3 million, representing 4.5 per cent of competitive effects are clearly outweighed by bene­ market deposits. The acquisition of Bank would fits to the public in meeting the convenience and increase Applicant’s share of market deposits to needs of the community to be served. 27.2 per cent and entrench its position as the largest The financial and managerial resources of Appli­ banking organization in the market. Accordingly, cant, its subsidiaries and Bank are regarded as generally satisfactory and consistent with approval of the application. Considerations relating to bank­ ing factors are also consistent with approval of the 1A11 banking data are as of June 30, 1976. By separate Order application. While Applicant proposes to expand dated March 23, 1977 (42 F.R. 16855 and 16856) the Board Bank’s commercial and industrial lending, there is approved Applicant’s acquisition of Dallas National Bank in Dallas (formerly Fair Park National Bank of Dallas) Dallas, Texas, and no indication that the needs of Bank’s customers First National Bank in Garland, Garland, Texas (“Garland Bank”). Applicant consummated both of these acquisitions on May 2, 1977. 2The Dallas banking market is approximated by the Dallas RMA. 4Applicant characterizes the business of Republic Bank as 3By separate action of this date, the Board approved Applicant’s “wholesale banking” and that of Bank as “consumer banking”. acquisition of Midway National Bank of Grand Prairie, Grand The Board does not view this as an appropriate distinction for Prairie, Texas. purposes of competitive analysis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 681 are not currently being met, and that the proposed Applicant, the fourth largest banking organiza­ new loans cannot be obtained elsewhere in the tion in the State of Texas, has eight banking sub­ Dallas banking market. Accordingly, the Board sidiaries with aggregate deposits of $2.8 billion, finds that considerations relating to convenience representing 5.9 per cent of commercial bank de­ and needs of the community to be served do not posits in the State. Acquisition of Bank, one of the outweigh the adverse competitive effects that State’s smaller banking organizations, would in­ would result from Applicant’s acquisition of Bank. crease Applicant’s share of commercial bank de­ On the basis of the facts in the record, and in light posits in Texas by only 0.06 per cent.1 of the factors set forth in § 3(c) of the Act, it is the By Order dated October 25, 1973 (38 F.R. 30581), Board’s judgment that approval of the proposal the Board approved the application of Applicant to would not be in the public interest. Accordingly, become a bank holding company through the direct the application is denied for the reasons sum­ acquisition of Republic National Bank of Dallas marized herein. (“Republic Bank”) and the indirect acquisition of By Order of the Board of Governors, effective 29.9 per cent of the voting shares of Oak Cliff Bank June 20, 1977. & Trust Company, Dallas, Texas. In addition to its interest in Bank, Republic Bank at the time also owned indirectly between 5 and 24.99 per cent of Voting for this action: Vice Chairman Gardner and Governors Wallich, Jackson, Partee and Lilly. Absent and the shares of twenty other banks, seventeen of not voting: Chairman Burns and Governor Coldwell. which were in the Dallas banking market.2 Appli­ cant represented to the Board that it would file (Signed) Ruth A. Reister, separate applications for prior approval by the [seal] Assistant Secretary of the Board. Board for acquisition of additional shares in each of certain of those banks, and would divest completely its interests in others. In its Order the Board stated that each such application filed by Applicant would be considered on its own merits in light of the statutory standards set forth in § 3 of the Act. Since Republic of Texas Corporation, that time Applicant has divested its interests in Dallas, Texas seven of the Dallas-area banks, and has applied to Order Approving Acquisition of Bank acquire additional shares of four of the Dallas-area banks.3 Republic of Texas Corporation, Dallas, Texas, a Bank is the 34th largest banking organization in bank holding company within the meaning of the the Dallas banking market and holds deposits of Bank Holding Company Act, has applied for the $29.3 million, representing 0.3 per cent of the total Board’s approval under § 3(a)(3) of the Act (12 deposits held by commercial banks in the market. U.S.C. § 1842(a)(3)) to acquire all of the voting Applicant is already a significant competitor in the shares (less directors’ qualifying shares) of the Dallas banking market. The recent addition of Gar­ successor by merger to Midway National Bank of land Bank and Dallas National Bank as subsidiaries Grand Prairie, Grand Prairie, Texas (“Bank”). The increased Applicant’s share of the deposits to 25.4 bank into which Bank is to be merged has no per cent, and at the present time Applicant controls significance except as a means to facilitate the the second and ninth largest banks in the market acquisition of the voting shares of Bank. Accord­ plus two smaller banks. In addition, the nine banks ingly, the proposed acquisition of shares of the in the Dallas market (including Bank) in which successor organization is treated herein as the Applicant presently holds minority interests have proposed acquisition of the shares of Bank. Appli­ aggregate deposits of $416.3 million, representing cant presently indirectly controls 24.9 per cent of 4.5 per cent of market deposits. the voting shares of Bank. Notice of the application, affording opportunity for interested persons to submit comments and XAI1 banking data are as of June 30, 1976. By separate Orders views, has been given in accordance with § 3(b) of dated March 23, 1977 (42 F.R. 16855 and 16856) the Board the Act. The time for filing comments and views has approved Applicant’s acquisition of Dallas National Bank in Dallas (formerly Fair Park National Bank of Dallas) Dallas, Texas, and expired, and the Board has considered the applica­ First National Bank in Garland, Garland, Texas (“Garland tion and all comments received, including those of Bank”). Applicant consummated both of these acquisitions on the Comptroller of the Currency, in light of the May 2, 1977. 2The Dallas banking market is approximated by the Dallas RM A. factors set forth in § 3(c) of the Act (12 U.S.C. 3By separate action of this date, the Board denied Applicant’s § 1842(c)). proposal to acquire Preston State Bank, Dallas, Texas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

682 Federal Reserve Bulletin □ July 1977 While consummation of the proposal would ap­ Voting for this action: Vice Chairman Gardner and pear to eliminate some existing competition inas­ Governors Wallich, Jackson, Partee and Lilly. Absent and not voting: Chairman Burns and Governor Coldwell. much as Applicant and Bank operate in the same market, the Board notes that Applicant, or its (Signed) Ruth A. Reister, predecessor in interest, Republic Bank, has held 20 [seal] Assistant Secretary of the Board. per cent or more of the shares of Bank since its formation in 1963, and that the nature of this relationship is such that little, if any, meaningful The Royal Trust Company, competition presently exists between Bank and Royal Trust Bank Corp., Applicant’s subsidiary banks in the Dallas market. Montreal, Quebec, Canada But for the history of the established relationship between Applicant and Bank, the effects on exist­ Order Approving Acquisition of Bank ing competition would be viewed as more serious, The Royal Trust Company, Montreal, Quebec, but viewed in light of that relationship the effects Canada (“Applicant”), and its wholly-owned sub­ are only slight. Moreover, while Applicant is one of sidiary, Royal Trust Bank Corp., Miami, Florida the largest organizations in the banking market, in (“Bank Corp.”), both of which are bank holding view of the facts presented in the record of this companies within the meaning of the Bank Holding application, the Board does not regard the slight Company Act, have applied for the Board’s ap­ increase in concentration of market deposits as proval under § 3(a)(3) of the Act (12 U.S.C. significant. Accordingly, the Board concludes that § 1842(a)(3)) to acquire all of the voting shares of the proposed acquisition of Bank by Applicant Royal Trust Bank of South Dade, N.A., Dade would not have significant adverse effects on com­ County, Florida, a proposed new bank (“Bank”). petition. Notice of the applications, affording opportunity The financial and managerial resources of Appli­ for interested persons to submit comments and cant, its subsidiaries, and Bank are regarded as views, has been given in accordance with § 3(b) of generally satisfactory and consistent with approval the Act. The time for filing comments and views has of the application. Considerations relating to bank­ expired, and the Board has considered the applica­ ing factors are also consistent with approval of the tions and all comments received in light of the application. Following consummation of the trans­ factors set forth in § 3(c) of the Act (12 U.S.C. action, Applicant intends to assist Bank in expand­ § 1842(c)). ing its residential real estate lending activities, as Applicant, with total assets of approximately $4.3 well as its commercial loan and deposit services. billion,1 is the largest trust company and the eighth These considerations relating to convenience and largest financial institution in Canada, and oper­ needs of the community to be served do not appear ates, through its subsidiaries and other interests, in to be substantial but they do lend some weight both Europe and the Caribbean Islands. In the toward approval of the application, and in the United States, Applicant controls six Florida banks Board’s view, outweigh any slightly adverse effects ($184.7 million in deposits)2 and one nonbank sub­ on competition that might result from consumma­ sidiary.3 Consummation of the subject proposal tion of this proposal. Accordingly, it is the Board’s judgment that the proposed acquisition would be in the public interest and that the application should be approved. XA11 banking data are as of December 31, 1976, unless otherwise indicated and reflect bank holding company formations and On the basis of the record, the application is acquisitions approved by the Board through April 30, 1977. approved for the reasons summarized above. The 2Applicant currently controls five of these banks through Bank Corp. which was formed in 1976 as a wholly-owned subsidiary of transaction shall not be made (a) before the thirtieth Applicant in order to hold directly Applicant’s banking interests in calendar day following the effective date of this the United States. Order or (b) later than three months after the information Systems Design of Florida, Inc., Miami, Florida (“ISD-Florida”) was formed as a subsidiary of Information effective day of this Order, unless such period is Systems Design, Inc., Santa Clara, California (“ISD-California”) extended for good cause by the Board, or by the in 1971. While ISD-Florida is fully engaged in data processing Federal Reserve Bank of Dallas pursuant to dele­ activities permissible for bank holding companies within the scope of Regulation Y, 12 CFR § 225.4(a)(8), ISD-California is not. ISDgated authority. California is, in turn, owned by Computel Systems, Ltd. (“Computel”), a Canadian data processing company. By Order of December 6, 1973, the Board denied Applicant’s retention of ISD- California after Applicant’s acquisition of Computel pursuant to § By Order of the Board of Governors, effective 4(c)(9) of the Act [60 Fed. Res. Bulletin 58 (1974)]. On January June 20, 1977. 31, 1977, the Board approved in principle a plan of divestiture of ISD- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 683 would not have an immediate effect upon the con­ toward approval of the application. It is the Board’s centration of banking resources in Florida. judgment that the proposed acquisition would be in Bank will be located in the southern part of Dade the public interest and that the applications should County approximately four miles from the Univer­ be approved. sity of Miami’s south campus. With two subsidiary On the basis of the record, the applications are banks in the relevant market,4 Applicant controls approved for the reasons summarized above. The $107 million in deposits, or approximately 1.7 per transaction shall not be made (a) before the thirtieth cent of market deposits,5 and is the 18th largest of calendar day following the effective date of this 46 banking organizations (with 110 banks) operating Order or (b) later than three months after that date, in the market. Florida’s six largest bank holding and (c) Royal Trust Bank of South Dade, N.A., companies are also represented in the market. Dade County, Florida, shall be opened for business Although Applicant is already competing in the not later than six months after the effective date of market, its lead bank and its closest subsidiary this Order. Each of the periods described in (b) and bank, Royal Trust Bank of Miami, N.A., is located (c) may be extended for good cause by the Board, 12.3 miles north of Bank’s proposed location.6 Due or by the Federal Reserve Bank of Atlanta pursuant to the relative size of Applicant, the distances to delegated authority. separating Bank from Applicant’s other subsidiary By order of the Board of Governors, effective banks, and the fact that Bank is a proposed new June 20, 1977. bank, consummation of Applicant’s proposal would Voting for this action: Chairman Burns and Governors not appear to eliminate any potential competition, Gardner, Wallich. Jackson, Partee, and Lilly. Absent and nor would it significantly increase the concentration not voting: Governor Coldwell. of banking resources, in the relevant market. Ac­ (Signed) G riffith L. Garwood, cordingly, the Board concludes that competitive [seal] Deputy Secretary of the Board. considerations are consistent with approval of the applications. The financial and managerial resources and fu­ ture prospects of Applicant, Bank Corp. and their Trade Development Holland Holding B.V., subsidiaries are regarded as satisfactory. As a pro­ Trade Development Finance posed new bank, Bank has no financial or operating (Netherlands Antilles) N.V. history; however, its prospects as a subsidiary of Amsterdam, The Netherlands Applicant appear favorable. Considerations relating to banking factors, therefore, are consistent with Order Approving Formation of Bank Holding approval of the application. Companies Bank will serve as an additional full service Trade Development Holland Holding B.V. banking alternative in the relevant market, and (“TDHH”), Amsterdam, The Netherlands, and its affiliation with Applicant will enable Bank to offer parent corporation, Trade Development Finance international banking services, accounts receivable (Netherlands Antilles) N.V. (“TDFNA”), Curacao, financing, factoring, investment management, and The Netherlands Antilles, have applied for the investment portfolio analysis. Thus, these con­ Board’s approval under section 3(a)(1) of the Bank siderations relating to the convenience and needs of Holding Company Act (12 U.S.C. § 1842(a)(1)) to the community to be served lend some weight become bank holding companies through direct acquisition by TDHH of approximately 40 to 47 per cent of the voting shares of Republic New York California that had been submitted by Applicant. Immediately Corporation (“Republic”), New York, New York, prior to consummation of the divestiture proposal, Applicant will increasing thereby TDHH’s direct ownership and retain ISD-Florida through a corporate reorganization by which ISD-Florida will be transferred to Applicant or to another TDFNA’s indirect ownership of Republic’s voting subsidiary of Applicant. shares from approximately 22 per cent to between 4The Greater Miami banking market, the relevant market, 62 and 69 per cent. Republic is a bank holding includes Dade County and that portion of Broward County lying south of the Dania Canal. The northern boundary of the market company that owns all the voting shares, except area is delineated by the Dania Canal, the Miami International directors’ qualifying shares, of Republic National Airport, and a tract of undeveloped land extending across Broward County. Bank of New York (“Bank”), New York, New 5A11 market data are as of June 30, 1976. York. 6In addition, Applicant’s lead bank, has received approval from Notice of the applications, affording opportunity the Regional Administrator of National Banks to open two branches, one 17 miles and the other 7.7 miles from Bank. for interested persons to submit comments and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

684 Federal Reserve Bulletin □ July 1977 views, has been given in accordance with § 3(b) of will be no immediate change in the services offered the Act. The time for filing comments and views by Bank as a result of consummation of the has expired, and the Board has considered the proposal, convenience and needs considerations applications and all comments received in light of are also consistent with approval of the applica­ the factors set forth in § 3(c) of the Act (12 U.S.C. tions. Therefore, it is the Board’s judgment that the § 1842(c)). proposed transactions should be approved. These applications are essentially for a reorgani­ As part of their applications, Applicants have zation of existing ownership interests in Republic. contended that they should be considered foreign TDFNA is a wholly-owned subsidiary of Trade bank holding companies. Under sections 2(h) and Development Bank Holding S.A. (“TDBH”), Lux­ 4(c)(9) of the Act and section 225.4(g) of Regulation embourg, Luxembourg, a foreign bank holding Y, foreign bank holding companies are entitled to company registered under the Act by virtue of its greater regulatory freedom than domestic bank indirect ownership of 62 per cent of Bank.1 Upon holding companies with regard to their foreign approval of these applications, TDHH will investments and foreign activities. Applicants are in acquire approximately 40 per cent of the the process of submitting to the Board information shares of Republic from two wholly-owned required to clarify their claim of foreign bank hold­ subsidiaries of TDBH. It will purchase approximately ing company status under § 225.4(g)(1) of the 27 per cent of Republic’s shares from Trade Board’s Regulation Y, but have asked the Board Development Bank, Geneva, Switzerland, and not to delay action on the present applications approximately 13 per cent from Trade Development pending a determination of their status.2 The sig­ Europe Holding B.V., Amsterdam, The Nether­ nificance of foreign bank holding company status lands. These transactions will result in direct under the Act and Regulation Y relates principally ownership by TDHH and indirect ownership by to exemptions from the nonbanking prohibitions of TDFNA of approximately 62 per cent of Republic’s section 4 of the Act.3 For bank acquisitions under shares. The indirect interest of TDBH and its section 3 of the Act, the factors that the Board must parent corporation, Saban S.A., Panama, Panama, consider under section 3(c) of the Act apply equally which is also a registered bank holding company, to both domestic and foreign companies. Since, as will be unaffected. An additional seven per cent of discussed below, it appears that only one existing Republic’s shares, however, may be purchased by foreign investment of Applicants may be affected TDBH from unaffiliated persons and transferred to by the ultimate determination of Applicants’ status TDHH under Applicants’ proposal. Since Ap­ as foreign or domestic bank holding companies and plicants’ proposal represents essentially a reorgani­ since it further appears that this investment does zation of existing intermediate interests among not bear significantly on the factors that the Board TDBH’s subsidiaries, and does not affect ultimate must consider under § 3(c) of the Act, the Board control or beneficial ownership of Bank, consum­ does not view the current inquiry regarding Appli­ mation of the proposal would not eliminate banking cants’ status as an impediment to approval of these competition or increase the concentration of applications. Accordingly, Applicants shall be deemed banking resources. Thus, competitive considera­ to be domestic bank holding companies unless they tions are consistent with approval of the applica­ later establish by satisfactory evidence their en­ tions. The financial and managerial resources and future prospects of Applicants and Bank are regarded as generally satisfactory and consistent 2Incident to Applicants’ request for expedited processing of these applications, Applicants’ counsel has advised them to with approval of the applications. Although there undertake no activities and make no investments except in accordance with rules applicable to domestic bank holding companies. 3Bank holding companies that do not qualify as foreign bank holding companies under section 225.4(g) of Regulation Y must xBank is the fourteenth largest commercial bank in the apply to retain or acquire shares of foreign companies under Metropolitan New York Market, and holds $1.6 billion in section 225.4(f) of Regulation Y which implements section 4(c)(13) consolidated deposits, or 0.7 per cent of the deposits in of the Act. In general, under section 225.4(f) of Regulation Y commercial banks in the market. All banking data are as of domestic bank holding companies are limited to owning and December 31, 1976. Market data are as of June 30, 1975. The controlling shares of foreign companies that are engaged in Metropolitan New York banking market is approximated by the international or foreign banking and other foreign or international five boroughs of New York City, plus Nassau, Putnam, Rockland, financial operations. In contrast, under section 4(c)(9) a foreign and Westchester Counties, and western Suffolk County, all in bank holding company can own and control shares of any foreign New York State, as well as the northern two-thirds of Bergen company, regardless of the activities the company is engaged in, County and eastern Hudson County in New Jersey and south­ so long as it is only engaged in incidental activities in the United western Fairfield County in Connecticut. States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 685 titlement under section 225.4(g) of Regulation Y to a Notice of the application, affording opportunity different status.4 for interested persons to submit comments and Upon consummation of the proposed acquisi­ views, has been given in accordance with § 3(b) of tions, Applicants must conform their investments the Act. The time for filing comments and views has and activities to those provisions of the Act appli­ expired, and the Board has considered the applica­ cable to domestic bank holding companies. Spe­ tion and all comments received, including, but not cifically, Applicants will be required by law to limited to, those on behalf of shareholders and divest their voting shares of Trade Development customers of Bank filed by Messrs. Frank Feivor Bank (France) S. A., Paris, France, in excess of five and Walter Karth (hereinafter collectively referred per cent, within two years after the date on which to as “Protestants”) in light of the factors set forth they become bank holding companies, unless in § 3(c) of the Act (12 U.S.C. § 1842(c)). within that time the Board determines Applicants to Applicant, the sixth largest banking organization be foreign bank holding companies or approves in Wisconsin, controls 14 banks with total deposits their retention of those shares under section of $295.1 million, which represents 1.8 per cent of 4(c)(13) of the Act. total deposits in commercial banks in the State.1 On the basis of the record, the applications are Bank, with deposits of $51.3 million, controls .31 approved for the reasons summarized above. The per cent of total deposits in the State. Consumma­ transactions shall not be made before the thirtieth tion of the proposed acquisition would increase calendar day following the effective date of this Applicant’s share of statewide deposits to 2.1 per Order, or later than three months after the effective cent, and Applicant would become the fifth largest date of this Order, unless such period is extended banking organization in the State of Wisconsin. for good cause by the Board or by the Federal Inasmuch as the five largest banking organizations Reserve Bank of New York pursuant to delegated in Wisconsin hold only 31.5 per cent of the total authority. deposits in the State, consummation of the proposal By order of the Board of Governors, effective would have no appreciable effect on the concentra­ June 20, 1977. tion of banking resources in the State. While Applicant is not currently represented in Voting for this action: Vice Chairman Gardner and Governors Wallich, Coldwell, Jackson, Partee, and Lilly. the relevant market, three of its subsidiary banks Absent and not voting: Chairman Burns. each maintain an office 28 to 30 miles from Bank’s sole office. The three offices are located in Out­ (Signed) Ruth A. Reister, agamie County, in which Applicant’s subsidiary [seal] Assistant Secretary of the Board. banks maintain six additional offices. Although eight of Applicant’s fourteen subsidiary banks de­ rive deposits from Bank’s service area, the aggre­ gate of those deposits amounts to less than 4For some companies, domestic bank holding company status $200,000, and none derives more than $62,000. The could entail a significant divestiture of interests in foreign aggregate amount of loans Applicant’s subsidiaries companies, and this requirement could materially affect the financial resources and future prospects of the companies under derive from Bank’s service area is less than section 3 of the Act. In connection with the present applications, $30,000. Conversely, Bank does not derive signifi­ however, domestic bank holding company status will not cant amounts of deposits or loans from the service necessarily involve any significant divestiture by either Applicant. areas of Applicant’s subsidiaries. Accordingly, it does not appear that Applicant’s acquisition of Bank would eliminate significant amounts of exist­ ing competition. Valley Bancorporation, Applicant proposes to enter the Shawano bank­ Appleton, Wisconsin ing market2 by acquiring the largest of ten banking organizations in that market, with 32.8 per cent of Order Approving Acquisition of Bank total market deposits.3 The Shawano market does Valley Bancorporation, Appleton, Wisconsin, a not appear attractive for de novo entry and 12 large bank holding company within the meaning of the Bank Holding Company Act, has applied for the Board’s approval under § 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to acquire 80 per cent or more *A11 banking data are as of December 31, 1976. of the voting shares of Shawano National Bank, 2The Shawano banking market is approximated by Shawano County and the southern one-half of Menominee County. Shawano, Wisconsin (“Bank”). 3Market data are as of June 30, 1976. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

686 Federal Reserve Bulletin □ July 1977 multibank holding companies, including the five tion to the directors of Bank prior to making its largest banking organizations in the State, appear to tender offer, Applicant forwarded a copy of the be as likely to enter the Shawano market as Appli­ application to Bank on the same day that it filed the cant. In light of the above, the Board concludes the application with the Federal Reserve Bank of proposed acquisition would not have significant Chicago. Furthermore, Applicant’s letter proposing adverse effects on potential competition. the tender offer indicated that Applicant proposed The financial and managerial resources of Appli­ to incur debt in connection with the acquisition, and cant and Bank are regarded as satisfactory and the the specific financing proposal was not put into final future prospects for each appear favorable. Protes­ form until it was incorporated in the application tants contend that this application should be denied which, as noted above, was promptly forwarded to on the grounds that the financial and managerial Bank. resources of Applicant are inadequate in that Ap­ Protestants state that Applicant’s tender offer is plicant would assume more debt than it can retire below the market value of Bank’s shares. The without extracting earnings from Bank and Appli­ record in this application indicates the Applicant’s cant’s subsidiary banks. In connection with the offer was the highest of the competing bids made to acquisition of Bank, Applicant will incur debt of the shareholders, and that the protesting share­ $5.5 million through the issuance of four-year unse­ holders were among those shareholders owning cured promissory notes and 12-year corporate 97.5 per cent of the Bank’s shares who accepted the notes.4 Applicant proposes to service its new debt offer. Bank’s own analysis of the projected market primarily through dividends from its subsidiary value of its shares indicated that Applicant’s offer banks and consolidated tax benefits. Applicant’s represented a premium on market value. There is projections of cash flow requirements and growth in nothing in the record to support Protestants’ opin­ assets, earnings, and capital of subsidiary banks ion that the offer was inadequate, other than a appear reasonable in light of historical data. It statement by Protestants that an unidentified expert appears, based upon those projections, that Appli­ indicated a higher market value for Bank’s shares. cant can service the acquisition debt without impos­ In light of the above and other facts of record, the ing excessive burdens on the capital of Bank and its Board is unable to conclude that Applicant’s con­ other subsidiary banks. In light of the above the duct relating to the tender offer reflects adversely Board regards the financial and managerial re­ on its managerial resources. sources of Applicant and Bank as satisfactory and consistent with approval. Protestants also claim that the convenience and needs of the community to be served would not be Protestants argue that the manner in which ten­ aided by the proposed acquisition. Specifically, der offers were made to Bank’s shareholders re­ they state that transferring control of Bank outside flects adversely on the management of Applicant. of the Shawano community will make Bank less Protestants assert that the presidents of Bank and responsive to local needs. In this connection Appli­ Applicant conducted negotiations without the cant has indicated that a representative of the knowledge of Bank’s directors and that Bank’s Shawano community would be named to Appli­ directors did not have an opportunity to analyze the cant’s Board of Directors upon consummation of specific proposal, including the debt financing, that the proposal. In addition, while it appears that the Applicant later submitted to the Board. The record banking needs of the Shawano area are adequately before the Board in this case, including submissions served at present, Applicant has stated its intention by Protestants and Applicant, does not indicate any to improve and expand Bank’s services in the areas impropriety or questionable actions in the prepara­ of real estate mortgages, farm loans, loan opera­ tion of Applicant’s tender offer. The board of tions, employee fringe benefits, data processing, directors of Bank endorsed Applicant’s offer to and personnel services. Applicant also proposes to Bank’s shareholders following a series of presenta­ offer investment advice at no charge to local tions to the board by Applicant and rival offerors, municipalities and to provide equity capital to Bank and any discussions between officers of Bank and when necessary. In light of these factors the Board Applicant were conducted in consultation with legal regards considerations of the convenience and counsel. While Applicant did not submit its applica­ needs of the community to be served as lending weight in favor of approval of the application. On the basis of the record, the application is 4 Approximately $1 million of this debt will be used for corporate approved for the reasons summarized above. The purposes other than the proposed acquisition, including improving the capital position of subsidiary banks. transaction shall not be made (a) before the thirtieth Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 687 calendar day following the effective date of this published (42 Federal Register 17524). The time for Order or (b) later than three months after the filing comments and views has expired, and the effective date of this Order, unless such period is Board has considered the application and all com­ extended for good cause by the Board, or by the ments received in the light of the public interest Federal Reserve Bank of Chicago pursuant to dele­ factors set forth in § 4(c)(8) of the Act (12 U.S.C. gated authority. § 1843(c)(8)). By order of the Board of Governors, effective Applicant is a one-bank holding company con­ June 29, 1977. trolling the largest commercial bank in the world, Bank of America NT&SA, San Francisco, Califor­ Voting for this action: Vice Chairman Gardner and Governors Wallich, Jackson, Partee and Lilly. Absent and nia. As of December 31, 1976, Bank of America not voting: Chairman Burns and Governor Coldwell. NT&SA held total domestic deposits of approxi­ mately $33.5 billion, representing 37.7 per cent of (Signed) Ruth A. Reister, total deposits in commercial banks in the State of [seal] Assistant Secretary of the Board. California, and total foreign deposits of approxi­ mately $27.9 billion. Applicant also controls non­ banking subsidiaries primarily engaged in providing data processing services, leasing activities, invest­ Orders Under Section 4 ment advisory services, the sale and underwriting of Bank Holding Company Act of credit-related insurance, the sale and issuance of travelers’ checks, and mortgage banking. BankAmerica Corporation, By Order dated August 14, 1973, the Board San Francisco, California approved, subject to certain conditions, Appli­ cant’s proposal to acquire shares of GAC Finance, Order Approving Continuation of Data Processing Inc., Allentown, Pennsylvania (“Finance”). As a Activities through Finance America subsidiary of Applicant, Finance was renamed BankAmerica Corporation, San Francisco, Finance America Corporation. FAC is lawfully en­ California, a bank holding company within the gaged in the activities of making direct loans to meaning of the Bank Holding Company Act consumers; purchasing sales financing paper; (“Act”), has applied for the Board’s approval, financing inventories; servicing receivables arising under § 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) from inventory financing by certain manufacturers; and § 225.4(b)(2) of the Board’s Regulation Y (12 and selling credit-related insurance to its direct C.F.R. § 225.4(b)(2)), to continue to engage in data consumer borrowers. Prior to the acquisition of processing activities through its wholly-owned sub­ Finance by Applicant on January 1, 1974, Finance sidiary, Finance America Corporation, Allentown, owned, and provided data processing services to, Pennsylvania (“FAC”). Applicant proposes that the Stuyvesant group, which was sold to H.F. Ah- FAC continue to engage in the activities of provid­ manson & Company, Los Angeles, California on ing bookkeeping and data processing activities for the same date. As part of the terms of that sale, the internal operations of Applicant’s direct and Finance committed to continue to provide the indirect subsidiaries, and storing and processing Stuyvesant group with data processing services. banking, financial or related economic data, for While the particular services provided to the certain insurance underwriting companies (collec­ Stuyvesant group appear to be within the scope of tively referred to as the “Stuyvesant group”).1 data processing activities that bank holding com­ Such activities have been determined by the Board panies may perform under the Board’s Regulation to be closely related to banking (12 C.F.R. Y, Applicant had not sought the Board’s prior § 225.4(a)(8)). approval to engage in the provision of such serv­ Notice of the application, affording opportunity ices.2 The subject application seeks to obtain such for interested persons to submit comments and approval. views on the public interest factors, has been duly 2Section 4 of the Act and section 225.4 of Regulation Y prohibit irThe companies are: The Stuyvesant Insurance Company, a bank holding company from engaging in any nonbanking activity Stuyvesant Life Insurance Company, Trans-Oceanic Life Insur­ without the Board’s prior approval. In addition, § 225.4(c)(2) of ance Company, and National American Insurance Company of Regulation Y specifically states that, after the Board approves an New York, all of which are headquartered in Allentown, Pennsyl­ application, “the activities involved [in an application] shall not be vania. altered in any significant respect from those considered by the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

688 Federal Reserve Bulletin □ July 1977 In acting on an application to continue to engage, tion of such services to only Stuyvesant would have through a subsidiary, in an activity that is permissi­ any significant adverse effects on existing or poten­ ble for bank holding companies under § 4(c)(8) of tial competition. The continuation of such services the Act and § 225.4(a) of Regulation Y, the Board should provide benefits to the public by assuring applies the same standards that it applies to an the Stuyvesant group of a continued and convenient application to acquire a company engaged in such source for financially-related data processing serv­ an activity. The Board analyzes the competitive ices. Moreover, there is no evidence in the record effects of the proposal both at the time of the indicating that the continuation of such data pro­ acquisition of the company engaged in the activity cessing group would result in any undue concentra­ and at the time of the application to continue to tion of resources, unfair competition, conflicts of engage in the activity. Prior to Finance’s acquisi­ interests, unsound banking practices or other ad­ tion by Applicant, Finance provided data process­ verse effects on the public interest. ing services for itself and its subsidiaries, which Based upon the foregoing and other con­ included the Stuyvesant group.3 It does not appear siderations reflected in the record, the Board has that Applicant competed with Finance for the pro­ determined that the balance of the public interest vision of data processing services to the Stuyvesant factors the Board is required to consider under group at the time of the acquisition, nor does it § 4(c)(8) is favorable. Accordingly, the application appear that Applicant was likely to enter into such is hereby approved. This determination is subject to competition at that time. Thus, it does not appear the conditions set forth in § 225.4(c) of Regulation Y that Applicant’s provision of such services to the and to the Board’s authority to require such modifi­ Stuyvesant group had any significant adverse ef­ cation or termination of the activities of a holding fects on competition at that time. With respect to company or any of its subsidiaries as the Board competitive effects as of the present, Applicant finds necessary to assure compliance with the pro­ would limit FAC’s data processing activities to visions and purposes of the Act and the Board’s providing services to FAC and its subsidiaries and regulations and orders issued thereunder, or to providing financially-related data processing serv­ prevent evasion thereof. ices to the Stuyvesant group. Again, it does not By order of the Board of Governors, effective appear that, but for FAC’s performance of these June 7, 1977. services, Applicant would be competing for those Voting for this action: Chairman Bums and Governors services or likely to do so. Therefore, it does not Wallich, Coldwell, Jackson, and Lilly. Absent and not appear from the facts of record that the continua­ voting: Governors Gardner and Partee. (Signed) Ruth A. Reister, [seal] Assistant Secretary of the Board. Board in making the determination . . . .” Accordingly, it is the Board’s judgment that Applicant, by engaging in data processing activities without prior Board approval, violated the Act. Applicant has stated that the violation occurred because indi­ NBC Co., viduals unfamiliar with the requirements of the Act negotiated the terms of sale of the Stuyvesant group and that individuals unfamil­ Lincoln, Nebraska iar with the Act reviewed the ancillary data processing agreement on behalf of Applicant. The Board has examined the circum­ Order Denying stances surrounding the provision of data processing services Acquisition of Fremont State Company without the Board’s prior approval. Applicant’s senior manage­ ment has taken affirmative steps to prevent violations of the Act NBC Co., Lincoln, Nebraska, a bank holding from occurring in the future, having established procedures for centralized internal review of all of Applicant’s activities for company within the meaning of the Bank Holding compliance with the substantive and procedural requirements of Company Act, has applied for the Board’s approval the Act and Regulation Y. The Board expects that these actions under § 4(c)(8) of the Act and § 225.4(b)(2) of the will assist Applicant in avoiding any recurrence of violations of law. Based upon an examination of all of the facts of record, it is Board’s Regulation Y to acquire all of the voting the Board’s judgment that the facts are such that they do not shares of the Fremont State Company, Fremont, warrant denial of the instant application. “Finance, FAC’s predecessor, had on occasion provided certain Nebraska (“Company”), an industrial loan and data processing services to businesses in the Allentown, Pennsyl­ investment company, and to act as agent in the sale vania area. However, such services were quite limited in scope of credit life and credit accident and health insur­ and were usually limited to excess capacity. The revenue gained from providing such services was de minimis. Therefore, such ance directly related to extensions of credit by services are not viewed as being significant for purposes of Company. Such activities have been determined by analyzing the competitive effects of the acquisition of FAC’s data the Board to be closely related to banking (12 CFR processing activities. FAC has terminated providing such services to any company other than those in the Stuyvesant group. § 225.4(a)(2) and (9)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 689 Notice of the application, affording opportunity These two banks, the first and third largest com­ for interested persons to submit comments and mercial banks in the Fremont market, together views on the public interest factors, has been duly control total deposits of $72.4 million, representing published (42 Fed. Reg. 21661 (1977)). The time for 50.9 per cent of the total commercial bank deposits filing comments and views has expired, and the in the market. These two banks compete with Board has considered the application and all com­ Company for IPC (individual, partnership and ments received in the light of the public interest corporation) time and savings deposits and ac­ factors set forth in § 4(c)(8) of the Act (12 U.S.C. count for approximately 19.9 per cent ($39.2 § 1843(c)(8)). million) of the total IPC deposits in the Fremont Applicant, the fifth largest banking organization market. Since Company controls IPC deposits in Nebraska, controls one bank with deposits of representing 0.5 per cent ($0.9 million) of such $256.9 million, representing 3.8 per cent of total total deposits in the Fremont market. Appli­ deposits in commercial banks in the State.1 Appli­ cant, or at least those that manage or control cant also controls three industrial loan companies, Applicant, upon its acquisition of Company, would Mutual Savings Company, Lincoln, Nebraska, control approximately 20.4 per cent of the total IPC Nebraska Savings Company, Scottsbluff Nebraska, time and savings deposits in the Fremont market. In and Mutual Savings Company of Omaha, Omaha, the Board’s opinion, the increased concentration in Nebraska, with total deposits of $24.1 million, this product market, although only slight, weighs representing 17.3 per cent of total deposits in the 14 adversely against the subject proposal. industrial loan companies in Nebraska. In addition to competing for deposits, Appli­ Company operates as an industrial loan company cant’s affiliated banks and Company compete for and issues one type of “certificate of indebted­ the origination of consumer loans in the Fremont ness”, a fully paid certificate that is similar to a banking market. The two affiliated banks have total savings account. Company is subject to regulation consumer loans outstanding of $11.3 million, repre­ and examination by State supervisory authorities. senting 39.4 per cent of the total consumer loans In its lending capacity, Company makes commer­ made in the Fremont market, by far the largest cial, mortgage and personal consumer loans. Com­ market share held by any of the fifteen sources of pany also engages in general insurance agency and consumer loans in Fremont.4 Company, with con­ real estate brokerage activities that would not be sumer loans outstanding of approximately $0.9 mil­ acquired by Applicant as part of the proposed lion, representing 3.1 per cent of such loans in the transaction. market, is the sixth largest of the fifteen sources of Company, with total deposits of $0.9 million, is consumer loans in the market. The market shares of located in the Fremont banking market, the rele­ the four most significant sources of consumer loans vant market in which to assess the competitive in the market aggregate to approximately 80.6 per effects of the proposed acquisition.2 In that market, cent and thus the Fremont market for consumer loans Company competes for deposits and/or loans with appears quite concentrated. Applicant, or at least seven commercial banks, two savings and loan those that manage or control Applicant, upon its associations, three credit unions, and five con­ acquisition of Company, would hold approximately sumer finance companies. Of the seven commercial 42.5 per cent of the total consumer loans in the banks in the Fremont market, Applicant is affiliated Fremont market. In the Board’s opinion, this in­ with Fremont First National Company, a holding crease in concentration and reduction in existing company that controls First National Bank & Trust competition that would derive from elimination of Company of Fremont, and is also affiliated with Company as an independent competitive alterna^ Fremont First State Company, a holding company tive source for consumer loans in the market weigh that controls First State Bank, also of Freemont.3 substantially against approval of the subject propo­ sal. On the basis of the foregoing and other facts of record, the Board concludes that approval of the Unless otherwise indicated, banking data are as of December application would result in a significant decrease in 31, 1976. competition within the Fremont banking market. 2The Fremont banking market is approximated by the southern Accordingly, the competitive factors lend substan­ half of Dodge County, the extreme southwest portion of Washing­ ton County, and northern Saunders County. tial weight toward denial of the application. 3The affiliation exists because shareholders of Applicant own controlling interests in Fremont First National Company and in Fremont First State Company. Applicant maintains management and director interlocks with both companies and their subsidiary banks, as well as management contracts with the subsidiary 4Applicant’s affiliated banks are considered one source for pur­ banks. poses of consumer loan data. 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690 Federal Reserve Bulletin □ July 1977 The subject proposal contemplates a purchase of Peoples Credit Co., stock involving a cash outlay of $25 thousand for all Kansas City, Missouri of the voting shares of Company and a contribution Order Approving to Company’s equity capital account of $150 Retention of Midwest Data Processing thousand. Applicant intends to raise these funds from a combination of cash and a liquidation of notes receivable. While Applicant’s investment in Peoples Credit Co., Kansas City, Missouri, a Company would not require a substantial cash bank holding company within the meaning of the outlay and Applicant’s present financial condition Bank Holding Company Act, has applied for the is generally satisfactory, that investment, in light of Board’s approval, under § 4(c)(8) of the Act (12 recent events, may continue to place a burden on U.S.C. § 1843(c)(8)) and § 225.4(b)(2) of the Board’s Applicant and its subsidiaries. The expenses inci­ Regulation Y (12 C.F.R. § 225.4(b)(2)), to retain the dent to the construction and financing of a new assets of Midwest Data Processing, Kansas City, office building for Applicant’s bank subsidiary Missouri, a division of Peoples Credit Co. that placed and may continue to place a strain upon engages in bookkeeping and data processing ac­ Applicant’s earnings and may otherwise result in an tivities for its subsidiary banks and other commer­ increase in financial leverage.5 In these circum­ cial banks and commercial businesses. Such ac­ stances, the Board is of the opinion that it would be tivities have been determined by the Board to be preferable for Applicant to conserve its resources closely related to banking (12 C.F.R. § 225.4(a)(8)). for the benefit of its existing subsidiaries rather than Notice of the application, affording opportunity for expansion of Applicant’s nonbanking interests for interested persons to submit comments and at this time. views on the public interest factors, has been duly Applicant proposes to expand the types of in­ published (42 Federal Register 19399). The time for struments by which Company raises lendable filing comments and views has expired, and the funds, and to offer second mortgage loans. While Board has considered the application and all com­ these considerations lend some weight toward ap­ ments received in the light of the public interest proval of this application; they do not outweigh the factors set forth in § 4(c)(8) of the Act (12 U.S.C. substantially adverse effects of Applicant’s propo­ § 1843(c)(8)). sal, as discussed above. The Board regards the standards of § 4(c)(8) for Based upon the foregoing and the other facts of the retention of a nonbanking activity to be the record, it is the Board’s judgment that approval of same as the standards for a proposed commence­ the application would not be in the public interest ment of a § 4(c)(8) nonbanking activity. Applicant and that the application should be, and hereby is, controls three banks with total deposits as of De­ denied. cember 31, 1975 of $36.3 million, representing .21 By order of the Board of Governors, effective per cent of total deposits of all Missouri banks. Two June 29, 1977. of Applicant’s subsidiary banks are in the Kansas City banking market and control .62 per cent of total deposits in that market. Applicant commenced the operations of Midwest de novo in December Voting for this action: Vice Chairman Gardner and 1966 and it now provides data processing services Governors Coldwell, Jackson, Partee, and Lilly. Voting for Applicant’s subsidiary banks, other commercial against this action: Governor Wallich. Absent and not banks and several businesses in Kansas and Mis­ voting: Chairman Burns. souri. It appears that the de novo establishment of Midwest by Applicant had positive effects on com­ petition in the area serviced by Midwest, which is approximately the area within a 30-mile radius of (Signed) G riffith L. Garwood, Kansas City, Missouri. It appears that retention of [seal] Deputy Secretary of the Board. Midwest by Applicant would have no adverse ef­ fects on competition in any relevant area. There is no evidence indicating that the retention of Mid­ west by Applicant would lead to an undue concen­ 5During 1976, Bank incurred operating expenses almost $2 mil­ tration of resources, conflicts of interests, or un­ lion more than in 1975, due primarily to increased mortgage and sound banking practices. Furthermore, approval of occupancy expenses. As a result, Applicant’s consolidated earn­ ings in 1976 were $1.5 million, compared to $2.6 million in 1975. the application should enable Midwest to remain a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 691 viable competitor in serving the data processing (“IHOI”).1 Applicant has filed a separate applica­ needs of the relevant community. tion pursuant to § 4(c)(13) of the Act (12 U.S.C. Based upon the foregoing and other con­ 1843(c)(13)) to retain its interest in IHOI and the siderations reflected in the record, the Board has Board’s action on that application is also con­ determined that the balance of the public interest sidered herein. Bank (deposits of approximately factors the Board is required to consider under $43.8 million2) controls .6 of one per cent of the total § 4(c)(8) is favorable. Accordingly, the application is deposits held by commercial banks in the relevant hereby approved. This determination is subject to banking market3 and is the fifteenth largest of 114 the conditions set forth in § 225.4(c) of Regulation Y banking organizations operating in that market. and to the Board’s authority to require such modifi­ Upon acquisition of Bank, Applicant would control cation or termination of the activities of a holding .3 of one per cent of total deposits in the State. company or any of its subsidiaries as the Board Applicant engages in no activities in the United finds necessary to assure compliance with the pro­ States. Consummation of the proposed transaction visions and purposes of the Act and the Board’s would not eliminate any existing or potential com­ regulations and orders issued thereunder, or to petition. Competitive considerations, therefore, are prevent evasion thereof. consistent with approval of the application. By order of the Board of Governors, effective The financial and managerial resources and fu­ June 3, 1977. ture prospects of Applicant and Bank are con­ sidered satisfactory. Applicant will incur debt of Voting for this action: Chairman Burns and Governors approximately $3.2 million in order to purchase Gardner, Wallich, Cold well, Jackson, Partee and Lilly. shares of Bank. A substantial portion of that debt would be serviced by funds generated from Appli­ (Signed) G riffith L. Garwood, cant’s investment in IHOI. In addition, Applicant’s [seal] Deputy Secretary of the Board. principal has irrevocably subscribed to $2 million in preferred stock of Applicant that would be available for debt reduction should the funds to be generated from Applicant’s investment in IHOI fall below Orders Unders Sections 3 & 4 projected levels. The preferred stock subscription of Bank Holding Company Act is secured by the principal’s pledge of municipal bonds bearing a face amount of approximately $1.9 Chalfen-Holiday, Inc., million. In view of the foregoing and Bank’s and Minneapolis, Minnesota IHOI’s earnings history, it appears that Applicant’s income will be sufficient to enable it to service its Order Approving Formation of Bank Holding debt without impairing the financial resources of Company and Retention of Nonbanking Activity Bank. Accordingly, considerations relating to the banking factors are consistent with approval of the Chalfen-Holiday, Inc., Minneapolis, Minnesota, application. Consummation of the transaction has applied for the Board’s approval under § 3(a)(1) would have no immediate effect on the area’s of the Bank Holding Company Act (12 U.S.C. banking convenience and needs; however, con­ 1942(a)(1)) of formation of a bank holding company siderations relating to the convenience and needs of through acquisition of 70 per cent or more of the the community to be served are regarded as being voting shares of First National Bank in Anoka, consistent with approval of the application. It is the Anoka, Minnesota (“Bank”). Board’s judgment that consummation of the pro­ Notice of the application, affording opportunity posed transaction would be consistent with the for interested persons to submit comments and public interest and that the application to become a views, has been given in accordance with § 3(b) of bank holding company should be approved. the Act. The time for filing comments and views has IHOI is a joint venture owned 20 per cent by expired, and the Board has considered the applica­ Applicant and 80 per cent by International Holiday tion and all comments received in light of the factors set forth in § 3(c) of the Act (12 U.S.C. 1842(c)). Applicant also has an inactive subsidiary. Chalfen Produc­ Applicant, an Ohio corporation, was formed in tions, Inc., which will be liquidated prior to consummation of 1965, at which time it acquired from its principal his the proposed transaction. 2 All banking data are as of June 30, 1976. 20 per cent interest in a joint venture, International 3The relevant banking market is approximated by the Min­ Holiday on Ice Company, London, England neapolis/St. Paul RMA, including all of Carver County. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

692 Federal Reserve Bulletin □ July 1977 on Ice, Inc., New York, New York, a wholly- Board’s judgment, once the 25 per cent line is owned indirect subsidiary of Madison Square Gar­ passed, the Edge Corporation or bank holding den Corporation, New York, New York. IHOI is company usually ceases to be a mere passive inves­ operated subject to the terms and conditions of a tor and takes an active operating interest in the joint venture agreement (the “Agreement”) be­ company. The Board, however, makes this judg­ tween the parties dated June 30, 1965, as amended. ment on the particular facts of each case. Applicant’s 20 per cent interest in IHOI represents From the facts of record, it is clear that IHOI is an investment of approximately $625,000. IHOI not a subsidiary of Applicant for purposes of the engages in the business of producing and presenting Act, that Applicant otherwise does not have a touring ice shows in Europe and South America. It significant operating interest in IHOI, and that conducts no business in the United States. Appli­ Applicant’s investment is purely passive in nature. cant’s principal, a founder of IHOI, was president Accordingly, the only issue presented by this appli­ of IHOI from its establishment in 1965 until 1972. cation is a narrow one—whether Applicant’s reten­ From 1972 until 1975, he served as a consultant to tion of its passive minority investment in IHOI, IHOI. Since that time he has not been involved in under the particular circumstance of this applica­ the operations of IHOI and maintains his 20 per tion, would not be substantially at variance with the cent interest through Applicant for investment pur­ purposes of the Act and would be in the public poses only. In connection with its application to interest. become a bank holding company, Applicant has It is clear that one of the principal purposes of the applied pursuant to § 4(c)(13) of the Act to retain its Act is to separate banking from commerce in order interest in IHOI. to avoid undue concentration of resources, de­ Section 4(c)(13) of the Act provides that the creased or unfair competition, conflicts of interests, nonbanking prohibitions of § 4 of the Act shall not unsound banking practices or similar adverse ef­ apply to the shares of, or activities conducted by, fects that may derive from the common ownership any company which does no business in the United of banking and commercial enterprises. In the usual States except as an incident to its international or case of a U.S. banking organization investing foreign business, if the Board by regulation or order abroad to expand its foreign banking capabilities, determines that, under the circumstances and sub­ the Board, in light of such purpose, would not be ject to the conditions set forth in the regulation or disposed to grant its specific consent to an invest­ order, the exemption would not be substantially at ment in a wholly commercial concern such as IHOI variance with the purposes of the Act and would be where, as in this case, the investment is not incident in the public interest. to a greater banking or financing relationship or In § 225.4(f)(1) of Regulation Y implementing transaction. There is, however, no evidence in the section 4(c)(13) of the Act, the Board has deter­ record of this application indicating that retention mined that a bank holding company may, with the of IHOI by Applicant would result in any effects Board’s consent, own or control voting shares of that would be substantially at variance with the any company in which a company organized under purposes of the Act or that would otherwise be § 25(a) of the Federal Reserve Act [12 U.S.C. 611] inconsistent with the public interest. The passive (an Edge Corporation) may invest. Edge Corpora­ noncontrolling nature of Applicant’s investment, its tions are organized for the purpose of engaging in ability under the Agreement to unconditionally re­ international or foreign banking or other interna­ quire that its interest be purchased by the co­ tional or foreign financial operations. In keeping venturer and its stated intention to do so should the with this statutory purpose, it has been Board venture become unprofitable, the absence of any policy that it is inappropriate for an Edge Corpora­ existing or proposed credit relationship between tion to acquire a significant ownership interest in a Applicant and Bank and IHOI, the unique expertise foreign company that is not engaged in international of Applicant’s principal in IHOI’s activities, and or foreign banking or other international or foreign the fact that these activities are conducted wholly financial operations. The Board does not believe outside the United States all combine to indicate that an Edge Corporation should engage indirectly that retention of IHOI would involve an insignifi­ in nonfinancial activities abroad that the Board cant amount of risk to Applicant and Bank. would not otherwise permit an Edge Corporation to In fact, IHOI’s earnings record indicates that it engage in directly. In general, the Board considers a will contribute significantly to Applicant’s ability to significant ownership interest to be any investment service the debt incurred in acquiring Bank, thus representing more than 24 per cent of the foreign minimizing any servicing burden on Bank’s earn­ company’s outstanding voting shares. In the ings. It is the Board’s judgment in these unique Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 693 circumstances that approval of Applicant’s applica­ of credit by Applicant. Such activities have been tion to retain its interest in IHOI would not be determined by the Board to be closely related to substantially at variance with the purposes of the banking (12 CFR § 225.4(a)(2) and (9)). Bank Holding Company Act and would be in the Notice of the applications, affording opportunity public interest. for interested persons to submit comments and On the basis of the foregoing and all the facts of views, has been given in accordance with §§3 and 4 record, the Board has determined that the con­ of the Act (41 Federal Register 35908). The time for siderations affecting the competitive, banking, and filing comments and views has expired, and the convenience and needs factors under section 3(c) of Board has considered the applications and all com­ the Act, and the factors the Board must consider ments received in light of the factors set forth in under section 4(c)(13) of the Act in permitting a § 3(c) of the Act and the considerations specified in bank holding company to retain an investment in a § 4(c)(8) of the Act. foreign company both favor approval of the applica­ Applicant is chartered as an industrial loan com­ tions. Accordingly, the applications are approved pany under Chapter 368 of the Missouri Revised based on the record and for the reasons sum­ Statutes and engages in the activity of making small marized above. The acquisition of Bank shall not be loans. Pursuant to the provisions of State law, made (a) before the thirtieth calendar day following Applicant also engages in the business of selling the effective date of this Order or (b) later than debt instruments in the form of uninsured passbook three months after the effective date of this Order, investment certificates and term investment certifi­ unless such period is extended for good cause by cates, an activity similar to the deposit-taking the Board or by the Federal Reserve Bank of activities of a commercial bank.1 Minneapolis pursuant to delegated authority. Applicant is a relatively small institution (assets By order of the Board of Governors, effective of $9.1 million) and operates its sole office in June 6, 1977. Sedalia, Missouri.2 Bank (deposits of $2.6 million) Voting for this action: Chairman Burns and Governors is the smallest of five banks operating in the War­ Wallich, Coldwell, Jackson, and Lilly. Absent and not saw banking market, and controls 6.1 per cent (as of voting: Governors Gardner and Partee. December 31, 1975) of the total deposits in com­ (Signed) G riffith L. Garwood, mercial banks in that market.3 Although Applicant and Bank offer some similar services, Applicant [seal] Deputy Secretary of the Board. does not compete in the Warsaw banking market, and the proposed acquisition would not result in the elimination of any existing competition. Moreover, in view of the relatively small size of Applicant and Bank, it appears that the proposal would not have Industrial Loan and Investment Company, significant adverse effects upon potential competi­ Sedalia, Missouri tion, nor would it increase the concentration of banking resources. Accordingly, on the basis of the Order Approving Formation of a Bank Holding facts of record, the Board concludes that competi­ Company and Continuation of Industrial Loan tive considerations are consistent with approval of Company and Insurance Agency Activities the application to acquire Bank. The financial and managerial resources and fu­ Industrial Loan and Investment Company, ture prospects of Applicant and Bank are regarded Sedalia, Missouri, has applied for the Board’s ap­ as satisfactory and consistent with approval of the proval under § 3(a)(1) of the Bank Holding Com­ pany Act (“Act”) (12 U.S.C. § 1842(a)(1)) of forma­ tion of a bank holding company through acquisition of 87.67 per cent of the voting shares of Bank of Although chartered by the State, Applicant at the present time Ionia, Ionia, Missouri (“Bank”). At the same time, is not subject to any significant regulation or examination by a State regulatory authority. However, upon becoming a bank Applicant has applied, pursuant to § 4(c)(8) of the holding company, Applicant would become subject to the Bank Act (12 U.S.C. § 1843(c)(8)) and § 225.4(b)(2) of the Holding Company Act and supervision and regulation by the Board. In addition, pursuant to section 5(c) of the Act, Applicant Board’s Regulation Y (12 CFR § 225.4(b)(2)), for would be required to file regular reports with the Board and would permission to continue to engage in the activities of be subject to examination. an industrial loan company and to continue to 2Unless otherwise indicated, all banking data are as of December 31, 1976. engage in the sale of credit life and credit accident 3The Warsaw banking market is approximated by Benton and health insurance directly related to extensions County. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

694 Federal Reserve Bulletin □ July 1977 application. Although consummation of the pro­ Bank shall not be made (a) before the thirtieth posed transaction may not result in any immediate calendar day following the effective date of this benefits to the public, Applicant is substantially Order; nor (b) later than three months after the larger than Bank and possesses some managerial effective date of this Order unless such period is and technical resources that are unavailable to extended for good cause by the Board or by the Bank due to its relatively small size. It is antici­ Federal Reserve Bank of Kansas City pursuant to pated that the proposed acquisition would provide delegated authority. The determination as to Appli­ Bank with access to Applicant’s greater resources cant’s industrial loan and insurance activities is and thereby enhance Bank’s ability to improve subject to the conditions set forth in § 225.4(c) of services to the community. Accordingly, con­ Regulation Y and to the Board’s authority to re­ siderations relating to the convenience and needs of quire reports by, and make examinations of, hold­ the community to be served lend some weight ing companies and their subsidiaries and to require toward approval of the application. It is the Board’s such modification or termination of the activities of judgment that consummation of the proposal to a bank holding company or any of its subsidiaries as form a bank holding company would be in the the Board finds necessary to assure compliance public interest and the application should be ap­ with the provisions and purposes of the Act and the proved. Board’s regulations and orders issued thereunder or In connection with the application to become a to prevent evasion thereof. bank holding company, Applicant has also applied, By order of the Board of Governors, effective pursuant to § 225.4(a)(2) and (9) of Regulation Y, to June 10, 1977. continue to engage in the activities of an industrial Voting for this action: Chairman Burns and Governors loan company and continue selling credit life and Gardner, Wallich, Coldwell, Jackson, Partee, and Lilly. credit accident and health insurance directly related to extensions of credit by the industrial loan com­ (Signed) Ruth A. Reister, pany.4 Approval of these applications would enable [seal] Assistant Secretary of the Board. Applicant to acquire Bank, which acquisition is viewed as being in the public interest. Moreover, Midland Capital Co., approval of these applications would serve to as­ Oklahoma City, Oklahoma sure the residents of Sedalia and nearby areas of a convenient source of industrial loan and credit- Order Approving Formation related insurance services, and the Board views of Bank Holding Company and these results as being in the public interest. It does Acquisition of Midland Mortgage Co. not appear that Applicant’s continuation of these Midland Capital Co., Oklahoma City, Oklahoma, activities would have any significant adverse effects has applied for the Board’s approval under § 3(a)(1) on competition. Furthermore, there is no evidence of the Bank Holding Company Act (12 U.S.C. in the record indicating that consummation of the § 1842(a)(1)) of formation of a bank holding com­ proposal would result in any undue concentration pany through acquisition of 100 per cent of the of resources, unfair competition, conflicts of inter­ voting shares of Northwest Bank, Oklahoma City, ests, unsound banking practices or other adverse Oklahoma (“Bank”). effects on the public interest. Applicant has also applied, pursuant to § 4(c)(8) Based on the foregoing and other considerations of the Act (12 U.S.C. § 1843(c)(8)) and § 225.4(b)(2) reflected in the record, the Board has determined of the Board’s Regulation Y, for the Board’s ap­ that the considerations affecting the competitive proval to acquire 75 per cent of the voting shares of factors under § 3(c) of the Act and the balance of the Midland Mortgage Co., Oklahoma City, Oklahoma public interest factors the Board must consider (“Mortgage”), a company principally engaged di­ under § 4(c)(8) of the Act both favor approval of rectly and through a wholly owned subsidiary, Applicant’s proposals. Johnston-Records Co., in the general business of Accordingly, the applications are approved for mortgage banking, including the origination and the reasons summarized above. The acquisition of servicing of conventional, FHA and VA residential and commercial mortgages,1 The mortgage banking activities that Applicant proposes to engage in have 4Applicant is also engaged in leasing activities of a type generally permissible for bank holding companies. Applicant has indicated that upon becoming a bank holding company it would promptly file an application, pursuant to the relevant provisions of Mortgage also currently owns 100 per cent of Midland Property Regulation Y, to continue to engage in such leasing activities. Management Co. and Midland Center Co. These corporations Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 695 been determined by the Board to be closely related improve its operating efficiency and thereby be­ to banking (12 C.F.R. § 225.4(a)(1)). come a stronger competitor within the market. Notice of the applications, affording opportunity Accordingly, considerations relating to conveni­ for interested persons to submit comments and ence and needs are consistent with approval. It is views, has been given in accordance with §§3 and 4 the Board’s judgment that the proposed acquisition of the Act (42 Federal Register 26247). The time for of Bank would be in the public interest and that the filing comments and views has expired, and the application to become a bank holding company Board has considered the applications and all com­ should be approved. ments received in light of the factors set forth in In connection with the application to become a § 3(c) of the Act and the considerations specified in bank holding company, Applicant has also applied § 4(c)(8) of the Act. for approval to acquire 75 per cent of the outstand­ Applicant is a non-operating corporation or­ ing voting shares of Mortgage, a company that, ganized for the purposes of becoming a bank hold­ along with its wholly owned subsidiary, Johnstoning company through the acquisition of Bank and of Records Co., engages in the general business of engaging in the general business of mortgage bank­ mortgage banking, as described above, at four ing through the acquisition of Mortgage. Bank, with locations in the Oklahoma City area and in Lawton, deposits of approximately $24.5 million, holds ap­ Tulsa, and Broken Arrow, Oklahoma; Tucson, proximately 0.2 per cent of total commercial bank Phoenix, and Prescott, Arizona; Houston and San deposits in the State and is the 35th largest banking Antonio, Texas; Denver, Colorado Springs, Pue­ organization in the Oklahoma City market,2 con­ blo, and Canon City, Colorado; and Tustin, trolling 0.7 per cent of the total deposits therein. California.3 As of July 31, 1976, Mortgage ranked as Inasmuch as Applicant has no existing operations, the 56th largest mortgage servicer in the United consummation of the proposal insofar as it relates States, with a mortgage loan servicing portfolio of to the acquisition of Bank would have no adverse $575.5 million. During 1976, it originated in excess effects on existing or potential competition. Ac­ of $121 million in residential and commercial loans. cordingly, the Board concludes that considerations Bank and Mortgage are presently under common relating to the competitive factors are consistent ownership, Bank having been acquired by a princi­ with approval of the application to become a bank pal of Mortgage during the latter half of 1976. Bank holding company. and Mortgage both compete in the Oklahoma City The financial and managerial resources and fu­ market in the origination of mortgage loans on 1-4 ture prospects of Applicant, which are dependent family residential properties. During 1976, upon those of Bank and Mortgage, are considered Mortgage originated $19.5 million of such satisfactory and consistent with approval of the mortgages while Bank originated $0.4 million. Ap­ application to become a bank holding company. proval of Applicant’s proposal would have some The debt to be incurred by Applicant appears to be adverse effects on competition in the origination of serviceable primarily from dividends to be derived loans on 1-4 family residential properties in the from Bank and Mortgage without having adverse relevant market, but the Board does not regard effects on the financial condition of either Bank or such effects as being particularly significant in view Mortgage. Therefore, considerations relating to of the relatively small market shares (Bank and banking factors are regarded as being consistent Mortgage accounted for about three per cent of the with approval. Consummation of the proposed 1-4 family mortgage originations) and the large transaction would result in an organization that number of competitors within the market. On the appears capable of enhancing Bank’s ability to other hand, consummation of the proposal whereby Applicant will acquire Bank and Mortgage will result in a well-managed and financially strong exist solely for the purpose of owning Midland Realty Co., a general partnership that holds title to and operates Midland 3Prior to July 31, 1976, Mortgage held stock ownership interests Center, an office building in downtown Oklahoma City in which in various other companies engaged in certain activities not Mortgage’s head office is located. Discussion of the acquisition of heretofore deemed permissible for bank holding companies. Midland Center appears infra. Through a series of transactions on July 31, 1976, Mortgage 2The relevant market for both banking and the origination of divested its ownership interests in all but one of these companies. mortgage loans is approximated by the five-county Oklahoma On April 26, 1977, Mortgage completed its series of planned City, Oklahoma SMSA. Within this market there are 76 banks, 15 divestitures through the sale of Midmark Co., a company whose savings and loan associations, and some of the largest mortgage only activity was the shared operation of an airplane that companies in the country. Mortgage uses in connection with its mortgage banking business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

696 Federal Reserve Bulletin □ July 1977 organization with resources capable of providing an Bank nor the commencement of the above­ increased variety of banking and mortgage ac­ described mortgage business activities shall be tivities to the public. The Board regards such accomplished later than three months after the effec­ results as positive factors in its consideration of the tive date of this Order, unless such period is ex­ proposal. In addition, with respect to other con­ tended for good cause by the Board, or with respect siderations, the Board finds no evidence in the to Bank, by the Federal Reserve Bank of Kansas record that consummation of the proposal would City pursuant to delegated authority, and, with result in an undue concentration of resources, con­ respect to Mortgage, pursuant to authority hereby flicts of interests, unsound banking practices or delegated. The determination as to Applicant’s other adverse effects upon the public interest. proposed non-banking activities is also subject to In connection with the application to acquire the conditions set forth in § 225.4(c) of Regulation Mortgage, the Board has also considered Y and to the Board’s authority to require such Mortgage’s ownership of 100 per cent of the shares modification or termination of the activities of a of Midland Property Management Co. and Midland holding company or any of its subsidiaries as the Center Co., both of which are essentially inactive Board finds necessary to assure compliance with corporations that exist for the sole purpose of the provisions and purposes of the Act and the owning Midland Realty Co., a general partnership Board’s regulations and orders issued thereunder, that holds title to and operates Midland Center, an or to prevent evasion thereof. office building in downtown Oklahoma City, Ok­ By order of the Board of Governors, effective lahoma, that serves as the head office for June 30, 1977. Mortgage’s operation. Mortgage currently occupies Voting for this action: Vice Chairman Gardner and approximately 18.9 per cent of the total available Governors Wallich, Jackson, Partee and Lilly. Absent and space in Midland Center with the remainder leased not voting: Chairman Burns and Governor Coldwell. to third parties with an annual rental of approxi­ mately $600,000. Although Applicant has indicated (Signed) Griffith L. Garwood, that it and its subsidiaries ultimately plan to occupy [seal] Deputy Secretary of the Board. all of the space in Midland Center and that it expects to occupy up to 25 per cent of the building through the establishment of a data processing system for Mortgage’s operation, it is estimated that it will be nine years before the building is at least 50 per cent occupied by Applicant. Prior C ertifications Pursuant to the Based upon these facts and Applicant’s projec­ Bank H olding Company Tax A ct of 1976 tions for the future utilization of Midland Center, the Board is unable to conclude that Applicant’s American General Insurance Company, interest in Midland Center is insignificant or that it Houston, Texas should be regarded as “incidental activi­ ties . . . necessary to carry on the activities” of [Docket No. TCR 76-141] Mortgage, within the meaning of § 225.4(a) of Regu­ American General Insurance Company, Hous­ lation Y. Accordingly, under § 4(a)(2) of the Act, ton, Texas (“AG”), has requested a prior certifica­ Applicant is required to dispose of its direct or tion pursuant to § 1101(b) of the Internal Revenue indirect ownership or control of Midland Center Code (the “Code”), as amended by § 2(a) of the within two years from the date it becomes a bank Bank Holding Company Tax Act of 1976 (the “Tax holding company. Act”), that its proposed divestiture of all of the Based on the foregoing and other considerations 2,632,042 nonvoting shares of common stock (the reflected in the record, the Board has determined “TCB Shares”) of Texas Commerce Bancshares, that the considerations affecting the competitive Inc., Houston, Texas (“TCB”), presently held by factors under § 3(c) of the Act and the balance of AG,1 through the pro rata distribution of such the public interest factors set forth in § 4(c)(8) of the shares of the holders of common stock of AG, is Act both favor approval of Applicant’s proposed necessary or appropriate to effectuate the policies transaction, and that these applications should be approved. The acquisition of Bank shall not be made before JBy Order of April 11, 1972, the Board determined that AG had the thirtieth calendar day following the effective ceased to be a bank holding company for purposes of the BHC date of this Order; and neither the acquisition of Act. The Board’s determination was conditioned, in part, upon Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 697 of the Bank Holding Company Act (12 U.S.C. 954,410 shares of Bank’s stock, which represented § 1841 et seq.) (“BHC Act”).2 approximately 34.7 per cent of the outstanding In connection with this request, the following voting shares of Bank. On July 7, 1971, as part of information is deemed relevant, for purposes of the formation of TCB, Bank was merged into a issuing the requested certification:3 newly created, wholly-owned subsidiary of TCB. 1. AG is a corporation organized under the laws Pursuant to the terms of the merger, holders of of the State of Texas on May 8, 1926. Bank’s stock exchanged their Bank stock for com­ 2. AG, directly and through four wholly-owned mon stock in TCB on a share-for-share basis.5 On subsidiaries, acquired ownership or control of a May 30, 1972, pursuant to the previously noted total of 104,363 shares of Texas Commerce Bank, condition of the Board’s Order of April 11, 1972, Houston, Texas (“Bank”), by purchase from unre­ AG and its subsidiaries exchanged their shares of lated parties prior to December 31, 1967. On Febru­ TCB common stock on a share-for-share basis for ary 28, 1968, AG and its subsidiaries received 9,523 new Class B stock in TCB, which is in all respects additional shares of Bank’s stock as the result of a identical to TCB common stock except that while stock dividend. On May 17, 1968, AG and 10 of its the Class B stock is held by AG and/or its sub­ subsidiaries purchased 807,375 shares, representing sidiaries the stock has no voting rights. Upon approximately 28 per cent of Bank’s stock, from disposition of the Class B stock by AG and its Houston Endowment, Inc. Between February 9, subsidiaries, the transferee has the right to ex­ 1968 and March 26, 1969, various subsidiaries of change the Class B stock for TCB common stock on AG acquired additional shares of Bank’s stock by a share-for-share basis. AG has indicated that no purchase from unrelated parties. Numerous inter­ gain or loss was recognized on the exchange of the company sales among AG’s subsidiaries occurred TCB common stock for the Class B stock.6 between May 17, 1968 and May 13, 1974; however, 3. AG became a bank holding company on De­ the only purchase of Bank’s stock by AG or its cember 31, 1970 as a result of the 1970 Amendments subsidiaries from unrelated parties after July 7, to the BHC Act, by virtue of its direct and indirect 1970, was 6.0034382 shares acquired on March 4, ownership and control at that time of more than 25 1971 to round off fractional shares received by AG per cent of the outstanding voting shares of Bank, and its subsidiaries in connection with the stock and it registered as such with the Board as a bank dividend of . 1034482 shares of Bank stock for each holding company on August 23, 1971. AG would share of Bank stock outstanding paid by Bank on have been a bank holding company on July 7, 1970 that date.4 On July 7, 1970, AG, directly and if the BHC Act Amendments of 1970 had been in through its subsidiaries, owned or controlled effect on such date, by virtue of its direct and indirect ownership and control on that date of more than 25 per cent of the outstanding voting shares of Bank. 4. AG holds property acquired by it on or before July 7, 1970, the disposition of which would be AG exchanging all voting shares of TCB then held by AG for a necessary or appropriate to effectuate § 4 of the new class of shares of TCB that would be nonvoting while held by BHC Act if AG were to continue to be a bank AG. AG was further required to divest of all its nonvoting shares of TCB by December 31, 1980. See 58 Federal Reserve Bulletin 487 (1972). 2By Order of April 14, 1977 (42 Federal Register 20662), the Board approved a plan submitted by AG, whereby AG would 5In connection with the formation of TCB, a ruling was obtained divest its interest in TCB through distributions to AG’s common from the Internal Revenue Service that the transaction whereby shareholders at a rate of not less than one TCB share for every 100 TCB acquired control of Bank and Bank’s stockholders ex­ shares of AG common stock owned. AG has committed to divest changed their shares of Bank’s stock for common stock of TCB itself of all interest in TCB by December 31, 1980. was a qualified tax-free reorganization pursuant to § 368(a)(1)(A) 3This information derives from AG’s correspondence with the of the Code. Accordingly, even though the TCB stock was Board concerning its request for this certification, AG’s Registra­ received by AG after July 7, 1970, it nevertheless qualifies as tion Statement filed with the Board pursuant to the BHC Act, and property eligible for the tax benefits provided in § 1101(b) of the other records of the Board. Code, by virtue of § 1101(c) of the Code, since it was received in a 4Under subsection (c) of § 1101 of the Code, property acquired reorganization described in § 368(a)(1)(A) of the Code and no gain after July 7, 1970 generally does not qualify for the tax benefits of was recognized by AG. § 1101(b) when distributed by an otherwise qualified bank holding 8AG has indicated that for accounting and tax purposes, this company. However, where such property was acquired by a exchange of its TCB common stock for Class B stock was treated qualified bank holding company in a transaction in which gain was as a recapitalization under § 368(a)(1)(E) of the Code. Accordingly, not recognized under § 305(a) of the Code, then § 1101(b) is even though the Class B stock was acquired by AG after July 7, applicable. AG has indicated that pursuant to § 305(a) of the Code, 1970, it would nevertheless qualify as property eligible for the no gain was recognized as a result of the March 4, 1971 stock tax benefits provided in § 1101(b) of the Code, by virtue of § 1101(c), dividend declared by Bank in which AG received 98,738 additional since the Class B stock was received in a transaction described in shares of Bank’s stock. § 368(a)(1)(E) of the Code in which no gain was recognized. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

698 Federal Reserve Bulletin □ July 1977 holding company beyond December 31, 1980, Transohio Financial Corporation, which property is “prohibited property” within the Cleveland, Ohio meaning of § 1103(c) of the Code. [Docket No. TCR 76-109] 5. AG has committed to divest itself of all inter­ est in TCB by December 31, 1980, and no director, Transohio Financial Corporation, Cleveland, officer or policymaking employee of AG does or Ohio (“Transohio”), as the successor in interest to will serve in a similar capacity with TCB or any of Union Financial Corporation, Cleveland, Ohio its subsidiaries. Moreover, no officer, director, or (“Union”), has requested a prior certification pur­ policymaking employee of AG, or a person owning suant to § 6158(a) of the Internal Revenue Code 25 per cent or more of the shares of AG or any (the “Code”), as amended by § 3(a) of the Bank combination of such persons, does or will own or Holding Company Tax Act of 1976 (the “Tax control, directly or indirectly, 25 per cent or more Act”), that the sale on May 31, 1974, by Union of of the voting shares of TCB or any of its sub­ Port Clinton National Bank (“Bank”), to Union sidiaries. Commerce Corporation, Cleveland, Ohio (“Com­ On the basis of the foregoing information, it is merce”), was necessary or appropriate to effec­ hereby certified that: tuate the policies of the Bank Holding Company (A) AG is a qualified bank holding corporation, Act (12 U.S.C. § 1841 et seq.) (“BHC Act”). within the meaning of subsection (b) of section 1103 Transohio has also requested a final certification of the Code, and satisfies the requirements of that pursuant to § 6158(c)(2) of the Code that Union has subsection;7 (before the expiration of the period prohibited (B) the shares of TCB that AG proposes to property is permitted under the BHC Act to be held distribute to its shareholders are all or part of the by a bank holding company) ceased to be a bank property by reason of which AG controls (within holding company.1 the meaning of § 2(a) of the BHC Act) a bank or a In connection with these requests, the following bank holding company ; and information is deemed relevant for purposes of (C) the distribution of su.ch shares is necessary issuing the requested certification:2 or appropriate to effectuate the policies of the BHC 1. Transohio is a corporation organized under Act. the laws of the State of Delaware on December 22, This certification is based upon the representa­ 1970. Union was a corporation organized under the tions made to the Board by AG and upon the facts laws of the State of Ohio on January 25, 1960. set forth above. In the event the Board should 2. Between August 25, 1964, and April 2, 1970, determine that facts material to this certification are Union acquired ownership and control of 69,534 otherwise than as represented by AG, or that AG shares, representing 86.9 per cent of the outstand­ has failed to disclose to the Board other material ing voting shares, of Bank. facts, it may revoke this certification. 3. Union became a bank holding company on By order of the Board of Governors, acting December 31, 1970, as a result of the 1970 Amend­ through its General Counsel, pursuant to delegated ments to the BHC Act, by virtue of its ownership authority (12 C.F.R. 265.2(b)(3)), effective June 23, and control at that time of more than 25 per cent of 1977. the outstanding voting shares of Bank, and it regis­ (Signed) G riffith L. Garwood, tered as such with the Board on September 1, 1971. [seal] Deputy Secretary of the Board. Union would have been a bank holding company on 1 Pursuant to §§ 2(d)(2) and 3(e)(2) of the Tax Act, in the case of any sale that takes place on or before December 31, 1976, (the 90th day after the date of the enactment of the Tax Act), the certifica­ 7Although the Board determined in 1972 that AG had ceased to tion described in § 6158(a) shall be treated as made before the sale, be a bank holding company for purposes of the BHC Act, that and the certification described in § 6158(c)(2) shall be treated as determination was conditioned upon AG’s divestiture by Decem­ made before the close of the calendar year following the calendar ber 31, 1980 of the new class of nonvoting shares it was to acquire year in which the last such sale occurred, if application for such as another condition of that determination. Accordingly, until all certification was made before the close of December 31, 1976. conditions of the Board’s determination have been satisfied, the Transohio’s application for such certifications was received by the Board believes that for purposes of the Tax Act AG should be Board on December 10, 1976. deemed to continue to control TCB, even though the Board has for 2This information derives from Transohio’s correspondence regulatory purposes treated the conversion of AG’s stock in TCB with the Board concerning its request for this certification, to nonvoting shares as sufficient basis for relieving AG from the Union’s Registration Statement filed with the Board pursuant to controls of the BHC Act pending final divestiture of those shares. the BHC Act, and other records of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 699 July 7, 1970, if the BHC Act Amendments of 1970 10. Transohio does not control in any manner the had been in effect on such date, by virtue of its election of a majority of directors, or exercise a ownership and control on that date of more than 25 controlling influence over the management or per cent of the voting shares of Bank. policies, of Commerce, including Bank, or of any 4. On May 31, 1974, Union sold 79,358 shares,3 other bank or company that controls a bank. representing 99.2 per cent of the total outstanding On the basis of the foregoing, it is certified that: voting shares, of Bank to Commerce for cash. (A) at the time of its sale of the shares of Bank to 5. On May 31, 1974, Union held property ac­ Commerce, Union was a qualified bank holding quired by it on or before July 7, 1970, the disposi­ corporation, within the meaning of subsection (b) of tion of which would, but for the proviso of § 4(a)(2) section 1103 of the Code, and satisfied the require­ of the BHC Act, have been necessary or appropri­ ments of that subsection; ate to effectuate § 4 of the BHC Act if Union were (B) the shares of Bank that Union sold to Com­ to have remained a bank holding company beyond merce were all or part of the property by reason of December 31, 1980, and which property would, but which Union controlled (within the meaning of for such proviso, have been “prohibited property” § 2(a) of the BHC Act) a bank or bank holding within the meaning of §§ 6158(f)(1) and 1103(c) of company; the Code. Section 1103(g) of the Code provides that (C) the sale of the shares of Bank by Union was any bank holding company may elect, for purposes necessary or appropriate to effectuate the policies of Part VIII of subchapter 0 of chapter 1 of the of the BHC Act; Code, to have the determination whether property (D) Union has (before the expiration of the is “prohibited property” or is property eligible to period prohibited property is permitted under the be distributed without recognition of gain under BHC Act to be held by a bank holding company) § 1101(b)(1) of the Code, made under the BHC Act ceased to be a bank holding company; and as if such Act did not contain the proviso of (E) Union has disposed of all banking property. § 4(a)(2) thereof. Transohio, as successor to Union, This certification is based upon the representa­ has represented that it will make such an election.4 tions made to the Board by Transohio and upon the 6. On June 11, 1974, Union and Transohio facts sets forth above, and is conditioned upon merged pursuant to the laws of Ohio and Delaware Transohio making the election required by with Transohio continuing as the surviving corpora­ § 1103(g) of the Code at such time and in such tion. Pursuant to contract and the laws of Ohio and manner as the Secretary of the Treasury or his Delaware, Transohio succeeded to all the delegate may by regulations prescribe. In the event properties, assets, and rights and liabilities of the Board should hereafter determine that facts Union. material to this certification are otherwise than as 7. Neither Transohio nor any subsidiary of represented by Transohio, or that Transohio has Transohio holds any interest in Bank, Commerce, failed to disclose to the Board other material facts, or any subsidiary of Commerce, or in any other bank it may revoke this certification. or any company that controls a bank. By order of the Board of Governors acting 8. Neither Commerce, nor any subsidiary of through its General Counsel, pursuant to delegated Commerce, including Bank, holds any interest in authority (12 CFR § 265.2(b)(3)) effective June 24, Transohio or any subsidiary of Transohio. 1977. 9. No officer, director (including honorary or advisory director) or employee with policy-making (Signed) Ruth A. Reister, functions of Transohio or any subsidiary of Trans­ [seal] Assistant Secretary of the Board. ohio also holds any such position with Commerce or any subsidiary of Commerce, including Bank, or with any other bank or any company that owns a The Wachovia Corporation, bank. Winston-Salem, North Carolina [Docket No. TCR 76-105] The Wachovia Corporation, Winston-Salem, 3Of the 79,358 shares of Bank sold by Union on May 31, 1974, 9,824 shares had been acquired by Union after July 7, 1970. North Carolina (“Wachovia”) has requested a prior 4Section 1103(g) requires that an election thereunder be made certification pursuant to § 6158(a) of the Internal “at such time and in such manner as the Secretary [of the Revenue Code (the “Code”), as amended by § 3(a) Treasury] or his delegate may by regulations prescribe.” As of this date, no such regulations have been promulgated. of the Bank Holding Company Tax Act of 1976 (the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

700 Federal Reserve Bulletin □ July 1977 “Tax Act”), that the sale on August 31, 1976 of all Mortgage is a corporation organized under the laws the 10 issued and outstanding shares of common of the State of North Carolina on January 1, 1969 as stock of North Carolina Title Company, Winston- a wholly-owned subsidiary of Wachovia. On Au­ Salem, North Carolina (“Title Company”), held by gust 31, 1976 Mortgage owned and controlled 10 Wachovia Mortgage Company, Winston-Salem, shares of common stock, representing 100 per cent North Carolina (“Mortgage”), a wholly-owned of the issued and outstanding voting shares, of Title subsidiary of Wachovia, to Chicago Title Insurance Company, all of which were acquired by it before Company, Chicago, Illinois (“Chicago Title”) for July 7, 1970. $600,000 cash, was necessary or appropriate to 5. Wachovia did not file an application with the effectuate § 4 of the Bank Holding Company Act Board, or otherwise obtain the Board’s approval, (12 U.S.C. § 1843) (“BHC Act”).1 pursuant to § 4(c)(8) of the BHC Act to retain the In connection with this request, the following shares of Title Company or engage in the activities information is deemed relevant for purposes of carried on by Title Company,3 and the disposition issuing the requested certification:2 of the shares of Title Company was necessary or 1. Wachovia is a corporation organized under appropriate to effectuate § 4 of the BHC Act if the laws of the State of North Carolina on Septem­ Wachovia were to be a bank holding company ber 19, 1968 to acquire and hold all the shares of beyond December 31, 1980. Wachovia Bank and Trust Company, N.A. 6. On August 31, 1976, Wachovia and Mortgage (“Bank”). sold the shares of Title Company to Chicago Title 2. December 31, 1968, Wachovia acquired for cash. ownership and control of all of the outstanding On the basis of the foregoing information it is voting shares (less directors’ qualifying shares) of hereby certified that: Bank. (A) At the time of the sale by Mortgage of its 3. Wachovia became a bank holding company on shares of Title Company, Wachovia was a qualified December 31, 1970, as a result of the 1970 Amend­ bank holding corporation, within the meaning of ments to the BHC Act, by virtue of its ownership § 6158(f)(1) and subsection (b) of section 1103 of the and control at that time of more than 25 per cent of Code, and satisfied the requirements of that sec­ the outstanding voting shares of Bank, and it regis­ tion, and Mortgage was a subsidiary of Wachovia tered as such with the Board on January 20, 1972. within the meaning of §§ 6158(f)(1), 1103(b)(2)(A) Wachovia would have been a bank holding com­ and 1103(a)(1)(B) of the Code and § 2(d) of the BHC pany on July 7, 1970, if the BHC Act Amendments Act; of 1970 had been in effect on such date, by virtue of (B) The shares of Title Company that Mortgage its ownership and control on that date of more than sold to Chicago Title were “prohibited property” 25 per cent of the voting shares of Bank. Wachovia within the meaning of §§ 6158(f)(2) and 1103(c) of presently owns and controls 100 per cent (less the Code; and directors’ qualifying shares) of the outstanding vot­ (C) The sale of the shares of Title Company by ing shares of Bank. Mortgage was necessary or appropriate to effec­ 4. Title Company is a corporation organized tuate § 4 of the BHC Act. under the laws of the State of North Carolina This certification is based upon the representa­ on January 1, 1969, as a wholly-owned sub­ tions made to the Board by Wachovia and upon the sidiary of Mortgage. Title Company engaged in facts set forth above. In the event the Board should the business of acting as agent for the sale of title hereafter determine that facts material to this cer­ insurance policies insuring the title to real property, tification are otherwise than as represented by which policies were underwritten by Chicago Title. Wachovia, or that Wachovia has failed to disclose 1 Pursuant to § 3(e)(2) of the Tax Act, in the case of any sale that takes place on or before December 31, 1976 (the 90th day 3It does not appear that Title Company’s activities would after the date of the enactment of the Tax Act), the certification qualify for approval by the Board had an application been described in 6158(a) shall be treated as made before the sale, if filed. Although § 225.4(a)(9) of Regulation Y, 12 CFR application for such certification was made before the close of § 225.4(a)(9) permitted certain insurance agency activities by December 31, 1976. Wachovia’s application for such certification bank holding companies, the scope of that provision was was received by the Board on November 19, 1976. narrowed substantially by a decision of the United States 2This information derives from Wachovia’s correspondence Court of Appeals for the Fifth Circuit. Alabama Association of with the Board concerning its request for this certification, Insurance Agents v. Board of Governors of the Federal Wachovia’s Registration Statement filed with the Board pursuant Reserve System, 522 F. 2d 224 (1976), vacated in part and to the BHC Act and other records of the Board. modified in part, 544 F. 2d 572 (1977). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 701 to the Board other material facts, it may revoke this authority (12 CFR § 265.2(b)(3)), effective June 17, certification. 1977. By order of the Board of Governors acting (Signed) Griffith L. Garwood, through its General Counsel, pursuant to delegated [seal] Deputy Secretary of the Board. ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By the Board of Governors During June 1977, 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 Administration Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Board action Federal (ieffective Register Applicant Bank(s) date) citation First International Peoples State Bank 6/15/77 42 F.R. 31635 Bancshares, Inc., of Baytown, Bay­ m in i Dallas, Texas town, Texas Florida Bankshares, Inc., First National Bank 6/29/77 42 F.R. 34553 Hollywood, Florida of Sebring, 7/6/77 Sebring, Florida Hawkeye Bancorporation, Commercial State 6/17/77 42 F.R. 31838 Des Moines, Iowa Bank, Marshall­ 6/23/77 town, Iowa Omaha State Corporation, Omaha State Bank, 6/17/77 42 F.R. 30537 Omaha, Nebraska Omaha, Nebraska 6/15/77 Sections 3 and 4 Nonbanking Federal company Reserve Effective Register Applicant Bank(s) (or activity) Bank date citation Krey Co. Ltd., Peoples Bank, Consumer Kansas City 6/3/77 42 F.R. 29343 Pratt, Kansas Pratt, Kansas finance 6/8/77 and insur­ ance agency activities Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

702 Federal Reserve Bulletin □ July 1977 PENDING CASES INVOLVING THE BOARD OF GOVERNORS* BankAmerica Corporation v. Board of Governors, Memphis Trust Company v. Board of Governors, filed May 1977, U.S.D.C. for the Northern Dis­ filed February 1976, U.S.D.C. for the Western trict of California. District of Tennessee. BankAmerica Corporation v. Board of Governors, First Lincolnwood Corporation v. Board of Gover­ filed May 1977, U.S.C.A. for the Ninth Circuit. nors, filed February 1976, U.S.C.A. for the First Security Corporation v. Board of Governors, Seventh Circuit. filed March 1977, U.S.C.A. for the Tenth Cir­ Roberts Farm, Inc. v. Comptroller of the Currency, cuit. et al., filed November 1975, U.S.D.C. for the Farmers State Bank of Crosby v. Board of Gover­ Southern District of California. nors, filed January 1977, U.S.C.A. for the Eighth Florida Association of Insurance Agents, Inc. v. Circuit. Board of Governors, and National Association National Automobile Dealers Association, Inc. v. of Insurance Agents, Inc. v. Board of Gover­ Board of Governors, filed November 1976, nors, filed August 1975, actions consolidated in U.S.C.A. for the District of Columbia. U.S.C.A for the Fifth Circuit. First Security Corporation v. Board of Governors, tXDavid R. Merrill, et al. v. Federal Open Market filed August 1976, U.S.C.A. for the Tenth Cir­ Committee of the Federal Reserve System, filed cuit. May 1975, U.S.D.C. for the District of Colum­ Central Wisconsin Bankshares, Inc. v. Board of bia, appeal pending, U.S.D.A. for the District Governors, filed June 1976, U.S.C.A. for the of Columbia. Seventh Circuit. Louis J. Roussel v. Board of Governors, filed April National Urban League, et al. v. Office of the 1975, U.S.D.C. for the Eastern District of Comptroller of the Currency, et al., filed April Louisiana. 1976, U.S.D.C. for the District of Columbia Georgia Association of Insurance Agents, et al. v. Circuit. Board of Governors, filed October 1974, Farmers & Merchants Bank of Las Cruces, New U.S.C.A. for the Fifth Circuit. Mexico v. Board of Governors, filed April 1976, Alabama Association of Insurance Agents, et al. v. U.S.C.A. for the District of Columbia Circuit. Board of Governors, filed July 1974, U.S.C.A. Grandview Bank & Trust Company v. Board of for the Fifth Circuit. Governors, filed March 1976, U.S.C.A. for the Bankers Trust New York Corporation v. Board of Eighth Circuit. Governors, filed May 1973, U.S.C.A. for the Association of Bank Travel Bureaus, Inc. v. Board Second Circuit. of Governors, filed February 1976, U.S.C.A. for the Seventh Circuit. *This list of pending cases does not include suits against the tDecisions have been handed down in these cases, subject to Federal Reserve Banks in which the Board of Governors is not appeals noted. named a party. tThe Board of Governors is not named as a party in this action. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

703 Announcements REGULATION J: Amendment lished in revised form in January 1976. The rules as adopted reflect Board consideration of hundreds of The Board of Governors of the Federal Reserve comments received on its proposals. System has amended Regulation J (Collection of A third subpart to Regulation J is in preparation. Checks and Other Items by Federal Reserve It will deal with the processing of payments Banks) by adding a new section concerning the wire recorded on magnetic tape by using Federal Re­ transfer of funds between member banks. serve facilities. The Board had included such draft The new part of Regulation J is designated Sub­ rules in its January 1976 proposal concerning elec­ part B. It codifies rules and procedures evolved by tronic payments. the Federal Reserve System since it began wire transfer of funds in 1915, and puts the rules into regulatory form. The existing Regulation J rules for INTERPRETATION check collection remain unchanged and become Subpart A of the regulation. The Board of Governors has ruled that State laws The wire transfer service of the Federal Reserve making contracts enforceable against married utilizes the System’s computerized communica­ people at a younger age than against those who are tions network linking the Board and all Federal not married do not conflict with the Equal Credit Reserve Banks and their offices, to allow member Opportunity Act. banks to transfer funds almost instantly from their Creditors may, therefore, act according to such reserve balances to the reserve accounts of other laws in making credit decisions without violating member banks, for their own account or for a the Equal Credit Opportunity Act or the Board’s customer. The most frequent use of this service is Regulation B. for the transfer of excess reserves of member banks The Board made its ruling in response to in­ to banks needing additional reserves and the trans­ quiries whether sections of Alabama and Nevada fer of funds for corporations. laws (Alabama Code 34, Sections 76 and 76(1) and The use of wire transfer has risen during the past Nevada Revised Statute 38, Section 101) are incon­ 10 years from $6.6 trillion in 1967 to $35 trillion in sistent with—and are therefore pre-empted by—the 1976. The greatly increased use of the System’s Federal law. wire transfer services led the Board to conclude Both of the State laws establish a younger age of that it should put rules now contained in Reserve majority for persons who are married than for Bank operating circulars into regulatory form, unmarried persons. The Board determined that this clarifying the duties and responsibilities of partici­ does not conflict with provisions of the Equal pants using the System’s wire transfer facilities. Credit Opportunity Act and Regulation B making it Subpart B covers only wire transfer of funds and illegal to discriminate in granting credit on the basis does not touch on other electronic payments such of age or marital status. as those processed through automated clearing houses (where payments instructions recorded on magnetic tape, rather than on checks, are cleared) CHANGES IN BOARD STAFF or point-of-sale transactions (in which electronic means are used for verification of checks, or to The Board of Governors has announced the follow­ charge customers’ bank accounts for their pur­ ing organizational changes and staff promotions and chases of goods or services). appointments: The wire transfer rules adopted by the Board are William H. Wallace, Director, Division of Fed­ a revision from proposed wire transfer rules the eral Reserve Bank Examinations and Budgets, has Board had published in November 1973 and repub­ been named Staff Director for Federal Reserve Bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

704 Federal Reserve Bulletin □ July 1977 Activities, effective June 20, 1977. He will have Don E. Kline has been appointed Assistant Di­ responsibility for overseeing the Divisions of Fed­ rector of the Division of Banking Supervision and eral Reserve Bank Operations and Federal Reserve Regulation, effective June 20, 1977. Mr. Kline, who Bank Examinations and Budgets. joined the Board’s staff in 1963, holds a B.S. degree Edwin M. Truman, Associate Director of the from Juniata College, Huntingdon, Pennsylvania, Division of International Finance, has been ap­ and graduated from the Stonier Graduate School of pointed Director of the division, effective June 20, Banking at Rutgers University. 1977. William Taylor has been appointed Assistant John E. Reynolds, Acting Director, has been Director of the Division of Banking Supervision and named Counselor to the Division of International Regulation, effective June 20, 1977. Mr. Taylor has Finance, effective June 20, 1977. been with the Board since 1976. He has a B.A. Robert F. Gemmill, Senior International Division degree from Cornell College, Mt. Vernon, Iowa, Officer, has been named Associate Director of the and was on the staff of the Federal Reserve Bank of Division of International Finance, effective June Chicago from 1961-69. 20, 1977. George B. Henry, Senior International Division Officer, has been appointed Associate Director of the Division of International Finance, effective PROPOSED BHC ACTIVITY June 20, 1977. Charles J. Siegman, Senior International Division The Board of Governors has decided to take under Officer, has been appointed Associate Director of consideration proposals by four bank holding com­ the Division of International Finance, effective panies to have a subsidiary engage in the business June 20, 1977. of acting as a futures commission merchant to John E. Ryan, Acting Director of the Division of execute futures contracts covering gold and silver Banking Supervision and Regulation, has been bullion and coins. The deadline for comments was named Director of that division, effective June 20, July 13, 1977. 1977. Frederick C. Schadrack, Vice President for Bank Supervision at the Federal Reserve Bank of New York, will be on loan to the Board to serve as SYSTEM MEMBERSHIP: Deputy Director of the Division of Banking Super­ Admission of State Bank vision and Regulation, effective August 1, 1977. Mr. Schadrack has been on the staff of the Federal The following State bank was admitted to member­ Reserve Bank of New York since 1960. ship in the Federal Reserve System during the Frederick R. Dahl, Assistant Director of the period June 16, 1977, through July 15, 1977: Division of Banking Supervision and Regulation, has been named Associate Director of that divi­ Ohio sion, effective June 20, 1977. Columbus ..................Columbus Trust Company Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

705 Industrial Production Released for publication July 15 rials continued to increase rapidly. Iron and steel output rose further but at a slower rate than Industrial production in June increased by an esti­ that of the previous 3 months. mated 0.7 per cent, following gains of 1.0 per cent in May and 0.7 per cent in April. Automotive Seasonally adjusted, ratio scale, 1967=100 products, business equipment, and durable goods materials contributed substantially to the June ad­ vance, while output of nondurable consumer goods and nondurable goods materials was little changed over the month. Industrial production rose at about a 12Vi per cent annual rate between the first and second quarters, after a weatherdamped 5.3 per cent annual rate of increase for the first quarter. Auto assemblies rose about 5Vi per cent from May to a 9.7-million-unit annual rate in June, con­ tributing significantly to the sharp rise in output of durable consumer goods. Production of busi­ ness equipment continued to advance strongly, rising 1.5 per cent in June and at about an 18 per cent annual rate for the second quarter as a whole. Output of home goods and nondurable consumer goods rose slightly in June. Production of nondurable goods materials was F.R. indexes, seasonally adjusted. Latest figures: June. about unchanged in June, but durable goods mate­ *Auto sales and stocks include imports. Seasonally adjusted, 1967 = 100 Per cent changes from— Industrial production 1977 Mar. Apr. Mayp Junep Month ago Year ago Q1 to Q2 Total ............................................................................. 135.2 136.2 137.6 138.6 .7 6.5 3.0 Products, total .................................................................... 134.9 136.2 137.2 138.3 .8 6.8 2.4 Final products ................................................................ 133.0 134.4 135.3 136.3 .7 6.8 2.6 Consumer goods ....................................................... 142.8 143.6 143.9 144.7 .6 5.0 2.0 Durable goods ....................................................... 152.4 152.0 152.6 155.2 1.7 7.6 3.7 Nondurable goods ................................................... 139.0 140.3 140.4 140.7 .2 4.1 1.3 Business equipment ................................................. 144.5 147.0 149.3 151.6 1.5 12.3 4.3 Intermediate products ................................................... 141.9 142.8 144.6 145.8 .8 7.3 1.8 Construction supplies ............................................... 136.4 137.4 139.6 141.1 1.1 7.1 2.4 Materials ............................................................................. 135.5 136.4 137.9 138.9 .7 5.9 3.6 pPreliminary. Estimated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 1 Financial and Business Statistics CONTENTS DOMESTIC FINANCIAL STATISTICS Weekly Reporting Commercial Banks A3 Monetary aggregates and interest rates Assets and Liabilities of— A4 Factors affecting member bank reserves A20 All reporting banks A5 Reserves and borrowings of member A21 Banks in New York City banks A22 Banks outside New York City A6 Federal funds transactions of money A23 Balance sheet memoranda market banks A24 Commercial and industrial loans A25 Gross demand deposits of individuals, Policy Instruments partnerships, and corporations A8 Federal Reserve Bank interest rates A9 Member bank reserve requirements Financial Markets A10 Maximum interest rates payable on time and savings deposits at Federally A25 Commercial paper and bankers insured institutions acceptances outstanding A10 Margin requirements A26 Prime rate charged by banks on A11 Federal Reserve open market short-term business loans transactions A26 Interest rates charged by banks on business loans Federal Reserve Banks A27 Interest rates in money and capital markets A12 Condition and F.R. note statements A28 Stock market—Selected statistics A13 Maturity distribution of loan and security holdings A29 Savings institutions—Selected assets and liabilities Monetary and Credit Aggregates A13 Demand deposit accounts—Debits and Federal Finance rate of turnover A30 Federal fiscal and financing operations A14 Money stock measures and components A31 U.S. Budget receipts and outlays A15 Aggregate reserves and deposits of A32 Federal debt subject to statutory member banks limitation A15 Loans and investments of all A32 Gross public debt of U.S. Treasury— commercial banks Types and ownership A33 U.S. Government marketable Commercial Bank Assets and Liabilities securities—Ownership, by maturity A16 Last-Wednesday-of-month series A34 U.S. Government securities dealers— A17 Call-date series Transactions, positions, and financing A18 Detailed balance sheet, Dec. 31, 1976 A35 Federal and Federally sponsored credit agencies—Debt outstanding Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A2 Federal Reserve Bulletin □ July 1977 Securities Markets and INTERNATIONAL STATISTICS Corporate Finance A54 U.S. international transactions— A36 New security issues—State and local Summary government and corporate A55 U.S. foreign trade A37 Corporate securities—Net change in A55 U.S. reserve assets amounts outstanding A56 Selected U.S. liabilities to foreigners A37 Open-end investment companies—Net and to foreign official institutions sales and asset position A38 Corporate profits and their distribution Reported by Banks in the United States: A38 Nonfinancial corporations—Assets and A57 Short-term liabilities to foreigners liabilities A59 Long-term liabilities to foreigners A38 Business expenditures on new plant A60 Short-term claims on foreigners and equipment A61 Long-term claims on foreigners A39 Domestic finance companies—Assets and liabilities; business credit A62 Foreign branches of U.S. banks— Balance sheet data Real Estate A40 Mortgage markets Securities Holdings and Transactions A41 Mortgage debt outstanding A64 Marketable U.S. Treasury bonds and notes—Foreign holdings and Consumer Instalment Credit transactions A42 Total outstanding and net change A64 Foreign official accounts A43 Extensions and liquidations A65 Foreign transactions in securities Flow of Funds Reported by Nonbanking Concerns in the United States: A44 Funds raised in U.S. credit markets A45 Direct and indirect sources of funds to A66 Short-term liabilities to and claims on credit markets foreigners A67 Long-term liabilities to and claims on DOMESTIC NONFINANCIAL STATISTICS foreigners A46 Nonfinancial business activity— Interest and Exchange Rates Selected measures A46 Output, capacity, and capacity A68 Discount rates of foreign central banks utilization A68 Foreign short-term interest rates A47 Labor force, employment, and A68 Foreign exchange rates unemployment A48 Industrial production SPECIAL TABLE A50 Housing and construction A69 Sales, revenue, profits, and dividends A51 Consumer and wholesale prices of large manufacturing corporations A52 Gross national product and income A53 Personal income and saving INSIDE BACK COVER Guide to Tabular Presentation and Statistical Releases Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Statistics A3 1.10 MONETARY AGGREGATES AND INTEREST RATES 1976 1977 1977 Item Q3 Q4 Ql Q2 Feb. Mar. Apr. May June Monetary and credit aggregates (annual rates of change, seasonally adjusted in per cent)1 Member bank reserves 1 Total.................................................................... 2.7 4.4 2.7 -13.1 -3.1 13.0 1.5 2 Required........................................................................ 2.4 4.0 3.0 -10.9 -3.8 13.9 0.9 3 Nonborrowed.............................................................. 2.6 4.8 2.6 -13.3 -4.3 14.1 -3.1 Concepts of money 1 4 M-l...................................................................... 4.4 r6.5 r4.2 0.8 '5.4 M9.4 '0.7 5 M-2................................................................................ 9.1 M2.5 r9.9 HA r8.6 M3.5 r4.7 6 M-3................................................................................ 11.4 r14.4 r 11. 3 r8.9 '9.4 M2.4 r7.2 Time and savings deposits Commercial banks: 7 Total.......................................................................... 7.0 M2.2 M2.5 M0.7 r6.7 r6.9 r8.3 8 Other than large CD’s............................................ 12.8 r17.1 M4.0 Ml.7 M0.7 r9.5 r7.6 9 Thrift institutions 2..................................................... 14.8 17.3 13.4 Ml.7 M0.9 M0.5 M0.9 10 Total loans and investments at commercial banks 3 6.9 10.8 14.7 10.0 10.3 Interest rates (levels, per cent per annum) Short-term rates 11 Federal funds 4......................................... 5.28 4.88 4.66 5.16 4.68 4.69 4.73 5.35 5.39 12 Treasury bills (3-month market yield) 5 5.15 4.67 3.63 4.84 4.67 4.60 4.54 4.96 5.02 13 Commercial paper (90- to 119-day) 6.. 5.41 4.91 4.74 5.15 4.76 4.75 4.75 5.26 5.42 14 Federal Reserve discount 7..................... 5.50 5.39 5.25 5.25 5.25 5.25 5.25 5.25 5.25 Long-term rates Bonds: 15 U.S. Govt. 8........................................... 7.90 7.54 7.62 7.68 7.64 7.74 7.67 7.74 7.64 16 State and local government 9............ 6.64 6.18 5.88 5.70 5.89 5.89 5.73 5.75 5.62 17 Aaa utility (new issue) io................... 8.48 8.15 8.17 8.22 8.25 8.26 8.33 8.21 18 Conventional mortgages 11.................... 9.03 8.95 8.82 8.80 8.85 8.90 8.95 1 M-l equals currency plus private demand deposits adjusted. 7 Rate for the Federal Reserve Bank of New York. M-2 equals M-l plus bank time and savings deposits other than large 8 Market yields adjusted to a 20-year maturity by the U.S. Treasury. negotiable CD’s. 9 Bond Buyer series for 20 issues of mixed quality. M-3 equals M-2 plus deposits at mutual savings banks, savings and I o Weighted averages of new publicly offered bonds rated Aaa, Aa, loan associations, and credit union shares. and A by Moody’s Investors Service and adjusted to an Aaa basis. 2 Savings and loan associations, mutual savings banks, and credit Federal Reserve compilations. unions. II Average rates on new commitments for conventional first mortgages 3 Quarterly changes calculated from figures shown in Table 1.23. on new homes in primary markets, unweighted and rounded to nearest 4 Seven-day averages of daily effective rates (average of the rates on 5 basis points, from Dept, of Housing and Urban Development. a given date weighted by the volume of transactions at those rates). 12 Unless otherwise noted, rates of change are calculated from average 5 Quoted on a bank-discount rate basis. amounts outstanding in preceding month or quarter. 6 Most representative offering rate quoted by five dealers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Financial Statistics □ July 1977 1.11 FACTORS AFFECTING MEMBER BANK RESERVES Millions of dollars Monthly averages of daily Weekly averages of daily figures for weeks ending— figures Factors 1977 1977 Apr. May June? May 18 May 25 June 1 June 8 June 15 June? 22 June? 29 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding.. . 108,558 112,694 109,450 112,988 111,751 109,165 104,434 103,365 111,543 117,235 2 U.S. Govt, securities1.................... 95,316 99,023 95,337 99,334 98,491 96,431 90.899 90.289 97,194 101,992 3 Bought outright......................... 94,534 97,000 94,132 97,263 96,707 96,312 90.899 90.289 96,244 98,359 4 Held under repurchase agree­ ment ......................................... 782 2,023 1,205 2,071 1,784 119 950 3,633 5 Federal agency securities............. 6,813 7,259 7,312 7,357 7,275 7,078 7.077 7.059 7,165 7,878 6 Bought outright......................... 6,766 7,077 7,176 7,077 7,077 7,077 7.077 7.059 7,110 7,436 7 Held under repurchase agree­ ment ......................................... 47 182 136 280 198 1 55 442 8 Acceptances.................................... 284 489 228 520 409 66 56 52 203 565 9 Loans............................................... 73 200 261 127 311 230 226 223 271 334 10 Float................................................. 2,992 2,773 3,430 2,643 2,708 2,497 3,502 2,979 3,802 3,446 11 Other Federal Reserve assets. . . 3,080 2,950 2,882 3,007 2,556 2,862 2,675 2,762 2,906 3,020 12 Gold stock.......................................... 11,636 11,632 11,628 11,633 11,629 11,629 11,629 11,629 11,629 11,626 13 Special Drawing Rights certificate account........................................ 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 14 Treasury currency outstanding____ 11,010 11,056 11,099 11,055 11,069 11,066 11,083 11,091 11,110 11,113 ABSORBING RESERVE FUNDS 15 Currency in circulation..................... 94,295 94,968 96,029 95,152 94,888 95,394 95,933 96,146 95,993 95,951 16 Treasury cash holdings.................... 452 442 437 440 438 433 433 434 440 441 Deposits, other than member bank reserves with F.R. Banks: 17 Treasury.......................................... 7,369 10,997 7,057 10,862 10,505 6,932 3,300 1,320 8,690 14,058 18 Foreign............................................ 294 322 277 365 263 321 279 287 261 259 19 Other 2.............................................. 633 559 675 525 548 822 559 715 600 628 20 Other F.R. liabilities and capital... 3,266 3,324 3,260 3,281 3,375 3,476 3,012 3,125 3,289 3,525 21 Member bank reserves with F.R. Banks............................................... 26,096 25,970 25,643 26,251 25,632 25,681 24,831 25,258 26,209 26,315 End-of-month figures Wednesday figures 1977 1977 Apr. May Junep May 18 May 25 June 1 June 8 June 15 June*’ 22 June** 29 SUPPLYING RESERVE FUNDS 22 Reserve Bank credit outstanding. .. 114,406 111,838 117,311 112,369 109,586 110,286 101,784 105,657 115,631 117,349 23 U.S. Govt, securities1..................... 99,967 97,394 102,239 98,162 95.906 95.252 87.309 90.720 99,451 101,864 24 Bought outright........................ 97,993 96,560 98,163 97,043 95.906 95.252 87.309 90.720 96,709 98,310 25 Held under repurchase agree­ ment ........................................ 1,974 834 4,076 1,119 2,742 3,554 26 Federal agency securities............... 7,201 7,087 8,033 7,353 7.077 7.077 7.077 7.056 7,680 7,778 27 Bought outright......................... 7,077 7,077 7,423 7,077 7.077 7.077 7.077 7.056 7,436 7,436 28 Held under repurchase agree­ ment ......................................... 124 10 610 276 244 342 29 Acceptances.................................... 881 108 621 358 60 58 54 49 399 456 30 Loans............................................... 379 400 258 211 451 222 767 974 1,212 605 31 Float................................................. 2,735 3,993 3,238 3,531 3,404 3,660 3,901 4,005 3,906 3,664 32 Other Federal Reserve assets. . . 3,243 2,856 2,922 2,754 2,688 4,017 2,676 2,853 2,983 2,982 33 Gold stock.......................................... 11,636 11,629 11,620 11,629 11,629 11,629 11,629 11,629 11,629 11,620 34 Special Drawing Rights certificate account............................................ 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 35 Treasury currency outstanding... . 10,984 11,026 11,116 11,058 11,073 11,073 11,083 11,096 11,112 11,116 ABSORBING RESERVE FUNDS 36 Currency in circulation.................... 93,960 95,606 96,685 95,223 95,242 96,018 96,343 96,318 96,116 96,678 37 Treasury cash holdings..................... 439 433 443 440 433 429 432 435 441 441 Deposits, other than member bank reserves with F.R. Banks: 38 Treasury.......................................... 13,628 5,838 15,183 10,848 9,044 4,946 2,723 1,228 12,958 16,115 39 Foreign............................................ 305 436 379 279 274 325 293 344 250 287 40 Other 2.............................................. 591 831 748 536 713 1,996 554 657 631 592 41 Other F.R. liabilities and capital. . 3,528 3,539 3,616 3,296 3,425 3,517 3,011 3,173 3,348 3,526 42 Member bank reserves with F.R. Banks............................................... 25,773 29,009 24,194 25,635 24,357 26,956 22,340 27,427 25,829 23,647 1 Includes securities loaned—fully guaranteed by U.S. Govt, securities voluntarily held with member banks and redeposited in full with Federal pledged with F.R. Banks—and excludes (if any) securities sold and sched­ Reserve Banks. ule 2 d I t n o c l b u e d e b s o u c g e h r t t a b in ac k d e u p n o d s e i r ts m a o t f c h f e o d r e s i a g l n e - o p w ur n c e h d a se b a tr n a k n i s n a g c ti i o n n s s t . itutions 1.1 N 2.ote.—For amounts of currency and coin held as reserves, see Table Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Member Banks A5 1.12 RESERVES AND BORROWINGS Member Banks Millions of dollars Monthly averages of daily figures Reserve classification 1975 1976 1977 Dec. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May JuneP All member banks Reserves: At F.R. Banks................... 27,215 26,127 26,458 26,430 27,229 25,725 25,849 26,096 25,970 25,643 Currency and coin........... 7,773 8,025 8,180 8,548 8,913 8,326 8,134 8,368 8,610 8,610 Total held1......................... 34,989 34,305 34,797 35,136 36,290 34,199 34,135 34,613 34,732 34,401 Required......................... 34,727 34,116 34,433 34,964 35,796 34,234 33,870 34,602 34,460 34,291 Excess1........................... 262 189 364 172 494 -35 265 11 272 110 Borrowings at F.R. Banks:2 Total.................................... 127 66 84 62 61 79 110 73 200 261 Seasonal.............................. 13 32 21 12 8 12 13 14 31 54 Large banks in New York City 8 Reserves held............................ 6,812 6,374 6,589 6,520 7,076 6,442 6,331 6,264 6,310 6,175 9 Required............................... 6,748 6,346 6,485 6,602 6,948 6,537 6,259 6,351 6,279 6,188 10 Excess.................................... 64 28 104 -82 128 -95 72 -87 31 -13 11 Borrowings2............................. 63 36 15 6 47 44 16 18 36 Large banks in Chicago 12 Reserves held............... 1,740 1,648 1,621 1,632 1,731 1.624 1,610 1,629 1,637 1,601 13 Required................... 1,758 1,635 1,602 1,641 1,698 1.624 1,611 1,634 1,634 1,626 14 Excess....................... -18 13 19 — 9 33 -1 -5 3 -25 15 Borrowings2................. 3 4 2 3 * 4 15 Other large banks 16 Reserves held... 13,249 12,704 12,889 13,117 13,556 12,683 12,779 13,090 13,067 12,790 17 Required........ 13,160 12,706 12,802 13,053 13,427 12,765 12,705 13,110 12,996 12,938 18 Excess............. 89 -2 87 64 129 -82 74 -20 71 -148 19 Borrowings2.... 26 17 7 14 25 4 29 23 62 79 All other banks 20 Reserves held. 13,188 13,579 13,698 13,867 13,927 13,450 13,415 13,630 13,718 13,630 21 Required... 13,061 13,429 13,544 13,668 13,723 13,308 13,295 13,507 13,551 13,5*39 22 Excess........ 127 150 154 199 204 142 120 123 167 91 23 Borrowings2.. 38 46 41 29 28 28 34 34 116 131 Weekly averages of daily figures for weeks ending— 1977 Apr. 27 May 4 May 11 May 18 May 25 June 1 June 8 June 15 June 22p June 29 *> All member banks Reserves: 24 At F.R. Banks................... 26,746 26,786 25,527 26,251 25,632 25,681 24,831 25,258 26,209 26,315 25 Currency and coin........... 8,341 8,892 8,998 8,543 8,149 8,585 8,751 8,695 8,364 8,624 26 Total heldi......................... 35,240 35,831 34,678 34,946 33,933 34,418 33,734 34,104 34,720 35,086 27 Required......................... 35,076 35,529 34,632 34,728 33,798 34,009 33,701 33,858 34,616 34,916 28 Excess1........................... 164 302 46 218 135 409 33 246 104 170 Borrowings at F.R. Banks:2 29 Total.................................... 99 215 156 127 311 230 226 223 271 334 30 Seasonal.............................. 15 19 21 29 35 45 52 48 51 68 Large banks in New York City 31 Reserves held......................... 6,259 6,516 6,299 6,454 5,988 6,312 6,042 6,118 6,165 6,368 32 Required............................. 6,290 6,467 6,307 6,432 6,034 6,227 6,099 6,065 6,231 6,316 33 Excess.................................. -31 49 -8 22 -46 85 -57 53 -66 52 34 Borrowings2........................... 34 54 25 27 9 83 16 57 Large banks in Chicago 35 Reserves held......................... 1,629 1,732 1,595 1,728 1,559 1,670 1,578 1,627 1,511 1,516 36 Required............................. 1,621 1,699 1,625 1,706 1,568 1,594 1,594 1,629 1,651 1,636 37 Excess.............................. 8 33 -30 22 -9 76 -16 -2 -140 -120 38 Borrowings2........................... 1 18 49 14 Other large banks 39 Reserves held.......................... 13,407 13,526 13,093 13,129 12,757 12,804 12,664 12,864 13,023 13,047 40 Required............................. 13,339 13,470 13,140 13,107 12,680 12,749 12,678 12,828 13,059 13,176 41 Excess.................................. 68 56 -47 22 77 55 -14 36 -36 -129 42 Borrowings2........................... 27 88 51 31 111 62 51 74 69 125 All other banks 43 Reserves held.......................... 13,945 14,057 13,691 13,635 13,629 13,632 13,450 13,495 13,783 13,881 44 Required............................. 13,826 13,893 13,560 13,483 13,516 13,439 13,330 13,336 13,675 13,788 45 Excess.................................. 119 164 131 152 113 193 120 159 108 93 46 Borrowings2........................... 37 73 80 78 173 159 92 84 131 209 1 Adjusted to include waivers of penalties for reserve deficiencies in nonmember bank joins the Federal Reserve System. For weeks for which accordance with Board policy, effective Nov. 19, 1975, of permitting figures are preliminary, figures by class of bank do not add to total transitional relief on a graduated basis over a 24-month period when a because adjusted data by class are not available. nonmember bank merges into an existing member bank, or when a 2 Based on closing figures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Financial Statistics □ July 1977 1.13 FEDERAL FUNDS TRANSACTIONS of Money Market Banks Millions of dollars, except as noted 1977, week ending Wednesday- Type May 4 May 11 May 18 May 25 June 1 June 8 June 15 June 22 June 29 Total, 46 banks Basic reserve position 1 Excess reserves1........................... 142 -20 64 54 164 -20 68 17 36 Less: 2 Borrowings at F.R. Banks... 107 31 18 62 19 87 105 96 51 3 Net interbank Federal funds transactions....................... 15,076 18,142 16,727 14,942 13,970 18,101 17,921 16,742 12,789 Equals : Net surplus, or deficit ( —): 4 Amount...................................... -15,042 -18,193 -16,681 -14,949 -13,825 -18,208 -17,958 -16,821 -12,804 5 Per cent of average required reserves............................... 98.1 121.7 110.1 104.5 94.6 125.7 123.4 113.2 85.5 Interbank Federal funds transactions Gross transactions: Purchases....................................... 24,040 25,762 24,063 22,870 21,749 24,451 23,993 24,407 21,551 Sales................................................. 8,963 7,620 7,336 7,929 7,779 6,350 6,072 7,665 8,763 Two-way transactions2................... 5,589 5,026 5,227 5,619 5,391 4,711 4,732 5,462 5,170 Net transactions: Purchases of net buying banks.. 18,450 20,736 18,836 17,251 16,358 19,740 19,261 18,945 16,381 Sales of net selling banks............ 3,374 2,594 2,110 2,309 2,389 1,639 1,340 2,203 3,593 Related transactions with U.S. Govt, securities dealers 11 Loans to dealers3................... 2,899 2,914 2,857 2,930 2,909 5,462 4,593 2,895 1,905 12 Borrowing from dealers4. . . 2,029 2,091 2,327 2,770 1,707 2,187 1,968 1,733 2,235 13 Net loans.................................. 870 822 530 160 1,202 3,274 2,625 1,162 -329 8 banks in New York City Basic reserve position 14 Excess reserves1.................................. 29 5 30 -23 53 -18 40 -5 71 Less: 15 Borrowings at F.R. Banks. . 54 25 21 83 16 57 16 Net interbank Federal funds transactions............................. 5,815 7,329 5,656 5,088 4,445 6,062 5,438 5,551 4,305 Equals : Net surplus, or deficit (—): 17 Amount............................................ -5,840 -7,349 -5,627 -5,133 -4,392 -6,163 -5,414 -5,612 -4,234 18 Per cent of average required reserves..................................... 99.2 128.2 96.0 93.9 77.5 111.3 98.4 99.4 73.9 Interbank Federal funds transactions Gross transactions: 19 Purchases.......................................... 6,951 8,249 7,083 6,659 5,835 6,900 6,660 6,878 5,566 20 Sales................................................... 1,136 920 1,427 1,572 1,390 838 1,222 1,327 1,261 21 Two-way transactions2..................... 1,135 920 1,427 1,571 1,390 838 1,222 1,327 1,261 Net transactions: 22 Purchases of net buying banks... 5,815 7,329 5,656 5,088 4,445 6,062 5,438 5,551 4,305 23 Sales of net selling banks............. Related transactions with U.S. Govt, securities dealers 24 Loans to dealers3................................ 1,535 1,569 1,533 1,590 1,705 2,661 2,067 1,425 868 25 Borrowing from dealers4................. 631 849 1,019 1,097 679 737 466 720 581 26 Net loans.............................................. 904 721 514 494 1,026 1,924 1,602 705 287 38 banks outside New York City Basic reserve position 27 Excess reserves1................................ 113 -24 34 78 111 -2 29 21 -35 Less: 28 Borrowings at F.R. Banks......... 54 6 18 41 19 4 89 39 51 29 Net interbank Federal funds transactions........................... 9,261 10,813 11,070 9,854 9,525 12,038 12,483 11,191 8,483 Equals : Net surplus, or deficit (—): 30 Amount.......................................... -9,202 -10,843 -11,054 -9,817 -9,433 -12,044 -12,543 -11,209 -8,570 31 Per cent of average required reserves................................... 97.3 117.7 119.1 111.0 105.4 134.7 138.6 121.7 92.6 Interbank Federal funds transactions Gross transactions: Purchases....................................... 17,089 17,513 16,979 16,211 15,914 17,551 17,333 17,529 15,985 Sales................................................. 7,828 6,700 5,909 6,357 6,389 5,512 4,850 6,337 7,501 Two-way transactions2................... 4,454 4,106 3,800 4,048 4,001 3,873 3,510 4,135 3,909 Net transactions: Purchases of net buying banks.. 12,635 13,407 13,180 12,163 11,913 13,678 13,824 13,394 12,076 Sales of net selling banks........... 3,374 2,594 2,110 2,309 2,389 1,639 1,340 2,203 3,593 Related transactions with U.S. Govt, securities dealers 37 Loans to dealers3................... 1,364 1,345 1,324 1,340 1,204 2,801 2,526 1,470 1,038 38 Borrowing from dealers4.... 1,398 1,243 1,308 1,674 1,028 1,450 1,503 1,014 1,653 39 Net loans.................................. -34 102 16 -334 175 1,351 1,024 457 -616 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Funds A7 1.13 Continued 1977, week ending Wednesday- Type May 4 May 11 May 18 May 25 June 1 June 8 June 15 June 22 June 29 5 banks in City of Chicago Basic reserve position 40 Excess reserves1............................ 38 -12 18 4 61 6 20 -7 -6 Less: 41 Borrowings at F.R. Banks. .. 18 49 14 42 Net interbank Federal funds transactions....................... 5,410 5,883 5,908 5,227 5,066 5,973 6,042 5,882 4,994 Equals: Net surplus, or deficit (—): 43 Amount.................................... -5,372 -5,896 -5,907 -5,223 -5,006 -5,967 -6,071 -5,903 -5,001 44 Per cent of average required reserves............................ 337.8 388.4 369.0 356.4 322.1 400.5 398.1 381.7 326.7 Interbank Federal funds transactions Gross transactions: 45 Purchases........................................ 6,600 6,780 6,904 6,246 6,038 6,783 6,708 6,902 6,122 46 Sales................................................ 1,190 897 996 1,018 972 811 666 1,020 1,128 47 Two-way transactions2................... 1,178 897 996 1,018 972 811 666 1,020 1,128 Net transactions: 48 Purchases of net buying banks.. 5,421 5,883 5,908 5,228 5,066 5,972 6,042 5,882 4,994 49 Sales of net selling banks........... 12 Related transactions with U.S. Govt, securities dealers 50 Loans to dealers 3............................. 365 295 229 244 292 497 401 379 176 51 Borrowing from dealers4............... 543 512 561 600 460 411 406 401 557 52 Net loans............................................ -178 -217 -333 -356 -168 86 -5 -22 -381 33 other banks Basic reserve position 53 Excess reserves1.................................. 75 -12 16 74 50 -7 9 28 -29 Less: 54 Borrowings at F.R. Banks........... 54 6 41 19 4 40 25 51 55 Net interbank Federal funds transactions............................. 3,852 4,930 5,163 4,627 4,459 6,066 6,441 5,309 3,489 Equals: Net surplus, or deficit (—): 56 Amount............................................ -3,830 -4,948 -5,174 -4,594 -4,427 -6,077 -6,473 -5,306 -3,569 57 Per cent of average required reserves..................................... 48.7 64.3 67.0 62.2 59.5 81.5 86.0 69.2 46.2 Interbank Federal funds transactions Gross transactions: 58 Purchases.......................................... 10,489 10,733 10,075 9,965 9,875 10,768 10,625 10,627 9,862 59 Sales................................................... 6,638 5,803 4,913 5,339 5,417 4,702 4,184 5,317 1,373 60 Two-way transactions2..................... 3,276 3,209 2,803 3,030 3,029 3,062 2,843 3,115 2,781 Net transactions: 61 Purchases of net buying banks... 7,214 7,523 7,272 6,936 6,847 7,705 7,782 7,512 7,081 62 Sales of net selling banks............. 3,362 2,594 2,110 2,309 2,389 1,639 1,340 2,203 3,593 Related transactions with U.S. Govt, securities dealers 63 Loans to dealers3............................... 999 1,050 1,095 1,096 912 2,304 2,125 1,091 862 64 Borrowing from dealers4.................. 855 731 746 1,073 569 1,039 1,097 613 1,092 65 Net loans.............................................. 144 319 349 22 343 1,265 1,028 479 -234 1 Based on reserve balances, including adjustments to include waivers 4 Federal funds borrowed, net funds acquired from each dealer by of penalties for reserve deficiencies in accordance with changes in Board clearing banks, reverse repurchase agreements (sales of securities to policy effective Nov. 19, 1975. dealers subject to repurchase), resale agreements, and borrowings secured 2 Derived from averages for individual banks for entire week. Figure by U.S. Govt, or other securities. for each bank indicates extent to which the bank’s average purchases and sales are offsetting. Note.—Weekly averages of daily figures. For description of series, 3 Federal funds loaned, net funds supplied to each dealer by clearing see Federal Reserve Bulletin for August 1964, pp. 944—53. Back data for banks, repurchase agreements (purchases from dealers subject to resale), 46 banks appear in the Board’s Annual Statistical Digest, 1971-1975, or other lending arrangements. Table 3. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Financial Statistics □ July 1977 1.14 FEDERAL RESERVE BANK INTEREST RATES Per cent per annum Current and previous levels Loans to member banks— Loans to all others Under Sec. 10(b)2 under Sec. 13, last par.4 Federal Reserve Under Secs. 13 and 13a1 Bank Regular rate Special rate3 Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous 6/30/77 date rate 6/30/77 date rate 6/30/77 date rate 6/30/77 date rate Boston.................. 5V4 11/22/76 5V2 5Va 11 /22/76 6% 11/22/76 6I/2 8% 11/22/76 8i/i New York........... 5Va 11/22/76 5Vi 5Va U122/16 6% 11/22/16 6Vi 81/4 U/22/16 8 Vi Philadelphia........ 5V4 11/22/76 5Vz 5 Va 11 /22/76 6*4 \\/22/16 6i/i m 11/22/76 8i/i Cleveland............. 5Va 11/22/76 5V2 5Ya 11 /22/76 6% 11/22/76 61/2 81/4 11/22/76 8i/i Richmond........... 5V4 11/22/76 5V2 5Va II122116 6Va U/22/16 6Vi 81/4 11/22/76 8 Vi Atlanta................. 5Ya 11 /22/76 5V2 5Va U122/16 6Ya 11/22/76 6i/i SVa U/22/16 8 Vi Chicago................ 5Ya U122176 5V2 5Va 11122/16 6Va 11/22/76 6i/i sy4 11/22/16 8V4 St. Louis.............. 5V4 11126116 5V2 5 Va 11/26/76 6Va 11/26/76 6Vi 81/4 11/26/76 8 Vi Minneapolis........ 5V4 11/22/76 5Vi 5Va 11/22/76 6Va 11/22/76 61/2 8V4 11/22/76 8Vi Kansas City......... 5V4 11/22/76 5V2 5Va 11/22/76 6Va 11/22/76 6i/2 81/4 11/22/76 8 Vi Dallas................... 5V4 11/22/76 5V2 5% 11/22/76 61/4 11/22/76 6% 81/4 11/22/76 8 Vi San Francisco. .. 5Va 11/22/76 5% 5% 11/22/76 6V4 11/22/76 61/2 8V4 11/22/76 8 Vi Range of rates in recent years5 Range F.R. Range F.R. Range F.R. Effective date (or level)— Bank Effective date or level)— Bank Effective date (or level)— Bank All F.R. of All F.R. of All F.R of Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1970........ 5Vi 5Vi I973—Jan. 15................... 5 5 1975—Jan. 6................... 71/4-73/4 734 Feb. 26................... 5-51/2 51/2 10................... 71/4-73/4 71/4 1971—Jan. 8..................... 51/4-51/2 51/4 Mar. 2. 5 Vi 51/2 24................... 71/4 714 15..................... 514 514 Apr. 23................... 51/2-534 5Vi Feb. 5................... 6V4-IV4 63/4 19..................... 5 -514 51/4 May 4................... 534 534 7................... 6Y4 634 22..................... 5 -514 5 11................... 53/4-6 6 Mar. 10................... 6V4-6V4 6 V4 29..................... 5 5 18................... 6 6 14................... 6V4 614 Feb. 1 1 3 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 4 4 3 -5 4 4 5 34 June 1 1 1 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 61 - / 6 2 Vi 6 6 1 1 / /2 2 May 2 1 3 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 6 -61/4 6 6 July 16..................... 434-5 5 July 2................... 7 7 23..................... 5 5 Aug. 14................... 7-7Vi 71/2 1976—Jan. 19................... 5 Vi-6 5Vi Nov. 11..................... 434-5 5 23................... 7Vi 7 Vi 23................... 5% 5Vi 19..................... 434 434 Dec. 13..................... 41/2-434 434 1974—Apr. 25................... 7Vi-8 8 Nov. 22................... 51/4-51/2 514 17..................... 41/2-434 41/2 30................... 8 8 26................... 5% 514 24..................... 41/2 4Vi Dec. 9................... 734-8 734 16................... 7*4 IVa In effect June 30, 1977. .. 5% 514 1 Discounts of eligible paper and advances secured by such paper or by 4 Advances to individuals, partnerships, or corporations other than U.S. Govt, obligations or any other obligations eligible for F.R. Bank member banks secured by direct obligations of, or obligations fully purchase. guaranteed as to principal and interest by, the U.S. Govt, or any agency 2 Advances secured to the satisfaction of the F.R. Bank. Advances thereof. secured by mortgages on 1- to 4-family residential property are made at 5 Rates under Secs. 13 and 13a (as described above). For description the Section 13 rate. and earlier data, see the following publications of the Board of Governors: 3 Applicable to special advances described in Section 201.2(e)(2) of Banking and Monetary Statistics, 1914-1941, Banking and Monetary Regulation A. Statistics, 1941-1970, and Annual Statistical Digest, 1971-75. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.15 MEMBER BANK RESERVE REQUIREMENTS1 Per cent of deposits Requirements in effect Previous requirements June 30, 1977 Type of deposit, and deposit interval in millions of dollars Per cent Effective date Per cent Effective date Net demand:2 0-2............................................................................................................ 7 12/30/76 m 2/13/75 2-10......................................................................................................... 9% 12/30/76 10 2/13/75 10-100..................................................................................................... 11% 12/30/76 12 2/13/75 100-400................................................................................................... 123^ 12/30/76 13 2/13/75 Over 400..........................;..................................................................... 161/4 12/30/76 161/2 2/13/75 Time:2,3 Savings..................................................................................................... 3 3/16/67 3 Vi 3/2/67 Other time: 0-5, maturing in— 30-179 days................................................................................... 3 3/16/67 3i/i 3/2/67 180 days to 4 years...................................................................... 4 2^ 1/8/76 3 3/16/67 4 years or more............................................................................ 4 1 10/30/75 3 3/16/67 Over 5, maturing in— 30-179 days.................................................................................... 6 12/12/74 5 10/1/70 180 days to 4 years...................................................................... 4 21/2 1/8/76 3 12/12/74 4 years or more............................................................................ 41 10/30/75 3 12/12/74 Legal limits, June 30, 1977 Minimum Maximum Net demand: Reserve city banks 10 22 Other banks.......... 7 14 Time........................... 3 10 1 For changes in reserve requirements beginning 1963, see Board’s (c) Member banks are required under the Board’s Regulation M to Annual Statistical Digest, 1971-1975 and for prior changes, see Board’s maintain reserves against foreign branch deposits computed on the basis Annual Report for 1976, Table 13. of net balances due from domestic offices to their foreign branches and 2 (a) Requirement schedules are graduated, and each deposit interval against foreign branch loans to U.S. residents. Loans aggregating $100,000 applies to that part of the deposits of each bank. Demand deposits or less to any U.S. resident are excluded from computations, as are total subject to reserve requirements are gross demand deposits minus cash loans of a bank to U.S. residents if not exceeding $1 million. Regulation D items in process of collection and demand balances due from domestic imposes a similar reserve requirement on borrowings from foreign banks banks. by domestic offices of a member bank. A reserve of 4 per cent is required (b) The Federal Reserve Act specifies different ranges of requirements for each of these classifications. for reserve city banks and for other banks. Reserve cities are designated 3 Negotiable orders of withdrawal (NOW) accounts and time deposits under a criterion adopted effective Nov. 9, 1972, by which a bank having such as Christmas and vacation club accounts are subject to the same net demand deposits of more than $400 million is considered to have the requirements as savings deposits. character of business of a reserve city bank. The presence of the head 4 The average of reserves on savings and other time deposits must be office of such a bank constitutes designation of that place as a reserve at least 3 per cent, the minimum specified by law. city. Cities in which there are F.R. Banks or branches are also reserve cities. Any banks having net demand deposits of $400 million or less Note.—Required reserves must be held in the form of deposits with are considered to have the character of business of banks outside of F.R. Banks or vault cash. reserve cities and are permitted to maintain reserves at ratios set for banks not in reserve cities. For details, see the Board’s Regulation D. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Financial Statistics n July 1977 1.16 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions Per cent per annum Commercial banks Savings and loan associations and mutual savings banks Type and maturity of deposit In effect June 30, 1977 Previous maximum In effect June 30, 1977 Previous maximum Effective Per cent Effective Per cent Effective Per cent Effective date date date date 1 Savings......................................................... 7/1/73 41/2 1/21/70 5Va (5) (6) 2 Negotiable order of withdrawal (NOW) accounts1....................................... 1/1/74 5 1/1/74 Time (multiple- and single-maturity unless otherwise indicated):2 30-89 days: 4 3 S M in u g lt l i e p - l m e- a m tu a r t i u ty ri . t .. y .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7/1/73 4 5 1/2 9 1 / / 2 2 6 1 / / 6 7 6 0 (7) (7) 90 days to 1 year: 5 6 S M in u g lt l i e p - l m e- a m tu a r t i u ty ri .. t . y .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 5Vi 7/1/73 5 I 9 7 / / 2 2 6 0 / / 6 6 6 6 3 5Y4 (5) 5*4 1/21/70 7 8 2 1 t t o o 2 2 V y i e y ar e s a 3 rs .. 3 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 7/1/73 5 5V V a i 1 1 / / 2 2 1 1 / / 7 7 0 0 6V2 (5) 5 6 V4 1 1 / / 2 2 1 1 / / 7 7 0 0 9 2Vi to 4 years3.................................... 61/2 7/1/73 5Va 1/21/70 6Y4 (5) 6 1/21/70 10 4 to 6 years4........................................ 7!/4 11/1/73 (8) 71/2 11/1/73 (8) 11 6 years or more4................................. 71/2 12/23/74 m 11/1/73 1V4 12/23/74 m 11/1/73 12 Governmental units (all maturities). IVa 12/23/74 m 11/27/74 1V4 12/23/74 m 11 jll HA 1 For authorized States only. Federally insured commercial banks, 8 Between July 1, 1973, and Oct. 31, 1973, there was no ceiling for savings and loan associations, cooperative banks, and mutual savings certificates maturing in 4 years or more with minimum denominations banks were first permitted to offer NOW accounts on Jan. 1, 1974. of $1,000; however, the amount of such certificates that an institution Authorization to issue NOW accounts was extended to similar institu­ could issue was limited to 5 per cent of its total time and savings deposits. tions throughout New England on Feb. 27, 1976. Sales in excess of that amount, as well as certificates of less than $1,000, 2 For exceptions with respect to certain foreign time deposits see the were limited to the 6Vi per cent ceiling on time deposits maturing in 2Vi Federal Reserve Bulletin for October 1962 (p. 1279), August 1965 (p. years or more. 1094), and February 1968 (p. 167). Effective Nov. 1, 1973, the present ceilings were imposed on certificates 3 A minimum of $1,000 is required for savings and loan associations, maturing in 4 years or more with minimum denominations of $1,000. except in areas where mutual savings banks permit lower minimum de­ There is no limitation on the amount of these certificates that banks can nominations. This restriction was removed for deposits maturing in less issue. than 1 year, effective Nov. 1, 1973. 4 $1,000 minimum except for deposits representing funds contributed Note—Maximum rates that can be paid by Federally insured commer­ to an individual retirement account (IRA) or a Keogh (H.R. 10) plan es­ cial banks, mutual savings banks, and savings and loan associations are tablished pursuant to the Internal Revenue Code. The $1,000 minimum established by the Board of Governors of the Federal Reserve System, requirement was removed for such accounts in December 1975 and No­ the Board of Directors of the Federal Deposit Insurance Corporation, vember 1976, respectively. and the Federal Home Loan Bank Board under the provisions of 12 5 July 1, 1973, for mutual savings banks; July 6, 1973, for savings and CFR 217, 329, and 526, respectively. The maximum rates on time de­ loan associations. posits in denominations of $100,000 or more were suspended in mid- 6 Oct. 1, 1966, for mutual savings banks; Jan. 21, 1970, for savings and 1973. For information regarding previous interest rate ceilings on all loan associations. types of accounts, see earlier issues of the Federal Reserve Bulletin, 7 No separate account category. the Federal Home Loan Bank Board Journal, and the Annual Report of the Federal Deposit Insurance Corporation. 1.161 MARGIN REQUIREMENTS Per cent of market value; effective dates shown. Type of security on sale Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 1 Margin stocks............................................................ 70 80 65 55 65 50 2 Convertible bonds.................................................... 50 60 50 50 50 50 3 Short sales.................................................................. 70 80 65 55 65 50 Note.—Regulations G, T, and U of the Federal Reserve Board of difference between the market value (100 per cent) and the maximum Governors, prescribed in accordance with the Securities Exchange Act of loan value. The term “margin stocks” is defined in the corresponding 1934, limit the amount of credit to purchase and carry margin stocks regulation. that may be extended on securities as collateral by prescribing a maximum Regulation G and special margin requirements for bonds convertible loan value, which is a specified percentage of the market value of the into stocks were adopted by the Board of Governors effective Mar. 11, collateral at the time the credit is extended. Margin requirements are the 1968. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments All 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars Type of transaction 1974 1975 1976 Nov. Dec. Jan. Feb. Mar. Apr. May U.S. GOVT. SECURITIES Outright transactions (excl. matched salepurchase transactions) Treasury bills: Gross purchases. 11,660 11,562 14,343 346 975 2,535 110 1,671 681 Gross sales........... 5,830 5,599 8,462 480 1,546 313 801 368 260 489 Redemptions 4,550 26,431 2 5,017 600 19 400 Others within 1 year:1 Gross purchases..................... 450 472 18 59 45 107 41 20 Gross sales............................... Exchange, or maturity shift. -1,183 -4 792 1,047 252 ’ 63 -266 374 -1,209 Redemptions........................... 131 3,549 1 to 5 years: Gross purchases...................... 797 2 3,284 2 3,202 113 681 475 348 174 327 9 Gross sales............................... 177 10 Exchange, or maturity shift. -697 3,854 -2,588 430 -252 -880 266 -374 -865 5 to 10 years: 11 Gross purchases.................... 434 1,510 1,048 62 170 128 151 46 104 12 Gross sales............................... 13 Exchange, or maturity shift. 1,675 -4,697 1,572 -1,167 * 5 i 7 1,174 Over 10 years: 14 Gross purchases..................... 196 1,070 642 73 119 48 81 37 38 15 Gross sales............................... 16 Exchange, or maturity shift. 205 848 225 -310 300 900 All maturities:1 17 Gross purchases. 13,537 221,313 19,707 612 2,004 3,229 797 298 2,160 681 18 Gross sales........... 5,830 5,599 8,639 480 1,546 313 801 368 260 489 19 Redemptions 4,682 29,980 25,017 600 19 400 Matched sale-purchase transactions 20 Gross sales.................................... 64,229 151,205 196,078 22,675 23,193 24,595 22,674 30,115 32,287 28,532 21 Gross purchases.......................... 62,801 152,132 196,579 21,525 24,343 22,544 23,447 30,828 32,852 27,306 Repurchase agreements 22 Gross purchases. . . 71,333 140,311 232,891 17,612 30,872 23,820 13,853 14,368 13,397 29,308 23 Gross sales.............. 70,947 139,538 230,355 20,173 27,119 27,573 12,921 14,860 11,862 30,448 24 Net change in U.S. Govt, securities.......... 1,984 7,434 9,087 -4,179 5,361 -2,887 1,702 151 3,980 -2,573 FEDERAL AGENCY OBLIGATIONS Outright transactions: 25 Gross purchases........... 3,087 1,616 891 115 346 26 Gross sales..................... 27 Redemptions................. 322 246 169 14 63 36 Repurchase agreements: 28 Gross purchases........... 23,204 15,179 10,520 897 1,380 930 689 523 709 2,164 29 Gross sales..................... 22,735 15,566 10,360 976 1,102 1,208 612 546 639 2,278 BANKERS ACCEPTANCES 30 Outright transactions, net. .. 511 163 -545 -9 -5 -18 -51 -45 31 Repurchase agreements, net. 420 -35 410 -140 795 -795 149 653 -729 32 Net change in total System Account. 6,149 8,539 9,833 -4,307 6,379 -3,969 1,886 50 4,998 -3,461 1 Both gross purchases and redemptions include special certificates amounting to $189 million. Acquisition of these notes is treated as a created when the Treasury borrows directly from the Federal Reserve, purchase; the run-off of bills, as a redemption. as follows (millions of dollars): 1974,131; 1975, 3,549; and 1976 to present, none. Note.—Sales, redemptions, and negative figures reduce holdings of 2 In 1975, the System obtained $421 million of 2-year Treasury notes the System Open Market Account; all other figures increase such holdings. in exchange for maturing bills. In 1976 there was a similar transaction Details may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Financial Statistics □ July 1977 1.18 FEDERAL RESERVE BANKS Condition and F.R. Note Statements Millions of dollars Wednesday End of Month Account 1977 1977 June 1 June 8 June 15 June 22*> June 29^ Apr. May June*5 Consolidated condition statement ASSETS Gold certificate account.................................. 11,629 11,629 11,629 11,629 11,620 11,636 11,629 11,620 Special Drawing Rights certificate account. 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 3 Coin1. 315 309 311 313 313 340 319 315 Loans: 4 Member bank borrowings................. 222 767 974 1,212 605 379 400 258 5 Other....................................................... Acceptances: 6 Bought outright.................................... 58 54 49 47 43 103 58 43 7 Held under repurchase agreements., 352 413 778 50 578 Federal agency obligations: 8 Bought outright.................................... 7,077 7,077 7,056 7,436 7,436 7,077 7,077 7,423 9 Held under repurchase agreements., 244 342 124 10 610 U.S. Govt, securities Bought outright: 10 Bills..................................................... 38,386 30,443 33,854 39,373 40,974 41,127 39,694 40,827 11 Certificates—Special....................... 12 Other......................... 13 Notes.................................................. 48,732 48,732 48,732 49,088 49,088 49,632 48,732 49,088 14 Bonds................................................. 8,134 8,134 8,134 8,248 8,248 7.234 8,134 8,248 15 Total2..................................................... 95,252 87,309 90,720 96,709 98,310 97,993 96,560 98,163 16 Held under repurchase agreements. 2,742 3.554 1,974 834 4,076 17 Total U.S. Govt, securities. 95,252 87,309 90,720 99,451 101,864 99,967 97,394 102,239 18 Total loans and securities.. 102,609 95,207 98,799 108,742 110,703 108,428 104,989 111,151 19 Cash items in process of collection..., 11,212 9,324 10,530 9,715 9,501 8.234 8,360 8,520 20 Bank premises.......................................... 369 371 371 371 370 366 369 371 Other assets: 21 Denominated in foreign currencies. 59 59 59 60 57 56 60 57 22 All other................................................ 3,589 2,246 2,423 2,552 2.555 2,821 2,427 2,494 23 Total assets. 130,982 120,345 125,322 134,582 136,319 133,081 129,353 135,728 LIABILITIES 24 F.R. notes.............................................. 85,690 86,001 85,968 85,757 86,315 83,757 85,333 86,326 Deposits: 25 Member bank reserves....................... 26,956 22,340 27,427 25,829 23,647 25,773 29,009 24,194 26 U.S. Treasury—General account. 4,946 2,723 1,228 12,958 16,115 13,628 5,838 15,183 27 Foreign............................................... 325 293 344 250 287 305 436 379 28 Other 3................................................. 1,996 554 657 631 592 591 831 748 29 Total deposits. 34,223 25,910 29,656 39,668 40,641 40,297 36,114 40,504 30 Deferred availability cash items............ 7,552 5,423 6,525 5,809 5,837 5,499 4,367 5,282 31 Other liabilities and accrued dividends. 992 898 952 1,007 1,090 1,052 1,016 1,165 32 Total liabilities...................................... 128,457 118,232 123,101 132,241 133,883 130,605 126,830 133,277 CAPITAL ACCOUNTS 33 Capital paid in............................................................. 999 1,000 1,000 1,000 1,000 993 1,000 1,000 34 Surplus.......................................................................... 983 983 983 983 983 983 983 983 35 Other capital accounts.............................................. 543 130 238 358 453 500 540 468 36 Total liabilities and capital accounts....................... 130,982 120,345 125,322 134,582 136,319 133,081 129,353 135,728 37 Memo: Marketable U.S. Govt, securities held in custody for foreign and inti, account............... 58,395 58,593 57,624 57,809 58,032 60,092 58,214 57,867 Federal Reserve note statement 38 F.R. notes outstanding (issued to Bank)........ 90,294 90,574 90,843 90,980 91,171 89,630 90,242 91,250 Collateral held against notes outstanding: 39 Gold certificate account.................................. 11,625 11,625 11,625 11,625 11,616 11,631 11,625 11,616 40 Special Drawing Rights certificate account.... 643 752 752 752 752 643 643 752 41 Acceptances....................................................... 42 U.S. Govt, securities........................................ 79,383 79,258 79,755 79,905 79,965 78,933 79,283 80,015 43 Total collateral. 91,651 91,635 92,132 92,282 92,333 91,207 91,551 92,383 1 Effective Jan. 1, 1977, Federal Reserve notes of other Federal Reserve owned banking institutions voluntarily held with member banks and Banks were merged into the liability account for Federal Reserve notes. redeposited in full with F.R. Banks. 2 Includes securities loaned—fully guaranteed by U.S. Govt, securities pledged with F.R. Banks—and excludes (if any) securities sold and Note.—Beginning Jan. 1, 1977, “Operating equipment” was transferred scheduled to be bought back under matched sale-purchase transactions. to “Other assets.” 3 Includes certain deposits of domestic nonmember banks and foreign- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Reserve Banks A13 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holdings Millions of dollars Wednesday End of month Type and maturity 1977 June 1 June 8 June 15 June 22 June 29 Apr. 30 May 31 June 30 1 Loans............................. 220 769 973 1,212 605 377 398 258 2 Within 15 days 201 747 947 1,201 596 371 386 235 3 16 days to 90 days. 19 22 26 11 9 6 12 22 4 91 days to 1 year.. 5 Acceptances................. 58 54 49 399 456 881 108 621 6 Within 15 days 9 8 6 37 426 812 59 591 7 16 days to 90 days. 45 42 39 358 26 51 45 26 8 91 days to 1 year... 4 4 4 4 4 18 4 4 U.S. Govt, securities............ 95,252 87,309 90,720 99,451 101,864 99,967 97,394 102,239 Within 15 days1................ 1,937 3,118 3,520 7,484 7.778 6,259 2,629 6,195 16 days to 90 days........... 18,195 9,801 12,777 17,343 17,712 22,770 19,615 17,712 91 days to 1 year.............. 27,673 26,943 26,976 26,796 28,546 24,327 27,703 30,981 Over 1 year to 5 years. . , 29,930 29,930 29,930 30,129 30,129 31,168 29,930 29,652 Over 5 years to 10 years. 11,165 11,165 11,165 11,233 11,233 9,991 11,165 11,233 Over 10 years.................. 6,352 6,352 6,352 6,466 6,466 5,452 6,352 6,466 16 Federal agency obligations. 7,077 7,077 7,056 7,680 7.778 7,201 7,087 8,033 17 Within 15 days1................ 71 71 12 304 402 170 149 657 18 16 days to 90 days.......... 277 327 440 393 393 289 277 393 19 91 days to 1 year.............. 1,102 1,052 1,025 1,025 1,025 1,091 1,034 1,025 20 Over 1 year to 5 years. . , 3,450 3,450 3,403 3,636 3,636 3,490 3,450 3,636 21 Over 5 years to 10 years . 1,387 1,387 1,386 1,499 1,499 1,371 1,387 1,499 22 Over 10 years................... 790 790 790 823 823 790 790 823 1 Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements. 1.20 DEMAND DEPOSIT ACCOUNTS Debits and Rate of Turnover Monthly data are at seasonally adjusted annual rates. 1977 Standard metropolitan statistical area 1974 1975 1976 Jan. Feb. Mar. Apr. May Debits (billions of dollars)2 1 All 233 SMSA’s............................................................. 22,192.2 23,565.1 28,911.0 29,288.1 30,145.4 30,421.7 '30,585.5 32,024.0 2 New York City.............................................................. 9,931.8 10,970.9 13,835.0 14,411.8 14,898.0 14,612.1 14,988.9 15,739.7 3 232 SMSA’s................................................................... 12,260.6 12,594.2 15,076.1 14,876.3 15,247.4 15,809.6 H5,956.5 16,284.2 4 6 leading SMSA’s other than N.Y.C.1............... 5,152.7 4,937.5 5,917.1 5,864.3 5,887.1 6,155.7 6,055.5 6,420.4 5 226 others................................................................... 7,107.9 7,661.8 9,159.0 9,012.0 9,360.2 9,653.9 '9,541.1 9,863.8 Turnover of deposits (annual rate) 6 All 233 SMSA’s............................................................ 128.0 131.0 153.5 154.3 153.3 *■155.2 '158.2 160.2 7 New York City............................................................. 312.8 351.8 419.8 443.5 437.3 436.0 465.2 474.9 8 232 SMSA’s................................................................... 86.6 84.7 97.0 94.6 93.8 97.3 96.3 97.7 9 6 leading SMSA’s other than N.Y.C.1............... 131.8 118.4 136.9 133.9 129.9 135.2 134.7 139.8 10 226 others................................................................... 69.3 71.6 81.7 19 A 79.8 82.5 '82.1 81.7 1 Boston, Philadelphia, Chicago, Detroit, San Francisco-Oakland, and Note.—Total SMSA’s includes some cities and counties not designated Los Angeles-Long Beach. as SMSA’s. 2 Excludes interbank and U.S. Govt, demand deposit accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Financial Statistics □ July 1977 1.21 MONEY STOCK MEASURES AND COMPONENTS Billions of dollars, averages of daily figures 1976 1977 1973 1974 1975 Dec. Dec. Dec. Item Nov. Dec. Jan. Feb. Mar. Apr. May Seasonally adjusted MEASURES i 1 M-l.......................................... 270.5 283.1 294.8 310.4 312.4 313.8 314.0 315.4 320.5 320.7 2 M-2.......................................... 571.4 612.4 664.3 732.3 740.3 746.3 750.7 756.1 764.6 767.6 3 M-3.......................................... 919.6 981.5 1.092.6 1,223.4 1,237.1 1,248.9 1,258.2 1,268.1 1,281.2 1,288.9 4 M-4.......................................... 634.4 701.4 746.5 794.6 803.5 809.3 814.0 818.2 826.2 829.9 5 M-5.......................................... 982.5 1,070.5 1.174.7 1,285.6 1,300.3 1,312.0 1,321.5 1,330.3 1,342.8 1,351.2 COMPONENTS 6 Currency................................. 61.5 67.8 73.7 80.2 80.5 81.1 81.8 82.2 83.1 83.6 Commercial bank deposits: 7 Demand.............................. 209.0 215.3 221.0 230.2 231.9 232.7 232.1 233.2 237.4 237.1 8 Time and savings............... 363.9 418.3 451.7 484.2 491.1 495.6 500.0 502.8 505.7 509.2 9 Negotiable CD’s2......... 63.0 89.0 82.1 62.2 63.3 63.1 63.3 62.2 61.6 62.3 10 Other............................... 300.9 329.3 369.6 422.0 427.9 432.5 436.7 440.6 444.1 446.9 11 Nonbank thrift institutions3 348.1 369.1 428.3 491.0 496.8 502.6 507.5 512.1 516.6 521.3 Not seasonally adjusted MEASURES i 12 M-l........................................................... 278.3 291.3 303.2 312.3 321.3 319.7 309.9 312.4 322.3 315.5 13 M-2........................................................... 576.5 617.5 669.3 730.0 745.3 751.2 747.2 756.2 770.0 766.2 14 M-3........................................................... 921.8 983.8 1,094.3 1,216.3 1,237.9 1,251.4 1,253.1 1,269.8 1,290.2 1,290.0 15 M-4........................................................... 640.5 708.0 752.8 792.8 809.5 814.3 808.5 817.0 830.1 827.4 16 M-5........................................................... 985.8 1,074.3 1,177.7 1,279.2 1,302.1 1,314.5 1,314.4 1,330.7 1,350.3 1,351.2 COMPONENTS 17 Currency................................................. 62.7 69.0 75.1 80.7 82.0 80.5 80.8 81.6 82.8 83.4 Commercial bank deposits: 18 Demand............................................... 215.7 222.2 228.1 231.6 239.3 239.2 229.1 230.9 239.6 232.1 19 Member........................................... 156.5 159.7 162.1 162.5 168.5 168.1 161.0 162.1 167.6 161.8 20 Domestic nonmember.................. 56.3 58.5 62.6 65.8 67.3 67.5 64.6 65.2 68.3 66.6 21 Time and savings................................ 362.2 416.7 449.6 480.5 488.2 494.6 498.6 504.6 507.7 511.8 22 Negotiable CD’s2......................... 64.0 90.5 83.5 62.9 64.3 63.1 61.3 60.8 60.1 61.2 23 Other............................................... 298.2 326.3 366.2 417.7 423.9 431.5 437.3 443.8 447.7 450.7 24 Nonbank thrift institutions3............... 345.3 366.3 424.9 486.3 492.6 500.2 505.9 513.6 520.5 523.8 25 U.S. Govt, deposits (all commercial banks).............................................. 6.3 4.9 4.1 4.2 4.7 4.2 4.4 4.5 5.6 3.8 1 Composition of the money stock measures is as follows: M-4: M-2 plus large negotiable CD’s. M-5: M-3 plus large negotiable CD’s. M-l: Averages of daily figures for (1) demand deposits of commercial For a description of the latest revisions in the money stock measures banks other than domestic interbank and U.S. Govt., less cash items in see “Money Stock Measures: Revision” on pp. 305 and 306 of the process of collection and F.R. float; (2) foreign demand balances at F.R. March 1977 Bulletin. Banks; and (3) currency outside the Treasury, F.R. Banks, and vaults Latest monthly and weekly figures are available from the Board’s H.6 of commercial banks. release. Back data are available from the Banking Section, Division of M-2: M-l plus savings deposits, time deposits open account, and time Research and Statistics. certificates of deposit (CD’s) other than negotiable CD’s of $100,000 or 2 Negotiable time CD’s issued in denominations of $100,000 or more more of large weekly reporting banks. by large weekly reporting commercial banks. M-3: M-2 plus the average of the beginning- and end-of-month deposits 3 Average of the beginning- and end-of-month figures for deposits of of mutual savings banks, savings and loan shares, and credit union shares mutual savings banks, for savings capital at savings and loan associations, (nonbank thrift). and for credit union shares. NOTES TO TABLE 1.23: 1 Adjusted to exclude domestic commercial interbank loans. As of Oct. 31, 1974, “Total loans and investments” of all commercial 2 Loans sold are those sold outright to 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 reduced these loans by about $1.2 billion Note.—Data are for last Wednesday of month except for June 30 as of Mar. 31, 1976. and Dec. 31; data are partly or wholly estimated except when June 30 4 Data beginning June 30, 1974, include one large mutual savings and Dec. 31 are call dates. bank that merged with a nonmember commercial bank. As of that date there were increases of about $500 million in loans, $100 million in “Other” securities, and $600 million in “Total loans and investments.” Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Aggregates A15 1.22 AGGREGATE RESERVES AND DEPOSITS Member Banks Billions of dollars, averages of daily figures 1976 1977 Item 1973 1974 1975 Dec. Dec. Dec. Oct. Nov. Dec. Jan. Feb. Mar. Apr. | May Seasonally adjusted 1Reserves 1.......................................................................... 34.94 33.60 34.73 34.51 34.85 34.95 34.78 34.40 34.31 34.68 34.72 2 Nonborrowed............................................................... 33.64 35.87 34.60 34.41 34.78 34.90 34.71 34.33 34,20 34.61 34.52 3 Required........................................................................ 34.64 36.34 34.46 34.29 34.59 34.68 34.51 34.20 34,09 34.49 34.51 4 Deposits subject to reserve requirements 2................. 442.3 486.2 505.4 520.0 524.9 529.6 532.5 532.0 535.2 538.4 537.6 5 Time and savings........................................................ 279.2 322.1 337.9 346.2 350.2 355.0 357.3 360. 1 361.3 361.4 363.1 Demand: 6 Private....................................................................... 158.1 160.6 164.5 170.4 170.7 171.4 172.5 169.5 171.1 173.4 172.3 7 U.S. Govt................................................................. 5.0 3.5 3.0 3.4 4.0 3.2 2.7 2.5 2.8 3.6 2.1 8 Deposits plus nondeposit items 3.................................. 448.9 494.6 513.8 529.0 534.0 538.8 540.8 539.5 542.9 546.1 545.4 Not seasonally adjusted 9 Deposits subject to reserve requirements 2................. 447.5 491.8 510.9 518.9 522.5 534.8 537.7 528.7 534.0 541.3 538.8 10 Time and savings......................................................... 278.5 321.7 337.2 346.7 347.6 353.6 357.0 358.4 361.7 362.3 364.7 Demand: 11 Private....................................................................... 164.0 166.6 170.7 169.5 171.9 177.9 177.8 167.2 169.1 175.0 168.5 12 U.S. Govt.................................................................. 5.0 3.4 3.1 2.8 3.0 3.3 2.9 3.1 3.2 4.0 2.5 13 Deposits plus nondeposit items 3.................................. 454.0 500.1 519.3 527.9 531.5 544.0 546.0 536.2 541.7 549.0 543.6 1 Series reflects actual reserve requirement percentages with no adjust­ deposits except those due to the U.S. Govt., less cash items in process of ment to eliminate the effect of changes in Regulations D and M. There collection and demand balances due from domestic commercial banks. are breaks in series because of changes in reserve requirements effective 3 “Total member bank deposits” subject to reserve requirements, plus Dec. 12, 1974; Feb. 13, May 22, and Oct. 30,1975; Jan. 8, and Dec. 30,1976. Euro-dollar borrowings, loans sold to bank-related institutions, and In addition, effective Jan. 1, 1976, statewide branching in New York certain other nondeposit items. This series for deposits is referred to as was instituted. The subsequent merger of a number of banks raised “the adjusted bank credit proxy.” required reserves because of higher reserve requirements on aggregate deposits at these banks. Note.—Back data and estimates of the impact on required reserves 2 Includes total time and savings deposits and net demand deposits as and changes in reserve requirements are shown in Table 14 of the Board’s defined by Regulation D. Private demand deposits include all demand Annual Statistical Digest, 1971-1975. 1.23 LOANS AND INVESTMENTS All Commercial Banks Billions of dollars; last Wednesday of month except for June 30 and Dec. 31 1977 1973 1974 4 1975 1976 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Category Jan. 26 Feb. 23 Mar. 30 Apr. 27 May 25 June 30 V V V V V V Seasonally adjusted 1 Loans and investments1..................................................... 633.4 690.4 721.1 784.4 786.6 796.4 803.0 812.4 819.4 825.5 2 Including loans sold outright2............................ 637.7 695.2 725.5 788.2 790.6 800.3 807.0 816.4 823.4 829.5 Loans: 3 Total.......................................................................... 449.0 500.2 496.9 538.9 540.9 545.4 551.0 557.7 562.1 567.0 4 Including loans sold outright2........................ 453.3 505.0 501.3 542.7 544.9 549.3 555.0 561.7 566.1 571.0 5 Commercial and industrial3................................ 156.4 183.3 176.0 179.5 179.8 181.2 182.9 184.9 185.9 188.3 6 Including loans sold outright2,3..................... 159.0 186.0 178.5 181.9 182.4 183.8 185.6 187.7 188.7 191.1 Investments: 7 U.S. Treasury.......................................................... 54.5 50.4 79.4 97.3 96.9 101.5 103.6 102.8 104.6 105.3 8 Other......................................................................... 129.9 139.8 144.8 148.2 148.8 149.5 148.4 151.9 152.7 153.2 1 Not seasonally adjusted 9 Loans and investments1............................................. 647.3 705.6 737.0 801.6 784.9 790.0 801.1 809.6 816.6 830.5 10 Including loans sold outright.............................. 651.6 710.4 741.4 805.4 788.9 793.9 805.1 813.6 820.6 834.5 Loans: 11 Total1........................................................................ 458.5 510.7 507.4 550.2 536.0 538.9 547.7 553.5 561.3 574.4 12 Including loans sold outright2........................ 462.8 515.5 511.8 554.0 540.0 542.8 551.7 557.5 565.3 578.4 13 Commercial and industrial3................................ 159.4 186.8 179.3 182.9 177.8 179.4 182.8 185.1 186.1 190.7 14 Including loans sold outright2,3..................... 162.0 189.5 181.8 185.3 180.4 182.0 185.5 187.9 188.9 193.5 Investments: 15 U.S. Treasury.......................................................... 58.3 54.5 84.1 102.5 101.1 102.6 104.7 103.0 101.9 101.7 16 Other......................................................................... 130.6 140.5 145.5 148.9 147.9 148.5 148.7 153.1 153.4 154.4 For notes see bottom of opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics □ July 1977 1.24 COMMERCIAL BANK ASSETS AND LIABILITIES Last-Wednesday-of-Month Series Billions of dollars except for number of banks 1975 19763 1977 Account Dec. 31 Sept. Oct. Nov. Dec. Jan. | Feb. Mar. Apr.** Mayp June All commercial 1 Loans and investments................. 775.8 800.8 808.0 817.6 846.4 824.2 831.6 840.4 846.5 853.1 8,645 2 Loans, gross.............................. 546.2 560.2 566.5 571.0 594.9 575.3 580.4 587.0 590.4 597.8 6,095 Investments: 3 U.S. Treasury securities. .. 84.1 93.5 94.4 98.0 102.5 101.1 102.6 104.7 103.0 101.9 101.3 4 Other...................................... 145.5 147.0 147.1 148.6 148.9 147.9 148.5 148.7 153.1 153.4 153.7 5 Cash assets.................................... 133.6 119.8 116.9 127.0 136.1 120.1 127.1 122.8 122.7 119.4 124.5 6 Currency and coin................... 12.3 12.4 12.7 11.9 12.1 12.8 12.5 12.9 13.3 13.1 13.6 7 Reserves with F.R. Banks... 26.8 29.8 26.4 29.1 26.1 28.6 28.6 26.9 28.2 24.0 23.5 8 Balances with banks................ 47.3 37.0 38.2 42.5 49.6 39.2 41.5 41.9 40.1 41.3 42.9 9 Cash items in process of collection.. 47.3 40.7 39.7 43.5 48.4 39.6 44.4 41.1 41.0 41.0 44.4 10 Total assets/total liabilities and capital1...................................... 964.9 969.7 973.7 995.7 1,030.7 996.7 1,011.6 1,018.2 1,024.8 1,026.9 1,044.9 11 786.3 779.2 784.4 796.5 838.2 801.0 809.3 817.1 819.4 818.9 833.7 Demand: 12 41.8 34.6 34.0 39.1 45.4 35.3 36.6 37.6 33.9 35.2 37.3 13 U.S. Govt............................ 3.1 5.8 3.7 3.4 3.0 4.0 3.8 3.1 7.4 3.6 3.0 14 Other.................................... 278.7 255.2 260.8 264.0 288.4 260.6 264.5 263.1 267.9 262.8 272.5 Time: 15 12.0 9.6 9.2 9.1 9.2 8.8 8.6 8.9 8.6 8.5 8.9 16 Other...................................... 450.6 473.9 476.6 481.0 492.2 492.3 495.9 504.4 501.6 508.8 511.9 17 Borrowings.................................... 60.2 78.1 76.7 84.6 80.2 82.5 87.6 84.5 88.2 87.6 90.2 18 Total capital accounts2............... 69.1 73.7 74.3 74.8 78.1 76.3 76.8 77.1 77.5 78.1 78.7 19 Memo: Number of banks.......... 14,633 14,656 14,660 14,674 14,671 14,667 14,688 14,685 14,690 14,695 14,695 Member 20 Loans and investments................ 578.6 585.7 590.7 597.6 620.5 600.9 605.9 611.8 614.8 620.2 629.1 21 Loans, gross.............................. 416.4 417.2 421.6 424.1 442.9 426.3 429.9 434.6 435.9 441.5 450.1 Investments: 22 U.S. Treasury securities. .. 61.5 67.0 67.7 70.8 74.6 72.6 73.7 74.9 73.0 72.6 72.6 23 Other...................................... 100.7 101.5 101.4 102.7 103.1 102.0 102.3 102.3 105.8 106.1 106.4 24 Cash assets, total......................... 108.5 98.9 94.9 103.0 108.9 97.7 102.8 100.0 99.4 95.7 100.5 25 Currency and coin................... 9.2 9.2 9.5 8.9 9.1 9.5 9.3 9.6 9.9 9.7 10.0 26 Reserves with F.R. Banks. ., 26.8 29.8 26.4 29.1 26.0 28.6 28.6 26.9 28.2 24.0 23.5 27 Balances with banks............... 26.9 20.6 20.9 23.3 27.4 21.5 22.2 24.0 21.9 22.6 24.2 28 Cash items in process of collection.. 45.5 39.3 38.2 41.8 46.5 38.1 42.7 39.5 39.4 39.3 42.7 29 Total assets/total liabilities and 733.6 726.8 727.6 744.8 772.9 744.6 755.1 759.7 762.7 763.9 778.9 30 Deposits....................................... 590.8 573.9 576.1 584.8 618.7 587.0 592.0 598.1 597.8 597.4 609.4 Demand: 31 Interbank............................. 38.6 32.7 32.2 37.2 42.4 33.1 34.1 35.3 31.6 32.9 34.9 32 U.S. Govt.............................. 3.2 4.3 2.9 2.4 2.1 3.0 2.7 2.1 5.9 2.7 2.2 33 Other.................................... 210.8 191.0 194.7 196.0 215.5 193.7 196.6 195.9 199.0 195.1 202.7 Time: 34 Interbank............................. 10.0 7.5 7.1 7.0 7.2 6.8 6.6 6.9 6.6 6.5 6.9 35 Other.................................... 329.1 338.4 339.2 342.1 351.5 350.3 351.9 357.9 354.7 360.3 362.7 3.6 53.6 70.6 69.1 76.4 71.7 73.6 78.0 75.3 78.1 77.5 80.0 37 Total capital accounts2............. 52.1 55.7 56.2 56.6 58.6 57.7 57.9 58.1 58.3 58.8 59.2 38 Memo: Number of banks____ 5,788 5,774 5,769 5,767 5,759 5,739 5,740 5,739 5,726 5,708 5,708 1 Includes items not shown separately. Note.—Figures include all bank-premises subsidiaries and other sig­ Effective Mar. 31, 1976, some of the item “reserve for loan losses” nificant majority-owned domestic subsidiaries. and all of the item “unearned income on loans” are no longer reported Commercial banks: All such banks in the United States, including as liabilities. As of that date the “valuation” portion of “reserve for member and nonmember banks, stock savings banks, nondeposit trust loan losses” and the “unearned income on loans” have been netted companies, and U.S. branches of foreign banks, but excluding one na­ against “other assets,” and against “total assets” as well. tional bank in Puerto Rico and one in the Virgin Islands. Total liabilities continue to include the deferred income tax portion of Member banks: The following numbers of noninsured trust companies “reserve for loan losses.” that are members of the Federal Reserve System are excluded from mem­ 2 Effective Mar. 31, 1976, includes “reserves for securities” and the ber banks in Tables 1.24 and 1.25 and are included with noninsured banks contingency portion (which is small) of “reserve for loan losses.” in Table 1.25: 1974—June, 2; December, 3; 1975—June and December, 3 Figures partly estimated except on call dates. 4; 1976 (beginning month shown)—July, 5, December, 7; 1977-January 8. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A17 1.25 COMMERCIAL BANK ASSETS AND LIABILITIES Call-Date Series Millions of dollars except for number of banks 1975 1976 1975 1976 Account June 30 Dec. 31 June 30 Dec. 31 June 30 Dec. 31 June 30 Dec. 31 Total insured National (all insured) 1 Loans and investments, Gross................................. 736,164 762,400 773,696 827,692 428,167 441,135 443,955 476,602 Loans: 2 Gross..................................................................... 526,272 535,170 539,017 578,712 312,229 315,738 315,624 340,679 3 Net......................................................................... (2) (2) 520,970 560,069 (2) (2) 305,275 329,968 Investments: 4 U.S. Treasury securities.................................... 67,833 83,629 90,947 101,459 37,606 46,799 49,688 55,729 5 Other..................................................................... 142,060 143,602 143,731 147,520 78,331 78,598 78,642 80,193 6 Cash assets................................................................... 125,181 128,256 124,072 129,578 75,686 78,026 75,488 76,074 7 Total assets/total liabilities1...................................... 914,781 944,654 942,510 1,004,020 536,836 553,285 548,697 583,315 8 Deposits........................................................................ 746,348 775,209 776,957 825,001 431,646 447,590 444,251 469,378 Demand: 9 U.S. Govt............................................................. 3,106 3,108 4,622 3,020 1,723 1,788 2,858 1,674 10 Interbank............................................................. 41,244 40,259 37,503 44,072 21,096 22,305 20,329 23,148 11 Other..................................................................... 261,903 276,384 265,670 285,190 152,576 159,840 152,382 163,347 Time: 12 Interbank............................................................. 10,252 10,733 9,407 8,250 6,804 7,302 5,532 4,909 13 Other..................................................................... 429,844 444,725 459,754 484,468 249,446 256,355 263,148 276,298 14 Borrowings................................................................... 59,310 56,775 63,823 75,308 41,954 40,875 45,183 54,420 15 Total capital accounts................................................ 65,986 68,474 68,989 72,070 37,483 38,969 39,502 41,323 16 Memo: Number of banks........................................ 14,320 14,372 14,373 14,397 4,730 4,741 4,747 4,735 State member (all insured) Insured nonmember 17 Loans and investments, Gross.................................. 134,759 137,620 136,915 144,000 173,238 183,645 192,825 207,089 Loans: 18 Gross................................................................. 100,968 100,823 98,889 102,278 113,074 118,609 124,503 135,754 19 Net......................................................................... (2) (2) 96,037 99,475 (2) (2) 119,658 130,626 Investments: 20 U.S. Treasury securities.................................... 12,004 14,720 16,323 18,847 18,223 22,109 24,934 26,882 21 Other..................................................................... 21,787 22,077 21,702 22,874 41,942 42,927 43,387 44,451 22 Cash assets................................................................... 31,466 30,451 30,422 32,859 18,029 19,778 18,161 20,644 23 Total assets/total liabilities........................................ 179,787 180,495 179,645 189,573 198,157 210,874 214,167 231,130 24 Deposits........................................................................ 141,995 143,409 142,061 149,481 172,707 184,210 190,644 206,141 Demand: 25 U.S. Govt............................................................. 443 467 869 429 940 853 894 917 26 Interbank.............................................................. 18,751 16,265 15,834 19,296 1,397 1,689 1,339 1,627 27 Other..................................................................... 48,621 50,984 49,658 52,194 60,706 65,560 63,629 69,648 Time: 28 Interbank............................................................. 2,771 2,712 3,074 2,384 676 719 799 957 29 Other..................................................................... 71,409 72,981 72,624 75,177 108,989 115,389 123,980 132,991 30 Borrowings................................................................... 14,380 12,771 15,300 17,318 2,976 3,128 3,339 3,569 31 Total capital accounts................................................. 12,773 13,105 12,791 13,199 15,730 16,400 16,696 17,547 32 Memo: Number of banks........................................ 1,064 1,046 1,029 1,023 8,526 8,585 8,597 8,639 Noninsured nonmember Total nonmember 33 Loans and investments, Gross.................................. 11,725 13,674 15,905 18,819 184,963 197,319 208,730 225,908 Loans: 34 Gross..................................................................... 9,559 11,283 13,209 16,336 122,633 129,892 137,712 152,091 35 Net......................................................................... (2) (2) 13,092 16,209 (2) (2) 132,751 146,836 Investments: 36 U.S. Treasury securities.................................... 358 490 472 1,054 18,581 22,599 25,407 27,936 37 Other...................................................................... 1,808 1,902 2,223 1,428 43,750 44,829 45,610 45,880 38 Cash assets.................................................................... 3,534 5,359 4,362 6,496 21,563 25,137 22,524 27,141 39 Total assets/total liabilities........................................ 16,277 20,544 21,271 26,790 214,434 231,418 235,439 257,921 40 8,314 11,323 11,735 13,325 181,021 195,533 202,380 219,467 Demand: 41 U.S. Govt............................................................. 11 6 4 4 951 859 899 921 42 Interbank.............................................................. 1,338 1,552 1,006 1,277 2,735 3,241 2,346 2,904 43 Other..................................................................... 2,124 2,308 2,555 3,236 62,830 67,868 66,184 72,884 Time: 44 Interbank.............................................................. 957 1,291 1,292 1,041 1,633 2,010 2,092 1,998 45 Other..................................................................... 3,883 6,167 6,876 7,766 112,872 121,556 130,857 140,758 46 Borrowings................................................................... 3,110 3,449 3,372 4,842 6,086 6,577 6,711 8,412 47 Total capital accounts................................................. 570 651 663 818 16,300 17,051 17,359 18,366 48 Memo: Number of banks........................................ 253 261 270 275 8,779 8,846 8,867 8,914 1 Includes items not shown separately. For Note see Table 1.24. 2 Not available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Financial Statistics □ July 1977 1.26 COMMERCIAL BANK ASSETS AND LIABILITIES Detailed Balance Sheet, December 31, 1976-* Asset and liability items are shown in millions of dollars. Member banks1 All Insured Non­ Asset account commercialcommercial Large banks member banks banks banks1 Total All other New York City of Other City Chicago large 1 Cash bank balances, items in process....................... 136,075 129,578 108,934 29,494 3,934 40,471 35,034 27,141 2 Currency and coin.................................................... 12,124 12,115 9,066 832 220 3,048 4,965 3,059 3 25,968 25,968 25,968 3,585 1,423 10,627 10,334 4 Demand balances with banks in United States. . 36,815 32,964 19,711 7,389 196 3,324 8,804 17,103 5 Other balances with banks in United States___ 6,972 5,763 3,623 193 34 1,434 1,961 3,349 6 Balances with banks in foreign countries........... 5,823 4,509 4,046 836 23 2,102 1,085 1,777 7 Cash items in process of collection....................... 48,374 48,260 46,520 16,659 2,038 19,937 7,886 1,854 8 Total securities held—Book value.............................. 249,882 247,439 176,333 21,349 8,157 57,755 89,072 73,549 9 U.S. Treasury............................................................. 102,514 101,460 74,577 11,823 4,072 25,735 32,948 27,937 10 Other U.S. Govt, agencies...................................... 35,838 35,269 22,150 1,355 500 6,237 14,059 13,688 11 States and political subdivisions........................... 104,661 104,374 75,310 7,751 3,349 24,546 39,665 29,350 12 All other securities................................................... 6,732 6,220 4,217 421 236 1.191 2,370 2,515 n Unclassified total...................................................... 137 116 78 47 30 60 14 Trading-account securities....................................... 7,904 7,882 7,650 3,251 832 3,246 322 253 15 U.S. Treasury......................................................... 5,011 5,011 4,861 2,386 582 1,705 188 151 16 Other U.S. Govt, agencies.................................. 991 991 975 259 55 624 38 15 17 States and political subdivisions....................... 1,324 1,324 1,297 479 110 660 48 27 18 All other trading acct. securities....................... 440 440 440 127 86 209 17 19 137 116 78 47 30 60 20 Bank investment portfolios...................................... 241,979 239,557 168,683 18,098 7,325 54,510 88,750 73,296 21 U.S. Treasury........................................................ 97,503 96,449 69,111 9,437 3,490 24,030 32,760 27,786 22 Other U.S. Govt, agencies.................................. 34,847 34,279 21,175 1,096 445 5,613 14,021 13,672 23 States and political subdivisions....................... 103,336 103,049 74,013 7,272 3,239 23,885 39,617 29,323 24 All other portfolio securities............................. 6,292 5,780 3,778 293 151 981 2,352 2,515 25 F.R. stock and corporate stock................................ 1,580 1,541 1,313 281 86 497 449 268 26 Federal funds sold and securities resale agreement. . 48,346 45,767 36,378 1,993 1,339 19,648 13,398 11,968 27 Commercial banks.................................................... 40,199 37,876 28,780 979 1,035 14,217 12,550 11,419 28 Brokers and dealers.................................................. 5,775 5,693 5,499 610 192 3,981 716 275 29 Others......................................................................... 2,373 2,198 2,099 404 113 1,450 132 273 30 Other loans, gross......................................................... 546,704 532,945 406,579 75,468 21,807 148,516 160,788 140,124 31 Less: Unearned income on loans......................... 12,577 12,526 8,614 561 82 2,856 5,117 3,963 32 Reserves for loan loss.................................. 6,192 6,116 4,899 1,185 300 1,751 1,663 1,293 33 Other loans, net........................................................ 527,934 514,303 393,066 73,722 21,426 143,909 154,008 134,869 Other loans, gross, by category 34 Real estate loans....................................................... 149,483 149,276 104,714 9,419 1,848 37,462 55,984 44,769 35 Construction and land development................ 16,644 16,638 13,153 2,801 382 6,039 3,931 3,491 36 Secured by farmland............................................ 6,721 6,710 2,868 16 14 295 2,543 3,853 37 Secured by residential.......................................... 84,922 84,784 60,487 4,433 944 21,816 33,294 24,435 38 1- to 4-family residences.................................. 80,394 80,265 57,201 3,992 845 20,639 31,726 23,193 39 FHA-insured or VA-guaranteed............... 7,956 7,919 6,859 611 49 3,670 2,529 1,097 40 Conventional................................................ 72,438 72,346 50,342 3,381 797 16,968 29,196 22,096 41 Multifamily residences..................................... 4,528 4,519 3,286 441 99 1,178 1,568 1,242 42 FHA-insured................................................. 388 387 323 122 25 95 82 64 43 Conventional................................................ 4,140 4,132 2,963 320 74 1,083 1,486 1,177 44 Secured by other properties............................... 41,195 41,144 28,206 2,169 509 9,311 16,216 12,989 45 Loans to financial institutions................................. 42,427 35,738 33,760 12,048 4,383 14,349 2,981 8,666 46 To REIT’s and mortgage companies............... 9,982 9,855 9,516 3,496 1,301 4,045 674 466 47 To domestic commercial banks......................... 4,531 2,774 2,196 606 127 1,126 337 2,335 48 To banks in foreign countries........................... 10,880 6,617 6,487 3,022 290 2,717 457 4,393 49 To other depositary institutions....................... 1,482 1,340 1,173 163 24 789 198 309 50 To other financial institutions........................... 15,552 15,151 14,389 4,761 2,641 5,672 1,315 1,164 51 Loans to security brokers and dealers................. 11,420 11,075 10,793 6,900 1,417 2,267 209 627 52 Other loans to purch./carry securities................. 4,032 4,015 3,329 336 317 1,701 975 703 53 Loans to farmers—except real estate................... 23,282 23,259 12,971 128 149 3,028 9,667 10,311 54 Commercial and industrial loans......................... 182,920 177,128 145,849 37,893 11,018 55,108 41,830 37,071 55 Loans to individuals................................................ 118,408 118,051 82,896 6,003 1,820 29,066 46,005 35,512 56 Instalment loans......................................................... 94,078 93,751 65,619 4,428 1,040 23,385 36,766 28,458 57 Passenger automobiles.................................... 39,862 39,588 25,641 790 136 7,397 17,318 14,221 58 Residential-repair/modernize......................... 6,523 6,522 4,589 324 55 1,808 2,403 1,933 59 Credit cards and related plans....................... 14,358 14,353 12,675 1,649 669 6,935 3,422 1,683 60 Charge-account credit cards...................... 11,317 11,317 10,172 1,186 637 5,731 2,618 1,146 61 Check and revolving credit plans............. 3,041 3,036 2,504 463 33 1,205 803 537 62 Other retail consumer goods......................... 15,937 15,930 10,974 327 73 3,886 6,689 4,963 63 Mobile homes............................................... 8,743 8,742 6,217 173 28 2,231 3,785 2,525 64 Other............................................................... 7,195 7,189 4,757 154 44 1,654 2,904 2,438 65 Other instalment loans.................................... 17,397 17,358 11,739 1,338 106 3,360 6,935 5,658 66 Single-payment loans to individuals................. 24,330 24,300 17,276 1,575 781 5,681 9,239 7,054 67 All other loans........................................................... 14,732 14,405 12,267 2,741 855 5,533 3,137 2,466 68 Total loans and securities, net.................................... 827,742 809,050 607,089 97,344 31,009 221,810 256,927 220,653 69 Direct lease financing.................................................. 5,111 5,111 4,865 1,088 129 2,910 738 246 70 Fixed assets—Buildings, furniture, real estate.... 19,539 19,448 14,616 1,949 662 5,680 6,325 4,923 71 Investment in unconsolidated subsidiaries............. 2,341 2,303 2,272 1,000 206 978 89 68 72 Customer acceptances outstanding........................... 9,505 9,147 8,758 4,125 177 4,169 288 747 73 Other assets.................................................................... 30,498 29,384 26,355 9,322 1,651 11,257 4,126 4,142 74 Total assets..................................................................... 1,030,811 1,004,020 772,890 144,323 37,767 287,274 303,526 257,922 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A19 1.26 Continued Member banks1 All Insured Non­ Liability or capital commercialcommercial Large banks5 member account banks banks banks1 Total All other New York City of Other City Chicago large 75 Demand deposits................................................................... 336,800 332,283 260,090 60,201 10,267 92,746 96,876 76,711 76 Mutual savings banks............................................ 1,684 1,385 1,254 624 2 268 360 430 77 Other individuals, partnerships, and corporations..................................................... 255,433 254,221 192,616 32,600 7,552 72,262 80,201 62,818 78 U.S. Govt................................................................. 3,025 3,020 2,103 134 41 669 1,259 921 79 States and political subdivisions......................... 17,715 17,648 12,071 645 125 3,568 7,733 5,644 80 Foreign governments, central banks, etc........... 2,414 1,846 1,813 1,365 35 387 26 601 81 Commercial banks in United States................... 36,256 35,926 34,679 16,412 2,022 11,852 4,394 1,577 82 Banks in foreign countries.................................... 7,410 6,761 6,512 5,345 174 862 132 898 83 Certified and officers’ checks, etc........................ 12,864 11,475 9,041 3,076 318 2,878 2,769 3,822 84 Time deposits............................................................... 298,276 289,949 212,936 33,842 12,151 73,759 93,183 85,340 85 146 146 118 10 108 28 86 Mutual savings banks............................................ 339 317 296 145 6 125 20 43 87 Other individuals, partnerships, and corporations................................................... 233,964 228,522 166,393 25,005 8,745 56,289 76,354 67,571 88 U.S. Govt................................................................. 675 675 514 66 27 205 216 161 89 States and political subdivisions......................... 44,165 43,885 30,407 1,203 861 12,835 15,508 13,758 90 Foreign governments, central banks, etc........... 10,044 8,481 8,218 4,574 1,408 2,185 52 1,827 91 Commercial banks in United States................... 7,139 6,709 5,858 2,148 1,011 1,878 820 1,281 92 Banks in foreign countries.................................... 1,803 1,213 1,132 702 94 231 106 670 93 Savings deposits........................................................... 203,251 202,770 145,835 11,157 2,983 54,407 77,288 57,416 94 Individuals and nonprofit organizations........... 188,391 187,922 134,596 10,209 2,782 49,570 72,036 53,795 95 Corporations and other profit organizations... 8,642 8,633 6,420 480 175 2,761 3,003 2,222 96 U.S. Govt................................................................. 6,103 6,100 4,719 388 25 2,060 2,245 1,384 97 All other................................................................... 115 114 100 79 16 4 15 98 Total deposits............................................................... 838,328 825,002 618,860 105,200 25,401 220,912 267,347 219,468 99 Federal funds purchased and securities sold under agreements to repurchase.................................. 72,847 70,188 66,899 15,000 8,643 34,537 8,719 5,948 100 Commercial banks.................................................. 42,819 40,613 39,195 6.523 7,241 20,844 4,587 3,624 101 Brokers and dealers................................................ 5,603 5,577 5,345 949 29 3,651 716 258 102 Others........................................................................ 24,425 23,998 22,360 7,529 1,373 10,041 3,416 2,066 103 Other liabilities for borrowed money..................... 7,304 5,120 4,840 2,500 49 1,919 372 2,464 104 Mortgage indebtedness.............................................. 776 774 548 66 15 271 196 227 105 Bank acceptances outstanding................................. 10,118 9,755 9,366 4,714 177 4,186 288 752 106 Other liabilities........................................................... 23,389 16,013 13,772 4,539 805 5,298 3,129 9,617 107 Total liabilities............................................................. 952,761 926,852 714,285 132,020 35,091 267,122 280,052 238,476 108 Subordinated notes and debentures....................... 5,161 5,098 4,082 1,124 83 1,823 1,053 1,079 109 Equity capital............................................................... 72,889 72,070 54,522 11,179 2,593 18,329 22,421 18,366 110 Preferred stock........................................................ 73 67 25 2 23 48 111 Common stock........................................................ 16,238 16,143 11,882 2,453 570 3,818 5,041 4,356 112 Surplus...................................................................... 29,205 28,791 21,407 4,229 1,243 7,655 8,280 7,798 113 Undivided profits.................................................... 25,505 25,266 19,929 4,406 728 6,422 8,373 5,575 114 Other capital reserves............................................ 1,868 1,803 1,279 91 52 432 705 589 115 Total liabilities and equity capital........................... 1,030,811 1,004,020 772,890 144,323 37,767 287,274 303,526 257,922 Memo items : 116 Demand deposits adjusted2...................................... 249,146 245,076 176,787 26,996 6,167 60,288 83,336 72,359 Average for last 15 or 30 days: 117 Cash and due from bank...................................... 129,797 125,226 106,860 29,510 4,372 39,824 33,154 22,936 118 Federal funds sold and securities purchased under agreements to resell........................... 48,860 45,794 35,440 2,307 1,425 17,825 13,883 13,420 119 Total loans............................................................... 529,177 515,977 394,113 73,976 21,349 143,957 154,831 135,064 120 Time deposits of $100,000 or more.................... 139,381 132,893 109,644 28,517 9,682 43,372 28,073 29,736 121 Total deposits.......................................................... 816,113 803,019 600,420 98,932 24,869 213,361 263,259 . 215,693 122 Federal funds purchased and securities sold under agreements to repurchase................. 80,161 77,949 74,703 20,453 9,340 35,775 9,135 5,458 123 Other liabilities for borrowed money................. 6,936 4,686 4,396 2,165 53 1,842 335 2,540 124 Standby letters of credit outstanding..................... 13,493 12,969 11,340 6,494 921 3,162 762 2,153 125 Time deposits of $100,000 or more........................ 141,153 135,031 111,415 28,795 9,582 44,546 28,492 29,738 126 Certificates of deposit............................................ 117,258 113,275 92.891 24,451 8,276 35,878 24,285 24,368 127 Other time deposits................................................ 23,895 21,756 18,524 4,344 1,306 8,668 4,207 5,371 128 Number of banks....................................................... 14,672 14,397 5,758 12 9 154 5,583 8,914 1 Member banks exclude and nonmember banks include 8 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 do­ member banks exclude 2 national banks outside the continental United mestic subsidiaries. Securities are reported on a gross basis before deduc­ States. tions of valuation reserves. Holdings by type of security will be reported 2 Demand deposits adjusted are demand deposits other than domestic as soon as they become available. commercial interbank and U.S. Govt., less cash items reported as in Back data in lesser detail were shown in previous Bulletins. Details process of collection. may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Financial Statistics □ July 1977 1.27 ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS Assets and Liabilities Millions of dollars, Wednesday figures 1977 Account May 11 May 18 May 25 June 1 June 8 June 15 June 22 June 29 1 Total loans and investments........................................ 416,589 418,864 417,430 423,242 422,968 425,999 421,099 424,309 Loans: 2 Federal funds sold1................................................... 20,626 22,221 22,297 25,512 24,905 23,217 21,562 23,405 3 To commercial banks.......................................... 15,941 17,216 16,840 20,211 16,653 16,534 17,268 19,209 To brokers and dealers involving— 4 U.S. Treasury securities.................................. 2,589 2,805 3,334 3,048 5,878 4,221 2,274 2,227 5 Other securities................................................. 488 431 346 409 570 466 436 299 6 To others................................................................ 1,608 1,769 1,777 1,844 1,804 1,996 1,584 1,670 7 Other, gross................................................................ 292,498 293,685 292,717 295,037 294,032 296,999 295,845 297,531 8 117,928 117,752 117,620 117,982 117,744 118,371 119,653 119,666 9 Agricultural........................................................... 4,483 4,521 4,541 4,570 4,595 4,628 4,688 4,694 For purchasing or carrying securities: To brokers and dealers: 10 U.S. Treasury securities............................. 1,171 1,661 1,720 1,802 2,158 2,177 880 1,014 11 Other securities............................................. 8,406 8,928 8,178 8,342 7,810 8,748 8,178 8,633 To others: 12 U.S. Treasury securities............................. 95 98 92 95 92 95 95 93 13 2,493 2,525 2,519 2,509 2,509 2,519 2,509 2,539 To nonbank financial institutions: 14 Personal and sales finance cos., etc.............. 7,482 7,408 7,389 7,488 7,473 7,727 7,410 7,414 15 Other................................................................... 15,789 15,786 15,594 15,720 15,557 15,718 15,533 15,664 16 65,768 65,957 66,072 66,304 66,452 66,825 67,069 67,214 To commercial banks: 17 1,978 1,953 1,880 2,096 1,780 2,062 1,849 2,113 18 Foreign................................................................ 5,735 5,743 5,616 6,015 5,808 5,543 5,515 5,734 19 Consumer instalment.......................................... 40,676 40,812 41,053 41,198 41,330 41,592 41,749 41,924 20 Foreign governments, official institutions, etc.. 1,641 1,626 1,599 1,587 1,576 1,506 1,527 1,530 21 All other loans....................................................... 18,853 18,915 18,844 19,329 19,148 19,488 19,190 19,299 22 Less: Loan loss reserve and unearned income on loans..................................................... 8,828 8,880 8,908 8,901 8,979 9,028 9,065 8,970 23 Other loans, net......................................................... 283,670 284,805 283,809 286,136 285,053 287,971 286,780 288,561 Investments: 24 U.S. Treasury securities.......................................... 48,713 48,390 47,673 48,273 49,784 50,788 49,024 48,407 25 Bills.......................................................................... 8,703 8,880 8,361 8,814 9,942 10,959 9,601 9,131 Notes and bonds, by maturity: 26 Within 1 year..................................................... 8,327 8,467 8,356 8,797 8,820 8,890 8,773 8,910 27 1 to 5 years........................................................ 27,548 26,876 26,809 26,562 27,080 26,930 26,834 26,392 28 After 5 years...................................................... 4,135 4,167 4,147 4,100 3,942 4,009 3,816 3,974 29 Other securities.......................................................... 63,580 63,448 63,651 63,321 63,226 64,023 63,733 63,936 Obligations of States and political subdivisions: 30 Tax warrants, short-term notes, and bills.............................................................. 9,139 8,748 8,724 8,533 8,563 8,468 8,400 8,289 31 All other............................................................. 40,891 40,947 41,142 41,135 41,121 41,622 41,608 41,686 Other bonds, corporate stocks, and securities: 32 Certificates of participation2......................... 2,086 2,060 2,114 2,031 2,045 2,063 2,046 2,099 33 All other, including corporate stocks.......... 11,464 11,693 11,671 11,622 11,497 11,870 11,679 11,862 34 Cash items in process of collection.......................... 35,088 40,525 35,813 46,473 36,147 44,728 38,133 38,934 35 Reserves with F.R. Banks.......................................... 20,998 19,038 17,261 20,129 16,109 21,267 18,691 16,398 5,820 5,770 5,947 5,752 5,709 5,729 5,919 6,081 37 Balances with domestic banks.....................'............. 11,828 12,898 13,054 14,528 14,269- 12,788 12,738 14,502 38 Investments in subsidiaries not consolidated......... 2,641 2,684 2,667 2,617 2,694 2,691 2,674 2,676 39 Other assets.................................................................... 53,562 52,512 53,123 55,766 55,522 54,593 54,123 55,033 40 Total assets/total liabilities.......................................... 546,526 552,291 545,295 568,507 553,418 567,795 553,377 557,933 Deposits: 41 Demand deposits....................................................... 166,628 173,809 168,388 185,989 171,771 191,280 173,446 176,278 42 Individuals, partnerships, and corporations .. 122,621 124,296 121,485 132,874 123,597 134,465 125,874 127,156 43 States and political subdivisions....................... 5,751 5,844 5,922 6,678 5,577 6,237 6,083 6,167 44 U.S. Govt............................................................... 1,670 2,350 1,814 1,083 921 9,912 1,900 1,408 Domestic interbank: 45 Commercial....................................................... 23,072 25,136 24,188 29,090 26,984 25,474 23,534 25,477 46 Mutual savings.................................................. 816 828 783 972 870 786 780 831 Foreign: 47 Governments, official institutions, etc......... 1,013 1,379 1,103 1,215 1,508 1,152 982 1,276 48 Commercial banks........................................... 5,679 5,788 5,689 5,985 5,982 5,665 6,256 6,363 49 Certified and officers’ checks............................. 6,006 8,188 7,404 8,092 6,332 7,589 8,037 7,600 50 Time and savings deposits3.................................... 234,393 235,143 235,910 235,803 236,847 236,053 236,861 238,667 51 Savings4................................................................. 95,007 94,890 94,606 94,411 94,477 94,144 93,981 94,109 Time: 52 Individuals, partnerships, and corporations 105,774 106,192 107,026 107,152 108,361 108,050 108,866 110,419 53 States and political subdivisions................... 20,198 20,340 20,644 20,552 20,352 20,131 20,062 19,877 54 Domestic interbank......................................... 4,596 4,567 4,518 4,542 4,712 4,750 4,847 4,850 55 Foreign govts., official institutions, etc........ 7,375 7,665 7,573 7,606 7,370 7,380 7,449 7,603 56 Federal funds purchased, etc.5.................................. 73,927 71,647 68,359 72,550 70,098 65,106 68,754 68,834 Borrowings from: 57 261 138 339 114 708 894 1,075 379 58 3,268 3,507 3,850 4,121 4,535 4,640 4,617 5,024 59 Other liabilities, etc.6................................................... 25,702 25,638 26,005 27,208 26,796 27,226 25,933 25,996 60 Total equity capital and subordinated notes/debentures7................................................. 42,347 42,409 42,444 42,722 42,663 42,596 42,691 42,755 1 Includes securities purchased under agreements to resell. 5 Includes securities sold under agreements to repurchase. 2 Federal agencies only. 6 Includes minority interest in consolidated subsidiaries and deferred 3 Includes time deposits of U.S. Govt, and of foreign banks, which are tax portion of reserves for loans. not shown separately. 7 Includes reserves for securities and contingency portion of reserves 4 For amounts of these deposits by ownership categories, see Table 1.30. for loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A21 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1977 Account May 11 May 18 May 25 June 1 June 8 June 15 June 22 June 29 1Total loans and investments........................................ 91,057 93,020 91,386 91,993 91,205 93,897 91,018 92,491 Loans: 2 Federal funds sold 1................................................... 3,489 4,421 3,860 4,009 3,361 3,715 3,627 4,503 3 To commercial banks.......................................... 2,021 2,773 2,357 2,491 1,808 2,460 2,512 3,304 To brokers and dealers involving— 4 U.S. Treasury securities.................................. 851 915 800 778 1,119 685 494 563 5 Other securities................................................. 0 0 0 0 1 0 3 0 6 To others................................................................ 617 733 703 740 433 570 618 636 7 Other, gross................................................................ 66,858 67,457 67,001 67,665 67,318 68,739 67,064 67,850 8 Commercial and industrial................................. 33,326 33,230 33,222 33,538 33,503 33,856 34,467 34,446 9 Agricultural........................................................... 134 136 138 136 131 129 157 149 For purchasing or carrying securities: To brokers and dealers: 10 U.S. Treasury securities.............................. 953 1,424 1,503 1,572 1,888 1,900 690 812 11 Other securities............................................. 4,412 4,963 4,387 4,314 4,084 4,730 4,252 4,507 To others: 12 U.S. Treasury securities.............................. 25 25 24 24 24 24 24 24 13 Other securities............................................. 345 348 347 347 346 345 346 347 To nonbank financial institutions: 14 Personal and sales finance cos., etc.............. 2,497 2,340 2,374 2,381 2,395 2,619 2,446 2,402 15 Other................................................................... 5,081 5,041 5,020 5,039 A,921 4,968 4,900 4,893 16 Real estate.............................................................. 8,779 8,772 8,788 8,798 8,761 8,777 8,761 8,732 To commercial banks: 17 Domestic............................................................ 685 598 606 760 479 738 545 750 18 Foreign............................................................... 2,594 2,591 2,593 2,781 2,770 2,569 2,511 2,698 19 Consumer instalment.......................................... 4,041 4,060 4,069 4,070 4,090 4,109 4,124 4,144 20 Foreign governments, official institutions, etc. 389 369 356 340 326 305 332 331 21 All other loans...................................................... 3,597 3,560 3,574 3,565 3,594 3,670 3,509 3,615 22 Less: Loan loss reserve and unearned income on loans............................................................... 1,642 1,652 1,648 1,670 1,682 1,688 1,678 1,633 23 Other loans, net......................................................... 65,216 65,805 65,353 65,995 65,636 67,051 65,386 66,217 Investments: 24 U.S. Treasury securities........................................... 11,939 12,327 11,712 11,611 11,941 12,669 11,676 11,373 25 Bills.......................................................................... 3,428 3,824 3,253 3,092 3,441 4,449 3,553 3,258 Notes and bonds, by maturity: 26 Within 1 year..................................................... 910 1,149 1,040 1,173 1,182 1,180 1,174 1,232 27 1 to 5 years........................................................ 6,791 6,532 6,511 6,392 6,489 6,199 6,156 6,018 28 After 5 years..................................................... 810 822 908 954 829 841 793 865 29 Other securities.......................................................... 10,413 10,467 10,461 10,378 10,267 10,462 10,329 10,398 Obligations of States and political subdivisions: 30 Tax warrants, short-term notes, and bills.. 2,563 2,503 2,482 2,437 2,435 2,451 2,418 2,355 31 All other............................................................. 6,053 6,087 6,140 6,153 6,059 6,200 6,172 6,238 Other bonds, corporate stocks, and securities: 32 Certificates of participation2......................... 214 213 212 213 213 214 214 211 33 All other, including corporate stocks.......... 1,583 1,664 1,627 1,575 1,560 1,597 1,525 1,594 34 Cash items in process of collection.......................... 10,984 14,804 12,851 14,982 12,186 15,515 13,595 14,358 35 Reserves with F.R. Banks........................................... 5,514 4,543 4,067 6,396 4,862 5,931 4,972 4,006 36 Currency and coin........................................................ 919 877 865 881 885 870 882 906 37 Balances with domestic banks.................................... 5,394 5,914 6,333 6,222 7,643 5,701 5,735 6,907 38 Investments in subsidiaries not consolidated......... 1,268 1,267 1,284 1,286 1,284 1,284 1,285 1,289 39 Other assets.................................................................... 18,761 18,377 18,744 19,514 19,766 18,710 18,976 18,720 40 Total assets/total liabilities.......................................... 133,897 138,802 135,530 141,274 137,831 141,908 136,463 138,677 Deposits: 41 Demand deposits........................................................ 45,651 50,507 48,625 53,583 49,478 55,989 49,948 51,992 42 Individuals, partnerships, and corporations.. 26,208 26,932 26,140 29,495 25,610 30,536 27,282 28,307 43 States and political subdivisions....................... All 566 514 672 652 760 649 529 44 U.S. Govt................................................................ 259 424 305 90 85 3,178 324 112 Domestic interbank: 45 Commercial....................................................... 10,548 12,260 11,945 13,160 13,903 12,061 11,181 12,747 46 Mutual savings................................................. 412 422 403 529 466 378 391 416 Foreign: 47 Governments, official institutions, etc......... 784 1,139 871 967 1,247 911 750 1,062 48 Commercial banks........................................... 4,328 4,351 4,335 4,620 4,594 4,356 4,884 4,974 49 Certified and officers’ checks.............................. 2,635 4,413 4,112 4,050 2,921 3,809 4,487 3,845 50 Time and savings deposits3...................................... 42,219 42,654 42,670 42,440 42,302 41,960 42,215 42,360 51 Savings4.................................................................. 10,943 10,918 10,841 10,766 10,776 10,781 10,741 10,694 Time: 52 Individuals, partnerships, and corporations 22,999 23,102 23,186 22,939 23,198 22,943 23,100 23,366 53 States and political subdivisions................... 1,474 1,504 1,514 1,550 1,469 1,441 1,412 1,357 54 Domestic interbank......................................... 1,867 1,803 1,760 1,766 1,792 1,821 1,889 1,874 55 Foreign govts., official institutions, etc........ 4,142 4,488 4,487 4,541 4,169 4,104 4,187 4,180 56 Federal funds purchased, etc.5.................................. 21,510 20,953 18,638 19,465 19,735 17,384 18,517 18,813 Borrowings from: 57 F.R. Banks................................................................. 175 0 190 0 580 110 396 0 58 Others.......................................................................... 1,211 1,438 1,589 1,597 1,837 1,812 1,721 1,793 59 Other liabilities, etc.6................................................... 11,140 11,266 11,828 12,149 11,846 12,601 11,535 11,579 60 Total equity capital and subordinated notes/debentures7................................................. 11,991 11,984 11,990 12,040 12,053 12,052 12,131 12,140 1 Includes securities purchased under agreements to resell. 5 Includes securities sold under agreements to repurchase. 2 Federal agencies only. 6 Includes minority interest in consolidated subsidiaries and deferred 3 Includes time deposits of U.S. Govt, and of foreign banks, which tax portion of reserves for loans. are not shown separately. 7 Includes reserves for securities and contingency portion of reserves 4 For amounts of these deposits by ownership categories, see Table 1.30. for loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Financial Statistics □ July 1977 1.29 LARGE WEEKLY REPORTING COMMERCIAL BANKS OUTSIDE NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1977 Account May 11 May 18 May 25 June 1 June 8 June 15 June 22 June 29 1Total loans and investments........................................ 325,532 325,844 326,044 331,249 331,763 332,102 330,081 331,818 Loans: 2 Federal funds sold1................................................... 17,137 17,800 18,437 21,503 21,544 19,502 17,935 18,902 3 To commercial banks.......................................... 13,920 14,443 14,483 17,720 14,845 14,074 14,756 15,905 To brokers and dealers involving— 4 U.S. Treasury securities.................................. 1,738 1,890 2,534 2,270 4,759 3,536 1,780 1,664 5 Other securities................................................. 488 431 346 409 569 466 433 299 6 To others................................................................ 991 1,036 1,074 1,104 1,371 1,426 966 1,034 7 Other, gross................................................................ 225,640 226,228 225,716 227,372 226,714 228,260 228,781 229,681 8 Commercial and industrial................................ 84,602 84,522 84,398 84,444 84,241 84,515 85,186 85,220 9 Agricultural........................................................... 4,349 4,385 4,403 4,434 4,464 4,499 4,531 4,545 For purchasing or carrying securities: To brokers and dealers: 10 U.S. Treasury securities.............................. 218 111 217 230 270 277 190 202 11 Other securities............................................. 3,994 3,965 3,791 4,028 3,726 4,018 3,926 4,126 To others: 12 U.S. Treasury securities.............................. 70 73 68 71 68 71 71 69 13 Other securities............................................. 2,148 2,177 2,ill 2,162 2,163 2,174 2,163 2,192 To nonbank financial institutions: 14 Personal and sales finance cos., etc.............. 4,985 5,068 5,015 5,107 5,078 5,108 4,964 5,012 15 Other................................................................... 10,708 10,745 10,574 10,681 10,630 10,750 10,633 10,771 16 Real estate.............................................................. 56,989 57,185 57,284 57,506 57,691 58,048 58,308 58,482 To commercial banks: 17 Domestic............................................................. 1,293 1,355 1,274 1,336 1,301 1,324 1,304 1,363 18 Foreign............................................................... 3,141 3,152 3,023 3,234 3,038 2,974 3,004 3,036 19 Consumer instalment........................................... 36,635 36,752 36,984 37,128 37,240 37,483 37,625 37,780 20 Foreign governments, official institutions, etc. 1,252 1,257 1,243 1,247 1,250 1,201 1,195 1,199 21 All other loans....................................................... 15,256 15,355 15,270 15,764 15,554 15,818 15,681 15,684* 22 Less : Loan reserve and unearned income on loans......................................................... 7,186 7,228 7,260 7,231 7,297 7,340 7,387 7,337 23 218,454 219,000 218,456 220,141 219,417 220,920 221,394 222,344 Investments: 24 U.S. Treasury securities........................................... 36,774 36,063 35,961 36,662 37,843 38,119 37,348 37,034 25 Bills.......................................................................... 5,275 5,056 5,108 5,722 6,501 6,510 6,048 5,873 Notes and bonds, by maturity: 26 Within 1 year..................................................... 7,417 7,318 7,316 7,624 7,638 7,710 7,599 7,678 27 1 to 5 years........................................................ 20,757 20,344 20,298 20,170 20,591 20,731 20,678 20,374 28 After 5 years...................................................... 3,325 3,345 3,239 3,146 3,113 3,168 3,023 3,109 29 Other securities.......................................................... 53,167 52,981 53,190 52,943 52,959 53,561 53,404 53,538 Obligations of States and political subdivisions: 30 Tax warrants, short-term notes, and bills.. 6,576 6,245 6,242 6,096 6,128 6,017 5,982 5,934 31 All other............................................................. 34,838 34,860 35,002 34,982 35,062 35,422 35,436 35,448 Other bonds, corporate stocks, and securities: 32 Certificates of participation2......................... 1,872 1,847 1,902 1,818 1,832 1,849 1,832 1,888 33 All other, including corporate stocks.......... 9,881 10,029 10,044 10,047 9,937 10,273 10,154 10,268 34 Cash items in process of collection........................... 24,104 25,721 22,962 31,491 23,961 29,213 24,538 24,576 35 15,484 14,495 13,194 13,733 11,247 15,336 13,719 12,392 4,901 4,893 5,082 4,871 4,824 4,859 5,037 5,175 37 Balances with domestic banks................................... 6,434 6,984 6,721 8,306 6,626 7,087 7,003 7,595 38 Investments in subsidiaries not consolidated......... 1,373 1,417 1,383 1,331 1,410 1,407 1,389 1,387 39 Other assets.................................................................... 34,801 34,135 34,379 36,252 35,756 35,883 35,147 36,313 40 Total assets/total liabilities.......................................... 412,629 413,489 409,765 427,233 415,587 425,887 416,914 419,256 Deposits: 41 Demand deposits......................................................... 120,977 123,302 119,763 132,406 122,293 135,291 123,498 124,286 42 Individuals, partnerships, and corporations .. 96,413 97,364 95,345 103,379 97,987 103,929 98,592 98,849 43 States and political subdivisions....................... 5,274 5,278 5,408 6,006 4,925 5, All 5,434 5,638 44 U.S. Govt............................................................... 1,411 1,926 1,509 993 836 6,734 1,576 1,296 Domestic interbank: 45 12,524 12,876 12,243 15,930 13,081 13,413 12,353 12,730 46 404 406 380 443 404 408 389 415 Foreign: 47 Governments, official institutions, etc......... 229 240 232 248 261 241 232 214 48 Commercial banks........................................... 1,351 1,437 1,354 1,365 1,388 1,309 1,372 1,389 49 Certified and officers’ checks............................. 3,371 3,775 3,292 4,042 3,411 3,780 3,550 3,755 50 Time and savings deposits3...................................... 192,174 192,489 193,240 193,363 194,545 194,093 194,646 196,307 51 Savings4................................................................. 84,064 83,972 83,765 83,645 83,701 83,363 83,240 83,415 Time: 52 Individuals, partnerships, and corporations 82,775 83,090 83,840 84,213 85,163 85,107 85,766 87,053 53 States and political subdivisions................... 18,724 18,836 19,130 19,002 18,883 18,690 18,650 18,520 54 Domestic interbank......................................... 2,729 2,764 2,758 2,776 2,920 2,929 2,958 2,976 55 Foreign govts., official institutions, etc........ 3,233 3,177 3,086 3,065 3,201 3,276 3,262 3,423 56 Federal funds purchased, etc.5.................................. 52,417 50,694 49,721 53,085 50,363 47,722 50,237 50,021 Borrowings from: 57 F. R. Banks................................................................ 86 138 149 114 128 784 679 379 58 Others.......................................................................... 2,057 2,069 2,261 2,524 2,698 2,828 2,896 3,231 59 Other liabilities, etc.6................................................... 14,562 14,372 14,177 15,059 14,950 14,625 14,398 14,417 60 Total equity capital and subordinated notes/debentures7................................................. 30,356 30,425 30,454 30,682 30,610 30,544 30,560 30,615 1 Includes securities purchased under agreements to resell. 5 Includes securities sold under agreements to repurchase. 2 Federal agencies only. 6 Includes minority interest in consolidated subsidiaries and deferred 3 Includes time deposits of U.S. Govt, and of foreign banks, which tax portion of reserves for loans. are not shown separately. 7 Includes reserves for securities and contingency portion of reserves 4 For amounts of these deposits by ownership categories, see Table 1.30. for loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A23 1.30 LARGE WEEKLY REPORTING COMMERCIAL BANKS Balance Sheet Memoranda Millions of dollars, Wednesday figures 1977 Account and bank group May 11 May 18 May 25 June 1 June 8 June 15 June 22 June 29 Total loans (gross) and investments, adjusted1 407,498 408,575 407,618 409,836 413,514 416,431 411,047 411,957 2 New York City banks......................................... 89,993 91,301 90,071 90,412 90,600 92,387 89,639 90,070 3 Banks outside New York City.......................... 317,505 317,274 317,547 319,424 322,914 324,044 321,408 321,887 Total loans (gross), adjusted 4 Large banks............................................................... 295,205 296,737 296,294 298,242 300,504 301,620 298,290 299,614 5 New York City banks......................................... 67,641 68,507 67,898 68,423 68,392 69,256 67,634 68,299 6 Banks outside New York City.......................... 227,564 228,230 228,396 229,819 232,112 232,364 230,656 231,315 Demand deposits, adjusted2 106, 798 105,798 106,573 109,343 107,719 111,166 109,879 110,459 23,860 23,019 23,524 25,351 23,304 25,235 24,848 24,775 9 Banks outside New York City.......................... 82,938 82,779 83,049 83,992 84,415 85,931 85,031 85,684 Large negotiable time CD’s included in time and savings deposits3 Total: 60,909 61,547 62,362 62,224 62,983 62,558 63,321 64,485 11 New York City..................................................... 20,961 21,299 21,368 21,044 20,786 20,338 20,593 20,737 12 Banks outside New York City.......................... 39,948 40,248 40,994 41,180 42,197 42,220 42,728 43,748 Issued to IPC’s: 39,644 39,942 40,717 40,582 41,588 41,056 41,629 42,856 14 New York City Banks........................................ 13,978 14,016 14,128 13,768 13,942 13,547 13,690 13,930 15 Banks outside New York City.......................... 25,666 25,926 26,589 26,814 27,646 27,509 27,939 28,926 Issued to others: 21,265 21,605 21,645 21,642 21,395 21,502 21,692 21,629 17 New York City banks......................................... 6,983 7,283 7,240 7,276 6,844 6,791 6,903 6,807 18 Banks outside New York City.......................... 14,282 14,322 14,405 14,366 14,551 14,711 14,789 14,822 All other large time deposits4 Total: 19 Large banks.................................................................... 25,653 IS,191 26,029 26,069 26,239 26,070 26,163 26,306 20 New York City banks......................................... 5,020 5,108 5,132 5,276 5,381 5,395 5,418 5,466 21 Banks outside New York City.......................... 20,633 20,684 20,897 20,793 20,858 20,675 20,745 20,840 Issued to IPC’s: 22 Large banks............................................................... 14,033 14,101 14,162 14,206 14,391 14,469 14,594 14,703 23 New York City banks......................................... 3,777 3,814 3,794 3,876 3,959 4,015 4,014 4,039 24 Banks outside New York City.......................... 10,256 10,287 10,368 10,330 10,432 10,454 10,580 10,664 Issued to others: 25 Large banks................................................................ 11,620 11,691 11,867 11,863 11,848 11,601 11,569 11,603 26 New York City banks......................................... 1,243 1,294 1,338 1,400 1,422 1,380 1,404 1,427 27 Banks outside New York City.......................... 10,377 10,397 10,529 10,463 10,426 10,221 10,165 10,176 Savings deposits, by ownership category Individuals and nonprofit organizations: 28 Large banks............................................................... 87,406 87,265 87,101 87,037 87,014 86,707 86,653 86,807 9,820 9,783 9,752 .9,732 9,716 9,688 9,688 9,681 30 Banks outside New York City.......................... 77,586 77,482 77,349 77,305 77,298 77,019 76,965 77,126 Partnerships and corporations for profit:5 31 Large banks................................................................ 5,039 5,071 5,093 5,072 5,130 5,048 5,061 5,180 32 New York City banks......................................... 577 569 570 570 572 566 564 567 33 Banks outside New York City.......................... 4,462 4,502 4,523 4,502 4,558 4,482 4,497 4,613 Domestic governmental units: 2,493 2,478 2,357 2,251 2,285 2,334 2,209 2,062 35 New York City banks......................................... 504 513 484 433 458 492 451 411 36 Banks outside New York City.......................... 1,989 1,965 1,873 1,818 1,827 1,842 1,758 1,651 All other:6 37 Large banks................................................................ 69 76 55 51 48 55 58 60 38 New York City banks......................................... 42 53 35 31 30 35 38 .35 39 Banks outside New York City.......................... 27 23 20 20 18 20 20 25 Gross liabilities of banks to their foreign branches 40 Large banks................................................................ 3,580 4,005 3,716 3,106 3,155 5,597 3,751 4,497 41 New York City banks......................................... 2,423 2,512 2,152 1,899 1,911 4,349 2,398 2,636 42 Banks outside New York City.......................... 1,157 1,493 1,564 1,207 1,244 1,248 1,353 1,861 Loans sold outright to selected institutions by all large banks7 2,735 2,733 2,758 2,727 2,698 2,742 2,834 2,844 44 Real estate................................................................. 210 201 216 204 204 216 217 193 45 All other..................................................................... 983 972 991 981 1,053 1,028 1,009 985 1 Exclusive of loans and Federal funds transactions with domestic 5 Other than commercial banks. commercial banks. « Domestic and foreign commercial banks, and official international 2 All demand deposits except U.S. Govt, and domestic commercial organizations. banks, less cash items in process of collection. 7 To bank’s own foreign branches, nonconsolidated nonbank af­ 3 Certificates of deposit (CD’s) issued in denominations of $100,000 or filiates of the bank, the bank’s holding company (if not a bank), and more. nonconsolidated nonbank subsidiaries of the holding company. 4 All other time deposits issued in denominations of $100,000 or more (not included in large negotiable CD’s). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Financial Statistics □ July 1977 1.31 LARGE WEEKLY REPORTING COMMERCIAL BANKS Commercial and Industrial Loans Millions of dollars Outstanding Net change during— Industry group 1977 1977 1977 June 1 June 8 June 15 June 22 June 29 Ql Q2 Apr. May June Total loans classified2 1 Total......................................................... 96,038 95,885 96,305 97,453 97,336 -916 1,542 197 -136 1,481 Durable goods manufacturing: 2 Primary metals.................................. 2,424 2,459 2,475 2,460 2,416 377 -161 -164 -7 10 3 Machinery........................................... 4,804 4,827 4,844 4,970 4,804 108 38 17 -35 56 4 Transportation equipment............... 2,391 2,385 2,373 2,426 2,398 74 94 77 35 -18 5 Other fabricated metal products... 1,892 1,911 1,957 1,964 1,961 181 70 16 -18 72 6 Other durable goods........................ 3,482 3,564 3,604 3,651 3,667 90 323 110 -15 228 Nondurable goods manufacturing: 7 Food, liquor, and tobacco.............. 3,286 3,266 3,268 3,292 3,328 -151 -21 -63 -1 43 8 Textiles, apparel, and leather......... 3,634 3,732 3,778 3,831 3,852 381 475 138 111 226 9 Petroleum refining............................. 2,498 2,440 2,380 2,493 2,621 -305 285 83 68 134 10 Chemicals and rubber...................... 2,734 2,724 2,738 2,748 2,757 131 68 84 -48 32 11 Other nondurable goods................. 2,041 2,071 2,059 2,038 2,022 147 -22 -2 13 -33 12 Mining, including crude petroleum and natural gas.............................. 7,826 7,843 8,033 8,188 8,172 94 757 184 170 403 Trade: 13 Commodity dealers........................... 1,776 1,621 1,615 1,748 1,703 204 -434 -131 -217 -86 14 Other wholesale................................. 6,716 6,588 6,641 6,833 6,761 465 36 120 -124 40 15 Retail................................................... 6,727 6,766 6,703 6,764 6,887 405 380 84 156 140 16 Transportation....................................... 4,970 4,934 4,961 4,987 5,037 -140 -128 -141 -14 27 17 Communication...................................... 1,279 1,283 1,316 1,326 1,196 -10 -152 -39 -6 -107 18 Other public utilities............................. 5,458 5,534 5,629 5,669 5,552 -61 12 -152 -3 167 19 Construction........................................... 4,145 4,182 4,230 4,289 4,267 64 294 61 85 148 20 Services.................................................... 11,264 11,237 11,293 11,345 11,284 398 331 121 187 23 21 All other domestic loans..................... 7,606 7,632 7,609 7,691 7,721 -303 105 -104 140 69 22 Bankers acceptances.............................. 3,711 3,624 3,599 3,587 3,680 -2,930 -263 14 -283 6 23 Foreign commercial and industrial 5,374 5,262 5,200 5,153 5,250 -135 -545 -116 -330 -99 Memo: 24 Commercial paper included in total classified loans1 ................. 318 -216 -34 -94 -10 70 25 Total commercial and industrial loans of all large weekly reporting banks.............................. 117,982 117,744 118,371 119,653 119,439 203 2,648 856 -27 1,819 1977 1977 1977 Feb. 23 Mar. 30 Apr. 27 May 25 June 29 Ql Q2 Apr. May “Term” loans classified3 26 Total......................................................... 45,735 45,841 45,893 46,107 46,585 630 744 52 214 478 Durable goods manufacturing: 27 Primary metals................................... 1,481 1,521 1,344 1,342 1,390 204 -131 -177 -2 48 28 Machinery........................................... 2,551 2,552 2,499 2,490 2,522 -33 -30 -53 -9 32 29 Transportation equipment............... 1,298 1,339 1,383 1,386 1,382 -13 43 44 3 -4 30 Other fabricated metal products... 815 820 841 826 839 44 19 21 -15 13 31 Other durable goods......................... 1,585 1,625 1,630 1,647 1,728 103 5 17 81 Nondurable goods manufacturing: 32 Food, liquor, and tobacco.............. 1,447 1,412 1,374 1,438 1,436 14 24 -38 64 -2 33 Textiles, apparel, and leather......... 1,036 1,071 1,099 1,163 1,150 -27 79 28 64 -13 34 Petroleum refining............................ 1,901 1,770 1,805 1,824 1,940 -202 170 35 19 116 35 Chemicals and rubber...................... 1,522 1,547 1,589 1,615 1,642 103 95 42 26 27 36 Other nondurable goods................. 987 1,032 1,101 1,172 1,135 78 103 69 71 -37 37 Mining, including crude petroleum and natural gas.............................. 5,761 5,856 6,015 6,043 6,375 173 519 159 28 332 Trade: 38 Commodity dealers........................... 219 199 199 202 172 -1 -27 3 -30 39 Other wholesale................................. 1,478 1,479 1,489 1,519 1,506 16 27 10 30 -13 40 Retail................................................... 2,212 2,268 2,274 2,353 2,329 223 61 6 79 -24 41 Transportation....................................... 3,830 3,773 3,695 3,604 3,649 -164 -124 -78 -91 45 42 Communication.................................. 829 779 802 793 748 -68 -31 23 -9 -45 43 Other public utilities............................. 3,869 3,907 3,796 3,796 3,775 243 -132 -111 — 21 44 Construction.......................................... 1,683 1,661 1,720 1,722 1,838 32 177 59 2 116 45 Services.................................................... 5,216 5,111 5,188 5,283 5,310 113 199 77 95 27 46 All other domestic loans..................... 2,352 2,433 2,408 2,465 2,432 -167 -1 -25 57 -33 47 Foreign commercial and industrial loans................................................ 3,663 3,686 3,642 3,424 3,287 62 -399 -44 -218 -137 1 Reported for the last Wednesday of each month. all outstanding loans granted under a formal agreement—revolving credit 2 Includes “term” loans, shown below. or standby—on which the original maturity of the commitment was in 3 Outstanding loans with an original maturity of more than 1 year and excess of 1 year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Deposits and Commercial Paper A25 1.32 GROSS DEMAND DEPOSITS of Individuals, Partnerships, and Corporations Billions of dollars, estimated daily-average balances All commercial banks Type of holder 1975 1976 1977 1972 1973 1974 Dec. Dec. Dec. Sept. Dec. Mar. June Sept. Dec. Mar. 208.0 220.1 225.0 227.0 236.9 227.9 234.2 236.1 250.1 242.3 2 Financial business....................................................... 18.9 19.1 19.0 19.0 20.1 19.9 20.3 19.7 22.3 21.6 109.9 116.2 118.8 118.7 125.1 116.9 121.2 122.6 130.2 125.1 4 Consumer...................................................................... 65.4 70.1 73.3 76.5 78.0 77.2 78.8 80.0 82.6 81.6 1.5 2.4 2.3 2.2 2.4 2.4 2.5 2.3 2.7 2.4 12.3 12.4 11.7 10.6 11.3 11.4 11.4 11.5 12.4 11.6 All weekly reporting banks 1976 1977 1973 1974 1975 Dec. Dec. Dec. Nov. Dec. Jan. Feb. Mar. Apr. May? 7 All holders, IPC.......................................................... 118.1 119.7 124.4 124.3 128.5 127.4 123.0 124.7 127.5 124.4 8 Financial business....................................................... 14.9 14.8 15.6 16.2 17.5 16.7 15.6 16.7 16.7 17.0 66.2 66.9 69.9 68.7 69.7 69.5 67.4 67.8 68.5 67.2 10 Consumer...................................................................... 28.0 29.0 29.9 30.4 31.7 32.0 31.1 31.5 33.5 31.5 2.2 2.2 2.3 2.5 2.6 2.2 2.4 2.2 2.3 2.4 12 Other.............................................................................. 6.8 6.8 6.6 6.6 7.1 7.1 6.5 6.5 6.6 6.4 Note.—Figures include cash items in process of collection. Estimates of banks. Types of depositors in each category are described in the June 1971 gross deposits are based on reports supplied by a sample of commercial Bulletin, p. 466. 1.33 COMMERCIAL PAPER AND BANKERS ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1976 1977 1974 1975 1976 Instrument Dec. Dec. Dec. Nov. Dec. Jan. Feb. Mar. Apr. May Commercial paper (seasonally adjusted) 1 49,742 48,145 52,623 51,503 52,623 52,778 52,775 54,546 56,715 57,434 Financial companies:1 Dealer-placed paper:2 2 Total...................................................................... 4,599 6,220 7,271 6,869 7,271 7,053 6,931 7,196 7,286 7,555 3 Bank-related......................................................... 1,814 1,762 1,900 1,825 1,900 1,895 1,929 1,839 1,778 1,805 Directly-placed paper:3 4 Total...................................................................... 31,801 31,230 32,365 32,113 32,365 32,726 32,073 33,873 34,753 34,949 5 6,518 6,892 5,959 5,944 5,959 5,637 5,502 6,126 5,703 5,999 13,342 10,695 12,987 12,521 12,987 12,999 13,771 13,475 14,676 14,930 Dollar acceptances (not seasonally adjusted) 7 Total.............................................................................. 18,484 18,727 22,523 20,678 22,523 22,362 22,187 22,694 r22,899 23,201 Held by: 8 Accepting banks....................................................... 4,226 7,333 10,442 9,031 10,442 8,183 7,991 7,787 r7,761 7,326 9 Own bills.............................................................. 3,685 5,899 8,769 7,706 8,769 7,011 6,654 6,367 6,309 6,141 10 Bills bought......................................................... 542 1,435 1,673 1,325 1,673 1,172 1,337 1,421 r1,381 1,108 F.R. Banks: 11 Own account....................................................... 999 1,126 991 188 991 191 322 r280 881 108 12 Foreign correspondents.................................... 1,109 293 375 349 375 374 440 435 394 385 13 Others........................................................................ 12,150 9,975 13,447 11,111 10,715 13,615 13,434 M4,191 >•13,863 15,382 Based on: 14 Imports into United States.................................. 4,023 3,726 4,992 4,667 4,992 4,992 5,138 4,983 *•5,114 5,124 15 Exports from United States................................. 4,067 4,001 4,818 4,628 4,818 5,137 5,074 5,222 r5,376 5,642 16 All other.................................................................... 10,394 11,000 12,713 11,383 12,713 12,233 11,974 12,489 ’•12,410 12,436 1 Institutions engaged primarily in activities such as, but not limited to, 3 As reported by financial companies that place their paper directly commercial, savings, and mortgage banking; sales, personal, and mortgage with investors. financing; factoring, finance leasing, and other business lending; insurance 4 Includes public utilities and firms engaged primarily in activities such underwriting; and other investment activities. as communications, construction, manufacturing, mining, wholesale and 2 Includes all financial company paper sold by dealers in the open retail trade, transportation, and services. market. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Financial Statistics □ July 1977 1.34 PRIME RATE CHARGED BY BANKS on Short-term Business Loans Per cent per annum Effective date Rate Effective date Rate Month Average i 1975—Feb. 3 9Va 1975—Oct. 27 m 1975—Oct...................................... 7.96 10 9 Nov..................................... 7.53 18 m Dec..................................... 7.26 24 7l/4 1976—Jan...................................... 7.00 Mar. 5 Feb...................................... 6.75 10 7 Mar..................................... 6.75 18 6Va Apr..................................... 6.75 24 May.................................... 6.75 7 June.................................... 7.20 May 20 IVa July.................................... 7.25 Aug..................................... 7.01 June 9 7 Sept..................................... 7.00 Oct...................................... 6.78 July 18 6Va 6.50 28 Dec..................................... 6.35 6% Aug. 12 1977—Jan...................................... 6.25 6Va Feb...................................... 6.25 Sept. 15, Mar..................................... 6.25 6 Vi Apr...................................... 6.25 6 Va 6.41 June................................... 6.75 00 00 Nov. 5 Dec. 2 8 Va 8 1976—Jan. 12 7Va 21 m June 1 71/4 7 7 Aug. 2 IVa Oct. 4 IVi Nov. 1 m Dec. 13 8 1977—May 13. 31. 1.35 INTEREST RATES CHARGED BY BANKS on Business Loans Per cent per annum Size of loan (in thousands of dollars) All sizes Center 1-9 10-99 100-499 500-999 1,000 and over 1976 1976 1976 1976 1976 1976 1976 1976 1976 1976 1976 1976 Nov. Aug. Nov. Aug. Nov. Aug. Nov. Aug. Nov. Aug. Nov. Aug. Short-term rates 1 All 35 centers.......................... 7.28 7.80 8.83 9.06 8.18 8.58 7.66 7.99 7.31 7.84 7.02 7.61 2 New York City................... 6.88 7.48 8.56 8.85 7.94 8.40 7.43 7.91 7.24 7.77 6.74 7.36 3 7 Other Northeast.............. 7.62 8.18 9.22 9.41 8.34 8.84 7.88 8.25 7.49 8.16 7.34 7.98 4 8 North Central.................. 7.28 7.70 8.45 8.65 8.12 8.50 7.69 7.85 7.36 7.71 7.03 7.55 5 7 Southeast.......................... 7.51 7.95 9.13 9.33 8.48 8.76 7.71 8.00 7.04 7.85 7.07 7.54 6 8 Southwest......................... 7.33 7.75 8.51 8.83 7.82 8.24 7.39 7.80 7.21 7.61 7.12 7.55 7 4 West Coast....................... 7.52 8.15 8.69 9.26 8.46 8.79 7.88 8.28 7.44 8.06 7.34 8.05 Revolving credit rates 8 All 35 centers........................... 7.19 7.87 8.37 8.70 8.14 8.33 7.60 8.02 7.41 7.80 7.12 7.88 9 New York City................... 7.18 8.14 7.23 7.25 7.86 8.26 7.21 7.70 6.97 7.56 7.19 8.19 10 7 Other Northeast............. 6.92 7.59 8.15 8.00 8.20 8.22 7.26 7.67 7.75 8.36 6.75 7.47 11 8 North Central.................. 7.54 7.96 8.52 8.94 8.95 9.03 8.05 8.50 7.88 7.74 7.39 7.90 12 7 Southeast.......................... 7.05 7.48 8.31 8.75 8.09 8.40 7.56 8.16 6.77 6.83 7.13 13 8 Southwest......................... 7.45 7.81 8.19 8.74 7.96 8.09 7.74 8.20 7.24 7.47 7.39 7.80 14 4 West Coast....................... 7.11 7.73 8.77 9.10 7.85 8.08 7.58 7.95 7.45 7.91 7.01 7.68 Long-term rates 15 All 35 centers.......................... 7.48 8.45 9.39 9.61 8.88 9.02 8.14 8.55 8.13 8.60 7.24 8.40 16 New York City................... 7.36 8.52 7.19 8.55 8.27 7.93 8.05 8.06 8.44 7.26 8.56 17 7 Other Northeast.............. 6.64 8.62 9.22 9.40 8.84 9.43 7.95 8.93 7.92 7.50 5.73 8.70 18 8 North Central.................. 7.66 8.05 9.20 8.83 9.03 9.07 8.35 8.26 8.99 8.36 7.32 7.92 19 7 Southeast.......................... 7.59 8.88 9.87 9.60 9.35 9.08 7.93 9.88 4.00 8.18 7.79 8.06 20 8 Southwest......................... 7.73 8.42 10.54 10.85 9.05 9.04 8.28 8.23 8.44 8.69 7.20 8.30 21 4 West Coast....................... 8.04 8.67 8.70 9.28 8.54 8.58 8.31 8.81 7.78 10.00 8.03 8.46 Note.—Weighted-average rates based on sample of loans made during first 7 days of the survey month. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets A27 1.36 INTEREST RATES Money and Capital Markets Averages, per cent per annum 1977 1977, week ending— Instrument 1974 1975 1976 Mar. Apr. May June June 4 June 11June 18June 25 July 2 Money market rates Prime commercial paper 1 1 90- to 119-day.............................................. 10.05 6.26 5.24 4.75 4.75 5.26 5.42 5.48 5.48 5.40 5.40 5.38 2 4- to 6-month............................................... 9.87 6.33 5.35 4.87 4.87 5.35 5.49 5.53 5.51 5.50 5.48 5.44 3 Finance company paper, directly placed, 3- to 6-month 2........................................ 8.62 6.16 5.22 4.77 4.81 5.13 5.38 5.38 5.38 5.38 5.38 5.38 4 Prime bankers acceptances, 90-day 3.......... 9.92 6.30 5.19 4.80 4.78 5.34 5.39 5.42 5.42 5.41 5.39 5.35 5 Federal funds 4................................................. 10.51 5.82 5.05 4.69 4.73 5.35 5.39 5.36 5.31 5.37 5.43 5.43 Large negotiable certificates of deposit 6 3-month, secondary market 5................... 10.27 6.43 5.26 4.83 4.81 5.20 5.42 5.50 5.46 5.42 5.39 5.40 7 3-month, primary market 6....................... 5.15 4.74 4.72 5.13 5.35 5.40 5.38 5.35 5.30 5.30 8 Euro-dollar deposits, 3-month 7................... 10.96 6.97 5.57 5.13 5.16 5.70 U.S. Govt, securities Bills: 8 Market yields: 9 3-month................................................. 7.84 5.80 4.98 4.60 4.54 4.96 5.02 5.03 5.06 5.01 5.01 4.97 10 6-month................................................. 7.95 6.11 5.26 4.88 4.80 5.20 5.21 5.23 5.24 5.20 5.22 5.19 11 1-year..................................................... 7.71 6.30 5.52 5.19 5.10 5.43 5.41 5.42 5.43 5.40 5.41 5.39 Rates on new issue: 12 3-month................................................. 7.886 5.838 4.989 4.613 4.540 4.942 5.004 4.993 5.048 5.000 5.012 4.965 13 6-month................................................. 7.926 6.122 5.266 4.883 4.790 5.193 5.198 5.192 5.234 5.167 5.222 5.173 Notes and bonds maturing in—9 14 9 to 12 months......................................... 8.25 6.70 5.84 5.50 5.37 5.81 5.76 5.83 5.80 5.75 5.74 5.68 Constant maturities:1 o 8.18 6.76 5.88 5.50 5.44 5.84 5.80 5.86 5.83 5.80 5.79 5.72 Capital market rates Government notes and bonds U.S. Treasury: Constant maturities:1 o 2-yea r 6.31 6.09 5.96 6.25 6.13 6.20 6.16 6.11 6.11 6.07 3-yea r 7.82 7.49 6.77 6.47 6.31 6.55 6.39 6.49 6.46 6.35 6.35 6.32 5-year............................ 7.80 7.77 7.18 6.93 6.79 6.94 6.76 6.87 6.84 6.72 6.72 6.68 7-year............................ 7.71 7.90 7.42 7.20 7.11 7.26 7.05 7.17 7.13 7.01 7.01 6.98 10-year.......................... 7.56 7.99 7.61 7.46 7.37 7.46 7.28 7.38 7.35 7.24 7.25 7.22 20-year.......................... 8.05 8.19 7.86 7.73 7.67 7.74 7.64 7.68 7.68 7.63 7.63 7.57 30-year.......................... 7.80 7.73 7.80 7.64 7.74 7.68 7.61 7.61 7.57 Notes and bonds maturing in—9 23 3 to 5 years.................................. 7.81 7.55 6.94 6.73 6.58 6.76 6.58 6.71 6.68 6.56 6.54 6.49 ' 24 Over 10 years (long-term)......... 6.99 6.98 6.78 7.20 7.14 7.17 6.99 7.10 7.07 6.96 6.95 6.90 State and local:11 Moody’s series: 25 5.89 6.42 5.66 5.21 5.18 5.23 5.21 5.26 5.20 5.20 5.20 5.18 26 Baa..................... 6.53 7.62 7.49 6.41 6.27 6.23 6.05 6.16 6.12 6.02 6.00 5.95 27 Bond Buyer series 6.17 7.05 6.64 5.89 5.73 5.75 5.62 5.72 5.65 5.55 5.61 5.56 Corporate bonds Seasoned issues 13 All industries......... 9.03 9.57 9.01 8.51 8.49 8.47 8.38 8.45 8.42 8.36 8.35 8.32 By rating groups: Aaa..................... 8.57 8.83 8.43 8.10 8.04 8.05 7.95 8.00 7.98 7.94 7.94 7.91 Aa....................... 8.84 9.17 8.75 8.28 8.28 8.28 8.19 8.27 8.24 8.19 8.14 8.11 A......................... 9.20 9.65 9.09 8.55 8.55 8.55 8.46 8.53 8.52 8.43 8.42 8.40 Baa..................... 9.50 10.61 9.75 9.12 9.07 9.01 8.91 8.98 8.95 8.89 8.88 8.87 Aaa utility bonds:14 33 New issue....................... 9.33 9.40 8.48 8.25 8.26 8.33 8.08 8.15 8.11 8.01 8.07 34 Recently offered issues. 9.34 9.41 8.49 8.29 8.22 8.31 8.12 8.25 8.22 8.06 8.07 8.03 Common stocks Dividend/price ratio: 35 Preferred stocks............ 8.23 8.38 7.97 7.56 4.47 4.39 7.62 7.60 7.68 7.68 7.61 7.51 36 Common stocks........... 4.47 4.31 3.77 4.37 7.60 7.63 4.60 4.69 4.63 4.57 4.54 4.56 1 Averages of the most representative daily offering rate quoted by 8 Except for new bill issues, yields are computed from daily closing dealers. bid prices. Yields for all bills are quoted on a bank-discount basis. 2 Averages of the most representative daily offering rates published by 9 Unweighted averages for all outstanding notes and bonds in maturity finance companies for varying maturities in this range. ranges shown, based on daily closing bid prices. “Long-term” includes 3 Beginning Aug. 15, 1974, the rate is the average of the midpoint of all bonds neither due nor callable in less than 10 years. the range of daily dealer closing rates offered for domestic issues; prior Yields on the more actively traded issues adjusted to constant data are averages of the most representative daily offering rate quoted by maturities by the U.S. Treasury, based on daily closing bid prices. dealers. 11 General obligations only, based on figures for Thursday, from 4 Weekly figures are 7-day averages of daily effective rates for the week Moody’s Investors Service. ending Wednesday; the daily effective rate is an average of the rates on 12 Twenty issues of mixed quality. a given day weighted by the volume of transactions at these rates. 13 Averages of daily figures from Moody’s Investors Service. 5 Averages of the daily midpoints as determined from the range of 14 Compilation of the Board of Governors of the Federal Reserve offering rates in the secondary market. System. 6 Posted rates, which are the annual interest rates most often quoted Issues included are long-term (20 years or more). New-issue yields are on new offerings of negotiable CD’s in denominations of $100,000 or based on quotations on date of offering; those on recently offered issues more. Rates prior to 1976 not available. Weekly figures are for Wednes­ (included only for first 4 weeks after termination of underwriter price Digitized dfaoyr dFaRtesA.SER restrictions); on Friday close-of-business quotations. 7 Averages of daily quotations for the week ending Wednesday. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics □ July 1977 1.37 STOCK MARKET Selected Statistics 1976 1977 Indicator 1974 1975 1976 Dec. Jan. Feb. Mar. Apr. May June Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31,1965 = 50). 43.84 45.73 54.45 56.34 56.28 54.93 54.67 53.92 53,96 54.31 2 Industrial.................................................................. 48.08 51.88 60.44 61.54 61.26 59.65 59.56 58.47 58.13 58.44 3 Transportation........................................................ 31.89 30.73 39.57 41.77 41.93 40.59 40.52 41.51 43.25 43.29 4 Utility....................................................................... 29.82 31.45 36.97 40.61 41.13 40.86 40.18 40.24 41.14 41.59 5 Finance..................................................................... 49.67 46.62 52.94 57.45 57.86 55.65 54.84 54.30 54.80 55.15 6 Standard & Poor’s Corporation (1941-43 = 10)1.. 82.85 85.17 102.01 104.66 103.81 100.96 100.57 99.05 98.76 99.29 7 American Stock Exchange (Aug. 31,1973 = 100). 79.97 83.15 101.63 104.06 111.04 112.17 111.77 111.70 113.72 116.28 Volume of trading (thousands of shares)2 8 New York Stock Exchange.................................. 13,883 18,568 21,189 23,621 23,562 19,310 17,814 17,380 18,700 20,478 9 American Stock Exchange................................... 1,908 2,150 2,565 3,095 3,268 2,830 2,580 2,500 2,440 2,720 Customer financing (end-of-period balances, in millions of dollars) 10 Regulated margin credit at brokers/dealers and banks3................................................ 4,836 6,500 '9,011 9,011 9,301 9,523 9,701 9,887 10,068 11 Brokers, total..................................................... 3,980 5,540 8,166 8,166 8,469 8,679 8,891 9,078 9,267 12 Margin stock4.............................................. 3,840 5,390 7,950 7,960 8,270 8,480 8,690 8,880 9,070 13 Convertible bonds....................................... 137 147 204 204 196 197 199 196 196 14 Subscription issues...................................... 3 3 2 2 3 2 2 2 1 15 Banks, total....................................................... 856 960 r845 r845 r832 r844 '810 809 801 16 Margin stocks............................................... 815 909 '800 '800 '788 '799 '767 766 761 17 Convertible bonds........................................ 30 36 '30 '30 27 '28 '25 25 25 18 Subscription issues...................................... 11 15 '15 '15 17 17 '18 18 15 19 Unregulated nonmargin stock credit at banks5 2,064 2,281 '2,817 '2,817 '2,844 '2,850 '3,390 2,878 2,886 Memo: Free credit balances at brokers6 20 Margin-account................................................ 410 475 585 585 645 605 605 '615 625 21 Cash-account.................................................... 1,425 1,525 1,855 1,855 1,930 1,815 1,720 '1,715 1,710 Margin-account debt at brokers (percentage distribution, end of period) 22 Total.......................................... 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 By equity class (in per cent): 23 Under 40............................... 45.4 24.0 12.0 12.0 15.0 17.6 16.5 16.5 17.8 24 40-49..................................... 23.0 28.8 23.0 23.0 28.8 34.9 36.8 34.1 35.6 25 50-59..................................... 13.9 22.3 35.0 35.0 28.0 23.4 23.2 25.4 23.0 26 60-69...................................... 8.8 11.6 15.0 15.0 13.0 11.3 11.6 11.8 11.0 27 70-79...................................... 4.6 6.9 8.7 8.7 8.3 7.3 6.7 6.8 7.0 28 80 or more............................ 4.3 5.3 6.0 6.0 5.8 5.5 5.3 5.4 5.0 Special miscellaneous-account balances at brokers (end of period) 29 Total balances (millions of dollars) 8... 7,010 7,290 8,776 8,776 9,070 9,170 9,350 9,300 9,360 , Distribution by equity status (per cent) 30 Net credit status.................................... 41.1 43.8 41.3 41.3 42.3 42.9 42.3 41.4 41.0 Debit status, equity of— 31 60 per cent or more.......................... 32.4 40.8 47.8 47.8 46.6 45.5 46.0 46.3 46.3 32 Less than 60 per cent....................... 26.5 15.4 10.9 10.9 11.1 11.6 11.7 12.4 12.6 1 Effective July 1976 includes a new financial group, banks and in­ 5 Nonmargin stocks are those not listed on a national securities ex­ surance companies. With this change the index includes 400 industrial change and not included on the Federal Reserve System’s list of over-thestocks (formerly 425), 20 transportation (formerly 15 rail), 40 public counter margin stocks. At banks, loans to purchase or carry nonmargin utility (formerly 60), and 40 financial. stocks are unregulated; at brokers, such stocks have no loan value. 2 Based on trading for a 5 Vi-hour day. 6 Free credit balances are in accounts with no unfulfilled commitments 3 Margin credit includes all credit extended to purchase or carry to the brokers and are subject to withdrawal by customers on demand. stocks or related equity instruments and secured at least in part by stock. 7 Each customer’s equity in his collateral (market value of collateral Credit extended by brokers is end-of-month data for member firms of less net debit balance) is expressed as a percentage of current collateral the New York Stock Exchange; June data for banks are universe totals; values. all other data for banks are estimates for all commercial banks based on 8 Balances that may be used by customers as the margin deposit re­ data from a sample of reporting banks. quired for additional purchases. Balances may arise as transfers based In addition to assigning a current loan value to margin stock generally, on loan values of other collateral in the customer’s margin account or Regulations T and U permit special loan values for convertible bonds deposits of cash (usually sales proceeds) occur. and stock acquired through exercise of subscription rights. 4 A distribution of this total by equity class is shown below. Note.—For table on “Margin Requirements” see p. A-10, Table 1.161. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Thrift Institutions A29 1.38 SAVINGS INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1976 1977 1974 1975 1976 Account Sept. Oct. Nov. Dec. Jan. Feb. | Mar. Apr.r May Savings and loan associations 1 Assets........................................ 295,545 338,233 391,999 379,747 385,013 389,173 391,999 398,299 403,591 409,357 414,425 421,873 2 Mortgages................................ 249,301 278,590 323,130 311,847 315,742 319,273 323,130 326,056 329,086 333,703 338,984 344,642 3 Cash and investment 23,251 30,853 35,660 35,209 36,442 36,605 35,660 38,252 39,505 39,656 39,060 40,470 4 Other.......................................... 22,993 28,790 33,209 32,691 32,829 33,295 33,209 33,991 35,000 35,998 36,381 36,761 5 Liabilities and net worth........ 295,545 338,233 391,999 379,747 385,013 389,173 391,999 398,299 403,591 409,357 414,425 421,873 6 Savings capital......................... 242,974 285,743 336,030 323,800 327,252 329,833 336,030 341,211 344,616 352,194 354,318 357,958 7 Borrowed money...................... 24,780 20,634 19,087 19,083 18,810 18,715 19,087 18,455 18,256 18,283 18,880 19,857 8 FHLBB................................. 21,508 17,524 15,708 15,832 15,636 15,571 15,708 15,029 14,661 14,325 14,809 15,007 9 Other...................................... 3,272 3,110 3,379 3,251 3,174 3,144 3,379 3,426 3,595 3,958 4,071 4,850 10 Loans in process..................... 3,244 5,128 6,836 6,688 6,735 6,753 6,836 6,718 6,783 7,351 7,899 8,504 11 Other.......................................... 6,105 6,949 8,015 8,779 10,531 11,918 8,015 9,667 11,418 8,833 10,350 12,250 12 Net worth2............................... 18,442 19,779 22,031 21,398 21,685 21,954 22,031 22,248 22,518 22,696 22,978 23,304 13 Memo: Mortgage loan com­ mitments outstanding3.. 7,454 10,673 14,828 15,449 15,319 15,467 14,828 15,079 16,796 19,304 21,241 22,253 Mutual savings banks 14 Assets........................................ 109,550 121,056 134,702 131,413 132,455 133,361 134,812 135,906 137,307 138,901 139,496 Loans: 15 Mortgage.............................. 74,891 77,221 81,554 80,145 80,543 80,884 81,630 81,826 81,982 82,273 82,653 16 Other..................................... 3,812 4,023 5,192 5,478 5,549 5,801 5,183 5,956 6,254 6,389 6,088 Securities: 17 U.S. Govt.............................. 2,555 4,740 5,911 5,851 5,796 5,836 5,840 5,917 6,096 6,360 6,323 18 State and local government. 930 1,545 2.420 2,359 2,429 2,466 2,417 2,295 2,366 2,431 2,504 19 Corporate and other4........ 22,550 27,992 33,676 32,432 32,793 33,074 33,793 34,475 35,088 35,928 36,323 20 Cash.......................................... 2,167 2,330 2,374 1,581 1,695 1,668 2,355 1,800 1,835 1,823 1,900 21 Other assets.............................. 2,645 3,205 3,574 3,567 3,649 3,632 3,593 3,637 3,686 3,668 3,704 22 Liabilities.................................. 109,550 121,056 134,702 131,413 132,455 133,361 134,812 135,906 137,307 138,901 139,496 23 Devosits.................................... 98,701 109,873 122,802 119,590 120,360 120,971 122,877 123,864 124,728 126,687 126,938 24 Regular:5.............................. 98,221 109,291 121,874 118,510 119,346 120,125 121,961 122,874 123,721 125,624 125,731 25 Ordinary savings............. 64,286 69,653 74,483 73,484 73,610 73,857 74,535 74,621 75,038 76,260 76,336 26 Time and other............... 33,935 39,639 47,391 45,027 45,736 46,268 47,426 48,253 48,683 49,364 49,395 27 Other..................................... 480 582 928 1,080 1,014 846 916 989 1,007 1,063 1,207 28 Other liabilities....................... 2,888 2,755 2,853 2,898 3,140 3,376 2,884 2,940 3,368 2,939 3,230 29 General reserve accounts.... 7,961 8,428 9,047 8,925 8,955 9,015 9,052 9,102 9,211 9,275 9,329 30 Memo: Mortgage loan commitments outstanding6.. 2,040 1,803 2,439 2,671 2,548 2,553 2,439 2,584 2,840 3,161 3,287 Life insurance companies 31 Assets........................................ 263,349 289,304 321,552 312,873 314,845 317,499 321,552 323,407 325,094 326,753 328,786 Securities: 32 10,900 13,758 17,942 17,450 18,019 18,390 17,942 18,198 18,443 18,470 18,500 33 3,372 4,736 5,368 5,419 5,821 5,992 5,368 5,537 5,592 5,546 5,544 34 State and local................. 3,667 4,508 5,594 5,406 5,463 5,533 5,594 5,657 5,709 5,732 5,758 35 Foreign8........................... 3,861 4,514 6,980 6,625 6,735 6,865 6,980 7,004 7,142 7,192 7,198 36 119,637 135,317 157,246 152,088 153,291 154,382 157,246 159,213 160,463 161,214 162,816 37 97,717 107,256 122,984 118,918 120,610 121,763 122,984 125,910 127,603 128,596 130,057 38 Stocks................................ 21,920 28,061 34,262 33,170 32,681 32,619 34,262 33,303 32,860 32,618 32,759 39 Mortgages................................ 86,234 89,167 91,552 90,202 90,293 90,794 91,552 91,566 91,585 91,786 92,200 40 Real estate................................ 8,331 9,621 10,476 10,130 10,231 10,244 10,476 10,556 10,629 10,738 10,802 41 Policy loans.............................. 22,862 24,467 25,834 25,494 25,594 25,695 25,834 25,911 26,034 26,207 26,364 42 Other assets.............................. 15,385 16,971 18,502 17,509 17,417 17,994 18,502 17,963 17,940 18,338 18,104 Credit unions 43 Total assets/liabilities and capital............................. 31,948 38,037 44,897 43,079 43,415 44,089 44,835 44,906 45,798 47,111 47,348 48,322 44 Federal............................. 16,715 20,209 24,164 23,198 23,283 23,668 24,164 24,188 24,756 25,596 25,697 26,259 45 State................................. 15,233 17,828 20,733 19,881 20,132 20,421 20,671 20,718 21,042 21,515 21,651 22,063 46 Loans outstanding................. 24,432 28,169 34,033 33,093 33,275 33,732 34,293 34,188 34,549 35,411 36,019 36,936 47 Federal............................. 12,730 14,869 18,022 17,458 17,522 17,786 18,202 18,081 18,275 18,776 19,050 19,583 48 State................................. 11,702 13,300 16,011 15,635 15,753 15,946 16,091 16,107 16,274 16,635 16,969 17,353 49 Savings.................................... 27,518 33,013 39,264 37,436 37,854 38,281 38,968 39,344 39,981 41,161 41,394 42,125 50 Federal (shares)............... 14,370 17,530 21,149 20,167 20,358 20,597 20,980 21,165 21,559 22,346 22,524 22,955 51 State (shares and deposits) 13,148 15,483 18,115 17,269 17,496 17,684 17,988 18,179 18,442 18,815 18,870 19,170 For notes see bottom of page A30. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Financial Statistics □ July 1977 1.39 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Fiscal year Calendar year Transition quarter Type of account or operation (July- 1975 1976 1977 1975 1976 Sept. 1976) H2 H2 Apr. May U.S. Budget 1 Receipts................................................ 280,997 300,005 81,773 139,455 160,552 157,961 25,171 40,016 27,672 2 Outlays1,2.......................................... 326,105 366.466 94,746 185,097 181,369 193,719 34,646 35,547 33,715 3 Surplus, or deficit (—).................. -45,108 -66,461 -12,973 -45,642 -20,816 -35,758 -9,475 4,469 -6,043 4 Trust funds..................................... 7,419 2,409 -1,952 -3,125 5,503 -4,621 -1,441 647 7,542 5 Federal funds 3.............................. -52,526 -68,870 - 11,021 -42,517 -26,320 -31,137 -8,033 3,822 -13,584 Off-budget entities surplus, or deficit (—) 6 Federal Financing Bank outlays. . -6,389 -5,915 -2,575 -2,693 -3,222 -5,176 -843 581 -299 7 Other1,4............................................ -1,652 -1,355 793 -236 -1,119 3,809 -83 -114 245 U.S. Budget plus off-budget, in­ cluding Federal Financing Bank 8 Surplus, or deficit ( —)..................... -53,149 -73,731 -14,755 -48,571 -25,158 -37,125 -10,402 4,936 -6,097 Financed by: 9 Borrowing from the public 2. . . 50,867 82,922 18,027 49,361 33,561 35,457 5,351 1,206 -2,871 10 Cash and monetary assets (de­ crease, or increase (—)).... -320 -7,796 -2,899 -2,046 -7,909 2,153 5,610 -9,422 11,268 11 Other 5............................................ 2,602 -1,396 -373 1,256 -495 -485 -559 3,280 -2,300 Memo items: 12 Treasury operating balance (level, end of period)........................................ 7,591 14,836 17,418 8,452 14,836 11,670 9,023 17,763 6,992 13 F.R. Banks........................................ 5,773 11,975 13,299 7,286 11,975 10,393 7,149 13,628 5,836 14 Tax and loan accounts................... 1,475 2,854 4,119 1,159 2,854 1,277 1,874 4,135 1,156 15 Other demand accounts 6............... 343 7 7 7 1 Outlay totals reflect the reclassification of the Export-Import Bank 5 Includes: Public debt accrued interest payable to the public; deposit from off-budget status to unified budget status. funds; miscellaneous liability (including checks outstanding) and asset 2 Export-Import Bank certificates of beneficial interest (effective July accounts; seignorage; increment on gold; net gain/loss for U.S. currency 1, 1975) and loans to the Private Export Funding Corp. (PEFCO), a wholly valuation adjustment; net gain/loss for IMF valuation adjustment. owned subsidiary of the Export-Import Bank are treated as debt rather 6 Excludes the gold balance but includes deposits in certain commercial than asset sales. depositories that have been converted from a time deposit to a demand 3 Half years calculated as a residual of total surplus/deficit and trust deposit basis to permit greater flexibility in Treasury cash management. fund surplus/deficit. 4 Includes Pension Benefit Guaranty Corp., Postal Service Fund, Rural Source.—“Monthly Treasury Statement of Receipts and Outlays of Electrification and Telephone Revolving Fund, Rural Telephone Bank, the U.S. Government,” Treasury Bulletin, and U.S. Budget, Fiscal Year and Housing for the Elderly or Handicapped Fund. 1978. NOTES TO TABLE 1.38 1 Stock of the Federal Home Loan Bank Board (FHLBB) is included Even when revised, data for current and preceding year are subject to in “other assets.” further revision. 2 Includes net undistributed income, which is accrued by most, but not Mutual savings banks: Estimates of National Association of Mutual all, associations. Savings Banks for all savings banks in the United States. Data are re­ 3 Excludes figures for loans in process, which are shown as a liability. ported on a gross-of-valuation-reserves basis. 4 Includes securities of foreign governments and international organiza­ Life insurance companies: Estimates of the Institute of Life Insurance tions and nonguaranteed issues of U.S. Govt, agencies. for all life insurance companies in the United States. Annual figures are 5 Excludes checking, club, and school accounts. annual-statement asset values, with bonds carried on an amortized basis 6 Commitments outstanding (including loans in process) of banks in and stocks at year-end market value. Adjustments for interest due and New York State as reported to the Savings Banks Assn. of the State of accrued and for differences between market and book values are not New York. made on each item separately but are included, in total, in “other assets.” 7 Direct and guaranteed obligations. Excludes Federal agency issues Credit unions: Estimates by the National Credit Union Administration not guaranteed, which are shown in this table under “business” securities. for a group of Federal and State-chartered credit unions that account for 8 Issues of foreign governments and their subdivisions and bonds of the about 30 per cent of credit union assets. Figures are preliminary and International Bank for Reconstruction and Development. revised annually to incorporate recent benchmark data. Note.—Savings and loan associations: Estimates by the FHLBB for all associations in the United States. Data are based on monthly reports of Federally insured associations and annual reports of other associations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A31 1.40 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Fiscal year Calendar year Transition quarter Source or type (July- 1977 Sept. 1976) H2 HI H2 Apr. May Receipts 1 All sources.............................................. 280,997 300,005 81,773 139,455 160,552 157,961 25,171 40,016 27,672 2 Individual income taxes, net............... 122,386 131,603 38,801 65,835 65,767 75,094 6,131 18,660 9,413 3 Withheld............................................ 122,071 123,408 32,949 59,549 63,859 68,023 12,961 11,797 12,993 4 Presidential Election Campaign Fund........................................... 32 34 1 33 1 10 7 6 5 Nonwithheld...................................... 34,296 35,528 6,809 7,649 27,879 8,426 2,719 14,581 2,092 6 Refunds.............................................. 34,013 27,367 958 1,362 26,004 1,356 9,559 7,725 5,678 7 Corporation income taxes: 8 Gross receipts.................................... 45,747 46,783 9,808 18,810 27,973 20,706 9,131 8,461 1,465 9 Refunds.............................................. 5,125 5,374 1,348 2,735 2,639 2,886 412 488 369 10 Social insurance taxes and contribu­ tions, net......................................... 86,441 92,714 25,760 40,886 51,828 47,596 7,412 10,703 14,203 11 Payroll employment taxes and contributions 1.......................... 71,789 76,391 21,534 35,443 40,947 40,427 6,569 6,670 9,912 12 Self-employment taxes and contributions 1......................... 3,417 3,518 269 268 3,250 286 290 2,328 248 13 Unemployment insurance............... 6,771 8,054 2,698 2,861 5,193 4,379 126 1,296 3,582 14 Other net receipts 2......................... 4,466 4,752 1,259 2,314 2,438 2,504 428 409 461 15 Excise taxes............................................ 16,551 16,963 4,473 8,761 8,204 8,910 1,283 1,392 1,485 16 Customs.................................................. 3,676 4,074 1,212 1,927 2,147 2,361 466 393 427 17 Estate and gift....................................... 4,611 5,216 1,455 2,573 2,643 2,943 625 376 501 18 Miscellaneous receipts 3..................... 6,711 8,026 1,612 3,397 4,630 3,236 534 517 548 Outlays 19 All types 4.......................................... 326,105 366,466 94,746 185,097 181,369 193,719 34,646 35,547 33,715 20 National defense.............................. 86,585 89,996 22,518 46,214 44,052 45,002 8,572 7,976 8,555 21 International affairs 4..................... 5,862 5,067 1,997 2,574 2,668 3,028 521 548 284 22 General science, space, and technology.................................. 3,989 4,370 1,161 2,415 1,708 2,377 403 356 350 23 Natural resources, environment, and energy................................. 9,537 11,282 3,324 5,018 6,900 7,206 1,180 1,077 1,239 24 Agriculture........................................ 1,660 2,502 584 1,489 417 2,019 564 737 138 25 Commerce and transportation.... 16,010 17,248 4,700 11,496 5,766 9,643 1,265 1,316 1,586 26 Community and regional development.............................. 4,431 5,300 1,530 2,548 2,411 3,192 496 579 525 27 Education, training, employment, and social services................... 15,248 18,167 5,013 8,423 9,116 9,083 1,645 1,604 1,628 28 Health................................................. 27,647 33,448 8,720 16,681 17,008 19,329 2,674 3,241 3,317 29 Income security................................ 108,605 127,406 32,796 61,655 65,336 65,456 13,045 11,632 11,568 30 Veterans benefits and services.... 16,597 18,432 3,962 9,010 9,450 8,542 1,611 1,684 1,625 31 Law enforcement and justice......... 2,942 3,320 859 1,589 1,784 1,839 292 305 285 32 General government........................ 3,089 2,927 878 1,929 870 1,734 284 113 488 33 Revenue sharing and general purpose fiscal assistance......... 7,005 7,119 2,024 3,528 3,664 4,729 31 2,103 45 34 Interest5.............................................. 30,974 34,589 7,246 15,180 18,560 18,409 2,522 2,751 2,690 35 Undistributed offsetting receipts 5-6 -14,075 -14,704 -2,567 -4,652 -8,340 -7,869 -459 -475 -609 1 Old-age, disability and hospital insurance, and Railroad Retirement Private Export Funding Corp. (PEFCO), a wholly owned subsidiary of accounts. the Export-Import Bank, are treated as debt rather than asset sales. 2 Supplementary medical insurance premiums, Federal employee re­ 5 Effective September 1976, “Interest” and “Undistributed Offsetting tirement contributions and Civil Service retirement and disability fund. Receipts” reflect the accounting conversion for the interest on special 3 Deposits of earnings by F.R. Banks and other miscellaneous receipts. issues for U.S. Govt, accounts from an accrual basis to a cash basis. 4 Outlay totals reflect the reclassification of the Export-Import Bank 6 Consists of interest received by trust funds, rents and royalties on from off-budget status to unified budget status. Export-Import Bank the Outer Continental Shelf, and U.S. Govt, contributions for em­ certificates of beneficial interest (effective July 1, 1975) and loans to the ployee retirement. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Financial Statistics □ July 1977 1.41 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1973 1974 1975 1976 1977 Item Dec. 31 June 30 Dec. 31 June 30 Dec. 31 June 30 Sept. 30 Dec. 31 Mar. 31 1 Federal debt outstanding....................... 480.7 486.2 504.0 544.1 587.6 631.9 2646.4 665.5 680.1 2 Public debt securities.............................. 469.1 474.2 492.7 533.7 576.6 620.4 634.7 653.5 669.2 3 Held by public.................................... 339.4 336.0 351.5 387.9 437.3 470.8 488.6 506.4 524.3 4 Held by agencies................................ 129.6 138.2 141.2 145.3 139.3 149.6 146.1 147.1 144.9 5 Agency securities..................................... 11.6 12.0 11.3 10.9 10.9 11.5 11.6 12.0 10.9 6 Held by public.................................... 9.6 10.0 9.3 9.0 8.9 9.5 29.7 10.0 9.1 7 Held by agencies................................ 2.0 2.0 2.0 1.9 2.0 2.0 1.9 1.9 1.8 8 Debt subject to statutory limit.............. 470.8 476.0 493.0 534.2 577.8 621.6 635.8 654.7 670.3 9 Public debt securities............................. 468.4 473.6 490.5 532.6 576.0 619.8 634.1 652.9 668.6 10 Other debt i.............................................. 2.4 2.4 2.4 1.6 1.7 1.7 1.7 1.7 1.7 11 Memo: Statutory debt limit................. 475.7 495.0 495.0 577.0 595.0 636.0 636.0 682.0 682.0 1 Includes guaranteed debt of Govt, agencies, specified participation $0.5 billion due to a retroactive reclassification of the Export-Import Bank certificates, notes to international lending organizations, and District of certificates of beneficial interest from loan asset sales to debt, effective Columbia stadium bonds. July 1, 1975. 2 Gross Federal debt and Agency debt held by the public increased Note.—Data from Treasury Bulletin (U.S. Treasury Dept.). 1.42 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership Billions of dollars, end of period 1977 Type and holder 1973 1974 1975 1976 Feb. Mar. Apr. May June 1 Total gross public debt1........................................... 469.9 492.7 576.6 653.5 663.3 669.2 671.0 672.1 674.4 By type: 673,4 467.8 491.6 575.7 652.5 662.3 668.2 668.5 671.0 431 1 3 Marketable............................................................. 270.2 282.9 363.2 421.3 431.6 435.4 434.1 431.4 155.1 4 Bills...................................................................... 107.8 119.7 157.5 164.0 164.2 164.3 162.0 157.9 232.9 5 Notes................................................................... 124.6 129.8 167. 1 216.7 225.9 229.6 230.7 230.2 43.2 6 Bonds................................................................... 37.8 33.4 38.6 40.6 41.6 41.5 41.4 43.3 242.2 7 Nonmarketable2..................................................... 197.6 208.7 212.5 231.2 230.7 232.8 234.4 239.5 2,2 8 Convertible bonds3.......................................... 2.3 2.3 2.3 2.3 2.3 2.2 2.2 2.2 21.7 9 Foreign issues4................................................... 26.0 22.8 21.6 22.3 22.1 22.1 21.9 21.8 74.7 10 Savings bonds and notes................................. 60.8 63.8 67.9 72.3 73.0 73.4 73.9 74.3 11 108.0 119.1 119.4 129.7 127.8 128.2 129.0 133.0 134.8 By holder:® 12 U.S. Govt, agencies and trust funds................. 129.6 141.2 139.3 147.1 144.4 145.0 145.5 13 F.R. Banks............................................................. 78.5 80.5 87.9 97.0 95.8 96.0 99.8 14 Private investors..................................................... 261.7 271.0 349.4 409.5 423.1 428.3 425.7 15 Commercial banks............................................ 60.3 55.6 85.1 102.5 104.5 106.0 103.5 16 Mutual savings banks...................................... 2.9 2.5 4.5 5.5 5.7 5.2 5.2 17 Insurance companies........................................ 6.4 6.1 9.3 12.3 12.2 12.2 12.1 18 Other corporations........................................... 10.9 11.0 20.2 25.5 27.9 26.0 26.3 19 State and local governments.......................... 29.2 29.2 33.8 41.6 42.3 43.4 46.9 Individuals: 20 Savings bonds................................................ 60.3 63.4 67.3 72.0 72.8 72.8 73.6 21 Other securities.............................................. 16.9 21.5 24.0 28.8 28.7 29.1 28.6 22 Foreign and international7............................. 55.5 58.4 66.5 78.1 82.3 84.7 85.9 23 Other miscellaneous investors8...................... 19.3 23.2 38.6 43.2 46.7 48.9 43.6 1 Includes $1.0 billion of non-interest-bearing debt (of which $611 6 Data for F.R. Banks and U.S. Govt, agencies and trust funds are million on June 30, 1977, was not subject to statutory debt limitations). actual holdings; data for other groups are Treasury estimates. 2 Includes (not shown separately): Securities issued to the Rural 7 Consists of the investments of foreign balances and international Electrification Administration and to State and local governments, de­ accounts in the United States. Beginning with 1974, the figures exclude positary bonds, retirement plan bonds, and individual retirement bonds. non-interest-bearing notes issued to the International Monetary Fund. 3 These nonmarketable bonds, also known as Investment Series B 8 Includes savings and loan associations, nonprofit institutions, cor­ Bonds, may be exchanged (or converted) at the owner’s option for 1 Vi porate pension trust funds, dealers and brokers, certain Govt, deposit per cent, 5-year marketable Treasury notes. Convertible bonds that have accounts, and Govt.-sponsored agencies. been so exchanged are removed from this category and recorded in the notes category above. Note.—Gross public debt excludes guaranteed agency securities and, 4 Nonmarketable certificates of indebtedness, notes, and bonds in the beginning in July 1974, includes Federal Financing Bank security issues. Treasury foreign series and foreign-currency series. Data by type of security from Monthly Statement of the Public Debt of 5 Held only by U.S. Govt, agencies and trust funds. the United States, U.S. Treasury Dept.; data by holder from Treasury Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A33 1.43 U.S. GOVERNMENT MARKETABLE SECURITIES Ownership, by maturity Par value; millions of dollars, end of period 1977 1977 Type of holder 1975 1976 1975 1976 Apr. May Apr. May All maturities 1 to 5 years 1All holders....................................................................................... 363,191 421,276 434,065 431,447 112,270 141,132 144,528 143,011 2 U.S. Govt, agencies and trust funds......................................... 19,347 16,485 15,528 15,434 7,058 6,141 5,950 5,949 3 F. R. Banks.................................................................................... 87,934 96,971 99,837 97,394 30,518 31,249 31,649 30,239 4 Private investors............................................................................. 255,860 307,820 318,699 318,619 74,694 103,742 106,929 106,823 5 Commercial banks.................................................................... 64,398 78,262 78,234 77,048 29,629 40,005 43,089 41,129 6 Mutual savings banks............................................................... 3,300 4,072 4,510 4,450 1,524 2,010 2,141 2,093 7 Insurance companies................................................................ 7,565 10,284 9,959 10,158 2,359 3,885 3,810 4,088 8 Nonfinancial corporations...................................................... 9,365 14,193 14,448 13,607 1,967 2,618 3,530 3,120 9 Savings and loan associations................................................ 2,793 4,576 5,288 5,170 1,558 2,360 2,521 2,662 10 State and local governments.................................................. 9,285 12,252 16,102 16,201 1,761 2,543 4,590 4,573 11 All others.................................................................................... 159,154 184,182 190,159 191,985 35,894 50,321 47,247 49,157 Total, within 1 year 5 to 10 years i 12 All holders....................................................................................... 199,692 211,035 216,788 213,662 26,436 43,045 45,806 45,972 13 U.S. Govt, agencies and trust funds......................................... 2,769 2,012 1,910 1,821 3,283 2,879 2,145 2,141 14 F. R. Banks..................................................................................... 46,845 51,569 52,459 49,630 6,463 9,148 10,192 11,172 15 Private investors............................................................................. 150,078 157,454 162,419 162,211 16,690 31,018 33,469 32,658 16 Commercial banks.................................................................... 29,875 31,213 27,270 28,622 4,071 6,278 7,156 6,576 17 Mutual savings banks............................................................... 983 1,214 1,357 1,407 448 567 111 654 18 Insurance companies................................................................ 2,024 2,191 1,756 1,720 1,592 2,546 2,833 2,791 19 Nonfinancial corporations....................................................... 7,105 11,009 10,250 9,861 175 370 422 380 20 Savings and loan associations................................................ 914 1,984 2,511 2,297 216 155 184 140 21 State and local governments................................................... 5,288 6,622 8,690 8,747 782 1,465 1,240 1,253 22 All others.................................................................................... 103,889 103,220 110,585 109,556 9,405 19,637 20,917 20,865 Bills, within 1 year 10 to 20 years 23 All holders....................................................................................... 157,483 163,992 161,977 157,931 14,264 11,865 11,685 11,656 24 U.S. Govt, agencies and trust funds......................................... 207 449 285 280 4,233 3,102 3,102 3,102 25 F. R. Banks.................................................................................... 38,018 41,279 41,689 40,065 1,507 1,363 1,410 1,374 26 Private investors............................................................................. 119,258 122,264 120,003 117,597 8,524 7,400 7,173 7,180 27 Commercial banks.................................................................... 17,481 17,303 11,218 11,410 552 339 320 301 28 Mutual savings banks............................................................... 554 454 476 445 232 139 135 134 29 Insurance companies................................................................. 1,513 1,463 816 728 1,154 1,114 1,085 1,076 30 Nonfinancial corporations....................................................... 5,829 9,939 8,771 8,178 61 142 171 159 31 518 1,266 1,515 1,268 82 64 56 56 32 State and local governments................................................... 4,566 5,556 7,255 6,916 896 718 666 663 33 All others.................................................................................... 88,797 86,282 89,951 88,651 5,546 4,884 4,741 4,790 Other, within 1 year Over 20 years 34 All holders....................................................................................... 42,209 47,043 54,811 55,731 10,530 14,200 15,258 17,146 35 U.S. Govt, agencies and trust funds......................................... 2,562 1,563 1,625 1,541 2,053 2,350 2,421 2,421 8,827 10,290 10,770 9,576 2,601 3,642 4,127 A,919 37 Private investors............................................................................. 30,820 35,190 42,416 44,614 5,876 8,208 8,709 9,746 38 Commercial banks.................................................................... 12,394 13,910 16,052 17,212 271 All 399 419 39 Mutual savings banks............................................................... 429 760 881 962 112 143 161 162 40 511 728 940 992 436 548 475 483 41 Nonfinancial corporations....................................................... 1,276 1,070 1,479 1,683 57 55 73 87 42 Savings and loan associations................................................ 396 718 996 1,029 22 13 15 15 43 State and local governments.................................................. 722 1,066 1,435 1,831 558 904 917 965 44 All others.................................................................................... 15,092 16,938 20,634 20,905 4,420 6,120 6,669 7,616 Note.—Direct public issues only. Based on Treasury Survey of Owner­ banks, 467 mutual savings banks, and 724 insurance companies, each ship from Treasury Bulletin (U.S. Treasury Dept.). about 90 per cent; (2) 447 nonfinancial corporations and 486 savings Data complete for U.S. Govt, agencies and trust funds and F.R. Banks, and loan assns., each about 50 per cent; and (3) 499 State and local but data for other groups include only holdings of those institutions govts., about 40 per cent. that report. The following figures show, for each category, the number “All others,” a residual, includes holdings of all those not reporting and proportion reporting as of May 31, 1977; (1) 5,498 commercial in the Treasury Survey, including investor groups not listed separately. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic Financial Statistics □ July 1977 1.44 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars 1977 1977. week ending Wednesday— Item 1974 1975 1976 Mar. Apr. May May 25 June 1 June 8 June 15 June 22 June 29 1 U.S. Govt, securities............... 3,579 6,027 10,449 11,128 13,597 10,306 '10,555 8,874 7,725 10,037 7,445 9,052 By maturity: 2 Bills........................................ 2,550 3,889 6,676 7,445 8,829 6,495 '6,607 5,809 4,851 5,707 4,083 4,895 3 Other within 1 year........... 250 223 210 234 215 183 122 244 167 239 171 230 4 1-5 years.............................. 465 1,414 2,317 2,373 2,727 1,981 '2,632 1,992 1,727 2,356 1,896 2,305 5 5-10 years............................ 256 363 1,019 883 1,592 1,322 945 658 653 1,280 926 1,081 6 Over 10 years...................... 58 138 229 193 235 325 249 170 327 455 369 541 By type of customer: 7 U.S. Govt, securities dealers.......................... 652 885 1,360 1,492 1,523 1,059 1,068 994 1,077 1,125 739 N/A 8 U.S. Govt, securities brokers......................... 965 1,750 3,407 3,300 4,795 3,975 4,274 2,898 2,043 3,331 2,025 N/A 9 Commercial banks............. 998 1,451 2,426 2,528 2,705 2,095 2,176 1,972 1,786 2,350 1,606 N/A 10 All others1........................... 964 1,941 3,257 3,808 4,575 3,177 '3,036 3,010 2,817 3,232 3,075 N/A 11 Federal agency securities.... 965 1,043 1,548 '1, 589 '2,008 1,786 '2,285 1,945 1,800 2,281 2,030 2,342 1 Includes—among others—all other dealers and brokers in commodi­ Transactions are market purchases and sales of U.S. Govt, securities ties and securities, foreign banking agencies, and the F.R. System. dealers reporting to the F.R. Bank of New York. The figures exclude allotments of, and exchanges for, new U.S. Govt, securities, redemptions Note.—Averages for transactions are based on number of trading days of called or matured securities, or purchases or sales of securities under in the period. repurchase, reverse repurchase (resale), or similar contracts. 1.45 U.S. GOVERNMENT SECURITIES DEALERS Positions and Sources of Financing Par value; averages of daily figures, in millions of dollars 1977 1977, week ending Wednesday— Item 1974 1975 1976 Mar. Apr. May Apr. 20 Apr. 27 May 4 May 11 May 18 May 25 Positions2 1U.S. Govt, securities............... 2,580 5,884 7,592 5,266 5,911 3,900 7,667 2,860 3,489 3,657 3,581 3,584 2 Bills........................................ 1,932 4,297 6,290 4,864 5,215 3,786 6,566 2,279 3,128 3,459 3,871 3,647 3 Other within 1 year........... -6 265 188 237 253 198 278 280 221 217 183 230 4 1-5 years.............................. 265 886 515 -14 211 -101 403 237 335 -131 -432 -259 5 5-10 years............................ 302 1 300 402 52 101 -70 216 -83 -201 -31 -123 -111 6 Over 10 years...................... 88 | 136 198 128 131 87 203 148 6 143 82 76 7 Federal agency securities.... 1,212 943 729 383 '687 539 1,049 648 429 397 597 481 Sources of financing3 8 All sources............................... 3,977 6,666 8,715 9,433 '10,301 9,351 12,799 9,020 8,920 9,423 9,976 9,338 Commercial banks: 9 New York City................... 1,032 1,621 1,896 1,552 1,948 881 2,761 1,757 1,029 707 861 840 10 Outside New York City... 1,064 1,466 1,660 1,910 2,174 1,735 2,629 1,383 1,123 1,712 1,906 1,711 11 Corporations1......................... 459 842 1,479 2,131 1,891 1,806 2,141 1,674 1,343 1,623 1,898 2,103 12 All other................................... 1,423 2,738 3,681 3,839 '4,288 4,929 5,268 4,207 5,426 5,381 5,312 4,683 1A11 business corporations except commercial banks and insurance firms and dealer departments of commercial banks against U.S. Govt, companies. and Federal agency securities (through both collateral loans and sales 2 Net amounts (in terms of par values) of securities owned by nonbank under agreements to repurchase), plus internal funds used by bank dealer dealer firms and dealer departments of commercial banks on a commit­ departments to finance positions in such securities. Borrowings against ment, that is, trade-date basis, including any such securities that have been securities held under agreement to resell are excluded where the borrowing sold under agreements to repurchase. The maturities of some repurchase contract and the agreement to resell are equal in amount and maturity, agreements are sufficiently long, however, to suggest that the securities that is, a matched agreement. involved are not available for trading purposes. Securities owned, and hence dealer positions, do not include securities purchased under agree­ Note.—Averages for positions are based on number of trading days ments to resell. in the period; those for financing, on the number of calendar days in the 3 Total amounts outstanding of funds borrowed by nonbank dealer period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A35 1.46 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1965 1977 Agency 1973 1974 1975 Nov. Dec. Jan. Feb. Mar. Apr. 1 Federal and Federally sponsored agencies............ 71,594 89,381 97,680 r103,381 >•103,274 r103,502 102,976 103,688 105,594 2 Federal agencies......................................................... 11,554 12,719 19,046 r22,611 r22,385 22,183 22,322 22,428 22,477 3 Defense Department1.......................................... 1,439 1,312 1,220 1,117 1,113 1,095 1,086 1,077 1,068 4 Export-Import Bank2,3....................................... 2,625 2,893 7,188 8,336 8,574 8,557 8,580 8,615 8,610 5 Federal Housing Administration4..................... 415 440 564 585 575 579 581 592 598 6 Government National Mortgage Association participation certificates 5........................... 4,390 4,280 4,200 *•4,111 >■4,086 3,860 3,860 3,860 3,818 7 Postal Service6....................................................... 250 721 1,750 3,498 2,998 2,998 2,998 2,998 2,998 8 Tennessee Valley Authority................................ 2,435 3,070 3,915 4,865 4,935 4,985 5,005 5,070 5,155 9 United States Railway Association6................. 3 209 99 104 109 212 216 230 10 Federally sponsored agencies.................................... 60,040 76,662 78,634 80,770 80,889 81,321 80,654 81,260 83,117 11 Federal home loan banks.................................... 15,362 21,890 18,900 16,807 16,811 16,805 16,587 16,626 16,678 12 Federal Home Loan Mortgage Corporation.. 1,784 1,551 1,550 1,150 1,150 1,350 957 957 957 13 Federal National Mortgage Association........ 23,002 28,167 29,963 30,413 30,565 30,394 30,143 30,392 30,684 14 Federal land banks............................................... 10,062 12,653 15,000 17,127 17,127 17,304 17,304 17,304 18,137 15 Federal intermediate credit banks..................... 6,932 8,589 9,254 10,669 10,494 10,631 10,556 10,670 10,990 16 Banks for cooperatives......................................... 2,695 3,589 3,655 4,207 4,330 4,425 4,695 4,899 5,254 17 Student Loan Marketing Association7............. 200 220 310 395 410 410 410 410 415 18 Other........................................................................ 3 3 2 2 2 2 2 2 2 Memo items: 19 Federal Financing Bank debt6,8............................. 4,474 17,154 27,028 28,711 29,848 30,328 31,312 30,823 Lending to Federal and Federally sponsored agencies: 20 Export-Import Bank3.......................................... 4,595 4,768 5,208 5,208 5,237 5,273 5,273 21 Postal Service6....................................................... 500 1,500 3,248 2,748 2,748 2,748 2,748 2,748 22 Student Loan Marketing Association7............ 220 310 395 410 410 410 410 415 23 Tennessee Valley Authority................................ 895 1,840 2,890 3,110 3,160 3,180 3,245 3,330 24 United States Railway Association6................. 3 209 99 104 109 212 216 230 Other lending:9 25 Farmers Home Administration......................... 2,500 7,000 10,250 10,750 11,450 11,450 11,750 11,750 26 Rural Electrification Administration................ 566 1,674 1,768 1,509 1,584 1,677 1,806 27 Other........................................................................ 356 1,134 3,704 4,613 5,254 5,507 5,993 5,271 1 Consists of mortgages assumed by the Defense Department between 7 Unlike other Federally sponsored agencies, the Student Loan 1957 and 1963 under family housing and homeowners assistance programs. Marketing Association may borrow from the Federal Financing Bank 2 Includes participation certificates reclassified as debt beginning (FFB) since its obligations are guaranteed by the Department of Health, Oct. 1, 1976. Education, and Welfare. 3 Off-budget Aug. 17, 1974 through Sept. 30, 1976; on-budget thereafter. 8 The FFB, which began operations in 1974, is authorized to purchase 4 Consists of debentures issued in payment of Federal Housing Ad­ or sell obligations issued, sold, or guaranteed by other Federal agencies. ministration insurance claims. Once issued, these securities may be sold Since FFB incurs debt solely for the purpose of lending to other agencies, privately on the securities market. its debt is not included in the main portion of the table in order to avoid 5 Certificates of participation issued prior to fiscal 1969 by the Govern­ double counting. ment National Mortgage Association acting as trustee for the Farmers 9 Includes FFB purchases of agency assets and guaranteed loans; Home Administration; Department of Health, Education, and Welfare; the latter contain loans guaranteed by numerous agencies with the Department of Housing and Urban Development; Small Business Ad­ guarantees of any particular agency being generally small. The Farmers ministration; and the Veterans Administration. Home Administration item consists exclusively of agency assets, while the 6 Off-budget. Rural Electrification Administration entry contains both agency assets and guaranteed loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Financial Statistics □ July 1977 1.47 NEW SECURITY ISSUES State and Local Government and Corporate Millions of dollars 1976 1977 Type of issue or issuer, 1974 1975 1976 or use Dec. Jan. Feb. Mar. Apr. May State and local government 1 All issues, new and refunding 1.................................................. 24,315 30,607 35,313 2,352 3,429 3,150 4,140 3,566 4,167 By type of issue: 2 General obligation................................................................... 13,563 16,020 18,040 1,176 1,867 1,624 1,812 1,701 1,994 3 Revenue...................................................................................... 10,212 14,511 17,140 1,166 1,552 1,518 2,323 1,862 2,169 4 Housing Assistance Administration 2................................. 461 5 U.S. Govt, loans...................................................................... 79 76 133 10 10 8 5 3 4 By type of issuer: 6 State............................................................................................ 4,784 7,438 7,054 361 468 441 705 769 875 7 Special district and statutory authority.............................. 8,638 12,441 15,304 1,251 1,786 1,335 1,818 1,388 1,724 8 Municipalities, counties, townships, school districts.... 10,817 10,660 12,845 732 1,166 1,367 1,612 1,407 1,565 9 Issues for new capital, total........................................................ 23,508 29,495 32,108 1,847 3,084 3,019 3,209 2,938 3,674 By use of proceeds: 10 Education.................................................................................. 4,730 4,689 4,900 334 489 502 472 248 474 11 Transportation.......................................................................... 1,712 2,208 2,586 107 104 410 180 119 506 12 Utilities and conservation...................................................... 5,634 7,209 9,594 723 1,050 935 804 703 1,210 13 Social welfare............................................................................ 3,820 4,392 6,566 233 483 580 600 658 392 14 Industrial aid............................................................................ 494 445 483 63 15 12 38 42 127 15 Other purposes......................................................................... 7,118 10,552 7,979 387 943 580 1,115 1,168 965 Corporate 16 All issues 3........................................ 38,313 53,619 53,356 6,480 3,989 2,708 5,495 17 Bonds................................................ 32,066 42,756 42,262 5,560 3,387 1,888 4,300 By type of offering: 18 Public............................................ 25,903 32,583 26,453 2,568 2,786 1,108 2,610 19 Private placement....................... 6,160 10,172 15,808 2,992 601 780 1,690 By industry group: 20 Manufacturing............................ 9,867 16,980 13,243 2,275 817 568 1,049 21 Commercial and miscellaneous 1,845 2,750 4,361 696 743 346 454 22 Transportation........................... 1,550 3,439 4,357 564 165 47 243 23 Public utility................................ 8,873 9,658 8,297 560 634 210 756 24 Communication.......................... 3,710 3,464 2,787 196 50 290 808 25 Real estate and financial.......... 6,218 6,469 9,222 1,271 979 426 991 26 Stocks............................................... 6,247 10,863 11,094 920 602 820 1,195 By type: 27 Preferred...................................... 2,253 3,458 2,789 308 103 128 520 28 Common...................................... 3,994 7,405 8,305 612 499 692 675 By industry group: 29 Manufacturing............................ 544 1,670 2,237 110 89 175 76 30 Commercial and miscellaneous 940 1,470 1,183 198 136 94 114 31 T ransportation........................... 22 1 24 125 32 Public utility................................ 3,964 6,235 6,101 596 352 225 842 33 Communication.......................... 217 1,002 776 267 34 Real estate and financial.......... 562 488 771 is 25 60 38 1 Par amounts of long-term issues based on date of sale. than $100,000, secondary offerings, undefined or exempted issues as 2 Only bonds sold pursuant to the 1949 Housing Act, which are secured defined in the Securities Act of 1933, employee stock plans, investment by contract requiring the Housing Assistance Administration to make companies other than closed-end, intracorporate transactions, and sales to annual contributions to the local authority. foreigners. tha 3 n F i 1 g u y r e e a s r , , w so h l i d c h f o re r p c r a e s s h e n i t n g th ro e s s U n p i r t o e c d e e S d ta s te o s f , i a s r s e u e p s r in m c a ip tu a r l i n a g m i o n u n m t o o re r As S s o o u ci r a c ti e o s n .— ; c S o ta rp te o r a a n te d s l e o c c u a r l i tie g s o , v e S r e n c m ur e it n ie t s s e a c n u d r it E ie x s c , ha S n e g cu e ri C tie o s m I m n i d s u si s o tr n y . number of units multiplied by offering price. Excludes offerings of less Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Corporate Finance A37 1.48 CORPORATE SECURITIES Net Change in Amounts Outstanding Millions of dollars 1975 1976 Source of change, or industry 1974 1975 1976 Q2 Q3 Q4 Q1 Q2 Q3 Q4 All issues1 1New issues.................................................................... 39,344 53,255 53,123 15,602 9,079 13,363 13,671 14,229 11,385 13,838 2 Retirements.................................................................. 9,935 10,991 12,184 3,211 2,576 3,116 2,315 3,668 2,478 3,723 3 Net change.................................................................... 29,399 42,263 40,939 12,390 6,503 10,247 11,356 10,561 8,907 10,115 Bonds and notes 4 New issues................................................................... 31,354 40,468 38,994 11,460 6,654 9,595 9,404 10,244 8,701 10,645 5 Retirements.................................................................. 6,255 8,583 9,109 2,336 2,111 2,549 1,403 3,159 1,826 2,721 6 Net change: Total....................................................... 25,098 31,886 29,884 9,124 4,543 7,047 8,001 7,084 6,875 7,924 By industry: 7 Manufacturing.................................................... 7,404 13,219 8,978 4,574 1,442 2,069 2,966 1,529 1,551 2,932 8 Commercial and other2.................................... 1,116 1,605 2,259 483 221 528 203 726 610 720 9 Transportation, including railroad................. 341 2,165 3,078 429 147 1,588 985 488 1,092 513 10 Public utility....................................................... 7,308 7,236 6,829 1,977 1,395 1,211 1,820 1,260 2,109 1,640 11 Communication.................................................. 3,499 2,980 1,687 810 472 429 498 953 335 -99 12 Real estate and financial.................................. 5,428 4,682 7,054 852 866 1,222 1,530 2,128 1,178 2,218 Common and preferred stock 13 New issues................................................................... 7,980 12,787 14,129 4,142 2,425 3,768 4,267 3,985 2,684 3,193 14 Retirements.................................................................. 3,678 2,408 3,075 875 465 567 912 509 652 1,002 15 Net change: Total....................................................... 4,302 10,377 11,055 3,266 1,960 3,200 3,355 3,477 2,032 2,191 By industry: 16 Manufacturing................................................... 17 1,607 2,634 500 412 433 838 1,120 744 -68 17 Commercial and other2.................................... -135 1,137 762 490 108 462 88 318 117 239 18 Transportation, including railroad................. -20 65 96 7 53 4 5 25 17 49 19 Public utility........................................................ 3,834 6,015 6,171 1,866 1,043 1,537 2,174 1,300 932 1,765 20 Communication.................................................. 398 1,084 854 359 97 604 47 735 19 53 21 Real estate and financial.................................. 207 468 538 43 247 160 203 -21 203 153 1 Excludes issues of investment companies. New issues and retirements exclude foreign sales and include sales of 2 Extractive and commercial and miscellaneous companies. securities held by affiliated companies, special offerings to employees, new stock issues and cash proceeds connected with conversions of bonds Note.—Securities and Exchange Commission estimates of cash trans­ into stocks. Retirements, defined in the same way, include securities actions only, as published in the Commission’s Statistical Bulletin. retired with internal funds or with proceeds of issues for that purpose. 1.49 OPEN-END INVESTMENT COMPANIES Net Sales and Asset Position Millions of dollars 1976 1977 Item 1975 1976 Nov. Dec. Jan. Feb. Mar. Apr. May INVESTMENT COMPANIES excluding money market funds 1 Sales of own shares1............................................ 3,302 4,226 446 661 655 423 463 r558 421 2 Redemptions of own shares2............................ 3,686 6,802 419 628 628 463 553 r468 531 3 Net sales................................................................. -384 2,496 27 33 141 -40 -90 r63 -110 4 Assets3.................................................................... 42,179 47,537 45,369 47,537 45,760 45,040 44,516 44,862 44,403 5 Cash position4.................................................. 3,748 2,747 2,635 2,747 2,958 3,260 3,474 '2,776 2,859 6 Other................................................................... 38,431 44,790 42,734 44,790 42,802 41,780 41,042 '42,086 41,544 1 Includes reinvestment of investment income dividends. Excludes 4 Also includes all U.S. Govt, securities and other short-term debt reinvestment of capital gains distributions and share issue of conversions securities. from one fund to another in the same group. 2 Excludes share redemption resulting from conversions from one fund Note.—Investment Company Institute data based on reports of mem­ to another in the same group. bers, which comprise substantially all open-end investment companies 3 Market value at end of period, less current liabilities. registered with the Securities and Exchange Commission. Data reflect newly formed companies after their initial offering of securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Financial Statistics □ July 1977 1.50 CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1975 1976 1977 Account 1974 1975 1976 Q3 Q4 Ql Q2 Q3 Q4 Ql 1 Profits before tax.......................................................... 127.6 114.5 147.9 126.9 131.3 141.1 146.2 150.2 154.2 160.0 2 Profits tax liability....................................................... 52.4 49.2 64.4 54.8 57.2 61.4 63.5 65.1 67.4 68.8 3 Profits after tax............................................................. 75.2 65.3 83.5 72.1 74.1 79.7 82.7 85.1 86.8 91.2 4 Dividends........................................................................ 30.8 32.1 35.2 32.6 32.2 33.1 34.4 35.4 37.7 37.6 5 Undistributed profits................................................... 44.4 33.2 48.3 39.5 41.9 46.6 48.3 49.7 49.1 53.6 6 Capital consumption allowances............................... 81.6 89.4 97.3 90.5 92.9 94.3 96.2 98.2 100.5 102.6 7 Net cash flow................................................................ 126.0 122.6 145.6 130.0 134.8 140.9 144.5 147.9 149.6 156.2 Source.—U.S. Dept, of Commerce, Survey of Current Business. 1.51 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, end of period I 1975 1976 Account 1971 1972 1973 1974 Q3 Q4 Ql Q2 Q3 Q4 1Current assets.............................................................. 529.4 574.4 643.2 712.2 716.5 731.6 753.5 775.4 791.8 816.8 2 Cash.......................................................................... 53.3 57.5 61.6 62.7 65.6 68.1 68.4 70.8 71.1 77.0 3 11.0 10.2 11.0 11.7 14.3 19.4 21.7 23.3 23.9 26.4 4 Notes and accounts receivable.............................. 221.1 243.4 269.6 293.2 298.0 298.2 310.9 321.8 328.5 328.2 5 U.S. Govt.1......................................................... 3.5 3.4 3.5 3.5 3.3 3.6 3.6 3.7 4.3 4.3 6 Other..................................................................... 217.6 240.0 266.1 289.7 294.7 294.6 307.3 318.1 324.2 323.9 7 Inventories............................................................... 200.4 215.2 246.7 288.0 279.6 285.8 288.8 295.6 302.1 315.4 8 Other......................................................................... 43.8 48.1 54.4 56.6 59.0 60.0 63.6 63.9 66.3 69.8 9 Current liabilities......................................................... 326.0 352.2 401.0 450.6 444.7 457.5 465.9 475.9 484.1 499.9 10 Notes and accounts payable.................................. 220.5 234.4 265.9 292.7 279.6 288.0 286.9 293.8 291.7 302.9 11 U.S. Govt.1......................................................... 4.9 4.0 4.3 5.2 6.2 6.4 6.4 6.8 7.0 7.0 12 Other..................................................................... 215.6 230.4 261.6 287.5 273.4 281.6 280.5 287.0 284.7 295.9 13 Accrued Federal income taxes............................ 13.1 15.1 18.1 23.2 19.4 20.7 23.9 22.0 24.9 26.8 14 Other......................................................................... 92.4 102.6 117.0 134.8 145.6 148.8 155.0 160.1 167.5 170.2 15 Net working capital.................................................... 203.6 221.3 242.3 261.5 271.8 274.1 287.6 299.5 307.7 316.9 1 Receivables from, and payables to, the U.S. Govt, exclude amounts Source.—Securities and Exchange Commission estimates published offset against each other on corporations’ books. in the Commission’s Statistical Bulletin. 1.52 BUSINESS EXPENDITURES on New Plant and Equipment Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1975 1976 1977 Industry 1975 1976 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 2 1 All industries................................................................ 112.75 120.82 111.80 114.72 118.12 122.55 125.22 130.16 134.46 136.91 Manufacturing 2 Durable goods industries...................................... 21.88 23.50 21.07 21.63 22.54 24.59 25.50 26.30 26.42 28.30 3 Nondurable goods industries.............................. 26.13 29.22 25.75 27.58 28.09 30.20 28.93 30.13 32.20 33.46 Nonmanufacturing 4 Mining...................................................................... 3.80 3.98 3.82 3.83 3.83 4.21 4.13 4.24 4.42 4.54 Transportation : 5 Railroad............................................................... 2.56 2.35 2.39 2.08 2.64 2.69 2.63 2.71 2.69 2.37 1.87 1.31 1.65 1.18 1.44 1.12 1.41 1.62 1.52 1.94 7 Other..................................................................... 3.03 3.56 3.56 3.29 4.16 3.44 3.49 2.96 2.39 2.43 Public utilities: 8 Electric................................................................. 16.99 18.90 17.92 18.56 18.82 18.22 19.49 21.19 21.09 21.58 9 Gas and other..................................................... 3.14 3.47 3.00 3.36 3.03 3.45 3.96 4.16 4.56 4.14 10 Communication...................................................... 12.76 12.93 12.22 12.54 12.62 13.64 14.30 14.19 11 Commercial and other *........................................ 20.61 20.87 20.44 20.68 20.94 20.99 21.36 22.67 > 39.16 38.14 1 Includes trade, service, construction, finance, and insurance. agriculture; real estate operators; medical, legal, educational, and cultural 2 Anticipated by business. service; and nonprofit organizations. Note.—Estimates for corporate and noncorporate business, excluding Source.—U.S. Dept, of Commerce, Survey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Corporate Finance A39 1.521 DOMESTIC FINANCE COMPANIES Assets and Liabilities Billions of dollars, end of period 1975 1976 1977 Account 1972 1973 1974 Q3 Q4 Ql Q2 Q3 Q4 Ql ASSETS Accounts receivable, gross 1 Consumer................................................................. 31.9 35.4 36.1 35.4 36.0 35.7 36.7 37.6 38.6 39.2- 2 Business.................................................................... 27.4 32.3 37.2 38.6 39.3 41.2 42.4 42.4 44.7 47.5 3 Total...................................................................... 59.3 67.7 73.3 74.1 75.3 76.9 79.2 80.0 83.4 86.7 4 Less: Reserves for unearned income and losses 7.4 8.4 9.0 9.2 9.4 9.4 9.8 10.2 10.5 10.6 5 Accounts receivable, net........................................... 51.9 59.3 64.2 64.8 65.9 67.4 69.4 69.9 72.9 76.1 6 Cash and bank deposits............................................ 2.8 2.6 3.0 3.1 2.9 2.8 2.7 2.6 2.6 2.7 7 Securities...................................................................... .9 .8 .4 .8 1.0 .8 .8 1.2 1.1 1.0 8 All other........................................................................ 10.0 10.6 12.0 11.7 11.8 12.5 12.4 12.7 12.6 13.0 9 Total assets................................................................... 65.6 73.2 79.6 80.5 81.6 83.5 85.3 86.4 89.2 92.8 LIABILITIES 10 Bank loans.................................................................... 5.6 7.2 9.7 8.2 8.0 7.4 6.9 5.5 6.3 6.1 11 Commercial paper...................................................... 17.3 19.7 20.7 20.8 22.2 22.2 22.2 21.7 23.7 24.8 Debt: 12 Short-term, n.e.c..................................................... 4.3 4.6 4.9 4.5 4.5 4.9 5.0 5.2 5.4 4.5 13 Long-term, n.e.c...................................................... 22.7 24.6 26.5 26.7 27.6 28.4 30.1 31.0 32.3 34.0 14 Other.......................................................................... 4.8 5.6 5.5 7.7 6.8 7.8 7.8 9.5 8.1 9.5 15 Capital, surplus, and undivided profits................. 10.9 11.5 12.4 12.6 12.5 12.8 13.2 13.4 13.4 13.9 16 Total liabilities and capital........................................ 65.6 73.2 79.6 80.5 81.6 83.5 85.3 86.4 89.2 92.8 Note.—Components may not add to totals due to rounding. 1.522 DOMESTIC FINANCE COMPANIES Business Credit Millions of dollars, seasonally adjusted except as noted Changes in accounts Extensions Repayments Accounts receivable during— receivable Type outstand­ ing May 31, 1977 1977 1977 1977 i Mar.r Apr.r May Mar.r Apr.r May Mar.r Apr.r May 1 Retail automotive (commercial vehicles)........ 10,339 230 307 229 927 1,005 943 697 698 714 2 Wholesale automotive........................................ 10,642 386 164 361 5,534 5,261 5,120 5,148 5,097 4,759 3 Retail paper on business, industrial, and farm equipment............................................ 12,388 -39 76 113 745 752 731 784 676 618 4 Loans on commercial accounts receivable... 3,789 16 60 37 2,516 2,585 2,333 2,500 2,525 2,296 5 Factored commercial accounts receivable... . 2,164 -2 124 -14 1,603 1,721 1,541 1,605 1,597 1,555 6 All other business credit.................................... 10,126 176 112 273 1,322 1,310 1,392 1,146 11,198 1,119 1 Not seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Financial Statistics □ July 1977 1.53 MORTGAGE MARKETS Millions of dollars. Exceptions noted. 1976 1977 Item 1974 1975 1976 Dec. Jan. Feb. Mar. Apr. May Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms:1 1 Purchase price (thous. dollars)..................... 40.1 44.6 48.4 51.0 52.5 53.1 53.8 53.4 52.1 2 Amount of loan (thous. dollars)................. 29.8 33.3 35.9 37.1 39.0 39.3 40.9 39.6 39.4 3 Loan/price ratio (per cent)............................ 74.3 74.7 74.2 74.7 76.3 75.8 77.5 75.5 77.3 4 Maturity (years).............................................. 26.3 26.8 27.2 27.7 28.2 27.8 28.0 27.3 27.9 5 Fees and charges (per cent of loan amount) 1.30 1.54 1.44 1.38 1.38 1.31 1.34 1.30 1.34 6 Contract rate (per cent per annum)........... 8.71 8.75 8.76 8.87 8.82 8.78 8.74 8.73 8.74 Yield (per cent per annum): 7 FHLBB series 3................................................. 8.92 9.01 8.99 9.10 9.05 8.99 8.95 8.94 8.96 8 HUD series4..................................................... 9.22 9.10 8.99 8.90 8.80 8.80 8.85 8.90 8.95 SECONDARY MARKETS Yields (per cent per annum) on— 9 FHA mortgages (HUD series)5................... 9.55 9.19 8.82 8.25 8.40 8.50 8.58 8.57 10 GNMA securities6.......................................... 8.72 8.52 8.17 7.59 7.85 7.98 8.06 7.96 8.04 FNMA auctions:7 11 Government-underwritten loans............. 9.31 9.26 8.99 8.45 8.48 8.55 8.68 8.67 8.74 12 Conventional loans.................................... 9.43 9.37 9.11 8.84 8.82 8.86 8.91 8.97 9.08 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 13 Total............................................................. 29,578 31,824 32,904 32,904 32,848 32,792 32,830 32,938 33,580 14 FHA-insured.......................................... 19,189 19,732 18,916 18,916 18,854 18,771 18,739 18,745 18,939 15 VA-guaranteed...................................... 8,310 9,573 9,212 9,212 9,162 9,115 9.099 9,125 9,399 16 Conventional.......................................... 2,080 2,519 4,776 4,776 4,833 4,906 4.992 5,069 5,241 Mortgage transactions (during period) 17 Purchases................................................ 6,953 ,263 ,606 191 141 150 283 391 947 18 Sales............................................................. 4 2 86 7 Mortgage commitments:8 19 Contracted (during period)................... 10,765 6,106 6,247 290 1,180 968 1,119 716 1,452 20 Outstanding (end of period)................... 7,960 4,126 3,398 3,398 4,142 4,707 5,184 5,411 5,773 Auction of 4-month commitments to buy- Government-underwritten loans: 21 Offered 9.................................................. 5,462.6 7,042.6 4,929.8 56.9 747.4 868.4 1,138.2 456.1 1,842.8 22 Accepted................................................. 2.371.4 3.848.3 2,787.2 41.5 549.1 484.7 612.0 269.8 1,027.4 Conventional loans: 23 Offered 9................................................... 1.195.4 1.401.3 2,595.7 150.2 326.8 300.0 373.9 348.1 1,164.6 24 Accepted................................................. 656.5 765.0 1,879.2 135.4 238.3 235.8 268.1 280.7 751.7 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)1 o 25 Total............................................................ 4,586 4,987 4,269 4,269 3,896 3,672 3,557 3,355 3,285 26 FHA/VA................................................. 1,904 1,824 1,618 1,618 1,594 1,580 1,564 1,542 1,523 27 Conventional.......................................... 2,682 3,163 2,651 2,651 2,302 2,092 1,993 1,813 1,762 Mortgage transactions (during period) 28 Purchases.................................................... 2,191 1,716 1,175 208 98 200 235 310 29 Sales............................................................. 52 1,020 1,396 60 290 285 388 329 Mortgage commitments:11 30 Contracted (during period)................... 4,553 982 1,477 105 250 170 459 606 525 31 Outstanding (end of period)................... 2,390 111 333 333 462 533 760 1,112 1,314 1 Weighted averages based on sample surveys of mortgages originated securities, assuming prepayment in 12 years on pools of 30-year FHA/VA by major institutional lender groups. Compiled by the Federal Home Loan mortgages carrying the prevailing ceiling rate. Monthly figures are Bank Board in cooperation with the Federal Deposit Insurance Cor­ unweighted averages of Monday quotations for the month. poration. 7 Average gross yields (before deduction of 38 basis points for mortgage 2 Includes all fees, commissions, discounts, and “points” paid (by servicing) on accepted bids in Federal National Mortgage Association’s the borrower or the seller) in order to obtain a loan. auctions of 4-month commitments to purchase home mortgages, assuming 3 Average effective interest rates on loans closed, assuming prepayment prepayment in 12 years for 30-year mortgages. No adjustments are made at the end of 10 years. for FNMA commitment fees or stock related requirements. Monthly 4 Average contract rates on new commitments for conventional first figures are unweighted averages for auctions conducted within the month. mortgages, rounded to the nearest 5 basis points; from Dept, of Housing 8 Includes some multifamily and nonprofit hospital loan commitments and Urban Development. in addition to 1- to 4-family loan commitments accepted in FNMA’s 5 Average gross yields on 30-year, minimum-downpayment, Federal free market auction system, and through the FNMA-GNMA Tandem Housing Administration-insured first mortgages for immediate delivery plans. in the private secondary market. Any gaps in data are due to periods of 9 Mortgage amounts offered by bidders are total bids received. adjustment to changes in maximum permissible contract rates. 10 Includes participations as well as whole loans. 6 Average net yields to investors on Government National Mortgage 11 Includes conventional and Government-underwritten loans. Association-guaranteed, mortgage-backed, fully-modified pass-through Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate Debt A41 1.54 MORTGAGE DEBT OUTSTANDING Millions of dollars, end of period 1976 1977 Type of holder, and type of property 1972 1973 1974 1975 Q2 Q3 Q4 Ql 1All holders...................................................... 603,417 682,321 742,504 801,640 840,813 864,345 888,958 910,625 2 1- to 4-family............................................ 372,793 416,883 449,937 491,568 521,705 541,224 558,415 574,534 3 Multifamily................................................ 82,572 92,877 99,851 100,471 100,790 100,344 102,380 102,591 4 Commercial............................................... 112,294 131,308 146,428 158,724 164,209 167,070 170,870 174,233 5 Farm........................................................... 35,758 41,253 46,288 50,877 54,109 55,707 57,293 59,267 6 Maior financial institutions......................... 450,000 505,400 542,552 581,296 611,524 629,949 647,314 661,851 7 Commercial banks1.................................. 99,314 119,068 132,105 136,186 143,699 147,636 150,869 154,007 8 1- to 4-family........................................ 57,004 67,998 74,758 77,018 82,900 86,013 87,897 89,725 9 Multifamily........................................... 5,778 6,932 7,619 5,915 6,107 6,201 6,336 6,468 10 Commercial........................................... 31,751 38,696 43,679 46,882 48,125 48,749 49,817 50,853 11 Farm....................................................... 4,781 5,442 6,049 6,371 6,567 6,673 6,819 6,961 12 Mutual savings banks.............................. 67,556 73,230 74,920 77,249 78,838 80,249 81,734 82,273 13 1- to 4-family........................................ 46,229 48,811 49,213 50,025 51,326 52,250 53,217 53,568 14 Multifamily............................................ 10,910 12,343 12,923 13,792 13,674 13,915 14,173 14,266 15 Commercial........................................... 10,355 12,012 12,722 13,373 13,780 14,028 14,287 14,381 16 Farm....................................................... 62 64 62 59 58 56 57 58 17 Savings and loan associations................. 206,182 231,733 249,293 278,693 299,296 311,847 323,130 333,697 18 1- to 4-family........................................ 167,049 187,750 201 ,553 224,710 241,623 251,629 260,895 270,094 19 Multifamily........................................... 20,783 22,524 23,683 25,417 26,817 27,505 28,436 29,032 20 Commercial.......................................... 18,350 21,459 24,057 28,566 31,456 32,713 33,799 34,571 21 Life insurance companies......................... 76,948 81,369 86,234 89,168 89,691 90,217 91,581 91,874 22 1- to 4-family........................................ 22,315 20,426 19,026 17,590 16,861 16,458 16,108 15,780 23 Multifamily........................................... 17,347 18,451 19,625 19,629 19,374 19,256 19,201 19,064 24 Commercial........................................... 31,608 36,496 41,256 45,196 46,456 47,322 48,854 49,405 25 Farm....................................................... 5,678 5,996 6,327 6,753 7,000 7,181 7,418 7,625 26 Federal and related agencies...................... 40,157 46,721 58,320 66,891 66,033 67,314 66,753 66,248 27 Government National Mortgage Assn... 5,113 4,029 4,846 7,438 5,557 5,068 4,241 4,013 28 1- to 4-family........................................ 2,513 1,455 2,248 4,728 3,165 2,486 1,970 1,670 29 Multifamily........................................... 2,600 2,574 2,598 2,710 2,392 2,582 2,271 2,343 30 Farmers Home Admin.............................. 1,019 1,366 1,432 1,109 830 1,355 1,064 500 31 1- to 4-family........................................ 279 743 759 208 228 754 454 98 32 Multifamily........................................... 29 29 167 215 46 143 218 28 33 Commercial........................................... 320 218 156 190 151 133 72 64 34 Farm....................................................... 391 376 350 496 405 325 320 310 35 Federal Housing and Veterans Admin... 3,338 3,476 4,015 4,970 5,111 5,092 5,150 5,406 36 1- to 4-family........................................ 2,199 2,013 2,009 1,990 1,781 1,716 1,676 1,732 37 Multifamily............................................ 1,139 1,463 2,006 2,980 3,330 3,376 3,474 3,674 38 Federal National Mortgage Assn........... 19,791 24,175 29,578 31,824 32,028 32,962 32,904 32,830 39 1- to 4-family........................................ 17,697 20,370 23,778 25,813 26,112 27,030 26,934 26,836 40 Multifamily............................................ 2,094 3,805 5,800 6,011 5,916 5,932 5,970 5,994 41 Federal land banks.................................... 9,107 11,071 13,863 16,563 17,978 18,568 19,125 19,942 42 1- to 4-family........................................ 13 123 406 549 575 586 601 611 43 Farm....................................................... 9,094 10,948 13,457 16,014 17,403 17,982 18,524 19,331 44 Federal Home Loan Mortgage Corp.... 1,789 2,604 4,586 4,987 4,529 4,269 4,269 3,557 45 1- to 4-family........................................ 1,754 2,446 4,217 4,588 4,166 3,917 3,889 3,200 46 Multifamily............................................ 35 158 369 399 363 352 380 357 47 Mortgage pools or trusts2........................... 14,404 18,040 23,799 34,138 41,225 44,960 49,801 54,811 48 Government National Mortgage Assn... 5,504 7,890 11,769 18,257 23,634 26,725 30,572 34,260 49 1- to 4-family........................................ 5,353 7,561 11,249 17,538 22,821 25,841 29,583 33,190 50 Multifamily............................................ 151 329 520 719 813 884 989 1,070 51 Federal Home Loan Mortgage Corp... 441 766 757 1,598 2,153 2,506 2,671 3,570 52 1- to 4-family........................................ 331 617 608 1,349 1,831 2,141 2,282 3,112 53 Multifamily............................................ 110 149 149 249 322 365 389 458 54 Farmers Home Admin.............................. 8,459 9,384 11,273 14,283 15,438 15,729 16,558 16,981 55 1- to 4-family........................................ 5,017 5,458 6,782 9,194 9,670 9,587 10,219 10,423 56 Multifamily............................................ 131 138 116 295 541 535 532 530 57 Commercial.......................................... 867 1,124 1,473 1,948 2,104 2,291 2,440 2,560 58 Farm....................................................... 2,444 2,664 2,902 2,846 3,123 3,316 3,367 3,468 59 Individuals and others3................................ 98,856 112,160 117,833 119,315 122,031 122,122 125,090 127,715 60 1- to 4-family........................................ 45,040 51,112 53,331 56,268 59,246 60,816 62,690 64,495 61 Multifamily............................................ 21,465 23,982 24,276 22,140 21,095 19,298 20,011 19,307 62 Commercial........................................... 19,043 21,303 23,085 22,569 22,137 21,834 21,601 22,399 63 Farm....................................................... 13,308 15,763 17,141 18,338 19,553 20,174 20,788 21,514 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 Outstanding principal balances of mortgages backing securities in­ with the Federal Home Loan Bank Board and the Dept, of Commerce. sured or guaranteed by the agency indicated. Separation of nonfarm mortgage debt by type of property, if not re­ 3 Other holders include mortgage companies, real estate investment ported directly, and interpolations and extrapolations where required, are trusts, State and local credit agencies, State and local retirement funds, estimated mainly by Federal Reserve. Multifamily debt refers to loans on noninsured pension funds, credit unions, and U.S. agencies for which structures of 5 or more units. amounts are small or separate data are not readily available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Financial Statistics □ July 1977 1.55 CONSUMER INSTALMENT CREDIT Total Outstanding, and Net Change Millions of dollars 1976 1977 Holder, and type of credit 1974 1975 1976 Nov. Dec. Jan. Feb. Mar. Apr. May Amounts outstanding (end of period) 1 155,384 162,237 178,775 175,333 178,775 Ill,91S 178,252 179,695 182,265 185,280 By holder: 2 Commercial banks............................ 75,846 78,703 85,379 84,278 85,379 85,051 85,005 85,916 87,481 88,769 3 Finance companies........................... 36,208 36,695 39,642 39,129 39,642 39,665 39,831 39,889 40,361 40,953 4 Credit unions...................................... 22,116 25,354 30,546 30,053 30,546 30,410 30,701 31,448 31,912 32,704 5 Retailers1............................................ 17,933 18,002 19,178 17,726 19,178 18,693 18,322 18,068 18,205 18,402 6 Others2................................................ 3,281 3,483 4,030 4,147 4,030 4,156 4,393 4,374 4,306 4,452 By type of credit: 7 Automobile........................................... 50,392 53,028 60,498 60,002 60,498 60,349 60,774 61,841 63,183 64,551 8 Commercial banks........................ 30,994 31,534 35,313 35,095 35,313 35,284 35,492 36,232 37,145 37,910 9 Indirect........................................ 18,687 18,353 19,642 19,575 19,642 19,566 19,640 20,005 20,468 20,823 10 Direct.......................................... 12,306 13,181 15,671 15,520 15,671 15,719 15,852 16,227 16,678 17,087 11 Finance companies....................... 10,618 11,439 13,059 12,957 13,059 12,973 13,042 13,084 13,347 13,627 12 Credit unions................................. 8,414 9,653 11,633 11,442 11,633 11,579 11,690 11,976 12,152 12,455 13 Others.............................................. 366 402 493 508 493 513 550 549 539 559 Mobile homes: 14 Commercial banks........................ 8,972 8,704 8,233 8,254 8,233 8,146 8,094 8,076 8,100 8,123 15 Finance companies....................... 3,524 3,451 3,277 3,295 3,277 3,248 3,207 3,197 3,177 3,155 16 Home improvement............................ 7,754 8,004 8,773 8,790 8,773 8,736 8,750 8,816 8,923 9,111 17 Commercial banks........................ 4,694 4,965 5,381 5,388 5,381 5,340 5,307 5,343 5,425 5,531 Revolving credit: 18 Bank credit cards.......................... 8,281 9,501 11,075 10,329 11,075 10,996 10,820 10,705 10,877 10,931 19 Bank check credit......................... 2,797 2,810 3,010 2,935 3,010 3,031 3,039 3,030 3,045 3,094 20 All other............................................... 73,664 76,738 83,910 81,728 83,910 83,469 83,568 84,031 84,959 86,315 21 Commercial banks, total............. 20,108 21,188 22,368 22,277 22,368 22,254 22,253 22,531 22,888 23,180 22 Personal loans........................... 13,771 14,629 15,606 15,517 15,606 15,569 15,590 15,769 16,003 16,180 23 Finance companies, total............ 21,717 21,655 23,178 22,748 23,178 23,319 23,454 23,480 23,709 24,043 24 Personal loans........................... 16,961 17,681 19,043 18,773 19,043 19,002 18,998 19,048 19,235 19,524 25 Credit unions.................................. 13,037 14,937 17.993 17,706 17,993 17,915 18,086 18,524 18,799 19,264 26 Retailers.......................................... 17,933 18,002 19,178 17,726 19,178 18,693 18,322 18,068 18,205 18,402 27 Others.............................................. 869 956 1,193 1,271 1,193 1,288 1,453 1,428 1,358 1,426 Net change (during period)3 28 8,952 6,843 16,539 1,243 1,823 1,918 2,022 2,717 2,660 2,526 By holder: 29 Commercial banks............................ 3,975 2,851 6,678 381 913 565 829 1,462 1,295 1,050 30 Finance companies........................... 806 483 2,946 245 364 481 442 373 559 516 31 Credit unions...................................... 2,507 3,238 5,192 395 537 416 540 717 557 679 32 Retailers.............................................. 1,538 69 1,176 98 64 249 118 238 191 198 33 Others.................................................. 126 202 547 124 -55 207 93 -72 58 82 By type of credit: 34 Automobile.......................................... 327 2,631 7,470 477 1,013 758 884 1,201 1,174 1,091 35 Commercial banks........................ -508 535 3,779 221 652 418 504 759 686 539 36 Indirect........................................ -310 -340 1,289 70 330 160 239 385 357 235 37 Direct.......................................... -198 875 2,490 151 322 258 265 373 329 304 38 Finance companies....................... -100 821 1,620 98 146 99 161 194 282 270 39 Credit unions.................................. 958 1,239 1,980 144 207 174 213 267 203 265 40 Other................................................ -23 36 91 14 8 66 6 -19 2 17 Mobile homes: 41 Commercial banks........................ 632 -268 -471 -43 32 -43 -26 16 17 5 42 Finance companies....................... 168 -73 -174 -16 -16 -18 -43 3 -15 -22 43 Home improvement............................ 804 248 768 103 73 130 73 97 106 108 44 Commercial banks........................ 611 111 416 55 54 36 14 75 66 56 Revolving credit: 45 Bank credit cards.......................... 1,443 1,220 1,576 71 -33 28 170 293 246 176 46 Bank check credit......................... 543 14 199 6 7 41 32 38 49 90 47 All other.............................................. 5,036 3,072 7,172 645 747 1,023 931 1,069 1,083 1,078 48 Commercial banks, total............. 1,255 1,080 1,180 72 199 85 134 281 231 183 49 Personal loans........................... 898 858 977 47 148 101 114 200 160 141 50 Finance companies, total............ 803 -64 1,523 163 236 401 320 175 291 269 51 Personal loans........................... 479 111 1,362 161 113 178 129 168 251 212 52 Credit unions.................................. 1,473 1,900 3,056 239 313 227 312 428 336 395 53 Retailers.......................................... 1,538 69 1,176 98 64 249 118 238 191 198 54 Others.............................................. -33 87 237 73 -66 60 48 -54 34 32 1 Excludes 30-day charge credit held by retailers, oil and gas companies, Note.—Total consumer noninstalment credit outstanding—credit and travel and entertainment companies. scheduled to be repaid in a lump sum, including single-payment loans, 2 Mutual savings banks, savings and loan associations, and auto dealers. charge accounts, and service credit—amounted to $39.0 billion at the 3 Net change equals extensions minus liquidations (repayments, charge- end of 1976, $35.0 billion at the end of 1975, and $33.4 billion at the end offs, and other credits); figures for all months are seasonally adjusted. of 1974. Comparable data for Dec. 31, 1977, will be published in the Bulletin for February 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Consumer Debt A43 1.56 CONSUMER INSTALMENT CREDIT Extensions and Liquidations Millions of dollars 1976 1977 Holder, and type of credit 1974 1975 1976 Nov. Dec. Jan. Feb. Mar. Apr. May Extensions1 1Total......................................................... 160,008 163,483 186,221 15,763 16,702 16,870 17,186 18,253 18,077 17,902 By holder: 2 Commercial banks............................ 72,605 77,131 88,666 7,486 8,182 7,546 8,055 8,715 8,670 8,524 3 Finance companies........................... 35,644 32,582 35,956 3,059 3,157 3,431 3,437 3,559 3,442 3,364 4 Credit unions...................................... 22,403 24,151 28,829 2,395 2,688 2,683 2,743 2,978 2,933 2,922 5 Retailers2............................................ 27,034 27,049 29,569 2,467 2,480 2,775 2,603 2,817 2,722 2,759 6 Others 3................................................ 2,322 2,570 3,201 356 194 436 347 185 310 333 By type of credit: 7 Automobile.......................................... 43,209 48,103 55,807 4,632 5,263 4,940 5,205 5,654 5,474 5,445 8 Commercial banks........................ 26,406 28,333 32,687 2,691 3,170 2,892 3,075 3,350 3,243 3,131 9 Indirect........................................ 15,576 15,761 17,600 1,426 1,723 1,544 1,641 1,818 1,735 1,636 10 Direct.......................................... 10,830 12,572 15,087 1,265 1,446 1,349 1,435 1,532 1,507 1,496 11 Finance companies....................... 8,630 9,598 11,210 927 992 964 999 1,151 1,101 1,130 12 Credit unions.................................. 7,788 9,702 11,336 957 1,051 974 1,075 1,124 1,072 1,120 13 Others.............................................. 385 470 574 57 51 110 55 30 49 63 Mobile homes: 14 Commercial banks........................ 3,486 2,681 2,449 207 267 195 207 254 260 251 15 Finance companies....................... 1,413 771 690 54 53 50 52 57 58 49 16 Home improvement............................ 4,571 4,398 5,034 464 461 494 457 478 488 506 17 Commercial banks........................ 2,789 2,722 3,036 276 288 262 251 308 301 298 Revolving credit: 18 Bank credit cards.......................... 17,098 20,428 25,481 2,181 2,217 2,117 2,332 2,434 2,509 2,521 19 Bank check credit......................... 4,227 4,024 4,832 410 426 462 448 456 452 486 20 All other.............................................. 86,004 83,079 91,928 7,815 8,015 8,612 8,484 8,920 8,836 8,644 21 Commercial banks, total............. 18,599 18,944 20,182 1,721 1,815 1,618 1,742 1,913 1,905 1,837 22 Personal loans........................... 13,176 13,386 14,463 1,238 1,317 1,213 1,281 1,379 1,389 1,349 23 Finance companies, total............ 25,316 22,135 24,014 2,072 2,108 2,413 2,379 2,346 2,268 2,178 24 Personal loans........................... 16,691 17,333 19,610 1,696 1,688 1,787 1,843 1,814 1,775 1,680 25 Credit unions.................................. 14,228 13,992 16,911 1,389 1,582 1,656 1,612 1,792 1,803 1,740 26 Retailers.......................................... 27,034 27,049 29,569 2,467 2,480 2,775 2,603 2,817 2,722 2,759 27 Others.............................................. 827 959 1,253 166 30 151 149 52 139 130 Liquidations1 28 Total......................................................... 151,056 156,640 169,682 14,520 14,879 14,952 15,164 15,536 15,418 15,376 By holder: 29 Commercial banks............................ 68,630 74,280 81,988 7,105 7,269 6,981 7,227 7,253 7,375 7,474 30 Finance companies........................... 34,838 32,099 33,010 2,814 2,793 2,949 2,995 3,186 2,883 2,848 31 Credit unions...................................... 19,896 20,913 23,637 2,000 2,151 2,267 2,203 2,261 2,377 2,242 32 Retailers2............................................ 25,496 26,980 28,393 2,369 2,416 2,526 2,485 2,579 2,531 2,561 33 Others3................................................. 2,196 2,368 2,654 232 249 228 254 257 252 251 By type of credit: 34 42,883 45,472 48,337 4,155 4,250 4,183 4,320 4,453 4,300 4,354 35 Commercial banks........................ 26,915 27,798 28,908 2,470 2,517 2,474 2,571 2,591 2,557 2,592 36 Indirect........................................ 15,886 16,101 16,311 1,356 1,393 1,384 1,402 1,432 1,378 1,401 37 Direct.......................................... 11,029 11,697 12,597 1,114 1,124 1,090 1,169 1,159 1,178 1,192 38 Finance companies....................... 8,730 8,777 9,590 829 846 866 838 957 828 860 39 Credit unions.................................. 6,830 8,463 9,356 813 843 800 862 857 869 856 40 Others............................................... 408 434 483 43 43 43 49 49 47 46 Mobile homes: 41 Commercial banks........................ 2,854 2,949 2,921 250 234 238 233 238 243 246 42 Finance companies....................... 1,245 844 864 70 70 67 96 53 73 71 43 3,767 4,150 4,266 360 388 364 385 382 382 398 44 Commercial banks........................ 2,178 2,451 2,620 221 234 227 237 233 236 242 Revolving credit: 45 Bank credit cards.......................... 15,655 19,208 23,905 2,110 2,250 2,089 2,161 2,141 2,264 2,345 46 Bank check credit......................... 3,684 4,010 4,632 404 419 421 416 419 403 396 47 All other............................................... 80,969 80,007 84,757 7,170 7,268 7,590 7,553 7,850 7,753 7,567 48 Commercial banks, total............. 17,345 17,864 19,002 1,649 1,615 1,533 1,608 1,632 1,674 1,653 49 Personal loans............................ 12,278 12,528 13,486 1,191 1,169 1,111 1,167 1,179 1,229 1,208 50 Finance companies, total............ 24,513 22,199 22,491 1,909 1,872 2,012 2,059 2,171 1,976 1,909 51 Personal loans............................ 16,212 16,616 18,248 1,535 1,575 1,608 1,714 1,646 1,524 1,468 52 Credit unions.................................. 12,755 12,092 13,855 1,150 1,268 1,429 1,300 1,363 1,467 1,345 53 Retailers.......................................... 25,496 26,980 28,393 2,369 2,416 2,526 2,485 2,579 2,531 2,561 54 Others.............................................. 860 872 1,016 93 96 90 101 105 105 98 1 Monthly figures are seasonally adjusted. 3 Mutual savings banks, savings and loan associations, and auto dealers. 2 Excludes 30-day charge credit held by retailers, oil and gas companies, and travel and entertainment companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Financial Statistics □ July 1977 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; half-year data are at seasonally adjusted annual rates. 1975 1976 Transaction category, or sector 1971 1972 1973 1974 1975 1976 HI H2 HI H2 Nonfinancial sectors 1 1Total funds raised................................................... 151.0 176.9 197.6 188.8 210.4 271.6 184.2 236.5 256.6 286.3 1 2 Excluding equities.............................................. 139.6 166.4 190.0 185.0 200.3 260.8 173.8 226.9 243.0 278.2 2 By sector and instrument: 3 U.S. Govt............................................................. 24.7 15.2 8.3 12.0 85.2 69.0 80.8 89.6 71.6 66.6 3 4 Public debt securities.................................... 26.0 14.3 7.9 12.0 85.8 69.1 82.0 89.7 71.5 66.9 4 5 Agency issues and mortgages..................... -1.3 1.0 .4 * -.6 -.1 -1.2 -.1 .1 -.3 5 6 All other nonfinancial sectors........................... 126.3 161.7 189.4 176.8 125.2 202.6 103.4 146.9 185.0 219.7 6 7 Corporate equities......................................... 11.5 10.5 7.7 3.8 10.0 10.8 10.5 9.6 13.6 8.1 7 8 Debt instruments........................................... 114.8 151.2 181.7 173.0 115.1 191.8 93.0 137.3 171.4 211.7 8 9 Private domestic nonfinancial sectors......... 121.1 157.7 183.1 161.6 112.2 181.1 94.9 129.4 169.1 192.5 9 10 Corporate equities..................................... 11.4 10.9 7.9 4.1 9.9 10.5 10.3 9.5 13.3 7.7 10 11 Debt instruments........................................ 109.7 146.8 175.3 157.5 102.3 170.5 84.6 119.9 155.8 184.8 11 12 Debt capital instruments....................... 86.8 102.8 106.7 101.2 101.3 123.6 97.5 105.1 113.5 133.8 12 13 State and local obligations............. 17.5 15.4 16.3 19.6 17.3 17.2 16.2 18.4 18.1 16.4 13 14 Corporate bonds............................... 18.8 12.2 9.2 19.7 27.2 22.8 33.4 21.0 20.7 25.0 14 Mortgages: 15 Home............................................... 28.6 42.6 46.4 34.6 40.8 64.4 33.5 48.1 58.1 70.7 15 16 Multifamily residential................. 9.7 12.7 10.4 7.0 -.1 1.1 * -.2 1.6 .6 16 17 Commercial.................................... 9.8 16.4 18.9 15.1 10.9 11.7 8.7 13.1 9.8 13.5 17 18 Farm................................................ 2.4 3.6 5.5 5.1 5.2 6.4 5.6 4.8 5.1 7.6 18 19 Other debt instruments.......................... 22.8 44.0 68.6 56.3 1.0 46.9 -12.8 14.8 42.3 51.0 19 20 Consumer credit................................ 11.6 18.6 21.7 9.8 8.5 20.5 1.1 16.0 19.4 21.6 20 21 Bank loans n.e.c................................. 6.5 18.1 34.8 26.2 -14.5 7.7 -23.5 -5.5 2.2 12.7 21 22 Open market paper........................... -.4 .8 2.5 6.8 -2.2 3.5 -.2 -4.2 8.2 -1.3 22 23 Other................................................... 5.1 6.5 9.6 13.5 9.1 15.3 9.7 8.5 12.6 17.9 23 24 By borrowing sector. ................................. 121.1 157.7 183.1 161.6 112.2 181.1 94.9 129.4 169.1 192.5 24 25 State and local governments............... 17.8 15.2 14.8 18.6 14.9 16.8 13.9 15.9 16.4 17.2 25 26 Households............................................. 42.1 64.8 73.5 45.2 49.7 90.7 39.0 60.4 88.3 93.0 26 27 Farm......................................................... 4.5 5.8 9.7 7.9 9.4 12.3 9.4 9.4 11.0 13.6 27 28 Nonfarm noncorporate........................ 10.3 13.1 12.3 6.7 1.2 4.7 -.8 3.2 4.2 4.8 28 29 Corporate................................................ 46.4 58.8 72.9 83.1 37.1 56.6 33.5 40.6 49.3 63.9 29 30 Foreign............................................................. 5.2 4.0 6.2 15.3 13.0 21.5 8.5 17.4 15.9 27.2 30 31 Corporate equities..................................... * -.4 -.2 -.2 .1 .3 .1 .1 .3 .3 31 32 Debt instruments........................................ 5.2 4.4 6.4 15.5 12.8 21.2 8.4 17.3 15.6 26.9 32 33 Bonds....................................................... .9 1.0 1.0 2.1 6.2 8.4 5.7 6.7 7.3 9.4 33 34 Bank loans n.e.c..................................... 2.1 3.0 2.8 4.7 4.0 6.8 .6 7.4 4.2 9.3 34 35 Open market paper............................... .3 -1.0 .9 7.1 -.1 2.5 -1.2 1.0 .8 4.2 35 36 U.S. Govt, loans.................................... 1.8 1.5 1.7 1.6 2.8 3.6 3.3 2.2 3.2 4.0 36 Financial sectors 37 Total funds raised................................................... 17.0 29.1 56.7 43.0 14.8 29.8 14.4 15.3 27.5 32.1 37 By instrument: 38 U.S. Govt, related.............................................. 5.9 8.4 19.9 23.1 13.5 17.7 14.0 13.1 18.0 17.4 38 39 Sponsored credit agency securities............. 1.1 3.5 16.3 16.6 2.3 2.4 1.4 3.3 3.9 .9 39 40 Mortgage pool securities............................. 4.8 4.9 3.6 5.8 10.3 15.7 11.5 9.2 14.2 17.2 40 41 Loans from U.S. Govt.................................. .7 .9 - .4 1.1 .6 * -.7 41 42 Private financial sectors..................................... 11.1 20.7 36.8 19.9 1.3 12.1 .4 2.1 9.5 14.7 42 43 Corporate equities......................................... 3.5 2.8 1.5 1.0 1.2 1.8 1.2 1.2 .3 3.3 43 44 Debt instruments............................................. 7.6 18.0 35.3 18.9 .1 10.3 -.8 1.0 9.1 11.4 44 45 Corporate bonds........................................ 3.8 5.1 3.5 2.1 2.9 5.8 2.5 3.3 7.2 4.4 45 46 Mortgages................................................... 2.1 1.7 -1.2 -1.3 2.3 1.9 1.2 3.4 1.0 2.8 46 47 Bank loans n.e.c......................................... 3.5 6.8 14.0 7.5 -3.9 -3.3 -4.7 -3.2 -3.6 -3.0 47 48 Open market paper and Rp’s................. .9 4.4 11.8 3.9 2.8 7.8 7.6 -1.9 6.8 8.8 48 49 Loans from FHLB’s.................................. -2.7 * 7.2 6.7 -4.0 -2.0 -7.3 -.6 -2.3 -1.7 49 By sector: 50 Sponsored credit agencies................................ 1.1 3.5 16.3 17.3 3.2 2.0 2.5 4.0 3.9 .2 50 51 Mortgage pools.................................................. 4.8 4.9 3.6 5.8 10.3 15.7 11.5 9.2 14.2 17.2 51 52 Private financial sectors.................................... 11.1 20.7 36.8 19.9 1.3 12.1 .4 2.1 9.5 14.7 52 53 2.4 4.8 8.1 -1.1 1.7 7.6 5.7 -2.3 9.9 5.3 53 54 Bank affiliates................................................. -.4 .7 2.2 3.5 .3 -.8 .9 -.3 -1.3 -.3 54 55 Foreign banking agencies............................ 1.6 .8 5.1 2.9 -.3 .4 -.9 .2 -1.5 2.4 55 56 Savings and loan associations..................... -.1 2.0 6.0 6.3 -2.1 -.1 -7.8 3.6 -1.0 .7 56 57 Other insurance companies......................... .6 .5 .5 .9 .9 1.0 .9 1.0 1.0 1.0 57 58 Finance companies........................................ 2.7 6.2 9.4 4.5 .7 6.1 -.8 2.1 6.0 6.2 58 59 REIT’s............................................................. 2.9 6.3 6.5 1.1 -1.9 -2.1 -1.6 -2.2 -1.8 -2.5 59 60 Open-end investment companies............... 1.3 -.5 -1.2 -.5 .8 .3 1.5 .1 -1.1 1.8 60 61 2.4 1.3 -.3 2.6 * -.7 .2 61 All sectors 62 Total funds raised, by instrument........................ 168.1 206.0 254.3 231.8 225.2 301.4 198.6 251.8 284.1 318.4 62 63 Investment company shares............................ 1.3 -.5 -1.2 -.5 .8 .3 1.5 .1 -1.1 1.8 63 64 Other corporate equities.................................. 13.7 13.8 10.4 5.4 10.4 12.3 10.2 10.7 15.0 9.6 64 65 Debt instruments................................................. 153.1 192.8 245.2 227.0 214.0 288.7 187.0 241.0 270.2 307.0 65 66 U.S. Govt, securities.................................... 30.7 23.7 28.3 34.5 98.0 87.2 93.6 102.4 89.8 84.7 66 67 State and local obligations.......................... 17.5 15.4 16.3 19.6 17.3 17.2 16.2 18.4 18.1 16.4 67 68 Corporate and foreign bonds..................... 23.5 18.4 13.6 23.9 36.3 37.0 41.6 31.0 35.2 38.8 68 69 Mortgages....................................................... 52.5 76.8 79.9 60.5 59.0 85.4 49.1 69.0 75.7 95.2 69 70 Consumer credit............................................. 11.6 18.6 21.7 9.8 8.5 20.5 1.1 16.0 19.4 21.6 70 71 Bank loans n.e.c............................................. 12.1 27.8 51.6 38.4 -14.4 11.2 -27.6 -1.2 2.9 19.1 71 72 .9 4.1 15.2 17.8 .5 13.8 6.2 -5.1 15.8 11.8 72 73 Other loans...................................................... 4.2 8.0 18.5 22.5 8.7 16.5 6.8 10.7 13.4 19.5 73 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A45 1.58 DIRECT AND INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS Billions of dollars, except as noted; half-year data are at seasonally adjusted annual rates. 1975 1976 Transaction category or sector 1971 1972 1973 1974 1975 1976 HI H2 HI H2 1 Total funds advanced in credit markets to nonfinancial sectors........................................ 139.6 166.4 190.0 185.0 200.3 260.8 173.8 226.9 243.0 278.2 1 By public agencies and foreign: 2 Total net advances................................................... 43.4 19.8 34.2 52.7 44.2 55.9 51.9 36.6 50.5 61.2 2 3 U.S. Govt, securities......................................... 34.4 7.6 9.6 11.9 22.5 26.8 32.6 12.4 26.7 26.9 3 4 Residential mortgages....................................... 7.0 7.0 8.2 14.7 16.2 12.8 15.9 16.5 10.8 14.8 4 5 FHLB advances to S&L’s................................ -2.7 * 7.2 6.7 -4.0 -2.0 -7.3 -.6 -2.3 -1.7 5 6 Other loans and securities................................ 4.6 5.1 9.2 19.5 9.5 18.2 10.6 8.3 15.3 21.1 6 Totals advanced, by sector 7 U.S. Govt............................................................. 2.8 1.8 2.8 9.8 15.1 10.2 14.9 15.2 5.6 14.9 7 8 Sponsored credit agencies................................ 5.2 9.2 21.4 25.6 14.5 20.6 15.9 13.2 20.0 21.3 8 9 Monetary authorities........................................ 8.9 .3 9.2 6.2 8.5 9.8 7.0 10.1 13.6 6.1 9 10 Foreign................................................................. 26.4 8.4 .7 11.2 6.1 15.2 14.2 -2.0 11.4 19.0 10 11 Agency borrowing not included in line 1......... 5.9 8.4 19.9 23.1 13.5 17.7 14.0 13.1 18.0 17.4 11 Private domestic funds advanced 12 Total net advances.................................................. 102.1 155.0 175.7 155.3 169.6 222.6 135.9 203.4 210.5 234.4 12 13 U.S. Govt, securities......................................... -3.7 16.1 18.7 22.6 75.5 60.4 61.0 90.0 63.1 51.8 13 14 State and local obligations.............................. 17.5 15.4 16.3 19.6 17.3 17.2 16.2 18.4 18.1 16.4 14 15 Corporate and foreign bonds......................... 19.5 13.1 10.0 20.9 32.8 30.3 38.9 26.7 27.0 33.5 15 16 Residential mortgages...................................... 31.2 48.1 48.5 26.9 24.4 52.7 17.7 31.1 48.9 56.4 16 17 Other mortgages and loans............................. 35.0 62.3 89.3 71.9 15.7 60.1 -5.2 36.5 51.1 68.6 17 18 Less: FHLB advances...................................... -2.7 * 7.2 6.7 -4.0 -2.0 -7.3 -.6 -2.3 -1.7 18 Private financial intermediation 19 Credit market funds advanced by private financial institutions....................................... 109.7 149.4 163.8 126.2 116.0 181.8 97.7 134.3 161.9 201.1 19 20 Commercial banking........................................ 50.6 70.5 86.5 64.6 27.6 51.1 13.5 41.7 41.5 73.6 20 21 Savings institutions............................................ 39.1 47.2 36.0 27.0 51.0 69.1 49.8 52.2 71.0 68.2 21 22 Insurance and pension funds.......................... 14.2 17.8 23.8 30.1 39.3 44.2 36.4 42.3 44.3 44.2 22 23 Other finance...................................................... 5.9 13.8 17.4 4.5 -1.8 10.1 -1.9 -1.8 5.1 15.1 23 24 Sources of funds...................................................... 109.7 149.4 163.8 126.2 116.0 181.8 97.7 134.3 161.9 201.1 24 25 Private domestic deposits................................ 89.4 100.9 86.4 69.4 90.5 122.7 90.3 90.6 103.8 141.4 25 26 Credit market borrowing................................. 7.6 18.0 35.3 18.9 .1 10.3 -.8 1.0 9.1 11.4 26 27 Other sources....................................................... 12.6 30.5 42.1 37.8 25.4 48.8 8.2 42.7 49.0 48.3 27 28 Foreign funds................................................. -3.9 5.3 6.9 14.5 -.4 2.5 -5.1 5.0 -2.7 1.1 28 29 Treasury balances.......................................... 2.2 .7 -1.0 -5.1 -1.7 -.1 -3.5 .1 3.9 -4.2 29 30 Insurance and pension reserves.................. 8.6 11.6 18.4 26.0 29.9 34.3 27.4 32.5 33.6 35.0 30 31 Other, net........................................................ 5.7 12.8 17.8 2.4 -2.4 12.1 -10.1 5.2 14.2 9.9 31 Private domestic nonfinancial investors 32 Direct lending in credit markets........................... * 23.6 47.2 40.8 53.7 51.1 37.4 70.1 57.7 44.7 32 33 U.S. Govt, securities......................................... -10.8 4.2 19.4 17.9 23.0 19.6 5.0 41.0 21.5 17.6 33 34 State and local obligations.............................. .5 3.1 7.5 12.2 9.9 7.1 10.3 9.6 6.0 8.2 34 35 Corporate and foreign bonds......................... 8.3 4.2 .9 5.3 10.4 5.9 12.9 7.9 8.2 3.6 35 36 Commercial paper............................................. -1.1 3.0 12.5 4.6 3.1 6; 3 3.5 2.7 10.6 2.0 36 37 Other.................................................................... 3.2 9.1 6.9 8.1 7.3 12.2 5.6 8.9 11.3 13.2 37 38 Deposits and currency............................................ 92.8 105.3 90.3 75.7 96.7 130.0 95.7 97.7 107.9 151.9 38 39 Time and saving accounts.................................. 79.1 83.7 76.2 67.4 84.8 113.2 75.0 94.7 97.9 128.5 39 40 Large negotiable CD’s................................. 6.3 7.7 18.3 18.9 -13.3 -14.1 -27.3 .1 -17.9 -10.3 40 41 Other at commercial banks......................... 33.2 30.6 29.6 26. 1 39.0 58.1 39.4 38.5 50.0 66.2 41 42 At savings institutions.................................. 39.6 45.4 28.4 22.4 59.2 69.2 63.0 55.4 65.7 72.7 42 43 Money................................................................... 13.7 21.6 14.1 8.3 11.9 16.8 20.7 3.0 10.1 23.3 43 44 Demand deposits........................................... 10.4 17.2 10.2 2.0 5.1 9.5 15.3 -4.0 5.9 12.9 44 45 Currency.......................................................... 3.4 4.4 3.9 6.3 6.2 7.3 5.4 7.1 4.2 10.5 45 46 Total of credit market instruments, deposits and currency.................................................... 92.9 129.0 137.5 123.7 150.4 181.2 133.1 167.8 165.6 196.5 46 47 Public support rate (in per cent)..................... 31.1 11.9 18.0 28.5 22.1 21.4 29.9 16.1 20.8 22.0 47 48 Private financial intermediation (in per cent) 107.4 96.4 93.2 81.2 68.4 81.6 71.9 66.0 76.9 85.8 48 49 Total foreign funds............................................ 22.5 13.7 7.6 25.7 5.7 17.7 8.5 3.0 8.7 26.6 49 Memo: Corporate equities not included above 50 Total net issues....................................................... 15.0 13.3 9.2 4.9 11.2 12.7 11.7 10.8 14.0 11.4 50 51 Mutual fund shares........................................... 1.3 -.5 -1.2 -.5 .8 .3 1.5 .1 -1.1 1.8 51 52 Other equities..................................................... 13.7 13.8 10.4 5.4 10.4 12.3 10.2 10.7 15.0 9.6 52 53 Acquisitions by financial institutions................. 17.8 15.3 13.3 5.5 8.3 12.0 9.2 7.4 11.8 12.1 53 54 Other net purchases.............................................. -2.9 -2.1 -4.1 -.7 2.9 .7 2.4 3.4 2.1 -.7 54 Notes by line no. 29. Demand deposits at commercial banks. 1. Line 2 of p. A-44. 30. Excludes net investment of these reserves in corporate equities. 2. Sum of lines 3-6 or 7-10. 31. Mainly retained earnings and net miscellaneous liabilities. 6. Includes farm and commercial mortgages. 32. Line 12 less line 19 plus line 26. 11. Credit market funds raised by Federally sponsored credit agencies, 33-37. Lines 13-17 less amounts acquired by private finance. Line 37 and net issues of Federally related mortgage pool securities. Included includes mortgages. below in lines 3, 13, and 33. 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 50. 52. Includes issues by financial institutions. line 18. Note.—Full statements for sectors and transaction types quarterly, 28. Foreign deposits at commercial banks, bank borrowings from foreign and annually for flows and for amounts outstanding, may be obtained branches, and liabilities of foreign banking agencies to foreign af­ from Flow of Funds Section, Division of Research and Statistics, Board filiates. of Governors of the Federal Reserve System, Washington, D.C, 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics □ July 1977 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures 1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. i 1976 1977 Measure 1974 1975 1976 Nov. Dec. Jan. Feb. Mar. Apr. May June 129.3 117.8 129.8 131.8 133.1 132.1 133.2 135.2 136.2 137.6 138.6 Market groupings: 7 129.3 119.3 129.3 131.7 133.8 133.1 133.9 134.9 136.2 137.2 138.3 125.1 118.2 127.3 129.8 132.1 130.8 131.8 133.0 134.4 135.3 136.3 4 128.9 124.0 136.8 139.1 142.0 140.2 141.0 142.8 143.6 143.9 144.7 5 120.0 110.2 114.3 116.9 118.6 117.8 119.0 119.7 121.8 123.3 124.9 6 135.3 123.1 136.8 138.8 139.8 141.8 141.8 141.9 142.8 144.6 145.8 7 132.4 115.5 130.5 131.9 131.9 130.7 132.4 135.5 136.4 137.9 138.9 Industry groupings: 8 Manufacturing......................................................... 129.4 116.3 129.4 131.9 132.8 131.5 132.9 135.2 136.3 137.9 138.7 Capacity utilization (per cent)1 in— 9 Manufacturing............................................................. 84.2 73.6 80.1 80.8 81.2 80.2 80.8 82.1 82.5 83.3 83.5 10 Industrial materials industries.................................. 87.7 73.6 80.3 80.3 80.1 79.1 80.0 81.6 82.1 82.8 83.2 11 C.nnstrnr.tinn rnntracts2.................................................... 173.9 162.3 190.2 186.0 183.0 203.0 207.0 207.0 250.0 317.0 17 lMnnnpriniltiirnl pmnlnvmpnf. total3............................... 119.1 116.9 120.6 121.6 122.0 122.3 122.7 123.6 '124.0 '124.4 i>124.6 13 Goods-producing, total............................................. 106.2 96.9 100.3 100.9 101.0 101.3 101.9 103.2 '104.1 '104.5 *104.6 14 Manufacturing, total.............................................. 103.1 94.3 97.5 98.0 98.2 98.8 98.9 99.8 '100.4 '100.8 *100.7 15 Manufacturing, production-worker.................... 102.1 91.3 95.2 95.6 95.7 96.5 96.5 97.6 '98.3 '98.9 *98.7 16 Service-nroducine........................................................... 126.1 127.8 131.7 132.9 133.5 133.8 134.1 134.8 '134.9 '135.3 *135.5 17 Pprsnnnl inrnmp. tntal4 .................................................... 184.1 199.4 219.1 226.8 229.7 230.0 233.7 237.2 239.0 P240.5 18 Wages and salary disbursements............................. 178.9 188.7 208.3 213.2 217.6 218.4 221.5 224.8 '226.9 *290.1 19 Manufacturing............................................................. 157.6 157.9 176.7 182.4 184.1 185.0 188.4 192.6 '194.3 *196.9 20 Disposable personal income.......................................... 180.5 198.5 217.0 218.1 234.2 21 Retail sales5..................................................................... 171.2 186.0 206.6 212.3 221.2 216.5 215.7 227.4 227.6 229.3 226.3 Prices:6 22 Consumer..................................................................... 147.7 161.2 170.5 173.8 174.3 175.3 177.1 178.2 179.6 180.6 181.8 23 Wholesale...................................................................... 160.1 174.1 182.9 185.6 187.1 188.0 190.0 191.9 194.3 195.2 194.4 1 Ratios of indexes of production to indexes of capacity. Based on data 5 Based on Bureau of Census data published in Survey of Current from Federal Reserve, McGraw-Hill Economics Department, and De­ Business (U.S. Dept, of Commerce). partment of Commerce. 6 Data without seasonal adjustment, as published in Monthly Labor 2 Index of dollar value of total construction contracts, including Review (U.S. Dept, of Labor). Seasonally adjusted data for changes in residential, nonresidential, and heavy engineering, from McGraw-Hill the price indexes may be obtained from the Bureau of Labor Statistics, Informations Systems Company, F. W. Dodge Division. U.S. Dept, of Labor. 3 Based on data in Employment and Earnings (U.S. Dept, of Labor). Series covers employees only, excluding personnel in the Armed Forces. Note.—Basic data (not index numbers) for series mentioned in notes 4 Based on data in Survey of Current Business (U.S. Dept, of Com­ 3, 4. and 5, and indexes for series mentioned in notes 2 and 6 may also be merce). Series for disposable income is quarterly. found in the Survey of Current Business (U.S. Dept, of Commerce). 2.11 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1976 1977 1976 1977 1976 1977 Series Q3 Q4 Ql Q2* Q3 Q4 Ql Q2* 03 Q4 Ql Q2* Output (1967 = 100) Capacity (per cent of 1967 output) Utilization rate (per cent) i 1 Manufacturing.................................................. 131.1 131.5 133.2 137.6 162.3 163.2 164.3 165.6 80.8 80.6 81.1 83.1 2 Primary processing...................................... 139.3 138.9 140.1 146.6 168.8 170.1 171.4 172.9 82.5 81.7 81.7 84.8 3 Advanced processing.................................. 126.3 127.5 129.4 132.8 158.8 159.6 160.6 161.8 79.6 79.9 80.6 82.1 4 Materials........................................................... 132.6 131.8 132.9 137.7 163.1 164.3 165.5 166.6 81.3 80.2 80.3 82.7 5 Durable goods.............................................. 130.7 128.4 129.0 135.9 166.7 167.8 169.0 170.3 78.4 76.5 76.3 79.8 6 Basic metal............................................... 117.1 107.7 107.9 117.0 143.7 144.4 144.8 145.1 81.5 74.6 74.5 80.7 7 Nondurable goods...................................... 146.6 147.0 149.3 154.8 172.5 174.1 175.6 177.2 85.0 84.4 85.0 87.4 8 Textile, paper, and chemical................ 151.2 151.5 153.7 160.6 180.1 182.0 183.6 185.4 84.0 83.2 83.7 86.6 9 Textile.................................................... 114.4 111.7 111.1 113.3 139.8 140.6 141.4 141.9 81.8 79.4 78.6 79.9 10 Paper..................................................... 131.9 130.2 131.7 135.6 146.7 147.9 148.9 150.1 89.9 88.1 88.4 90.4 11 Chemical............................................... 175.1 177.6 181.4 191.6 211.2 213.7 216.2 218.7 82.9 83.1 83.9 87.6 12 Energy........................................................... 119.9 121.5 121.7 121.5 142.7 143.9 144.3 144.7 84.0 84.4 84.3 83.9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Manpower A47 2.12 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data are seasonally adjusted. Exceptions noted. 1976 1977 Category 1974 1975 1976 Dec. Jan. Feb. Mar. Apr. May June Household survey data 1 Noninstitutional population1................ 150,827 153,449 156,048 157,176 157,381 157,584 157,782 157,986 158,228 158,456 2 Labor force (including Armed Forces)1........................................... 93,240 94,793 96,917 98,106 97,649 98,282 98,677 98,892 99,286 99,770 3 Civilian labor force............................... 91,011 92,613 94,773 95,960 95,516 96,145 96,539 96,760 97,158 97,641 Employment: 4 Nonagricultural industries2........ 82,443 81,403 84,188 85,184 85,468 85,872 86,359 86,763 87,022 87,341 5 Agriculture...................................... 3,492 3,380 3,297 3,257 3,090 3,090 3,116 3,260 3,386 3,338 Unemployment: 6 Number........................................... 5,076 7,830 7,288 7,517 6,958 7,183 7,064 6,737 6,750 6,962 7 Rate (per cent of civilian labor force)........................................ 5.6 8.5 7.7 7.8 7.3 7.5 7.3 7.0 6.9 7.1 8 Not in labor force.................................. 57,587 58,655 59,130 59,071 59,732 59,302 59,104 59,094 58,943 58,686 Establishment survey data 9 Nonagricultural payroll employment3 78,413 77,050 79,443 80,344 80,561 80,824 81,395 '81,686 '81,921 *>82,056 10 Manufacturing.................................... 20,046 18,347 18,958 19,095 19,211 19,233 19,404 '19,528 '19,599 2*19,575 11 Mining................................................. 694 745 783 808 817 823 842 '847 '844 2*859 12 Contract construction....................... 3,957 3,515 3,593 3,605 3,561 3,645 3,759 '3,842 '3,867 2*3,898 13 Transportation and public utilities. 4,696 4,499 4,508 4,553 4,549 4,553 4,568 '4,575 '4,585 2*4,574 14 Trade.................................................... 17,017 16,997 17,694 17,898 17,981 18,067 18,189 '18,203 '18,226 2*18,237 15 Finance................................................ 4,208 4,222 4,315 4,403 4.423 4,431 4,453 '4,463 '4,481 2*4,493 16 Service.................................................. 13,617 14,008 14,645 14,936 15;010 15,068 15,149 '15,182 '15,205 2*15,281 17 Government........................................ 14,177 14,773 14,947 15,046 15,009 15,004 15,031 '15,046 '15,114 2*15,139 1 Persons 16 years of age and over. Monthly figures, which are based 3 Data include all full- and part-time employees who worked during, on sample data, relate to the calendar week that contains the 12th day; or received pay for, the pay period that includes the 12th day of the annual data are averages of monthly figures. By definition, seasonality month, and exclude proprietors, self-employed persons, domestic servants, does not exist in population figures. Based on data from Employment unpaid family workers, and members of the Armed Forces. Data are and Earnings (U.S. Dept, of Labor). adjusted to the February 1977 benchmark. Based on data from Employ­ 2 Includes self-employed, unpaid family, and domestic service workers. ment and Earnings (U.S. Dept, of Labor). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics □ July 1977 2.13 INDUSTRIAL PRODUCTION 1967 = 100 except as noted; monthly data are seasonally adjusted. 1967 1976 1977 Grouping pro­ 1976 por­ aver­ tion age Apr. May June Jan. Feb. Mar. Apr. May? Junee Major market groupings 1 Total index................................................. 100.00 129.8 128.4 129.6 130.1 132.1 133.2 135.2 136.2 137.6 138.6 2 Products..................................................... 60.71 129.3 128.0 128.9 129.5 133.1 133.9 134.9 136.2 137.2 138.3 3 Final products........................................ 47.82 127.3 126.3 127.3 127.6 130.8 131.8 133.0 134.4 135.3 136.3 4 Consumer goods.............................. 27.68 136.8 136.1 137.4 137.8 140.2 141.0 142.8 143.6 143.9 144.7 5 Equipment......................................... 20.14 114.3 112.9 113.5 113.8 117.8 119.0 119.7 121.8 123.3 124.9 6 Intermediate products......................... 12.89 136.8 134.7 135.0 135.9 141.8 141.8 141.9 142.8 144.6 145.8 7 Materials.................................................... 39.29 130.5 129.2 130.6 131.1 130.7 132.4 135.5 136.4 137.9 138.9 Consumer goods 8 Durable consumer goods..................... 7.89 141.5 141.1 143.2 144.2 145.1 146.1 152.4 152.0 152.6 155.2 9 Automotive products...................... 2.83 154.8 155.2 154.0 156.6 164.0 161.8 178.3 174.9 172.3 179.0 10 Autos and utility vehicles.......... 2.03 149.9 152.1 153.4 156.6 155.8 152.7 176.1 171.2 166.8 175.8 11 Autos.......................................... 1.90 132.0 134.3 134.4 137.5 136.9 132.8 155.8 150.6 148.5 156.8 12 Auto parts and allied goods........ .80 167.2 163.1 135.6 156.9 184.9 184.5 184.1 184.8 186.5 187.8 13 Home goods...................................... 5.06 134.1 133.1 137.2 137.4 134.6 137.3 137.9 139.0 141.6 141.9 14 Appliances, A/C, and TV.......... 1.40 115.8 117.2 123.5 123.8 113.4 118.5 124.1 126.3 132.2 133.8 15 Appliances and TV................. 1.33 118.6 119.6 126.4 126.7 116.0 121.1 126.5 129.7 136.0 16 Carpeting and furniture............. 1.07 144.1 143.0 142.6 142.5 142.7 145.9 144.6 144.8 148.2 17 Misc. home goods....................... 2.59 139.9 137.8 142.5 142.6 142.8 144.0 142.7 143.5 144.0 144.4 18 Nondurable consumer goods............... 19.79 134.9 134.0 135.1 135.1 138.3 138.9 139.0 140.3 140.4 140.7 19 Clothing............................................. 4.29 126.9 129.6 132.1 127.9 124.2 | 124.2 124.0 125.0 20 Consumer staples............................. 15.50 137.2 135.2 135.8 137.1 142.2 142.9 143.3 144.5 143.8 143.7 21 Consumer foods and tobacco.. 8.33 130.8 128.4 129.8 130.8 132.9 135.4 136.5 138.1 137.8 22 Nonfood staples........................... 7.17 144.6 143.3 142.7 144.5 153.1 151.6 151.1 151.7 151.0 150.4 23 Consumer chemical products 2.63 166.6 162.1 161.4 165.4 178.5 175.7 175.9 178.1 177.4 24 Consumer paper products. . . 1.92 113.3 114.2 113.8 112.3 117.0 113.3 117.4 116.6 117.1 25 Consumer energy products. . 2.62 145.4 145.9 145.1 147.2 154.1 155.3 151.3 151.1 149.6 26 Residential utilities............. 1.45 154.5 154.7 153.2 Equipment 27 Business equipment............................... 12.63 136.1 134.1 134.6 135.0 142.0 143.1 144.5 147.0 149.3 151.6 28 Industrial equipment....................... 6.77 127.9 125.3 126.9 127.4 131.4 133.2 133.9 136.3 138.8 140.3 29 Building and mining equip........ 1.44 177.4 170.7 174.6 174.9 187.9 192.9 195.9 200.5 206.1 207.8 30 Manufacturing equipment......... 3.85 106.4 105.4 106.4 106.5 107.8 108.5 109.0 112.0 113.2 114.6 31 Power equipment......................... 1.47 135.3 132.7 134.0 135.4 137.5 139.3 138.3 136.7 139.7 141.3 32 Commercial transit, farm equip... 5.86 145.5 144.6 143.7 143.8 154.5 154.6 156.6 159.2 161.5 164.5 33 Commercial equipment.............. 3.26 173.2 170.0 169.5 171.4 185.2 185.2 186.1 189.7 192.0 195.4 34 Transit equipment....................... 1.93 103.8 105.6 104.2 102.9 108.4 108.7 113.0 114.7 115.8 118.9 35 Farm equipment.......................... .67 130.6 132.7 133.1 128.0 138.0 137.7 138.8 140.0 144.4 36 Defense and space equipment............ 7.51 77.9 77.3 78.2 78.3 77.1 78.5 78.3 79.4 79.6 80.0 Intermediate products 37 Construction supplies......................... 6.42 132.0 128.0 130.9 131.8 136.1 135.7 136.4 137.4 139.6 141.1 38 Business supplies................................. 6.47 141.5 141.3 139.0 140.1 147.3 147.8 147.4 148.1 149.5 39 Commercial energy products........ 1.14 156.5 156.8 157.1 156.1 162.3 165.7 164.2 165.9 167.4 Materials 40 Durable goods materials..................... 20.35 126.6 124.5 126.8 127.0 126.8 128.0 132.1 134.1 135.9 137.6 41 Durable consumer parts................. 4.58 121.6 119.2 123.0 123.1 121.5 124.1 126.8 130.3 133.4 135.6 42 Equipment parts.............................. 5.44 133.9 130.5 133.0 134.0 135.1 137.3 137.8 140.7 142.1 144.6 43 Durable materials n.e.c.................. 10.34 125.0 123.5 125.2 125.0 124.8 124.9 131.3 132.2 133.7 134.8 44 Basic metal materials................. 5.57 109.8 107.8 113.2 111.3 104.7 104.8 114.1 115.1 117.5 45 Nondurable goods materials............... 10.47 146.4 146.9 146.2 147.5 144.6 150.3 153.1 153.8 155.3 155.4 46 Textile, paper, and chem. mat.... 7.62 151.2 152.2 150.9 151.8 148.8 154.2 158.2 159.5 161.3 161.0 47 Textile materials.......................... 1.85 114.4 114.1 116.4 116.1 110.6 110.4 112.4 112.8 113.8 48 Paper materials............................ 1.62 131.1 132.1 131.2 134.2 127.6 133.2 134.3 133.6 136.8 49 Chemical materials..................... 4.15 175.5 ill.2 173.9 174.7 174.2 181.9 188.0 190.6 192.2 50 Containers, nondurable................. 1.70 142.6 141.9 140.7 146.6 139.5 150.7 148.9 146.9 149.7 51 Nondurable materials n.e.c............ 1.14 120.0 120.4 123.2 119.6 122.6 124.3 126.1 126.0 123.7 52 Energy materials.................................. 8.48 120.3 118.8 120.6 120.6 122.6 120.8 121.7 120.5 121.2 53 Primary energy................................. 4.65 107.0 105.0 106.2 107.5 102.9 103.1 107.0 105.4 106.5 54 Converted fuel materials................ 3.82 136.4 135.7 138.1 136.7 146.5 142.3 139.6 139.0 139.0 Supplementary groups 55 Home goods and clothing................. 9.35 130.8 131.5 134.9 133.0 129.8 131.3 131.5 132.5 135.2 136.4 56 Energy, total......................................... 12.23 129.0 128.2 129.3 129.7 133.0 132.4 132.0 131.3 131.6 132.3 57 Products............................................ 3.76 148.8 149.3 148.8 149.9 156.5 158.4 155.2 155.6 155.0 58 Materials............................................ 8.48 120.3 118.8 120.6 120.6 122.6 120.8 121.7 120.5 121.2 For Note see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Output A49 2.13 Continued 1967 1976 1977 Grouping SIC pro­ 1976 code por­ aver­ tion age Apr. May June Jan. Feb. Mar. Apr. Mayz> Junee Gross value of products in market structure (annual rates, in billions of 1972 dollars) 1 1507.4 550.6 545.0 551.5 552.4 564.2 570.3 578.1 580.5 586.5 589.8 ? 1390.9 426.2 421.8 427.5 428.3 436.5 441.2 449.0 449.5 453.9 457.1 3 1277.5 302.9 299.9 303.7 305.5 309.3 312.6 317.6 316.9 318.9 321.3 4 U13.4 123.5 122.1 123.7 123.1 127.2 128.6 131.7 132.4 135.1 135.6 5 Intermediate products................................ 1116.6 124.3 123.0 123.7 124.1 127.8 128.6 129.3 130.8 132.4 132.7 Major industry groupings 12.05 131.9 131.2 132.0 131.9 136.1 136.4 136.2 134.6 135.8 137.1 7 6.36 114.1 113.5 113.0 114.4 113.2 116.5 120.2 118.7 119.5 122.3 8 5.69 151.7 150.8 153.0 151.2 161.5 158.8 154.2 152.4 154.0 153.9 9 3.88 165.7 169.8 167.2 10 M’ nnufarturine.................................................... 87.95 129.4 128.5 129.6 130.2 131.5 132.9 135.2 136.3 137.9 138.7 11 Nondurable................................................... 35.97 141.0 140.7 140.9 141.3 143.7 145.7 147.0 148.1 149.4 149.5 12 Durable......................................................... 51.98 121.4 120.1 121.7 122.3 123.0 124.0 126.8 128.0 130.0 131.2 Mining 13 Metal mining................................................ 10 .51 122.8 124.3 118.3 118.3 135.6 132.3 133.8 127.5 123.9 14 Coal................................................................ 11, 12 .69 116.9 114.4 119.2 122.7 95.3 100.8 124.1 118.4 122.4 133.6 15 Oil and gas extraction................................ 13 4.40 112.0 111.3 110.8 112.3 112.0 115.8 117.0 116.7 117.9 119.9 16 Stone and earth minerals........................... 14 .75 118.3 117.5 116.7 116.5 121.6 124.9 126.1 124.7 124.0 Nondurable manufactures 17 Foods............................................................. 20 8.75 132.0 129.2 131.2 130.5 135.5 137.1 138.5 140.6 140.1 18 Tobacco products........................................ 21 .67 117.2 115.4 114.5 115.4 114.8 117.0 115.3 112.1 19 Textile mill products.................................. 22 2.68 135.9 135.7 138.0 138.1 131.8 133.0 133.1 135. 5 137.9 20 Apparel products........................................ 23 3.31 126.1 126.1 130.3 126.8 123.6 125.2 123.5 124.2 21 Paper and products.................................... 26 3.21 133.1 133.9 134.0 139.1 130.6 136.5 135.5 136.5 139.2 139.3 22 Printing and publishing............................. 27 4.72 120.7 122.0 120.5 119.7 124.3 122.4 124.3 123.4 123.9 124.0 23 Chemicals and products............................. 28 7.74 169.4 168.7 166.6 170.0 172.0 175.1 179.0 180.6 181.6 24 Petroleum products.................................... 29 1.79 132.7 131.6 .132.7 135.1 141.0 145.4 145.1 145.9 145.3 i44! 7 25 Rubber & plastic products........................ 30 2.24 199.8 198.2 •185.6 189.1 218.7 220.4 225.6 226.0 232.7 26 Leather and products................................. 31 .86 82.0 87.7 ,91.4 84.0 74.8 75.0 73.8 73.8 75.4 Durable manufactures 27 Ordnance, pvt. & govt................................ 19, 91 3.64 71.7 69.1 ' 71.4 73.1 70.8 72.4 72.3 73.8 73.7 73.4 28 Lumber and products................................. 24 1.64 125.1 122.8 123.0 120.3 132.7 132.2 132.1 131.6 132.2 29 Furniture and fixtures................................ 25 1.37 132.8 131.7 131.0 130.1 135.1 137.1 135.1 135.4 137.0 30 Clay, glass, stone prod............................... 32 2.74 135.8 132.7 133.9 136.1 137.3 139.0 143.7 144.5 145.5 31 Primary metals............................................. 33 6.57 108.0 105.4 113.2 111.5 100.0 100.4 108.3 112.3 117.0 118.0 32 Iron and steel........................................... 331,2 4.21 104.4 103.5 110.7 110.0 89.8 91.3 97.9 104.0 111.2 112.5 33 Fabricated metal prod............................... 34 5.93 123.3 121.5 121.4 124.0 125.7 126.0 127.5 128.6 130.1 131.1 34 Nonelectrical machinery............................ 35 9.15 134.7 133.5 134.0 133.5 139.5 139.4 140.4 142.9 145.5 147.5 35 Electrical machinery.................................... 36 8.05 131.7 130.0 131.8 132.0 134.0 137.6 137.6 139.6 142.0 143.0 36 Transportation equip.................................. 37 9.27 110.6 110.6 112.9 112.6 113.5 113.4 120.5 119.7 120.1 122.7 37 Motor vehicles & pts.............................. 371 4.50 140.7 141.3 144.3 146.5 145.5 145.4 161.2 157.8 158.0 162.7 38 Aerospace & misc. tr. eq....................... 372,9 4.77 82.2 81.7 83.3 80.7 83.4 83.3 82.3 83.7 84.4 85.0 39 Instruments................................................... 38 2.11 148.2 145.4 149.0 149.5 153.7 157.0 156.9 157.8 158.5 159.7 40 Miscellaneous mfrs..................................... 39 1.51 143.5 140.7 145.5 145.9 147.8 147.9 147.4 145.8 147.8 148.0 i 1972 dollars. Note.—Published groupings include some series and subtotals not shown separately. For summary description and historical data, see Bulletin for June 1976, pp. 470-79. Availability of detailed descriptive and historical data will be announced in a forthcoming Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics □ July 1977 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates. Exceptions noted. 1976 1977 Item 1974 r 1975' 1976' Nov.' Dec.' Jan.r Feb.r Mar.' Apr.' May Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized......................... ,074 927 1,281 1,590 1,514 1,307 1,529 1,712 1,563 1,606 2 1-family....................................... 644 669 895 1,072 1,053 927 1,064 1,208 1,030 1,070 3 2-or-more-family....................... 431 278 386 518 461 380 465 504 533 536 4 Started............................................. ,338 1,160 1,540 1,706 1,889 1,384 1,802 2,089 1,899 1,929 5 1-family....................................... 888 892 1,163 1,236 1,324 1,006 1,424 1,503 1,433 1,461 6 2-or-more-family....................... 450 268 377 470 565 378 378 586 466 468 7 Under construction, end of period ',189 1,003 1,157 1,168 1,192 1,198 1,215 1,240 1,275 8 1-family....................................... 516 531 656 671 686 692 710 735 754 9 2-or-more-family....................... 673 472 501 497 507 506 505 505 521 10 Completed........................................ ',692 1,297 1,362 1,399 1,444 1,416 1,637 1,705 1,510 11 1-family....................................... 931 866 1,026 1,068 1,078 1,103 1,242 1,232 1,197 12 2-or-more-family....................... 760 430 336 331 366 313 395 473 313 13 Mobile homes shipped................. 329 213 250 247 248 258 275 275 252 242 Merchant builder activity in 1-family units: 14 Number sold.................................. 501 544 639 694 808 827 887 827 726 15 Number for sale, end of period1. 407 383 433 429 431 431 433 435 440 Price (thous. of dollars)2 Median: 16 Units sold............................... 35.9 39.3 44.2 45.8 45.9 45.5 47.4 46.0 48.9 17 Units for sale......................... 36.2 38.9 41.6 41.2 41,6 41.9 42.0 42.9 43.3 Average: 18 Units sold............................... 38.9 42.5 48.1 50.0 50,6 50.7 52.6 51.4 55.1 55.0 EXISTING UNITS (1-family) 19 Number sold.................................. 1,212 2,452 3,002 3,300 3,470 3,190 3,080 3,410 3,300 3,450 Price of units sold (thous. of dollars):2 20 Median.................................... 32.0 35.3 38.1 38.8 39.0 39.6 40.7 41.0 42.0 42.2 21 Average................................... 35.8 39.0 42.2 42.9 43.3 44.0 45.1 45.5 46.5 46.8 Value of new construction 3 (millions of dollars) CONSTRUCTION 22 Total put in place.................................. 138,501 134,293 147,481 153,837 155,425 148,393 157,117 163,346 166,298 169,578 23 Private...................................................... 100,166 93,623 109,500 118,958 121,153 116,410 122,634 127,942 130,113 131,547 24 Residential.......................................... 50,376 46,472 60,500 69,574 71,094 66,785 72,378 76,209 78,126 80,420 25 Nonresidential, total........................ 49,790 47,151 48,980 49,384 50,059 49,625 50,256 51,733 51,987 51,127 Buildings: 26 Industrial.................................... 7,902 8,018 7,183 6,727 6,559 6,157 6,262 7,162 7,279 6,986 27 Commercial................................ 15,944 12,806 12,756 12,566 12,796 12,537 12,542 13,677 13,851 13,881 28 Other............................................ 5,791 5,582 6,152 6,500 6,507 6,068 6,061 5,850 6,271 6,136 29 Public utilities and other............. 20,153 20,745 22,889 23,591 24,197 24,963 25,391 25,044 24,586 24,124 30 Public....................................................... 38,334 40,670 37,981 34,879 34,273 31,983 34,483 35,403 36,185 38,031 31 Military................................................ 1,185 1,390 1,508 1,525 1,474 1,498 1,552 1,452 1,494 1,640 32 Highway.............................................. 12,065 10,861 9,764 8,502 8,162 33 Conservation and development. .. 2,741 3,234 3,722 3,856 3,651 2,731 3,111 2,9i8 3,271 2,856 34 Other4.................................................. 22,343 25,165 22,997 20,996 20,986 27,754 29,820 31,033 31,420 33,535 1 Not at annual rates. Note.—Census Bureau estimates for all series except (a) mobile 2 Not seasonally adjusted. homes, which are private, domestic shipments as reported by the Manu­ 3 Value of new construction data in recent periods may not be strictly factured Housing Institute and seasonally adjusted by the Census Bureau, comparable with data in prior periods due to changes by the Bureau of and (b) sales and prices of existing units, which are published by the the Census in its estimating techniques. For a description of these changes National Association of Realtors. All back and current figures are avail­ see Construction Reports (C-30-76-5), issued by the Bureau in July 1976. able from originating agency. Permit authorizations are for 14,000 4 Beginning Jan. 1977 Highway imputations are included in Other. jurisdictions reporting to the Census Bureau. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Prices A51 2.15 CONSUMER AND WHOLESALE PRICES Percentage changes based on seasonally adjusted data, except as noted. 12 months to— 3 months (at annual rate) to— 1 month to— Index level Item 1976 1977 1976 1977 May 1976 1977 1977 May May (1967 June Sept. Dec. Mar. Dec. Feb. Mar. Apr. May = 100)1 Consumer prices 1 AM items............................................................. 6.2 6.7 6.1 5.3 4.2 10.0 .4 1.0 .6 .8 .6 180.6 2 Commodities...................................................... 4.9 6.2 6.0 3.9 3.4 10.4 1.2 .5 .8 .5 174.3 3 Food............................................................... 4.8 6.5 6.2 1.6 0.0 14.6 2.0 .6 1.5 .7 191.7 4 Commodities less food............................... 5.0 5.9 5.6 5.5 5.7 7.4 .7 .4 .4 .4 164.7 5 Durable...................................................... 6.0 6.4 6.5 5.0 6.0 10.5 .9 .6 .5 .2 163.4 6 Nondurable.............................................. 4.6 6.0 5.0 6.0 5.4 10.1 1.5 .5 .9 .5 178.3 7 Services............................................................... 8.4 7.8 6.5 7.5 5.1 9.8 .6 .8 .8 .7 192.3 8 Rent................................................................ 5.4 5.8 5.4 5.4 5.3 6.3 .3 .5 .7 .4 152.2 9 Services less rent......................................... 8.9 8.0 6.7 7.7 5.4 10.4 .7 .8 .8 .7 199.5 Other groupings: 10 All items less food1.................................... 6.7 6.8 7.0 7.4 5.3 6.9 .3 .6 .6 .7 .6 177.3 11 All items less shelter1................................. 6.4 6.8 6.9 5.6 4.3 9.4 .3 1.1 .6 .8 .5 178.4 12 Homeo wnership1......................................... 5.3 6.7 4.3 8.0 1.2 9.1 .1 .7 .6 .9 .6 202.3 Wholesale prices 13 All commodities................................................ 5.0 7.3 6.6 3.5 7.1 10.2 .6 .9 1.1 1.1 .4 195.2 14 Farm products, and processed foods and feeds............................................................ 2.0 6.5 13.4 -12.0 6.6 19.1 2.1 2.0 2.1 2.9 .3 196.8 15 Farm products............................................. 4.4 6.1 18.2 -11.9 5.8 26.0 2.6 2.2 2.5 3.4 -2.3 204.3 16 Processed foods and feeds......................... .5 6.7 10.3 -11.8 6.5 15.6 1.8 1.8 1.9 2.5 1.8 192.0 17 Industrial commodities.................................... 6.0 7.6 4.8 8.0 7.6 7.9 .3 .6 .8 .6 .4 194.2 Materials, supplies, and components of which: 18 Crude materials2...................................... 9.0 15.6 16.4 10.6 21.6 21.9 -2.2 4.0 2.3 .3 .8 284.5 19 Intermediate materials 3......................... 5.8 7.2 3.5 8.3 7.1 8.0 .5 .6 .9 .6 .3 201.6 Finished goods, excluding foods: 20 Consumer.................................................. 5.5 7.3 3.6 7.7 5.2 8.5 .3 .3 .8 .7 .5 171.0 21 Durable................................................. 4.4 5.5 3.1 5.1 3.3 7.0 .1 .5 .4 .7 .4 150.8 22 Nondurable.......................................... 6.2 8.4 3.8 9.1 6.5 9.5 .3 .2 1.0 .7 .5 184.6 23 Producer.................................................... 6.3 6.4 4.3 4.7 9.5 5.3 .7 .5 .4 .6 .6 182.4 Memo: 24 Consumer foods............................................... 3.1 5.0 13.2 -13.1 8.4 12.7 2.8 2.0 1.1 2.5 2.1 192.4 1 Not seasonally adjusted. 3 Excludes intermediate materials for food manufacturing and manu- 2 Excludes crude foodstuffs and feedstuffs, plant and animal fibers, factured animal feeds. oilseeds, and leaf tobacco. Source.—Bureau of Labor Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics □ July 1977 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1975 1976 1977 Account 1974 1975 1976 Q4 Q2 Q3 Q4 Ql Q1 Gross national product 1 1,413.2 1,516.3 1,691.6 1,588.2 1,636.2 1,675.2 1,708.9 1,745.1 *1,799.3 By source: 2 Personal consumption expenditures..................... 887.5 973.2 1,079.7 1,012.0 1,043.6 1,064.7 1,088.5 1,122.0 1,159.1 3 Durable goods................................................... 121.6 131.7 156.5 141.8 151.4 155.0 157.6 162.0 174.0 4 Nondurable goods............................................ 376.2 409.1 440.4 421.6 429.1 434.8 441.8 456.0 464.7 5 Services............................................................... 389.6 432.4 482.8 448.6 463.2 474.9 489.1 504.0 520.4 6 Gross private domestic investment...................... 215.0 183.7 239.6 201.4 229.6 239.2 247.0 242.8 267.9 7 Fixed investment............................................... 204.3 198.3 227.7 205.7 214.7 223.2 231.9 241.0 254.1 8 Nonresidential................................................ 149.2 147.1 160.0 148.7 153.4 157.9 163.0 165.6 173.9 9 Structures.................................................... 54.1 52.0 55.3 52.1 53.2 54.9 56.0 57.0 56.6 10 Producers’ durable equipment............... 95.1 95.1 104.7 96.6 100.2 103.0 107.0 108.6 117.4 11 Residential structures.................................. 55.1 51.2 67.7 57.0 61.3 65.3 68.9 75.5 80.2 12 Nonfarm..................................................... 52.7 49.0 65.1 54.2 58.6 62.9 66.3 72.7 77.4 13 Change in business inventories...................... 10.7 -14.6 11.9 -4.3 14.8 16.0 15.1 1.7 13.8 14 Nonfarm......................................................... 12.2 -17.6 11.9 -9.5 12.7 17.3 15.6 2.2 13.0 15 Net exports of goods and services....................... 7.5 20.5 6.6 21.0 8.4 9.3 4.7 4.2 r—6.2 16 Exports................................................................ 144.4 148.1 162.7 153.7 154.1 160.3 167.7 168.5 *•171.4 17 Imports............................................................... 136.9 127.6 156.0 132.7 145.7 151.0 163.0 164.3 *•177.6 18 Govt, purchases of goods and services............... 303.3 339.0 365.6 353.8 354.7 362.0 369.6 376.2 378.5 19 Federal................................................................. 111.6 124.4 133.4 130.4 129.2 131.2 134.5 138.9 138.2 20 State and local................................................... 191.6 214.5 232.2 223.4 225.5 230.9 235.0 237.4 240.3 By major type of product: 21 Final sales, total.................................................... 1,402.5 1,531.0 1,679.7 1,592.5 1,621.4 1,659.2 1,694.7 1,743.4 *■1,785.5 22 Goods................................................................... 639.7 681.7 760.2 719.7 742.3 758.4 766.1 774.3 802.9 23 Durable goods............................................... 247.2 254.4 300.5 270.0 282.7 301.2 308.2 309.8 333.7 24 Nondurable.................................................... 392.4 427.3 459.8 449.7 459.6 457.1 457.9 464.5 469.1 25 Services............................................................... 626.6 692.5 772.0 719.5 742.6 759.6 781.5 804.4 *•827.4 26 Structures........................................................... 146.9 142.1 159.3 149.1 151.3 157.3 162.2 166.5 169.0 27 Change in business inventories.......................... 10.7 -14.6 11.9 -4.3 14.8 16.0 15.1 1.7 13.8 28 Durable goods................................................... 7.1 -12.1 2.7 -10.6 -3.6 5.4 6.8 2.0 8.2 29 Nondurable goods............................................ 3.6 -2.6 9.2 6.3 18.5 10.6 8.3 -.3 5.6 Memo: 30 Total GNP in 1972 dollars.................................... 1,214.0 1,191.7 1,264.7 1,219.2 1,246.3 1,260.0 1,272.2 1,280.4 *•1,302.0 National income 31 1,135.7 1,207.6 1,348.4 1,264.6 1,304.7 1,337.4 1,362.5 1,389.3 *1,435.2 32 Compensation of employees................................... 875.8 928.8 1,028.4 963.1 994.4 1,017.2 1,037.5 1,064.5 1,097.7 33 Wages and salaries................................................ 764.5 806.7 890.4 836.4 861.5 881.1 897.8 921.0 947.1 34 Government and Government enterprises.. 160.4 175.8 190.7 182.2 185.4 188.7 191.7 197.0 200.0 35 Other................................................................... 604.1 630.8 699.7 654.1 676.1 692.4 706.1 723.9 747.1 36 Supplement to wages and salaries....................... 111.3 122.1 138.0 126.7 132.9 136.2 139.6 143.5 150.5 37 Employer contributions for social insurance..................................................... 55.8 59.7 67.9 61.6 65.9 67.1 68.6 70.2 74.7 38 Other labor income.......................................... 55.5 62.5 70.1 65.2 67.1 69.0 71.1 73.3 75.8 39 Proprietors' income1.................................................. 86.9 90.2 96.7 97.2 93.2 100.3 96.1 97.1 103.6 40 Business and professional1.................................. 61.1 65.3 73.8 69.0 71.4 72.8 74.4 76.8 79.6 41 Farm1...................................................................... 25.8 24.9 22.8 28.3 21.9 27.5 21.7 20.3 24.0 42 Rental income of persons2...................................... 21.0 22.4 23.5 22.9 23.3 23.1 23.4 24.3 25.1 43 Corporate profits1..................................................... 84.8 91.6 117.8 105.6 115.1 116.4 122.0 117.8 *■119.9 44 Profits before tax3................................................ 127.6 114.5 147.9 131.3 141.1 146.2 150.2 154.2 *•160.0 45 Inventory valuation adjustment......................... -39.8 -11.4 -14.6 -12.3 -11.5 -14.4 -12.6 -20.0 -23.1 46 Capital consumption adjustment....................... -3.0 -11.5 -15.5 -13.5 -14.5 -15.4 -15.7 -16.4 -17.0 47 Net interest................................................................. 67.1 74.6 82.0 75.8 78.6 80.3 83.5 85.6 88.9 1 With inventory valuation and capital consumption adjustments. 3 For after-tax profits, dividends, etc., see Table 1.50. 2 With capital consumption adjustments. Source.—Survey of Current Business (U.S. Dept, of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

National Income Accounts A53 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1975 1976 1977 1974 1975 1976 Account Q4 Ql Q2 Q3 Q4 Ql Personal income and saving 1 Total personal income............................................... 1,153.3 1,249 7 1,375.3 1,299.7 1,331.3 1,362.0 1,386.0 1,421.7 1,464.a 2 Wage and salary disbursements............................... 765.0 806.7 890.4 836.4 861.5 881.1 897.8 921.0 947.1 3 Commodity-producing industries...................... 273.9 275.3 304.8 285.8 295.3 302.9 307.0 314.0 323.9 4 Manufacturing................................................... 211.4 211.7 237.0 220.3 229.6 235.6 238.9 243.9 253.0 5 Distributive industries.......................................... 184.4 195.6 214.9 202.3 208.3 212.8 216.5 221.9 229.2 6 Service industries.................................................. 145.9 159.9 180.0 166.1 172.4 176.7 182.7 188.1 194.0 7 Government and government enterprises........ 160.9 175.8 190.7 182.2 185.4 188.7 191.7 197.0 200.0 8 Other labor income.................................................. 55.5 62.5 70.1 65.2 67.1 69.0 71.1 73.3 75.8 9 Proprietors' income1.................................................. 86.9 90.2 96.7 97.2 93.2 100.3 96.1 97.1 103.6 10 Business and professional1.................................. 61.1 65.3 73.8 69.0 71.4 72.8 74.4 76.8 79.6 11 Farm1...................................................................... 25.8 24.9 22.8 28.3 21.9 27.5 21.7 20.3 24.0 12 Rental income of persons2...................................... 21.0 22.4 23.5 22.9 23.3 23.1 23.4 24.3 25.1 13 Dividends.................................................................... 30.8 32.1 35.1 32.2 33.1 34.4 35.4 37.7 37.6 14 Personal interest income.......................................... 101.4 110.7 123.0 114.4 118.0 120.7 125.0 128.4 131.6 15 Transfer payments..................................................... 140.3 175.2 191.3 182.5 188.6 187.6 192.4 196.6 202.8 16 Old-age survivors, disability, and health insurance benefits.......................................... 70.1 81.4 93.0 86.3 88.1 89.5 95.8 98.5 100.0 17 Less: Personal contributions for social insurance......................................................... 47.6 50.0 54.9 51.0 53.4 54.3 55.2 56.6 59.7 18 Equals: Personal income....................................... 1,153.3 1,249.7 1,375.3 1,299.7 1,331.3 1,362.0 1,386.0 1,421.7 1,464.0 19 Less: Personal tax and nontax payments.. .. 170.4 168.8 193.6 179.8 183.8 189.5 195.8 205.3 218.2 20 Equals : Disposable personal income.................. 982.9 1,080.9 1,181.7 1,119.9 1,147.6 1,172.5 1,190.2 1,216.5 1,245.8 21 Less: Personal outlays........................................ 910.7 996.9 1,105.2 1,036.2 1,068.0 1,089.6 1,114.3 1,148.6 1,186.1 22 Equals: Personal saving.................................... 72.2 84.0 76.5 83.7 79.5 82.9 75.8 67.8 59.7 Memo: Per capita (1972 dollars): 23 Gross national product........................................ 3,968.0 4,007.0 4,140.0 4,049.0 4,103.0 4,143.0 4,142.0 4,168.0 4,195.0 24 Personal consumption expenditures................. 887.5 973.2 1,079.7 1,012.0 1,043.6 1,064.7 1,088.5 1,122.0 1,159.1 25 Disposable personal income............................... 840.8 855.5 890.5 867.5 880.4 890.5 892.0 899.6 907.0 26 Saving rate (per cent)............................................... 7.3 7.8 6.5 7.5 6.9 7.1 6.4 5.6 4.8 Gross saving 27 Gross private saving.................................................. 211.6 255.6 274.6 269.4 273.8 279.1 278.9 266.7 '265.3 28 Personal saving...................................................... 72.2 84.0 76.5 83.7 79.5 82.9 75.8 67.8 59.7 29 Undistributed corporate profits1....................... 1.7 10.3 18.3 16.2 20.6 18.5 21.5 12.7 r 13.5 30 Corporate inventory valuation adjustment.... -39.8 -11.4 -14.6 -12.3 -11.5 -14.4 -12.6 -20.0 —23.1 Capital consumption allowances: 31 Corporate........................................................... 84.6 100.9 112.8 106.4 108.8 111.6 113.9 116.9 119.5 32 Noncorporate..................................................... 53.1 60.4 67.0 63.2 64.8 66.1 67.7 69.3 72.6 33 Wage accruals less disbursements..................... 34 Government surplus, or deficit (—), national income and product accounts........................... -4.2 -64.4 -44.7 -61.5 -51.6 —44.9 -44.7 -37.4 r —21.0 35 Federal.................................................................... -11.5 -71.2 -58.6 -69.4 -63.8 -54.1 -57.4 -59.3 r—41.2 36 State and local....................................................... 7.3 6.9 14.0 7.9 12.2 9.2 12.7 21.9 '20.2 37 Capital grants received by the United States, net........................................................................ -2.0 38 Investment................................................................... 211.9 195.6 237.7 214.0 229.4 240.0 242.9 238.4 '252.9 39 Gross private domestic........................................ 215.0 183.7 239.6 201.4 229.6 239.2 247.0 242.8 267.9 40 Net foreign............................................................. -3.0 11.9 -2.0 12.6 -.2 .8 -4.1 -4.3 r —14.9 41 Statistical discrepancy.............................................. 6.8 4.4 7.7 6.1 7.2 5.8 8.7 9.2 '8.6 1 With inventory valuation and capital consumption adjustments. Source.—Survey of Current Business (U.S. Dept, of Commerce). 2 With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics □ July 1977 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data are seasonally adjusted except as noted.1 1976 1977 Item credits or debits 1974 1975 1976 Ql Q2 Q3 Q4 Ql 1 Merchandise exports..................................................................... 98,306 107,088 114,700 26,998 28,379 29,603 29,720 29,476 2 Merchandise imports.................................................................... 103,673 98,043 123,917 28,324 29,914 32,387 33,292 36,456 3 Merchandise trade balance2................................................... -5,367 9,045 -9,217 -1,326 -1,535 -2,784 -3,572 -6,980 4 Military transactions, net............................................................. -2,083 -876 366 -65 -39 235 235 82 5 Investment income, net................................................................ 8,744 5,954 9,808 2,437 2,280 2,667 2,424 3,170 6 Other service transactions, net................................................... 865 2,042 2,743 523 839 781 598 556 7 Balance on goods and services3.................................................. 2,160 16,164 3,699 1,569 1,545 889 -315 -3,172 8 Remittances, pensions, and other transfers......................... -1,714 -1,719 -1,878 -485 -459 -461 -473 -518 9 U.S. Govt, grants (excluding military)................................. -5,475 -2,893 -3,146 -544 -556 -1,475 -572 -627 10 Balance on current account........................................................... -5,028 11,552 -1,324 540 530 -1,037 -1,360 -4,317 11 1,475 661 -3,785 325 -3,622 12 Change in U.S. Govt, assets, other than official reserve assets, net (increase, —)...................................................... 365 -3,463 -4,213 -723 -944 -1,405 -1,142 -895 13 Change in U.S. official reserve assets (increase, —)................ -1,434 -607 -2,530 -773 -1,578 -407 228 -388 14 Gold.............................................................................................. -58 15 SDR’s........................................................................................... -172 -66 -78 -45 14 -18 -29 16 Reserve position in IMF......................................................... -1,265 -466 -2,212 -237 -798 -716 -461 -389 17 Foreign currencies..................................................................... 3 -75 -240 -491 -794 327 718 59 18 Change in U.S. private assets abroad (increase,—)................ -25,960 -27,478 -36,216 -9,254 -7,257 -6,597 -13,108 1,734 19 Bank-reported claims................................................................. -19,516 -13,532 -20,904 -3,630 -4,754 -3,372 -9,148 2,374 20 Long-term................................................................................ -1,183 -2,357 -2,124 -289 -377 -978 -480 -541 21 Short-term............................................................................... -18,333 -11,175 -18,780 -3,341 -4,377 -2,394 -8,668 3,815 22 Nonbank-reported claims.......................................................... -3,221 -1,447 -1,986 -738 -1,004 723 -967 -359 23 Long-term................................................................................ -474 -432 10 -191 145 66 -10 38 24 Short-term............................................................................... -2,747 -1,015 -1,996 -547 -1,149 657 -957 -397 25 U.S. purchase of foreign securities, net................................ -1,854 -6,236 -8,730 -2,460 -1,357 -2,743 -2,171 -649 26 U.S. direct investments abroad, net...................................... -1,368 -6,264 -4,596 -2,427 -142 -1,205 -822 -532 27 Change in foreign official assets in the United States (increase, -f)................................................................................ 10,981 6,960 17,945 3,847 4,051 3,070 6,977 5,852 28 U.S. Treasury securities........................................................... 3,282 4,408 9,333 1,998 2,166 1,260 3,909 4,980 29 Other U.S. Govt, obligations.................................................. 902 905 566 68 316 66 116 99 30 Other U.S. Govt, liabilities4................................................... 724 1,701 4,938 1,524 743 1,819 852 1,005 31 Other U.S. liabilities reported by U.S. banks..................... 5,818 -2,158 893 -412 135 -599 1,769 -405 32 Other foreign official assets5................................................... 254 2,104 2,215 669 691 524 331 173 33 Change in foreign private assets in the United States (in 22,631 7,376 16,575 3,009 3,333 5,131 5,102 -2,785 34 U.S. bank-reported liabilities................................................... 16,017 628 10,982 672 3,528 1,774 5,008 -5,249 35 Long-term............................................................................... 9 -280 175 -105 -16 75 221 96 36 16,008 908 10,807 111 3,544 1,699 4,787 -5,345 37 1,844 240 -616 161 -238 -297 -242 -433 38 Long-term............................................................................... -90 334 -947 -233 -162 -241 -311 -238 39 1,934 -94 331 394 -76 -56 69 -195 40 Foreign private purchases of U.S. Treasury securities, net. 697 2,590 2,783 437 -592 3,026 -88 1,191 41 Foreign purchases of other U.S. securities, net................. 378 2,503 1,250 1,030 131 68 21 879 42 Foreign direct investments in the United States, net........ 3,695 1,414 2,176 709 504 561 403 827 43 Allocations of SDR’s................................................................................ -1,555 5,660 9,763 3,355 1,865 1,244 3,303 799 45 Owing to seasonal adjustments.............................................. 111 129 — 2,622 1,780 470 46 Statistical discrepancy in recorded data before seasonal adjustment.......................................................................... -1,555 5,660 9,763 2,638 1,736 3,866 1,523 329 Memo: Changes in official assets: 47 U.S. official reserve assets (increase,—)................................ -1,434 -607 -2,530 -773 -1,578 -401 228 -388 48 Foreign official assets in the U.S. (increase,+).................. 10,257 5,259 13,007 2,323 3,308 1,251 6,125 4,847 49 Changes in OPEC official assets in the U.S. (part of line 27 above)...................................................................................... 10,841 7,092 9,324 3,482 3,263 1,774 805 3,178 50 Transfers under military grant programs (excluded from lines 1, 4, and 9 above)........................................................ 1,817 2,217 386 50 86 156 94 32 1 Seasonal factors are no longer calculated for lines 13 through 50. excludes certain military sales to Israel from exports and excludes U.S. 2 Data are on an international accounts (IA) basis. Differs from the Govt, interest payments from imports. Census basis primarily because the IA basis includes imports into the 4 Primarily associated with military sales contracts and other transac­ U.S. Virgin Islands, and it excludes military exports, which are part of tions arranged with or through foreign official agencies. Line 4. 5 Consists of investments in U.S. corporate stocks and in debt securi­ 3 Differs from the definition of “net exports of goods and services” in ties of private corporations and state and local governments. the national income and product (GNP) account. The GNP definition Note.—Data are from Bureau of Economic Analysis, Survey of Cur­ rent Business (U.S. Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Trade and Reserve Assets A55 3.11 U.S. FOREIGN TRADE Millions of dollars; monthly data are seasonally adjusted. 1976 1977 Item 1974 1975 1976 Nov. Dec. Jan. Feb. Mar. Apr. May 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments............................................ 97,908 107,130 114,807 9,589 10,410 9,599 9,808 10,072 9,970 10,395 2 GENERAL IMPORTS including merchandise for immediate con­ sumption plus entries into bonded warehouses.......................................... 100,252 96,115 120,677 10,623 11,020 11,269 11,674 12,459 12,593 11,616 3 Trade balance.......................................... -2,344 +11,014 -5,870 -1,034 -610 -1,670 -1,866 -2,387 -2,623 -1,221 Note.—Bureau of Census data reported on a free-alongside-ship exports (which are combined with other military transactions and are (f.a.s.) value basis. Before 1974 imports were reported on a customs reported separately in the “service account”). On the import side, the import value basis. For calendar year 1974 the f.a.s. import value was largest single adjustment is the addition of imports into the Virgin Islands $100.3 billion, about 0.7 per cent less than the corresponding customs (largely oil for a refinery on St. Croix), which are not included in Census import value. The international-accounts-basis data shown in Table 3.10 statistics. adjust the Census basis data for reasons of coverage and timing. On the export side, the largest adjustments are: (a) the addition of exports to Source.—U.S. Dept, of Commerce, Bureau of the Census, Summary Canada not covered in Census statistics, and (b) the exclusion of military of U.S. Export and Import Merchandise Trade (FT 900). 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1976 1977 Type 1973 1974 1975 Dec. Jan. Feb. Mar. Apr. Mayp June? 1 Total......................................................... 3 14,378 15,883 16,226 18,747 19,087 19,122 19,120 18,868 19,195 419,156 2 Gold stock, including Exchange Stabilization Fund1.......................... 3 11,652 11,652 11,599 11,598 11,658 11,658 11,658 11,658 11,658 11,658 3 Special Drawing Rights2..................... 3 2,166 2,374 2,335 2,395 2,375 2,383 2,389 2,384 2,470 42,486 4 Reserve position in International Monetary Fund................................. 3 552 1,852 2,212 4,434 4,682 4,819 4,812 4,720 4,972 44,920 5 Convertible foreign currencies........... 8 5 80 320 372 262 261 106 95 92 1 Gold held under earmark at F.R. Banks for foreign and international 4 Beginning July 1974, the IMF adopted a technique for valuing the accounts is not included in the gold stock of the United States; see Table SDR based on a weighted average of exchange rates for the currencies 3.24. of 16 member countries. The U.S. SDR holdings and reserve position in 2 Includes allocations by the International Monetary Fund of SDR’s the IMF also are valued on this basis beginning July 1974. At valuation as follows: $867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; used prior to July 1974 (SDR1 = $1.20635) total U.S. reserve assets and $710 million on Jan. 1, 1972; plus net transactions in SDR’s. at end of May amounted to $19,369; SDR holdings, $2,565, and reserve 3 Change in par value of U.S. dollar on Oct. 18, 1973 increased total position in IMF, $5,051; figures for June are not yet available. reserve assets by $1,436 million, gold stock by $1,165 million, SDR’s by $217 million, and reserve position in IMF by $54 million. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics □ July 1977 3.13 SELECTED U.S. LIABILITIES TO FOREIGNERS Millions of dollars, end of period 1974 1976 1977 Holder, and type of liability 1973 1975 Dec.9 Dec. Jan. Feb. Mar. Apr.p Mayp 1 Total......................................................... 92,490 119,240 119,164 126,552 151,329 147,913 149,008 151,903 157,006 161,224 2 Foreign countries.................................... 90,487 115,918 115,842 120,929 142,846 139,994 141,023 143,806 149,298 152,530 3 Official institutions1............................... 66,861 76,801 76,823 80,712 91,900 93,046 93,858 96,782 99,748 101,267 4 Short-term, reported by banks in the United States.2................... 43,923 53,057 53,079 49,530 53,528 54,515 54,796 56,040 57,486 58,258 U.S. Treasury bonds and notes: 5 Marketable3................................... 5,701 5,059 5,059 6,671 11,788 12,017 12,725 13,772 14,694 15,676 6 Nonmarketable4........................... 15,564 16,339 16,339 19,976 20,648 20,622 20,495 21,106 20,976 20,950 7 Other readily marketable liabilities5............................... 1,673 2,346 2,346 4,535 5,936 5,892 5,842 5,864 6,592 6,383 Commercial banks abroad: 8 Short-term, reported by banks in the United States2,6................. 17,694 30,314 30,106 29,516 37,377 33,510 33,088 32,858 35,342 36,274 9 Other foreigners...................................... 5,932 8,803 8,913 10,701 13,569 13,438 14,077 14,166 14,208 14,989 10 Short-term, reported by banks in the United States2.................... 5,502 8,305 8,415 10,000 12,592 12,441 13,056 13,008 12,878 13,693 11 Marketable U.S. Treasury bonds and notes3,7............................... 430 498 498 701 977 997 1,021 1,158 1,330 1,296 12 Nonmonetary international and regional organization8................... 2,003 3,322 3,322 5,623 8,483 7,919 7,985 8,097 7,708 8,694 13 Short-term, reported by banks in the United States2........... 1,955 3,171 3,171 5,292 5,450 4,625 3,918 4,278 5,282 6,559 14 Marketable U.S. Treasury 48 151 131 331 3,033 3,294 4,067 3,819 2,426 2,135 1 Includes Bank for International Settlements. 9 Data in the two columns shown for this date differ because of changes 2 Includes Treasury bills as shown in Table 3.15. in reporting coverage. Figures in the first column are comparable in cover­ 3 Derived by applying reported transactions to benchmark data. age with those for the preceding date; figures in the second column are 4 Excludes notes issued to foreign official nonreserve agencies. comparable with those shown for the following date. 5 Includes long-term liabilities reported by banks in the United States and debt securities of U.S. Federally sponsored agencies and U.S. cor­ Note.—Based on Treasury Dept, data and on data reported to the porations. Treasury Dept, by banks (including Federal Reserve banks) and brokers 6 Includes short-term liabilities payable in foreign currencies to com­ in the United States. Data exclude the holdings of dollars of the Inter­ mercial banks abroad and to other foreigners. national Monetary Fund derived from payments of the U.S. subscription, 7 Includes marketable U.S. Treasury bonds and notes held by com­ and from the exchange transactions and other operations of the IMF. mercial banks abroad and other foreigners. Data also exclude U.S. Treasury letters of credit and nonnegotiable, non- 8 Principally the International Bank for Reconstruction and Develop­ interest-bearing special U.S. notes held by nonmonetary international ment and the Inter-American and Asian Development Banks. and regional organizations. 3.14 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1974 1976 1977 Area 1973 1975 Dec.3 Dec. Jan. Feb. Mar. Apr.p May*3 1 Total......................................................... 66,861 76,801 >76,823 80,712 91,900 93,046 93,858 96,782 99,748 101,267 2 Western Europe 1............................. 45,764 44,328 >•44,328 45,701 45,855 45,927 46,108 47,932 48,733 49,924 3 Canada................................................ 3,853 3,662 3,662 3,132 3,406 3,197 2,844 2,684 2,752 2,798 4 Latin American republics............... 2,544 4,419 4,419 4,450 4,853 4,546 4,525 4,826 4,396 4,666 5 Asia...................................................... 10,887 18,604 18,627 22,551 34,112 35,562 36,458 37,730 39,946 40,182 6 Africa.................................................. 788 3,161 3,160 2,983 1,893 1,757 1,771 1,628 1,883 1,821 7 Other countries 2............................... 3,025 2,627 2,627 1,895 1,781 2,057 2,152 1,982 2,038 1,876 1 Includes Bank for International Settlements. 3 See Note 9 to Table 3.13. 2 Includes countries in Oceania and Eastern Europe, and Western European dependencies in Latin America. Note.—Data represent breakdown by area of line 3, Table 3.13. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-reported Data A57 3.15 SHORT-TERM LIABILITIES TO FOREIGNERS Reported by Banks in the United States By Holder and by Type of Liability Millions of dollars, end of period 1974 1976 1977 Holder, and type of liability 1973 1975 Dec.8 Dec. Jan. Feb. Mar. Apr.*3 Mayp 1 All foreigners, excluding the International Monetary Fund................................................... 69,074 9 A M l 94,771 94,338 108,947 105,091 104,858 106,184 110,988 114,784 2 Payable in dollars................................................... 68,477 94,081 94,004 93,780 108,223 104,359 104,043 105,323 110,179 114,131 Deposits: 3 11,310 14,068 14,051 13,564 16,803 15,314 16,098 15,101 15,382 16,741 4 6,882 10,106 9,932 10,250 11,297 11,395 11,205 11,239 11,277 11,859 5 U.S. Treasury bills and certificates2.............. 31,886 35,662 35,662 37,414 40,744 41,275 42,669 43,498 44,661 45,463 6 Other short-term liabilities3............................ 18,399 34,246 34,359 32,552 39,380 36,374 34,071 35,485 38,860 40,068 7 Payable in foreign currencies................................ 597 766 766 558 724 732 815 861 809 653 8 Nonmonetary international and regional 1,955 3,171 3,171 5,293 5,450 4,625 3,918 4,278 5,282 6,559 9 1,955 3,171 3,171 5,284 5,445 4,621 3,912 4,275 5,279 6,553 Deposits: 10 101 139 139 139 290 166 216 203 119 172 11 Time1............................................................... 83 111 111 148 205 230 237 236 202 166 12 U.S. Treasury bills and certificates................ 296 497 497 2,554 2,701 2,890 2,779 2,743 2,849 2,977 13 Other short-term liabilities5............................ 1,474 2,424 2,424 2,443 2,250 1,335 680 1,093 2,109 3,237 14 8 5 4 6 3 3 6 15 Official institutions, banks, and other foreigners.. 67,119 91,676 91,600 89,046 103,497 100,466 100,940 101,906 105,706 108,225 16 Payable in dollars................................................... 66,522 90,910 90,834 88,497 102,778 99,738 100,131 101,048 104,901 107,578 Deposits: 17 Demand........................................................... 11,209 13,928 13,912 13,426 16,513 15,148 15,882 14,898 15,262 16,569 18 Time1................................................................ 6,799 9,995 9,796 10,102 11,092 11,166 10,968 11,003 11,076 11,693 19 U.S. Treasury bills and certificates2.............. 31,590 35,165 35,165 34,860 38,042 38,386 39,889 40,755 41,813 42,485 20 Other short-term liabilities3............................ 16,925 31,822 31,961 30,109 37,130 35,039 33,391 34,392 36,750 36,831 21 Payable in foreign currencies................................ 597 766 766 549 719 728 809 858 805 647 22 Official institutions6................................................... 43,923 53,057 53,079 49,530 53,528 54,515 54,796 56,040 57,486 58,258 23 Payable in dollars................................................... 43,795 52,930 52,952 49,530 53,528 54,515 54,796 56,040 57,486 58,258 Deposits: 24 Demand........................................................... 2,125 2,951 2,951 2,644 3,394 2,931 2,404 2,629 2,747 2,671 25 Time1............................................................... 3,911 4,257 4,167 3,423 2,289 2,456 2,376 2,269 2,335 2,449 26 U.S. Treasury bills and certificates2.............. 31,511 34,656 34,656 34,199 37,725 38,081 39,559 40,399 41,508 42,197 27 Other short-term liabilities5............................ 6,248 11,066 11,178 9,264 10,120 11,047 10,457 10,744 10,896 10,942 28 Pnvahle in fnreien currencies...................................... 127 127 127 29 Banks and other foreigners........................................ 23,196 38,619 38,520 39,515 49,969 45,951 46,144 45,866 48,221 49,967 30 22,727 37,980 37,881 38,966 49,250 45,223 45,335 45,008 47,415 49,320 31 Banks7.................................................................. 17,224 29,676 29,467 28,966 36,658 32,788 32,279 32,000 34,537 35,627 Deposits: 32 Demand....................................................... 6,941 8,248 8,231 7,534 9,104 8,475 9,387 8,401 8,712 9,787 33 Time1........................................................... 529 1,942 1,885 1,856 2,279 2,074 1,779 1,739 1,670 1,748 34 U.S. Treasury bills and certificates............ 11 232 232 335 119 122 102 108 104 108 35 Other short-term liabilities3........................ 9,743 19,254 19,119 19,241 25,156 22,111 21,011 21,752 24,051 23,984 36 Other foreigners................................................. 5,502 8,304 8,414 10,000 12,592 12,441 13,056 13,008 12,878 13,693 Deposits: 37 Demand....................................................... 2,143 2,729 2,730 3,248 4,015 3,741 4,091 3,868 3,803 4,111 38 Time1........................................................... 2,359 3,796 3,744 4,823 6,524 6,636 6,813 6,996 7,070 7,496 39 U.S. Treasury bills and certificates............ 68 277 277 325 198 183 229 248 201 180 40 Other short-term liabilities5........................ 933 1,502 1,664 1,604 1,854 1,876 1,924 1,896 1,804 1,906 41 Payable in foreign currencies................................ 469 639 639 549 719 728 809 858 805 647 1 Excludes negotiable time certificates of deposit, which are included 6 Foreign central banks and foreign central governments and their in “Other short-term liabilities.” agencies, and Bank for International Settlements. 2 Includes nonmarketable certificates of indebtedness and Treasury 7 Excludes central banks, which are included in “Official institutions.” bills issued to official institutions of foreign countries. 8 Data in the two columns shown for this date differ because of changes 3 Includes liabilities of U.S. banks to their foreign branches, liabilities in reporting coverage. Figures in the first column are comparable with of U.S. agencies and branches of foreign banks to their head offices and those for the preceding date; figures in the second column are comparable foreign branches of their head offices, bankers acceptances, commercial with those shown for the following date. paper, and negotiable time certificates of deposit. 4 Principally the International Bank for Reconstruction and Develop­ Note.—“Short-term obligations” are those payable on demand, or ment, and the Inter-American and Asian Development Banks. having an original maturity of 1 year or less. 5 Principally bankers acceptances, commercial paper, and negotiable time certificates of deposit. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics □ July 1977 3.16 SHORT-TERM LIABILITIES TO FOREIGNERS Reported by Banks in the United States By Country Millions of dollars, end of period 1974 1976 1977 Area and country 1973 1975 Dec. 7 Dec. Jan. Feb. Mar Apr.* Mayp 1 69,074 94,847 94,771 94,338 108,947 105,091 104,858 106,183 110,988 114,783 2 Foreign countries......................................................... 67,119 91,676 91,600 89,046 103,497 100,466 100,940 101,906 105,706 108,225 3 Europe......................................................................... 40,742 48,667 48,813 43,988 46,923 43,765 43,584 44,363 45,040 48,246 4 Austria.................................................................. 161 607 607 754 348 373 401 499 509 466 5 Belgium-Luxembourg........................................ 1,483 2,506 2,506 2,898 2,268 2,376 2,411 2,566 2,607 2,640 6 Denmark.............................................................. 659 369 369 332 363 419 419 569 809 974 7 Finland................................................................. 165 266 266 391 419 389 367 312 306 242 8 3,483 4,287 4,287 7,733 4,875 4,701 4,590 4,817 4,748 4,920 9 Germany............................................................... 13,227 9,420 9,429 4,357 5,965 5,304 5,495 4,677 4,490 4,825 10 Greece................................................................... 389 248 248 284 403 421 346 302 350 409 11 Italy....................................................................... 1,404 2,617 2,577 1,072 3,206 2,858 2,703 2,361 2,625 3,509 12 Netherlands......................................................... 2,886 3,234 3,234 3,411 3,007 2,832 2,817 3,181 2,924 3,111 13 965 1,040 1,040 996 785 566 793 746 906 999 14 Portugal................................................................ 534 310 310 195 239 172 228 209 184 238 15 305 382 382 426 565 492 546 555 501 586 16 Sweden................................................................. 1,885 1,138 1,138 2,286 1,693 1,613 1,593 1,717 2,047 2,431 17 3,377 9,986 10,139 8,514 9,453 9,571 9,619 8,927 8,798 8,512 18 98 152 152 118 166 85 82 88 81 66 19 United Kingdom................................................ 6,148 7,559 7,584 6,886 9,999 8,996 8,711 10,368 10,695 11,910 20 Yugoslavia........................................................... 86 183 183 126 188 113 121 96 111 102 21 Other Western Europe1.................................... 3,352 4,073 4,073 2,970 2,672 2,263 2,136 2,144 2,132 2,056 22 U.S.S.R................................................................. 22 82 82 40 51 47 45 50 41 66 23 Other Eastern Europe....................................... 110 206 206 200 255 172 162 178 176 183 24 Canada...................................................................... 3,627 3,517 3,520 3,076 4,784 4,519 4,815 4,324 4,823 4,869 25 Latin America......................................................... 7,664 12,038 11,754 14,942 19,010 17,847 18,529 19,089 20,437 19,978 26 Argentina............................................................. 924 886 886 1,147 1,538 1,648 1,820 1,890 1,845 1,971 27 Bahamas............................................................... 852 1,448 1,054 1,827 2,789 1,979 2,439 2,184 4,001 2,744 28 Brazil.................................................................... 860 1,034 1,034 1,227 1,432 1,292 1,272 1,108 1,225 1,175 29 Chile..................................................................... 158 276 276 317 335 325 302 403 329 430 30 Colombia............................................................. 247 305 305 417 1,017 1,090 1,152 1,201 1,253 1,171 31 7 7 7 6 6 6 6 6 6 8 32 1,296 1,770 1,770 2,066 2,848 2,710 2,782 2,747 2,699 2,764 33 Panama................................................................. 282 488 510 1,099 1,140 909 1,002 1,001 1,008 984 34 Peru....................................................................... 135 272 272 244 257 244 228 246 255 219 35 Uruguay............................................................... 120 147 165 172 245 250 239 241 263 251 36 Venezuela............................................................. 1,468 3,413 3,413 3,289 3,060 2,986 2,909 2,927 2,440 2,991 37 Other Latin American republics..................... 884 1,316 1,316 1,494 1,740 2,033 2,226 2,429 2,284 2,270 38 71 158 158 129 140 151 157 162 173 215 39 Other Latin America........................................ 359 519 589 1,507 2,139 2,223 1,995 2,545 2,656 2,785 40 Asia............................................................................ 10,839 21,073 21,130 21,539 28,461 29,789 29,258 29,614 30,457 30,216 41 China, People’s Republic of (Mainland).... 38 50 50 123 47 47 47 52 52 55 42 China, Republic of (Taiwan).......................... 757 818 818 1,025 985 1,058 1,158 1,067 1,138 1,492 43 Hong Kong......................................................... 372 530 530 623 892 941 1,039 1,018 993 950 44 India...................................................................... 85 261 261 126 648 510 559 538 648 722 45 Indonesia............................................................. 133 1,221 1,221 369 340 695 546 480 887 531 46 Israel..................................................................... 327 386 389 386 385 430 547 509 436 503 47 Japan.................................................................... 6,967 10,897 10,931 10,218 14,380 14,481 13,358 13,271 13,071 12,481 48 Korea.................................................................... 195 384 384 390 437 448 483 382 430 472 49 Philippines........................................................... 515 747 747 698 627 602 554 652 624 634 50 Thailand............................................................... 247 333 333 252 275 301 313 312 308 275 51 Middle East oil-exporting countries3............ 4,633 4,623 6,461 8,073 9,029 9,276 9,987 10,399 10,437 52 Other4................................................................... 1,202 813 844 867 1,373 1,245 1,377 1,346 1,471 1,664 53 Africa........................................................................ 1,056 3,551 3,551 3,373 2,300 2,207 2,406 2,285 2,589 2,753 54 Egypt.................................................................... 35 103 103 343 333 209 244 251 245 360 55 Morocco............................................................... 11 38 38 68 88 97 105 94 91 93 56 South Africa........................................................ 114 130 130 169 143 211 155 136 176 184 57 Zaire..................................................................... 87 84 84 63 35 48 41 39 28 30 58 Oil-exporting countries5................................... 2,814 2,814 2,239 1,116 1,033 1,132 964 1,151 1,205 59 Other4................................................................... 808 383 383 491 585 609 728 802 898 881 60 Other countries........................................................ 3,190 2,831 2,831 2,128 2,019 2,339 2,348 2,231 2,361 2,162 61 Australia.............................................................. 3,131 2,742 2,742 2,014 1,911 2,224 2,231 2,101 2,223 2,026 62 All other............................................................... 59 89 89 114 108 116 118 130 138 135 63 Nonmonetary international and regional organizations............................................................ 1,955 3,171 3,171 5,293 5,450 4,625 3,918 4,278 5,282 6,559 64 International............................................................ 1,627 2,900 2,900 5,064 5,091 4,275 3,599 3,960 4,995 6,229 65 Latin American regional...................................... 272 202 202 187 136 160 132 131 105 119 66 Other regional6....................................................... 57 69 69 1 42 223 190 187 187 182 211 For notes see bottom of p. A59. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-reported Data A59 3.17 SHORT-TERM LIABILITIES TO FOREIGNERS Reported by Banks in the United States Supplemental “Other” Countries 1 Millions of dollars, end of period 1974 1975 1976 1974 1975 1976 Area and country Area and country Dec. Apr. Dec. Apr. Dec, Dec. Apr. Dec. Apr. Dec. Other Western Europe: Other Asia: 1 Cyprus.......................... 17 69 25 Afghanistan................... 18 19 41 57 57 2 Iceland.......................... 20 40 26 Bangladesh.................... 21 50 54 44 3 Ireland, Republic of.. 29 27 Burma............................ 65 49 31 34 "i3 28 Cambodia...................... 4 4 4 3 4 Other Eastern Europe: 29 Jordan............................ 22 30 39 23 37 4 Bulgaria........................................ 13 19 34 30 Laos................................ 3 5 2 2 1 5 Czechoslovakia........................... 11 32 21 31 Lebanon......................... 126 180 117 132 140 6 German Democratic Republic. 18 17 32 Malaysia........................ 63 92 77 130 396 7 Hungary........................................ 11 13 19 33 Nepal.............................. 25 22 28 34 33 8 Poland........................................... 42 66 77 34 Pakistan......................... 91 118 74 92 189 9 Rumania....................................... 14 44 19 35 Singapore....................... 245 215 256 344 280 36 Sri Lanka (Ceylon)___ 14 13 13 10 23 Other Latin American republics: 37 Vietnam......................... 126 70 62 66 66 10 Bolivia....................................... 96 93 110 117 133 11 Costa Rica................................ 118 120 124 134 141 Other Africa: 12 Dominican Republic............. 128 214 169 170 275 38 Ethiopia (incl. Eritrea) 95 76 60 72 41 13 Ecuador.................................... 122 157 120 150 319 39 Ghana............................. 18 13 23 45 27 14 El Salvador.............................. 129 144 171 212 178 40 Ivory Coast................... 7 11 62 17 10 15 Guatemala................................ 219 255 260 368 397 41 Kenya............................. 31 32 19 39 46 16 Haiti.......................................... 35 34 38 48 47 42 Liberia............................ 39 33 53 63 77 17 Honduras.................................. 88 92 99 137 137 43 Southern Rhodesia.... 2 3 1 1 1 18 Jamaica..................................... 69 62 41 59 35 44 Sudan............................. 4 14 12 17 22 19 Nicaragua................................. 127 125 133 158 119 45 Tanzania........................ 11 21 30 20 20 Paraguay.................................. 46 38 43 50 49 46 Tunisia........................... 19 23 29 34 20 21 Surinam2.................................. 13 47 Uganda........................... 13 38 22 50 43 22 Trinidad and Tobago............ 107 31 131 44 167 48 Zambia........................... 22 18 78 14 Other Latin America: All Other: 23 Bermuda................... 116 100 170 197 177 49 New Zealand................. 47 36 42 48 45 24 British West Indies., 449 627 1,311 2,284 1,874 1 Represents a partial breakdown of the amounts shown in the “Other” 2 Surinam included with Netherlands Antilles until January 1976. categories on Table 3.16. 3.18 LONG-TERM LIABILITIES TO FOREIGNERS Reported by Banks in the United States Millions of dollars, end of period 1976 1977 Holder, and area or country 1973 1974 1975 Nov. Dec. Jan. Feb. Mar.p Apr.*1 May2* 1 1,462 1,285 1,812 2,324 2,408 2,352 2,297 2,295 2,510 2,283 2 Nonmonetary international and regional organizations............................................................ 761 822 415 313 264 263 248 262 255 262 3 Foreign countries......................................................... 700 464 1,397 2,011 2,144 2,090 2,049 2,033 2,256 2,022 4 Official institutions, including central banks. .. 310 124 931 1,311 1,352 1,262 1,192 1,163 1,358 1,042 5 Banks, excluding central banks.......................... 291 261 r366 526 588 604 627 648 631 630 6 Other foreigners...................................................... 100 79 100 173 204 224 230 222 267 350 Area or country: 7 Europe...................................................................... 470 226 330 517 537 555 580 571 583 594 8 159 146 214 309 313 313 296 354 304 297 9 United Kingdom................................................ 66 59 66 127 134 144 122 103 131 148 10 Canada...................................................................... 8 19 23 26 29 31 29 37 35 34 11 Latin America......................................................... 132 115 140 152 230 244 267 263 264 254 12 Middle East oil-exporting countries1................. 94 894 1,239 1,251 1,186 1,104 1,091 1,304 1,069 13 Other Asia2............................................................. 82 7 8 75 96 67 67 67 68 68 14 African oil-exporting countries3......................... * * * * * * * * * 15 Other Africa4.......................................................... 1 1 1 1 2 2 2 2 16 All other countries................................................. 7 * * 1 1 4 1 1 1 1 1 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, 4 Includes African oil-exporting countries until December 1974. and United Arab Emirates (Trucial States). 2 Includes Middle East oil-exporting countries until December 1974. Note.—Long-term obligations are those having an original maturity 3 Comprises Algeria, Gabon, Libya, and Nigeria. of more than 1 year. NOTES TO TABLE 3.16: 1 Includes Bank for International Settlements. 6 Asian, African, and European regional organizations, except BIS, 2 Surinam included with Netherlands Antilles until January 1976. which is included in “Other Western Europe.” 3 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, 7 Data in the two columns shown for this date differ because of changes and United Arab Emirates (Trucial States). in reporting coverage. Figures in the first column are comparable with 4 Includes oil-exporting countries until December 1974. those shown for the preceding date; figures in the second column are 5 Comprises Algeria, Gabon, Libya, and Nigeria. comparable with those shown for the following date. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics □ July 1977 3.19 SHORT-TERM CLAIMS ON FOREIGNERS Reported by Banks in the United States By Country Millions of dollars, end of period 1976 1977 Area and country 1973 1974 1975 Nov. Dec. Jan. Feb. Mar. Apr.p May? 1 20,723 39,056 50,231 63,313 69,126 63,719 63,447 65,187 65,865 68,018 2 Foreign countries......................................................... 20,723 39,055 50,229 63,307 69,121 63,712 63,442 65,181 65,860 68,014 3 Europe....................................................................... 3,970 6,255 8,987 10,790 12,162 10,486 10,764 10,887 12,033 12,845 4 Austria.................................................................. 11 21 15 54 44 41 42 58 63 43 5 Belgium-Luxembourg........................................ 147 384 352 501 662 554 611 570 470 589 6 Denmark.............................................................. 48 46 49 129 85 72 64 67 84 88 7 Finland................................................................. 108 122 128 136 141 137 131 141 126 130 8 France................................................................... 621 673 1,471 1,098 1,448 1,246 1,372 1,343 1,511 1,539 9 Germany............................................................... 311 589 436 577 563 511 667 535 550 502 10 Greece................................................................... 35 64 49 76 79 57 85 54 70 65 11 Italy....................................................................... 316 345 370 877 929 875 802 870 946 964 12 Netherlands......................................................... 133 348 300 240 304 246 510 252 385 362 13 Norway................................................................. 72 119 71 85 98 124 127 133 142 148 14 Portugal............................................................... 23 20 16 53 65 80 90 98 90 100 15 Spain..................................................................... 222 196 249 304 429 362 375 291 363 301 16 Sweden................................................................. 153 180 167 93 177 112 85 74 116 79 17 Switzerland.......................................................... 176 335 237 511 482 539 530 496 496 471 18 Turkey.................................................................. 10 15 86 140 173 199 207 274 291 322 19 United Kingdom................................................ 1,459 2,580 4,718 5,591 6,158 4,960 4,671 5,218 5,939 6,756 20 Yugoslavia........................................................... 10 22 38 38 45 60 64 37 31 54 21 Other Western Europe...................................... 25 22 27 53 52 53 60 56 51 40 22 U.S.S.R................................................................. 46 46 103 103 99 82 95 104 108 82 23 Other Eastern Europe....................................... 44 131 108 132 130 178 175 218 203 209 24 Canada...................................................................... 1,955 2,776 2,817 3,136 3,100 2,944 3,512 3,737 3,701 3,541 25 Latin America......................................................... 5,900 12,377 20,532 31,010 34,060 31,459 31,487 32,057 31,781 32,539 26 Argentina............................................................. 499 720 1,203 858 962 937 867 914 873 885 27 Bahamas............................................................... 883 3,405 7,570 14,021 15,340 13,872 14,102 15,431 14,148 15,115 28 Brazil..................................................................... 900 1,418 2,221 3,254 3,378 3,456 3,145 2,951 3,186 3,058 29 Chile..................................................................... 151 290 360 358 396 370 379 357 420 361 30 Colombia............................................................. 397 713 689 523 575 593 598 544 565 505 31 Cuba..................................................................... 12 14 13 14 13 13 13 13 13 13 32 Mexico................................................................. 1,373 1,972 2,802 3,290 3,419 3,366 3,332 3,295 3,302 3,213 33 Panama................................................................. 274 505 1,052 781 1,021 760 869 849 753 835 34 Peru....................................................................... 178 518 583 630 690 737 739 733 756 738 35 Uruguay............................................................... 55 63 51 35 38 41 39 39 35 36 36 Venezuela............................................................. 518 704 1,086 1,512 1,552 1,296 1,260 1,241 1,197 1,359 37 Other Latin American republics..................... 493 852 967 1,069 1,140 1,127 1,120 1,132 1,079 1,175 38 Netherlands Antilles1........................................ 13 62 49 43 40 45 41 41 54 36 39 Other Latin America........................................ 154 1,142 1,885 4,623 5,495 4,848 4,985 4,518 5,401 5,208 40 Asia........................................................................... 8,224 16,226 16,057 16,365 17,765 16,686 15,471 16,118 15,760 16,571 41 China, People’s Republic of (Mainland). . . 31 4 22 3 3 4 30 5 3 18 42 China, Republic of (Taiwan)........................... 140 500 736 1,099 987 1,028 1,089 1,124 1,099 1,212 43 Hong Kong......................................................... 147 223 258 267 361 229 265 317 337 296 44 India..................................................................... 16 14 21 48 41 28 23 32 24 34 45 Indonesia............................................................. 88 157 102 120 76 54 55 53 41 39 46 Israel..................................................................... 155 255 491 330 554 344 337 328 287 280 47 Japan..................................................................... 6,398 12,518 10,776 10,428 10,992 10,579 9,472 9,486 9,397 9,581 48 Korea................................................................... 403 955 1,561 1,577 1,722 1,710 1,574 1,736 1,807 1,909 49 Philippines........................................................... 181 372 384 495 559 592 479 463 490 488 50 Thailand............................................................... 273 458 499 414 422 421 446 491 468 519 51 Middle East oil-exporting countries2............ 330 524 1,082 1,312 981 1,050 1,389 1,170 1 469 52 Other3................................................................... 392 441 684 503 735 715 651 693 638 ’724 53 Africa. ...................................................................... 388 855 1,228 1,394 1,486 1,519 1,478 1,603 1,572 1,556 54 Egypt..................................................................... 35 111 101 109 132 151 126 149 146 149 55 Morocco............................................................... 5 18 9 14 13 19 13 26 35 34 56 South Africa........................................................ 129 329 545 748 763 798 797 792 783 778 57 Zaire..................................................................... 61 98 34 25 29 16 11 10 8 7 58 Oil-exporting countries4................................... 115 231 213 256 238 249 343 291 243 59 Other3................................................................... 158 185 308 284 293 298 282 283 309 344 60 Other countries........................................................ 286 565 609 612 549 618 729 779 1,013 963 61 Australia............................................................... 243 466 535 502 450 512 604 663 894 846 62 All other............................................................... 43 99 73 110 99 105 125 116 119 117 63 Nonmonetary international and regional organizations........................................................... 1 * 1 6 5 7 5 6 5 4 1 Includes Surinam until January 1976. 3 Includes oil-exporting countries until December 1974. 2 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, 4 Comprises Algeria, Gabon, Libya, and Nigeria, and United Arab Emirates (Trucial States). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-reported Data A61 3.20 SHORT-TERM CLAIMS ON FOREIGNERS Reported by Banks in the United States By Type of Claim Millions of dollars, end of period 1976 1977 Type 1973 1974 1975 Nov. Dec. Jan. Feb. Mar. Apr.* May* 1Total.............................................................................. 20,723 39,056 50,231 63,313 69,126 63,719 63,447 65,187 65,865 68,018 2 Payable in dollars....................................................... 20,061 37,859 48,683 61,508 67,481 61,987 61,488 63,290 64,180 66,258 3 Loans, total............................................................. 7,660 11,287 13,194 16,141 18,300 16,072 16,234 15,756 16,484 16,625 4 Official institutions, including central banks. 284 381 613 1,267 1,451 1,251 935 784 741 966 5 Banks, excluding central banks...................... 4,538 7,332 7,665 9,628 11,076 9,334 9,764 9,730 10,638 10,614 6 All other, including nonmonetary interna­ tional and regional organizations............... 2,838 3,574 4,916 5,245 5,773 5,487 5,535 5,241 5,105 5,045 7 Collections oustanding.......................................... 4,307 5,637 5,467 5,628 5,846 5,833 5,868 6,190 6,316 6,292 8 Acceptances made for accounts of foreigners... 4,160 11,237 11,147 11,422 12,367 12,018 12,009 12,793 12,976 13,015 9 Other claims1.......................................................... 3,935 9,694 19,054 28,316 30,968 28,064 27,378 28,550 28,403 30,324 10 Payable in foreign currencies.................................... 662 1,196 1,368 1,805 1,645 1,732 1,959 1,897 1,686 1,760 11 Deposits with foreigners....................................... 428 669 656 1,084 1,063 1,126 1,091 1,100 863 824 12 Foreign government securities, commercial and finance paper.............................................. 119 289 340 89 89 145 272 323 332 377 13 Other claims............................................................ 115 238 372 632 493 460 596 474 490 559 1 Includes claims of U.S. banks on their foreign branches and claims made to, and acceptances made for, foreigners; drafts drawn against of U.S. agencies and branches of foreign banks on their head offices and foreigners, where collection is being made by banks and bankers for foreign branches of their head offices. 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. 3.21 LONG-TERM CLAIMS ON FOREIGNERS Reported by Banks in the United States Millions of dollars, end of period 1976 1977 Type, and area or country 1973 1974 1975 Nov. Dec. Jan. Feb. Mar. Apr.* May* 1 Total.............................................................................. 5,996 7,179 9,536 11,596 11,660 11,684 11,829 12,201 12,481 12,288 By type: 2 Payable in dollars................................................... 5,924 7,099 9,419 11,449 11,512 11,534 11,618 12,012 12,280 12,085 3 Loans, total......................................................... 5,446 6,490 8,316 9,846 9,935 9,953 10,131 10,411 10,557 10,393 4 Official institutions, including central banks 1,156 1,324 1,351 1,367 1,422 1,404 1,535 1,625 1,647 1,641 5 Banks, excluding central banks.................. 591 929 1,567 2,170 2,212 2,178 2,218 2,192 2,215 2,111 6 All other, including nonmonetary interna­ tional and regional organizations.......... 3,698 4,237 5,399 6,310 6,301 6,371 6,377 6,591 6,695 6,481 7 Other long-term claims......................................... 478 609 1,103 1,603 1,577 1,581 1,487 1,604 1,723 1,693 8 Payable in foreign currencies................................ 72 80 116 147 148 150 211 190 201 202 By area or country: 9 Europe...................................................................... 1,271 1,908 2,704 3,283 3,232 3,309 3,362 3,616 3,689 3,650 10 Canada..................................................................... 490 501 555 590 586 518 536 566 558 499 11 Latin America......................................................... 2,116 2,614 3,468 4,694 4,806 4,878 4,906 4,908 4,990 5,036 12 Asia............................................................................ 1,582 1,619 1,795 1,881 1,882 1,835 1,841 1,896 1,964 1,884 13 Japan..................................................................... 251 258 296 364 387 383 363 417 416 420 14 Middle East oil-exporting countries1............ 384 220 141 146 117 123 152 181 149 15 Other Asia2......................................................... 1,331 977 1,279 1,376 1,349 1,334 1,356 1,327 1,368 1,316 16 Africa........................................................................ 355 366 747 888 883 856 876 890 953 898 17 Oil-exporting countries3................................... 62 151 269 264 201 206 211 228 213 18 Other4................................................................... 355 305 596 619 619 655 670 678 725 685 19 All other countries 5............................................... 181 171 267 261 269 288 308 327 327 321 1 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, 3 Comprises Algeria, Gabon, Libya, and Nigeria. and United Arab Emirates (Trucial States). 4 Includes oil-exporting countries until December 1974. 2 Includes Middle East oil-exporting countries until December 1974. 5 Includes nonmonetary international and regional organizations. 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A 62 International Statistics □ July 1977 3.22 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1976 1977 Asset account 1973 1974 1975 Oct. Nov. Dec. Jan. J Feb.' Mar. Apr.P All foreign countries 1 Total, all currencies............................... 121,866 151,905 176,493 206,599 207,734 219,432 212,415 215,914 223,222 223,044 2 Claims on United States................... 5,091 6,900 6,743 9,968 7,639 7,999 6,563 7,062 7,252 8,826 3 Parent bank.................................... 1,886 4,464 3,665 6,863 4,359 4,435 2,999 3,759 3,658 5,462 4 Other................................................ 3,205 2,435 3,078 3,105 3,281 3,564 3,563 3,303 3,594 3,364 5 Claims on foreigners......................... 111,974 138,712 163,391 189,502 192,886 204,390 198,241 201,416 208,551 207,244 6 Other branches of parent bank 19,177 27,559 34,508 41,825 42,747 45,894 46,086 41,166 48,645 47,826 7 Other banks.................................... 56,368 60,283 69,206 76,303 77,401 83,765 77,415 77,923 81,719 79,713 8 Official institutions....................... 2,693 4,077 5,792 9,205 9,550 10,608 10,836 11,188 11,766 12,356 9 Nonbank foreigners..................... 33,736 46,793 53,886 62,169 63,188 64,123 63,905 64,538 66,421 67,350 10 Other assets........................................ 4,802 6,294 6,359 7,129 7,208 7,043 7,612 7,436 7,420 6,973 11 Total payable in U.S. dollars.............. 79,445 105,969 132,901 156,146 156,597 167,717 163,026 165,461 172,352 171,956 12 Claims on United States................... 4,599 6,603 6,408 9,623 7,297 7,705 6,283 6,774 6,853 8,453 13 Parent bank.................................... 1,848 4,428 3,628 6,818 4,296 4,375 2,960 3,714 3,611 5,419 14 Other................................................ 2,751 2,175 2,780 2,805 3,001 3,330 3,323 3,061 3,242 3,034 15 Claims on foreigners.......................... 73,018 96,209 123,496 143,169 145,986 156,808 152,831 155,063 161,973 160,200 16 Other branches of parent bank.. 12,799 19,688 28,478 34,064 34,399 37,848 38,362 39,822 40,922 39,960 17 Other banks.................................... 39,527 45,067 55,319 59,380 60,352 66,331 60,816 60,909 64,642 62,951 18 Official institutions....................... 1,777 3,289 4,864 7,885 8,298 9,017 9,468 9,853 10,469 11,056 19 Nonbank foreigners..................... 18,915 28,164 34,835 41,840 42,936 43,611 44,185 44,479 45,940 46,233 20 Other assets....................................... 1,828 3,157 2,997 3,354 3,315 3,204 3,912 3,623 3,526 3,303 United Kingdom 21 Total, all currencies............................... 61,732 69,804 74,883 76,854 77,249 81,466 76,482 78,708 81,268 80,150 22 Claims on United States................... 1,789 3,248 2,392 3,256 3,426 3,354 2,262 1,772 2,311 2,541 23 Parent bank.................................... 738 2, All 1,449 2,413 2,538 2,376 1,377 1,011 1,302 1,698 24 Other................................................ 1,051 116 943 843 888 978 885 761 1,009 843 25 Claims of foreigners.......................... 57,761 64,111 70,331 71,162 71,477 75,859 71,995 74,713 76,865 75,559 26 Other branches of parent bank.. 8,773 12,724 17,557 18,358 17,949 19,753 19,483 21,450 21,115 21,733 27 Other banks.................................... 34,442 32,701 35,904 35,336 35,846 38,089 34,827 35,517 37,074 35,559 28 Official institutions....................... 735 788 881 1,211 1,168 1,274 1,377 1,615 1,606 1,611 29 Nonbank foreigners..................... 13,811 17,898 15,990 16,257 16,514 16,743 16,309 16,130 17,070 16,656 30 Other assets........................................ 2,183 2,445 2,159 2,436 2,345 2,253 2,225 2,224 2,092 2,050 31 40,323 49,211 57,361 57,161 57,699 61,587 57,758 60,038 62,353 61,179 32 Claims on United States................... 1,642 3,146 2,273 3,124 3,313 3,275 2,185 1,684 2,173 2,430 33 Parent bank.................................... 730 2,468 1,445 2,406 2,523 2,374 1,372 1,008 1,297 1,690 34 Other................................................ 912 678 828 719 789 902 813 676 876 740 35 Claims on foreigners.......................... 37,817 44,694 54,121 53,112 53,541 57,488 54,735 57,492 59,342 57,894 36 Other branches of parent bank.. 6,509 10,265 15,645 15,829 15,405 17,249 17,183 19,114 18,712 19,256 37 Other banks.................................... 23,389 23,716 28,224 26,421 27,008 28,983 26,184 26,767 28,352 26,917 38 Official institutions....................... 510 610 648 912 817 846 1,110 1,340 1,310 1,297 39 Nonbank foreigners..................... 7,409 10,102 9,604 9,950 10,311 10,410 10,258 10,271 10,968 10,424 40 Other assets........................................ 865 1,372 967 925 845 824 838 862 839 855 Bahamas and Caymans 41 Total, all currencies............................... 23,771 31,733 45,203 63,578 61,886 66,774 66,479 66,134 69,562 70,980 42 Claims on United States................... 2,210 2,464 3,229 5,492 2,970 3,506 3,192 3,722 3,395 4,993 43 Parent bank.................................... 317 1,081 1,477 3,519 845 1,141 811 1,418 1,073 2,734 44 Other................................................ 1,893 1,383 1,752 1,973 2,126 2,365 2,381 2,303 2,321 2,259 45 Claims on foreigners.......................... 21,041 28,453 41,040 56,847 57,683 62,050 61,539 60,999 64,834 64,687 46 Other branches of parent bank.. 1,928 3,478 5,411 7,296 7,389 8,144 8,463 7,815 9,060 8,095 47 Other banks.................................... 9,895 11,354 16,298 22,175 22,481 25,354 23,836 23,435 25,390 25,148 48 Official institutions....................... 1,151 2,022 3,576 6,040 6,485 7,101 7,004 7,225 7,495 7,784 49 Nonbank foreigners..................... 8,068 11,599 15,756 21,336 21,327 21,451 22,236 22,523 22,890 23,660 50 Other assets........................................ 520 815 933 1,239 1,232 1,217 1,748 1,413 1,333 1,300 51 Total payable in U.S. dollars.............. 21,937 28,726 41,887 59,289 57,799 62,705 62,266 61,605 64,982 66,396 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Overseas Branches A63 3.22 Continued 1976 1977 Liability account 1973 1974 1975 Oct. Nov. Dec. Jan. Feb.' Mar. Apr.* All foreign countries 52 Total, all currencies............................. 121,866 151,905 176,493 206,599 207,734 219,432 212,415 215,914 223,222 223,044 53 To United States.............................. 5,610 11,982 20,221 28,984 30,290 32,836 30,411 30,515 34,455 33,166 54 Parent bank.................................. 1,642 5,809 12,165 17,869 19,059 19,894 18,728 19,261 21,054 18,396 55 Other.............................................. 3,968 6,173 8,057 11,115 11,231 12,942 11,683 11,253 13,402 14,770 56 To foreigners..................................... 111,615 132,990 149,815 170,770 170,690 179,862 175,124 178,540 181,905 182,967 57 Other branches of parent bank. 18,213 26,941 34,111 41,052 41,711 44,309 44,288 46,327 47,661 46,175 58 Other banks.................................. 65,389 65,675 72,259 79,415 78,369 83,852 79,486 78,295 80,036 82,669 59 Official institutions..................... 10,330 20,185 22,773 25,019 23,967 25,828 25,771 26,631 26,194 26,125 60 Nonbank foreigners................... 17,683 20,189 20,672 25,284 26,643 25,873 25,580 27,288 28,014 27,998 61 Other liabilities................................ 4,641 6,933 6,456 6,845 6,755 6,734 6,880 6,859 6,862 6,910 62 Total payable in U.S. dollars............ 80,374 107,890 135,907 160,553 161,054 173,092 167,589 170,533 177,247 177,092 63 To United States.............................. 5,027 11,437 19,503 28,210 29,399 32,049 29,475 29,601 33,512 32,202 64 Parent bank.................................. 1,477 5,641 11,939 17,633 18,821 19,680 18,480 19,015 20,800 18,151 65 Other.............................................. 3,550 5,795 7,564 10,576 10,578 12,368 10,996 10,585 12,712 14,051 66 To foreigners..................................... 73,189 92,503 112,879 128,943 128,231 137,527 134,352 137,290 140,155 141,221 67 Other branches of parent bank. 12,554 19,330 28,217 33,853 34,008 37,037 37,706 39,372 40,691 39,096 68 Other banks.................................. 43,641 43,656 51,583 56,711 55,900 60,597 56,772 56,096 57,755 60,514 69 Official institutions..................... 7,491 17,444 19,982 21,910 20,924 22,877 23,038 23,598 23,406 23,216 70 Nonbank foreigners................... 9,502 12,072 13,097 16,468 17,398 17,016 16,836 18,223 18,303 18,395 71 Other liabilities................................ 2,158 3,951 3,526 3,400 3,424 3,516 3,761 3,643 3,580 3,669 United Kingdom 72 Total, all currencies............................. 61,732 69,804 74,883 76,854 77,249 81,466 76,482 78,708 81,268 80,150 73 To United States.............................. 2,431 3,978 5,646 5,310 5,520 5,997 5,101 4,871 6,365 6,272 74 Parent bank.................................. 136 510 2,122 1,468 1,459 1,198 1,211 1,191 1,537 1,515 75 Other.............................................. 2,295 3,468 3,523 3,842 4,061 4,798 3,889 3,681 4,828 4,756 76 To foreigners.................................... 57,311 63,409 67,240 69,151 69,368 73,228 69,202 71,523 72,665 71,787 77 Other branches of parent bank. 3,944 4,762 6,494 6,826 6,783 7,092 7,663 7,981 8,252 7,764 78 Other banks.................................. 34,979 32,040 32,964 32,488 33,690 36,259 '32,336 32,097 33,830 33,747 79 Official institutions..................... 8,140 15,258 16,553 17,567 16,181 17,273 '16,975 18,204 17,711 17,260 80 Nonbank foreigners................... 10,248 11,349 11,229 12,270 12,713 12,605 12,228 13,242 12,872 13,016 81 Other liabilities................................ 1,990 2,418 1,997 2,394 2,360 2,241 2,179 2,313 2,238 2,091 82 Total payable in U.S. dollars............ 39,689 49,666 57,820 58,031 58,757 63,174 59,009 61,331 63,346 62,373 83 To United States.............................. 2,173 3,744 5,415 5,152 5,330 5,849 4,876 4,704 6,189 6,108 84 Parent bank.................................. 113 484 2,083 1,448 1,447 1,182 1,195 1,166 1,506 1,498 85 Other.............................................. 2,060 3,261 3,332 3,704 3,883 4,666 3,681 3,538 4,683 4,610 86 To foreigners.................................... 36,646 44,594 51,447 52,017 52,503 56,372 53,230 55,675 56,283 55,390 87 Other branches of parent bank. 2,519 3,256 5,442 5,742 5,520 5,874 6,573 6,906 7,188 6,563 88 Other banks.................................. 22,051 20,526 23,330 21,493 23,040 25,527 '22,137 22,211 23,841 23,815 89 Official institutions..................... 5,923 13,225 14,498 15,550 14,283 15,423 '15,184 16,345 15,817 15,394 90 Nonbank foreigners................... 6,152 7,587 8,176 9,233 9,660 9,547 9,336 10,213 9,437 9,617 91 Other liabilities................................ 870 1,328 959 862 924 953 903 953 874 875 Bahamas and Caymans 92 Total, all currencies............................. 23,771 31,733 45,203 63,578 61,886 66,774 66,479 66,134 '69,562 70,980 93 To United States.............................. 1,573 4,815 11,147 20,167 20,676 22,723 21,689 21,672 r24,314 23,090 94 Parent bank.................................. 307 2,636 7,628 14,000 14,797 16,163 15,191 15,241 '17,146 14,545 95 Other.............................................. 1,266 2,180 3,520 6,167 5,879 6,560 6,499 6,431 '7,167 8,545 96 To foreigners.................................... 21,747 26,140 32,949 42,358 40,111 42,897 43,376 43,166 '43,863 46,641 97 Other branches of parent bank. 5,508 7,702 10,569 13,381 12,931 13,801 13,551 14,406 '14,931 14,123 98 Other banks.................................. 14,071 14,050 16,825 22,615 19,923 21,758 22,256 21,006 '20,475 23,780 99 Official institutions..................... 492 2,377 3,308 2,784 3,198 3,573 3,607 3,314 '3,302 3,892 100 Nonbank foreigners................... 1,676 2,011 2,248 3,577 4,059 3,765 3,963 4,439 '5,155 4,845 101 Other liabilities................................ 451 778 1,106 1,053 1,099 1,154 1,413 1,295 '1,385 1,249 102 Total payable in U.S. dollars............ 22,328 28,840 42,197 r60,036 '58,367 63,417 62,851 62,416 '65,792 67,199 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 International Statistics a July 1977 3.23 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Holdings and Transactions Millions of dollars 1977 1976 1977 Country or area 1975 1976 Jan.— May? Nov. Dec. Jan. Feb. Mar. Apr.p May33 Holdings (end of period) 4 11 1 Estimated total....................... 7,703 15,798 15,063 15,798 16,307 17,813 18,748 18,450 19,107 2 Foreign countries................... 7,372 12,765 12,337 12,765 13,014 13,746 14,929 16,024 16,972 3 Europe................................. 1,085 2,330 2,293 2,330 2,300 2,504 2,870 3,505 3,475 4 Belgium-Luxembourg.. 13 14 14 14 14 14 14 14 11 5 Germany......................... 215 764 746 764 764 789 894 1,112 1,112 6 Netherlands................... 16 288 288 288 287 367 388 388 418 7 Sweden........................... 276 191 192 191 191 188 188 188 148 8 Switzerland..................... 55 261 291 261 271 324 317 397 429 9 United Kingdom.......... 363 485 433 485 476 512 713 1,069 1,037 10 Other Western Europe. 143 323 325 323 293 306 354 332 315 11 Eastern Europe............. 4 4 4 4 4 4 4 4 4 12 Canada................................ 395 256 250 256 256 261 270 268 271 13 Latin America.................................. 200 312 302 312 314 295 405 448 472 14 Venezuela...................................... 4 149 149 149 149 149 258 193 193 15 Other Latin America republics. 29 35 28 35 21 21 26 21 21 16 Netherlands Antilles 1............... 161 118 115 118 125 121 120 119 113 17 Asia.................................................... 5,370 9,323 8,950 9,323 9,637 10,330 11,068 11,476 12,448 18 Japan.............................................. 3,271 2,687 2,587 2,687 2,682 2,806 3,123 3,174 3,773 19 Africa................................................ 321 543 543 543 506 356 305 305 279 20 All other........................................ * * * * * * 11 23 27 21 Nonmonetary international and regional organizations........................................ 331 3,033 2,726 3,033 3,294 4,068 3,819 2,426 2,135 22 International...................... 322 2,905 2,655 2,905 3,180 3,948 3,700 2,318 2,032 23 Latin American regional. 9 128 71 128 114 119 118 108 103 Transactions (net purchases, or sales (—), during period) 24 Total....................... 1,994 8,095 3,309 577 735 510 1,505 936 -298 657 25 Foreign countries. 1,814 5,393 4,207 383 428 249 732 1,184 1,094 948 26 Official institutions. 1,612 5,116 3,888 340 421 229 709 1,047 922 982 27 Other foreign........... 202 276 319 43 6 21 23 137 173 -35 28 Nonmonetary international and regional organizations........................................ 180 2,702 -898 193 307 261 773 -248 -1,392 -291 Memo: Oil-exporting countries 29 Middle East 2........................................... 1,797 3,887 1,817 630 140 254 505 408 338 312 30 Africa 3...................................................... 170 221 -264 11 -37 -150 -51 -26 1 Includes Surinam until January 1976. 4 Estimated official and private holdings of marketable U.S. Treasury 2 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, securities with an original maturity of more than I year. Data are based and United Arab Emirates (Trucial States). Data not available until 1975. on a benchmark survey of holdings as of Jan. 31, 1971, and monthly 3 Comprises Algeria, Gabon, Libya, and Nigeria. Data not available transactions reports. Excludes nonmarketable U.S. Treasury bonds and until 1975. notes held by official institutions of foreign countries. 3.24 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS Millions of dollars, end of period 1976 1977 Assets 1973 1974 1975 Dec. Jan. Feb. Mar. Apr. May June 1 Deposits....................................................................... 251 418 353 352 383 361 349 305 436 379 Assets held in custody: 2 U.S. Treasury securities1...................................... 52,070 55,600 60,019 66,532 66,992 68,653 71,435 73,261 73,964 74,098 3 Earmarked gold2................................................... 17,068 16,838 16,745 16,414 16,343 16,304 16,271 16,282 16,221 16,184 1 Marketable U.S. Treasury bills, certificates of indebtedness, notes, Note.—Excludes deposits and U.S. Treasury securities held for inter­ and bonds; and nonmarketable U.S. Treasury securities payable in dollars national and regional organizations. Earmarked gold is gold held for and in foreign currencies. foreign and international accounts and is not included in the gold stock 2 The value of earmarked gold increased because of the changes in of the United States. par value of the U.S. dollar in May 1972 and in October 1973. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Investment transactions A65 3.25 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1977 1976 1977 Transactions, and area or country 1975 1976 Jan.- Nov. r Dec.r Jan.r Feb.r Mar. Apr.*5 j May*5 MayP U.S. corporate securities Stocks: 1 Foreign purchases.................................................. 15,347 18,227 6,033 977 1,562 1,425 1,162 1,101 1,135 1,210 2 Foreign sales........................................................... 10,678 15,474 5,044 1,025 1,287 1,137 1,036 980 913 978 3 Net purchases, or sales (—).................................. 4,669 2,752 989 -49 274 288 126 121 222 232 4 Foreign countries..................................................... 4,651 2,740 964 -50 281 290 124 116 222 212 5 Europe.................................................................. 2,491 336 482 -118 111 130 47 72 105 128 6 France............................................................... 262 256 12 -25 37 27 -10 4 -6 -3 7 Germany.......................................................... 251 68 65 -13 24 1 -7 -4 38 37 8 Netherlands..................................................... 359 -199 29 -29 -35 24 -5 -10 -7 27 9 Switzerland...................................................... 899 -100 134 -44 -7 39 23 30 38 4 10 United Kingdom............................................ 594 340 244 -5 84 39 36 55 47 67 11 Canada................................................................. 361 325 9 1 60 8 30 9 -5 -33 12 Latin America..................................................... -7 155 70 25 1 4 14 14 21 17 13 Middle East1....................................................... 1,640 1,803 356 64 115 100 50 17 97 92 14 Other Asia2......................................................... 142 117 44 -23 9 46 -17 3 5 7 15 Africa.................................................................... 10 7 * 1 2 * * * * * 16 Other countries.................................................. 15 -4 4 * -17 2 1 1 -1 1 17 Nonmonetary international and regional organizations................................................... 18 12 25 2 -6 -2 1 5 1 20 Bonds3 18 Foreign purchases.................................................. 5,408 5,529 2,611 355 533 400 534 348 856 473 19 Foreign sales............................................................ 4,642 4,322 1,405 364 524 322 214 208 243 418 20 Net purchases, or sales (—)................................. 766 1,207 1,206 -9 9 78 320 140 613 55 21 Foreign countries..................................................... 1,795 1,248 1,167 110 6 73 329 112 568 85 22 Europe.................................................................. 113 92 392 24 53 8 281 75 102 -74 23 France............................................................... 82 49 -22 5 7 -5 -3 -2 -5 -7 24 Germany.......................................................... -6 -50 9 4 1 -4 4 * -4 13 25 Netherlands..................................................... -8 -29 -38 3 -20 2 -2 -3 -7 -28 26 Switzerland...................................................... 117 158 93 -3 13 15 32 31 -4 19 27 United Kingdom............................................ -52 23 314 15 54 8 225 43 109 -71 28 Canada................................................................. 128 96 70 16 7 11 55 -3 6 1 29. Latin America..................................................... 31 94 7 6 27 -5 8 1 3 * 30 Middle East1....................................................... 1,553 1,179 696 74 -21 59 -7 48 454 142 31 Other Asia2......................................................... -35 -165 8 -8 -43 1 -8 -6 4 17 32 Africa.................................................................... 5 -25 -2 -2 -14 * * -2 * * 33 Other countries.................................................. 1 -21 * * -2 * * * * * 34 Nonmonetary international and regional organizations................................................... -1,030 -41 36 -119 3 4 -9 27 45 -31 Foreign securities 35 Stocks, net purchases, or sales ( —)........................ -189 -322 -236 -1 4 -18 -109 -62 -40 -7 36 Foreign purchases.................................................. 1,541 1,937 859 167 217 181 130 187 157 204 37 Foreign sales........................................................... 1,730 2,259 1,094 168 213 199 238 249 197 211 38 Bonds, net purchases, or sales (—)......................... -6,325 -8,652 1,328 481 -1,323 -30 -374 -56 -11 -857 39 Foreign purchases.................................................. 2,383 4,932 3,236 455 670 818 581 628 606 603 40 Foreign sales........................................................... 8,708 13,584 4,564 936 1,993 848 955 684 617 1,460 41 Net purchases, or sales ( —) of stocks and bonds.. -6,515 -8,973 -1,565 -481 -1,319 -49 -483 -118 -51 -864 42 Foreign countries......................................................... -4,323 -7,078 -1,163 -351 -790 -338 -488 -149 4 -192 43 Europe...................................................................... -53 -844 -297 -17 -140 -21 -207 54 2 -125 44 Canada..................................................................... -3,202 -5,168 -855 -40 -668 -298 -265 -83 -94 -115 45 Latin America......................................................... -306 3 158 -26 37 25 42 35 69 -13 46 Asia........................................................................... -622 -700 -185 -70 -24 -53 -61 -155 25 59 47 Africa........................................................................ 15 48 1 * 2 -1 2 * * 48 Other countries....................................................... -155 -416 14 -197 3 9 1 * 2 2 49 Nonmonetary international and regional organizations....................................................... -2,192 -1,898 -402 -132 -529 290 5 31 -55 -673 1 Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, 3 Includes State and local government securities, and securities of U.S. Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial Govt, agencies and corporations. Also includes issues of new debt securities States). sold abroad by U.S. corporations organized to finance direct investments 2 Includes Middle East oil-exporting countries until 1975. abroad. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 International Statistics □ July 1977 3.26 SHORT-TERM LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Nonbanking Concerns in the United States Millions of dollars, end of period 1975 1976 1975 1976 Type, and area or country Dec. Mar. June Sept. Dec.p Dec. Mar. June Sept. Dec.P Liabilities to foreigners Claims ion foreigners 1 6,006 6,350 6,301 6,318 6,477 12,151 12,698 13,847 13,190 14,148 By type: 2 Payable in dollars................................................... 5,402 5,700 5,676 5,702 5,867 11,048 11,713 12,912 12,211 13,211 3 Payable in foreign currencies................................ 605 650 625 615 610 1,103 985 935 980 936 4 Deposits with banks abroad in reporter’s 564 478 496 493 379 5 539 508 439 487 557 By area or country: 6 Foreign countries......................................................... 5,602 6,132 6,055 6,131 6,269 12,150 12,697 13,846 13,189 14,147 7 Europe....................................................................... 2,333 2,344 2,286 2,270 2,122 4,499 4,935 5,330 5,155 5,250 8 Austria................................................................. 14 6 13 15 10 16 17 17 21 21 9 Belgium-Luxembourg........................................ 299 296 233 183 166 133 116 193 195 163 10 Denmark.............................................................. 9 12 12 13 7 39 35 30 26 50 11 Finland................................................................. 14 10 7 21 4 91 36 138 139 79 12 France................................................................... 149 205 159 185 198 291 355 363 413 426 13 Germany.............................................................. 149 152 228 256 173 355 305 358 492 377 14 Greece................................................................... 19 25 29 28 48 33 41 47 56 51 15 Italy....................................................................... 171 125 116 128 97 381 406 335 358 383 16 Netherlands......................................................... 114 162 170 141 141 167 176 146 142 162 17 Norway................................................................ 20 23 22 24 29 40 58 52 43 49 18 Portugal............................................................... 4 3 3 5 13 44 45 22 28 40 19 Spain..................................................................... 81 68 51 36 40 408 516 432 336 . 369 20 Sweden................................................................. 29 25 24 35 34 62 80 84 62 89 21 130 159 213 241 187 242 207 270 254 241 22 Turkey.................................................................. 25 14 20 16 13 28 26 31 23 25 23 United Kingdom................................................ 998 929 846 789 811 1,901 2,280 2,599 2,363 2,437 24 Yugoslavia........................................................... 76 91 108 113 123 36 30 28 30 26 25 Other Western Europe...................................... 8 6 7 8 7 14 18 14 17 19 26 U.S.S.R................................................................. 20 23 10 19 9 150 106 96 81 156 27 Other Eastern Europe...................................... 11 10 16 14 13 70 80 75 79 85 28 Canada...................................................................... 295 313 369 324 377 2,109 2,234 2,202 2,216 2,449 29 Latin America......................................................... 912 1,176 1,077 1,011 1,017 2,367 2,563 3,053 2,813 3,557 30 Argentina............................................................. 36 41 42 41 38 58 48 43 39 44 31 Bahamas............................................................... 277 376 330 251 260 667 883 1,150 925 1,368 32 Brazil.................................................................... 96 91 90 53 65 409 475 462 417 682 33 Chile..................................................................... 14 11 15 16 17 36 27 46 26 34 34 Colombia............................................................. 17 16 19 11 13 49 47 57 66 59 35 Cuba..................................................................... * * * * * 1 1 1 1 1 36 Mexico................................................................. 82 92 72 74 95 362 332 332 352 332 37 Panama................................................................. 16 10 12 10 34 91 84 101 83 74 38 Peru....................................................................... 29 30 31 32 25 41 38 39 35 42 39 Uruguay............................................................... 3 2 3 3 4 4 4 4 22 5 40 Venezuela............................................................. 100 163 184 222 219 178 156 186 215 194 41 Other Latin American republics..................... 71 71 95 100 137 159 170 184 179 270 42 Netherlands Antilles 1...................................... 35 58 55 68 10 12 7 10 9 9 43 Other Latin America........................................ 138 214 130 129 101 301 292 437 444 442 44 Asia............................................................................ 1,721 1,733 1,752 2,027 2,080 2,631 2,489 2,727 2,419 2,330 •45 China, People’s Republic of (Mainland).... 6 5 8 1 20 65 35 23 11 23 46 China, Republic of (Taiwan).......................... 97 110 124 129 112 164 100 215 136 199 47 Hong Kong......................................................... 18 23 28 33 40 111 66 104 88 96 48 India..................................................................... 7 9 10 11 23 39 60 51 53 55 49 Indonesia............................................................. 137 141 133 144 136 140 155 160 193 209 50 Israel..................................................................... 31 26 34 32 39 54 42 53 48 41 51 Japan.................................................................... 295 307 290 275 228 1,130 1,161 1,169 1,008 912 52 Korea................................................................... 69 53 62 85 77 263 105 131 142 120 53 Philippines........................................................... 14 18 18 28 53 96 106 114 93 86 54 Thailand............................................................... 18 18 11 23 24 22 20 19 23 22 55 Other Asia........................................................... 1,031 1,022 1,035 1,260 1,326 549 638 691 624 567 56 Africa........................................................................ 390 502 527 432 597 405 343 378 407 390 57 Egypt.................................................................... 37 30 22 25 27 22 22 28 36 28 58 Morocco............................................................... 8 7 32 42 43 10 10 12 9 10 59 South Africa....................................................... 99 113 88 65 54 93 80 83 78 87 60 Zaire..................................................................... 6 7 12 24 36 24 23 25 28 21 61 Other Africa....................................................... 239 345 372 276 438 256 207 230 257 245 62 Other countries........................................................ 70 65 44 67 76 141 133 155 178 171 63 Australia............................................................... 55 47 32 50 57 102 97 100 112 106 64 All other............................................................... 14 18 12 18 19 39 36 56 67 65 65 Nonmonetary international and regional organizations....................................................... 276 219 246 186 208 1 1 1 1 1 1 Includes Surinam until 1976. mercial concerns and other nonbanking institutions in the United States. Data exclude claims held through U.S. banks and intercompany accounts Note.—Reported by exporters, importers, and industrial and com- between U.S. companies and their affiliates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-reported Data A67 3.27 SHORT-TERM CLAIMS ON FOREIGNERS Reported by Large Nonbanking Concerns in the United States Millions of dollars, end of period 1976 1977 Type and country 1973 1974 1975 Oct. Nov. Dec. Jan. Feb. Mar.2* Apr.? 1 Total.............................................. 3,164 3,357 3,792 4,897 5,123 5,419 5,358 5,575 6,286 6,208 By type: 2 Payable in dollars.................. 2,625 2,660 3,038 4,326 4,600 4,802 4,743 4,941 5,673 5,538 3 Deposits.............................. 2,588 2,591 2,706 3,935 4,213 4,429 4,375 4,564 5,218 4,956 4 Short-term investments 1. 37 69 332 391 387 373 368 377 455 582 5 Payable in foreign currencies 540 697 756 571 523 618 616 634 614 670 6 Deposits.............................. 435 429 510 339 307 332 308 336 312 360 7 Short-term investments 1. 105 268 246 232 216 286 308 298 302 310 By country: 8 United Kingdom................... 1,118 1,350 1,304 1,640 1,693 1,835 1,851 1,844 1,871 1,712 9 Canada.................................... 765 967 1,153 1,429 1,552 1,539 1,291 1,321 1,468 1,503 10 Bahamas.................................. 589 390 546 1,059 1,059 1,247 1,312 1,396 1,707 1,649 11 Japan....................................... 306 398 343 116 135 110 127 164 147 154 12 All other.................................. 386 252 445 653 684 688 111 850 1,093 1,190 1 Negotiable and other readily transferable foreign obligations payable Note.—Data represent the assets abroad of large nonbanking con­ on demand or having a contractural maturity of not more than 1 year cerns in the United States. They are a portion of the total claims on from the date on which the obligation was incurred by the foreigner. foreigners reported by nonbanking concerns in the United States and are included in the figures shown in Table 3.26. 3.28 LONG-TERM LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Nonbanking Concerns in the United States Millions of dollars, end of period 1975 1976 1975 1976 Area and country Dec. Mar. June Sept. Dec.? Dec. Mar. June Sept. Dec.p Liabilities to foreigners Claims on foreigners 1 Total.............................................................................. 4,256 4,069 3,935 3,725 3,507 4,977 5,177 5,034 4,971 4,910 2 Europe.......................................................................... 3,267 3,114 2,992 2,820 2,697 1,026 973 984 953 910 3 Germany.................................................................. 506 446 425 406 396 37 34 35 73 72 4 Netherlands............................................................. 202 214 214 270 258 217 219 211 211 156 5 Switzerland.............................................................. 522 484 467 327 260 59 56 56 54 57 6 United Kingdom.................................................... 1,604 1,577 1,493 1,445 1,407 396 349 365 298 297 7 Canada......................................................................... 155 144 166 111 86 1,426 1,473 1,516 1,511 1,534 8 Latin America............................................................. 269 248 222 230 241 1,634 1,770 1,602 1,547 1,520 9 Bahamas................................................................... 210 184 157 132 138 8 7 37 37 36 10 Brazil........................................................................ 4 5 5 5 5 170 182 164 171 203 11 Chile......................................................................... 1 1 1 1 1 315 312 306 244 248 12 Mexico..................................................................... 3 6 6 7 15 216 209 187 219 195 496 495 489 498 423 669 685 710 737 771 14 Japan........................................................................ 397 394 388 402 397 90 91 85 80 80 15 Africa............................................................................ 2 2 2 2 2 168 214 163 165 189 16 All other *................................................................... 66 65 64 64 58 55 61 59 58 58 i Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics □ July 1977 3.29 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Per cent per annum Rate on June 30, 1977 Rate on June 30, 1977 Rate on June 30, 1977 Country Country Country Per Month Per Month Per Month cent effective cent effective cent effective Argentina.......................... 18.0 Feb. 1972 10.5 Sept. 1976 6.0 Sept. 1976 Austria............................... 5.5 June 1977 Germany, Fed. Rep. of. 3.5 Sept. 1975 8.0 Oct. 1976 Belgium.............................. 6.0 June 1977 13.0 June 1977 2.0 June 1976 Brazil.................................. 28.0 May 1976 5.0 Apr. 1977 United Kingdom........... 8.0 May 1977 Canada.............................. 7.5 May 1977 4.5 June 1942 5.0 Oct. 1970 Denmark............................ 9.0 Mar. 1977 Netherlands.................... 3.5 May 1977 Note.—Rates shown are mainly those at which the central bank either more than one rate applicable to such discounts or advances, the rate discounts or makes advances against eligible commercial paper and/or shown is the one at which it is understood the central bank transacts the government securities for commercial banks or brokers. For countries with largest proportion of its credit operations. 3.30 FOREIGN SHORT-TERM INTEREST RATES Per cent per annum, averages of daily figures 1977 Country, or type 1974 1975 1976 Jan. Feb. Mar. Apr. May June 1 Euro-dollars............................................................... 11.01 7.02 5.58 5.14 5.08 5.13 5.16 5.80 5.78 2 United Kingdom....................................................... 13.34 10.63 11.35 13.53 11.56 10.31 8.59 7.63 7.81 3 Canada........................................................................ 10.47 8.00 9.39 8.24 7.78 7.63 7.58 7.44 7.16 4 Germany..................................................................... 9.80 4.87 4.19 4.70 4.64 4.70 4.57 4.43 4.24 5 Switzerland................................................................. 3.01 1.45 1.24 1.68 2.88 2.61 3.98 3.80 6 Netherlands................................................................. 5. 17 7.02 6.18 6.04 5.73 4.89 3.03 2.84 7 France.......................................................................... 7.91 8.65 10.02 9.81 9.87 9.33 9.13 9.01 8 Italy.............................................................................. 10.37 16.32 15.68 15 .86 16.57 16.26 15.49 14.65 9 Belgium....................................................................... 6.63 10.25 8.49 7.59 7.07 7.01 6.94 6.88 10 Japan............................................................................ 11.64 7.70 7.50 7.50 7.20 6.46 5.75 6.05 Note.—Rates are for 3-month interbank loans except for—Canada, over; and Japan, loans and discounts that can be called after being held finance company paper; Belgium, time deposits of 20 million francs and over a minimum of two month-ends. 3.31 FOREIGN EXCHANGE RATES Cents per unit of foreign currency 1977 Country/currency 1974 1975 1976 Jan. Feb. Mar. Apr. May June 1 Australia/dollar.................... 143.89 130.77 122.15 108.53 109.04 109.94 110.53 110.31 110.80 2 Austria/shilling..................... 5.3564 5.7467 5.5744 5.8852 5.8453 5.8822 5.9252 5.9533 5.9647 3 Belgium/franc....................... 2.5713 2.7253 2.5921 2.7249 2.7114 2.7258 2.7509 2.7700 2.7713 4 Canada/dollar....................... 102.26 98.30 101.41 98.985 97.295 95.125 95.103 95.364 94.549 5 Denmark/krone................... 16.442 17.437 16.546 16.967 16.891 17.038 16.710 16.638 16.544 6 Finland/markka................... 26.565 27.285 25.938 26.313 26.169 26.296 24.899 24.530 24.524 7 France/franc......................... 20.805 23.354 20.942 20.108 20.083 20.075 20.133 20.190 20.240 8 Germany/deutsche mark... 38.723 40.729 39.737 41.792 41.582 41.812 42.119 42.394 42.453 9 India/rupee........................... 12.460 11.926 11.148 11.231 11.285 11.313 11.310 11.320 11.286 10 Ireland/pound....................... 234.03 222.16 180.48 171.24 171.03 171.74 171.90 171.85 171.91 11 Italy/lira................................. .15372 .15328 .12044 .11372 .11327 .11276 .11264 .11279 .11295 12 Japan/yen.............................. .34302 .33705 .33741 .34359 .35087 .35687 .36339 .36046 .36652 13 Malaysia/ringgit................... 41.682 41.753 39.340 39.718 40.011 40.152 40.305 40.255 40.270 14 Mexico/peso......................... 8.0000 8.0000 6.9161 4.8114 4.4084 4.3978 4.4076 4.3890 4.3582 15 Netherlands/guilder............ 37.267 39.632 37.846 39.953 39.813 40.079 40.464 40.7009 40.326 16 New Zealand/dollar............ 140.02 121.16 99.115 94.839 95.192 95.689 96.129 96.002 96.264 17 Nor way/krone...................... 18.119 19.180 18.327 18.946 18.904 19.035 18.909 18.956 18.915 18 Portugal/escudo................... 3.9506 3.9286 3.3159 3.1276 3.0717 2.5778 2.5752 2.5818 2.5802 19 South Africa/rand............... 146.98 136.47 114.85 114.94 115.00 115.00 114.93 115.00 114.88 20 Spain/peseta......................... 1.7337 1.7424 1.4958 1.4577 1.4475 1.4530 1.4536 1.4491 1.4404 21 Sri Lanka/rupee................... 14.978 14.385 11.908 11.421 11.442 12.820 13.676 13.700 13.664 22 Sweden/krona....................... 22.563 24.141 22.957 23.734 23.543 23.726 23.004 22.962 22.625 23 Switzerland/franc................. 33.688 38.743 40.013 40.127 39.669 39.209 39.582 39.694 40.170 24 United Kingdom/pound... 234.03 222.16 180.48 171.24 171.03 171.74 171.90 171.85 171.91 Memo: 25 United States/dollar 1........ 84.11 82.20 89.68 90.35 90.55 90.45 90.13 89.99 89.91 1 Index of weighted-average exchange value of U.S. dollar against cur- Note.—Averages of certified noon buying rates in New York for cable rencies of other G-10 countries plus Switzerland. May 1970 parities = 100. transfers. Weights are 1972 global trade of each of the 10 countries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Business Finance A69 4.10 SALES, REVENUE, PROFITS, AND DIVIDENDS—Large Manufacturing Corporations Millions of dollars 1975 1976 Industry 1975 1976 Ql Q2 Q3 Q4 Ql r Q2 - Q3 Q4 Total (170 corps.) 1 Sales...................................................................... 586,948 667,821 138,392 145,898 148,008 154,650 159,311 166,452 161,596 180,462 2 Total revenue...................................................... 595,337 676,596 140,482 147,811 149,841 157,203 161,461 168,958 164,631 181,546 3 Profits before taxes............................................ 60,356 71,885 12,925 14,875 15,507 17,049 17,502 18,902 16,894 18,587 4 Profits after taxes............................................... 27,040 34,707 5,566 6,715 7,102 7,657 8,613 9,539 8,442 8,113 5 Memo: PAT unadj.1.................................... 27,810 36,016 5,682 6,603 7,054 8,471 8,636 9,490 8,550 9,340 6 12,458 14,491 3,132 3,036 3,076 3,214 3,191 3,449 3,480 4,371 Nondurable goods industries (86 corps.):2 7 323,136 362,935 77,297 78,656 82,361 84,822 86,927 87,404 88,678 99,926 8 Total revenue...................................................... 328,502 368,184 78,616 79,940 83,595 86,351 88,179 88,864 90,967 100,174 9 Profits before taxes............................................ 40,905 42,694 9,378 9,989 10,924 10,614 10,674 10,595 10,632 10,793 10 Profits after taxes............................................... 16,303 18,571 3,586 3,919 4,441 4,357 4,809 4,833 4,871 4,058 11 Memo: PAT unadj.1.................................... 16,719 19,468 3,572 3,900 4,439 4,808 4,829 4,809 4,962 4,868 12 7,228 7,910 1,815 1,784 1,803 1,826 1,879 1,947 1,990 2,094 Durable goods industries (84 corps.):3 13 Sales..................................................................... 263,812 304,886 61,095 67,242 65,647 69,828 72,384 79,048 72,918 80,536 14 Total revenue...................................................... 266,835 308,412 61,866 67,871 66,246 70,852 73,282 80,094 73,664 81,372 15 Profits before taxes............................................ 19,451 29,191 3,547 4,886 4,583 6,435 6,828 8,307 6,262 7,794 16 Profits after taxes.............................................. 10,737 16,136 1,980 2,796 2,661 3,300 3,804 4,706 3,571 4,055 17 Memo: PAT unadj.1.................................... 11,091 16,548 2,110 2,703 2,615 3,663 3,807 4,681 3,588 4,472 18 5,230 6,577 1,317 1,252 1,273 1,388 1,308 1,502 1,490 2,277 Selected industries: Food and kindred products (28 corps.): 19 Sales...................................................................... 57,149 62,568 13,490 14,117 14,600 14,942 14,762 15,057 16,048 16,701 20 Total revenue...................................................... 58,156 63,142 13,708 14,356 14,844 15,248 14,993 15,395 16,221 16,533 21 Profits before taxes............................................ 5,025 5,750 1,066 1,190 1,385 1,384 1,471 1,507 1,462 1,310 22 Profits after taxes............................................... 2,496 2,890 502 607 719 668 665 778 817 630 23 Memo: PAT unadj.1.................................... 2,601 3,013 526 615 745 715 667 785 827 734 24 1,100 1,259 268 271 274 287 307 325 309 318 Chemical and allied products (22 corps.): 25 Sales..................................................................... 57,735 64,125 13,618 14,329 14,660 15,128 15,756 16,081 15,878 16,410 26 Total revenue...................................................... 58,376 64,837 13,756 14,503 14,791 15,326 15,899 16,242 16,084 16,612 27 Profits before taxes............................................ 7,082 8,197 1,647 1,622 1,858 1,955 2,179 2,117 2,008 1,893 28 Profits after taxes.............................................. 3,889 4,511 932 929 1,035 993 1,244 1,208 1,130 929 29 Memo: PAT unadj.1.................................... 4,015 4,622 927 937 1,028 1,123 1,225 1,153 1,163 1,081 30 1,723 1,918 430 425 429 439 444 445 481 548 Petroleum refining (15 corps.): 31 Sales...................................................................... 172,645 196,154 41,988 41,342 43,873 45,442 46,656 46,065 46,923 56,510 32 Total revenue...................................................... 175,915 199,688 42,851 42,100 44,633 46,331 47,407 46,888 48,744 56,649 33 Profits before taxes............................................ 26,305 25,857 6,227 6,612 6,961 6,505 6,254 6,210 6,559 6,834 34 Profits after taxes............................................... 8,551 9,555 1,905 2,078 2,300 2,268 2,481 2,383 2,606 2,085 35 Memo: PAT unadj.1.................................... 8,712 10,168 1,871 2,040 2,268 2,533 2,512 2,404 2,635 2,617 36 3,801 4,089 966 937 949 949 971 1,017 1,036 1,065 Primary metals and products (23 corps.): 37 Sales...................................................................... 48,578 54,044 12,482 12,393 12,274 11,429 12,733 14,441 13,751 13,119 38 Total revenue...................................................... 49,534 54,825 12,782 12,604 12,479 11,669 12,904 14,650 13,958 13,313 39 Profits before taxes............................................ 2,921 2,834 1,015 711 487 708 633 924 701 576 40 Profits after taxes............................................... 1,822 1,652 633 478 396 315 409 603 513 127 41 Memo: PAT unadj.1.................................... 2,003 1,947 639 485 381 498 416 610 521 400 42 945 926 273 227 216 229 218 227 230 251 Machinery (27 corps.): 43 Sales...................................................................... 79,049 87,274 18,315 19,907 19,786 21,041 20,455 21,627 21,133 24,059 44 Total revenue...................................................... 80,000 88,519 18,535 20,130 19,977 21,358 20,707 22,072 21,280 24,460 45 Profits before taxes............................................ 8,735 11,320 1,757 2,105 2,233 2,640 2,469 2,781 2,700 3,370 46 Profits after taxes............................................... 4,837 6,181 986 1,186 1,232 1,433 1,355 1,528 1,461 1,837 47 Memo: PAT unadj.1.................................... 4,899 6,202 990 1,180 1,239 1,490 1,354 1,517 1,467 1,864 48 2,031 2,383 487 489 523 532 537 581 602 663 Motor vehicles and equipment (9 corps.): 49 85,863 107,563 18,866 22,275 21,005 23,717 26,395 28,710 24,250 28,208 50 Total revenue...................................................... 86,475 108,394 19,011 22,341 21,083 24,040 26,702 28,942 24,500 28,250 51 Profits before taxes............................................ 3,077 8,909 -98 854 590 1,731 2,494 3,056 1,272 2,087 52 Profits after taxes............................................... 1,471 4,870 -127 451 328 819 1,331 1,668 705 1,166 53 Memo: PAT unadj.1.................................... 1,604 4,918 -12 455 280 881 1,337 1,658 704 1,219 54 Dividends............................................................. 1,121 2,062 294 276 274 277 285 422 372 983 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

Board of Governors of the Federal Reserve System Arthur F. Burns, Chairman Stephen S. Gardner, Vice Chairman Henry C. Wallich Philip E. Coldwell Philip C. Jackson, Jr. J. Charles Partee David M. Lilly OFFICE OF OFFICE OF BOARD MEMBERS OFFICE OF STAFF DIRECTOR FOR MONETARY POLICY STAFF DIRECTOR 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 Milton W. Hudson, Assistant to the Arthur L. Broida, Deputy Staff Director Director Chairman Murray Altmann, Assistant to the Board Donald E. Anderson, Assistant Director for Joseph R. Coyne, Assistant to the Board Peter M. Keir, Assistant to the Board Construction Management Kenneth A. Guenther, Assistant to the Board Stanley J. Sigel, Assistant to the Board Gordon B. Grim wood, Assistant Director Jay Paul Brenneman, Special Assistant to the Normand R. V. Bernard, Special Assistant to and Program Director for Board the Board Contingency Planning Frank O’Brien, Jr., Special Assistant to the William W. Layton, Director of Equal Board Employment Opportunity Joseph S. Sims, Special Assistant to the Board Donald J. Winn, Special Assistant to the DIVISION OF RESEARCH AND STATISTICS Board James L. Kichline, Director Joseph S. Zeisel, Deputy Director DIVISION OF DATA PROCESSING Edward C. Ettin, Associate Director, LEGAL DIVISION John H. Kalchbrenner, Associate Director Charles L. Hampton, Director Eleanor J. Stockwell, Senior Research Bruce M. Beardsley, Associate Director John D. Hawke, Jr., General Counsel Division Officer Uyless D. Black, Assistant Director Baldwin B. Tuttle, Deputy General James R. Wetzel, Senior Research Division Glenn L. Cummins, Assistant Director Counsel Officer Robert J. Zemel, Assistant Director Robert E. Mannion, Assistant General Robert A. Eisenbeis, Associate Research Counsel Division Officer DIVISION OF PERSONNEL Allen L. Raiken, Assistant General Counsel $ John J. Mingo, Associate Research Division Gary M. Welsh, Assistant General Counsel Officer David L. Shannon, Director Charles R. McNeill, Assistant to the J. Cortland G. Peret, Associate Research Charles W. Wood, Assistant Director General Counsel Division Officer A 70 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OFFICE OF THE CONTROLLER DIVISION OF CONSUMER AFFAIRS t Helmut F. Wendel, Associate Research Division Officer John Kakalec, Controller Janet O. Hart, Director James M. Brundy, Assistant Research Tyler E. Williams, Jr., Assistant Controller Nathaniel E. Butler, Associate Director Division Officer Jerauld C. Kluckman, Associate Director Jared J. Enzler, Assistant Research Division Officer DIVISION OF ADMINISTRATIVE SERVICES Robert M. Fisher, Assistant Research Walter W. Kreimann, Director OFFICE OF THE SECRETARY Division Officer John D. Smith, Assistant Director Richard H. Puckett, Assistant Research Theodore E. Allison, Secretary Division Officer Griffith L. Garwood, Deputy Secretary Stephen P. Taylor, Assistant Research OFFICE OF STAFF *Ruth A. Reister, Assistant Secretary Division Officer DIRECTOR FOR FEDERAL RESERVE BANK Levon H. Garabedian, Assistant Director ACTIVITIES DIVISION OF BANKING William H. Wallace, Staff Director SUPERVISION AND REGULATION DIVISION OF FEDERAL RESERVE BANK EXAMINATIONS AND BUDGETS John E. Ryan, Director DIVISION OF INTERNATIONAL FINANCE IFrederick C. Schadrack, Deputy Director F D J C A P o E . I l l h V D y b D n e I d E . S r e R F I t R O H . A i R N . n L H . g F o O R a , H o r F E A v a n S s e m s s E r w i i R l s , t o t A V a r o n s E t n s t h i , D s B , t A A a i J r s n r N e s t . c o , K t c D o A i r i a O s r t s e e P i c s E t D t o a R r i n r A t e T c D t I o i O r r e N c S tor F W J T R T D a r h h o o i c e o l o b n k d l e m m e i r E M a a a r t . s s m i K . c S A E E l k . W . g . i P n R . M e S l e . r W i o e , d t D A t a i m s l a k o d s a e h s i , n n i s n l A s , , , , t , A s A a A A A s s n s s i s s s s s t s s i s t o i s i D a o s s c t t n c a t i i a a r i a n t a n e n t t D t e c t t e D t i D o D D r D i r e i r i i r c r i r e e r t e e c o e c c c t c t r o t t o o o t r o r r r r J G R R C E o o e d h e h e o D b w a n d e r r i i v r g l n E J i t e e s . . i M s o F I B R r n J . . . e . v T G H O y S i r n e n f i e f u e e m o n i g c , m l m r e S m d a r y i e l s a n , n , l A n , i C o , D , s A r o A s i o u r I s s e n s c n s c o i t o s e a t c e c o r t i l i e n r a o a a t r t D e t e i i o D r D n e i i c a r r e t l e o c c r t t o o r r James R. Kudlinski, Director S W a i m ll u i e a l m H T . a T y a l l o l r e , y A , s A si s s s ta is n ta t n D t ir D e i c r t e o c r tor Samuel Pizer, Senior International Division Walter A. Althausen, Assistant Director Officer Brian M. Carey, Assistant Director *0n loan from the Federal Reserve Bank of Minneapolis, Harry A. Guinter, Assistant Director t On loan from the Federal Reserve Bank of New York. t On leave of absence. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Federal Open Market Committee Arthur F. Burns, Chairman Paul A. Volcker, Vice Chairman Philip E. Coldwell Philip C. Jackson, Jr. J. Charles Partee Stephen S. Gardner David M. Lilly Lawrence K. Roos Roger Guffey Robert P. Mayo Henry C. Wallich Frank E. Morris Arthur L. Broida, Secretary Anatol Balbach, Associate Economist M urray Altmann, Deputy Secretary Richard G. Davis, Associate Economist Normand R. V. Bernard, Assistant Thomas Davis, Associate Economist Secretary Robert Eisenmenger, Associate Economist Thomas J. O ’Connell, General Counsel Edward C. Ettin, Associate Economist Edward G. Guy, Deputy General Counsel James L. Kichline, Associate Economist Baldwin B. Tuttle, Assistant General John E. Reynolds, Associate Economist Counsel Karl Scheld, Associate Economist Stephen H. Axilrod, Economist Edwin M. Truman, Associate Economist Joseph S. Zeisel, Associate Economist Alan R. Holmes, Manager, System Open Market Account Peter D. Sternlight, Deputy Manager for Domestic Operations Scott E. Pardee, Deputy Manager for Foreign Operations Federal Advisory Council Richard D. Hill, first federal reserve district, President Gilbert F. Bradley, twelfth federal reserve district, Vice President W alter B. W riston, second federal Edward Byron Smith, seventh federal reserve district reserve district Roger S. Hill as, third federal Donald E. Lasater, eighth federal reserve district reserve district M. Brock W eir, fourth federal Richard H. Vaughan, ninth federal reserve district reserve district John H. Lumpkin, fifth federal J. W. McLean, tenth federal reserve district reserve district Frank A. Plummer, sixth federal Ben F. Love, eleventh federal reserve district reserve district Herbert V. Prochnow, Secretary W illiam J. Korsvik, Associate Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A73 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 Thomas M. Timlen Buffalo .................... .14240 Paul A. Miller John T. Keane PHILADELPHIA 19105 John W. Eckman David P. Eastburn Werner C. Brown Vacant CLEVELAND* 44101 Horace A. Shepard Willis J. Winn Robert E. Kirby Walter H. MacDonald Cincinnati ............... 45201 Lawrence H. Rogers, 11 Robert E. Showalter Pittsburgh ............... 15230 G. Jackson Tankersley Robert D. Duggan RICHMOND* .............23261 E. Angus Powell Robert P. Black E. Craig Wall, Sr. George C. Rankin Baltimore ..................21203 I. E. Killian Jimmie R. Monhollon Charlotte ...................28230 Robert C. Edwards Stuart P. Fishburne Culpeper Communications and Records Center.. 22701 Albert D. Tinkelenberg ATLANTA ................. 30303 H. G. Pattillo Monroe Kimbrel Clifford M. Kirtland, Jr. Kyle K. Fossum Birmingham ............ 35202 William H. Martin, III Hiram J. Honea Jacksonville ............ 32203 Gert H. W. Schmidt Edward C. Rainey Miami ...................... 33152 David G. Robinson W. M. Davis Nashville ................. 37203 John C. Bolinger Jeffrey J. Wells New Orleans .......... 70161 George C. Cortright, Jr. 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 Vacant Little Rock .............. 72203 Ronald W. Bailey John F. Breen Louisville ............... 40201 James C. Hendershot Donald L. Henry Memphis ................. 38101 Frank A. Jones, Jr. L. Terry Britt MINNEAPOLIS 55480 James P. McFarland Mark H. Willes Stephen F. Keating Clement A. Van Nice Helena ...................... 59601 Patricia P. Douglas John D. Johnson KANSAS CITY 64198 Harold W. Andersen Roger Guffey Joseph H. Williams Henry R. Czerwinski Denver .................... 80217 A. L. Feldman Wayne W. Martin Oklahoma City ....... 73125 James G. Harlow, Jr. William G. Evans Omaha .................... 68102 Durward B. Varner Robert D. Hamilton DALLAS .................... 75222 Irving A. Mathews Ernest T. Baughman Charles T. Beaird Robert H. Boykin El Paso .................... 79999 Gage Holland Fredric W. Reed Houston ................... 77001 Alvin I. Thomas J. Z. Rowe San Antonio ............ 78295 Marshall Boykin, III Carl H. Moore SAN FRANCISCO ....94120 Joseph F. Alibrandi John J. Balles Cornell C. Maier 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 74 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 Bank Credit-Card and Check-Credit Plans. 1968. Functions. 1974. 125 pp. 102 pp. $1.00 each; 10 or more to one address, $.85 each. Annual Report Survey of Financial Characteristics of Con­ Federal Reserve Bulletin. Monthly. $20.00 per sumers. 1966. 166 pp. $1.00 each; 10 or more year or $2.00 each in the United States, its posses­ to one address, $.85 each. sions, Canada, and Mexico; 10 or more of same Survey of Changes in Family Finances. 1968. 321 issue to one address, $18.00 per year or $1.75 pp. $1.00 each; 10 or more to one address, $.85 each. Elsewhere, $24.00 per year or $2.50 each. each. Banking and Monetary Statistics, 1914-1941. Report of the Joint Treasury-Federal Reserve (Reprint of Part 1 only) 1976. 682 pp. $5.00. Study of the U.S. Government Securities Banking and Monetary Statistics, 1941-1970. Market. 1969. 48 pp. $.25 each; 10 or more to 1976. 1,168 pp. $15.00. one address, $.20 each. Annual Statistical Digest, 1970-75. 1976. 339 pp. Joint Treasury-Federal Reserve Study of the $4.00 per copy for each paid subscription to Fed­ Government Securities Market: Staff Stud­ eral Reserve Bulletin. All others, $5.00 each. ies— Part 1. 1970. 86 pp. $.50 each; 10 or more Federal Reserve Monthly Chart Book. Subscrip­ to one address, $.40 each. Part 2. 1971. 153 pp. tion includes one issue of Historical Chart Book. and Part 3. 1973. 131 pp. Each volume $1.00; $12.00 per year or $1.25 each in the United States, 10 or more to one address, $.85 each. its possessions, Canada, and Mexico; 10 or more Open Market Policies and Operating Proce­ of same issue to one address, $1.00 each. Else­ dures— Staff Studies. 1971. 218 pp. $2.00 where, $15.00 per year or $1.50 each. each; 10 or more to one address, $1.75 each. Historical Chart Book. Issued annually in Sept. Reappraisal of the Federal Reserve Discount Subscription to Monthly Chart Book includes one Mechanism. Vol. 1. 1971. 276 pp. Vol. 2. 1971. issue. $1.25 each in the United States, its posses­ 173 pp. Vol. 3. 1972. 220 pp. Each volume $3.00; sions, Canada, and Mexico; 10 or more to one 10 or more to one address, $2.50 each. address, $1.00 each. Elsewhere, $1.50 each. The Econometrics of Price Determination Con­ Capital Market Developments. Weekly. $15.00 per ference, October 30-31, 1970, Washington, D.C. year or $.40 each in the United States, its posses­ 1972. 397 pp. Cloth ed. $5.00 each; 10 or more sions, Canada, and Mexico; 10 or more of same to one address, $4.50 each. Paper ed. $4.00 each; issue to one address, $13.50 per year or $.35 each. 10 or more to one address, $3.60 each. Elsewhere, $20.00 per year or $.50 each. Federal Reserve Staff Study: Ways to Moderate Selected Interest and Exchange rates— Weekly Fluctuations in Housing Construction. 1972. Series of Charts. Weekly. $15.00 per year or 487 pp. $4.00 each; 10 or more to one address, $.40 each in the United States, its possessions, $3.60 each. Canada, and Mexico; 10 or more of same issue Lending Functions of the Federal Reserve to one address, $13.50 per year or $.35 each. Banks. 1973. 271 pp. $3.50 each; 10 or more Elsewhere, $20.00 per year or $.50 each. to one address, $3.00 each. The Federal Reserve Act, as amended through De­ Introduction to Flow of Funds. 1975. 64 pp. $.50 cember 1971, with an appendix containing provi­ each; 10 or more to one address, $.40 each. sions of certain other statutes affecting the Federal Improving the Monetary Aggregates (Report of the Reserve System. 252 pp. $1.25. Advisory Committee on Monetary Statistics). Regulations of the Board of Governors of the 1976. 43 pp. $1.00 each; 10 or more to one Federal Reserve System address, $.85 each. Published Interpretations of the Board of Gov­ Annual Percentage Rate Tables (Truth in Lend­ ernors, as of June 30, 1976. $7.50. ing—Regulation Z) Vol. I (Regular Transactions). Industrial Production— 1971 Edition. 1972. 383 1969. 100 pp. Vol. II (Irregular Transactions). pp. $4.00 each; 10 or more to one address, $3.50 1969. 116 pp. Each volume $1.00, 10 or more each. of same volume to one address, $.85 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Board Publications A 75 CONSUMER EDUCATION PAMPHLETS Revised Measures of Manufacturing Capacity Utilization. 10/71. (Short pamphlets suitable for classroom use. Multiple Revision of Bank Credit Series. 12/71. copies available without charge.) Assets and Liabilities of Foreign Branches of U.S. Banks. 2/72. The Equal Credit Opportunity Act and . . . Age Bank Debits, Deposits, and Deposit Turnover— The Equal Credit Opportunity Act and . . . Revised Series. 7/72. Doctors, Lawyers, Small Retailers, and Yields on Newly Issued Corporate Bonds. 9/72. Others Who May Provide Incidental Credit Recent Activities of Foreign Branches of U.S. The Equal Credit Opportunity Act and . Banks. 10/72. Women Revision of Consumer Credit Statistics. 10/72. Fair Credit Billing One-Bank Holding Companies Before the 1970 If You Borrow To Buy Stock Amendments. 12/72. U.S. Currency Yields on Recently Offered Corporate Bonds. What Truth in Lending Means to You 5/73. Credit-Card and Check-Credit Plans at Commer­ cial Banks. 9/73. STAFF ECONOMIC STUDIES Rates on Consumer Instalment Loans. 9/73. Studies and papers on economic and financial subjects New Series for Large Manufacturing Corpora­ that are of general interest in the field of economic tions. 10/73. U.S. Energy Supplies and Uses, Staff Economic research. Study by Clayton Gehman. 12/73. Inflation and Stagnation in Major Foreign In­ Su ( m L m im ar it i e e d s s O up n p l l y y o P f r i m n i t m ed eo g in r a t p h h e ed B c u o l p l ie e s t i o n f full text dustrial Countries. 10/74. available upon request for single copies.) The Structure of Margin Credit. 4/75. New Statistical Series on Loan Commitments at The Growth of Multibank Holding Companies: Selected Large Commercial Banks. 4/75. 1956-73, by Gregory E. Boczar. Apr. 1976. 27 Recent Trends in Federal Budget Policy. 7/75. pp. Recent Developments in International Financial Extending Merger Analysis Beyond the Single- Markets. 10/75. Market Framework, by Stephen A. Rhoades. MINNIE: A S m a ll V ersion of th e May 1976. 25 pp. MIT-PENN-SSRC Econometric M odel, Staff Seasonal Adjustment of Mx— Currently Pub­ Economic Study by Douglas Battenberg, Jared J. lished and Alternative Methods, by Edward Enzler, and Arthur M. Havenner. 11/75. R. Fry. May 1976. 22 pp. An Assessment of Bank Holding Companies, Staff Effects of NOW Accounts on Costs and Earnings Economic Study by Robert J. Lawrence and of Commercial Banks in 1974-75, by John D. Samuel H. Talley, 1/76. Paulus. Sept. 1976. 49 pp. Industrial Electric Power Use. 1/76. Recent Trends in Local Banking Market Struc­ Revision of Money Stock Measures. 2/76. ture, by Samuel H. Talley. May 1977. 26 pp. Survey of Finance Companies, 1975. 3/76. Revised Series for Member Bank Deposits and Aggregate Reserves. 4/76. Printed in Full in the Bulletin Industrial Production— 1976 Revision. 6/76. Staff Economic Studies shown in list below. Federal Reserve Operations in Payment Mecha­ nisms: A Summary. 6/76. Recent Growth in Activities of U.S. Offices of REPRINTS Banks. 10/76. New Estimates of Capacity Utilization: Manu­ (Except for Staff Papers, Staff Economic Studies, and facturing and Materials. 11/76. some leading articles, most of the articles reprinted do U.S. International Transactions in a Recovering not exceed 12 pages.) Economy. 4/77. Bank Holding Company Financial Developments in 1976. 4/77. A Revised Index of M anufacturing Capacity, Changes in Bank Lending Practices, 1976. 4/77. Staff Economic Study by Frank de Leeuw with Survey of Terms of Bank Lending— New Series. Frank E. Hopkins and Michael D. Sherman. 1 1/66. 5/77. U.S. International Transactions: Trends in Changes in Time and Savings Deposits at Com­ 1960-67. 4/68. mercial Banks, Oct.-Jan. 1977. 6/77. Measures of Security Credit. 12/70. The Commercial Paper Market. 6/77. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Federal Reserve Bulletin □ July 1977 Index to Statistical Tables References are to pages A-3 through A-69 although the prefix “A” is omitted in this index ACCEPTANCES, bankers, 11, 25, 27 Demand deposits: Agricultural loans, commercial banks, 18, 20-22 Adjusted, commercial banks, 13, 15, 19 Assets and liabilities (See also Foreigners): Banks, by classes, 16, 17, 19, 20-23 Banks, by classes, 16, 17, 18, 20-23, 29 Ownership by individuals, partnerships, and Domestic finance companies, 39 corporations, 25 Federal Reserve Banks, 12 Subject to reserve requirements, 15 Nonfinancial corporations, current, 38 Turnover, 13 Automobiles: Deposits (See also specific types of deposits): Consumer instalment credit, 42, 43 Banks, by classes, 3, 16, 17, 19, 20-23, 29 Production, 48, 49 Federal Reserve Banks, 4, 12 Subject to reserve requirements, 15 BANK credit proxy, 15 Discount rates at F.R. Banks (See Interest rates) Bankers balances, 16, 18, 20, 21, 22 Discounts and advances by F.R. Banks (See Loans) (See also Foreigners) Dividends, corporate, 38, 69 Banks for cooperatives, 35 Bonds (See also U.S. Govt, securities): New issues, 36, 37 EMPLOYMENT, 46, 47 Yields, 3 Euro-dollars, 15, 27 Branch banks: Assets and liabilities of foreign branches of U.S. FARM mortgage loans, 41 banks, 62 Farmers Home Administration, 41 Liabilities of U.S. banks to their foreign Federal agency obligations, 4, 11, 12, 13, 34 branches, 23 Federal and Federally sponsored credit agencies, 35 Business activity, 46 Federal finance: Business expenditures on new plant and Debt subject to statutory limitation and equipment, 38 types and ownership of gross debt, 32 Business loans (See Commercial and industrial loans) Receipts and outlays, 30, 31 Treasury operating balance, 30 CAPACITY utilization, 46, 47 Federal Financing Bank, 35 Capital accounts: Federal funds, 3, 6, 18, 20, 21, 22, 27, 30 Banks, by classes, 16, 17, 19, 20 Federal home loan banks, 35 Federal Reserve Banks, 12 Federal Home Loan Mortgage Corp., 35, 40, 41 Central banks, 68 Federal Housing Administration, 35, 40, 41 Certificates of deposit, 23, 27 Federal intermediate credit banks, 35 Commercial and industrial loans: Federal land banks, 35, 41 Commercial banks, 15, 18, 23, 26 Federal National Mortgage Assn., 35, 40, 41 Weekly reporting banks, 20, 21, 22, 23, 24 Federal Reserve Banks: Commercial banks: Condition statement, 12 Assets and liabilities, 3, 15-18, 20-23 Discount rates (See Interest rates) Business loans, 26 U.S. Govt, securities held, 4, 12, 13, 32, 33 Commercial and industrial loans, 24 Federal Reserve credit, 4, 5, 12, 13 Consumer loans held, by type, 42, 43 Federal Reserve notes, 12 Loans sold outright, 23 Federally sponsored credit agencies, 35 Number, by classes, 16, 17, 19 Finance companies: Real estate mortgages held, by type of holder and Assets and liabilities, 39 property, 41 Busines credit, 39 Commercial paper, 3, 24, 25, 27, 39 Loans, 20, 21, 22, 42, 43 Condition statements (See Assets and liabilities) Paper, 25, 27 Construction, 46, 50 Financial institutions, loans to, 18, 20-23 Consumer instalment credit, 42, 43 Float, 4 Consumer prices, 46, 51 Flow of funds, 44, 45 Consumption expenditures, 52, 53 Foreign: Corporations: Currency operations, 12 Profits, taxes, and dividends, 38 Deposits in U.S. banks, 4, 12, 19, 20, 21, 22 Sales, revenue, profits, and dividends of large Exchange rates, 68 manufacturing corporations, 69 Trade, 55 Security issues, 36, 37, 65 Foreigners: Cost of living (See Consumer prices) Claims on, 60, 61, 66, 67 Credit unions, 29, 42, 43 Liabilities to, 23, 56-59, 64-67 Currency and coin, 5, 16, 18 Currency in circulation, 4, 14 GOLD: Customer credit, stock market, 28 Certificates, 12 Stock, 4, 55 DEBITS to deposit accounts, 13 Government National Mortgage Assn., 35, 40, 41 Debt (See specific types of debt or securities) Gross national product, 52, 53 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Bulletin □ July 1977 All HOUSING, new and existing units, 50 REAL estate loans: Banks, by classes, 18, 20-23, 29, 41 INCOME, personal and national, 46, 52, 53 Life insurance companies, 29 Industrial production, 46, 48 Mortgage terms, yields, and activity, 3, 40 Instalment loans, 42, 43 Type of holder and property mortgaged, 41 Insurance companies, 29, 32, 33, 41 Reserve position, basic, member banks, 6 Insured commercial banks, 17, 18, 19 Reserve requirements, member banks, 9 Interbank deposits, 16, 17, 20, 21, 22 Reserves: Interest rates: Commercial banks, 16, 17, 18, 20, 21, 22 Bonds, 3 Federal Reserve Banks, 12 Business loans of banks, 26 Member banks, 3, 4, 5, 15, 16, 18 Federal Reserve Banks, 3, 8 U.S. reserve assets, 55 Foreign countries, 68 Residential mortgage loans, 40 Money and capital market rates, 3, 27 Retail credit and retail sales, 42, 43, 46 Mortgages, 3, 40 Prime rate, commercial banks, 26 SALES, revenue, profits, and dividends of large Time and savings deposits, maximum rates, 10 manufacturing corporations, 69 International capital transactions of the United Saving: States, 56-67 Flow of funds, 44, 45 International organizations, 56-61, 65-67 National income accounts, 53 Inventories, 52 Savings and loan assns., 3, 10, 29, 33, 41, 44 Investment companies, issues and assets, 37 Savings deposits (See Time deposits) Investments (See also specific types of investments): Savings institutions, selected assets, 29 Banks, by classes, 16, 17, 18, 20, 21, 22, 29 Securities (See also U.S. Govt, securities): Commercial banks, 3, 15, 16, 17, 18 Federal and Federally sponsored agencies, 35 Federal Reserve Banks, 12, 13 Foreign transactions, 65 Life insurance companies, 29 New issues, 36, 37 Savings and loan assns., 29 Prices, 28 Special Drawing Rights, 4, 12, 54, 55 State and local govts.: LABOR force, 47 Deposits, 19, 20, 21, 22 Life insurance companies (See Insurance companies) Holdings of U.S. Govt, securities, 32, 33 Loans (See also specific types of loans): New security issues, 36 Banks, by classes, 16, 17, 18, 20-23, 29 Ownership of securities of, 18, 20, 21, 22, 29 Commercial banks, 3, 15-18, 20-23, 24, 26 Yields of securities, 3 Federal Reserve Banks, 3, 4, 5, 8, 12, 13 State member banks, 17 Insurance companies, 29, 41 Stock market, 28 Insured or guaranteed by U.S., 40, 41 Stocks (See also Securities): Savings and loan assns., 29 New issues, 36, 37 Prices, 28 MANUFACTURERS: Capacity utilization, 46, 47 TAX receipts, Federal, 31 Production, 46, 49 Time deposits, 3, 10, 15, 16, 17, 19, 20, 21, Margin requirements, 28 22, 23 Member banks: Trade, foreign, 55 Assets and liabilities, by classes, 16, 17, 18 Treasury currency, Treasury cash, 4 Borrowings at Federal Reserve Banks, 5, 12 Treasury deposits, 4, 12, 30 Number, by classes, 16, 17, 19 Treasury operating balance, 30 Reserve position, basic, 6 Reserve requirements, 9 UNEMPLOYMENT, 47 Reserves and related items, 3, 4, 5, 15 U.S. balance of payments, 54 Mining production, 49 U.S. Govt, balances: Mobile home shipments, 50 Commercial bank holdings, 19, 20, 21, 22 Monetary aggregates, 3, 15 Member bank holdings, 15 Money and capital market rates (See Interest rates) Treasury deposits at Reserve Banks, 4, 12, 30 Money stock measures and components, 3, 14 U.S. Govt, securities: Mortgages (See Real estate loans) Bank holdings, 16, 17, 18, 20, 21, 22, 29, Mutual funds (See Investment companies) 32, 33 Mutual savings banks, 3, 10, 20-22, 29, 32, 33, 41 Dealer transactions, positions, and financing, 34 Federal Reserve Bank holdings, 4, 12, 13, 32, 33 NATIONAL banks, 17, 19 Foreign and international holdings and National defense outlays, 31 transactions, 12, 32, 64 National income, 52 Open market transactions, 11 Nonmember banks, 17, 18, 19 Outstanding, by type of security, 32, 33 Ownership, 32, 33 Rates in money and capital markets, 27 OPEN market transactions, 11 Yields, 3 Utilities, production, 49 PERSONAL income, 53 Prices: VETERANS Administration, 40. 41 Consumer and wholesale, 46, 51 Stock market, 28 WEEKLY reporting banks, 20-24 Prime rate, commercial banks, 26 Wholesale prices, 46 Production, 46, 48 Profits, corporate, 38, 69 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 78 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories LEGEND — Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities ----- Boundaries of Federal Reserve Branch • Federal Reserve Branch Cities Territories Federal Reserve Bank Facility Q Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Guide to Tabular Presentation and Statistical Releases GUIDE TO TABULAR PRESENTATION Symbols and Abbreviations p Preliminary SMSA’s Standard metropolitan statistical areas r Revised REIT’s Real estate investment trusts rp Revised preliminary * Amounts insignificant in terms of the partic­ e Estimated ular unit (e.g., less than 500,000 when c Corrected the unit is millions) n.e.c. Not elsewhere classified (1) Zero, (2) no figure to be expected, or Rp’s Repurchase agreements (3) figure delayed or, (4) no change (when IPC’s Individuals, partnerships, and corporations figures are expected in percentages). General Information Minus signs are used to indicate (1) a decrease, (2) obligations of the Treasury. “State and local govt.” a negative figure, or (3) an outflow. also includes municipalities, special districts, and other “U.S. Govt, securities” may include guaranteed political subdivisions. issues of U.S. Govt, agencies (the flow of funds figures In some of the tables details do not add to totals also include not fully guaranteed issues) as well as direct because of rounding. STATISTICAL RELEASES List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for individual releases ............................................... Dec. 1976 A-82 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis